Fresenius SE & Co. KGaA

Quarterly Report • Aug 6, 2018

Quarterly Financial Report of Fresenius Group

applying International Financial Reporting Standards (IFRS)

1st Half and 2nd Quarter 2018

TABLE OF CONTENTS

3 Fresenius Group fi gures at a glance

5 Fresenius share

6 Management Report

• 6 Health care industry
• 6 Results of operations, fi nancial position, assets and liabilities
• 6 Sales
• 7 Earnings
• 8 Reconciliation
• 9 Investments
• 9 Cash fl ow
• 10 Asset and liability structure
• 10 Annual General Meeting 2018
• 12 Business segments
• 12 Fresenius Medical Care
• 14 Fresenius Kabi
• 16 Fresenius Helios
• 17 Fresenius Vamed
• 18 Employees
• 18 Research and development
• 18 Opportunities and risk report
• 19 Rating
• 19 Outlook 2018

21 Consolidated fi nancial statements

• 21 Consolidated statement of income
• 21 Consolidated statement of comprehensive income
• 22 Consolidated statement of fi nancial position
• 23 Consolidated statement of cash fl ows
• 24 Consolidated statement of changes in equity
• 26 Consolidated segment reporting fi rst half of 2018
• 27 Consolidated segment reporting second quarter of 2018

28 Notes

58 Financial Calendar

FRESENIUS GROUP FIGURES AT A GLANCE

Fresenius is a global health care group providing products and services for dialysis, hospitals, and outpatient medical care. In addition, Fresenius focuses on hospital operations. We also manage projects and provide services for hospitals and other health care facilities. In 2017, Group sales were € 33.9 billion. As of June 30, 2018, more than 273,000 employees have dedicated themselves to the service of health in about 100 countries worldwide.

SALES, EARNINGS, AND CASH FLOW

€ in millions	Q2 / 2018	Q2 / 2017	Change	Change in constant currency	H1 / 2018	H1 / 2017	Change	Change in constant currency
Sales	8,382	8,532	0% 7	5% 7	16,503	16,894	- 1% 7	6% 7
EBIT 1	1,145	1,177	- 3%	2%	2,199	2,393	- 8%	- 2%
Net income 1, 2	472	459	3%	7%	922	916	1%	7%
Net income 1, 2, 3 excluding biosimilars	499	459	9%	12%	975	916	6%	12%
Earnings per share in € 1, 2	0.85	0.82	3%	7%	1.66	1.65	1%	7%
Earnings per share in € 1, 2, 3 excluding biosimilars	0.90	0.82	9%	12%	1.76	1.65	6%	12%
Operating cash fl ow	1,020	1,207	- 15%		1,256	1,683	- 25%

BALANCE SHEET AND INVESTMENTS

€ in millions	June 30, 2018	Dec. 31, 2017	Change
Total assets	54,982	53,133	3%
Non-current assets	40,695	40,529	0%
Equity 4	23,269	21,720	7%
Net debt	16,722	17,406	- 4%
Investments 5	1,217	7,130	- 83%

RATIOS

	Q2 / 2018	Q2 / 2017	H1 / 2018	H1 / 2017
EBITDA margin 1	18.0%	18.0%	17.6%	18.3%
EBIT margin 1	13.7%	13.8%	13.3%	14.2%
Depreciation and amortization in % of sales	4.3%	4.2%	4.3%	4.2%
Operating cash fl ow in % of sales	12.2%	14.1%	7.6%	10.0%
Equity ratio (June 30/ December 31)			42.3%	40.9%
Net debt / EBITDA (June 30 / December 31) 1, 6			2.80	2.84

Before special items

Net income attributable to shareholders of Fresenius SE & Co. KGaA

Before expenditures for further development of biosimilars business Equity including noncontrolling interest

Investments in property, plant and equipment, and intangible assets, acquisitions (six months)

6 Calculated at expected annual average exchange rates for both net debt and EBITDA; excluding effects of the Akorn and NxStage transactions

and proceeds from divestitures of Care Coordination activities; excluding further potential acquisitions; at current IFRS rules

Growth rates adjusted for IFRS 15 adoption (H1 / 17 base: € 16,624 million; Q2 / 17 base: €8,401)

INFORMATION BY BUSINESS SEGMENT

FRESENIUS MEDICAL CARE – Dialysis products, Dialysis services

€ in millions	Q2 / 2018	Q2 / 2017	Change	Change in constant currency	H1 / 2018	H1 / 2017	Change	Change in constant currency
Sales	4,214	4,471	- 6%	5% 1,2	8,189	9,019	- 9%	3%1,2
EBIT	1,401	583	140%	162% 3	1,898	1,235	54%	68%3
Net income 4	994	269	270%	303% 5	1,273	577	121%	141%5
Operating cash fl ow	656	882	- 26%		611	1,052	- 42%
Investments / Acquisitions	413	524	- 21%		818	872	- 6%
R & D expenses	38	35	7%		70	67	3%
Employees (June 30 / Dec. 31)					118,633	121,245	- 2%

FRESENIUS KABI – IV drugs, Biosimilars, Clinical nutrition, Infusion therapy, Medical devices / Transfusion technology

€ in millions	Q2 / 2018	Q2 / 2017	Change	Change in constant currency	H1 / 2018	H1 / 2017	Change	Change in constant currency
Sales	1,604	1,598	0%	6%	3,207	3,202	0%	7%
EBIT 6	289	309	- 6%	- 1% 7	557	622	- 10%	- 1% 7
Net income 6, 8	185	188	- 2%	5% 9	355	379	-6%	4% 9
Operating cash fl ow	228	203	12%		454	395	15%
Investments / Acquisitions	96	85	13%		174	152	14%
R & D expenses	129	87	48%		256	176	45%
Employees (June 30 / Dec. 31)					37,273	36,380	2%

FRESENIUS HELIOS – Hospital operations

€ in millions	Q2 / 2018	Q2 / 2017	Change	H1 / 2018	H1 / 2017	Change
Sales	2,343	2,238	5%	4,674	4,256	10%
EBIT	293	282	4%	571	537	6%
Net income 8	197	192	3%	388	373	4%
Operating cash fl ow	162	120	35%	259	304	- 15%
Investments / Acquisitions	108	101	7%	181	6,090	- 97%
Employees (June 30 / Dec. 31)				107,760	105,927	2%

FRESENIUS VAMED – Projects and services for hospitals and other health care facilities, post-acute care provider

€ in millions	Q2 / 2018	Q2 / 2017	Change	H1 / 2018	H1 / 2017	Change
Sales	266	258	3%	515	481	7%
EBIT	12	11	9%	18	17	6%
Net income 10	7	7	0%	11	11	0%
Operating cash fl ow	- 14	16	- 188%	- 56	- 28	- 100%
Investments / Acquisitions	29	4	--	37	7	--
Order intake	195	192	2%	455	412	10%
Employees (June 30 / Dec. 31)				8,938	8,667	3%

1 Growth rate adjusted for IFRS 15 implementation (Q2 / 17 base: € 4,340 million; H1 / 17 base: € 8,749 million)

2 Excluding VA agreement: Q2 / 2018: 5%; H1 / 2018: 4%

3 Adjusted for gains from divestitures of Care Coordination activities: Q2 / 2018: 4%; H1 / 2018: - 5% 4 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

• 5 Adjusted for gains from divestitures of Care Coordination activities and the effect of the U.S. Tax Reform: Q2 / 2018: 8%; H1 / 2018: 3%
• 6 Before special items

7 Before expenditures for further development of biosimilars business: Q2 / 2018: 11%; H1 / 2018: 10%

8 Net income attributable to shareholders of Fresenius SE & Co. KGaA 9 Before expenditures for further development of biosimilars business: Q2 / 2018: 19%; H1 / 2018: 17%

10 Net income attributable to shareholders of VAMED AG

FRESENIUS SHARE

The DAX index declined by 5% in the fi rst half 2018, while the Fresenius share increased by 6% over the same period.

FIRST HALF 2018

The global economy continued to show robust growth in the fi rst six months of 2018. The economic growth is driven by domestic demand in most regions of the euro zone. The economy in the euro zone is expected to grow by 2.1% this year, according to the latest ECB forecast. The ECB left its monetary policy unchanged during its June meeting.

The Federal Reserve's latest forecast projects the U.S. economy to grow by 2.8% in 2018. As expected, the U.S. Federal Reserve, raised the existing interest rates corridor by 25bps to 1.75% to 2.00% at its June meeting.

Within this economic environment, the DAX decreased by 5% in the fi rst half of 2018 to 12,306 points. The Fresenius share closed at € 68.80 on June 30, 2018. This represents an increase of 6% over the closing price of 2017.

KEY DATA OF THE FRESENIUS SHARE

	H1 / 2018	2017	Change
Number of shares (June 30 / December 31)	555,616,093	554,710,473	0%
Quarter-end quotation in €	68.80	65.07	6%
High in €	70.94	79.65	- 11%
Low in €	59.32	60.58	- 2%
Ø Trading volume (number of shares per trading day)	1,462,829	1,164,824	26%
Market capitalization, € in millions (June 30 / December 31)	38,226	36,095	6%

MANAGEMENT REPORT

After our successful start to the year, we have delivered a strong second quarter with continued healthy growth in sales and earnings. All four business segments contributed to this, and all four business segments display outstanding prospects for the future. We are therefore confirming our guidance for the remainder of the year.

FRESENIUS POSTS STRONG SECOND QUARTER AND CONFIRMS GROUP GUIDANCE – CONTINUED NET INCOME GROWTH – EBIT OUTLOOK RAISED FOR FRESENIUS KABI

	H1 / 2018	at actual rates	in constant currency
Sales	€ 16.5 bn	- 2%	6% 1
EBIT 2	€ 2,199 m	- 8%	- 2%
Net income 2, 3	€ 922 m	1%	7%
Net income 2, 3 (excluding Biosimilars)	€ 975 m	6%	12%

HEALTH CARE INDUSTRY

The health care sector is one of the world's largest industries. It is relatively insensitive to economic fl uctuations compared to other sectors and has posted above-average growth over the past years.

The main growth factors are rising medical needs deriving from aging populations, the growing number of chronically ill and multimorbid patients, stronger demand for innovative products and therapies, advances in medical technology and the growing health consciousness, which increases the demand for health care services and facilities.

In the emerging countries, drivers are the expanding availability and correspondingly greater demand for basic health care and increasing national incomes and hence higher spending on health care.

Health care structures are being reviewed and cost-cutting potential identifi ed in order to contain the steadily rising health care expenditures. However, such measures cannot compensate for the cost pressure. Market-based elements

are increasingly being introduced into the health care system to create incentives for cost- and quality-conscious behavior. Overall treatment costs shall be reduced through improved quality standards. In addition, ever-greater importance is being placed on disease prevention and innovative reimbursement models linked to treatment quality standards.

RESULTS OF OPERATIONS, FINANCIAL POSITION, ASSETS AND LIABILITIES

SALES

Group sales decreased by 1% 1 (increased by 6% 1 in constant currency) to € 16,503 million (H1 / 2017: € 16,894 million). Organic sales growth was 4%. Acquisitions / divestitures contributed net 2% to growth. Negative currency translation effects (7%) were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro. In Q2 / 2018, Group sales were nearly unchanged 1 (increased 5%1 in constant currency) at € 8,382 million (Q2 / 2017: € 8,532 million). Organic sales growth was 4%. Acquisitions / divestitures contributed net 1% to growth.

¹ Growth rates adjusted for IFRS 15 adoption (H1 / 17 base: € 16,624 million; Q2 / 17 base: € 8,401 million)

Before special items (i.e., expenses related to the Akorn transaction, gains related to divestitures of Care Coordination activities Net income attributable to shareholders of Fresenius SE & Co. KGaA

EARNINGS

€ in millions	Q2 / 2018	Q2 / 2017	H1 / 2018	H1 / 2017
EBIT 1	1,145	1,177	2,199	2,393
Net income 2	652	450	1,092	907
Net income (before special items) 2	472	459	922	916
Earnings per share 2	1.18	0.81	1.97	1.64
Earnings per share (before special items) 2	0.85	0.82	1.66	1.65

EARNINGS

Group EBITDA1 decreased by 6% (0% in constant currency) to € 2,912 million (H1 / 2017: € 3,098 million). Group EBIT ¹ decreased by 8% (- 2% in constant currency) to € 2,199 million (H1 / 2017: € 2,393 million). The prior-year period saw the compensation for treatments of U.S. war veterans ("VA agreement") contributing € 91 million as a one-time effect. Excluding the VA agreement, EBIT1 increased by 2% in constant currency in H1/2018. The EBIT margin 1 was 13.3% (13.1% before IFRS 15; H1 / 17: 14.2%). Group EBIT ¹ before expenses for the further development of the biosimilars business decreased by 5% (increased 1% in constant currency) to € 2,271 million. Group EBIT ¹ excluding the VA agreement and expenses for the biosimilars business increased by 5% in constant currency.

In Q2 / 2018, Group EBIT1 decreased by 3% (increased 2% in constant currency) to € 1,145 million (Q2 / 2017: € 1,177 million), with an EBIT margin 1 of 13.7% (13.4% before IFRS 15; Q2 / 2017: 13.8%). Group EBIT ¹ excluding expenses for the biosimilars business increased by 5% in constant currency.

Group net interest 1 was - € 297 million (H1 / 2017: - € 326 million). The decrease is mainly driven by currency effects and reduced interest following refi nancing activities.

The decrease of the Group tax rate before special items to 22.3% (H1 / 2017: 28.5%) was mainly due to the U.S. tax reform. In Q2 / 2018, the Group tax rate 1 was 23.4% (Q2 / 2017: 27.9%).

SALES BY REGION

€ in millions	H1 / 2018	H1 / 2017	Change at actual rates	Currency trans lations effects	Change at constant rates	Organic growth	Acquisitions / divestitures	% of total sales
North America	6,850	7,480 3	- 8%	- 10%	2%	2%	0%	42%
Europe	7,212	6,741	7%	- 1%	8%	3%	5%	44%
Asia-Pacifi c	1,548	1,516	2%	- 7%	9%	7%	2%	9%
Latin America	667	701	- 5%	- 19%	14%	12%	2%	4%
Africa	226	186	22%	- 2%	24%	24%	0%	1%
Total	16,503	16,624 3	- 1%	- 7%	6%	4%	2%	100%

SALES BY BUSINESS SEGMENT

€ in millions	H1 / 2018	H1 / 2017	Change at actual rates	Currency trans lations effects	Change at constant rates	Organic growth	Acquisitions / divestitures	% of total sales
Fresenius Medical Care	8,189	8,749 3	- 6%	- 9%	3%	3%	0%	50%
Fresenius Kabi	3,207	3,202	0%	- 7%	7%	7%	0%	19%
Fresenius Helios	4,674	4,256	10%	0%	10%	4%	6%	28%
Fresenius Vamed	515	481	7%	- 1%	8%	5%	3%	3%
Total	16,503	16,624 3	- 1%	- 7%	6%	4%	2%	100%

Before special items

• Net income attributable to shareholders of Fresenius SE & Co. KGaA
• 2017 base adjusted for IFRS 15 adoption (deduction of €270 million at Fresenius Medical Care)

Noncontrolling interest 1 was € 556 million (H1 / 2017: € 562 million), of which 95% was attributable to the noncon trolling interest in Fresenius Medical Care.

Group net income 1, 2 increased by 1% (7% in constant currency) to € 922 million (H1 / 2017: € 916 million). Earnings per share 1,2 increased by 1% (7% in constant currency) to € 1.66 (H1 / 2017: € 1.65). In Q2 / 2018, Group net income 1,2 increased by 3% (7% in constant currency) to € 472 million (Q2 / 2017: € 459 million). Earnings per share 1,2 increased by 3% (7% in constant currency) to € 0.85 (Q2 / 2017: € 0.82).

Group net income1, 2 before expenses for the further development of the biosimilars business increased by 6% (12% in constant currency) to € 975 million (H1 / 2017: € 916 million). Earnings per share 1,2 before expenses for the further development of the biosimilars business increased by 6% (12% in constant currency) to € 1.76 (H1 / 2017: € 1.65). In Q2 / 2018, Group net income 1,2 before expenses for the further development of the biosimilars business increased by 9% (12% in constant currency) to € 499 million (Q2 / 2017: € 459 million). Earnings per share 1,2 before expenses for the further development of the biosimilars business increased by 9% (12% in constant currency) to € 0.90 (Q2 / 2017: € 0.82).

Group net income 2 after special items increased by 20% (29% in constant currency) to € 1,092 million (H1 / 2017: € 907 million), mainly due to a gains related to divestitures in Care Cordination activities at Fresenius Medical Care. Earnings per share 2 after special items increased by 20% (29% in constant currency) to € 1.97 (H1 / 2017: € 1.64). In

RECONCILIATION

	Q2 / 2018
€ in millions	Before special items and before expenditures for further development of biosimilars business	Expenditures for further development of biosimilars Before Transaction-related business special items effects (Akorn)		Gains related to divestitures of Care Coordination activities	According to IFRS
Sales	8,382		8,382			8,382
EBIT	1,182	- 37	1,145	- 35	833	1,943
Net interest	- 149	- 2	- 151	- 4	0	- 155
Net income before taxes	1,033	- 39	994	- 39	833	1,788
Income taxes	- 245	12	- 233	8	- 147	- 372
Net income	788	- 27	761	- 31	686	1,416
Less noncontrolling interest	- 289		- 289		- 475	- 764
Net income attributable to share holders of Fresenius SE & Co. KGaA	499	- 27	472	- 31	211	652

	H1 / 2018
€ in millions	Before special items and before expenditures for further development of biosimilars business	Expenditures for further development of biosimilars business	Before special items	Transaction-related effects (Akorn)	Gains related to divestitures of Care Coordination activities	According to IFRS
Sales	16,503		16,503			16,503
EBIT	2,271	- 72	2,199	- 40	820	2,979
Net interest	- 293	- 4	- 297	- 7	0	- 304
Net income before taxes	1,978	- 76	1,902	- 47	820	2,675
Income taxes	- 447	23	- 424	10	- 147	- 561
Net income	1,531	- 53	1,478	- 37	673	2,114
Less noncontrolling interest	- 556		- 556		- 466	- 1,022
Net income attributable to share holders of Fresenius SE & Co. KGaA	975	- 53	922	- 37	207	1,092

Special items are reported in the Group Corporate / Other segment.

INVESTMENTS BY BUSINESS SEGMENT
---------------------------------	--	--

€ in millions	H1 / 2018	H1 / 2017	thereof property, plant and equipment	thereof acquisitions	Change	% of total
Fresenius Medical Care	818	872	466	352	- 6%	67%
Fresenius Kabi	174	152	173	1	14%	14%
Fresenius Helios	181	6,090	170	11	- 97%	15%
Fresenius Vamed	37	7	15	22	--	3%
Corporate / Other	7	9	7	0	- 22%	1%
Total	1,217	7,130	831	386	- 83%	100%

Q2 / 2018, Group net income 1 after special items increased by 45% (54% in constant currency) to € 652 million (Q2 / 2017: € 450 million). Earnings per share 1 after special items increased by 45% (54% in constant currency) to € 1.18 (Q2 / 2017: € 0.81).

RECONCILIATION

Consolidated results for Q2 / H1 include special items related to the Akorn transaction. These are mainly transaction costs in the form of legal and consulting fees as well as costs of the fi nancing commitment for the Akorn transaction. Moreover special items arose from gains / losses of divestitures in Care Coordination at Fresenius Medical Care. The tables on page 8 show the corresponding reconciliation to the IFRS values.

