Quarterly Financial Report of Fresenius Group

applying International Financial Reporting Standards (IFRS)

1st Half and 2nd Quarter 2017

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
8 Investments
9 Cash fl ow
9 Asset and liability structure
9 Second quarter of 2017
10 Annual General Meeting 2017
11 Business segments
11 Fresenius Medical Care
13 Fresenius Kabi
14 Fresenius Helios
15 Fresenius Vamed
16 Employees
16 Change to the Management Board
16 Research and development
17 Opportunities and risk report
17 Rating
17 Announced Acquisitions
18 Outlook 2017

20 Consolidated fi nancial statements

20 Consolidated statement of income
20 Consolidated statement of comprehensive income
21 Consolidated statement of fi nancial position
22 Consolidated statement of cash fl ows
23 Consolidated statement of changes in equity
25 Consolidated segment reporting fi rst half of 2017
26 Consolidated segment reporting second quarter of 2017

27 Notes

53 Financial Calendar

This Quarterly Financial Report was published on August 3, 2017

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 2016, Group sales were € 29.5 billion. As of June 30, 2017, more than 260,000 employees have dedicated themselves to the service of health in about 100 countries worldwide.

SALES, EARNINGS, AND CASH FLOW

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	8,532	7,203	18%	16,894	14,218	19%
EBIT 1	1,177	1,028	14%	2,393	1,987	20%
Net income 2	459	378	21%	916	736	24%
Earnings per share in € 2	0.82	0.70	19%	1.65	1.35	22%
Operating cash fl ow	1,207	997	21%	1,683	1,333	26%

BALANCE SHEET AND INVESTMENTS

€ in millions	June 30, 2017	Dec. 31, 2016	Change
Total assets	52,897	46,697	13%
Non-current assets	40,098	34,953	15%
Equity 3	21,020	20,849	1%
Net debt	18,539	13,201	40%
Investments 4	7,130	1,179	--

RATIOS

	Q2 / 2017	Q2 / 2016	H1 / 2017	H1 / 2016
EBITDA margin 1	18.0%	18.7%	18.3%	18.2%
EBIT margin 1	13.8%	14.3%	14.2%	14.0%
Depreciation and amortization in % of sales	4.2%	4.4%	4.2%	4.2%
Operating cash fl ow in % of sales	14.1%	13.8%	10.0%	9.4%
Equity ratio (June 30 / December 31)			39.7%	44.6%
Net debt / EBITDA (June 30 / December 31) 5			3.00	2.33 / 3.09 6

Before special items

Net income attributable to shareholders of Fresenius SE & Co. KGaA, before special items

Equity including noncontrolling interest

Investments in property, plant and equipment, and intangible assets, acquisitions (six months) At LTM average exchange rates for both net debt and EBITDA, pro forma acquisitions, before special items

6 Pro forma Quirónsalud

INFORMATION BY BUSINESS SEGMENT

FRESENIUS MEDICAL CARE – Dialysis products, Dialysis services

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	4,471	4,026	11%	9,019	7,942	14%
EBIT	584	571	2%	1,235	1,068	16%
Net income 1	269	264	2%	577	477	21%
Operating cash fl ow	882	604	46%	1,052	767	37%
Investments / Acquisitions	524	502	4%	872	819	6%
R & D expenses	35	34	3%	67	68	- 2%
Employees (June 30 / December 31)				119,629	116,120	3%

FRESENIUS KABI – IV drugs, Clinical nutrition, Infusion therapy,

Medical devices / Transfusion technology

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	1,598	1,476	8%	3,202	2,946	9%
EBIT 2	309	279	11%	622	582	7%
Net income 2, 3	188	163	15%	379	336	13%
Operating cash fl ow	203	212	- 4%	395	339	17%
Investments / Acquisitions	85	69	23%	152	221	- 31%
R & D expenses	87	109	- 20%	176	189	- 7%
Employees (June 30 / December 31)				35,220	34,917	1%

FRESENIUS HELIOS – Hospital operations

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	2,238	1,477	52%	4,256	2,912	46%
EBIT	282	173	63%	537	332	62%
Net income 3	192	138	39%	373	262	42%
Operating cash fl ow	120	164	- 27%	304	230	32%
Investments / Acquisitions	101	86	17%	6,090	133	--
Employees (June 30 / December 31)				104,456	72,687	44%

FRESENIUS VAMED – Projects and services for hospitals and other health care facilities

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	258	254	2%	481	472	2%
EBIT	11	9	22%	17	16	6%
Net income 4	7	6	17%	11	11	0%
Operating cash fl ow	16	19	- 16%	- 28	1	--
Investments / Acquisitions	4	2	100%	7	4	75%
Order intake	192	228	- 16%	412	465	- 11%
Employees (June 30 / December 31)				8,256	8,198	1%

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

Before special items

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

Net income attributable to shareholders of VAMED AG

FRESENIUS SHARE

In the fi rst half of 2017, uncertainty concerning the future development of the U.S. health care system weighed on the share performance of health care stocks. The Fresenius share increased by 1% in the fi rst half of 2017. The DAX index grew by 7% in the same period.

FIRST HALF OF 2017

The recovery of the global economy continued in the fi rst quarter, even though the pace has slowed down. Risks for the European growth outlook declined somewhat. However, global downward risks remained unchanged. Uncertainty concerning the future development of the U.S. health care system weighed on the share performance of health care stocks in the fi rst half.

The ECB left its monetary policy unchanged during its June meeting. As expected, the U.S. Federal Reserve, raised interest rates to a corridor between 1.00% and 1.25% at its June meeting.

The economic growth of the euro zone continues. The economy in the euro zone is expected to grow 1.9% this year, according to the latest ECB forecast. The Federal Reserve's latest forecast projects the U.S. economy to grow 2.2% in 2017.

Within this economic environment, the DAX increased by 7% in the fi rst half of 2017 to 12,325 points. The Fresenius share closed at € 75.06 on June 30, 2017. This represents a gain of 1% over the closing price of 2016.

