|
|
|
|
|
|
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Debt and lease liabilities(1)
|
|
|
12,900
|
|
|
12,380
|
|
Minus: Cash and cash equivalents
|
|
|
(1,073
|
)
|
|
(1,082
|
)
|
|
|
|
|
|
|
|
|
Net debt
|
|
|
11,827
|
|
|
11,298
|
|
Net income(2)
|
|
|
1,390
|
|
|
1,435
|
|
Income tax expense(2)
|
|
|
494
|
|
|
501
|
|
Interest income(2)
|
|
|
(48
|
)
|
|
(42
|
)
|
Interest expense(2)
|
|
|
388
|
|
|
410
|
|
Depreciation and amortization(2)
|
|
|
1,575
|
|
|
1,587
|
|
Adjustments(2),(3)
|
|
|
253
|
|
|
249
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
4,052
|
|
|
4,140
|
|
Net leverage ratio
|
|
|
2.9
|
|
|
2.7
|
|
-
(1)
-
Debt
includes the following balance sheet line items: short-term debt, current portion of long-term debt and long-term debt, less current portion.
-
(2)
-
Last
twelve months.
-
(3)
-
Acquisitions
and divestitures made for the last twelve months with a purchase price above a €50 M threshold as defined in the Amended 2012
Credit Agreement (2021: €6 M), non-cash charges, primarily related to pension expense (2021: €49 M; 2020: €50 M) and
impairment loss (2021: €198 M; 2020: €199 M).
At
March 31, 2021, we had cash and cash equivalents of €1,073 M (December 31, 2020: €1,082 M).
Free
cash flow (Net cash provided by (used in) operating activities, after capital expenditures, before acquisitions and investments) is a Non-IFRS Measure and is reconciled to net cash provided by
(used
in) operating activities, the most directly comparable IFRS measure, see "II. Discussion of measuresNonIFRS measuresCash flow measures" above.
The
following table shows the cash flow performance indicators for the three months ended March 31, 2021 and 2020 and reconciles free cash flow and free cash flow in percent of revenue to Net
cash provided
23
Table of Contents
by
(used in) operating activities and Net cash provided by (used in) operating activities in percent of revenue, respectively:
Cash flow measures
in € M, except where otherwise specified
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
2021
|
|
2020
|
|
Revenue
|
|
|
4,210
|
|
|
4,488
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
208
|
|
|
584
|
|
Capital expenditures
|
|
|
(184
|
)
|
|
(282
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
5
|
|
|
2
|
|
|
|
|
|
|
|
|
|
Capital expenditures, net
|
|
|
(179
|
)
|
|
(280
|
)
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
29
|
|
|
304
|
|
Net cash provided by (used in) operating activities in % of revenue
|
|
|
4.9
|
%
|
|
13.0
|
%
|
Free cash flow in % of revenue
|
|
|
0.7
|
%
|
|
6.8
|
%
|
Net cash provided by (used in) operating activities
In the first three months of 2021, we generated net cash provided by operating activities of €208 M, compared to €584 M in the
first three months of 2020. Net cash provided by operating activities in percent of revenue decreased to 5% for the first three months of 2021 as compared to 13% for 2020. Net cash provided by (used
in) operating activities is impacted by the profitability of our business, the development of our working capital, principally inventories, receivables and cash outflows that occur due to a number of
specific items as discussed below. The decrease in net cash provided by operating activities was largely driven by an increase in trade accounts and other receivables from unrelated parties primarily
related to seasonality in invoicing and periodic delays in payment by public health care organizations as well as a decrease in accounts payable to unrelated parties related to the timing of payments.
The
profitability of our business depends significantly on reimbursement rates for our services. Approximately 79% of our revenue is generated by providing health care services, a major portion of
which is reimbursed by either public health care organizations or private insurers. For the three months ended March 31, 2021, approximately 28% of our consolidated revenue was attributable to
reimbursements from U.S. federal health care benefit programs, such as Medicare and Medicaid. Legislative changes could affect Medicare reimbursement rates for a significant portion of the services we
provide as well as the scope of Medicare coverage. A decrease in reimbursement rates or the scope of coverage could have a material adverse effect on our business, financial position and results of
operations and thus on our capacity to generate cash flow. See "I. Overview," above.
We
intend to continue to address our current cash and financing requirements using net cash provided by operating activities, our existing and future credit agreements, issuances under our commercial
paper program (see note 5 of the notes to the consolidated financial statements (unaudited) included in this report) as well as from the use of our Accounts Receivable Facility. In addition, to
finance acquisitions or meet other needs, we expect to successfully complete long-term financing arrangements, such as the issuance of bonds.
Net
cash provided by (used in) operating activities depends on the collection of accounts receivable. Commercial customers and government institutions generally have different payment cycles.
Lengthening their payment cycles could have a material adverse effect on our capacity to generate cash flow. In addition, we could face difficulties enforcing and collecting accounts receivable under
the legal systems of, and due to the economic conditions in, some countries. Accounts receivable balances, net of expected credit losses, represented Days Sales Outstanding ("DSO") of 60 days
at March 31, 2021, an increase as compared to 50 days at December 31, 2020.
DSO
by segment is calculated by dividing the respective segment's accounts and other receivables from unrelated parties and contract liabilities, converted to euro using the average exchange rate for
the period presented, less any sales or value added tax included in the receivables, by the average daily sales for the last twelve months of that segment, converted to euro using the average exchange
rate for the period. Receivables and revenues are adjusted for amounts related to acquisitions and divestitures made within the
24
Table of Contents
reporting
period with a purchase price above a €50 M threshold as defined in the Amended 2012 Credit Agreement.
The
development of DSO by reporting segment is shown in the table below:
Development of days sales outstanding
|
|
|
|
|
|
|
|
|
in days
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Increase/decrease primarily driven by:
|
North America Segment
|
|
|
43
|
|
|
26
|
|
Seasonality in invoicing and periodic delays in payment by public health care organizations
|
EMEA Segment
|
|
|
85
|
|
|
90
|
|
Improvement of payment collections and increased sales with shorter payment terms in the region
|
Asia-Pacific Segment
|
|
|
102
|
|
|
110
|
|
Improvement of payment collections in the region
|
Latin America Segment
|
|
|
128
|
|
|
134
|
|
Improvement of payment collections in the region
|
FMC-AG & Co. KGaA average days sales outstanding
|
|
|
60
|
|
|
50
|
|
|
Due
to the fact that a large portion of our reimbursement is provided by public health care organizations and private insurers, we expect that most of our accounts receivable will be collectible.
For
information regarding litigation exposure as well as ongoing and future tax audits, see note 9, of the notes to the consolidated financial statements (unaudited) included in this report.
Net cash provided by (used in) investing activities
Net cash used in investing activities in the first three months of 2021 was €224 M as compared to net cash used in investing activities of
€312 M in the comparable period of 2020. The following table shows our capital expenditures for property, plant and equipment and capitalized development costs, net of proceeds from
sales of property, plant and equipment as well as acquisitions, investments and purchases of intangible assets for the first three months of 2021 and 2020:
Capital expenditures (net), acquisitions, investments, purchases of intangible assets and investments in debt securities
in € M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, net
|
|
Acquisitions, investments,
purchases of intangible
assets and investments in
debt securities
|
|
|
|
For the three months ended March 31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
North America Segment
|
|
|
93
|
|
|
149
|
|
|
91
|
|
|
13
|
|
thereof investments in debt securities
|
|
|
|
|
|
|
|
|
11
|
|
|
1
|
|
EMEA Segment
|
|
|
24
|
|
|
29
|
|
|
9
|
|
|
7
|
|
Asia-Pacific Segment
|
|
|
10
|
|
|
37
|
|
|
|
|
|
|
|
Latin America Segment
|
|
|
9
|
|
|
6
|
|
|
|
|
|
15
|
|
Corporate
|
|
|
43
|
|
|
59
|
|
|
17
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
179
|
|
|
280
|
|
|
117
|
|
|
38
|
|
The
majority of our capital expenditures in the first three months of 2021 was used for maintaining existing clinics and centers, equipping new clinics and centers, maintaining and expanding
production facilities, capitalization of machines provided to our customers and capitalization of certain development costs. Capital expenditures accounted for approximately 4% of total revenue in the
first three months of 2021 as compared to approximately 6% of total revenue during the same period in 2020.
25
Table of Contents
Investments
in the first three months of 2021 were primarily comprised of purchases of debt securities and equity investments. In the first three months of 2021, we received €72 M from
divestitures. These divestitures were mainly related to the divestment of debt securities. Acquisitions in the first three months of 2021 relate primarily to the purchase of dialysis clinics.
Investments
in the first three months of 2020 were primarily comprised of purchases of equity investments and debt securities. In the first three months of 2020, we received €6 M from
divestitures. These divestitures were mainly related to the divestment of debt securities. Acquisitions in the first three months of 2020 relate primarily to the purchase of dialysis clinics.
Net cash provided by (used in) financing activities
In the first three months of 2021, net cash used in financing activities was €36 M as compared to net cash used in financing activities of
€232 M in the first three months of 2020.
In
the first three months of 2021, cash was mainly used in the repayment of long-term debt (including the repayment at maturity of bonds in an aggregate principal amount of $650 M
(€473 M as of the date of issuance) and €300 M on February 15, 2021), the repayment of lease liabilities (including lease liabilities from related parties) and
distributions to noncontrolling interests, partially offset by proceeds from short-term debt (including borrowings under our commercial paper program).
In
the first three months of 2020, cash was mainly used for repayment of long-term debt (including the repayment of Convertible Bonds with a principal amount of €400 M at maturity in
January 2020), shares repurchased as part of a share buy-back program, repayment of short-term debt and the repayment of lease liabilities, partially offset by the proceeds from short-term debt
(including short-term debt from related parties) and the utilization of the Accounts Receivable Facility.
Balance sheet structure
Total assets as of March 31, 2021 increased by 5% to €33.2 billion as compared to €31.7 billion at
December 31, 2020. In addition to a 4% positive impact resulting from foreign currency translation, total assets increased by 1% to €32.1 billion from
€31.7 billion primarily due to increased trade accounts and other receivables from unrelated parties related to seasonality in invoicing, increases in goodwill and right-of use
assets related to translation adjustments, increased inventory related to a higher demand for specific products and higher safety inventory levels and an increase in property, plant and equipment,
partially offset by a decrease in other current assets.
Current
assets as a percent of total assets remained consistent period over period at 23% for March 31, 2021 and December 31, 2020, respectively. The equity ratio, the ratio of our
equity divided by total liabilities and shareholders' equity, increased to 40% at March 31, 2021 as compared to 39% at December 31, 2020, primarily driven by an increase in equity from
currency translation and net income attributable to shareholders of FMC-AG & Co. KGaA. ROIC increased to 5.9% at March 31, 2021 as compared to 5.8% at December 31, 2020.
Excluding the Impairment Loss as well as excluding both the Impairment Loss and the Effect from IFRS 16, ROIC was 6.4% and 7.2%, respectively, at March 31, 2021 (December 31,
2020: 6.6% and 7.5%, respectively). For further information on ROIC, see "II. Discussion of measuresNon-IFRS measuresReturn on invested capital (ROIC) (Non-IFRS Measure)"
above.
Report on post-balance sheet date events
Refer to note 12 in the notes to the consolidated financial statements (unaudited) included in this report.
Recently issued accounting standards
Refer to note 1 of the notes to the consolidated financial statements (unaudited) included in this report for information regarding recently issued
accounting standards.