INVESTMENTS

CASH FLOW STATEMENT (SUMMARY)

Spending on property, plant and equipment was € 831 million (H1 / 2017: € 709 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as

hospitals and day clinics. This corresponds to 5.0% of sales. Total acquisition spending was € 386 million (H1 / 2017: € 6,421 million). The prior-year period included the acquisition of Quirónsalud.

CASH FLOW

Operating cash fl ow decreased by 25% to € 1,256 million (H1 / 2017: € 1,683 million) with a margin of 7.6% (H1 / 2017: 10.0%). The decrease is mainly due to two effects at Fresenius Medical Care in North America: Receipt of a ~€ 200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. Moreover negative currency translation effects weighed on the cash fl ow development in H1 / 2018. Operating cash fl ow in Q2 / 2018 decreased by 15% to € 1,020 million (Q2 / 2017: € 1,207 million), with a margin of 12.2% (Q2 / 2017: 14.1%). Negative currency translation effects weighed on the cash fl ow development in Q2/2018.

€ in millions	H1 / 2018	H1 / 2017	Change
Net income	2,114	1,469	44%
Depreciation and amortization	713	705	1%
Change Working Capital	- 1,571	- 491	--
Operating cash fl ow	1,256	1,683	- 25%
Property, plant and equipment, investments net	- 831	- 685	- 21%
Cash fl ow before acquisitions and dividends	425	998	- 57%
Cash used for acquisitions, net	1,290	- 5,848	122%
Dividends paid	- 773	- 795	3%
Free cash fl ow after acquisitions and dividends	942	- 5,645	117%
Cash provided by / used for fi nancing activities	- 358	5,524	- 106%
Effect of exchange rates on change in cash and cash equivalents	47	- 87	153%
Net change in cash and cash equivalents	631	- 208	--
Cash fl ow (bankers' cashfl ow)	2,862	2,208	30%

Given the effects described above and growing investments, free cash fl ow before acquisitions and dividends decreased to € 425 million (H1 / 2017: € 998 million). Free cash fl ow after acquisitions and dividends was € 942 million (H1 / 2017: - € 5,645 million).

ASSET AND LIABILITY STRUCTURE

The Group's total assets increased by 3% (3% in constant currency) to € 54,982 million (Dec. 31, 2017: € 53,133 million). Current assets grew by 13% (13% in constant currency) to € 14,287 million (Dec. 31, 2017: € 12,604 million). Non-current assets were nearly unchanged (decreased by 1% in constant currency) at € 40,695 million (Dec. 31, 2017: € 40,529 million).

Total shareholders' equity increased by 7% (6% in constant currency) to € 23,269 million (Dec. 31, 2017: € 21,720 million). The equity ratio increased to 42.3% (Dec. 31, 2017: 40.9%).

Group debt was nearly unchanged (decreased by 1% in constant currency) at € 18,989 million (Dec. 31, 2017: € 19,042 million). Group net debt decreased by 4% (- 5% in constant currency) to € 16,722 million (Dec. 31, 2017: € 17,406 million) mainly due to the proceeds from divestitures of Care Coordination activities.

As of June 30, 2018, the net debt / EBITDA ratio was 2.80 1,2 (December 31, 2017: 2.84 1,2). Excluding the proceeds from divestitures of Care Coordination activities the net debt / EBITDA ratio was 3.02 1,2.

ANNUAL GENERAL MEETING 2018

At the Annual General Meeting 2018, the shareholders of Fresenius SE & Co. KGaA approved all agenda items with a large majority. Fresenius SE & Co. KGaA shareholders approved the 25nd consecutive dividend increase proposed by the general partner and the Supervisory Board (agenda item 2). Shareholders received € 0.75 per common share (prior year: € 0.62).

The voting results for all agenda items are listed in the table on page 11.

At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions / divestitures, excluding Akorn and NxStage transactions Before special items

				Yes votes		No votes
		Number of shares for which valid votes were cast	in % of the capital stock	Number	in % of the valid votes cast	Number	in % of the valid votes cast
Item no. 1	Resolution on the Approval of the Annual Financial Statements of Fresenius SE & Co. KGaA for the Fiscal Year 2017	400,866,147	72.24%	400,826,670	99.99%	39.477	0.01%
Item no. 2	Resolution on the Allocation of the Distributable Profi t	403,603,252	72.73%	360,015,558	89.20%	43,587,694	10.80%
Item no. 3	Resolution on the Approval of the Actions of the General Partner for the Fiscal Year 2017	256,155,426	46.16%	249,758,804	97.50%	6,396,622	2.50%
Item no. 4	Resolution on the Approval of the Actions of the Supervisory Board for the Fiscal Year 2017	228,946,910	41.26%	203,741,765	88.99%	25,205,145	11.01%
Item no. 5	Election of the Auditor and Group Auditor for the Fiscal Year 2017 and of the Auditor for the potential Review of the Half-Yearly Financial Report for the fi rst Half-Year of the Fiscal Year 2017 and other Financial Information	258,414,560	46.57%	223,381,511	86.44%	35,033,049	13.56%
Item no. 6	Resolution on the Approval of the Revised Com pensation System for the Members of the Man agement Board of the General Partner	398,698,386	71.85%	251,154,488	62.99%	147,543,898	37.01%
Item no. 7	Resolution on the Cancellation of the Existing Authorized Capital I and on the Creation of a New Authorized Capital I with Corresponding Amendment to the Articles of Association	404,720,266	72.93%	381,702,293	94.31%	23,017,973	5.69%
Item no. 8	Resolution on the Cancellation of the Existing Authorization to issue Option Bonds and / or Convertible Bonds dated May 16, 2014 and the Associated Conditional Capital III, and on the Creation of a New Authorization to issue Option Bonds and / or Convertible Bonds, on the Exclu sion of Subscription Rights and on the Creation of Conditional Capital and corresponding Amendments to the Articles of Association	404,717,138	72.93%	386,854,978	95.59%	17,862,160	4.41%
Item no. 9	Resolution on the Cancellation of the Authoriza tion to Purchase and Use Own Shares pursuant to sec. 71 para. 1 no. 8 of the German Stock Corporation Act granted by Resolution of the Annual General Meeting of May 16, 2014, and an Authorization to Purchase and Use Own Shares pursuant to sec. 71 para. 1 no. 8 of the German Stock Corporation Act and on the Exclusion of Subscription Rights	404,470,613	72.89%	377,034,171	93.22%	27,436,442	6.78%
	Item no. 10 Resolution on the Re-Authorization to utilize Equity Derivatives to purchase Own Shares subject to Exclusion of any Tender Right	404,487,482	72.89%	354,749,060	87.70%	49,738,422	12.30%

BUSINESS SEGMENTS

FRESENIUS MEDICAL CARE

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of June 30, 2018, Fresenius Medical Care was treating 325,188 patients in 3,815 dialysis clinics. Along with its core business, the company provides related medical services in the fi eld of Care Coordination.

€ in millions	Q2 / 2018	Q2 / 2017	Change	Change in constant cur rency	H1 / 2018	H1 / 2017	Change	Change in constant cur rency
Sales	4,214	4,471	- 6%	5%1,2	8,189	9,019	- 9%	3% 1,2
EBIT	1,401	583	140%	162%3	1,898	1,235	54%	68% 3
Net income 4	994	269	270%	303%5	1,273	577	121%	141% 5
Net income adjusted 4, 6	273	274	0%	6%	517	523	- 1%	7%
Net income adjusted 4, 7	308	269	15%	22%	599	577	4%	13%
Employees (June 30 / Dec. 31)					118,633	121,245	- 2%

• ▶ Q2 / 2018 reported results significantly positively influenced by divestitures of Care Coordination activities
• ▶ 5% adjusted 1,2 sales growth in constant currency in Q2
• ▶ 6% adjusted 4,6 net income growth in constant currency in Q2
• ▶ 22% net income growth in constant currency on a comparable basis 4,7 in Q2

Reported sales were strongly impacted by headwinds from foreign exchange rates and by the already anticipated decline in Fresenius Medical Care North America's pharmacy business. Sales decreased by 9% (increased by 3% 1 in constant currency) to € 8,189 million (H1 / 2017: € 9,019 million). Organic sales growth was 3%. Currency translation effects reduced sales by 9%. Adoption of IFRS 15 reduced sales by 3%. Excluding the VA agreement in the prior-year quarter, sales growth 1 was 4% in constant currency.

In Q2 / 2018, sales decreased by 6% (increased 5% 1 in constant currency) to € 4,214 million (Q2 / 2017: € 4,471 million). Organic sales growth was 4%. Currency translation effects reduced sales by 8%. Adoption of IFRS 15 reduced sales by 3%.

Health Care services sales (dialysis services and care coordination) decreased by 8% 8 (increased by 3% 8 in constant currency) to € 6,594 million (H1 / 2017: € 7,418 million). With € 1,595 million (H1 / 2017: € 1,601 million), Health Care product sales were on prior-year's level (increased by 6% in constant currency).

In North America, sales decreased by 9% 8 (increased by 1% 8 in constant currency) to € 5,746 million (H1 / 2017: € 6,600 million). Health Care services sales decreased by 9% 8 (increased by 1% 8 in constant currency) to € 5,351 million (H1 / 2017: € 6,182 million). Excluding the 2017 effect from the VA Agreement (€ 98 million), Health Care services sales increased by 3% 8 in constant currency. Health Care product sales decreased by 5% (increased by 6% in constant currency) to € 395 million (H1 / 2017: € 418 million).

Sales outside North America increased by 1% (8% in constant currency) to € 2,436 million (H1 / 2017: € 2,410 million). Health Care services sales increased by 1% (10% in constant currency) to € 1,243 million (H1 / 2017: € 1,236 million). Health Care product sales increased by 2% (7% in constant currency) to € 1,193 million (H1 / 2017: € 1,174 million).

Excluding VA agreement: : Q2 / 2018: 5%; H1 / 2018: 4%

Growth rate adjusted for IFRS 15 implementation (Q2 / 17 base: € 4,340 million; H1 / 17 base: € 8,749 million)

Adjusted for gains from divestitures of Care Coordination activities: Q2 / 2018: 4%; H1 / 2018: - 5% Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

Adjusted for gains from divestitures of Care Coordination activities and the effect of the U.S. Tax Reform: Q2 / 2018: 8%; H1 / 2018: - 3%

⁶ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform and excluding VA agreement

Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, including the effect of the U.S. Tax Reform and including VA agreement 8 Growth rate adjusted for IFRS 15 implementation (Q2 / 17: - € 131 million; H1 / 17: - € 270 million)

Fresenius Medical Care's EBIT increased by 54% (68% in constant currency) to € 1,898 million (H1 / 2017: € 1,235 million), driven by the divestitures of Care Coordination activities in Q2 / 18. The EBIT margin increased to 23.2% (H1 / 2017: 13.7%). Adjusted for the implementation of IFRS 15 and excluding the gains from divestitures of Care Coordination activities and the VA agreement in the prior-year period, EBIT increased by 3% in constant currency and EBIT margin was 13.2% (H1 / 2017: 13.2%). In Q2 / 2018, EBIT increased by 140% (increased by 162% in constant currency) to € 1,401 million (Q2 / 2017: € 583 million). The EBIT margin increased to 33.3% (Q2 / 2017: 13.0%). Adjusted for the adoption of IFRS 15 and excluding the gains from divestitures of Care Coordination activities, EBIT increased by 4% in constant currency and EBIT margin increased to 13.5%.

Net income 1 increased by 121% (141% in constant currency) to € 1,273 million (H1 / 2017: € 577 million). Consistent with full-year guidance, i.e. excluding the gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, net income growth 1 was 7% in constant currency. Net income 1 growth on a comparable basis, i.e. excluding the gains from divestitures of Care Coordination activities, but including the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, was 13% in constant currency.

In Q2 / 2018, net income 1 grew by 270% (303% in constant currency) to € 994 million (Q2 / 2017: € 269 million). Consistent with full-year guidance, i.e. excluding the gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, net income growth 1 was 6% in constant currency. Net income 1 growth on comparable basis, i.e. excluding the gains from divestitures of Care Coordination activities, but including the effect of the U.S. Tax Reform and the VA agreement in the prior-year period was 22% in constant currency.

Operating cash fl ow was € 611 million (H1 / 2017: € 1,052 million). The cash fl ow margin was 7.5% (H1 / 2017: 11.7%). The decrease is mainly due to two effects in North America: Receipt of a ~€ 200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In Q2 / 2018, operating cash fl ow was € 656 million (Q2 / 2017: € 882 million) with a cash fl ow margin of 15.6% (Q2 / 2017: 19.7%).

Fresenius Medical Care confi rms its outlook for 2018 and expects sales growth of 5 to 7% 2 in constant currency and net income 1 comparable growth of 13% to 15% 3 in constant currency (7% to 9% 4 adjusted net income growth).

The 2018 growth targets are based on 2017 fi gures and exclude effects from the planned acquisition of NxStage Medical and gains from divestitures of Care Coordination activities.

For further information, please see Fresenius Medical Care's Investor News at www.freseniusmedicalcare.com.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

²⁰¹⁷ base: € 16,739 million (adjusted for IFRS 15 adoption (-€ 486 million) and excluding Sound´s revenue for H2 / 2017 (-€ 558 million))

²⁰¹⁷ base: € 1,242 million, excluding Sound´s H2 / 17 net income (- € 38 million); 2018 including recurring benefi ts from U.S. tax reform but excluding gains from divestitures of Care Coordination activities

Excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform natural disaster costs, FCPA related charge and excluding VA agreement

FRESENIUS KABI

Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products. In the biosimilars business, we are developing products with a focus on oncology and autoimmune diseases.

€ in millions	Q2 / 2018	Q2 / 2017	Change	Change in constant currency	H1 / 2018	H1 / 2017	Change	Change in constant currency
Sales	1,604	1,598	0%	6%	3,207	3,202	0%	7%
EBITDA 1	361	385	- 6%	- 1%	699	767	- 9%	0%
EBIT 1	289	309	- 6%	- 1% 2	557	622	- 10%	- 1% 2
Net income 1, 3	185	188	- 2%	5% 4	355	379	- 6%	4% 4
Employees (June 30 / Dec. 31)					37,273	36,380	2%

• ▶ 6% organic sales growth and 11% EBIT 1 growth in constant currency (excluding biosimilars business) in Q2
• ▶ European Commission confirms marketing authorizations of HES subject to the implementation of risk minimization measures
• ▶ Sales outlook confirmed: 4% to 7% organic sales growth expected
• ▶ EBIT outlook raised: 2% to +1% 5 EBIT growth in constant currency expected (~6% to 9% ⁶ excl. biosimilars expenses)

Sales of € 3,207 million (H1 / 2017: € 3,202 million) were on prior-year level (increased by 7% in constant currency). Organic sales growth was 7%. Strong negative currency translation effects (- 7%) were mainly related to the devaluation of the U.S. dollar, the Brazilian real and the Chinese yuan against the euro. In Q2 / 2018, sales of € 1,604 million were nearly unchanged (increased by 6% in constant currency) from the prior-year level (Q2 / 2017: € 1,598 million). Organic sales growth was 6%.

Sales in Europe grew by 2% (organic growth: 3%) to € 1,120

million (H1 / 2017: € 1,097 million). In Q2 / 2018, sales increased by 2% (organic growth: 3%) to € 563 million (Q2 / 2017: € 553 million).

Sales in North America decreased by 4% (organic growth: 7%) to € 1,140 million (H1 / 2017: € 1,187 million). In Q2 / 2018, sales decreased by 3% (organic growth: 4%) to € 549 million (Q2 / 2017: € 568 million).

Sales in Asia-Pacifi c increased by 8% (organic growth: 13%) to € 627 million (H1 / 2017: € 582 million). In Q2 / 2018, sales increased by 8% (organic growth: 11%) to € 326 million (Q2 / 2017: € 302 million). Sales in Latin America / Africa decreased by 5% (organic growth: 10%) to € 320 million (H1 / 2017: € 336 million). In Q2 / 2018, sales decreased by 5% (organic growth: 10%) to € 166 million (Q2 / 2017: € 175 million).

EBIT 1 decreased by 10% (- 1% in constant currency) to € 557 million (H1 / 2017: € 622 million) with an EBIT margin 1 of 17.4% (H1 / 2017: 19.4%). In Q2 / 2018, EBIT ¹ decreased by 6% (- 1% in constant currency) to € 289 million (Q2 / 2017: € 309 million) with an EBIT margin 1 of 18.0% (Q2 / 2017: 19.3%).

Before special items

6 2017 base: € 1,237 million; 2017 & 2018 before special items

Before expenses for the further development of the biosimilars business: Q2 / 2018: 11%; H1 / 2018: 10%

Net income attributable to shareholders of Fresenius SE & Co. KGaA Before expenses for the further development of the biosimilars business: Q2 / 2018: 19%; H1 / 2018: 17%

²⁰¹⁷ base: € 1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€ 60 million

in FY / 17, and expected expenditures of ~€ 160 million in FY / 18)

EBIT ¹ before expenses for the further development of the biosimilars business increased by 1% (10% in constant currency) to € 629 million (H1 / 2017: € 622 million) with an EBIT margin 1 of 19.6% (H1 / 2017: 19.4%). In Q2 / 2018, EBIT 1 before expenses for the further development of the biosimilars business increased by 6% (11% in constant currency) to € 326 million (Q2 / 2017: € 309 million) with an EBIT margin 1 of 20.3% (Q2 / 2017: 19.3%).

Net income 1,2 decreased by 6% (increased by 4% in constant currency) to € 355 million (H1 / 2017: € 379 million). In Q2 / 2018, net income 1,2 decreased by 2% (increased by 5% in constant currency) to € 185 million (Q2 / 2017: € 188 million).

Operating cash fl ow increased by 15% to € 454 million (H1 / 2017: € 395 million). The cash fl ow margin grew to 14.2% (H1 / 2017: 12.3%). In Q2 / 2018, operating cash fl ow increased by 12% to € 228 million (Q2 / 2017: € 203 million) with a cash fl ow margin of 14.2% (Q2 / 2017: 12.7%).

Based on the strong development of Fresenius Kabi in H1 / 2018 and the reversal of some HES ³ associated risk adjustments, Fresenius Kabi raises its EBIT outlook for 2018 by 4%-points and now expects EBIT growth in constant currency of - 2% to +1%4 (previously: - 6% to - 3%4 in constant currency). Excluding expenditures for the further development of the biosimilars business, EBIT is now expected to grow by ~6% to 9% 5 in constant currency (previously: ~2% to 5%5 in constant currency). Fresenius Kabi confi rms its sales guidance of 4% to 7% organic growth.

Before special items

N et income attributable to shareholders of Fresenius SE & Co. KGaA

(€ 60 million in FY / 17, and expected expenditures of ~€ 160 million in FY / 18)

2017 base: € 1,237 million; 2017 & 2018 before special items

Hydroxyethyl starch (HES) 2017 base: € 1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business

FRESENIUS HELIOS

Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 87 acute care hospitals, 89 outpatient centers and treats approximately 5.2 million patients annually. Quirónsalud operates 45 hospitals, 56 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients per year.