Fresenius share DAX

KEY DATA OF THE FRESENIUS SHARE

	H1 / 2017	2016	Change
Number of shares (June 30 / December 31)	554,295,631	547,208,371	1%
Quarter-end quotation in €	75.06	74.26	1%
High in €	79.65	74.26	7%
Low in €	72.43	53.05	37%
Ø Trading volume (number of shares per trading day)	989,666	1,176,579	- 16%
Market capitalization, € in millions (June 30 / December 31)	41,605	40,636	2%

MANAGEMENT REPORT

We were able to sustain our strong momentum also in the second quarter. Strong increases in sales and earnings have put us well on track to reach our full-year targets.

FRESENIUS CONFIRMS ITS GUIDANCE AFTER A STRONG SECOND QUARTER WITH DOUBLE-DIGIT SALES AND EARNINGS GROWTH

	H1 / 2017	at actual rates	in constant currency
Sales	€ 16.9 bn	+ 19%	+ 17%
EBIT 1	€ 2,393 m	+ 20%	+ 19%
Net income 1, 2	€ 916 m	+ 24%	+ 23%

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 increased by 19% (17% in constant currency) to € 16,894 million (H1 / 2016: € 14,218 million). Organic sales growth was 6% 3 . Positive currency translation effects (2%) were mainly related to the appreciation of the U.S. dollar against the Euro. Acquisitions and the agreement with the United States Departments of Veterans Affairs and Justice at Fresenius Medical Care ("VA agreement") contributed 11%.

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

Excluding effects of VA-agreement

EARNINGS

€ in millions	Q2 / 2017	Q2 / 2016	H1 / 2017	H1 / 2016
EBIT 1	1,177	1,028	2,393	1,987
Net income 2	459	378	916	736
Earnings per share 2	0.82	0.70	1.65	1.35

EARNINGS

Group EBITDA1 increased by 20% (18% in constant currency) to € 3,098 million (H1 / 2016: € 2,586 million). Group EBIT ¹ increased by 20% (19% in constant currency) to € 2,393 million (H1 / 2016: € 1,987 million). The EBIT margin 1 increased to 14.2% (H1 / 2016: 14.0%).

Group net interest reached - € 326 million 1 (H1 / 2016: - € 291 million), mainly due to the fi nancing of the Quirónsalud acquisition.

The Group tax rate increased to 28.5% 1 (H1 / 2016: 28.3%), mainly driven by the higher proportion of U.S. pre-tax income, primarily due to the VA agreement.

Noncontrolling interest increased to € 562 million (H1 / 2016: € 480 million), of which 96% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income 2 increased by 24% (23% in constant currency) to € 916 million (H1 / 2016: € 736 million). The VA agreement increased net income 2 growth by 2%-points. Earnings per share 2 increased by 22% (21% in constant currency) to € 1.65 (H1 / 2016: € 1.35).

SALES BY REGION

€ in millions	H1 / 2017	H1 / 2016	Change at actual rates	Currency trans lations effects	Change at constant rates	Organic growth	Acquisitions / divestitures	% of total sales 4
North America	7,750 3	6,825	14% 3	4% 3	10% 3	7%	3% 3	46% 3
Europe	6,741	5,324	27%	0%	27%	4%	23%	40%
Asia-Pacifi c	1,516	1,359	12%	2%	10%	7%	3%	9%
Latin America	701	560	25%	6%	19%	12%	7%	4%
Africa	186	150	24%	10%	14%	14%	0%	1%
Total	16,894	14,218	19%	2%	17%	6%	11%	100%

SALES BY BUSINESS SEGMENT

€ in millions	H1 / 2017	H1 / 2016	Change at actual rates	Currency trans lations effects	Change at constant rates	Organic growth	Acquisitions / divestitures	% of total sales 4
Fresenius Medical Care	9,019	7,942	14%	3%	11%	7%	4%	53%
Fresenius Kabi	3,202	2,946	9%	2%	7%	7%	0%	19%
Fresenius Helios	4,256	2,912	46%	0%	46%	4%	42%	25%
Fresenius Vamed	481	472	2%	0%	2%	2%	0%	3%
Total	16,894	14,218	19%	2%	17%	6%	11%	100%

Before special items

Net income attributable to shareholders of Fresenius SE & Co. KGaA, before special items

Including effects of VA agreement Calculated on the basis of contribution to consolidated sales

RECONCILIATION

The Group's IFRS fi nancial results as of June 30, 2017 include special items. Net income attributable to shareholders of Fresenius SE & Co. KGaA was adjusted for these special items. The tables below show the special items and the reconciliation from net income (before special items) to earnings according to IFRS.

INVESTMENTS

Spending on property, plant and equipment was € 709 million (H1 / 2016: € 674 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. Total acquisition spending of € 6,421 million (H1 / 2016: € 505 million) was mainly related to the acquisition of Quirónsalud.

RECONCILIATION

H1 / 2017 (before special items)	Transaction costs biosimilars and Akorn Inc.	H1 / 2017 (incl. special items))	Q2 / 2017 (before special items)	Transaction costs biosimilars and Akorn Inc.	Q2 / 2017 (incl. special items))
16,894		16,894	8,532		8,532
2,393	- 10	2,383	1,177	- 10	1,167
- 326	- 3	- 329	- 169	- 3	- 172
2,067	- 13	2,054	1,008	- 13	995
- 589	4	- 585	- 281	4	- 277
1,478	- 9	1,469	727	- 9	718
- 562		- 562	- 268		- 268
					450
			916 - 9 907	459	- 9

The special items are reported in the Group Corporate / Other segment.