26
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Financial statements
Consolidated statements of income
(unaudited)
Consolidated statements of income
in € thousands ("THOUS"), except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended March 31,
|
|
|
|
Note
|
|
2021
|
|
2020
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Health care services
|
|
2a
|
|
|
3,325,459
|
|
|
3,594,663
|
|
Health care products
|
|
2a
|
|
|
884,666
|
|
|
893,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,210,125
|
|
|
4,487,796
|
|
Costs of revenue:
|
|
|
|
|
|
|
|
|
|
Health care services
|
|
|
|
|
2,568,382
|
|
|
2,707,649
|
|
Health care products
|
|
|
|
|
435,086
|
|
|
389,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,003,468
|
|
|
3,097,241
|
|
Gross profit
|
|
|
|
|
1,206,657
|
|
|
1,390,555
|
|
Operating (income) expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
711,515
|
|
|
809,917
|
|
Research and development
|
|
2b
|
|
|
48,645
|
|
|
45,917
|
|
Income from equity method investees
|
|
11
|
|
|
(27,756
|
)
|
|
(20,409
|
)
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
474,253
|
|
|
555,130
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
(15,256
|
)
|
|
(8,751
|
)
|
Interest expense
|
|
|
|
|
91,328
|
|
|
112,970
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
398,181
|
|
|
450,911
|
|
Income tax expense
|
|
|
|
|
93,847
|
|
|
100,542
|
|
Net income
|
|
|
|
|
304,334
|
|
|
350,369
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
55,388
|
|
|
67,650
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
|
|
248,946
|
|
|
282,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
2c
|
|
|
0.85
|
|
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
2c
|
|
|
0.85
|
|
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
27
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated statements of comprehensive income
(unaudited)
Consolidated statements of comprehensive income
in € THOUS
|
|
|
|
|
|
|
|
|
|
For the three months
ended March 31,
|
|
|
|
2021
|
|
2020
|
|
Net income
|
|
|
304,334
|
|
|
350,369
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
Components that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
Equity method investeesshare of OCI
|
|
|
(7,432
|
)
|
|
|
|
FVOCI equity investments
|
|
|
5,856
|
|
|
|
|
Actuarial gain (loss) on defined benefit pension plans
|
|
|
54,302
|
|
|
|
|
Income tax (expense) benefit related to components of other comprehensive income not reclassified
|
|
|
(16,956
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,770
|
|
|
|
|
Components that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
Gain (loss) related to foreign currency translation
|
|
|
545,796
|
|
|
105,678
|
|
FVOCI debt securities
|
|
|
(9,925
|
)
|
|
|
|
Gain (loss) related to cash flow hedges
|
|
|
(1,766
|
)
|
|
7,427
|
|
Cost of hedging
|
|
|
84
|
|
|
(1,139
|
)
|
Income tax (expense) benefit related to components of other comprehensive income that may be reclassified
|
|
|
2,118
|
|
|
(1,878
|
)
|
|
|
|
|
|
|
|
|
|
|
|
536,307
|
|
|
110,088
|
|
Other comprehensive income (loss), net of tax
|
|
|
572,077
|
|
|
110,088
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
876,411
|
|
|
460,457
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
103,981
|
|
|
90,094
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
772,430
|
|
|
370,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
28
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated balance sheets
(unaudited)
Consolidated balance sheets
in € THOUS, except share data
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
1,073,478
|
|
|
1,081,539
|
|
Trade accounts and other receivables from unrelated parties
|
|
|
|
|
3,740,713
|
|
|
3,153,045
|
|
Accounts receivable from related parties
|
|
3
|
|
|
153,437
|
|
|
91,438
|
|
Inventories
|
|
4
|
|
|
1,989,405
|
|
|
1,895,310
|
|
Other current assets
|
|
|
|
|
832,376
|
|
|
1,053,978
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
7,789,409
|
|
|
7,275,310
|
|
Property, plant and equipment
|
|
|
|
|
4,147,440
|
|
|
4,056,864
|
|
Right-of-use assets
|
|
|
|
|
4,268,203
|
|
|
4,129,888
|
|
Intangible assets
|
|
|
|
|
1,401,497
|
|
|
1,381,009
|
|
Goodwill
|
|
|
|
|
13,638,912
|
|
|
12,958,728
|
|
Deferred taxes
|
|
|
|
|
333,286
|
|
|
351,152
|
|
Investment in equity method investees
|
|
11
|
|
|
726,595
|
|
|
761,113
|
|
Other non-current assets
|
|
|
|
|
853,197
|
|
|
774,972
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
|
|
25,369,130
|
|
|
24,413,726
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
33,158,539
|
|
|
31,689,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable to unrelated parties
|
|
|
|
|
635,422
|
|
|
731,993
|
|
Accounts payable to related parties
|
|
3
|
|
|
105,446
|
|
|
95,401
|
|
Current provisions and other current liabilities
|
|
2d
|
|
|
3,792,747
|
|
|
3,517,076
|
|
Short-term debt from unrelated parties
|
|
5
|
|
|
1,126,911
|
|
|
62,950
|
|
Short-term debt from related parties
|
|
5
|
|
|
13,714
|
|
|
16,320
|
|
Current portion of long-term debt
|
|
6
|
|
|
785,475
|
|
|
1,008,359
|
|
Current portion of long-term lease liabilities from unrelated parties
|
|
|
|
|
617,467
|
|
|
588,492
|
|
Current portion of long-term lease liabilities from related parties
|
|
3
|
|
|
20,697
|
|
|
20,664
|
|
Income tax payable
|
|
|
|
|
145,094
|
|
|
118,389
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
7,242,973
|
|
|
6,159,644
|
|
Long-term debt, less current portion
|
|
6
|
|
|
6,315,270
|
|
|
6,800,101
|
|
Long-term lease liabilities from unrelated parties, less current portion
|
|
|
|
|
3,907,002
|
|
|
3,763,775
|
|
Long-term lease liabilities from related parties, less current portion
|
|
3
|
|
|
113,948
|
|
|
119,356
|
|
Non-current provisions and other non-current liabilities
|
|
|
|
|
804,329
|
|
|
931,590
|
|
Pension liabilities
|
|
|
|
|
679,199
|
|
|
718,502
|
|
Income tax payable
|
|
|
|
|
86,947
|
|
|
78,872
|
|
Deferred taxes
|
|
|
|
|
809,215
|
|
|
785,886
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
|
|
12,715,910
|
|
|
13,198,082
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
19,958,883
|
|
|
19,357,726
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
Ordinary shares, no par value, €1.00 nominal value, 362,370,124 shares authorized, 292,888,145 issued and outstanding as of March 31, 2021 and
362,370,124 shares authorized, 292,876,570 issued and outstanding as of December 31, 2020
|
|
|
|
|
292,888
|
|
|
292,877
|
|
Additional paid-in capital
|
|
|
|
|
2,887,037
|
|
|
2,872,630
|
|
Retained earnings
|
|
|
|
|
10,500,006
|
|
|
10,254,913
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
(1,681,856
|
)
|
|
(2,205,340
|
)
|
|
|
|
|
|
|
|
|
|
|
Total FMC-AG & Co. KGaA shareholders' equity
|
|
|
|
|
11,998,075
|
|
|
11,215,080
|
|
Noncontrolling interests
|
|
|
|
|
1,201,581
|
|
|
1,116,230
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
|
13,199,656
|
|
|
12,331,310
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
|
|
33,158,539
|
|
|
31,689,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
29
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated statements of cash flows
(unaudited)
Consolidated statements of cash flows
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
March 31,
|
|
|
|
Note
|
|
2021
|
|
2020
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
304,334
|
|
|
350,369
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and impairment loss
|
|
11
|
|
|
388,202
|
|
|
400,687
|
|
Change in deferred taxes, net
|
|
|
|
|
(6,054
|
)
|
|
(29,271
|
)
|
(Gain) loss from the sale of fixed assets, right-of-use assets, investments and divestitures
|
|
|
|
|
(8,024
|
)
|
|
17,709
|
|
Income from equity method investees
|
|
11
|
|
|
(27,756
|
)
|
|
(20,409
|
)
|
Interest expense, net
|
|
|
|
|
76,072
|
|
|
104,219
|
|
Changes in assets and liabilities, net of amounts from businesses acquired:
|
|
|
|
|
|
|
|
|
|
Trade accounts and other receivables from unrelated parties
|
|
|
|
|
(476,560
|
)
|
|
(286,867
|
)
|
Inventories
|
|
|
|
|
(41,423
|
)
|
|
(82,230
|
)
|
Other current and non-current assets
|
|
|
|
|
170,572
|
|
|
83,873
|
|
Accounts receivable from related parties
|
|
|
|
|
(3,964
|
)
|
|
32,219
|
|
Accounts payable to related parties
|
|
|
|
|
6,237
|
|
|
14,736
|
|
Accounts payable to unrelated parties, provisions and other current and non-current liabilities
|
|
|
|
|
(111,529
|
)
|
|
83,290
|
|
Income tax payable
|
|
|
|
|
67,610
|
|
|
53,048
|
|
Received dividends from investments in equity method investees
|
|
|
|
|
1,075
|
|
|
1,143
|
|
Paid interest
|
|
|
|
|
(104,607
|
)
|
|
(111,538
|
)
|
Received interest
|
|
|
|
|
15,256
|
|
|
8,751
|
|
Paid income taxes
|
|
|
|
|
(41,793
|
)
|
|
(35,662
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
|
|
207,648
|
|
|
584,067
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment and capitalized development costs
|
|
|
|
|
(184,301
|
)
|
|
(281,977
|
)
|
Acquisitions and investments, net of cash acquired, and purchases of intangible assets
|
|
|
|
|
(106,489
|
)
|
|
(37,085
|
)
|
Investments in debt securities
|
|
|
|
|
(10,739
|
)
|
|
(715
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
|
|
5,376
|
|
|
1,444
|
|
Proceeds from divestitures
|
|
|
|
|
1,841
|
|
|
(1,954
|
)
|
Proceeds from sale of debt securities
|
|
|
|
|
70,259
|
|
|
7,954
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
|
|
(224,053
|
)
|
|
(312,333
|
)
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from short-term debt from unrelated parties
|
|
|
|
|
1,070,531
|
|
|
182,217
|
|
Repayments of short-term debt from unrelated parties
|
|
|
|
|
(8,593
|
)
|
|
(177,570
|
)
|
Proceeds from short-term debt from related parties
|
|
|
|
|
|
|
|
498,811
|
|
Repayments of short-term debt from related parties
|
|
|
|
|
(2,606
|
)
|
|
|
|
Proceeds from long-term debt
|
|
|
|
|
9,693
|
|
|
12,664
|
|
Repayments of long-term debt
|
|
|
|
|
(888,215
|
)
|
|
(568,648
|
)
|
Repayments of lease liabilities from unrelated parties
|
|
|
|
|
(164,249
|
)
|
|
(172,352
|
)
|
Repayments of lease liabilities from related parties
|
|
|
|
|
(5,144
|
)
|
|
(4,117
|
)
|
Increase (decrease) of accounts receivable facility
|
|
|
|
|
12,450
|
|
|
270,936
|
|
Proceeds from exercise of stock options
|
|
|
|
|
575
|
|
|
415
|
|
Purchase of treasury stock
|
|
|
|
|
|
|
|
(216,123
|
)
|
Distributions to noncontrolling interests
|
|
|
|
|
(69,523
|
)
|
|
(61,806
|
)
|
Contributions from noncontrolling interests
|
|
|
|
|
9,166
|
|
|
4,041
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
|
(35,915
|
)
|
|
(231,532
|
)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
44,259
|
|
|
4,281
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
(8,061
|
)
|
|
44,483
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
1,081,539
|
|
|
1,007,723
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
1,073,478
|
|
|
1,052,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
30
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated statements of shareholders´ equity
For the three months ended March 31, 2021 and 2020 (unaudited)
Consolidated statements of shareholders´ equity
in € THOUS, except share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
|
|
Treasury stock
|
|
|
|
|
|
Total
FMC-AG & Co.
KGaA
shareholders'
equity
|
|
|
|
|
|
|
|
Note
|
|
Number of
shares
|
|
No par
value
|
|
Number of
shares
|
|
Amount
|
|
Additional
paid in
capital
|
|
Retained
earnings
|
|
Foreign
currency
translation
|
|
Cash flow
hedges
|
|
Pensions
|
|
Fair value
changes
|
|
Noncontrolling
interests
|
|
Total
equity
|
|
Balance at December 31, 2019
|
|
|
|
|
|
304,436,876
|
|
|
304,437
|
|
|
(6,107,629
|
)
|
|
(370,502
|
)
|
|
3,607,662
|
|
|
9,454,861
|
|
|
(664,987
|
)
|
|
(10,460
|
)
|
|
(363,098
|
)
|
|
|
|
|
11,957,913
|
|
|
1,269,324
|
|
|
13,227,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options and related tax effects
|
|
|
|
|
|
7,565
|
|
|
7
|
|
|
|
|
|
|
|
|
213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
|
|
|
|
220
|
|
Purchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
(4,992,660
|
)
|
|
(322,164
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(322,164
|
)
|
|
|
|
|
(322,164
|
)
|
Purchase/ sale of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,565
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,565
|
)
|
|
(29,731
|
)
|
|
(34,296
|
)
|
Contributions from/ to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(56,179
|
)
|
|
(56,179
|
)
|
Put option liabilities
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,339
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,339
|
)
|
|
|
|
|
(5,339
|
)
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
282,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
282,719
|
|
|
67,650
|
|
|
350,369
|
|
Other comprehensive income (loss) related to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,623
|
|
|
(237
|
)
|
|
(4,152
|
)
|
|
|
|
|
83,234
|
|
|
22,444
|
|
|
105,678
|
|
Cash flow hedges, net of related tax effects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,410
|
|
|
|
|
|
|
|
|
4,410
|
|
|
|
|
|
4,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
370,363
|
|
|
90,094
|
|
|
460,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2020
|
|
|
|
|
|
304,444,441
|
|
|
304,444
|
|
|
(11,100,289
|
)
|
|
(692,666
|
)
|
|
3,603,310
|
|
|
9,732,241
|
|
|
(577,364
|
)
|
|
(6,287
|
)
|
|
(367,250
|
)
|
|
|
|
|
11,996,428
|
|
|
1,273,508
|
|
|
13,269,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020
|
|
|
|
|
|
292,876,570
|
|
|
292,877
|
|
|
|
|
|
|
|
|
2,872,630
|
|
|
10,254,913
|
|
|
(1,936,713
|
)
|
|
(7,706
|
)
|
|
(346,282
|
)
|
|
85,361
|
|
|
11,215,080
|
|
|
1,116,230
|
|
|
12,331,310
|
|
Proceeds from exercise of options and related tax effects
|
|
|
|
|
|
11,575
|
|
|
11
|
|
|
|
|
|
|
|
|
431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
442
|
|
|
|
|
|
442
|
|
Purchase/ sale of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,976
|
|
|
28,545
|
|
|
42,521
|
|
Contributions from/ to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(47,175
|
)
|
|
(47,175
|
)
|
Put option liabilities
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,853
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,853
|
)
|
|
|
|
|
(3,853
|
)
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
248,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
248,946
|
|
|
55,388
|
|
|
304,334
|
|
Other comprehensive income (loss) related to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
504,179
|
|
|
(380
|
)
|
|
(6,498
|
)
|
|
(98
|
)
|
|
497,203
|
|
|
48,593
|
|
|
545,796
|
|
Cash flow hedges, net of related tax effects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,195
|
)
|
|
|
|
|
|
|
|
(1,195
|
)
|
|
|
|
|
(1,195
|
)
|
Pensions, net of related tax effects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,877
|
|
|
|
|
|
38,877
|
|
|
|
|
|
38,877
|
|
Fair value changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,401
|
)
|
|
(11,401
|
)
|
|
|
|
|
(11,401
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
772,430
|
|
|
103,981
|
|
|
876,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2021
|
|
|
|
|
|
292,888,145
|
|
|
292,888
|
|
|
|
|
|
|
|
|
2,887,037
|
|
|
10,500,006
|
|
|
(1,432,534
|
)
|
|
(9,281
|
)
|
|
(313,903
|
)
|
|
73,862
|
|
|
11,998,075
|
|
|
1,201,581
|
|
|
13,199,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to unaudited consolidated financial statements.