€ in millions	Q2 / 2018	Q2 / 2017	Change	H1 / 2018	H1 / 2017	Change
Sales	2,343	2,238	5%	4,674	4,256	10%
EBITDA	400	377	6%	776	711	9%
EBIT	293	282	4%	571	537	6%
Net income 1	197	192	3%	388	373	4%
Employees (June 30 / Dec. 31)				107,760	105,927	2%

• ▶ 4% organic sales growth in Q2
• ▶ DRG catalogue effects and preparatory structural activities for anticipated regulatory measures weigh on financial performance of Helios Germany
• ▶ Helios Spain with accelerated growth: 8% organic sales growth and 19% EBIT growth in Q2
• ▶ 2018 outlook confirmed

Fresenius Helios increased sales by 10% to € 4,674 million (H1 / 2017: € 4,256 million). Organic sales growth was 4%. In Q2 / 2018, sales increased by 5% (organic growth: 4%) to € 2,343 million (Q2 / 2017: € 2,238 million).

Sales of Helios Germany increased by 3% (organic growth: 3%) to € 3,121 million (H1 / 2017: € 3,038 million). In Q2 / 2018, sales increased by 2% (organic growth: 3%) to € 1,547 million (Q2 / 2017: € 1,510 million). Helios Spain increased sales by 28% (organic growth: 5%) to € 1,553 million (H1 / 2017: € 1,218 million), mainly due to the additional month of consolidation compared to the prior-year period (Quirónsalud is consolidated since February 1, 2017). In Q2 / 2018 Helios Spain increased sales by 9% (organic growth: 8%) to € 796 million (Q2 / 2017: € 728 million).

Fresenius Helios grew EBIT by 6% to € 571 million (H1 / 2017: € 537 million) with a margin of 12.2% (H1 / 2017: 12.6%). In Q2 / 2018, EBIT increased by 4% to € 293 million (Q2 / 2017: € 282 million) with a margin of 12.5% (Q2 / 2017: 12.6%).

EBIT of Helios Germany decreased by 4% to € 345 million (H1 / 2017: € 359 million) with a margin of 11.1% (H1 / 2017: 11.8%). The decline is mainly due to additional catalogue effects, preparatory structural activities for anticipated regulatory requirements (i.e. clustering) as well as a lack of privatization opportunities in the German market. In Q2 / 2018, EBIT decreased by 6% to € 168 million (Q2 / 2017: € 178 million) with a margin of 10.9% (Q2 / 2017: 11.8%).

EBIT of Helios Spain increased by 28% to € 227 million (H1 / 2017: € 178 million), mainly due to the additional month of consolidation compared to the prior-year period, with a margin of 14.6% (H1 / 2017: 14.6%). In Q2 / 2018, EBIT increased by 19% to €124 million (Q2 / 2017: € 104 million) with a margin of 15.6% (Q2 / 2017: 14.3%).

Net income 1 of Fresenius Helios increased by 4% to € 388 million (H1 / 2017: € 373 million). In Q2 / 2018, net income 1 increased by 3% to €197 million (Q2 / 2017: € 192 million).

Operating cash fl ow was € 259 million (H1 / 2017: € 304 million) with a margin of 5.5% (H1 / 2017: 7.1%).

The already announced transfer of the in-patient post-acute care business from Fresenius Helios to Fresenius Vamed has become effective as of July 1, 2018. As a consequence, Fresenius Helios' EBIT growth outlook for 2018 was adjusted to 5% to 8% (previously: 7% to 10%).

Fresenius Helios confi rms its outlook for 2018 and expects organic sales growth of 3% to 6% and EBIT growth of 5% to 8%.

FRESENIUS VAMED

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management, to total operational management.

€ in millions	Q2 / 2018	Q2 / 2017	Change	H1 / 2018	H1 / 2017	Change
Sales	266	258	3%	515	481	7%
EBITDA	15	14	7%	24	22	9%
EBIT	12	11	9%	18	17	6%
Net income 1	7	7	0%	11	11	0%
Employees (June 30 / Dec. 31)				8,938	8,667	3%

• ▶ Service business with continued good momentum: 11% sales growth in Q2
• ▶ Project business with good order intake of €195 million in Q2
• ▶ Transfer of in-patient post-acute care business from Helios Germany to Vamed as of July 1, 2018
• ▶ 2018 outlook confi rmed

Sales increased by 7% (7% in constant currency) to € 515 million (H1 / 2017: € 481 million). Organic sales growth was 5%. Sales in the project business increased by 4% to € 191 million (H1 / 2017: € 184 million). Sales in the service business grew by 9% to € 324 million (H1 / 2017: € 297 million). In Q2 / 2018, sales increased by 3% (organic growth: 1%) to € 266 million (Q2 / 2017: € 258 million).

EBIT increased by 6% to € 18 million (H1 / 2017: € 17 million) with a margin of 3.5% (H1 / 2017: 3.5%). In Q2 / 2018, EBIT increased by 9% to € 12 million (Q2 / 2017: € 11 million) with a margin of 4.5% (Q2 / 2017: 4.3%).

Net income 1 of € 11 million was unchanged from prior-year's level. In Q2 / 2018, net income 1 was also unchanged at € 7 million.

Order intake increased by 10% to € 455 million (H1 / 2017: € 412 million). As of June 30, 2018, order backlog was € 2,372 million (December 31, 2017: € 2,147 million).

The already announced transfer of the in-patient postacute care business from Fresenius Helios to Fresenius Vamed has become effective as of July 1, 2018. As a consequence, Fresenius Vamed's EBIT growth outlook for 2018 was adjusted to 32% to 37% (previously: 5% to 10%).

Fresenius Vamed confi rms its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

EMPLOYEES

As of June 30, 2018, the number of employees was 273,632 (Dec. 31, 2017: 273,249).

EMPLOYEES BY BUSINESS SEGMENT

Number of employees	June 30, 2018	Dec. 31, 2017	Change
Fresenius Medical Care	118,633	121,245	- 2%
Fresenius Kabi	37,273	36,380	2%
Fresenius Helios	107,760	105,927	2%
Fresenius Vamed	8,938	8,667	3%
Corporate / Other	1,028	1,030	0%
Total	273,632	273,249	0%

RESEARCH AND DEVELOPMENT

Product and process development as well as the improvement of therapies are at the core of our growth strategy. Fresenius focuses its R & D efforts on its core competencies in the following areas:

• ▶ Dialysis
• ▶ Generic IV drugs
• ▶ Infusion and nutrition therapies
• ▶ Medical devices

Apart from new products, we are concentrating on developing optimized or completely new therapies, treatment methods, and services.

Since September 1, 2017 research and development activities include the biosimilars business of Fresenius Kabi.

RESEARCH AND DEVELOPMENT EXPENSES BY BUSINESS SEGMENT

€ in millions	H1 / 2018	H1 / 2017	Change
Fresenius Medical Care	70	67	3%
Fresenius Kabi	256	176	45%
Fresenius Helios	–	–	--
Fresenius Vamed	0	0
Corporate / Other	- 1	0
Total	325	243	34%

OPPORTUNITIES AND RISK REPORT

Compared to the presentation in the consolidated fi nancial statements and the management report as of December 31, 2017 applying Section 315e HGB in accordance with IFRS, there have been the following important developments in Fresenius' overall opportunities and risk situation until July 31, 2018.

On April 24, 2017, Fresenius announced that Fresenius Kabi has agreed to acquire Akorn, Inc. (Akorn), a U.S.-based manufacturer and marketer of prescription and over-thecounter pharmaceutical products for approximately US\$ 4.3 billion, or US\$ 34 per share, plus the prevailing net debt at closing of the transaction.

Fresenius has been conducting an independent investigation, using external experts, into alleged breaches of FDA data integrity requirements relating to product development at Akorn.

Fresenius has decided on April 22, 2018 to terminate the company's merger agreement with Akorn, due to Akorn's failure to fulfi ll several closing conditions.

Fresenius' decision is based on, among other factors, material breaches of FDA data integrity requirements relating to Akorn's operations found during Fresenius' independent investigation. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn has declined that offer.

Akorn disagreed with Fresenius's position and fi led a lawsuit on April 23, 2018 purporting to enforce the merger agreement.

Fresenius fi led a counterclaim on April 30, 2018. The trial of the law suit took place in the Delaware Court of Chancery from July 9 to 13, 2018.

The exchange of post-trial briefs is expected to take place until August 20, with the closing arguments on August 23, 2018. Judgment is expected up to 90 days thereafter.

Against such judgment the losing party may appeal to the Delaware Supreme Court, the highest court in Delaware.

If Akorn were able to prevail in court, Fresenius could be forced to purchase Akorn at the original price. This could result in signifi cant reputational and fi nancial costs.

In April 2018 the Standing Committee of the European Commission did not decide according to the European Medicines Agency's (EMA) proposal to suspend the marketing authorizations (MAs) for products containing hydroxyethyl starch (HES) and referred the matter back to the Pharmacovigilance Risk Assessment Advisory Committee (PRAC) at the EMA.

The PRAC upheld its recommendation to suspend the MAs. Subsequently in July 2018 EMA's Coordination Group for Mutual and Decentralized Procedures – Human (CMDh) took the position to maintain the MAs, subject to the implementation of risk minimization measures. These include controlled access, trainings and direct communication to healthcare practitioners as well as warnings on the packages.

In July, 2018 the European Commission adopted this decision.

In addition, we report on legal proceedings, currency and interest risks on pages 46 to 52 in the Notes of this report.

RATING

Fresenius is covered by the rating agencies Moody's, Standard & Poor's and Fitch.

The following table shows the company rating of Fresenius SE & Co. KGaA:

	Standard & Poor's	Moody's	Fitch 1
Company rating	BBB -	Baa3	BBB -
Outlook	positive	stable	stable

OUTLOOK 1 2018

FRESENIUS GROUP

Fresenius confi rms its guidance for 2018. Group sales are expected to increase by 5% to 8% 2 in constant currency. Net income 3, 4 is expected to grow by 6% to 9% in constant currency. Excluding expenditures for the further development of the biosimilars business, net income 3, 5 is expected to grow by ~10% to 13% in constant currency.

Fresenius expects to further reduce its net debt / EBITDA 6 ratio by year-end 2018.

FRESENIUS MEDICAL CARE

Fresenius Medical Care confi rms its outlook for 2018 and expects sales to grow by 5% to 7% 7 in constant currency and net income 8 comparable growth of 13% to 15% 9 in constant currency (7% to 9% 10 adjusted net income growth).

The 2018 growth targets are based on 2017 fi gures and exclude effects from the planned acquisition of NxStage Medical and gains from divestitures of Care Coordination activities.

FRESENIUS KABI

Based on the strong development of Fresenius Kabi in H1/2018 and the reversal of some HES11 associated risk adjustments, Fresenius Kabi raises its EBIT outlook for 2018 by 4%-points and now expects EBIT growth in constant currency of - 2% to +1%12 (previously: - 6% to - 3%12 in constant currency). Excluding expenditures for the further development of the biosimilars business, EBIT is now expected to grow by ~6% to 9%13 in constant currency (previously: ~2% to 5%13 in constant currency). Fresenius Kabi confi rms its sales guidance of 4% to 7% organic growth.

1 Excluding expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities 2 2017 base adjusted for IFRS 15 adoption (deduction of € 486 million at Fresenius Medical Care) and divestitures of Care Coordination activities

(deduction of € 558 million at Fresenius Medical Care))

3 Net income attributable to shareholders of Fresenius SE & Co. KGaA

• 4 2017 base: € 1,804 million; 2018 before special items; including expenditures for further development of biosimilars business
• (€ 43 million after tax in FY / 17 and ~€ 120 million after tax in FY / 18) 5 2017 base: € 1,847 million; 2018 before special items

6 Calculated at expected annual average exchange rates for both net debt and EBITDA; excluding effects of the Akorn and NxStage transactions

• and gains from divestitures of Care Coordination activities; excluding further potential acquisitions; at current IFRS rules
• 7 2017 base: € 16,739 million (adjusted for IFRS 15 adoption (-€ 486 million) and excluding Sound´s revenue for H2 / 2017 (-€ 558 million))

8 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

from divestitures of Care Coordination activities ¹⁰ Excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform, natural disaster costs, FCPA related charge and excluding VA agreement

11 Hydroxyethyl starch (HES)

12 2017 base: € 1,177 million; 2017 and 2018 before special items, including expenditures for the further development of the biosimilars business

(€ 60 million in FY / 17 and expected expenditures of ~€ 160 million in FY / 18) 13 2017 base: € 1,237 million; 2017 and 2018 before special items, excluding expenditures for the further development of the biosimilars business

^{9 2017} base: € 1,242 million, excluding Sound´s H2 / 17 net income (-€38 million); 2018 including benefi ts from U.S. tax reform but excluding gains

^{(€ 60} million in FY / 17 and expected expenditures of ~€ 160 million in FY / 18)

GROUP FINANCIAL OUTLOOK 2018

	Targets 2018 1	Fiscal year 2017	New guidance
Sales, growth (in constant currency)	5% – 8%	€ 32,842 m 2	confi rmed
Net income 3 , growth (in constant currency)	6% – 9% 4	€ 1,804 m 5	confi rmed
Net income 3 , growth (in constant currency) excluding Biosimilars	~10% – 13% 6	€ 1,847 m 7	confi rmed

Excluding expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities

2017 base adjusted for IFRS 15 adoption (deduction of € 486 million at Fresenius Medical Care) and divestitures of Care Coordination activities

(deduction of € 558 million at Fresenius Medical Care) Net income attributable to shareholders of Fresenius SE & Co. KGaA

Before special items (i.e. expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities;

including expenditures for further development of biosimilars business (€ 43 m after tax in FY / 17 and expected expenditures of ~€ 120 m after tax in FY / 18)

Before special items, (i.e. expenses related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities

(deduction of € 12 million at Fresenius Medical Care), book gain from the U.S. tax reform and FCPA provision

6 Before special items (i.e. expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities;

excluding expenditures for further development of biosimilars business (€ 43 m after tax in FY / 17 and expected expenditures of ~€ 120 m after tax in FY / 18) Adjusted net income: Before special items (i.e. expenses related to the Akorn and NxStage transactions and gains from divestiture of Care Coordination activities

(deduction of € 12 million at Fresenius Medical Care), book gain from the U.S. tax reform and FCPA provision), before expenditures for further development of biosimilars business

OUTLOOK 2018 BY BUSINESS SEGMENT

	Targets 2018 1	Fiscal year 2017	New guidance
Fresenius Medical Care
Sales growth (in constant currency)	5% – 7% 2	€ 16,739 m 2	confi rmed
Net income on comparable basis 3 growth (in constant currency)	13% – 15% 4	€ 1,242 m 4	confi rmed
Net income on adjusted 3 growth (in constant currency)	7% – 9% 11	€ 1,162 m 11	confi rmed
Fresenius Kabi
Sales growth (organic)	4% – 7%	€ 6,358 m	confi rmed
EBIT growth (in constant currency) 5	- 6% – - 3%	€ 1,177 m	- 2% – 1%
EBIT growth (in constant currency) 6 excluding Biosimilars	~2% – 5%	€ 1,237 m	~6% – 9%
Fresenius Helios
Sales growth (organic)	3% – 6% 7	€ 8,668 m 9	confi rmed
EBIT, growth	5% – 8% 8	€ 1,052 m 9	confi rmed
Fresenius Vamed
Sales growth (organic)	5% – 10%	€ 1,228 m	confi rmed
EBIT, growth	32% – 37%10	€ 76 m	confi rmed

1 Excluding expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities

2 2017 base adjusted for IFRS 15 adoption (deduction of € 486 million at Fresenius Medical Care) and excluding Sound´s revenue for H2 / 17

(- € 558 million)

3 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

4 2017 base: €1,242 million, excluding Sound´s H2/17 net income (-€38 million); 2018 including benefi ts from U.S. tax reform

but excluding gains from divestitures of Care Coordination activities 5 Before special items, including expenditures for the further development of the biosimilars business

(€ 60 million in FY / 17 and expected expenditures of ~€ 160 million in FY / 18)

6 Before special items, before expenditures for the further development of the biosimilars business

(€ 60 million in FY / 17 and expected expenditures of ~€ 160 million in FY / 18)

7 Organic growth refl ects 11 months contribution of Helios Spain in 2018

8 Before transfer of the German inpatient post-acute care business from Helios to Vamed: 7% - 10%

9 Helios Spain consolidated for 11 months

10 Before transfer of the German inpatient post-acute care business from Helios to Vamed: 5% - 10%

11 Excluding gains from divestitures of Care Coordination activities, excluding effects of the U.S. tax reform, natural disaster costs, FCPA-related charge and excluding VA agreement

FRESENIUS HELIOS

Fresenius Helios confi rms its outlook for 2018 and expects organic sales growth of 3% to 6% and EBIT growth of 5% to 8%.

FRESENIUS VAMED

Fresenius Vamed confi rms its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

INVESTMENTS

The Group plans to invest around 6% of sales in property, plant and equipment.

FRESENIUS SE & CO. KGAA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

€ in millions	Q2 / 2018	Q2 / 2017	H1 / 2018	H1 / 2017
Sales	8,382	8,532	16,503	16,894
Cost of sales	- 5,900	- 5,891	- 11,683	- 11,560
Gross profi t	2,482	2,641	4,820	5,334
Selling, general and administrative expenses	- 1,206	- 1,357	- 2,336	- 2,713
Gain related to divestitures of care coordination activities	833	5	820	5
Research and development expenses	- 166	- 122	- 325	- 243
Operating income (EBIT)	1,943	1,167	2,979	2,383
Net interest	- 155	- 172	- 304	- 329
Income before income taxes	1,788	995	2,675	2,054
Income taxes	- 372	- 277	- 561	- 585
Net income	1,416	718	2,114	1,469
Noncontrolling interest	764	268	1,022	562
Net income attributable to shareholders of Fresenius SE & Co. KGaA	652	450	1,092	907
Earnings per share in €	1.18	0.81	1.97	1.64
Fully diluted earnings per share in €	1.17	0.81	1.96	1.63

The following notes are an integral part of the unaudited condensed interim fi nancial statements.