INVESTMENTS BY BUSINESS SEGMENT

€ in millions	H1 / 2017	H1 / 2016	thereof property, plant and equipment	thereof acquisitions	Change	% of total
Fresenius Medical Care	872	819	404	468	6%	12%
Fresenius Kabi	152	221	151	1	- 31%	2%
Fresenius Helios	6,090	133	138	5.952	--	86%
Fresenius Vamed	7	4	7	0	75%	0%
Corporate / Other	9	2	9	0	--	0%
Total	7,130	1,179	709	6,421	--	100%

CASH FLOW

Operating cash fl ow increased by 26% to € 1,683 million (H1 / 2016: € 1,333 million), mainly driven by the excellent development at Fresenius Medical Care and Fresenius Kabi. The cash fl ow margin increased to 10.0% (H1 / 2016: 9.4%).

Free cash fl ow before acquisitions and dividends increased by 54% to € 998 million (H1 / 2016: € 649 million). Free cash fl ow after acquisitions and dividends was - € 5,645 million (H1 / 2016: - € 207 million).

ASSET AND LIABILITY STRUCTURE

The Group's total assets increased by 13% (18% in constant currency) to € 52,897 million (Dec. 31, 2016: € 46,697 million), mainly due to the acquisition of Quirónsalud. Current assets grew by 9% (14% in constant currency) to € 12,799 million (Dec. 31, 2016: € 11,744 million). Non-current assets increased by 15% (19% in constant currency) to € 40,098 million (Dec. 31, 2016: € 34,953 million).

Total shareholders' equity grew by 1% (6% in constant currency) to € 21,020 million (Dec. 31, 2016: € 20,849 million). The equity ratio was 39.7% (Dec. 31, 2016: 44.6%).

Group debt increased by 35% (39% in constant currency) to € 19,910 million (Dec. 31, 2016: € 14,780 million), mainly driven by the acquisition fi nancing of Quirónsalud. As of June 30, 2017, the net debt / EBITDA ratio was 3.00 1 (Dec. 31, 2016: 2.33 1 ; pro forma Quirónsalud 3.09 1 ).

SECOND QUARTER OF 2017

In Q2 / 2017, Group sales increased by 18% (17% in constant currency) to € 8,532 million (Q2 / 2016: € 7,203 million). Organic sales growth was 5%. Acquisitions contributed 12% while divestitures had no meaningful impact on sales.

In Q2 / 2017, Group EBIT ² increased by 14% (13% in constant currency) to € 1,177 million (Q2 / 2016: € 1,028 million), with an EBIT margin 2 of 13.8% (Q2 / 2016: 14.3%).

In Q2 / 2017, the Group tax rate was 27.9% 2 (Q2 / 2016: 28.2%).

In Q2 / 2017, Group net income 3 increased by 21% (21% in constant currency) to € 459 million (Q2 / 2016: € 378 million). Earnings per share 3 increased by 19% (19% in constant currency) to € 0.82 (Q2 / 2016: € 0.70).

Operating cash fl ow in Q2 / 2017 increased by 21% to € 1,207 million (Q2 / 2016: € 997 million), with a margin of 14.1% (Q2 / 2016: 13.8%). As expected, the operating cash fl ow of Fresenius Medical Care improved considerably in Q2 / 2017.

CASH FLOW STATEMENT (SUMMARY)

€ in millions	H1 / 2017	H1 / 2016	Change
Net income	1,469	1,216	21%
Depreciation and amortization	705	599	18%
Change in accruals for pensions	34	45	- 24%
Cash fl ow	2,208	1,860	19%
Change in working capital	- 525	- 527	0%
Operating cash fl ow	1,683	1,333	26%
Property, plant and equipment, investments net	- 685	- 684	0%
Cash fl ow before acquisitions and dividends	998	649	54%
Cash used for acquisitions, net	- 5,848	- 264	--
Dividends paid	- 795	- 592	- 34%
Free cash fl ow paid after acquisitions and dividends	- 5,645	- 207	--
Cash provided by / used for fi nancing activities	5,940	263	--
Effect of exchange rates on change in cash and cash equivalents	- 87	- 2	--
Net change in cash and cash equivalents	208	54	--

Before special items

Net income attributable to shareholders of Fresenius SE & Co. KGaA; before special items

Net debt and EBITDA at LTM average exchange rates; before special items

ANNUAL GENERAL MEETING 2017

At the Annual General Meeting 2017, the shareholders of Fresenius SE & Co. KGaA approved all agenda items with a large majority. Fresenius SE & Co. KGaA shareholders approved the 24nd consecutive dividend increase proposed by the general partner and the Supervisory Board (agenda item 2).

Shareholders received € 0.62 per common share (prior year: € 0.55).

The voting results for all agenda items are listed in the table below.

				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 2016	385,906,057	69.70%	385,243,063	99.83%	662,994	0.17%
Item no. 2	Resolution on the Allocation of the Distributable Profi t	386,818,949	69.87%	352,145,338	91.04%	34,673,611	8.96%
Item no. 3	Resolution on the Approval of the Actions of the General Partner for the Fiscal Year 2016	242,270,109	43.76%	242,159,402	99.95%	110,707	0.05%
Item no. 4	Resolution on the Approval of the Actions of the Supervisory Board for the Fiscal Year 2016	237,429,799	42.88%	217,982,070	91.81%	19,447,729	8.19%
Item no. 5	Election of the Auditor and Group Auditor for the Fiscal Year 2017 and of the Auditor for the poten tial Review of the Half-Yearly Financial Report for the fi rst Half-Year of the Fiscal Year 2017 and other Financial Information	241,594,385	43.64%	234,744,120	97.16%	6,850,265	2.84%
Item no. 6	Resolution on the Amendment of the Authoriza tion to Grant Subscription Rights to Managerial Staff Members (Führungskräfte) and Members of the Management Board of Fresenius SE & Co. KGaA or an affi liated company (Stock Option Program 2013) as a Result of Financial Reporting exclusi vely in accordance with IFRS (International Financial Reporting Standards) and the correspon ding Amendment of Conditional Capital in Article 4 para 8 sentence 2 of the Articles of Association	387,595,567	70.01%	382,856,741	98.78%	4,738,826	1.22%
Item no. 7	Resolution on the Amendment of the Remunera tion of the Members of the Supervisory Board and its Committees and on the corresponding Revision of Article 13 of the Articles of Association and on the corresponding Amendment of Article 13e of the Articles of Association	386,774,705	69.86%	263,143,693	68.04%	123,631,012	31.96%

BUSINESS SEGMENTS

FRESENIUS MEDICAL CARE

Fresenius Medical Care is the world's largest provider of products and services for individuals with chronic kidney failure. As of June 30, 2017, Fresenius Medical Care was treating 315,305 patients in 3,690 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the fi eld of care coordination.