31
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements
(unaudited)
(in THOUS, except share and
per share data)
1. The Company and basis of presentation
The Company
Fresenius Medical Care AG & Co. KGaA ("FMC-AG & Co. KGaA" or the "Company"), a German partnership limited by shares
(Kommanditgesellschaft auf Aktien) registered in the commercial registry of Hof an der Saale under HRB 4019, with its business address at Else-Kröner-Str. 1, 61352 Bad Homburg v. d.
Höhe, is the world's leading provider of products and services for individuals with renal diseases, based on publicly reported revenue and number of patients treated. The Company
provides dialysis care and related services to persons who suffer from End-Stage Kidney Disease ("ESKD"), as well as other health care services. The Company also develops, manufactures and distributes
a wide variety of health care products. The Company's health care products include hemodialysis machines, peritoneal dialysis cyclers, dialyzers, peritoneal dialysis solutions, hemodialysis
concentrates, solutions and granulates, bloodlines, renal pharmaceuticals, systems for water treatment, acute cardiopulmonary and apheresis products. The Company supplies dialysis clinics it owns,
operates or manages with a broad range of products and also sells dialysis products to other dialysis service providers. The Company's other health care services include value and risk-based
arrangements, pharmacy services, vascular, cardiovascular and endovascular specialty services as well as ambulatory surgery center services, physician nephrology and cardiology services and ambulant
treatment services.
In
these unaudited notes, "FMC-AG & Co. KGaA," "Company" or the "Group" refers to the Company or the Company and its subsidiaries on a consolidated basis, as the context requires.
"Fresenius SE" and "Fresenius SE & Co. KGaA" refer to Fresenius SE & Co. KGaA. "Management AG" and the "General Partner" refer to Fresenius Medical Care Management AG which
is FMC-AG & Co. KGaA's general partner and is wholly owned by Fresenius SE. "Management Board" refers to the members of the management board of Management AG and, except as otherwise
specified, "Supervisory Board" refers to the supervisory board of FMC-AG & Co. KGaA. The term "North America Segment" refers to the North America operating segment, the term "EMEA
Segment" refers to the Europe, Middle East and Africa operating segment, the term "Asia-Pacific Segment" refers to the Asia-Pacific operating segment, and the term "Latin America Segment" refers to
the Latin America operating segment. For further discussion of the Company's operating segments, see note 11.
Basis of presentation
The consolidated financial statements and other financial information included in the Company's quarterly reports furnished under cover of Form 6-K and
its Annual Report on Form 20-F are prepared solely in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"),
using the euro as the Company's reporting and functional currency. The quarterly financial report is prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial
Reporting, and contains condensed financial statements, in that it does not include all of the notes that would be required in a complete set of financial statements, but rather selected explanatory
notes. However, the primary financial statements are presented in the format consistent with the consolidated financial statements as presented in the Company's Annual Report on Form 20-F for
the year ended December 31, 2020 (the "2020 Form 20-F") in accordance with IAS 1, Presentation of Financial Statements.
The
consolidated financial statements at March 31, 2021 and for the three months ended March 31, 2021 and 2020 contained in this report are unaudited and should be read in conjunction
with the consolidated financial statements contained in the Company's 2020 Form 20-F. The preparation of consolidated financial statements in conformity with IFRS requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such financial statements
32
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
1. The Company and basis of presentation (Continued)
reflect
all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are of a normal recurring nature.
The
Company applies IAS 29, Financial Reporting in Hyperinflationary Economies, in its Argentine and Lebanese subsidiaries due to inflation in these countries. The table below details the
specific inputs used to calculate the loss on net monetary position on a country-specific basis.
Inputs for the calculation of losses on net monetary positions
|
|
|
|
|
|
|
|
|
|
Argentina
|
|
Lebanon
|
|
Date of IAS 29 initial application
|
|
|
July 1, 2018
|
|
|
December 31, 2020
|
|
Consumer price index
|
|
|
Índice de precios al consumidor
|
|
|
Central Administration of Statistics
|
|
Index at March 31, 2021
|
|
|
435.9
|
|
|
331.0
|
|
Calendar year increase
|
|
|
13
|
%
|
|
17
|
%
|
Loss on net monetary position in € THOUS
|
|
|
7,494
|
|
|
852
|
|
In
the consolidated statements of income, "Selling, general and administrative" expenses related to the amortization of acquired technology and other costs in the amount of €20,213 for
the three months ended March 31, 2020 have been reclassified to "Costs of Revenue" to conform to the current year's presentation.
In
the consolidated statements of income, "(Gain) loss related to divestitures of Care Coordination activities" in the amount of €24,332 for the three months ended March 31,
2020, which were previously presented separately, have been included within "Selling, general and administrative" expenses to conform to the current year's presentation.
As
a result of further analysis of the contracts related to a multi-currency notional pooling cash management system, cash and cash equivalents and short-term debt associated with this system which
were previously presented on a gross basis are presented on a net basis in the consolidated financial statements. In the consolidated statements of cash flows, "Proceeds from short-term debt from
unrelated parties" and "Cash and cash equivalents at end of period" for the three months ended March 31, 2020 decreased by €352,846.
The
results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations for the year ending December 31, 2021.
At
May 6, 2021, the Management Board authorized the issuance of the Company's consolidated financial statements.
New accounting pronouncements
Recently implemented accounting pronouncements
The Company has prepared its consolidated financial statements at and for the three months ended March 31, 2021 in conformity with IFRS that must be
applied for the interim periods starting on or after January 1, 2021. In the three months ended March 31, 2021, there were no recently implemented accounting pronouncements that had a
material effect on the Company's consolidated financial statements.
33
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
1. The Company and basis of presentation (Continued)
Recent accounting pronouncements not yet adopted
The IASB issued the following new standards which are relevant for the Company:
IFRS 17, Insurance Contracts
In May 2017, the IASB issued IFRS 17, Insurance Contracts. IFRS 17 establishes principles for the recognition, measurement, presentation and
disclosure related to the issuance of insurance contracts. IFRS 17 replaces IFRS 4, Insurance Contracts, which was brought in as an interim standard in 2004. IFRS 4 permitted the
use of national accounting standards for the accounting of insurance contracts under IFRS. As a result of the varied application for insurance contracts there was a lack of comparability among peer
groups. IFRS 17 eliminates this diversity in practice by requiring all insurance contracts to be accounted for using current values. The frequent updates to the insurance values are expected to
provide more useful information to users of financial statements. On June 25, 2020, the IASB issued amendments to IFRS 17, which among others, defer the effective date to fiscal years
beginning on or after January 1, 2023. Earlier adoption is permitted for entities that have also
adopted IFRS 9, Financial Instruments and IFRS 15, Revenue from Contracts with Customers. The Company is evaluating the impact of IFRS 17 on the consolidated financial statements.
Amendments to IAS 1, Classification of Liabilities as Current and Non-current
In January 2020, the IASB issued Amendments to IAS 1, Classification of Liabilities as Current and Non-current. The amendments clarify under which
circumstances debt and other liabilities with an uncertain settlement date should be classified as current or non-current. Among others, the amendments state that liabilities shall be classified
depending on rights that exist at the end of the reporting period and define under which conditions liabilities might be settled by cash, other economic resources or equity.
On
July 15, 2020, the IASB deferred the effective date by one year to provide companies with more time to implement any classification changes resulting from the amendments. The Amendments to
IAS 1 are now effective for annual reporting periods beginning on or after January 1, 2023. Earlier adoption is permitted. The Company is currently evaluating the impact of the
amendments to IAS 1 on the consolidated financial statements.
In
the Company's view, no other pronouncements issued by the IASB are expected to have a material impact on the consolidated financial statements.
34
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income
-
a)
-
Revenue
The
Company has recognized the following revenue in the consolidated statement of income for the three months ended March 31, 2021 and 2020:
Revenue
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
2021
|
|
2020
|
|
|
|
Revenue from contracts with customers
|
|
Other revenue
|
|
Total
|
|
Revenue from contracts with customers
|
|
Other revenue
|
|
Total
|
|
Health care services
|
|
|
3,233,136
|
|
|
92,323
|
|
|
3,325,459
|
|
|
3,515,572
|
|
|
79,091
|
|
|
3,594,663
|
|
Health care products
|
|
|
849,620
|
|
|
35,046
|
|
|
884,666
|
|
|
870,362
|
|
|
22,771
|
|
|
893,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,082,756
|
|
|
127,369
|
|
|
4,210,125
|
|
|
4,385,934
|
|
|
101,862
|
|
|
4,487,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Research and development expenses
Research and development expenses of €48,645 for the three months ended March 31, 2021 (for the three months ended March 31, 2020:
€45,917) included research and non-capitalizable development costs as well as depreciation and amortization expenses
related to capitalized development costs of €1,302 (for the three months ended March 31, 2020: €1,263).
c) Earnings per share
The following table contains reconciliations of the numerators and denominators of the basic and diluted earnings per share computations for the three months ended March 31,
2021 and 2020:
Reconciliation of basic and diluted earnings per share
in € THOUS, except share and per share data
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
2021
|
|
2020
|
|
Numerator:
|
|
|
|
|
|
|
|
Net income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
248,946
|
|
|
282,719
|
|
|
|
|
|
|
|
|
|
Denominators:
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
292,878,085
|
|
|
297,842,343
|
|
Potentially dilutive shares
|
|
|
131,477
|
|
|
219,801
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
0.85
|
|
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
0.85
|
|
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d) Impacts of severe acute respiratory syndrome coronavirus 2 ("COVID-19")
The Company provides life-sustaining dialysis treatments and other critical healthcare services and products to patients. Its patients need regular and frequent dialysis
treatments, or else they face significant health consequences that would result in either hospitalization or death. To be able to continue care for its patients in light of COVID-19, the Company
determined that it needed to implement a number of
35
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
measures,
both operational and financial, to maintain an adequate workforce, protect its patients and employees through expanded personal protective equipment protocols and to develop surge capacity
for patients suspected or confirmed to have COVID-19. Additionally, the Company experienced a loss of revenue due to the pandemic in certain parts of its business, offset by increased demand for its
services and products in other parts. Various governments in regions in which the Company operates have provided economic assistance programs to address the consequences of the pandemic on companies
and support healthcare providers and patients.
The
Company received government relief in various regions in which it operates in the amount of €7,228 for the three months ended March 31, 2021. In addition to the costs
incurred which are eligible for government funding in various countries, the Company has been affected by impacts that COVID-19 had on the global economy and financial markets as well as effects
related to lockdowns.
The
remaining amount of U.S. government relief funding received under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act") recorded in deferred income was $16,513
(€14,083) and $22,473 (€18,314) at March 31, 2021 and December 31, 2020, respectively. In 2020, the Company also recorded a contract liability for advance
payments received under the CMS Accelerated and Advance Payment program within current provisions and other current liabilities and non-current provisions and other non-current liabilities. Contract
liabilities related to the CMS Accelerated and Advance Payment program were $1,046,025 (€892,133) and $1,046,025 (€852,437) as of March 31, 2021 and
December 31, 2020, respectively. Beginning on April 1, 2021, CMS began recouping these accelerated and advance payments from the Company.