FRESENIUS SE & CO. KGAA CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

€ in millions	Q2 / 2018	Q2 / 2017	H1 / 2018	H1 / 2017
Net income	1,416	718	2,114	1,469
Other comprehensive income (loss)
Positions which will be reclassified into net income in subsequent years
Foreign currency translation	511	- 1,119	84	- 1,186
Cash flow hedges	2	19	10	30
Change of fair value of available for sale financial assets	–	–	0	–
Income taxes on positions which will be reclassified	- 14	13	- 10	14
Positions which will not be reclassified into net income in subsequent years
Actuarial gains on defined benefit pension plans	0	9	1	11
Income taxes on positions which will not be reclassified	–	1	–	–
Other comprehensive income (loss), net	499	- 1,077	85	- 1,131
Total comprehensive income (loss)	1,915	- 359	2,199	338
Comprehensive income (loss) attributable to noncontrolling interest	1,029	- 185	1,098	58
Comprehensive income (loss) attributable to shareholders of Fresenius SE & Co. KGaA	886	- 174	1,101	280

FRESENIUS SE & CO. KGAA CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

ASSETS

€ in millions	June 30, 2018	December 31, 2017
Cash and cash equivalents	2,267	1,636
Trade accounts and other receivables, less allowance for doubtful accounts	6,735	6,260
Accounts receivable from and loans to related parties	21	17
Inventories	3,076	3,252
Other current assets	2,188	1,439
I. Total current assets	14,287	12,604
Property. plant and equipment	9,714	9,555
Goodwill	25,143	25,285
Other intangible assets	3,124	3,172
Other non-current assets	1,907	1,773
Deferred taxes	807	744
II. Total non-current assets	40,695	40,529
Total assets	54,982	53,133

LIABILITIES AND SHAREHOLDERS' EQUITY

€ in millions	June 30, 2018	December 31, 2017
Trade accounts payable	1,527	1,688
Short-term accounts payable to related parties	62	42
Short-term provisions and other short-term liabilities	6,210	5,854
Short-term debt	2,000	1,550
Short-term debt from related parties	–	–
Current portion of long-term debt and capital lease obligations	451	618
Current portion of bonds	1,542	731
Short-term accruals for income taxes	331	182
A. Total short-term liabilities	12,123	10,665
Long-term debt and capital lease obligations, less current portion	6,034	6,487
Bonds, less current portion	7,632	8,338
Convertible bonds	1,330	1,318
Long-term provisions and other long-term liabilities	1,947	2,094
Pension liabilities	1,197	1,163
Long-term accruals for income taxes	240	238
Deferred taxes	1,210	1,110
B. Total long-term liabilities	19,590	20,748
I. Total liabilities	31,713	31,413
A. Noncontrolling interest	8,888	8,059
Subscribed capital	556	555
Capital reserve	3,887	3,848
Other reserves	10,327	9,656
Accumulated other comprehensive loss	- 389	- 398
B. Total Fresenius SE & Co. KGaA shareholders' equity	14,381	13,661
II. Total shareholders' equity	23,269	21,720
Total liabilities and shareholders' equity	54,982	53,133

FRESENIUS SE & CO. KGAA CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

€ in millions	H1 / 2018	H1 / 2017
Operating activities
Net income	2,114	1,469
Adjustments to reconcile net income to cash and cash equivalents provided by operating activities
Depreciation and amortization	713	705
Gain on sale of investments and divestitures	- 822	- 1
Change in deferred taxes	- 6	- 3
Gain on sale of fixed assets	–	- 7
Changes in assets and liabilities, net of amounts from businesses acquired or disposed of
Trade accounts and other receivables, net	- 745	- 383
Inventories	- 137	- 103
Other current and non-current assets	- 183	- 188
Accounts receivable from / payable to related parties	17	- 6
Trade accounts payable, provisions and other short-term and long-term liabilities	165	219
Accruals for income taxes	140	- 19
Net cash provided by operating activities	1,256	1,683
Investing activities
Purchase of property, plant and equipment	- 861	- 724
Proceeds from sales of property, plant and equipment	30	39
Acquisitions and investments, net of cash acquired and net purchases of intangible assets	- 372	- 5,863
Proceeds from sale of investments and divestitures	1,662	15
Net cash provided by / used in investing activities	459	- 6,533
Financing activities
Proceeds from short-term debt	656	667
Repayments of short-term debt	- 256	- 22
Proceeds from long-term debt and capital lease obligations	116	2,207
Repayments of long-term debt and capital lease obligations	- 579	- 368
Proceeds from the issuance of bonds	0	2,600
Proceeds from the issuance of convertible bonds	0	500
Payments for the share buy-back program of Fresenius Medical Care	- 37	0
Payments of the accounts receivable securitization program	- 292	- 115
Proceeds from the exercise of stock options	30	55
Dividends paid	- 773	- 795
Change in noncontrolling interest	5	–
Exchange rate effect due to corporate financing	- 1	–
Net cash used in / provided by fi nancing activities	- 1,131	4,729
Effect of exchange rate changes on cash and cash equivalents	47	- 87
Net increase / decrease in cash and cash equivalents	631	- 208
Cash and cash equivalents at the beginning of the reporting period	1,636	1,579
Cash and cash equivalents at the end of the reporting period	2,267	1,371

ADDITIONAL INFORMATION ON PAYMENTS

THAT ARE INCLUDED IN NET CASH PROVIDED BY OPERATING ACTIVITIES

€ in millions	H1 / 2018	H1 / 2017
Received interest	29	32
Paid interest	- 252	- 292
Income taxes paid	- 523	- 585

FRESENIUS SE & CO. KGAA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

		Subscribed Capital		Reserves
	Number of ordinary shares in thousand	Amount € in thousands	Amount € in millions	Capital reserve € in millions	Other reserves € in millions
As of December 31, 2016	547,208	547,208	547	3,379	8,165
Issuance of bearer ordinary shares	6,108	6,108	6	394
Proceeds from the exercise of stock options	980	980	1	31
Compensation expense related to stock options				15
Dividends paid Purchase of noncontrolling interest					- 343
Noncontrolling interest subject to put provisions					28
Comprehensive income (loss)
Net income					907
Other comprehensive income (loss)
Cash flow hedges
Change of fair value of available for sale financial assets
Foreign currency translation
Actuarial gains on defined benefit pension plans
Comprehensive income (loss)					907
As of June 30, 2017	554,296	554,296	554	3,819	8,757
As of December 31, 2017	554,710	554,710	555	3,848	9,656
Adjustment due to the initial application of IFRS 9 and IFRS 15	0	0	0	0	- 26
As of January 1, 2018, adjusted	554,710	554,710	555	3,848	9,630
Proceeds from the exercise of stock options	906	906	1	25
Compensation expense related to stock options				14
Dividends paid					- 416
Purchase of noncontrolling interest
Noncontrolling interest subject to put provisions					21
Comprehensive income (loss)
Net income					1,092
Other comprehensive income (loss)
Cash flow hedges
Foreign currency translation
Actuarial gains on defined
benefit pension plans
Comprehensive income					1,092
As of June 30, 2018	555,616	555,616	556	3,887	10,327

FRESENIUS SE & CO. KGAA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

	Accumulated other com prehensive income (loss) € in millions	Total Fresenius SE & Co. KGaA shareholders' equity € in millions	Non controlling interest € in millions	Total shareholders' equity € in millions
As of December 31, 2016	573	12,664	8,185	20,849
Issuance of bearer ordinary shares		400	0	400
Proceeds from the exercise of stock options		32	23	55
Compensation expense related to stock options		15	8	23
Dividends paid		- 343	- 452	- 795
Purchase of noncontrolling interest		0	59	59
Noncontrolling interest subject to put provisions		28	63	91
Comprehensive income (loss)
Net income		907	562	1,469
Other comprehensive income (loss)
Cash flow hedges	14	14	8	22
Change of fair value of available for sale financial assets	–	–	–	–
Foreign currency translation	- 645	- 645	- 519	- 1,164
Actuarial gains on defined
benefit pension plans	4	4	7	11
Comprehensive income (loss)	- 627	280	58	338
As of June 30, 2017	- 54	13,076	7,944	21,020
As of December 31, 2017	- 398	13,661	8,059	21,720
Adjustment due to the initial application of IFRS 9 and IFRS 15		- 26	- 1	- 27
As of January 1, 2018, adjusted	- 398	13,635	8,058	21,693
Proceeds from the exercise of stock options		26	4	30
Compensation expense related to stock options		14	3	17
Dividends paid		- 416	- 357	- 773
Purchase of noncontrolling interest		0	36	36
Noncontrolling interest subject to put provisions		21	46	67
Comprehensive income (loss)
Net income		1,092	1,022	2,114
Other comprehensive income (loss)
Cash flow hedges	–	–	7	7
Foreign currency translation	8	8	69	77
Actuarial gains on defined benefit pension plans	1	1	0	1
Comprehensive income	9	1,101	1,098	2,199
As of June 30, 2018	- 389	14,381	8,888	23,269

2018 2	2017	Change	2018 2	2017 2	Change	2018	2017	Change	2018	2017	Change	2018 3	2017 3	Change	2018	2017	Change
8,189	9,019	- 9 %	3,207	3,202	0 %	4,674	4,256	10 %	515	481	7 %	- 82	- 64	- 28 %	16,503	16,894	- 2 %
8,173	9,004	- 9 %	3,179	3,175	0 %	4,667	4,256	10 %	484	457	6 %	0			16,503	16,894	- 2 %
16	15	7 %	28	27	4 %	7	0		31	24	29 %	- 82	- 66	- 24 %	0	0
50 %	53 %		19 %	19 %		28 %	25 %		3 %	3 %		0 %	0 %		100 %	100 %
1,433	1,611	- 11 %	699	767	- 9 %	776	711	9 %	24	22	9 %	760	- 23	--	3,692	3,088	20 %
355	376	- 6 %	142	145	- 2 %	205	174	18 %	6	5	20 %	5	5	0 %	713	705	1 %
1,078	1,235	- 13 %	557	622	- 10 %	571	537	6 %	18	17	6 %	755	- 28	--	2,979	2,383	25 %
- 164	- 188	13 %	- 60	- 57	- 5 %	- 80	- 71	- 13 %	- 1	- 1	0 %	1	- 12	108 %	- 304	- 329	8 %
- 203	- 332	39 %	- 124	- 169	27 %	- 97	- 89	- 9 %	- 5	- 5	0 %	- 132	10	--	- 561	- 585	4 %
599	577	4 %	355	379	- 6 %	388	373	4 %	11	11	0 %	- 261	- 433	40 %	1,092	907	20 %
611	1,052	- 42 %	454	395	15 %	259	304	- 15 %	- 56			- 12	- 40	70 %	1,256	1,683	- 25 %
165	664	- 75 %	254	229	11 %	95	180	- 47 %	- 61			- 28	- 48	42 %	425	998	- 57 %
25,045	24,025	4 %	12,130	11,792	3 %	16,923	16,583	2 %	1,347	1,282	5 %	- 463	- 549	16 %	54,982	53,133	3 %
7,264	7,448	- 2 %	4,958	4,806	3 %	6,770	6,665	2 %	332	245	36 %	- 335			18,989	19,042	0 %
5,284	5,282	0 %	3,027	2,879	5 %	2,228	2,027	10 %	576	621	- 7 %	399	452	- 12 %	11,514	11,261	2 %
466	404	15 %	173	151	15 %	170	138	23 %	15	7	114 %	7	9	- 22 %	831	709	17 %
352	468	- 25 %	1	1	0 %	11			22	–	--	0	0		386	6,421	- 94 %
70	67	3 %	256	176	45 %	–	–	--	0	0		- 1	0		325	243	34 %
118,633	121,245	- 2 %	37,273		2 %			2 %	8,938	8,667	3 %	1,028	1,030	0 %			0 %
17.5 %	17.9 %		21.8 %			16.6 %	16.7 %		4.7 %	4.6 %					17.6 %2
13.2 %	13.7 %		17.4 %	19.4 %		12.2 %	12.6 %		3.5 %	3.5 %
4.3 %	4.2 %		4.4 %	4.5 %		4.4 %	4.1 %		1.2 %	1.0 %					4.3%	4.2 %
7.5 %	11.7 %		14.2 %			5.5 %	7.1 %								7.6 %	10.0 %
10.1 %	10.9 %		10.7 %			7.0 %	6.9 %		8.8 %	9.8 %					9.0 %5	9.4 % 4
			Fresenius Medical Care		36,380 24.0 % 12.3 % 10.8 %	Fresenius Kabi	107,760	105,927	5,952 - 100 % Fresenius Helios	- 10.9 %	- 5.8 %	- 28 - 100 % - 27 - 126 % Fresenius Vamed			2 - 100 % - 122 - 175 % Corporate / Other	273,632 13.3 %2 The consolidated segment reporting is an integral part of the notes.	Fresenius Group 273,249 18.3 % 2 14.2 % 2

FRESENIUS SE & CO. KGAA CONSOLIDATED SEGMENT REPORTING FIRST HALF (UNAUDITED)

2 Before transaction-related effects 3 After transaction-related effects 4 The underlying pro forma EBIT does not include transaction-related effects and FCPA provision.

The following notes are an integral part of the unaudited condensed interim fi nancial statements.

5 The underlying pro forma EBIT does not include transaction-related effects.

At a Glance Fresenius Share Management Report Financial Statements Notes 26

	D) TE DI AU N R (U
	ARTE U
	D Q N G SECO
	N RTI O T REP
A A	N ME G D SE
US SE & CO. KG NI	ATE D OLI
FRESE	NS CO

		Fresenius Medical Care			Fresenius Kabi			Fresenius Helios			Fresenius Vamed			Corporate / Other			Fresenius Group
by business segment, € in millions	2018 1	2017	Change	2018 1	20171	Change	2018	2017	Change	2018	2017	Change	2018 2	20172	Change	2018	2017	Change
Sales	4,213	4,471	- 6 %	1,604	1,598	0 %	2,343	2,238	5 %	266	258	3 %	-44	- 33	- 33 %	8,382	8,532	- 2 %
thereof contribution to consolidated sales	4,205	4,463	- 6 %	1,590	1,584	0 %	2,336	2,238	4 %	251	245	2 %	0		2 - 100 %	8,382	8,532	- 2 %
thereof intercompany sales	8	8	0 %	14	14	0 %	7	0		15	13	15 %	-44	- 35	- 26 %	0	0
contribution to consolidated sales	50 %	52 %		19 %	19 %		28 %	26 %		3 %	3 %		0 %	0 %		100 %	100 %
EBITDA	748	770	- 3 %	361	385	- 6 %	400	377	6 %	15	14	7 %	783	- 18	--	2,307	1,528	51 %
Depreciation and amortization	180	186	- 3 %	72	76	- 5 %	107	95	13 %	3	3	0 %	2	1	100 %	364	361	1 %
EBIT	568	584	- 3 %	289	309	- 6 %	293	282	4 %	12	11	9 %	781	- 19	--	1,943	1,167	66 %
Net interest	- 84	- 96	13 %	- 31	- 29	- 7 %	- 40	- 42	5 %	- 1	- 1	0 %	1	- 4	125 %	- 1 55	- 172	10 %
Income taxes	- 116	- 150	23 %	- 64	- 84	24 %	- 52	- 47	- 11 %	- 3	- 3	0 %	- 137	7	--	- 372	- 277	- 34 %
shareholders of Fresenius SE & Co. KGaA Net income attributable to	307	269	14 %	185	188	- 2 %	197	192	3 %	7	7	0 %	-44	- 206	79 %	652	450	45 %
Operating cash fl ow	656	882	- 26 %	228	203	12 %	162	120	35 %	- 14		16 - 188 %	- 12	- 14	14 %	1,020	1,207	- 15 %
Cash fl ow before acquisitions and dividends	428	689	- 38 %	124	121	2 %	63	41	54 %	- 17		18 - 194 %	- 18	- 19	5 %	580	850	- 32 %
Capital expenditure, gross	245	206	18 %	95	85	12 %	100	81	23 %	12	4	200 %	- 1		5 - 120 %	451	381	18 %
Acquisitions, gross / investments	168	318	- 47 %	1	0		8	20	- 60 %	17	–	--	0	0		194	338	- 43 %
Research and development expenses	38	35	7 %	129	87	48 %	–	–	--	0	0		- 1	0		166	122	36 %
Key fi gures
EBITDA margin	17.8 %	17.2 %		22.5 %	24.1 %		17.1 %	16.8 %		5.6 %	5.4 %					18.0 % 1	18.0 %1
EBIT margin	13.5 %	13.0 %		18.0 %	19.3 %		12.5 %	12.6 %		4.5 %	4.3 %					13.7 % 1	13.8 %1
Depreciation and amortization in % of sales	4.3%	4.2%		4.5%	4.8%		4.6%	4.2%		1.1%	1.2%					4.3%	4.2%
Operating cash flow in % of sales	15.6 %	19.7 %		14.2 %	12.7 %		6.9 %	5.4 %		- 5.3 %	6.2 %					12.2 %	14.1 %

¹ Before transaction-related effects 2 After transaction-related effects

The following notes are an integral part of the unaudited condensed interim fi nancial statements.

The consolidated segment reporting is an integral part of the notes.

TABLE OF CONTENTS NOTES

29 General notes

• 29 1. Principles
• 29 I. Group structure
• 29 II. Basis of presentation
• 29 III. Summary of signifi cant accounting policies
• 29 IV. Recent pronouncements, applied
• 33 V. Recent pronouncements, not yet applied
• 33 2. Acquisitions, divestitures and investments

36 Notes on the consolidated statement of income

• 36 3. Special items
• 36 4. Sales
• 36 5. Research and development expenses
• 36 6. Taxes
• 36 7. Earnings per share

37 Notes on the consolidated statement of fi nancial position

• 37 8. Cash and cash equivalents
• 37 9. Trade accounts and other receivables
• 37 10. Inventories
• 37 11. Other current and non-current assets
• 38 12. Goodwill and other intangible assets
• 39 13. Debt and capital lease obligations
• 42 14. Bonds
• 43 15. Convertible bonds
• 43 16. Pensions and similar obligations
• 43 17. Noncontrolling interest
• 44 18. Fresenius SE & Co. KGaA shareholders' equity

46 Other notes

• 46 19. Legal and regulatory matters
• 49 20. Financial instruments
• 53 21. Supplementary information on capital management
• 53 22. Supplementary information on the consolidated statement of cash fl ows
• 53 23. Notes on the consolidated segment reporting
• 54 24. Share-based compensation plans
• 56 25. Subsequent events
• 56 26. Corporate Governance
• 57 27. Responsibility Statement

GENERAL NOTES

1. PRINCIPLES

I. GROUP STRUCTURE

Fresenius is a global health care group with products and services for dialysis, hospitals and outpatient medical care. In addition, the Fresenius Group focuses on hospi tal operations and also manages projects and provides services for hospitals and other health care facilities worldwide. Besides the activities of the parent company Fresenius SE & Co. KGaA, Bad Homburg v. d. H., the operating activities were split into the following legally independent business segments as of June 30, 2018:

• ▶ Fresenius Medical Care
• ▶ Fresenius Kabi
• ▶ Fresenius Helios
• ▶ Fresenius Vamed

The reporting currency in the Fresenius Group is the euro. In order to make the presentation clearer, amounts are mostly shown in million euros. Amounts under € 1 million after rounding are marked with "–".

II. BASIS OF PRESENTATION

Fresenius SE & Co. KGaA, as a stock exchange listed company with a domicile in a member state of the European Union, fulfi lls its obligation to prepare and publish the consolidated fi nancial statements in accordance with the International Financial Reporting Standards (IFRS) applying Section 315e of the German Commercial Code (HGB).

The accompanying condensed interim fi nancial statements comply with the International Accounting Standard (IAS) 34. They have been prepared in accordance with the IFRS in force on the reporting date and adopted by the European Union.

The Fresenius Group has applied IFRS 15, Revenue from Contracts with Customers, and IFRS 9, Financial Instruments, since January 1, 2018. As a result of the implementation, the Fresenius Group has updated its accounting policies accordingly. Changes in the accounting policies due to the implementation of IFRS 15 and IFRS 9 are described in note 1.IV, Recent pronouncements, applied. For all other issues, the accounting policies applied in the accompanying consolidated fi nancial statements are the same as those applied in the consolidated fi nancial statements as of December 31, 2017.

III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The condensed consolidated fi nancial statements and management report for the fi rst half and the second quarter ended June 30, 2018 have not been audited nor reviewed and should be read in conjunction with the notes included and published in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS.

Except for the reported acquisitions (see note 2, Acquisitions, divestitures and investments), there have been no other major changes in the entities consolidated.

The consolidated fi nancial statements for the fi rst half and the second quarter ended June 30, 2018 include all adjustments that, in the opinion of the Management Board, are of a normal and recurring nature and are necessary to provide an appropriate view of the assets and liabilities, fi nancial position and results of operations of the Fresenius Group.

The results of operations for the fi rst half ended June 30, 2018 are not necessarily indicative of the results of operations for the fi scal year 2018.

Classifi cations

In the prior year's comparative consolidated fi nancial statements, fi nance lease receivables in the amount of € 58 million have been reclassifi ed from other currents assets to trade accounts and other receivables to conform to the current year's presentation.