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	4,471	4,026	11%	9,019	7,942	14%
EBITDA	770	744	3%	1,611	1,406	15%
EBIT	584	571	2%	1,235	1,068	16%
Net income 1	269	264	2%	577	477	21%
Employees (June 30 / December 31)				119,629	116,120	3%

▶ 9% sales growth in constant currency in Q2
▶ 46% operating cash flow growth in Q2
▶ 2017 outlook confirmed

FIRST HALF OF 2017

Sales increased by 14% (11% in constant currency, 7% organic) to € 9,019 million (H1 / 2016: € 7,942 million). Acquisitions / divestitures and the VA agreement contributed 4% in total.

Health Care Services sales (dialysis services and care coordination) increased by 15% (11% in constant currency) to € 7,418 million (H1 / 2016: € 6,472 million). Product sales increased by 9% (7% in constant currency) to € 1,601 million (H1 / 2016: € 1,470 million).

In North America, sales increased by 14% to € 6,600 million (H1 / 2016: € 5,778 million). Health Care Services sales grew by 15% to € 6,182 million (H1 / 2016: € 5,383 million). Product sales increased by 6% to € 418 million (H1 / 2016: € 395 million).

Sales outside North America increased by 12% (10% in constant currency) to € 2,410 million (H1 / 2016: € 2,156 million). Health Care Services sales increased by 14% (11% in constant currency) to € 1,236 million (H1 / 2016: € 1,089 million). Product sales increased by 10% (8% in constant currency) to € 1,174 million (H1 / 2016: € 1,068 million).

EBIT increased by 16% (13% in constant currency) to € 1,235 million (H1 / 2016: € 1,068 million). The EBIT margin was 13.7% (H1 / 2016: 13.5%). Excluding the VA agreement EBIT increased by 7% (5% in constant currency).

Net income 1 increased by 21% (19% in constant currency) to € 577 million (H1 / 2016: € 477 million). Excluding the VA agreement net income 1 increased by 10% (8% in constant currency).

Operating cash fl ow increased by 37% to € 1,052 million (H1 / 2016: € 767 million). The cash fl ow margin increased to 11.7% (H1 / 2016: 9.7%).

SECOND QUARTER OF 2017

In Q2 / 2017, sales increased by 11% (9% in constant currency, 6% organic) to € 4,471 million (Q2 / 2016: € 4,026 million).

In Q2 / 2017, EBIT increased by 2% (stable in constant currency) to € 584 million (Q2 / 2016: € 571 million). The EBIT margin was 13.0% (Q2 / 2016: 14.2%).

In Q2 / 2017, net income 1 grew by 2% (stable in constant currency) to € 269 million (Q2 / 2016: € 264 million). In Q2 / 2017, operating cash fl ow increased by 46% to € 882 million (Q2 / 2016: € 604 million) with a cash fl ow margin of 19.7% (Q2 / 2016: 15.0%).

Fresenius Medical Care confi rms its outlook for 2017. The company expects sales to grow by 8% to 10% 2 in constant currency. Net income 1, 2 is expected to increase by 7% to 9% in constant currency.

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 Excluding effects of VA agreement

FRESENIUS KABI

Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition 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 millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	1,598	1,476	8%	3,202	2,946	9%
EBITDA 1	385	371	4%	767	739	4%
EBIT 1	309	279	11%	622	582	7%
Net income 2	188	163	15%	379	336	13%
Employees (June 30 / December 31)				35,220	34,917	1%

▶ 7% organic sales growth in Q2; positive contributions from all regions
▶ 9% constant currency EBIT growth in Q2
▶ 2017 outlook confirmed

FIRST HALF OF 2017

Sales increased by 9% (7% in constant currency, 7% organic) to € 3,202 million (H1 / 2016: € 2,946 million). Acquisitions / divestitures had no meaningful impact on sales.

Sales in Europe increased by 5% (6% organic) to € 1,097 million (H1 / 2016: € 1,048 million). Currency translation effects had no meaningful impact.

In North America sales increased by 9% (6% organic) to € 1,187 million (H1 / 2016: € 1,086 million).

Sales in Asia-Pacifi c increased by 10% (10% organic) to € 582 million (H1 / 2016: € 531 million).

In Latin America / Africa sales increased by 20% (11% organic) to € 336 million (H1 / 2016: € 281 million), mainly due to infl ation-driven price increases.

EBIT ¹ increased by 7% (6% in constant currency) to € 622 million (H1 / 2016: € 582 million). The EBIT margin 1 was 19.4% (H1 / 2016: 19.8%).

Net income 2 increased by 13% (11% in constant currency) to € 379 million (H1 / 2016: € 336 million).

Operating cash fl ow increased by 17% to € 395 million (H1 / 2016: € 339 million) driven by strong operating results and improved net working capital. The margin increased to 12.3% (H1 / 2016: 11.5%).

SECOND QUARTER OF 2017

In Q2 / 2017, sales increased by 8% (7% in constant currency, 7% organic) to € 1,598 million (Q2 / 2016: € 1,476 million).

In Q2 / 2017, sales in Europe increased by 3% (4% organic) to € 553 million (Q2 / 2016: € 536 million).

Sales in North America increased by 11% (9% organic) to € 568 million (Q2 / 2016: € 510 million).