3. Related party transactions
Fresenius SE is the Company's largest shareholder and owns 32.2% of the Company's outstanding shares at March 31, 2021. The Else Kröner-Fresenius-Stiftung is the sole shareholder
of Fresenius Management SE, the general partner of Fresenius SE, and has sole power to elect the supervisory board of Fresenius Management SE. The Company has entered into certain arrangements for
services and products with Fresenius SE or its subsidiaries and with certain of the Company's equity method investees as described in item a) below. The arrangements for leases with Fresenius
SE or its subsidiaries are described in item b) below. The Company's terms related to the receivables or payables for these services, leases and products are generally consistent with
the normal terms of the Company's ordinary course of business transactions with unrelated parties and the Company believes that these arrangements reflect fair market terms. The Company utilizes
various methods to verify the commercial reasonableness of its related party arrangements. Financing arrangements as described in item c) below have agreed-upon terms which are determined at
the time such financing transactions occur and reflect market rates at the time of the transaction. The relationship between the Company and its key management personnel who are considered to be
related parties is described in item d) below. The Company's related party transactions are settled through Fresenius SE's cash management system where appropriate.
a) Service agreements and products
The Company is party to service agreements with Fresenius SE and certain of its affiliates (collectively "Fresenius SE Companies") to receive services, including, but not
limited to: administrative services, management information services, employee benefit administration, insurance, information technology services, tax services and treasury management services. The
Company also provides central purchasing services to Fresenius SE Companies. These related party agreements generally have a duration of 1 to
5 years and are renegotiated on an as needed basis when the agreement comes due. The Company also provides administrative services to one of its equity method investees.
36
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
3. Related party transactions (Continued)
The Company sells products to Fresenius SE Companies and purchases products from Fresenius SE
Companies and equity method investees. In addition, Fresenius Medical Care Holdings, Inc. ("FMCH") purchases heparin supplied by Fresenius Kabi USA, Inc. ("Kabi USA"), through an
independent group purchasing organization ("GPO"). Kabi USA is an indirect, wholly-owned subsidiary of Fresenius SE. The Company has no direct supply agreement with Kabi USA and does not submit
purchase orders directly to Kabi USA. FMCH acquires heparin from Kabi USA, through the GPO contract, which was negotiated by the GPO at arm's length on behalf of all members of
the GPO.
In
December 2010, the Company and Galenica Ltd. (now known as Vifor Pharma Ltd.) formed the renal pharmaceutical company Vifor Fresenius Medical Care Renal Pharma Ltd., an equity
method investee of which the Company owns 45%. The Company has entered into exclusive supply agreements to purchase certain pharmaceuticals from, as well as certain exclusive distribution agreements
with, Vifor Fresenius Medical Care Renal Pharma Ltd.
Under
the Centers for Medicare and Medicaid Services' ("CMS") Comprehensive End-Stage Renal Disease ("ESRD") Care Model, the Company and participating physicians formed entities known as ESRD Seamless
Care Organizations ("ESCOs") as part of a payment and care delivery model that seeks to deliver better health outcomes for Medicare ESKD patients while lowering CMS's costs. The Company entered into
participation/service agreements with these ESCOs, which are accounted for as equity method investees.
Below
is a summary, including the Company's receivables from and payables to the indicated parties, resulting from the above described transactions with related parties.
Service agreements and products with related parties
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
March 31, 2021
|
|
For the
three months ended
March 31, 2020
|
|
March 31, 2021
|
|
December 31, 2020
|
|
|
|
Sales of
goods and
services
|
|
Purchases of
goods and
services
|
|
Sales of
goods and
services
|
|
Purchases of
goods and
services
|
|
Accounts
receivable
|
|
Accounts
payable
|
|
Accounts
receivable
|
|
Accounts
payable
|
|
Service agreements(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE
|
|
|
34
|
|
|
8,286
|
|
|
28
|
|
|
5,450
|
|
|
168
|
|
|
3,807
|
|
|
251
|
|
|
3,655
|
|
Fresenius SE affiliates
|
|
|
979
|
|
|
24,016
|
|
|
1,187
|
|
|
26,328
|
|
|
703
|
|
|
5,922
|
|
|
824
|
|
|
7,944
|
|
Equity method investees
|
|
|
10,229
|
|
|
|
|
|
2,109
|
|
|
|
|
|
87,654
|
|
|
|
|
|
74,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
11,242
|
|
|
32,302
|
|
|
3,324
|
|
|
31,778
|
|
|
88,525
|
|
|
9,729
|
|
|
76,010
|
|
|
11,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE affiliates
|
|
|
11,632
|
|
|
7,867
|
|
|
10,821
|
|
|
9,048
|
|
|
9,363
|
|
|
3,549
|
|
|
10,330
|
|
|
5,732
|
|
Equity method investees
|
|
|
|
|
|
106,002
|
|
|
|
|
|
112,129
|
|
|
|
|
|
72,202
|
|
|
|
|
|
57,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
11,632
|
|
|
113,869
|
|
|
10,821
|
|
|
121,177
|
|
|
9,363
|
|
|
75,751
|
|
|
10,330
|
|
|
62,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
In
addition to the above shown accounts payable, accrued expenses for service agreements with related parties amounted to €6,239 and
€5,368 at March 31, 2021 and December 31, 2020, respectively.
In
addition to the amounts noted in the table above, the Company recorded an accounts receivable amount of €54,323 related to dividend payments from Vifor Fresenius Medical Care Renal
Pharma Ltd as of March 31, 2021.
b) Lease agreements
In addition to the above-mentioned product and service agreements, the Company is a party to real estate lease agreements with Fresenius SE Companies, which mainly include
leases for the Company's corporate
37
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
3. Related party transactions (Continued)
headquarters
in Bad Homburg, Germany and production sites in Schweinfurt and St. Wendel, Germany. The leases have maturities up to the end of 2029.
Below
is a summary resulting from the above described lease agreements with related parties.
Lease agreements with related parties
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
March 31, 2021
|
|
For the three months ended
March 31, 2020
|
|
March 31, 2021
|
|
December 31, 2020
|
|
|
|
Depreciation
|
|
Interest
expense
|
|
Lease
expense(1)
|
|
Depreciation
|
|
Interest
expense
|
|
Lease
expense(1)
|
|
Right-of-
use asset
|
|
Lease
liability
|
|
Right-of-
use asset
|
|
Lease
liability
|
|
Fresenius SE
|
|
|
1,979
|
|
|
170
|
|
|
345
|
|
|
1,124
|
|
|
110
|
|
|
1,099
|
|
|
56,089
|
|
|
56,690
|
|
|
58,073
|
|
|
58,610
|
|
Fresenius SE affiliates
|
|
|
3,280
|
|
|
290
|
|
|
37
|
|
|
3,247
|
|
|
334
|
|
|
70
|
|
|
76,673
|
|
|
77,955
|
|
|
80,188
|
|
|
81,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,259
|
|
|
460
|
|
|
382
|
|
|
4,371
|
|
|
444
|
|
|
1,169
|
|
|
132,762
|
|
|
134,645
|
|
|
138,261
|
|
|
140,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Short-term
leases and expenses relating to variable lease payments as well as low value leases are exempted from balance sheet recognition.
c) Financing
The Company receives short-term financing from and provides short-term financing to Fresenius SE. The Company also utilizes Fresenius SE's cash management system for the
settlement of certain intercompany receivables and payables with its subsidiaries and other related parties. As of March 31, 2021 and December 31, 2020, the Company had accounts
receivable from Fresenius SE related to short-term financing in the amount of €789 and €1,037, respectively. As of March 31, 2021, the Company had accounts
payable to Fresenius SE related to short-term financing in the amount of €1,293. As of December 31, 2020, the Company did not have accounts payable to Fresenius SE related to
short-term financing. The interest rates for these cash management arrangements are set on a daily basis and are based on the then-prevailing overnight reference rate, with a floor of zero, for the
respective currencies.
On
August 19, 2009, the Company borrowed €1,500 from the General Partner on an unsecured basis at 1.335%. The loan repayment has been extended periodically and is currently due
on August 20, 2021 with an interest rate of 0.825%. On November 28, 2013, the Company borrowed an additional €1,500 with an interest rate of 1.875% from the General
Partner. The loan repayment has been extended periodically and is currently due on November 23, 2021 with an interest rate of 1.025%.
At
March 31, 2021, the Company borrowed from Fresenius SE €10,714 on an unsecured basis at an interest rate of 0.825%. At December 31, 2020, the Company borrowed from
Fresenius SE in the amount of €13,320 on an unsecured basis at an interest rate of 0.825%. For further information on this loan agreement, see note 5.
d) Key management personnel
Due to the Company's legal form of a German partnership limited by shares, the General Partner holds a key management position within the Company. In addition, as key
management personnel, members of the Management Board and the Supervisory Board, as well as their close relatives, are considered related parties.
The
Company's Articles of Association provide that the General Partner shall be reimbursed for any and all expenses in connection with management of the Company's business, including remuneration of
the members of the General Partner's supervisory board and the members of the Management Board. The aggregate amount reimbursed to the General Partner was €8,783 and
€8,265 for its management services
38
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
3. Related party transactions (Continued)
during
the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, the Company had accounts receivable from the General Partner in
the amount of €437 and €4,061, respectively. As of March 31, 2021 and December 31, 2020, the Company had accounts payable to the General Partner in the
amount of €18,673 and €20,863, respectively.
4. Inventories
At March 31, 2021 and December 31, 2020, inventories consisted of the following:
Inventories
in € THOUS
|
|
|
|
|
|
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Finished goods
|
|
|
1,173,679
|
|
|
1,088,311
|
|
Health care supplies
|
|
|
462,876
|
|
|
473,164
|
|
Raw materials and purchased components
|
|
|
240,369
|
|
|
232,422
|
|
Work in process
|
|
|
112,481
|
|
|
101,413
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
1,989,405
|
|
|
1,895,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Short-term debt
At March 31, 2021 and December 31, 2020, short-term debt consisted of the following:
Short-term debt
in € THOUS
|
|
|
|
|
|
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Commercial paper program
|
|
|
684,176
|
|
|
19,995
|
|
Borrowings under lines of credit
|
|
|
442,199
|
|
|
42,442
|
|
Other
|
|
|
536
|
|
|
513
|
|
|
|
|
|
|
|
|
|
Short-term debt from unrelated parties
|
|
|
1,126,911
|
|
|
62,950
|
|
Short-term debt from related parties (see note 3 c)
|
|
|
13,714
|
|
|
16,320
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
1,140,625
|
|
|
79,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Company and certain consolidated entities operate a multi-currency notional pooling cash management system. The Company met the conditions to offset balances within this cash pool for reporting
purposes. At March 31, 2021 and December 31, 2020, cash and borrowings under lines of credit in the amount of €264,539 and €998,044, respectively, were
offset under this cash management system.
Commercial paper program
The Company maintains a commercial paper program under which short-term notes of up to €1,000,000 can be issued. At March 31, 2021, the
outstanding commercial paper amounted to €684,000 (December 31, 2020: €20,000).
Short-term debt from related parties
The Company and one of its subsidiaries are parties to an unsecured loan agreement, as borrowers, with Fresenius SE, as lender, under which the Company and
one of its subsidiaries may request and receive one
39
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
5. Short-term debt (Continued)
or
more short-term advances up to an aggregate amount of €600,000 until maturity on July 31, 2022. For further information on short-term debt from related parties, see
note 3 c).
6. Long-term debt
As of March 31, 2021 and December 31, 2020, long-term debt consisted of the following:
Long-term debt
in € THOUS
|
|
|
|
|
|
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Amended 2012 Credit Agreement
|
|
|
1,172,472
|
|
|
1,162,342
|
|
Bonds
|
|
|
5,678,157
|
|
|
6,408,118
|
|
Accounts Receivable Facility
|
|
|
12,793
|
|
|
|
|
Other
|
|
|
237,323
|
|
|
238,000
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
7,100,745
|
|
|
7,808,460
|
|
|
|
|
|
|
|
|
|
Less current portion
|
|
|
(785,475
|
)
|
|
(1,008,359
|
)
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
6,315,270
|
|
|
6,800,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
bonds issued by Fresenius Medical Care US Finance, Inc. in the amount of $650,000 (€472,889 as of the date of issuance on February 3, 2011) were redeemed at maturity
on February 15, 2021. Additionally, the bonds issued by Fresenius Medical Care Finance VII S.A. on February 3, 2011 in the amount of €300,000 were redeemed at
maturity on February 15, 2021.