Use of estimates

The preparation of consolidated fi nancial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated fi nancial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

IV. RECENT PRONOUNCEMENTS, APPLIED

The Fresenius Group has prepared its consolidated fi nancial statements at June 30, 2018 in conformity with IFRS in force for the interim periods on January 1, 2018.

In the fi rst half of 2018, the Fresenius Group applied the following new standards relevant for its business for the fi rst time:

IFRS 15

In May 2014, the International Accounting Standards Board (IASB) issued IFRS 15, Revenue from Contracts with Customers. This new standard specifi es how and when companies reporting under IFRS will recognize revenue as well as providing users of fi nancial statements with more informative and relevant disclosures. IFRS 15 supersedes IAS 18, Revenue, IAS 11, Construction Contracts, and a number of revenue-related interpretations. This standard applies to nearly all contracts with customers, the main exceptions are leases, fi nancial instruments and insurance con tracts. In September 2015, the IASB issued the amendment Effective Date of IFRS 15, which defers the effective date of IFRS 15 by one year to fi scal years beginning on or after January 1, 2018. The Fresenius Group adopted this standard as of January 1, 2018. In accordance with the transition provisions in IFRS 15, the new rules have been adopted only to those contracts that were not completed contracts as of January 1, 2018 following the cumulative effect method with no restatement of the comparative periods presented.

IFRS 15 requires the consideration of implicit price concessions when determining the transaction price which, upon adoption, resulted in the implicit price concessions in the business segment Fresenius Medical Care directly reducing revenue in the amount of € 305 million for the fi rst half of 2018. Prior to the adoption of IFRS 15, these price concessions were included in the general and administrative expenses as an allowance for doubtful accounts in the amount of € 270 million for the fi rst half of 2017. Consequently, there is no effect on net income as the implicit price concessions are merely presented in different lines within the consolidated statement of income.

In the business segment Fresenius Vamed, sales from long-term production contracts are no longer recognized using the percentage of completion method (PoC method) but according to the IFRS 15 guidance for performance obligations satisfi ed over time, which did not result in any changes to the consolidated statement of income. In the consolidated statement of fi nancial position the amounts that were included

in inventory under the PoC method will generally be recognized as contract assets according to IFRS 15. Contract assets are included in other current and other non-current assets in the consolidated statement of fi nancial position. At the end of the reporting period, € 288 million were included in other current assets that would have been included in inventories according to the former rule.

Other contract assets relate to medical treatments that have been started but not completed at the respective reporting date. They were previously recognized as trade accounts receivable.

The Fresenius Group applies the following policies for recognizing revenue:

Revenues from services and products are billed according to the usual contract arrangements with customers, patients and related third parties. For services performed for patients, the transaction price is estimated based on either Fresenius Group's standard rates, rates determined under reimbursement arrangements or by government regulations. These arrangements are generally with third party payors, such as U.S. Medicare, U.S. Medicaid, German health insurance funds or commercial insurers. Deductions from rebates and discounts that are contractually agreed are taken into account to determine the expected recoverable amount which is calculated on the basis of historical data.

If the collection of the billed amount or a portion of the billed amount for services performed for patients is considered to be uncertain at the time services are performed, the Fresenius Group concludes that the consideration is variable (implicit price concession) and records the difference between the billed amount and the amount estimated to be collectible as a reduction to health care services revenue. Prior to the adoption of IFRS 15, it was recorded as an allowance for accounts receivable. Implicit price concessions include such items as amounts due from patients without adequate insurance coverage and patient co-payment and deductible amounts due from patients with health care coverage. The Fresenius Group determines implicit price concessions primarily upon past collection history.

Revenue from services is generally recognized on the date the service is performed. At this point of time the payor is obliged to pay for the performed services.

Revenue from product sales is recognized when the customer obtains control of the product, either after possession is transferred or upon installation and provision of the necessary technical instructions or at another point in time that better defi nes transfer of control.

A portion of revenues is generated from contracts which on the one hand give the customer the right to use dialysis machines and on the other hand provide the customer with disposables and services. In this case, the transaction price is allocated in accordance with IFRS 15, and revenue is recognized separately for the lease and the non-lease components of the contract in accordance with IAS 17 and IFRS 15, respectively.

Fresenius Vamed has performance obligations from longterm production contracts that are satisfi ed over time. Revenue is recognized according to progress towards completion. This progress towards completion of the performance obligation is measured based on the costs incurred in relation to expected total costs of fulfi lling the contract, contractually defi ned milestones or performance completed to date whichever better refl ects the progress towards completion of the performance obligation.

IFRS 15 does not apply to lease and insurance contracts. Revenue from leasing components and insurance contracts is determined according to IAS 17 and IFRS 4, respectively.

IFRS 9

In July 2014, the IASB issued a new version of IFRS 9, Financial Instruments. This IFRS 9 version is considered the fi nal and complete version, thus, mainly replacing IAS 39 as soon as IFRS 9 is applied. It includes all prior guidance on the classifi cation and measurement of fi nancial assets and fi nancial liabilities as well as hedge accounting and introduces requirements for impairment of fi nancial instruments as well as modifi ed requirements for the measurement categories of fi nancial assets. The impairment provisions refl ect a model that relies on expected losses (expected loss model). This model comprises a three stage approach: Upon recognition, an entity shall recognize losses that are expected within the next 12 months. If credit risk deteriorates signifi cantly, from that point in time impairment losses shall amount to lifetime expected losses. In case of objective evidence of impairment, there is an assignment to stage 3. The provisions for classifi cation and measurement are amended by introducing an additional third measurement category for certain debt instruments. Such instruments shall be measured at fair value with changes recognized in other comprehensive income (loss) (fair value through other comprehensive income). The standard is accompanied by additional disclosure requirements and is effective for fi scal years beginning on or after January 1, 2018.

In accordance with IAS 39 and IFRS 9, the majority of the non-derivative fi nancial assets are measured at amortized costs. The impact on the measurement of non-derivative fi nancial assets under IFRS 9 has not been signifi cant. For individual equity instruments, the Fresenius Group has opted to present changes in fair value in other comprehensive income (loss). The requirements for the classifi cation and measurement of non-derivative fi nancial liabilities have not changed signifi cantly. Thus, IFRS 9 has a limited impact on the consolidated fi nancial statements. Derivatives not designated as hedging instruments will continue to be classifi ed and measured at fair value through profi t and loss.

The Fresenius Group follows the modifi ed retrospective method without restatement of previous periods for adopting IFRS 9.

Differences in the carrying amounts of fi nancial assets and fi nancial liabilities as of December 31, 2017, according to IAS 39 and as of January 1, 2018, according to IFRS 9 are recognized in other reserves in the amount of - € 17 million.

IFRS 9 has an impact on the accounting policies for classifying fi nancial instruments, on the methodology to assess the impairment of fi nancial instruments and on the hedge accounting requirements. The Fresenius Group applies the following policies after implementing IFRS 9:

Classifi cation of fi nancial instruments

Financial instruments are allocated to categories following the analysis of the business model and cash fl ow characteristics as required by IFRS 9. The following categories are relevant for the Fresenius Group: fi nancial assets and liabilities measured at amortized cost, fi nancial assets and liabilities measured at fair value through profi t and loss and fi nancial

assets measured at fair value through other comprehensive income. In the fi rst half of 2018, no reclassifi cations between categories were necessary.

Impairment of fi nancial assets

According to IFRS 9, impairments are recognized on the basis of expected credit losses (expected credit loss model).

The Fresenius Group recognizes a loss allowance for expected credit losses on fi nancial assets measured at amortized cost, contract assets and lease receivables as well as in investments in debt instruments measured at fair value through other comprehensive income. The fi nancial assets mainly comprise trade accounts receivable and cash and cash equivalents. The amount of expected credit losses is updated at each reporting date to refl ect changes in credit risk since initial recognition of the respective instrument.

For trade accounts receivable, the Fresenius Group uses the simplifi ed method which requires recognizing lifetime expected credit losses.

Expected credit losses on cash and cash equivalents are measured according to the general method which is based on 12-month expected credit losses. Due to the short maturity term of the fi nancial instruments, this corresponds with the lifetime expected loss. A signifi cant increase in credit risk is calculated on the basis of available quantitative and qualitative information. Based on external credit ratings of the counterparties, the Fresenius Group considers that its cash and cash equivalents have a low credit risk.

The allowances are estimates comprised of customer and fi nancial asset specifi c evaluations regarding payment history, current fi nancial stability, and applicable future economic conditions.

Financial assets whose expected credit loss is not assessed individually are allocated to geographical regions. The impairment is generally assessed on the basis of macroeconomic indicators such as credit default swaps or scoring models.

In case of objective evidence of a detrimental impact on the estimated future cash fl ows of a fi nancial asset, the asset is considered to be credit impaired.

When a counterpart defaults, all fi nancial assets against this counterpart are considered impaired. The defi nition of default is mainly based on payment practices specifi c to individual regions and businesses.

Hedge accounting

The Fresenius Group applies the new IFRS 9 hedge accounting requirements. Therefore, the Fresenius Group makes sure that hedge accounting relationships are aligned with its risk management objectives and strategy and that a qualitative and forward-looking approach is used for assessing hedge effectiveness.

The Fresenius Group uses foreign exchange forward contracts to hedge the variability in cash fl ows arising from changes in foreign exchange rates relating to foreign currency sales, purchases, projects and services as well as inventory purchases and borrowings in foreign currency. The Fresenius Group solely designates the spot element of the foreign exchange forward contract as hedging instrument in cash fl ow hedges. The effective portion of changes in fair value of the spot element of the hedging instruments is accumulated in a cash fl ow hedge reserve as a separate component within other comprehensive income (loss). The forward element of the foreign exchange forward contract is separately accounted for as cost of hedging reserve within other comprehensive income (loss).

For all cash fl ow hedges, except for foreign currency risk associated with forecast purchases of non-fi nancial assets, the amounts accumulated in the cash fl ow hedge reserve are reclassifi ed to profi t or loss as a reclassifi cation adjustment in the same period as the hedged forecasted cash fl ows affect profi t or loss. For cash fl ow hedges of foreign currency risk associated with forecast purchases of non-fi nancial assets, the amounts accumulated in the cash fl ow hedge reserve are instead included directly in the initial cost of the asset when it is recognized. The same approach applies to the amounts accumulated in the costs of hedging reserve.

V. RECENT PRONOUNCEMENTS, NOT YET APPLIED

The International Accounting Standards Board (IASB) issued the following for the Fresenius Group relevant new standards:

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 fi nancial statements. IFRS 17 is effective for fi scal years beginning on or after January 1, 2021. Earlier adoption is permitted for entities that have also adopted IFRS 9, Financial Instruments, and IFRS 15, Revenue from Contracts with Customers. The Fresenius Group is currently evaluating the impact of IFRS 17 on the consolidated fi nancial statements.

In January 2016, the IASB issued IFRS 16, Leases, which supersedes the current standard on lease accounting, IAS 17, as well as the interpretations IFRIC 4, SIC-15 and SIC-27. IFRS 16 signifi cantly changes lessee accounting. For all leases, a lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Depreciation of the right-of-use asset and interest on the lease liability must be recognized in the income statement for every lease contract. Therefore, straight-line rental expenses will no longer be shown. The lessor accounting requirements in IAS 17 are substantially carried forward. The standard is effective for fi scal years beginning on or after January 1, 2019. Earlier application is permitted for entities that have also adopted IFRS 15, Revenue from Contracts with Cus tomers. The Fresenius Group decided that IFRS 16 will not be adopted early. The Fresenius Group expects a balance sheet extension

due to the on balance sheet recognition of right-of-use assets and liabilities for agreed lease payment obligations, currently classifi ed as operating leases, resulting in particular from leased clinics and buildings. Based on an impact analysis, using certain assumptions and simplifi cations, the Fresenius Group expects a fi nancial debt increase of approximately € 5 billion. Referring to the consolidated statement of income, the Fresenius Group expects an EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) as well as an operating income improvement due to the split of rent expenses in depreciation and interest expenses, by having unchanged cash outfl ows. The Fresenius Group also expects that its Leverage Ratio will increase by about 0.3 to 0.4. The impact on the Fresenius Group will depend on the contract portfolio at the effective date as well as on the transition method. Based on a previous impact analysis, the Fresenius Group will apply the modifi ed retrospective method. Except for the transition method, the Fresenius Group is currently evaluating the accounting policy options of IFRS 16.

The EU Commission's endorsement of IFRS 17 is still outstanding.

In the Fresenius Group's view, all other pronouncements issued by the IASB do not have a material impact on the consolidated fi nancial statements, as expected.

2. ACQUISITIONS, DIVESTITURES AND INVESTMENTS

The Fresenius Group made acquisitions, investments and purchases of intangible assets of € 386 million and € 6,421 million in the fi rst half of 2018 and 2017, respectively. Of this amount, € 372 million was paid in cash and € 14 million was assumed obligations in the fi rst half of 2018.

FRESENIUS MEDICAL CARE

In the fi rst half of 2018, Fresenius Medical Care spent € 352 million on acquisitions, mainly on investments in fi nancial assets, the purchase of dialysis clinics as well as an equity investment in Humacyte, Inc., a medical research, discovery and development company, to gain a 19% ownership stake as well as a related exclusive global distribution right to Humacyte's bioengineered human acellular vessels.

Divestment of Sound Inpatient Physicians Holdings, LLC, USA

On June 28, 2018, Fresenius Medical Care completed the divestment of its controlling interest in Sound Inpatient Physicians Holdings, LLC to an investment consortium led by Summit Partners, L.P. The total transaction proceeds were US\$ 1,925 million (€ 1,662 million). The pre-tax gain related to divestitures for care coordination activities was € 820 million, which primarily related to this divestiture, the effect of the six month impact from the increase in valuation of Sound's share based payment program, incentive compensation expense and other costs caused by the divestment of Sound.

Acquisition of NxStage Medical, Inc.

On August 7, 2017, Fresenius Medical Care announced the acquisition of NxStage Medical, Inc. (NxStage), a U.S.-based medical technology and services company, for a total transaction value of approximately US\$ 2.0 billion (€ 1.7 billion). On October 27, 2017, the shareholders of NxStage approved the acquisition. The transaction remains subject to regulatory approvals and other customary closing conditions. Fresenius Medical Care expects the closing of the transaction to occur in 2018.

FRESENIUS KABI

Termination of the merger agreement with Akorn, Inc.

On April 24, 2017, Fresenius announced that Fresenius Kabi has agreed to acquire Akorn, Inc. (Akorn), a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for approximately US\$ 4.3 billion, or US\$ 34 per share, plus the prevailing net debt at closing of the transaction.

Fresenius has been conducting an independent investigation, using external experts, into alleged breaches of FDA data integrity requirements relating to product development at Akorn.

Fresenius decided on April 22, 2018 to terminate the merger agreement with Akorn, due to Akorn's failure to fulfi ll several closing conditions.

Fresenius' decision is based on, among other factors, material breaches of FDA data integrity requirements relating to Akorn's operations found during Fresenius' independent investigation. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn declined that offer.

Akorn disagreed with Fresenius' position and fi led a lawsuit on April 23, 2018 purporting to enforce the merger agreement. Fresenius fi led a counterclaim on April 30, 2018.

The trial of the lawsuit took place in the Delaware Court of Chancery from July 9 to 13, 2018.

The exchange of post-trial briefs is expected to take place until August 20, with the closing arguments on August 23, 2018. Judgment is expected up to 90 days thereafter.

Against such judgment, the losing party may appeal to the Delaware Supreme Court, the highest court in Delaware.

Acquisition of the biosimilars business of Merck KGaA

On August 31, 2017, Fresenius Kabi has successfully closed the acquisition of Merck KGaA's biosimilars business. The transaction comprises a development pipeline and about 70 employees located in Aubonne and Vevey, Switzerland. The product pipeline has a focus on oncology and autoimmune diseases. The biosimilars business has been consolidated as of September 1, 2017.

The consideration transferred of € 748 million is composed of € 156 million, which were paid in cash upon closing, and risk-adjusted discounted success-related payments expected for the coming years with a current fair value of € 592 million, which are strictly tied to achievements of agreed development and sales targets.

The transaction was accounted for as a business combination. The following table summarizes the current estimated fair values of assets acquired and liabilities assumed at the date of the acquisition. This allocation of the purchase price

is based upon the best information available to management at present. Due to the relatively short interval between the closing date of the acquisition and the date of the statement of fi nancial position, this information may be incomplete. Any adjustments to acquisition accounting, net of related income tax effects, will be recorded with a corresponding adjustment to goodwill.

€ in millions

Consideration transferred	748
Goodwill	399
Liabilities	- 7
Intangible assets	352
Property, plant and equipment and other non-current assets	2
Working capital and other assets	2

The goodwill in the amount of € 399 million that was acquired as part of the acquisition will be deductible for tax purposes.

Goodwill mainly represents the value of future opportunities due to the acquisition of biosimilars products and their platform. The platform with highly qualifi ed biosimilars experts will enable Fresenius to develop further products in this market segment and bring them on the market in the future. Furthermore, Fresenius acquired the opportunity to sell biosimilars products in other markets.

FRESENIUS HELIOS

In the fi rst half of 2018, Fresenius Helios spent € 11 million on acquisitions, mainly for the purchase of outpatient clinics in Germany.

On July 1, 2018, Fresenius Helios has transferred 38 health care facilities and 13 service companies in Germany specializing in inpatient post-acute and nursing care to Fresenius Vamed.

Acquisition of IDCSalud Holding S.L.U. (Quirónsalud)

On January 31, 2017, Fresenius Helios closed the acquisition of 100% of the share capital in IDCSalud Holding S.L.U. (Quirónsalud), Spain's largest private hospital operator. Quirónsalud has been consolidated as of February 1, 2017.

Quirónsalud's network is comprised of 45 hospitals, 56 outpatient centers and about 300 Occupational Risk Preven tion centers located in every metropolitan region of Spain. The company offers the full spectrum of inpatient and outpatient care. With the acquisition, Fresenius Helios strengthens its position as Europe's largest private hospital operator.

€ 5.36 billion of the total purchase price in the amount of € 5.76 billion had already been fi nanced by means of different debt instruments and paid in cash on January 31, 2017. The balance of € 400 million was paid in the form of 6,108,176 new shares of Fresenius SE & Co. KGaA issued on January 31, 2017 from Authorized Capital excluding sub scription rights. In April 2017, a compensation payment in the amount of € 174 million was made for working capital taken over.

The transaction was accounted for as a business combination. The following table comprises the fi nal fair values of assets acquired and liabilities assumed at the date of the acquisition. Any adjustments to acquisition accounting until fi nalization on January 31, 2018 was recorded with a corresponding adjustment to goodwill, net of related income tax effects.

€ in millions
Trade accounts receivable	776
Working capital and other assets	74
Property, plant and equipment and other non-current assets	1,775
Intangible assets	1,306
Liabilities	- 1,315
Goodwill	3,336
Noncontrolling interest	- 21
Consideration transferred	5,931

The goodwill in the amount of € 3,336 million that was acquired as part of the acquisition is not deductible for tax purposes.

Goodwill mainly represents the market position of the acquired hospitals, health centers and health care facilities, the economies of scale of the signifi cantly grown largest private European hospital operator and the know-how of the employees.

The noncontrolling interests acquired as part of the acquisition are stated at fair value.

FRESENIUS VAMED

In the fi rst half of 2018, Fresenius Vamed spent € 22 million on acquisitions, mainly for an investment in an acute and post-acute care clinic in China.