In Asia-Pacifi c sales increased by 9% (10% organic) to € 302 million (Q2 / 2016: € 277 million).

Sales in Latin America / Africa increased by 14% (8% organic) to € 175 million (Q2 / 2016: € 153 million).

In Q2 / 2017, EBIT ¹ increased by 11% (9% in constant currency) to € 309 million (Q2 / 2016: € 279 million). The EBIT margin 1 increased to 19.3% (Q2 / 2016: 18.9%).

Net income 2 in Q2 / 2017 increased by 15% (13% in constant currency) to € 188 million (Q2 / 2016: € 163 million).

In Q2 / 2017, operating cash fl ow was € 203 million (Q2 / 2016: € 212 million). The cash fl ow margin was 12.7% (Q2 / 2016: 14.4%).

Fresenius Kabi confi rms its outlook for 2017 and expects 5% to 7% organic sales growth and EBIT growth in constant currency of 6% to 8% 3, 4.

Before special items

Net income attributable to shareholders of Fresenius SE & Co. KGaA; before special items

Before transaction costs of ~€ 50 million for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business Before expected expenditures for the further development of Merck KGaA's biosimilars business of ~€ 50 million (expected closing Q3 / 17)

FRESENIUS HELIOS

Fresenius Helios is Europe's leading private hospital operator. The company comprises HELIOS Kliniken in Germany and Quirónsalud in Spain. HELIOS Kliniken operates 112 hospitals, thereof 88 acute care clinics and 24 post-acute care clinics, and treats more than 5.2 million patients annually. Quirónsalud operates 44 hospitals, 44 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 9.7 million patiens per year.

€ in millions	Q2 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	2,238	1,477	52%	4,256	2,912	46%
EBITDA	377	221	71%	711	427	67%
EBIT	282	173	63%	537	332	62%
Net income 1	192	138	39%	373	262	42%
Employees (June 30 / December 31)				104,456	72,687	44%

▶ 52% sales growth (2% excluding Quirónsalud) in Q2
▶ 63% EBIT increase (3% excluding Quirónsalud) in Q2
▶ 2017 outlook confirmed

FIRST HALF OF 2017

Sales increased by 46% (4% organic) to € 4,256 million (H1 / 2016: € 2,912 million). Acquisitions, mainly Quirónsalud, increased sales by 42%.

Sales of HELIOS Kliniken 2 increased by 4% (4% organic) to € 3,038 million (H1 / 2016: € 2,912 million).

Quirónsalud is consolidated since February 1, 2017 and generated sales of € 1,218 million (thereof € 728 million in Q2 / 2017).

EBIT grew by 62% to € 537 million (H1 / 2016: € 332 million). The EBIT margin increased to 12.6% (H1 / 2016: 11.4%).

EBIT of HELIOS Kliniken 2 increased by 8% to € 359 million with a margin of 11.8% (H1 / 2016: 11.4%).

EBIT of Quirónsalud was € 178 million (thereof € 104 million in Q2 / 2017) with a margin of 14.6%.

Net income 1 increased by 42% to € 373 million (H1 / 2016: € 262 million).

Operating cash fl ow increased by 32% to € 304 million (H1 / 2016: € 230 million) driven by the fi rst-time consolidation of Quirónsalud and good operating results. The margin was 7.1% (H1 / 2016: 7.9%).

SECOND QUARTER OF 2017

In Q2 / 2017, sales increased by 52% (2% organic) to € 2,238 million (Q2 / 2016: € 1,477 million).

In Q2 / 2017, sales of HELIOS Kliniken 2 increased by 2% (2% organic) to € 1,510 million (Q2 / 2016: € 1,477 million).

EBIT increased by 63% to € 282 million (Q2 / 2016: € 173 million). The EBIT margin increased to 12.6% (Q2 / 2016: 11.7%).

In Q2 / 2017, EBIT of HELIOS Kliniken 2 increased by 3% to € 178 million (Q2 / 2016: € 173 million). In Q2 / 2017, net income 1 increased by 39% to € 192 million (Q2 / 2016: € 138 million).

Fresenius Helios confi rms its outlook for 2017 and projects organic sales growth of 3% to 5% 2 and sales of ~€ 8.6 billion (thereof Quirónsalud: ~€ 2.5 billion 3 ). EBIT is expected to increase to € 1,020 to € 1,070 million (thereof Quirónsalud: € 300 to 320 million 3 ).

Net income attributable to shareholders of Fresenius SE & Co. KGaA HELIOS Kliniken Germany, excluding Quirónsalud Quirónsalud consolidated for 11 months

FRESENIUS VAMED

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide. 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 / 2017	Q2 / 2016	Change	H1 / 2017	H1 / 2016	Change
Sales	258	254	2%	481	472	2%
EBITDA	14	12	17%	22	21	5%
EBIT	11	9	22%	17	16	6%
Net income 1	7	6	17%	11	11	0%
Employees (June 30 / December 31)				8,256	8,198	1%

▶ 2% sales growth in Q2 driven by service business
▶ Project business with strong order intake of € 412 million in H1
▶ 2017 outlook confi rmed

FIRST HALF OF 2017

Sales increased by 2% (2% organic) to € 481 million (H1 / 2016: € 472 million). Sales in the project business decreased by 6% to € 184 million (H1 / 2016: € 195 million). Sales in the service business grew by 7% to € 297 million (H1 / 2016: € 277 million).

EBIT increased by 6% to € 17 million (H1 / 2016: € 16 million). The EBIT margin increased to 3.5% (H1 / 2016: 3.4%).

Net income 1 remained unchanged at € 11 million.

Order intake reached a strong € 412 million, but could not quite match the previous year's excellent level (H1 / 2016: € 465 million). As of June 30, 2017, order backlog grew to an all-time high of € 2,188 million (December 31, 2016: € 1,961 million).

SECOND QUARTER OF 2017

In Q2 / 2017, sales increased by 2% (1% organic) to € 258 million (Q2 / 2016: € 254 million).