Amended 2012 Credit Agreement
The following table shows the available and outstanding amounts under the Amended 2012 Credit Agreement at March 31, 2021 and December 31, 2020:
Amended 2012 Credit AgreementMaximum amount available and balance outstanding
in THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available
March 31, 2021
|
|
Balance outstanding
March 31, 2021(1)
|
|
Revolving credit USD 2017 / 2022
|
|
$
|
900,000
|
|
€
|
767,590
|
|
$
|
|
|
€
|
|
|
Revolving credit EUR 2017 / 2022
|
|
€
|
600,000
|
|
€
|
600,000
|
|
€
|
|
|
€
|
|
|
USD term loan 2017 / 2022
|
|
$
|
1,080,000
|
|
€
|
921,109
|
|
$
|
1,080,000
|
|
€
|
921,109
|
|
EUR term loan 2017 / 2022
|
|
€
|
252,000
|
|
€
|
252,000
|
|
€
|
252,000
|
|
€
|
252,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
€
|
2,540,699
|
|
|
|
|
€
|
1,173,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
6. Long-term debt (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available
December 31, 2020
|
|
Balance outstanding
December 31, 2020(1)
|
|
Revolving credit USD 2017 / 2022
|
|
$
|
900,000
|
|
€
|
733,436
|
|
$
|
|
|
€
|
|
|
Revolving credit EUR 2017 / 2022
|
|
€
|
600,000
|
|
€
|
600,000
|
|
€
|
|
|
€
|
|
|
USD term loan 2017 / 2022
|
|
$
|
1,110,000
|
|
€
|
904,572
|
|
$
|
1,110,000
|
|
€
|
904,572
|
|
EUR term loan 2017 / 2022
|
|
€
|
259,000
|
|
€
|
259,000
|
|
€
|
259,000
|
|
€
|
259,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
€
|
2,497,008
|
|
|
|
|
€
|
1,163,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Amounts
shown are excluding debt issuance costs.
Accounts Receivable Facility
The following table shows the available and outstanding amounts under the Accounts Receivable Facility at March 31, 2021 and December 31, 2020:
Accounts Receivable FacilityMaximum amount available and balance outstanding
in THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available March 31, 2021(1)
|
|
Balance outstanding March 31, 2021(2)(3)
|
|
Accounts Receivable Facility
|
|
$
|
900,000
|
|
€
|
767,591
|
|
$
|
15,000
|
|
€
|
12,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available
December 31, 2020(1)
|
|
Balance outstanding
December 31, 2020(2)
|
|
Accounts Receivable Facility
|
|
$
|
900,000
|
|
€
|
733,437
|
|
$
|
|
|
€
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Subject
to availability of sufficient accounts receivable meeting funding criteria.
-
(2)
-
Amounts
shown are excluding debt issuance costs.
-
(3)
-
Included
in "Current portion of long-term debt" in the consolidated balance sheet as of March 31, 2021.
The
Company also had letters of credit outstanding under the Accounts Receivable Facility in the amount of $12,522 and $12,522 (€10,680 and €10,205) at March 31,
2021 and December 31, 2020, respectively. These letters of credit are not included above as part of the balance outstanding at March 31, 2021 and December 31, 2020; however, they
reduce available borrowings under the Accounts Receivable Facility.
7. Capital management
As of March 31, 2021 and December 31, 2020 total equity in percent of total assets was 39.8% and 38.9%, respectively, and debt and lease liabilities in percent of total assets was 38.9%
and 39.1%, respectively.
The
Company's financing structure and business model are reflected in the investment grade ratings. The Company is covered and rated investment grade by Moody's, Standard & Poor's and Fitch.
41
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
7. Capital management (Continued)
Rating(1)
|
|
|
|
|
|
|
|
|
Standard & Poor´s
|
|
Moody´s
|
|
Fitch
|
Corporate Credit Rating
|
|
BBB
|
|
Baa3
|
|
BBB
|
Outlook
|
|
stable
|
|
stable
|
|
stable
|
-
(1)
-
A
rating is not a recommendation to buy, sell or hold securities of the Company, and may be subject to suspension, change or withdrawal at any time by the assigning
rating agency.
42
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Share-based plans
On March 1, 2021 the members of the management board of Management AG were granted 192,201
performance shares with a total fair value of €10,448 under the Fresenius Medical Care Management Board Long Term Incentive Plan 2020. This amount will be amortized over the three-year
vesting period. The weighted average fair value per performance share at the grant date was €54.36.
9. Commitments and contingencies
Legal and regulatory matters
The Company is routinely involved in claims, lawsuits, regulatory and tax audits, investigations and other legal matters arising, for the most part, in the
ordinary course of its business of providing health care services and products. Legal matters that the Company currently deems to be material or noteworthy are described below. The Company records its
litigation reserves for certain legal proceedings and regulatory matters to the extent that the Company determines an unfavorable outcome is probable and the amount of loss can be reasonably
estimated. For the other matters described below, the Company believes that the loss probability is remote and/or the loss or range of possible losses cannot be reasonably estimated at this time. The
outcome of litigation and other legal matters is always difficult to predict accurately and outcomes that are not consistent with the Company's view of the merits can occur. The Company believes that
it has valid defenses to the legal matters pending against it and is defending itself vigorously. Nevertheless, it is possible that the resolution of one or more of the legal matters currently pending
or threatened could have a material adverse effect on its business, results of operations and financial condition.
Beginning
in 2012, the Company received certain communications alleging conduct in countries outside the United States that might violate the Foreign Corrupt Practices Act or other anti-bribery laws.
The Company conducted investigations with the assistance of outside counsel and, in a continuing dialogue, advised the Securities and Exchange Commission ("SEC") and the United States Department of
Justice ("DOJ") about these investigations. The DOJ and the SEC also conducted their own investigations, in which the Company cooperated.
In
the course of this dialogue, the Company identified and reported to the DOJ and the SEC, and took remedial actions with respect to, conduct that resulted in the DOJ and the SEC seeking monetary
penalties including disgorgement of profits and other remedies. This conduct revolved principally around the Company's products business in countries outside the United States.
On
March 29, 2019, the Company entered into a non-prosecution agreement ("NPA") with the DOJ and a separate agreement with the SEC intended to resolve fully and finally the U.S. government
allegations against the Company arising from the investigations. Both agreements included terms starting August 2, 2019. The DOJ NPA is scheduled to terminate on August 2, 2022 and the
dismissal of the SEC Order is scheduled to occur on November 30, 2022. The Company paid a combined total in penalties and disgorgement of approximately $231,715 (€205,854) to
the DOJ and the SEC in connection with these agreements. The entire amount paid to the DOJ and the SEC was reserved for in charges that the Company recorded in 2017 and 2018 and announced in 2018. As
part of the resolution, the Company agreed to certain self-reporting obligations and to retain an independent compliance monitor. Due to COVID-19 pandemic restrictions, the monitorship program faced
certain delays, but the Company is working to have all its obligations under the resolution with the DOJ and SEC completed in 2022.
In
2015, the Company self-reported to the German prosecutor conduct with a potential nexus to Germany and continues to cooperate with government authorities in Germany in their review of the conduct
that prompted the Company's and United States government investigations.
Since
2012, the Company has made and continues to make further significant investments in its compliance and financial controls and in its compliance, legal and financial organizations. The Company's
remedial actions included separation from those employees responsible for the above-mentioned conduct. The
42
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Commitments and contingencies (Continued)
Company
is dealing with post-FCPA review matters on various levels. The Company continues to be fully committed to compliance with the FCPA and other applicable anti-bribery laws.
On
October 30, 2020, Mexico's primary social security and health care agency filed a civil complaint in the United States District Court for the District of Massachusetts (Boston) asserting
claims for common law fraud against the Company and FMCH. 2020 Civ. 11927-IT (E. D. Mass.). The allegations of the complaint rely on the Company's resolution under the FCPA. FMCH has been served and
is proceeding to defend the litigation, initially by seeking dismissal based on improper venue and lack of jurisdiction. The Company has agreed to respond and defend if the case is not dismissed on
FMCH's motion.
Personal
injury and related litigation, including litigation by certain state government agencies, involving FMCH's acid concentrate product, labeled as Granuflo® or
Naturalyte®, first arose in 2012. The matters remaining after judicial decisions favorable to FMCH and settlement, including most significantly the settlement in the federal multi-district
personal injury litigation consummated in November 2017, do not present material risk. Accordingly, specific reporting on these matters has been discontinued.
FMCH's
insurers agreed to the settlement of the acid concentrate personal injury litigation and funded $220,000 (€179,284) of the settlement fund under a reciprocal reservation of
rights. FMCH accrued a net expense of $60,000 (€48,896) in connection with the settlement, including legal fees and other anticipated costs. Following the settlement, FMCH's insurers
in the AIG group initiated litigation against FMCH seeking to be indemnified by FMCH for their $220,000 (€179,284) outlay and FMCH initiated litigation against the AIG group to recover
defense and indemnification costs FMCH had borne. National Union Fire Insurance v. Fresenius Medical Care, 2016 Index No. 653108 (Supreme Court
of New York for New York County).
Discovery
in the litigation is complete. The AIG group abandoned certain of its coverage claims and submitted expert reports on damages asserting that, if AIG prevails on all its remaining claims, it
should recover $60,000 (€48,896). FMCH contests all of AIG's claims and submitted expert reports supporting rights to recover $108,000 (€88,012) from AIG, in addition
to the $220,000 (€179,284) already funded. A trial date has not been set in the matter.
In
August 2014, FMCH received a subpoena from the United States Attorney's Office ("USAO") for the District of Maryland inquiring into FMCH's contractual arrangements with hospitals and physicians
involving contracts relating to the management of in-patient acute dialysis services. On August 27, 2020, after the USAO declined to pursue the matter by intervening, the United States District
Court for Maryland unsealed a 2014 relator's qui tam complaint that gave rise to the investigation. United States ex rel. Martin
Flanagan v. Fresenius Medical Care Holdings, Inc., 2014 Civ. 00665 (D. Maryland). The relator has served the complaint and litigation is proceeding. In response to
FMCH's motion to dismiss the unsealed complaint, the relator filed an amended complaint on February 5, 2021 making broad allegations about financial relationships between FMCH and
nephrologists.
In
July 2015, the Attorney General for Hawaii issued a civil complaint under the Hawaii False Claims Act alleging a conspiracy pursuant to which certain Liberty Dialysis subsidiaries of FMCH
overbilled Hawaii Medicaid for Liberty's Epogen® administrations to Hawaii Medicaid patients during the period from 2006 through 2010, prior to the time of FMCH's acquisition of Liberty.
Hawaii v. Liberty DialysisHawaii, LLC et al., Case No. 15-1-1357-07 (Hawaii 1st Circuit). The State alleges that Liberty acted unlawfully by relying on incorrect and
unauthorized billing guidance provided to Liberty by Xerox State Healthcare LLC, which acted as Hawaii's contracted administrator for its Medicaid program reimbursement operations during the
relevant period. With discovery concluded, the State has specified that its demands for relief relate to $7,700 (€6,275) in overpayments on approximately twenty thousand "claims"
submitted by Liberty. After prevailing on motions by Xerox to preclude it from doing so, FMCH is pursuing third-party claims for contribution and indemnification against Xerox. The State's False
Claims Act complaint was filed after Liberty initiated an administrative action challenging the State's recoupment of alleged overpayments from
43
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Commitments and contingencies (Continued)
sums
currently owed to Liberty. The civil litigation and administrative action are proceeding in parallel. Trial in the civil litigation has been postponed because of COVID-19-related administrative
issues and has been rescheduled for January 2022.
On
August 31, 2015, FMCH received a subpoena under the False Claims Act from the United States Attorney for the District of Colorado (Denver) inquiring into FMCH's participation in and
management of dialysis facility joint ventures in which physicians are partners. FMCH continues to cooperate in the Denver USAO investigation, which has come to focus on purchases and sales of
minority interests in ongoing outpatient facilities between FMCH and physician groups.
On
November 25, 2015, FMCH received a subpoena under the False Claims Act from the United States Attorney for the Eastern District of New York (Brooklyn) also inquiring into FMCH's involvement
in certain dialysis facility joint ventures in New York. On September 26, 2018, the Brooklyn USAO declined to intervene on the qui tam complaint
filed under seal in 2014 that gave rise to this investigation. CKD Project LLC v. Fresenius Medical Care, 2014 Civ. 06646 (E.D.N.Y.
November 12, 2014). The court unsealed the complaint, allowing the relator to proceed on its own. On January 27, 2021, the Magistrate Judge recommended dismissal of the complaint with
prejudice and without leave to amend. The relator is appealing the Magistrate Judge's recommendation.
Beginning
October 6, 2015, the United States Attorney for the Eastern District of New York (Brooklyn) has led an investigation, through subpoenas issued under the False Claims Act, of
utilization and invoicing by FMCH's subsidiary Azura Vascular Care for a period beginning after FMCH's acquisition of American Access Care LLC ("AAC") in October 2011. FMCH is cooperating in
the Brooklyn USAO investigation. The Brooklyn USAO has indicated that its investigation is nationwide in scope and is focused on whether certain access procedures performed at Azura facilities were
medically unnecessary and whether certain physician assistants employed by Azura exceeded their permissible scope of practice. Allegations against AAC arising in districts in Connecticut, Florida and
Rhode Island relating to utilization and invoicing were settled in 2015.