On July 1, 2018, Fresenius Helios has transferred 38 health care facilities and 13 service companies in Germany specializing in inpatient post-acute and nursing care to Fresenius Vamed. The transaction has a total volume of € 485 million, including assumed net debt of € 15 million. It is fi nanced within the Group.

NOTES ON THE CONSOLIDATED STATEMENT OF INCOME

3. SPECIAL ITEMS

Net income attributable to shareholders of Fresenius SE & Co. KGaA for the fi rst half of 2018 in the amount of € 1,092 million includes special items relating to the terminated merger agreement with Akorn, Inc. These mainly comprise transaction costs in the form of legal and consulting expenses as well as fi nancing commitment expenses for the Akorn transaction. Furthermore, a gain related to divestitures of care coordination activities (mainly Sound Inpatient Physicians) is included.

The special items had the following impact on the consolidated statement of income:

	Interest	Net income attributable to share holders of Fresenius SE & Co. KGaA
2,199	- 297	922
- 40	- 7	- 37
820	0	207
2,979	- 304	1,092
	EBIT	expenses

4. SALES

In the fi rst half of 2018, sales by activity according due to the IFRS 15 categorization were as follows:

Sales	16,503
Other sales	151
thereof further sales from contracts with customers	3
thereof sales from long-term production contracts	191
thereof sales of products and related services	4,687
thereof sales of services	11,471
Sales from contracts with customers	16,352
€ in millions	H1 / 2018

Other sales include sales from insurance and lease contracts. In the fi rst half of 2017, sales by activity according due to

the categorization used until year end 2017 were as follows:

€ in millions	H1 / 2017
Sales of services	11,966
Sales of products and related goods	4,739
Sales from long-term production contracts	185
Other sales	4
Sales	16,894

The changes in activity classifi cation are due to the fi rst time use of the new IFRS 15 classifi cation in the fi rst quarter of 2018.

5. RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses of € 325 million (H1 / 2017: € 243 million) included expenditures for research and non- capitalizable development costs as well as regular depreciation and amortization expenses relating to capitalized development costs of € 8 million (H1 / 2017: € 8 million).

6. TAXES

During the fi rst half of 2018, there were no material changes relating to accruals for income taxes as well as recognized and accrued payments for interest and penalties. Further information can be found in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS.

The decrease of the group tax rate before special items to 22.3% (H1 / 2017: 28.5%) was mainly due to the U.S. tax reform.

7. EARNINGS PER SHARE

The following table shows the earnings per share including and excluding the dilutive effect from stock options issued:

	H1 / 2018	H1 / 2017
Numerators, € in millions
Net income attributable to
shareholders of
Fresenius SE & Co. KGaA	1,092	907
less effect from dilution due to
Fresenius Medical Care shares	1	–
Income available to
all ordinary shares	1,091	907
Denominators in number of shares
Weighted-average number of
ordinary shares outstanding	555,010,427	553,705,886
Potentially dilutive
ordinary shares	2,221,223	3,916,335
Weighted-average number
of ordinary shares outstanding
assuming dilution	557,231,650	557,622,221
Basic earnings per share in €	1.97	1.64
Fully diluted earnings per share in €	1.96	1.63

NOTES ON THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

8. CASH AND CASH EQUIVALENTS

As of June 30, 2018 and December 31, 2017, cash and cash equivalents were as follows:

€ in millions	June 30, 2018	Dec. 31, 2017
Cash	1,078	1,139
Time deposits and securities
(with a maturity of up to 90 days)	1,189	497
Total cash and cash equivalents	2,267	1,636

The increase of time deposits relates to short-term investments of proceeds from the divestment of the controlling interest in Sound Inpatient Physicians Holdings, LLC.

As of June 30, 2018 and December 31, 2017, earmarked funds of € 113 million and € 183 million, respectively, were included in cash and cash equivalents.

9. TRADE ACCOUNTS AND OTHER

RECEIVABLES

As of June 30, 2018, January 1, 2018 and December 31, 2017, trade accounts and other receivables were as follows:

	June 30, 2018		January 1, 2018			Dec. 31, 2017
€ in millions		thereof credit impaired	Book value according to IFRS 9 and IFRS 15	Adjustment on initial application of IFRS 9	Adjustment on initial application of IFRS 15
Trade accounts and other receivables	7,047	718	6,547	- 7	- 447	7,001
less allowance for doubtful accounts	312	238	312	35	- 464	741
Trade accounts and other receivables, net	6,735	480	6,235	- 42	17	6,260

Within trade accounts and other receivables, net, as of June 30, 2018, € 6,658 million relate to revenue from contracts with customers as defi ned by IFRS 15. This amount includes € 309 million of allowance for doubtful accounts. Further trade accounts and other receivables, net relate to lease contracts.

10. INVENTORIES

As of June 30, 2018 and December 31, 2017, inventories consisted of the following:

€ in millions	June 30, 2018	Dec. 31, 2017
Raw materials and purchased components	724	653
Work in process	377	715
Finished goods	2,080	2,024
less reserves	105	140
Inventories, net	3,076	3,252

Upon implementation of IFRS 15, € 311 million relating to long-term production contracts from Fresenius Vamed have been reclassifi ed from work in process within inventory to contract assets within other current and non-current assets.

11. OTHER CURRENT AND NON-CURRENT ASSETS

At equity investments as of June 30, 2018 in the amount of € 614 million (December 31, 2017: € 647 million) mainly related to the joint venture named Vifor Fresenius Medical Care Renal Pharma Ltd. between Fresenius Medical Care and Galenica Ltd. In the fi rst half of 2018, income of € 34 million (H1 / 2017: € 38 million) resulting from this valuation was included in selling, general and administrative expenses in the consolidated statement of income.

CONTRACT ASSETS

Since the implementation of IFRS 15 on January 1, 2018, other current and non-current assets include contract assets within non-fi nancial assets. As of June 30, 2018, they amount to € 402 million. Thereof, € 311 million relating to long-term production contracts from Fresenius Vamed have been reclassifi ed from inventory (work in process) upon the initial application of IFRS 15.

Contract assets mainly relate to long-term production contracts for which revenue is recognized over time.

As of June 30, 2018, contract assets from revenue from contracts with customers as defi ned by IFRS 15 include € 1 million of allowance for doubtful accounts.

12. GOODWILL AND OTHER INTANGIBLE ASSETS

As of June 30, 2018 and December 31, 2017, intangible assets, split into amortizable and non-amortizable intangible assets, consisted of the following:

AMORTIZABLE INTANGIBLE ASSETS

		June 30, 2018			December 31, 2017
€ in millions	Acquisition cost	Accumulated amortization	Carrying amount	Acquisition cost	Accumulated amortization	Carrying amount
Tradenames	699	67	632	699	48	651
Customer relationships	719	100	619	840	123	717
Capitalized development costs	743	170	573	828	229	599
Patents, product and distribution rights	723	412	311	674	386	288
Software	692	384	308	599	337	262
Technology	422	171	251	415	154	261
Non-compete agreements	321	274	47	314	262	52
Other	534	350	184	418	271	147
Total	4,853	1,928	2,925	4,787	1,810	2,977

NON-AMORTIZABLE INTANGIBLE ASSETS

	June 30, 2018			December 31, 2017
€ in millions	Acquisition cost	Accumulated amortization	Carrying amount	Acquisition cost	Accumulated amortization	Carrying amount
Goodwill	25,143	0	25,143	25,285	0	25,285
Tradenames	196	0	196	192	0	192
Management contracts	3	0	3	3	0	3
Total	25,342	0	25,342	25,480	0	25,480

The carrying amount of goodwill has developed as follows:

€ in millions	Fresenius Medical Care	Fresenius Kabi	Fresenius Helios	Fresenius Vamed	Corporate / Other	Fresenius Group
Carrying amount as of January 1, 2017	12,956	5,302	4,538	99	6	22,901
Additions	596	394	3,365	19	0	4,374
Disposals	0	- 1	- 1	0	0	- 2
Foreign currency translation	- 1,448	- 540	0	0	0	- 1,988
Carrying amount as of December 31, 2017	12,104	5,155	7,902	118	6	25,285
Additions	83	12	55	10	0	160
Disposals	- 626	0	0	0	0	- 626
Reclassifi cations	0	- 7	0	0	0	- 7
Foreign currency translation	246	85	0	0	0	331
Carrying amount as of June 30, 2018	11,807	5,245	7,957	128	6	25,143

As of June 30, 2018 and December 31, 2017, the carrying amounts of the other non-amortizable intangible assets were € 183 million and € 178 million, for Fresenius Medical Care as well as € 16 million and € 17 million for Fresenius Kabi.

13. DEBT AND CAPITAL LEASE OBLIGATIONS

SHORT-TERM DEBT

As of June 30, 2018 and December 31, 2017, short-term debt consisted of the following:

		Book value
€ in millions	June 30, 2018	December 31, 2017
Fresenius SE & Co. KGaA Commercial Paper	825	715
Fresenius Medical Care AG & Co. KGaA Commercial Paper	805	680
Other short-term debt	370	155
Short-term debt	2,000	1,550

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

As of June 30, 2018 and December 31, 2017, long-term debt and capital lease obligations net of debt issuance costs consisted of the following:

	Book value
€ in millions	June 30, 2018	December 31, 2017
Fresenius Medical Care Credit Agreement	1,930	2,018
Fresenius Credit Agreement	2,180	2,238
Schuldschein Loans	1,714	1,873
Accounts Receivable Facility of Fresenius Medical Care	0	294
Capital lease obligations	226	234
Other	435	448
Subtotal	6,485	7,105
less current portion	451	618
Long-term debt and capital lease obligations, less current portion	6,034	6,487

Fresenius Medical Care Credit Agreement

Fresenius Medical Care AG & Co. KGaA (FMC-AG & Co. KGaA) originally entered into a syndicated credit facility ( Fresenius Medical Care 2012 Credit Agreement) of US\$ 3,850 million and a 5-year tenor on October 30, 2012.

In the years 2014 and 2017, various amendments of the Fresenius Medical Care Credit Agreement were made. These related to the amount and structure of the available tranches, among other items. In addition, the terms have been extended.

The following tables show the available and outstanding amounts under the Fresenius Medical Care Credit Agreement at June 30, 2018 and at December 31, 2017:

	June 30, 2018
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit Facility (in US\$)	US\$ 900 million	772	US\$0 million	0
Revolving Credit Facility (in €)	€ 600 million	600	€ 0 million	0
Term Loan 5 years (in US\$)	US\$ 1,410 million	1,209	US\$ 1,410 million	1,209
Term Loan 3 years (in €)	€ 400 million	400	€ 400 million	400
Term Loan 5 years (in €)	€ 329 million	329	€ 329 million	329
Total		3,310		1,938
less fi nancing cost				8
Total				1,930

	December 31, 2017
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit Facility (in US\$)	US\$ 900 million	750	US\$70 million	58
Revolving Credit Facility (in €)	€ 600 million	600	€ 0 million	0
Term Loan 5 years (in US\$)	US\$ 1,470 million	1,226	US\$1,470 million	1,226
Term Loan 3 years (in €)	€ 400 million	400	€ 400 million	400
Term Loan 5 years (in €)	€ 343 million	343	€ 343 million	343
Total		3,319		2,027
less fi nancing cost				9
Total				2,018

In addition, at June 30, 2018 and December 31, 2017, Fresenius Medical Care had letters of credit outstanding in the amount of approximately US\$ 2 million (€ 1 million), respectively, under the U.S. dollar revolving credit facility. The letters of credit were not included in the above mentioned outstanding balances at those dates but reduce available borrowings under the applicable revolving credit facility.

As of June 30, 2018, FMC-AG & Co. KGaA and its subsidiaries were in compliance with all covenants under the Fresenius Medical Care Credit Agreement.

Fresenius Credit Agreement

On December 20, 2012, Fresenius SE & Co. KGaA and various subsidiaries entered into a delayed draw syndicated credit agreement (2013 Credit Agreement) in the original amount of US\$ 1,300 million and € 1,250 million. Since the initial funding of the Credit Agreement in June 2013, additional tranches were added. Furthermore, scheduled amortization payments as well as voluntary repayments have been made. In August 2017, the Credit Agreement was refi nanced and replaced by new tranches with a total amount of approximately € 3,800 million.

The following tables show the available and outstanding amounts under the Fresenius Credit Agreement at June 30, 2018 and at December 31, 2017:

	June 30, 2018
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit Facility (in €)	€ 1,000 million	1,000	€ 0 million	0
Revolving Credit Facility (in US\$)	US\$ 500 million	429	US\$ 0 million	0
Term Loan 4 years (in €)	€ 750 million	750	€ 750 million	750
Term Loan 5 years (in €)	€ 925 million	925	€ 925 million	925
Term Loan 5 years (in US\$)	US\$ 605 million	519	US\$ 605 million	519
Total		3,623		2,194
less fi nancing cost				14
Total				2,180

	December 31, 2017
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit Facility (in €)	€ 1,000 million	1,000	€ 0 million	0
Revolving Credit Facility (in US\$)	US\$ 500 million	417	US\$ 0 million	0
Term Loan 4 years (in €)	€ 750 million	750	€ 750 million	750
Term Loan 5 years (in €)	€ 975 million	975	€ 975 million	975
Term Loan 5 years (in US\$)	US\$ 635 million	529	US\$ 635 million	529
Total		3,671		2,254
less fi nancing cost				16
Total				2,238

As of June 30, 2018, the Fresenius Group was in compliance with all covenants under the Fresenius Credit Agreement.

Schuldschein Loans

As of June 30, 2018 and December 31, 2017, Schuld schein Loans of the Fresenius Group net of debt issuance costs consisted of the following:

Interest rate Notional amount Maturity fi xed / variable June 30, 2018 0 Fresenius SE & Co. KGaA 2014 / 2018 € 97 million April 2, 2018 2.09% Fresenius SE & Co. KGaA 2012 / 2018 € 72 million April 4, 2018 4.09% 0 Fresenius SE & Co. KGaA 2015 / 2018 € 91 million October 8, 2018 1.07% / variable 91 Fresenius SE & Co. KGaA 2014 / 2020 € 262 million April 2, 2020 2.67% / variable 262 Fresenius SE & Co. KGaA 2017 / 2022 € 372 million Jan. 31, 2022 0.93% / variable 371 21 Fresenius SE & Co. KGaA 2015 / 2022 € 21 million April 7, 2022 1.61% Fresenius SE & Co. KGaA 2017 / 2024 € 421 million Jan. 31, 2024 1.40% / variable 420 Fresenius SE & Co. KGaA 2017 / 2027 € 207 million Jan. 29, 2027 1.96% / variable 207 Fresenius US Finance II, Inc. 2016 / 2021 US\$ 342 million March 10, 2021 2.66% / variable 292 Fresenius US Finance II, Inc. 2016 / 2023 US\$ 58 million March 10, 2023 3.12% / variable 50 Schuldschein Loans 1,714			Book value € in millions
				Dec 31, 2017
				97
				72
				91
				262
				371
				21
				420
				206
				284
				49
				1,873

The Schuldschein Loans issued by Fresenius SE & Co. KGaA in the amount of € 97 million and € 72 million which were due on April 2, 2018 and April 4, 2018 were redeemed at maturity. The Schuld schein Loans issued by Fresenius SE & Co. KGaA in the amount of € 91 million which are due on October 8, 2018 are shown as current portion of long-term debt and capital lease obligations in the consolidated statement of fi nancial position.

As of June 30, 2018, the Fresenius Group was in compliance with all of its covenants under the Schuldschein Loans.

CREDIT LINES

In addition to the fi nancial liabilities described before, the Fresenius Group maintains additional credit facilities which have not been utilized, or have only been utilized in part, as of the reporting date. At June 30, 2018, the additional fi nancial cushion resulting from unutilized credit facilities was approximately € 3.7 billion. Thereof approximately € 2.8 billion accounted for syndicated credit facilities.

Bridge Financing Facility

On April 25, 2017, Fresenius SE & Co. KGaA entered into a Bridge Financing Facility in the amount of US\$ 4,200 million with a tenor of 18 months for the purpose of the acquisition of Akorn, Inc. which has not been utilized at June 30, 2018.

14. BONDS

As of June 30, 2018 and December 31, 2017, bonds of the Fresenius Group net of debt issuance costs consisted of the following:

				Book value € in millions
	Notional amount	Maturity	Interest rate	June 30, 2018	Dec. 31, 2017
Fresenius Finance Ireland PLC 2017 / 2022	€ 700 million	Jan. 31, 2022	0.875%	696	695
Fresenius Finance Ireland PLC 2017 / 2024	€ 700 million	Jan. 30, 2024	1.50%	696	696
Fresenius Finance Ireland PLC 2017 / 2027	€ 700 million	Feb. 1, 2027	2.125%	693	692
Fresenius Finance Ireland PLC 2017 / 2032	€ 500 million	Jan. 30, 2032	3.00%	494	494
Fresenius SE & Co. KGaA 2014 / 2019	€ 300 million	Feb. 1, 2019	2.375%	300	299
Fresenius SE & Co. KGaA 2012 / 2019	€ 500 million	Apr. 15, 2019	4.25%	499	499
Fresenius SE & Co. KGaA 2013 / 2020	€ 500 million	July 15, 2020	2.875%	498	498
Fresenius SE & Co. KGaA 2014 / 2021	€ 450 million	Feb. 1, 2021	3.00%	446	446
Fresenius SE & Co. KGaA 2014 / 2024	€ 450 million	Feb. 1, 2024	4.00%	449	449
Fresenius US Finance II, Inc. 2014 / 2021	US\$ 300 million	Feb. 1, 2021	4.25%	256	249
Fresenius US Finance II, Inc. 2015 / 2023	US\$ 300 million	Jan. 15, 2023	4.50%	256	248
FMC Finance VII S.A. 2011 / 2021	€ 300 million	Feb. 15, 2021	5.25%	297	297
FMC Finance VIII S.A. 2011 / 2018	€ 400 million	Sept. 15, 2018	6.50%	400	399
FMC Finance VIII S.A. 2012 / 2019	€ 250 million	July 31, 2019	5.25%	246	245
Fresenius Medical Care US Finance, Inc. 2011 / 2021	US\$ 650 million	Feb. 15, 2021	5.75%	554	538
Fresenius Medical Care US Finance II, Inc. 2011 / 2018	US\$ 400 million	Sept. 15, 2018	6.50%	343	332
Fresenius Medical Care US Finance II, Inc. 2012 / 2019	US\$ 800 million	July 31, 2019	5.625%	685	666
Fresenius Medical Care US Finance II, Inc. 2014 / 2020	US\$ 500 million	Oct. 15, 2020	4.125%	427	415
Fresenius Medical Care US Finance II, Inc. 2012 / 2022	US\$ 700 million	Jan. 31, 2022	5.875%	598	581
Fresenius Medical Care US Finance II, Inc. 2014 / 2024	US\$ 400 million	Oct. 15, 2024	4.75%	341	331
Bonds				9,174	9,069

On July 4, 2018, Fresenius Medical Care AG & Co. KGaA placed unsecured bonds with an aggregate principal amount of € 500 million. The bonds have a maturity of seven years and an annual coupon of 1.5%. The issue price is 99.704%. The proceeds will be used for general corporate purposes, including the refi nancing of upcoming maturities.

As of June 30, 2018, the bonds issued by FMC Finance VIII S.A. in the amount of € 400 million and by Fresenius Medical Care US Finance II, Inc. in the amount of US\$ 400 million due on September 15, 2018 as well as the bonds issued by Fresenius SE & Co. KGaA in the amount of € 300 million due on February 1, 2019 and € 500 million due on April 15, 2019 are shown as current portion of bonds in the consolidated statement of fi nancial position.