In Q2 / 2017, EBIT increased by 22% to € 11 million (Q2 / 2016: € 9 million) with an EBIT margin of 4.3%.

In Q2 / 2017, net income 1 increased by 17% to € 7 million (Q2 / 2016: € 6 million).

Fresenius Vamed confi rms its outlook for 2017 and expects both organic sales growth and EBIT growth in the range of 5% to 10%.

EMPLOYEES

As of June 30, 2017, the number of employees increased by 15% to 268,508 (Dec. 31, 2016: 232,873).

EMPLOYEES BY BUSINESS SEGMENT

Number of employees	June 30, 2017 Dec. 31, 2016		Change
Fresenius Medical Care	119,629	116,120	3%
Fresenius Kabi	35,220	34,917	1%
Fresenius Helios	104,456	72,687	44%
Fresenius Vamed	8,256	8,198	1%
Corporate / Other	947	951	0%
Total	268,508	232,873	15%

CHANGE TO THE MANAGEMENT BOARD

On July 21, 2017, Fresenius SE & Co. KGaA announced that the Supervisory Board of Fresenius Management SE has unanimously appointed Rachel Empey (41) as Chief Financial Offi cer of Fresenius, as of August 1, 2017. In this position she will succeed Stephan Sturm (54), who has continued to serve as CFO since his appointment as Chief Executive Offi cer of Fresenius last year.

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.

RESEARCH AND DEVELOPMENT EXPENSES BY BUSINESS SEGMENT

€ in millions	H1 / 2017	H1 / 2016	Change
Fresenius Medical Care	67	68	- 2%
Fresenius Kabi	176	189	- 7%
Fresenius Helios	−	−	--
Fresenius Vamed
Corporate / Other
Total	243	257	- 5%

DIALYSIS

The complex interactions and side effects that lead to kidney failure are better explored today than ever before. Technological advances develop in parallel with medical insights to improve the possibilities for treating patients. Our R & D activities at Fresenius Medical Care aim to translate new insights into novel or improved developments and to bring them to market as quickly as possible, and thus make an important contribution towards rendering the treatment of patients increasingly comfortable, safe, and individualized.

INFUSION THERAPIES, CLINICAL NUTRITION, GENERIC IV DRUGS, AND MEDICAL DEVICES

Fresenius Kabi's research and development activities concentrate on products for the therapy and care of critically and chronically ill patients. Our focus is on areas with high medical needs, such as in the treatment of oncology patients. Our products help to support medical advancements in acute and post-acute care and improve the patients' quality of life. We develop new products in areas such as clinical nutrition. In addition, we develop generic drug formulations ready to launch at the time of market formation as well as new formulations for non-patented drugs. Our medical devices signifi cantly contribute to a safe and effective application of infusion solutions and clinical nutrition. In transfusion technology our R & D focus is on medical devices and disposables to support the secure, user-friendly, and effi cient production of blood products.

OPPORTUNITIES AND RISK REPORT

Compared to the presentation in the consolidated fi nancial statements and the management report as of December 31, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS, there have been no material changes in Fresenius' overall opportunities and risk situation in the fi rst half of 2017. In the ordinary course of Fresenius Group's operations, the Fresenius Group is subject to litigation, arbitration and investigations relating to various aspects of its business. The Fresenius Group regularly analyzes current information about such claims for probable losses and provides accruals for such matters, including estimated expenses for legal services, as appropriate.

In addition, we report on legal proceedings, currency and interest risks on pages 42 to 49 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	stable	stable	stable

ANNOUNCED ACQUISITIONS

On April 24, 2017 Fresenius announced, that Fresenius Kabi has agreed to acquire Akorn, Inc., 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 approximately US\$ 450 million of net debt (Fresenius projection for December 31, 2017).

The transaction is subject to customary closing conditions, including regulatory review under the Hart-Scott-Rodino Antitrust Improvements Act in the United States. Akorn shareholders have approved the transaction at a meeting held on July 19, 2017. Closing is targeted for 2017, expected latest by early 2018.

The purchase price will be fi nanced by a broad mix of Euro and US-Dollar denominated long-term debt instruments.

Although Akorn has experienced lower revenue and earnings in the second quarter of 2017, Fresenius Kabi has left its expectations for Akorn's 2018 fi scal year unchanged.

On April 24, 2017, Fresenius and Merck KGaA announced that Fresenius Kabi will acquire Merck's biosimilars business, which comprises the entire development pipeline and an experienced team of more than 70 employees located in Aubonne and Vevey, Switzerland. The product pipeline has a focus on oncology and autoimmune diseases.

The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the third quarter of 2017.

Group net debt / EBITDA will temporarily increase to approximately 3.3 1 after closing of both transactions. The leverage ratio is expected to return to approximately 3.0 1 at the end of 2018.

OUTLOOK 2017

FRESENIUS GROUP

Fresenius confi rms its guidance for 2017. Group sales are expected to increase by 15% to 17% in constant currency. Group net income 1, 2, 3 is expected to grow by 19% to 21% in constant currency.

Pro forma the acquisitions of Akorn and Merck KGaA's biosimilars business, the net debt / EBITDA 4 ratio is expected to be approximately 3.3 at the end of 2017.

FRESENIUS MEDICAL CARE

Fresenius Medical Care confi rms its outlook for 2017. The company expects sales to grow by 8% to 10% 5 in constant currency. Net income 5,6 is expected to increase by 7% to 9% in constant currency.

FRESENIUS KABI

Fresenius Kabi confi rms its outlook for 2017 and expects EBIT growth in constant currency of 6% to 8% 1,2. The company confi rms its guidance of 5% to 7% organic sales growth.

FRESENIUS HELIOS

Fresenius Helios confi rms its outlook for 2017 and projects organic sales growth of 3% to 5% 7 and sales of ~€ 8.6 billion (thereof Quirónsalud: ~€ 2.5 billion 8 ). EBIT is expected to increase to € 1,020 to € 1,070 million (thereof Quirónsalud: € 300 to 320 million 8 ).