On
November 18, 2016, FMCH received a subpoena under the False Claims Act from the United States Attorney for the Eastern District of New York (Brooklyn) seeking documents and information
relating to the operations of Shiel Medical Laboratory, Inc. ("Shiel"), which FMCH acquired in October 2013. In the course of cooperating in the investigation and preparing to respond to the
subpoena, FMCH identified falsifications and misrepresentations in documents submitted by a Shiel salesperson that relate to the integrity of certain invoices submitted by Shiel for laboratory testing
for patients in long term care facilities. On February 21, 2017, FMCH terminated the employee and notified the United States Attorney of the termination and its circumstances. The terminated
employee's conduct is expected to result in demands for FMCH to refund overpayments and to pay related penalties under applicable laws, but the monetary value of such payment demands cannot yet be
reasonably estimated. FMCH contends that, under the asset sale provisions of its 2013 Shiel acquisition, it is not responsible for misconduct by the terminated employee or other Shiel employees prior
to the date of the acquisition. The Brooklyn USAO continues to investigate a range of issues involving Shiel, including allegations of improper compensation (kickbacks) to physicians, and has
disclosed that multiple sealed qui tam complaints underlie the investigation.
On
December 12, 2017, FMCH sold to Quest Diagnostics certain Shiel operations that are the subject of this Brooklyn subpoena, including the misconduct reported to the United States Attorney.
Under the Quest Diagnostics sale agreement, FMCH retains responsibility for responding to the Brooklyn investigation and for liabilities arising from conduct occurring after its 2013 acquisition of
Shiel and prior to its sale of Shiel to Quest Diagnostics. FMCH is cooperating in the investigation.
In
May 2017, the United States Attorney for the Middle District of Tennessee (Nashville) issued identical subpoenas to FMCH and two subsidiaries under the False Claims Act concerning FMCH's retail
44
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Commitments and contingencies (Continued)
pharmaceutical
business. The investigation is exploring allegations related to improper inducements to dialysis patients to fill oral prescriptions through FMCH's pharmacy service, improper billing
for returned pharmacy products and other allegations similar to those underlying the $63,700 (€53,778) settlement by DaVita Rx in Texas announced on December 14, 2017. United
States ex rel. Gallian, 2016 Civ. 00943 (N.D. Tex.). FMCH is cooperating in the Nashville investigation.
On
March 12, 2018, Vifor Fresenius Medical Care Renal Pharma Ltd. and Vifor Fresenius Medical Care Renal Pharma France S.A.S. (collectively, "VFMCRP") (see note 3), filed a
complaint for patent infringement against Lupin Atlantis Holdings SA and Lupin Pharmaceuticals Inc. (collectively, "Lupin"), and Teva Pharmaceuticals USA, Inc. ("Teva") in the
U.S. District Court for the District of Delaware (Case 1:18-cv-00390-MN, "first complaint"). The patent infringement action is in response to Lupin and Teva's filings of Abbreviated New Drug
Applications ("ANDA") with the U.S. Food and Drug Administration ("FDA") for generic versions of Velphoro®. Velphoro® is protected by patents listed in the FDA's Approved Drug
Products with Therapeutic Equivalence Evaluations, also known as the Orange Book. The complaint was filed within the 45-day period provided for under the Hatch-Waxman legislation, and triggered a stay
of FDA approval of the ANDAs for 30 months (specifically, up to July 29, 2020 for Lupin's ANDA; and August 6, 2020 for Teva's ANDA. In response to another ANDA being filed for a
generic Velphoro®, VFMCRP filed a complaint for patent infringement against Annora Pharma Private Ltd., and Hetero Labs Ltd. (collectively, "Annora"), in the U.S. District
Court for the District of Delaware on December 17, 2018. The case was settled among the parties, thus terminating the court action on August 4, 2020. On May 26, 2020, VFMCRP filed
a further complaint for patent infringement against Lupin in the U.S. District Court for the District of Delaware (Case No. 1:20-cv-00697-MN, "second complaint") in response to Lupin's ANDA for
a generic version of Velphoro® and on the basis of a newly listed patent in the Orange Book. On July 6, 2020, VFMCRP filed an additional complaint for patent infringement against
Lupin and Teva in the U.S. District Court for the District of Delaware (Case No. 1:20-cv-00911-MN) in response to the companies' ANDA for generic versions of Velphoro® and on the
basis of two newly listed patents in the Orange Book. All cases involving Lupin as defendant were settled among the parties, thus terminating the corresponding court actions on December 18,
2020. In relation to the remaining pending cases and the defendant Teva, trial took place for the first complaint between January 19 and 22, 2021, and trial is scheduled for the second
complaint for June 2022.
On
December 17, 2018, FMCH was served with a subpoena under the False Claims Act from the United States Attorney for the District of Colorado (Denver) as part of an investigation of allegations
against DaVita, Inc. involving transactions between FMCH and DaVita. The subject transactions include sales and purchases of dialysis facilities, dialysis-related products and pharmaceuticals,
including dialysis machines and dialyzers, and contracts for certain administrative services. FMCH is cooperating in the investigation.
On
June 28, 2019, certain FMCH subsidiaries filed a complaint against the United States seeking to recover monies owed to them by the United States Department of Defense under the Tricare
program, and to preclude Tricare from recouping monies previously paid. Bio-Medical Applications of Georgia, Inc., et al. v. United States, CA 19-947, United States Court of Federal Claims.
Tricare provides reimbursement for dialysis treatments and other medical care provided to members of the military services, their dependents and retirees. The litigation challenges unpublished
administrative actions by Tricare administrators reducing the rate of compensation paid for dialysis treatments provided to Tricare beneficiaries based on a recasting or "crosswalking" of codes used
and followed in
invoicing without objection for many years. Tricare administrators have acknowledged the unpublished administrative action and declined to change or abandon it. On July 8, 2020, the U.S.
government filed its answer (and confirmed their position). The parties will proceed to discovery. The court has not yet set a date for trial in this matter. FMCH has imposed a constraint on revenue
otherwise recognized from the Tricare program that it believes, in consideration of facts currently known, sufficient to account for the risk of this litigation.
45
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Commitments and contingencies (Continued)
On
August 21, 2020, FMCH was served with a subpoena from the United States Attorney for the District of Massachusetts requesting information and documents related to urgent care centers that
FMCH owned, operated, or controlled as part of its ChoiceOne and Medspring urgent care operations prior to its divestiture of and exit from that line of business in 2018. The subpoena appears to be
related to an ongoing investigation of alleged upcoding in the urgent care industry, which has resulted in certain published settlements under the federal False Claims Act. FMCH is cooperating in the
investigation.
On
March 25, 2021, FMCH received a grand jury subpoena issued from the United States District Court for the Northern District of Texas (Dallas). The subpoena seeks documents comprising
communications between employees of FMCH and DaVita and partially overlaps in content the 2018 Denver subpoena. The Dallas subpoena is part of a separate investigation by the Anti-Trust Division of
the Department of Justice into possible employee "no poaching" and similar agreements to refrain from competition and is related to the indictment in United States v. Surgical
Care Affiliates, 3:2021-Cr-0011 (N.D. Tex.). The unnamed co-conspirators described in the Surgical Care Affiliates indictment do
not include FMCH, the Company, or any of their employees. FMCH is cooperating in the investigation.
From
time to time, the Company is a party to or may be threatened with other litigation or arbitration, claims or assessments arising in the ordinary course of its business. Management regularly
analyzes current information including, as applicable, the Company's defenses and insurance coverage and, as necessary, provides accruals for probable liabilities for the eventual disposition of these
matters.
The
Company, like other health care providers, insurance plans and suppliers, conducts its operations under intense government regulation and scrutiny. It must comply with regulations which relate to
or govern the safety and efficacy of medical products and supplies, the marketing and distribution of such products, the operation of manufacturing facilities, laboratories, dialysis clinics and other
health care facilities, and environmental and occupational health and safety. With respect to its development, manufacture, marketing and distribution of medical products, if such compliance is not
maintained, the Company could be subject to significant adverse regulatory actions by the FDA and comparable regulatory authorities outside the U.S. These regulatory actions could include warning
letters or other enforcement notices from the FDA, and/or comparable foreign regulatory authority which may require the Company to expend significant time and resources in order to implement
appropriate corrective actions. If the Company does not address matters raised in warning letters or other enforcement notices to the satisfaction of the FDA and/or comparable regulatory authorities
outside the U.S., these regulatory authorities could take additional actions, including product recalls, injunctions against the distribution of products or operation of manufacturing plants, civil
penalties, seizures of the Company's products and/or criminal prosecution. FMCH is currently engaged in remediation efforts with respect to one pending FDA warning letter. The Company must also comply
with the laws of the United States, including the federal Anti-Kickback Statute, the federal False Claims Act, the federal Stark Law, the
federal Civil Monetary Penalties Law and the federal Foreign Corrupt Practices Act as well as other federal and state fraud and abuse laws. Applicable laws or regulations may be amended, or
enforcement agencies or courts may make interpretations that differ from the Company's interpretations or the manner in which it conducts its business. Enforcement has become a high priority for the
federal government and some states. In addition, the provisions of the False Claims Act authorizing payment of a portion of any recovery to the party bringing the suit encourage private plaintiffs to
commence whistleblower actions. By virtue of this regulatory environment, the Company's business activities and practices are subject to extensive review by regulatory authorities and private parties,
and continuing audits, subpoenas, other inquiries, claims and litigation relating to the Company's compliance with applicable laws and regulations. The Company may not always be aware that an inquiry
or action has begun, particularly in the case of whistleblower actions, which are initially filed under court seal.
The
Company operates many facilities and handles the personal data ("PD") of its patients and beneficiaries throughout the United States and other parts of the world and engages with other business
46
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Commitments and contingencies (Continued)
associates
to help it carry out its health care activities. In such a decentralized system, it is often difficult to maintain the desired level of oversight and control over the thousands of
individuals employed by many affiliated companies and its business associates. On occasion, the Company or its business associates may experience a breach under the Health Insurance Portability and
Accountability Act Privacy Rule and Security Rules, the EU's General Data Protection Regulation and or other similar laws ("Data Protection Laws") when there has been impermissible use, access, or
disclosure of unsecured PD or when the Company or its business associates neglect to implement the required administrative, technical and physical safeguards of its electronic systems and devices, or
a data breach that results in impermissible use, access or disclosure of personal identifying information of its employees, patients and beneficiaries. On those occasions, the Company must comply with
applicable breach notification requirements.
The
Company relies upon its management structure, regulatory and legal resources, and the effective operation of its compliance program to direct, manage and monitor the activities of its employees.
On occasion, the Company may identify instances where employees or other agents deliberately, recklessly or inadvertently contravene the Company's policies or violate applicable law. The actions of
such persons may subject the Company and its subsidiaries to liability under the Anti-Kickback Statute, the Stark Law, the False Claims Act, Data Protection Laws, the Health Information Technology for
Economic and Clinical Health Act and the Foreign Corrupt Practices Act, among other laws and comparable state laws or laws of other countries.
Physicians,
hospitals and other participants in the health care industry are also subject to a large number of lawsuits alleging professional negligence, malpractice, product liability, worker's
compensation or related claims, many of which involve large claims and significant defense costs. The Company has been and is currently subject to these suits due to the nature of its business and
expects that those types of lawsuits may continue. Although the Company maintains insurance at a level which it believes to be prudent, it cannot assure that the coverage limits will be adequate or
that insurance will cover all asserted claims. A successful claim against the Company or any of its subsidiaries in excess of insurance coverage could have a material adverse effect upon it and the
results of its operations. Any claims, regardless of their merit or eventual outcome, could have a material adverse effect on the Company's reputation and business.
The
Company has also had claims asserted against it and has had lawsuits filed against it relating to alleged patent infringements or businesses that it has acquired or divested. These claims and
suits relate both to operation of the businesses and to the acquisition and divestiture transactions. The Company has, when appropriate, asserted its own claims, and claims for indemnification. A
successful claim against the Company or any of its subsidiaries could have a material adverse effect upon its business, financial condition, and the results of its operations. Any claims, regardless
of their merit or eventual outcome, could have a material adverse effect on the Company's reputation and business.
In
Germany, the tax audits for the years 2006 through 2009 have been substantially completed. The German tax authorities have indicated a re-qualification of dividends received in connection with
intercompany mandatorily redeemable preferred shares into fully taxable interest payments for these and subsequent years until 2013. The Company has defended its position and will avail itself of
appropriate remedies. The Company is also subject to ongoing and future tax audits in the U.S., Germany and other jurisdictions in the ordinary course of business. Tax authorities routinely pursue
adjustments to the Company's tax returns and disallowances of claimed tax deductions. When appropriate, the Company defends these adjustments and disallowances and asserts its own claims. A successful
tax related claim against the Company or any of its subsidiaries could have a material adverse effect upon its business, financial condition and results of operations.