As of June 30, 2018, the Fresenius Group was in compliance with all of its covenants under the bonds.

15. CONVERTIBLE BONDS

As of June 30, 2018 and December 31, 2017, the convertible bonds of the Fresenius Group net of debt issuance costs consisted of the following:

					Book value € in millions
	Notional amount	Maturity	Coupon	Current conversion price	June 30, 2018	Dec. 31, 2017
Fresenius SE & Co. KGaA 2014 / 2019	€ 500 million	Sept. 24, 2019	0.000%	€ 49.0848	488	483
Fresenius SE & Co. KGaA 2017 / 2024	€ 500 million	Jan. 31, 2024	0.000%	€ 106.8947	452	448
Fresenius Medical Care AG & Co. KGaA 2014 / 2020	€ 400 million	Jan. 31, 2020	1.125%	€ 73.1980	390	387
Convertible bonds					1,330	1,318

The fair value of the derivatives embedded in the convertible bonds of Fresenius SE & Co. KGaA was € 250 million at June 30, 2018. The derivative embedded in the convertible bonds of Fresenius Medical Care AG & Co. KGaA (FMC-AG & Co. KGaA) was recognized with a fair value of € 99 million at June 30, 2018. Fresenius SE & Co. KGaA and FMC-AG & Co. KGaA have purchased stock options (call options) to hedge future fair value fl uctuations of these derivatives. As of June 30, 2018, the call options had a corresponding aggregate fair value of € 250 million and € 99 million, respectively.

The conversions will be cash-settled. Any increase of Fresenius' share price and of Fresenius Medical Care's share price above the conversion price would be offset by a corresponding value increase of the call options.

The derivatives embedded in the convertible bonds and the call options are recognized in other non-current liabilities / assets in the consolidated statement of fi nancial position.

16. PENSIONS AND SIMILAR OBLIGATIONS

DEFINED BENEFIT PENSION PLANS

At June 30, 2018, the pension liability of the Fresenius Group was € 1,219 million. The current portion of the pension liability of € 22 million is recognized in the consolidated statement of fi nancial position within short-term provisions and other short-term liabilities. The non-current portion of € 1,197 million is recorded as pension liability.

Contributions to Fresenius Group's pension fund were € 6 million in the fi rst half of 2018. The Fresenius Group expects approximately € 13 million contributions to the pension fund during 2018.

Defi ned benefi t pension plans' net periodic benefi t costs of € 42 million (H1 / 2017: € 42 million) were comprised of the following components:

€ in millions	H1 / 2018	H1 / 2017
Service cost	29	30
Net interest cost	13	12
Net periodic benefi t cost	42	42

17. NONCONTROLLING INTEREST

As of June 30, 2018 and December 31, 2017, noncon trolling interest in the Fresenius Group was as follows:

€ in millions	June 30, 2018	Dec. 31, 2017
Noncontrolling interest in Fresenius Medical Care AG & Co. KGaA	7,536	6,796
Noncontrolling interest in VAMED AG	70	66
Noncontrolling interest in the business segments
Fresenius Medical Care	1,083	1,008
Fresenius Kabi	83	89
Fresenius Helios	109	92
Fresenius Vamed	7	8
Total noncontrolling interest	8,888	8,059

Noncontrolling interest changed as follows:

€ in millions	H1 / 2018
Noncontrolling interest as of January 1, 2018	8,059
Noncontrolling interest in profi t	1,022
Purchase of noncontrolling interest	36
Stock options	7
Dividend payments	- 357
Currency effects and other changes	121
Noncontrolling interest as of June 30, 2018	8,888

18. FRESENIUS SE & CO. KGAA SHAREHOLDERS' EQUITY

SUBSCRIBED CAPITAL

As of January 1, 2018, the subscribed capital of Fresenius SE & Co. KGaA consisted of 554,710,473 bearer ordinary shares.

During the fi rst half of 2018, 905,620 stock options were exercised. Consequently, as of June 30, 2018, the subscribed capital of Fresenius SE & Co. KGaA consisted of 555,616,093 bearer ordinary shares. The shares are issued as non-par value shares. The proportionate amount of the subscribed capital is € 1.00 per share.

AUTHORIZED CAPITAL

By resolution of the Annual General Meeting on May 18, 2018, the previous Authorized Capital I was revoked and a new Authorized Capital I was created.

Accordingly, the general partner, Fresenius Management SE, is authorized, with the approval of the Supervisory Board, until May 17, 2023, to increase Fresenius SE & Co. KGaA's share capital (subscribed capital) by a total amount of up to € 125,000,000 through a single or multiple issues of new bearer ordinary shares against cash contributions and / or contributions in kind (Authorized Capital I).

The number of shares must increase in the same proportion as the subscribed capital. A subscription right must be granted to the shareholders in principle. In defi ned cases, the general partner is authorized, with the consent of the Supervisory Board, to decide on the exclusion of the shareholders' subscription right (e. g. to eliminate fractional amounts). For cash contributions, the authorization can only be exercised if the issue price is not signifi cantly below the stock exchange price of the already listed shares at the time the issue price is fi xed with fi nal effect by the general partner. Furthermore, in case of a capital increase against cash contributions, the proportionate amount of the shares issued with exclusion of subscription rights may not exceed 10% of the subscribed capital. An exclusion of subscription rights in the context of the use of other authorizations concerning the issuance or the sale of the shares of Fresenius SE & Co. KGaA or the issuance of rights which authorize or bind

to the subscription of shares of Fresenius SE & Co. KGaA has to be taken into consideration during the duration of the Authorized Capital until its utilization. In the case of a subscription in kind, the subscription right can be excluded only in order to acquire a company, parts of a company or a participation in a company.

The authorizations granted concerning the exclusion of subscription rights can be used by Fresenius Management SE only to such extent that the proportional amount of the total number of shares issued with exclusion of the subscription rights does not exceed 10% of the subscribed capital. An exclusion of subscription rights in the context of the use of other authorizations concerning the issuance or the sale of the shares of Fresenius SE & Co. KGaA or the issuance of rights which authorize or bind to the subscription of shares of Fresenius SE & Co. KGaA has to be taken into consideration during the duration of the Authorized Capital until its utilization.

The changes to the Authorized Capital I became effective upon registration with the commercial register on June 18, 2018.

CONDITIONAL CAPITAL

The following Conditional Capitals exist in order to fulfi ll the subscription rights under the stock option plans of Fresenius SE & Co. KGaA: Conditional Capital II (Stock Option Plan 2008) and Conditional Capital IV (Stock Option Plan 2013) (see note 24, Share-based compensation plans).

The previous authorization to issue option bearer bonds and / or convertible bonds (Conditional Capital III) dated May 16, 2014 was revoked by resolution of the Annual General Meeting of Fresenius SE & Co. KGaA on May 18, 2018. Simultaneously, a new Conditional Capital III with a fi ve-year term was approved.

Accordingly, the general partner is authorized, with the approval of the Supervisory Board, until May 17, 2023, to issue option bearer bonds and / or convertible bearer bonds, once or several times, for a total nominal amount of up to € 2.5 billion. To fulfi ll the granted subscription rights, the subscribed capital of Fresenius SE & Co. KGaA is increased conditionally by up to € 48,971,202 through issuing of up to

48,971,202 new bearer ordinary shares. The conditional capital increase shall only be implemented to the extent that the holders of cash issued convertible bonds or of cash issued warrants from option bonds exercise their conversion or

option rights and as long as no other forms of settlement are used. The new bearer ordinary shares shall participate in the profi ts from the start of the fi scal year in which they are issued.

The new Conditional Capital III became effective upon registration with the commercial register on June 18, 2018.

The following table shows the development of the Conditional Capital:

Ordinary shares
4,735,083
5,141,264
48,971,202
24,928,200
83,775,749
- 708,750
- 196,870
82,870,129

As of June 30, 2018, the Conditional Capital was composed as follows:

in €	Ordinary shares
Conditional Capital I Fresenius AG Stock Option Plan 2003	4,735,083
Conditional Capital II Fresenius SE Stock Option Plan 2008	4,432,514
Conditional Capital III option bearer bonds and / or convertible bonds	48,971,202
Conditional Capital IV Fresenius SE & Co. KGaA Stock Option Plan 2013	24,731,330
Total Conditional Capital as of June 30, 2018	82,870,129

DIVIDENDS

Under the German Stock Corporation Act (AktG), the amount of dividends available for distribution to shareholders is based upon the unconsolidated retained earnings of Fresenius SE & Co. KGaA as reported in its statement of fi nancial position determined in accordance with the German Commercial Code (HGB).

In May 2018, a dividend of € 0.75 per bearer ordinary share was approved by Fresenius SE & Co. KGaA's shareholders at the Annual General Meeting and paid afterwards. The total dividend payment was € 416 million.

TREASURY STOCK OF FRESENIUS MEDICAL CARE

In May and June 2018, Fresenius Medical Care repurchased 431,000 ordinary shares for an amount of € 37 million.

OTHER NOTES

19. LEGAL AND REGULATORY MATTERS

The Fresenius Group 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 Fresenius Group currently deems to be material or noteworthy are described below. For the matters described below in which the Fresenius Group believes a loss is both reasonably possible and estimable, an estimate of the loss or range of loss exposure is provided. For the other matters described below, the Fresenius Group 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 diffi cult to predict accurately and outcomes that are not consistent with Fresenius Group's view of the merits can occur. The Fresenius Group 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 fi nancial condition.

Further information regarding legal disputes, court proceedings and investigations can be found in detail in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS. In the following, only changes as far as content or wording are concerned during the fi rst half ended June 30, 2018 compared to the information provided in the consolidated fi nancial statements are described. These changes should be read in conjunction with the overall information in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS; defi ned terms or abbreviations having the same meaning as in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS.

TERMINATION OF THE MERGER AGREEMENT WITH AKORN, INC.

On April 24, 2017, Fresenius announced that Fresenius Kabi has agreed to acquire Akorn, Inc. (Akorn), a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for approximately US\$ 4.3 billion, or US\$ 34 per share, plus the prevailing net debt at closing of the transaction.

Fresenius has been conducting an independent investigation, using external experts, into alleged breaches of FDA data integrity requirements relating to product development at Akorn.

Fresenius decided on April 22, 2018 to terminate the merger agreement with Akorn, due to Akorn's failure to fulfi ll several closing conditions.

Fresenius' decision is based on, among other factors, material breaches of FDA data integrity requirements relating to Akorn's operations found during Fresenius' independent investigation. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn declined that offer.

Akorn disagreed with Fresenius' position and fi led a lawsuit on April 23, 2018 purporting to enforce the merger agreement. Fresenius fi led a counterclaim on April 30, 2018.

The trial of the lawsuit took place in the Delaware Court of Chancery from July 9 to 13, 2018.

The exchange of post-trial briefs is expected to take place until August 20, with the closing arguments on August 23, 2018. Judgment is expected up to 90 days thereafter.

Against such judgment, the losing party may appeal to the Delaware Supreme Court, the highest court in Delaware.

FRESENIUS MEDICAL CARE HOLDINGS – QUI TAM COMPLAINT (MASSACHUSETTS)

The court has subsequently rejected government requests to conduct new discovery and to add counts to its complaint-inintervention that would expand upon the relator's complaint, but has allowed Fresenius Medical Care Holdings, Inc. (FMCH) to take discovery against the government as if the government had intervened at the outset.

PRODUCT LIABILITY LITIGATION

Personal injury litigation involving the FMC-AG & Co. KGaA's acid concentrate product, labeled as GranuFlo ® / NaturaLyte ®, fi rst arose in 2012 and was substantially resolved by settlement agreed in principle in February 2016 and consummated in November 2017, as previously disclosed. Remaining individual personal injury cases do not present material risk and discussion of them is therefore discontinued.

FMC-AG & Co. KGaA's affected insurers agreed to the settlement of the acid concentrate personal injury litigation and funded US\$ 220 million of the settlement fund under a reciprocal reservation of rights encompassing certain coverage issues raised by insurers and FMC-AG & Co. KGaA's claims for indemnifi cation of defense costs. FMC-AG & Co. KGaA accrued a net expense of US\$ 60 million in connection with the settlement, including legal fees and other anticipated costs.

Following entry into the settlement, FMC-AG & Co. KGaA's insurers in the AIG group and FMC-AG & Co. KGaA each initiated litigation against the other relating to the AIG group's coverage obligations under applicable policies. In the coverage litigation, the AIG group seeks to be indemnifi ed by FMC-AG & Co. KGaA for a portion of its US\$ 220 million outlay; FMC-AG & Co. KGaA seeks to confi rm the AIG group's US\$ 220 million funding obligation, to recover defense costs already incurred by FMC-AG & Co. KGaA, and to compel the AIG group to honor defense and indemnifi cation obligations, if any, required for resolution of cases not participating in the settlement. As a result of decisions on issues of venue, the coverage

litigation is proceeding in the New York state trial court for Manhattan. (National Union Fire Insurance v. Fresenius Medical Care, 2016 Index No. 653108 (Supreme Court of New York for New York County)).

Four institutional plaintiffs fi led complaints against FMCH or its affi liates under state deceptive practices statutes resting on certain background allegations common to the GranuFlo ® / NaturaLyte ® personal injury litigation, but seeking as remedy the repayment of sums paid to FMCH attributable to the GranuFlo ® / NaturaLyte ® products. These cases implicate different legal standards, theories of liability and forms of potential recovery from those in the personal injury litigation and their claims were not extinguished by the personal injury litigation settlement described above. The four plaintiffs are the Attorneys General for the States of Kentucky, Louisiana and Mississippi and the commercial insurance company Blue Cross Blue Shield of Louisiana in its private capacity. State of Mississippi ex rel. Hood, v. Fresenius Medical Care Holdings, Inc., No. 14-cv-152 (Chancery Court, DeSoto County); State of Louisiana ex re. Caldwell and Louisiana Health Service & Indemnity Company v. Fresenius Medical Care Airline, 2016 Civ. 11035 (U.S.D.C. D. Mass.); Commonwealth of Kentucky ex rel. Beshear v. Fresenius Medical Care Holdings, Inc. et al., No. 16-CI-00946 (Circuit Court, Franklin County).

FMC-AG & Co. KGaA is not a party to a substantial adverse jury verdict and punitive damage award entered in Denver on June 27, 2018 against DaVita, involving DaVita's own clinical management of FMC-AG & Co. KGaA's acid concentrate product. See, White v. DaVita Healthcare Partners, Inc., 2015 Civ. 02106 (U.S.D.C. Colorado).

CIVIL COMPLAINT "HAWAII"

The amount of the overpayment claimed by the State is approximately US\$ 8 million, but the State seeks civil remedies, interest, fi nes, and penalties against Liberty and FMCH under the Hawaii False Claims Act substantially in excess of the overpayment. After prevailing on motions by Xerox to preclude it from doing so, FMCH is pursuing third-party claims for contribution and indemnifi cation against Xerox.

SUBPOENA "FRESENIUS VASCULAR CARE"

Beginning October 6, 2015, the United States Attorney for the Eastern District of New York and the Offi ce of Inspector General of the United States Department of Health and Human Services have investigated, through subpoenas issued under the False Claims Act, utilization and invoicing by FMC-AG & Co. KGaA's subsidiary Azura Vascular Care, for a period beginning after FMC-AG & Co. KGaA's acquisition of American Access Care, LLC in October 2011.

SUBPOENA "NEW YORK"

On February 21, 2017, FMCH terminated the employee and notifi ed the United States Attorney of the termination and its circumstances. The terminated employee's conduct is expected to result in demands for FMC-AG & Co. KGaA to refund overpayments and to pay related penalties under applicable laws, but the monetary value of such payment demands cannot yet be reasonably estimated.

SUBPOENA "AMERICAN KIDNEY FUND" / CMS LITIGATION

On January 3, 2017, FMC-AG & Co. KGaA received a subpoena from the United States Attorney for the District of Massachusetts under the False Claims Act inquiring into FMC-AG & Co. KGaA's interactions and relationships with the AKF, including FMC-AG & Co. KGaA's charitable contributions to the Fund and the Fund's fi nancial assistance to patients for insurance premiums. FMCH is cooperating in the investigation, which is part of a broader investigation into charitable contributions in the medical industry. FMC-AG & Co. KGaA believes that the investigation revolves around conduct alleged to be unlawful in United Healthcare v. American Renal Associates, 2018 Civ. 10622 (D. Mass.), but believes that such unlawful conduct was not undertaken by FMCH. On July 2, 2018, American Renal Associates announced that it had reached a settlement in principle of the United Healthcare litigation. FMC-AG & Co. KGaA lacks information necessary to assess how the American Renal Associates settlement may impact the United States Attorney's investigation.

SUBPOENA "NEW YORK (BROOKLYN)"

The matter is no longer relevant.

20. FINANCIAL INSTRUMENTS

The impact on the measurement categories and the measurement of fi nancial assets and liabilities according to IFRS 9 has not been signifi cant. The original measurement categories under IAS 39 as of December 31, 2017 and the new measurement categories according to IFRS 9 upon implementation on January 1, 2018 as well as their respective carrying amounts were as follows:

			Dec. 31, 2017	Jan. 1, 2018
€ in millions	Category according to IAS 39	Category according to IFRS 9		Carrying amount according to IFRS 9
Financial assets
Cash and cash equivalents	Relating to no category	Amortized cost	1,152	1,152
	Relating to no category	Fair value through profi t and loss	484	484 3
	Loans and receivables	Amortized cost	6,157	6,115 1
Trade accounts and other receivables, less allowance for doubtful accounts	Loans and receivables	Fair value through other comprehensive income	45	45 2
	Relating to no category	Relating to no category	58	58
Receivables from and loans to related parties	Loans and receivables	Amortized cost	17	17
Other fi nancial assets
Securities	Available for sale fi nancial assets	Fair value through other comprehensive income	19	19 4
Derivatives designated as cash flow hedging instruments	Relating to no category	Relating to no category	14	14
Derivatives not designated as hedging instruments	Financial assets measured at fair value though profi t and loss	Fair value through profi t and loss	321	321
Leasing receivables	Relating to no category	Relating to no category	79	79
Other investments	Loans and receivables	Fair value through other comprehensive income	54	89 1,2,4
	Loans and receivables	Fair value through profi t and loss	18	18 2
All other financial assets	Loans and receivables	Amortized cost	622	620 1
Financial assets			9,040	9,031

Changes in the carrying amounts from remeasurements of - € 9 million are included in the items of the consolidated statement of fi nancial position as follows:

• € 42 million trade accounts and other receivables, € 35 million other investments, - € 2 million all other fi nancial assets.

Reclassifi cation

The option to measure debt instruments at fair value through profi t and loss was not used.

4 The option to measure equity instruments at fair value through other comprehensive income upon implementation of IFRS 9 has been exercised. The option has been used for € 16 million securities and € 89 million other investments (included in other fi nancial assets).