FRESENIUS VAMED

Fresenius Vamed confi rms its outlook for 2017 and expects both organic sales growth and EBIT growth of 5% to 10%.

INVESTMENTS

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

EMPLOYEES

The number of employees in the Group will continue to rise in the future, as a result of the expected expansion. We anticipate that the number of employees will increase to approximately 270,000 9 (December 31, 2016: 232,873). The number of employees is expected to increase in all business segments.

RESEARCH AND DEVELOPMENT

Our R & D activities will continue to play a key role in securing the Group's long-term growth through innovations and new therapies.

We plan to increase the Group's R & D spending in 2017. Approximately 5% of our product sales will be reinvested in research and development.

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

Before transaction costs of ~€ 50 million for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business

Before expected expenditures for the further development of Merck KGaA's biosimilars business of ~€ 50 million (expected closing Q3 / 17)

Calculated at expected FY average exchange rates for both net debt and EBITDA; before transaction costs of ~€ 50 million; excluding further potential acquisitions 5 Excluding effects of VA-agreement

⁶ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

⁷ HELIOS Kliniken Germany, excluding Quirónsalud

⁸ Quirónsalud consolidated for 11 months

⁹ This fi gure includes 27,600 Quirónsalud employees. It does not take into account approximately 7,400 contract employees and independent doctors.

GROUP FINANCIAL OUTLOOK 2017

	Previous guidance	New guidance
Sales, growth (in constant currency)	15% – 17%	confi rmed
Net income 1 , growth (in constant currency)	19% – 21% 2	confi rmed

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

Before transaction costs of ~ € 50 million for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business; before expected expenditures

for the further development of Merck KGaA's biosimilars business of ~ € 50 million (expected closing Q3 / 17)

OUTLOOK 2016 BY BUSINESS SEGMENT

		Previous guidance	New guidance
Fresenius Medical Care	Sales growth 2 (in constant currency)	8% – 10%	confi rmed
	Net income 1, 2 growth (in constant currency)	7% – 9%	confi rmed
Fresenius Kabi	Sales growth (organic)	5% – 7%	confi rmed
	EBIT growth (in constant currency)	6% – 8% 3	confi rmed
Fresenius Helios	Sales growth (organic)	3% – 5% 4	confi rmed
	Sales	~ € 8.6 bn 5	confi rmed
	EBIT	€ 1,020 – 1,070 m 6	confi rmed
Fresenius Vamed	Sales growth (organic)	5% – 10%	confi rmed
	EBIT, growth	5% – 10%	confi rmed

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

Excluding effects of VA-agreement

Before transaction costs of ~ € 50 million for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business; before expected expenditures

for the further development of Merck KGaA's biosimilars business of ~€ 50 million (expected closing Q3 / 17) HELIOS Kliniken Germany, excluding Quirónsalud

Thereof Quirónsalud (consolidated for 11 months): ~ € 2.5 billion

6 Thereof Quirónsalud (consolidated for 11 months): EBIT € 300 to € 320 million

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

€ in millions	Q2 / 2017	Q2 / 2016	H1 / 2017	H1 / 2016
Sales	8,532	7,203	16,894	14,218
Cost of sales	- 5,891	- 4,886	- 11,560	- 9,662
Gross profi t	2,641	2,317	5,334	4,556
Selling, general and administrative expenses	- 1,352	- 1,147	- 2,708	- 2,312
Research and development expenses	- 122	- 142	- 243	- 257
Operating income (EBIT)	1,167	1,028	2,383	1,987
Net interest	- 172	- 139	- 329	- 291
Income before income taxes	995	889	2,054	1,696
Income taxes	- 277	- 251	- 585	- 480
Net income	718	638	1,469	1,216
Noncontrolling interest	268	260	562	480
Net income attributable to shareholders of Fresenius SE & Co. KGaA	450	378	907	736
Earnings per share in €	0.81	0.70	1.64	1.35
Fully diluted earnings per share in €	0.81	0.69	1.63	1.34

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 / 2017	Q2 / 2016	H1 / 2017	H1 / 2016
Net income	718	638	1,469	1,216
Other comprehensive income (loss)
Positions which will be reclassified into net income in subsequent years
Foreign currency translation	- 1,119	381	- 1,186	- 173
Cash flow hedges	19	–	30	7
Change of fair value of available for sale financial assets	–	–	–	–
Income taxes on positions which will be reclassified	13	- 7	14	2
Positions which will not be reclassified into net income in subsequent years
Actuarial gains / losses on defined benefit pension plans	9	- 4	11	13
Income taxes on positions which will not be reclassified	1	3	–	- 3
Other comprehensive income (loss), net	- 1,077	373	- 1,131	- 154
Total comprehensive income (loss)	- 359	1,011	338	1,062
Comprehensive income (loss) attributable to noncontrolling interest	- 185	445	58	400
Comprehensive income (loss) attributable to shareholders of Fresenius SE & Co. KGaA	- 174	566	280	662

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

ASSETS

€ in millions	June 30, 2017	December 31, 2016
Cash and cash equivalents	1,371	1,579
Trade accounts receivable, less allowance for doubtful accounts	5,937	5,052
Accounts receivable from and loans to related parties	14	13
Inventories	3,195	3,189
Other current assets	2,282	1,911
I. Total current assets	12,799	11,744
Property, plant and equipment	9,239	8,139
Goodwill	25,289	22,901
Other intangible assets	2,880	1,763
Other non-current assets	1,868	1,523
Deferred taxes	822	627
II. Total non-current assets	40,098	34,953
Total assets	52,897	46,697