Other
than those individual contingent liabilities mentioned above, the current estimated amount of the Company's other known individual contingent liabilities is immaterial.
47
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements
(unaudited)
(in THOUS, except share and per share
data)
10. Financial instruments
The following tables show the carrying amounts and fair values of the Company's financial instruments at March 31, 2021 and December 31, 2020:
Carrying amount and fair value of financial instruments
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
|
|
|
|
|
Fair value
|
|
|
|
|
|
|
|
|
|
Not
classified
|
|
|
|
March 31, 2021
|
|
Amortized cost
|
|
FVPL
|
|
FVOCI
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Cash and cash equivalents(1)
|
|
|
836,431
|
|
|
237,047
|
|
|
|
|
|
|
|
|
1,073,478
|
|
|
236,898
|
|
|
149
|
|
|
|
|
Trade accounts and other receivables from unrelated parties
|
|
|
3,668,560
|
|
|
|
|
|
|
|
|
72,153
|
|
|
3,740,713
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related parties
|
|
|
153,437
|
|
|
|
|
|
|
|
|
|
|
|
153,437
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
1,552
|
|
|
1,552
|
|
|
|
|
|
1,552
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
11,613
|
|
|
|
|
|
|
|
|
11,613
|
|
|
|
|
|
11,613
|
|
|
|
|
Equity investments
|
|
|
|
|
|
174,117
|
|
|
76,132
|
|
|
|
|
|
250,249
|
|
|
18,484
|
|
|
60,908
|
|
|
170,857
|
|
Debt securities
|
|
|
|
|
|
68,709
|
|
|
287,240
|
|
|
|
|
|
355,949
|
|
|
350,792
|
|
|
5,157
|
|
|
|
|
Other financial assets
|
|
|
119,528
|
|
|
|
|
|
|
|
|
121,574
|
|
|
241,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current assets
|
|
|
119,528
|
|
|
254,439
|
|
|
363,372
|
|
|
123,126
|
|
|
860,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
4,777,956
|
|
|
491,486
|
|
|
363,372
|
|
|
195,279
|
|
|
5,828,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to unrelated parties
|
|
|
635,422
|
|
|
|
|
|
|
|
|
|
|
|
635,422
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties
|
|
|
105,446
|
|
|
|
|
|
|
|
|
|
|
|
105,446
|
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
1,140,625
|
|
|
|
|
|
|
|
|
|
|
|
1,140,625
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
7,100,745
|
|
|
|
|
|
|
|
|
|
|
|
7,100,745
|
|
|
5,892,832
|
|
|
1,416,577
|
|
|
|
|
Lease liabilities
|
|
|
|
|
|
|
|
|
|
|
|
4,659,114
|
|
|
4,659,114
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
4,471
|
|
|
4,471
|
|
|
|
|
|
4,471
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
22,027
|
|
|
|
|
|
|
|
|
22,027
|
|
|
|
|
|
22,027
|
|
|
|
|
Variable payments outstanding for acquisitions
|
|
|
|
|
|
64,900
|
|
|
|
|
|
|
|
|
64,900
|
|
|
|
|
|
|
|
|
64,900
|
|
Put option liabilities
|
|
|
|
|
|
|
|
|
|
|
|
924,532
|
|
|
924,532
|
|
|
|
|
|
|
|
|
924,532
|
|
Other financial liabilities
|
|
|
1,550,346
|
|
|
|
|
|
|
|
|
|
|
|
1,550,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current liabilities
|
|
|
1,550,346
|
|
|
86,927
|
|
|
|
|
|
929,003
|
|
|
2,566,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
10,532,584
|
|
|
86,927
|
|
|
|
|
|
5,588,117
|
|
|
16,207,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Highly
liquid short-term investments are mainly categorized in level 1 of the fair value hierarchy. Cash and cash equivalents measured at amortized cost is
not categorized.
48
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
10. Financial instruments (Continued)
Carrying amount and fair value of financial instruments
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
|
|
|
|
|
Fair value
|
|
|
|
|
|
|
|
|
|
Not
classified
|
|
|
|
December 31, 2020
|
|
Amortized cost
|
|
FVPL
|
|
FVOCI
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Cash and cash equivalents(1)
|
|
|
781,029
|
|
|
300,510
|
|
|
|
|
|
|
|
|
1,081,539
|
|
|
300,367
|
|
|
143
|
|
|
|
|
Trade accounts and other receivables from unrelated parties
|
|
|
3,080,770
|
|
|
|
|
|
|
|
|
72,275
|
|
|
3,153,045
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related parties
|
|
|
91,438
|
|
|
|
|
|
|
|
|
|
|
|
91,438
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
1,130
|
|
|
1,130
|
|
|
|
|
|
1,130
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
5,367
|
|
|
|
|
|
|
|
|
5,367
|
|
|
|
|
|
5,367
|
|
|
|
|
Equity investments
|
|
|
|
|
|
191,739
|
|
|
56,911
|
|
|
|
|
|
248,650
|
|
|
11,911
|
|
|
48,221
|
|
|
188,518
|
|
Debt securities
|
|
|
|
|
|
103,387
|
|
|
297,954
|
|
|
|
|
|
401,341
|
|
|
396,392
|
|
|
4,949
|
|
|
|
|
Other financial assets
|
|
|
195,926
|
|
|
|
|
|
|
|
|
108,830
|
|
|
304,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current assets
|
|
|
195,926
|
|
|
300,493
|
|
|
354,865
|
|
|
109,960
|
|
|
961,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
4,149,163
|
|
|
601,003
|
|
|
354,865
|
|
|
182,235
|
|
|
5,287,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to unrelated parties
|
|
|
731,993
|
|
|
|
|
|
|
|
|
|
|
|
731,993
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties
|
|
|
95,401
|
|
|
|
|
|
|
|
|
|
|
|
95,401
|
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
79,270
|
|
|
|
|
|
|
|
|
|
|
|
79,270
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
7,808,460
|
|
|
|
|
|
|
|
|
|
|
|
7,808,460
|
|
|
6,764,681
|
|
|
1,404,640
|
|
|
|
|
Lease liabilities
|
|
|
|
|
|
|
|
|
|
|
|
4,492,287
|
|
|
4,492,287
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
1,667
|
|
|
1,667
|
|
|
|
|
|
1,667
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
39,281
|
|
|
|
|
|
|
|
|
39,281
|
|
|
|
|
|
39,281
|
|
|
|
|
Variable payments outstanding for acquisitions
|
|
|
|
|
|
66,359
|
|
|
|
|
|
|
|
|
66,359
|
|
|
|
|
|
|
|
|
66,359
|
|
Put option liabilities
|
|
|
|
|
|
|
|
|
|
|
|
882,422
|
|
|
882,422
|
|
|
|
|
|
|
|
|
882,422
|
|
Other financial liabilities
|
|
|
1,537,783
|
|
|
|
|
|
|
|
|
|
|
|
1,537,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current liabilities
|
|
|
1,537,783
|
|
|
105,640
|
|
|
|
|
|
884,089
|
|
|
2,527,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
10,252,907
|
|
|
105,640
|
|
|
|
|
|
5,376,376
|
|
|
15,734,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Highly
liquid short-term investments are mainly categorized in level 1 of the fair value hierarchy. Cash and cash equivalents measured at amortized cost is
not categorized.
Derivative
and non-derivative financial instruments are categorized in the following three-tier fair value hierarchy that reflects the significance of the inputs in making the measurements.
Level 1 inputs are quoted prices in active markets. Level 2 is defined as inputs other than quoted prices in active markets that are directly or indirectly observable. Level 3 is
defined as unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. Fair value information is not provided for financial
instruments, if the carrying amount is a reasonable estimate of fair value due to the relatively short period of maturity of these instruments. Transfers between levels of the fair value hierarchy
have not occurred as of March 31, 2021 and December 31, 2020. The Company accounts for transfers at the end of the reporting period.
Derivative financial instruments
In order to manage the risk of currency exchange rate and interest rate fluctuations, the Company enters into various hedging transactions by means of
derivative instruments with highly rated financial institutions. The Company primarily enters into foreign exchange forward contracts and interest rate
49
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
10. Financial instruments (Continued)
swaps.
Derivative contracts that do not qualify for hedge accounting are utilized for economic purposes. The Company does not use financial instruments for trading purposes.
Non-derivative financial instruments
The significant methods and assumptions used for the classification and measurement of non-derivative financial instruments are as follows:
The
Company assessed its business models and the cash flow characteristics of its financial assets. The vast majority of the non-derivative financial assets are held in order to collect the
contractual cash flows. The contractual terms of the financial assets allow the conclusion that the cash flows represent payment of principle and interest only. Trade accounts and other receivables
from unrelated parties, Accounts receivable from related parties and Other financial assets are consequently measured at amortized cost.
Cash
and cash equivalents are comprised of cash funds and other short-term investments. Cash funds are measured at amortized cost. Short-term investments are highly liquid and readily convertible to
known amounts of cash. Short-term investments are measured at fair value through profit or loss ("FVPL"). The risk of changes in fair value is insignificant.
Equity
investments are not held for trading. At initial recognition the Company elected, on an instrument-by-instrument basis, to represent subsequent changes in the fair value of individual strategic
investments in OCI. If equity instruments are quoted in an active market, the fair value is based on price quotations at the period-end-date. From time to time the Company engages external valuation
firms to determine the fair value of Level 3 equity investments. The external valuation uses a discounted cash flow model, which includes significant unobservable inputs such as investment
specific forecasted financial statements, weighted average cost of capital, that reflects current market assessments as well as a terminal growth rate.
The
majority of the debt securities are held within a business model whose objective is achieving both contractual cash flows and sell the securities. The standard coupon bonds give rise on specified
dates to cash flows that are solely payments of principal and interest on the outstanding principal amount. Subsequently these financial assets have been classified as fair value through other
comprehensive income ("FVOCI"). The smaller part of debt securities does not give rise to cash flows that are solely payments of principle and interest. Consequently, these securities are measured at
FVPL. In general, most of the debt securities are quoted in an active market.
Long-term
debt is initially recognized at its fair value. The fair values of major long-term debt are calculated on the basis of market information. Liabilities for which market quotes are available
are measured using these quotes. The fair values of the other long-term debt are calculated at the present value of the respective future cash flows. To determine these present values, the prevailing
interest rates and credit spreads for the Company as of the balance sheet date are used.
Variable
payments outstanding for acquisitions are recognized at their fair value. The estimation of the individual fair values is based on the key inputs of the arrangement that determine the future
contingent payment as well as the Company's expectation of these factors. The Company assesses the likelihood and timing of achieving the relevant objectives. The underlying assumptions are reviewed
regularly.
Put
option liabilities are recognized at the present value of the exercise price of the option. The exercise price of the option is generally based on fair value. The methodology the Company uses to
estimate the fair values assumes the greater of net book value or a multiple of earnings, based on historical earnings, development stage of the underlying business and other factors. From time to
time the Company engages external valuation firms for the valuation of the put options. The external valuation estimates the fair values using a combination of discounted cash flows and a multiple of
earnings and/or revenue. The put option liabilities are discounted at a pre-tax discount rate that reflects current market assessments of the
50
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
10. Financial instruments (Continued)
time
value of money and the risks specific to the liability. The estimated fair values of these put options can also fluctuate, and the discounted cash flows as well as the implicit multiple of
earnings and/or revenue at which these obligations may ultimately be settled could vary significantly from the Company's current estimates depending upon market conditions. For the purpose of
analyzing the impact of changes in unobservable inputs on the fair value measurement of put option liabilities, the Company assumes an increase on earnings of 10% compared to the actual estimation as
of the balance sheet date. The corresponding increase in fair value of €67,017 is then compared to the total liabilities and the shareholder's equity of the Company. This analysis
shows that an increase of 10% in the relevant earnings would have an effect of less than 1% on the total liabilities and less than 1% on the shareholder's equity of the Company.
Following
is a roll forward of Level 3 financial instruments at March 31, 2021 and December 31, 2020:
Reconciliation from beginning to ending balance of level 3 financial instruments
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
Equity investments
|
|
Variable
payments
outstanding for
acquisitions
|
|
Put option
liabilities
|
|
Equity
investments
|
|
Variable
payments
outstanding for
acquisitions
|
|
Put option
liabilities
|
|
Beginning balance at January 1,
|
|
|
188,518
|
|
|
66,359
|
|
|
882,422
|
|
|
183,054
|
|
|
89,677
|
|
|
934,425
|
|
Increase
|
|
|
|
|
|
4,846
|
|
|
30,177
|
|
|
|
|
|
17,253
|
|
|
51,388
|
|
Decrease
|
|
|
|
|
|
(2,198
|
)
|
|
(8,649
|
)
|
|
|
|
|
(35,764
|
)
|
|
(99,877
|
)
|
Gain / loss recognized in profit or loss(1)
|
|
|
(25,729
|
)
|
|
(4,419
|
)
|
|
|
|
|
22,489
|
|
|
(1,996
|
)
|
|
|
|
Gain / loss recognized in equity
|
|
|
|
|
|
|
|
|
(17,675
|
)
|
|
|
|
|
|
|
|
73,993
|
|
Foreign currency translation and other changes
|
|
|
8,068
|
|
|
312
|
|
|
38,257
|
|
|
(17,025
|
)
|
|
(2,811
|
)
|
|
(77,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at March 31, and December 31,
|
|
|
170,857
|
|
|
64,900
|
|
|
924,532
|
|
|
188,518
|
|
|
66,359
|
|
|
882,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Includes
realized and unrealized gains / losses.