			Dec. 31, 2017	Jan. 1, 2018
€ in millions	Category according to IAS 39	Category according to IFRS 9	Carrying amount according to IAS 39	Carrying amount according to IFRS 9
Financial liabilities
Trade accounts payable	Financial liabilities measured at amortized cost	Amortized cost	1,688	1,688
Short-term accounts payable to related parties	Financial liabilities measured at amortized cost	Amortized cost	42	42
Short-term debt	Financial liabilities measured at amortized cost	Amortized cost	1,550	1,550
Short-term debt from related parties	Financial liabilities measured at amortized cost	Amortized cost	–	–
Long-term debt and capital	Financial liabilities measured at amortized cost	Amortized cost	6,871	6,871
lease obligations	Relating to no category	Relating to no category	234	234
Bonds	Financial liabilities measured at amortized cost	Amortized cost	9,069	9,069
Convertible bonds	Financial liabilities measured at amortized cost	Amortized cost	1,318	1,318
Other fi nancial liabilities
Noncontrolling interest subject to put provisions	Relating to no category	Relating to no category	854	854
Derivatives in cash flow hedging relationships	Relating to no category	Relating to no category	9	9
Derivatives not designated as hedging instruments	Liabilities measured at fair value through profi t and loss	Fair value through profi t and loss	325	325
Accrued contingent payments outstanding for acquisitions	Liabilities measured at fair value through profi t and loss	Fair value through profi t and loss	793	793
All other fi nancial liabilities	Financial liabilities measured at amortized cost	Amortized cost	2,965	2,965
Financial liabilities			25,718	25,718

As of January 1, 2018, the adjustments due to the initial application of IFRS 9 on the components of shareholders' equity were as follows:

€ in millions	Other reserves	Noncontrolling interest	Total
Remeasurement of other investments due to reclassifi cation	27	8	35
Remeasurement of the allowance for bad debt for trade accounts and other receivables and other fi nancial assets	- 39	- 5	- 44
Deferred tax on adjustments	- 5	- 2	- 7
Total	- 17	1	- 16

MEASUREMENT OF FINANCIAL INSTRUMENTS AS OF JUNE 30, 2018

Carrying amounts of fi nancial instruments

As of June 30, 2018, the carrying amounts of fi nancial instruments by item of the statement of fi nancial position and structured according to IFRS 9 categories were as follows:

					Relating to no category
€ in millions	Carrying amount	Amortized cost	Fair value through profi t and loss 1	Fair value through other comprehensive income 2	Derivatives designated as cash fl ow hedg ing instruments at fair value	Noncontrolling interest subject to put provi sions measured at fair value	Valuation according to IAS 17 for leas ing receivables and liabilities
Financial assets
Cash and cash equivalents	2,267	1,092	1,175
Trade accounts and other receivables, less allowance for doubtful accounts	6,735	6,609	3	46			77
Accounts receivable from and loans to related parties	21	21
Other fi nancial assets 3	1,487	630	635	122	22		78
Financial assets	10,510	8,352	1,813	168	22	0	155
Financial liabilities
Trade accounts payable	1,527	1,527
Short-term accounts payable to related parties	62	62
Short-term debt	2,000	2,000
Short-term debt from related parties	–	–
Long-term debt and capital lease obligations	6,485	6,259					226
Bonds	9,174	9,174
Convertible bonds	1,330	1,330
Other fi nancial liabilities 4	4,955	2,991	1,148		13	803
Financial liabilities	25,533	23,343	1,148	0	13	803	226

All included fi nancial assets and liabilities are mandatorily measured at fair value through profi t and loss according to IFRS 9.

The option to measure equity instruments at fair value through other comprehensive income upon implementation of IFRS 9 has been exercised. The option has been used for € 119 million other investments (included in other fi nancial assets).

Other fi nancial assets are included in the item other current and non-current assets in the consolidated statement of fi nancial position.

4 Other fi nancial liabilities are included in the items short-term provisions and other short-term liabilities and long-term provisions and other long-term liabilities in the consolidated statement of fi nancial position.

Fair value of fi nancial instruments

The following table shows the carrying amounts and the fair value hierarchy levels according to IFRS 13 as of June 30, 2018 and as of January 1, 2018:

		June 30, 2018			January 1, 2018
	Fair value			Fair value
€ in millions	Carrying amount	Level 1	Level 2	Level 3	Carrying amount	Level 1	Level 2	Level 3
Financial assets
Cash and cash equivalents measured at fair value	1,175	1,175			484	484
Trade accounts and other receivables, less allowance for doubtful accounts measured at fair value	49		49		45		45
Other fi nancial assets measured at fair value
Securities	155	155			19	19
Derivatives designated as cash flow hedging instruments	22		22		14		14
Derivatives not designated as hedging instruments	368		368		321		321
Other investments	234		234		107		107
Financial liabilities
Long-term debt and capital lease obligations	6,485		6,519		7,105		7,154
Bonds	9,174		9,587		9,069		9,707
Convertible bonds	1,330		1,756		1,318		1,716
Other fi nancial liabilities measured at fair value
Noncontrolling interest subject to put provisions	803			803	854			854
Derivatives designated as cash flow hedging instruments	13		13		9		9
Derivatives not designated as hedging instruments	363		363		325		325
Accrued contingent payments outstanding for acquisitions	785			785	793			793

The following table shows the changes of the fair values of fi nancial instruments classifi ed as level 3 in the fi rst half of 2018:

€ in millions	Accrued contingent payments outstand ing for acquisitions	Noncontrolling interest subject to put provisions
As of January 1, 2018	793	854
Additions	–	9
Disposals	- 23	- 24
Gain / loss recognized in profi t or loss	4	66
Gain / loss recognized in equity	12	- 69
Dividend payments	0	- 51
Currency effects and other changes	- 1	18
As of June 30, 2018	785	803

21. SUPPLEMENTARY INFORMATION ON CAPITAL MANAGEMENT

The Fresenius Group has a solid fi nancial profi le. As of June 30, 2018, the equity ratio was 42.3% and the debt ratio (debt / total assets) was 34.5%. As of June 30, 2018, the leverage ratio (before special items) on the basis of net debt / EBITDA was 2.8.

The aims of the capital management and further information can be found in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS.

The Fresenius Group is covered by the rating agencies Moody's, Standard & Poor's and Fitch.

The following table shows the company rating of Fresenius SE & Co. KGaA:

	June 30, 2018	Dec. 31, 2017
Standard & Poor's
Corporate Credit Rating	BBB -	BBB -
Outlook	positive	positive
Moody's
Corporate Credit Rating	Baa3	Baa3
Outlook	stable	stable
Fitch
Corporate Credit Rating	BBB -	BBB -
Outlook	stable	stable

22. SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENT OF CASH FLOWS

Cash paid for acquisitions (without investments in licenses) consisted of the following:

€ in millions	H1 / 2018	H1 / 2017
Assets acquired	153	7,345
Liabilities assumed	- 7	- 1,255
Noncontrolling interest	- 44	- 84
Notes assumed in connection with acquisitions	- 13	- 158
Cash paid	89	5,848
Cash acquired	- 3	- 7
Cash paid for acquisitions, net	86	5,841
Cash paid for investments, net of cash acquired	245	15
Cash paid for intangible assets, net	41	7
Total cash paid for acquisitions and investments, net of cash acquired,
and net purchases of intangible assets	372	5,863

23. NOTES ON THE CONSOLIDATED SEGMENT REPORTING

GENERAL

The consolidated segment reporting shown on pages 26 and 27 of this interim report is an integral part of the notes.

The Fresenius Group has identifi ed the business segments Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed, which corresponds to the internal organi za tional and reporting structures (Management Approach) at June 30, 2018.

The business segments were identifi ed in accordance with IFRS 8, Operating Segments, which defi nes the segment reporting requirements in the annual fi nancial statements and interim reports with regard to the operating business, product and service businesses and regions. Further explanations with regard to the business segments can be found in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS.

NOTES ON THE BUSINESS SEGMENTS

Explanations regarding the notes on the business segments can be found in the consolidated fi nancial statements as of December 31, 2017 applying Section 315e HGB in accordance with IFRS.

RECONCILIATION OF KEY FIGURES TO CONSOLIDATED EARNINGS

€ in millions	H1 / 2018	H1 / 2017
Total EBIT of reporting segments	2,224	2,411
Special items	780	- 10
General corporate expenses Corporate / Other (EBIT)	- 25	- 18
Group EBIT	2,979	2,383
Net interest	- 304	- 329
Income before income taxes	2,675	2,054

RECONCILIATION OF NET DEBT WITH THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

€ in millions	June 30, 2018	Dec. 31, 2017
Short-term debt	2,000	1,550
Short-term debt from related parties	–	–
Current portion of long-term debt and capital lease obligations	451	618
Current portion of Bonds	1,542	731
Long-term debt and capital lease obligations, less current portion	6,034	6,487
Bonds, less current portion	7,632	8,338
Convertible bonds	1,330	1,318
Debt	18,989	19,042
less cash and cash equivalents	2,267	1,636
Net debt	16,722	17,406

24. SHARE-BASED COMPENSATION PLANS

SHARE-BASED COMPENSATION PLANS OF FRESENIUS SE & CO. KGAA

As of June 30, 2018, Fresenius SE & Co. KGaA had two sharebased compensation plans in place: the stock option based Fresenius SE Stock Option Plan 2008 (2008 Plan) and the Fresenius SE & Co. KGaA Long Term Incentive Program 2013 (2013 LTIP) which is based on stock options and phantom stocks. On June 30, 2017, the term of the options granted under the Fresenius AG Stock Option Plan 2003 expired. On April 12, 2018 and March 15, 2018, respectively, the Management Board and Supervisory Board of the general partner, Fresenius Management SE, resolved the Long Term Incentive Plan 2018 (LTIP 2018) which is solely based on performance shares.

LTIP 2018

The LTIP 2018 is based solely on virtual stocks (performance shares). The performance shares issued through the plan are non-equity-backed, virtual compensation instruments. When performance targets are reached and other prerequisites are met, they guarantee the entitlement to a cash payment by Fresenius SE & Co. KGaA or one of its affi liated companies.

The new plan is available both for members of the Management Board (with the exception of Mr. Rice Powell, who receives his compensation from Fresenius Medical Care Management AG) and other executives. Performance shares may be granted once annually over a period of fi ve years. The grant to the members of the Management Board is made by the Supervisory Board of the general partner, Fresenius Management SE, the grant to the other executives is made by the Management Board of Fresenius Management SE, in each case on the basis of a grant value determined at its reasonable discretion. The grant value is determined in consideration of the personal performance and the responsibilities of the concerned plan participant. The number of performance shares granted is calculated through applying the grant value and the average stock market price of the Fresenius share over the period of 60 stock exchange trading days prior to the grant date.

The number of performance shares may change over a period of four years, depending on the level of achievement of the performance targets described in more detail below. This could entail the entire loss of all performance shares or also – at maximum – the doubling of their number. The resulting number of performance shares, which is determined after a performance period of four years and based on the respective level of target achievement, is deemed fi nally earned four years after the date of the respective grant. The number of vested performance shares is then multiplied by the average stock exchange price of Fresenius SE & Co. KGaA's share over a period of 60 stock exchange trading days prior to the lapse of this vesting period plus the total of the dividends per share of Fresenius SE & Co. KGaA paid by Fresenius SE & Co. KGaA between the grant date and the vesting date. The resulting amount will be paid to the respective plan participant in cash. The potential disbursement entitlement of each member of the Management Board is limited to a maximum value of 250% of the grant value, the entitlement of all other plan participants is limited to a maximum value of 400%.

The LTIP 2018 has two equally weighted performance targets: fi rstly, the growth rate of the adjusted net income (adjusted for currency effects) and, secondly, the relative Total Shareholder Return based on the STOXX Europe 600 Health Care index. Disbursement entitlement requires that at least one of the two performance targets must be reached or surpassed over the four-year performance period.

For the performance target "Net Income Growth Rate" a level of target achievement of 100% is reached when the same is at least 8% over the four-year performance period. If the growth rate falls below or corresponds to only 5%, the level of target achievement is 0%. If the growth rate is between 5% and 8%, the level of target achievement is between 0% and 100%, while, where the growth rate is between 8% and 20%, the level of target achievement will be between 100% and 200%. Intermediate values are calculated through linear interpolation. The net income is the consolidated net income attributable to shareholders of Fresenius SE & Co. KGaA reported in the consolidated fi nancial statements of Fresenius SE & Co. KGaA prepared in accordance with IFRS, adjusted for extraordinary effects.

The determination of the adjusted net income (adjusted for currency effects) and the change in comparison with the adjusted net income (not adjusted for currency effects) of the previous Fresenius Group fi scal year will be verifi ed in a binding manner by the auditors of Fresenius SE & Co. KGaA on the basis of the audited consolidated fi nancial statements. For the ascertainment of the currency translation effects, all line items of the income statements of the companies that are included in the consolidated fi nancial statements and which have a functional currency other than the reporting currency (Euro) of the Fresenius Group are translated with the average exchange rates of the Fresenius Group fi scal year of the consolidated fi nancial statements that are the basis for the comparison.

For the "Total Shareholder Return" performance target, a target achievement of 100% is met when the Total Shareholder Return of Fresenius SE & Co. KGaA in comparison with the Total Shareholder Return of the other companies of the STOXX Europe 600 Health Care index achieves an average ranking within the benchmark companies, i.e. exactly in the middle (50th percentile), over the four-year performance period. If the ranking corresponds to the 25th percentile or less, the level of target achievement is 0%. Where the ranking is between the 25th percentile and the 50th percentile, the level of target achievement is between 0% and 100%; and, for a ranking between the 50th percentile and the 75th percentile, between 100% and 200%. Intermediate values will also be calculated through linear interpolation. Total

Shareholder Return denotes the percentage change in the stock market price within the performance period including re-invested dividends and all capital measures, whereby capital measures are to be calculated through rounding down to the fourth decimal place.

The ranking values are determined using the composition of STOXX Europe 600 Health Care on the grant date. For equalization purposes, the relevant market price is the average market price in the period of 60 stock exchange trading days prior to the beginning and end of a performance period; the relevant currency is that of the main stock exchange of a company, which was listed in STOXX Europe 600 Health Care on the grant date.

A level of target achievement in excess of 200% is not possible for both performance targets.

To calculate the level of overall target achievement, the level of target achievement of the two performance targets are given equal weighting. The total number of performance shares vested on each plan participant is calculated through multiplying the number of performance shares granted by the overall target achievement.

In the event of violation of compliance rules, the Supervisory Board of Fresenius Management SE, in due exercise of its discretion, is entitled to reduce the number of performance shares vested on a member of the Management Board to zero. Regarding all other plan participants, such decision is made by the Management Board of Fresenius Management SE. Furthermore, Fresenius SE & Co. KGaA is entitled to a complete or partial reimbursement in the event of violation of compliance rules in the period of three years following disbursement.

Transactions during the fi rst half of 2018

During the fi rst half of 2018, Fresenius SE & Co. KGaA received cash of € 24 million from the exercise of 905,620 stock options.

At June 30, 2018, out of 988,577 outstanding and exercisable stock options issued under the 2008 Plan, 85,140 were held by the members of the Fresenius Management SE Management Board. Out of 9,751,577 outstanding stock options issued under the 2013 LTIP 1,280,042 were exercisable at

June 30, 2018. The members of the Fresenius Management SE Management Board held 1,479,375 stock options. 952,787 phantom stocks issued under the 2013 LTIP were outstanding at June 30, 2018. The members of the Fresenius Management SE Management Board held 173,052 phantom stocks. As of June 30, 2018, 2,268,619 options for ordinary shares were outstanding and exercisable.

On June 30, 2018, total unrecognized compensation cost related to non-vested options granted under the 2013 LTIP was € 46 million. This cost is expected to be recognized over a weighted-average period of 2.3 years.

SHARE-BASED COMPENSATION PLANS OF FRESENIUS MEDICAL CARE AG & CO. KGAA

During the fi rst half of 2018, 104,905 stock options were exercised. Fresenius Medical Care AG & Co. KGaA received cash of € 5.5 million upon exercise of these stock options.

25. SUBSEQUENT EVENTS

On July 1, 2018, Fresenius Helios has transferred 38 health care facilities and 13 service companies in Germany specializing in inpatient post-acute and nursing care to Fresenius Vamed. The transaction has a total volume of € 485 million, including assumed net debt of € 15 million. It is fi nanced within the Group.

In July 2018, the European Commission agreed to maintain the marketing authorizations for products containing hydroxyethyl starch (HES) subject to implementation of risk minimization measures (see also: Opportunities and Risk Report of this Quarterly Financial Report).

There have been no signifi cant changes in the Fresenius Group's operating environment following the end of the fi rst half of 2018. Other events of material importance on the assets and liabilities, fi nancial position, and results of operations of the Group following the end of the fi rst half of 2018 are described in note 2, Acqui sitions, divestitures and investments (termination of the merger agreement with Akorn, Inc.). Further events of material importance on the assets and liabilities, fi nancial position, and results of operations of the Group have not occurred.

26. CORPORATE GOVERNANCE

For each consolidated stock exchange listed entity, the declaration pursuant to Section 161 of the German Stock Corporation Act (Aktiengesetz) has been issued and made available to shareholders on the website of Fresenius SE & Co. KGaA (www.fresenius.com / corporate-governance), and of Fresenius Medical Care AG & Co. KGaA (www.freseniusmedicalcare.com).

27. RESPONSIBILITY STATEMENT

"To the best of our knowledge, and in accordance with the applicable reporting principles for interim fi nancial reporting, the interim consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and

profi t or loss of the Group, and the interim Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the fi nancial year."

Bad Homburg v. d. H., August 1, 2018

Fresenius SE Co. KGaA, represented by: Fresenius Management SE, its General Partner

The Management Board

S. Sturm Dr. F. De Meo R. Empey Dr. J. Götz

M. Henriksson R. Powell Dr. E. Wastler

FINANCIAL CALENDAR

Report on 1st – 3rd quarter 2018
Conference call, Live webcas	Ocotber 30, 2018
Annual General Meeting, Frankfurt am Main
Live webcast of the speech of the Chairman of the Management Board	May 17, 2019

Subject to change

FRESENIUS SHARE / ADR

	Ordinary share		ADR
Securities identifi cation no.	578 560	CUSIP	35804M105
Ticker symbol	FRE	Ticker symbol	FSNUY
ISIN	DE0005785604	ISIN	US35804M1053
Bloomberg symbol	FRE GR	Structure	Sponsored Level 1 ADR
Reuters symbol	FREG.de	Ratio	4 ADR = 1 Share
Main trading location	Frankfurt / Xetra	Trading platform	OTCQX

Ordinary share	ADR

Corporate Headquarters

Else-Kröner-Straße 1 Bad Homburg v. d. H. Germany

Postal address Fresenius SE & Co. KGaA 61346 Bad Homburg v. d. H.

Germany

Contact for shareholders

Investor Relations Telephone: + 49 61 72 6 08-24 85 Telefax: + 49 61 72 6 08-24 88 E-mail: ir-fre@fresenius.com

Contact for journalists

Corporate Communications Telefon: + 49 61 72 6 08-23 02 Telefax: + 49 61 72 6 08-22 94 E-mail: pr-fre@fresenius.com

Commercial Register: Bad Homburg v. d. H.; HRB 11852 Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE

Registered Offi ce and Commercial Register: Bad Homburg v. d. H.; HRB 11673

Management Board: Stephan Sturm (President and CEO), Dr. Francesco De Meo, Rachel Empey, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Dr. Ernst Wastler Chairman of the Supervisory Board: Dr. Gerd Krick

For additional information on the performance indicators used please refer to our website https://www.fresenius.com/alternative-performance-measures.

Forward-looking statements:

This Quarterly Financial Report contains forward-looking statements. These statements represent assessments which we have made on the basis of the information available to us at the time. Should the assumptions on which the statements are based on not occur, or if risks should arise – as mentioned in the consolidated fi nancial statements and the management report as of December 31, 2017 applying Section 315e HBG in accordance with IFRS and the SEC fi lings of Fresenius Medical Care AG & Co. KGaA – the actual results could differ materially from the results currently expected.