11. Segment and corporate information
The Company's operating segments are the North America Segment, the EMEA Segment, the Asia-Pacific Segment and the Latin America Segment. The operating segments are determined based upon how the
Company manages its businesses with geographical responsibilities. All segments are primarily engaged in providing health care services and the distribution of products and equipment for the treatment
of ESKD and other extracorporeal therapies.
Management
evaluates each segment using measures that reflect all of the segment's controllable revenues and expenses. With respect to the performance of business operations, management believes that
the most appropriate measures are revenue and operating income. The Company does not include income taxes as it believes taxes are outside the segments' control. Financing is a corporate function,
which the Company's segments do not control. Therefore, the Company does not include interest expense relating to financing as a segment measurement. Similarly, the Company does not allocate certain
costs, which relate primarily to certain headquarters' overhead charges, including accounting and finance as well as certain legal costs, because the Company believes that these costs are also not
within the control of the individual segments. Production of products, production asset management, quality and supply chain management as well as procurement related to production are centrally
managed. Products transferred to the segments are transferred at cost; therefore, no internal profit is generated. The associated internal revenue for the product transfers and their elimination are
recorded as corporate activities. Capital expenditures for
51
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
11. Segment and corporate information (Continued)
production
are based on the expected demand of the segments and consolidated profitability considerations. The Company's global research and development as well as its Global Medical Office, which
seeks to standardize medical treatments and clinical processes within the Company, are also centrally managed. These corporate activities ("Corporate") do not fulfill the definition of a segment
according to IFRS 8, Operating Segments. In addition, certain revenues, investments and intangible assets, as well as any related expenses, are not allocated to a segment but are accounted for
as Corporate.
Information
pertaining to the Company's segment and Corporate activities for the three months ended March 31, 2021 and 2020 is set forth below:
Segment and corporate information
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
Segment
|
|
EMEA Segment
|
|
Asia-
Pacific
Segment
|
|
Latin
America
Segment
|
|
Total
Segment
|
|
Corporate(1)
|
|
Total
|
|
Three months ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from health care services
|
|
|
2,550,966
|
|
|
332,461
|
|
|
227,813
|
|
|
114,679
|
|
|
3,225,919
|
|
|
7,217
|
|
|
3,233,136
|
|
Revenue from health care products
|
|
|
251,804
|
|
|
319,011
|
|
|
230,748
|
|
|
43,785
|
|
|
845,348
|
|
|
4,272
|
|
|
849,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with customers
|
|
|
2,802,770
|
|
|
651,472
|
|
|
458,561
|
|
|
158,464
|
|
|
4,071,267
|
|
|
11,489
|
|
|
4,082,756
|
|
Other revenue external customers
|
|
|
96,059
|
|
|
18,134
|
|
|
12,625
|
|
|
551
|
|
|
127,369
|
|
|
|
|
|
127,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
2,898,829
|
|
|
669,606
|
|
|
471,186
|
|
|
159,015
|
|
|
4,198,636
|
|
|
11,489
|
|
|
4,210,125
|
|
Intersegment revenue
|
|
|
11,175
|
|
|
|
|
|
56
|
|
|
|
|
|
11,231
|
|
|
(11,231
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
2,910,004
|
|
|
669,606
|
|
|
471,242
|
|
|
159,015
|
|
|
4,209,867
|
|
|
258
|
|
|
4,210,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
398,503
|
|
|
79,890
|
|
|
85,296
|
|
|
6,640
|
|
|
570,329
|
|
|
(96,076
|
)
|
|
474,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(76,072
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
398,181
|
|
Depreciation and amortization
|
|
|
(239,783
|
)
|
|
(50,344
|
)
|
|
(25,662
|
)
|
|
(8,941
|
)
|
|
(324,730
|
)
|
|
(63,176
|
)
|
|
(387,906
|
)
|
Impairment loss
|
|
|
(296
|
)
|
|
|
|
|
|
|
|
|
|
|
(296
|
)
|
|
|
|
|
(296
|
)
|
Income (loss) from equity method investees
|
|
|
27,391
|
|
|
(406
|
)
|
|
726
|
|
|
45
|
|
|
27,756
|
|
|
|
|
|
27,756
|
|
Total assets
|
|
|
21,947,496
|
|
|
3,840,853
|
|
|
2,838,318
|
|
|
737,386
|
|
|
29,364,053
|
|
|
3,794,486
|
|
|
33,158,539
|
|
thereof investment in equity method investees
|
|
|
390,805
|
|
|
206,985
|
|
|
103,171
|
|
|
25,634
|
|
|
726,595
|
|
|
|
|
|
726,595
|
|
Additions of property, plant and equipment, intangible assets and right-of-use assets
|
|
|
220,534
|
|
|
48,576
|
|
|
20,790
|
|
|
12,744
|
|
|
302,644
|
|
|
57,625
|
|
|
360,269
|
|
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from health care services
|
|
|
2,828,946
|
|
|
341,107
|
|
|
217,840
|
|
|
120,588
|
|
|
3,508,481
|
|
|
7,091
|
|
|
3,515,572
|
|
Revenue from health care products
|
|
|
273,331
|
|
|
331,387
|
|
|
214,096
|
|
|
46,674
|
|
|
865,488
|
|
|
4,874
|
|
|
870,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with customers
|
|
|
3,102,277
|
|
|
672,494
|
|
|
431,936
|
|
|
167,262
|
|
|
4,373,969
|
|
|
11,965
|
|
|
4,385,934
|
|
Other revenue external customers
|
|
|
83,946
|
|
|
6,252
|
|
|
10,958
|
|
|
706
|
|
|
101,862
|
|
|
|
|
|
101,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
3,186,223
|
|
|
678,746
|
|
|
442,894
|
|
|
167,968
|
|
|
4,475,831
|
|
|
11,965
|
|
|
4,487,796
|
|
Intersegment revenue
|
|
|
7,175
|
|
|
1,313
|
|
|
4
|
|
|
121
|
|
|
8,613
|
|
|
(8,613
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
3,193,398
|
|
|
680,059
|
|
|
442,898
|
|
|
168,089
|
|
|
4,484,444
|
|
|
3,352
|
|
|
4,487,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
463,411
|
|
|
101,054
|
|
|
76,809
|
|
|
6,857
|
|
|
648,131
|
|
|
(93,001
|
)
|
|
555,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(104,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
450,911
|
|
Depreciation and amortization
|
|
|
(256,629
|
)
|
|
(45,975
|
)
|
|
(25,959
|
)
|
|
(8,712
|
)
|
|
(337,275
|
)
|
|
(62,399
|
)
|
|
(399,674
|
)
|
Impairment loss
|
|
|
(999
|
)
|
|
(14
|
)
|
|
|
|
|
|
|
|
(1,013
|
)
|
|
|
|
|
(1,013
|
)
|
Income (loss) from equity method investees
|
|
|
21,050
|
|
|
(1,662
|
)
|
|
950
|
|
|
71
|
|
|
20,409
|
|
|
|
|
|
20,409
|
|
Total assets
|
|
|
22,761,436
|
|
|
3,824,691
|
|
|
2,774,610
|
|
|
872,778
|
|
|
30,233,515
|
|
|
3,838,912
|
|
|
34,072,427
|
|
thereof investment in equity method investees
|
|
|
425,139
|
|
|
166,369
|
|
|
100,723
|
|
|
24,911
|
|
|
717,142
|
|
|
|
|
|
717,142
|
|
Additions of property, plant and equipment, intangible assets and right-of-use assets
|
|
|
359,866
|
|
|
45,173
|
|
|
45,290
|
|
|
17,167
|
|
|
467,496
|
|
|
75,785
|
|
|
543,281
|
|
(1) Includes
intersegment consolidation adjustments.
12. Events occurring after the balance sheet date
No significant activities have taken place subsequent to the balance sheet date March 31, 2021 that have a material impact on the key figures and earnings presented. Currently, there are no
significant changes in the Company's structure, management, legal form or personnel.
52
Table of Contents
Quantitative and qualitative disclosures about market risk
The information in note 10 of the notes to consolidated financial statements (unaudited), presented elsewhere in this report is incorporated by this
reference.
53
Table of Contents
Controls and procedures
The Company is a "foreign private issuer" within the meaning of Rule 3b-4(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As such, the Company is not required to file quarterly reports with the Securities and Exchange Commission and is required to provide an evaluation of the effectiveness of its disclosure
controls and procedures, to disclose significant changes in its internal control over financial reporting and to provide certifications of its Chief Executive Officer and Chief Financial Officer under
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 only in its Annual Report on Form 20-F. The Company furnishes quarterly financial information to the Securities and Exchange
Commission (the "Commission") and such certifications under cover of Form 6-K on a voluntary basis and pursuant to the provisions of the Company's pooling agreement entered into for the benefit
of the public holders of our shares. In connection with such voluntary reporting, the Company's management, including the Chief Executive Officer and the Chief Financial Officer of the Company's
General Partner, has conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report, of the type contemplated by
Securities Exchange Act Rule 13a-15. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded in connection with the furnishing of this report, that the
Company's disclosure controls and procedures are designed to ensure that the information the Company is required to disclose in the reports filed or furnished under the Act is recorded, processed,
summarized and reported within the time periods specified in the Commission's rules and forms and are effective to ensure that the information the Company is required to disclose in its reports is
accumulated and communicated to the General Partner's Management Board, including the General Partner's Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure. During the past fiscal quarter, there have been no significant changes in internal controls, or in factors that could significantly affect internal controls.
On
March 29, 2019, the Company entered into a non-prosecution agreement with the DOJ and a separate agreement with the SEC intended to resolve fully and finally the government's claims against
the Company arising from the investigations, described in note 9 of the notes to the consolidated financial statements (unaudited) presented elsewhere in this Report. The Company continues to
implement enhancements to its anti-corruption compliance program, including internal controls related to compliance with international anti-bribery laws. The Company continues to be fully committed to
compliance with the Foreign Corrupt Practices Act and other applicable anti-bribery laws.
In
2015, the Company self-reported to the German prosecutor conduct with a potential nexus to Germany and continues to cooperate with government authorities in Germany in their review of the conduct
that prompted the Company's and United States government investigations.
Since
2012, the Company has made and continues to make further significant investments in its compliance and financial controls and in its compliance, legal and financial organizations. The Company's
remedial actions included separation from those employees responsible for the above-mentioned conduct. The Company is dealing with post-FCPA review matters on various levels. The Company continues to
be fully committed to compliance with the FCPA and other applicable anti-bribery laws.
54
Table of Contents
OTHER INFORMATION
Legal proceedings
The information in note 9 of the notes to consolidated financial statements (unaudited), presented elsewhere in this report is incorporated by this
reference.
55
Table of Contents
Exhibits
|
|
|
|
Exhibit No.
|
|
|
|
1.2
|
|
Convenience translation of the Articles of Association (Satzung) of the registrant, as amended through March 24, 2021 (filed herewith).
|
|
31.1
|
|
Certification of Chief Executive Officer and Chairman of the Management Board of the Company's General Partner Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
Certification of Chief Financial Officer and member of the Management Board of the Company's General Partner Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
|
Certification of Chief Executive Officer and Chairman of the Management Board of the Company's General Partner and Chief Financial Officer and member of the Management Board of the Company's General Partner Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (this exhibit accompanies this report as required by the Sarbanes-Oxley Act of 2002 and is not to be deemed "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended).
|
|
101
|
|
The following financial statements as of and for the three-months periods ended March 31, 2021 from FMC-AG & Co. KGaA's Report on Form 6-K for the month of May 2021, formatted in XBRL (eXtensible Business Reporting Language):
(i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Shareholders' Equity
and (vi) Notes to Consolidated Financial Statements.
|
56
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DATE:
May 6, 2021
|
|
|
|
|
|
|
|
|
FRESENIUS MEDICAL CARE AG & Co. KGaA a partnership limited by shares, represented by:
|
|
|
FRESENIUS MEDICAL CARE MANAGEMENT AG, its General Partner
|
|
|
By:
|
|
/s/ RICE POWELL
|
|
|
|
|
Name:
|
|
Rice Powell
|
|
|
|
|
Title:
|
|
Chief Executive Officer and Chairman of the Management Board of the General Partner
|
|
|
By:
|
|
/s/ HELEN GIZA
|
|
|
|
|
Name:
|
|
Helen Giza
|
|
|
|
|
Title:
|
|
Chief Financial Officer and member of the Management Board of the General Partner
|
57
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