LIABILITIES AND SHAREHOLDERS' EQUITY

€ in millions	June 30, 2017	December 31, 2016
Trade accounts payable	1,437	1,315
Short-term accounts payable to related parties	57	57
Short-term accrued expenses and other short-term liabilities	5,776	5,514
Short-term debt	1,481	847
Short-term debt from related parties	–	6
Current portion of long-term debt and capital lease obligations	872	611
Current portion of Senior Notes	438	473
Short-term accruals for income taxes	308	256
A. Total short-term liabilities	10,369	9,079
Long-term debt and capital lease obligations, less current portion	6,582	5,048
Senior Notes, less current portion	9,231	6,941
Convertible bonds	1,306	854
Long-term accrued expenses and other long-term liabilities	1,687	1,615
Pension liabilities	1,178	1,155
Long-term accruals for income taxes	208	221
Deferred taxes	1,316	935
B. Total long-term liabilities	21,508	16,769
I. Total liabilities	31,877	25,848
A. Noncontrolling interest	7,944	8,185
Subscribed capital	554	547
Capital reserve	3,819	3,379
Other reserves	8,757	8,165
Accumulated other comprehensive income (loss)	- 54	573
B. Total Fresenius SE & Co. KGaA shareholders' equity	13,076	12,664
II. Total shareholders' equity	21,020	20,849
Total liabilities and shareholders' equity	52,897	46,697

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

€ in millions	H1 / 2017	H1 / 2016
Operating activities
Net income	1,469	1,216
Adjustments to reconcile net income to cash and cash equivalents provided by operating activities
Depreciation and amortization	705	599
Gain on sale of investments and divestitures	- 1	- 5
Change in deferred taxes	- 3	- 33
Gain on sale of fixed assets	- 7	–
Changes in assets and liabilities, net of amounts from businesses acquired or disposed of
Trade accounts receivable, net	- 328	- 218
Inventories	- 103	- 137
Other current and non-current assets	- 243	- 171
Accounts receivable from / payable to related parties	- 6	17
Trade accounts payable, accrued expenses and other short-term and long-term liabilities	219	46
Accruals for income taxes	- 19	19
Net cash provided by operating activities	1,683	1,333
Investing activities
Purchase of property, plant and equipment	- 724	- 697
Proceeds from sales of property, plant and equipment	39	13
Acquisitions and investments, net of cash acquired and net purchases of intangible assets	- 5,863	- 397
Proceeds from sale of investments and divestitures	15	133
Net cash used in investing activities	- 6,533	- 948
Financing activities
Proceeds from short-term debt	667	941
Repayments of short-term debt	- 22	- 153
Proceeds from long-term debt and capital lease obligations	2,207	372
Repayments of long-term debt and capital lease obligations	- 368	- 882
Proceeds from the issuance of Senior Notes	2,600	0
Proceeds from the issuance of convertible bonds	500	0
Changes of accounts receivable securitization program	- 115	- 46
Proceeds from the exercise of stock options	55	29
Dividends paid	- 795	- 592
Change in noncontrolling interest	–	–
Exchange rate effect due to corporate financing	–	2
Net cash provided by / used in fi nancing activities	4,729	- 329
Effect of exchange rate changes on cash and cash equivalents	- 87	- 2
Net decrease / increase in cash and cash equivalents	- 208	54
Cash and cash equivalents at the beginning of the reporting period	1,579	1,044
Cash and cash equivalents at the end of the reporting period	1,371	1,098

ADDITIONAL INFORMATION ON PAYMENTS

THAT ARE INCLUDED IN NET CASH PROVIDED BY OPERATING ACTIVITIES

€ in millions	H1 / 2017	H1 / 2016
Received interest	32	20
Paid interest	- 292	- 260
Income taxes paid	- 585	- 457

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, 2015	545,728	545,728	546	3,309	6,964
Proceeds from the exercise of stock options	551	551	–	15
Compensation expense related to stock options				9
Dividends paid					- 300
Purchase of noncontrolling interest
Noncontrolling interest subject to put provisions					- 50
Comprehensive income (loss)
Net income					736
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)					736
As of June 30, 2016	546,279	546,279	546	3,333	7,350
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					- 343
Purchase of noncontrolling interest
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

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, 2015	334	11,153	7,300	18,453
Proceeds from the exercise of stock options		15	14	29
Compensation expense related to stock options		9	4	13
Dividends paid		- 300	- 292	- 592
Purchase of noncontrolling interest		0	84	84
Noncontrolling interest subject to put provisions		- 50	- 112	- 162
Comprehensive income (loss)
Net income		736	480	1,216
Other comprehensive income (loss)
Cash flow hedges	- 2	- 2	6	4
Change of fair value of available for sale financial assets	–	–	–	–
Foreign currency translation	- 79	- 79	- 89	- 168
Actuarial gains on defined
benefit pension plans	7	7	3	10
Comprehensive income (loss)	- 74	662	400	1,062
As of June 30, 2016	260	11,489	7,398	18,887
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

2017 3 - 64 2 - 66 - 23 5 - 28 - 12 10 - 433 - 40 - 48 - 312 243 474 9 0 0 947 0% Change -- -- -- 2% 1% 26% 5% 0% 6% - 25% 0% 2% 31% - 7% 75% - 4 574 4 – 2016 472 453 19 5 16 0 - 3 1,108 176 0 3% 21 11 1 24 – 2017 457 22 5 17 - 5 - 28 - 27 230 536 7 0 3% 481 - 1 11 1,131 32% Change -- -- -- -- 46% 46% 67% 83% 62% - 82% 42% 41% 87% 53% 31% – 2016 2,912 2,912 0 427 95 332 - 20 - 49 262 230 128 8,696 1,406 1,387 105 28 72,687 20% – 2017 4,256 4,256 0 174 537 - 89 373 304 180 16,255 6,607 2,126 138 5,952 104,456 25% 711 - 71 17% Change 9% 9% 8% 4% - 8% 7% 26% - 11% 13% 9% - 3% - 7% 2% 37% - 99% - 7% 1% 2016 2,946 25 21% 739 157 582 - 77 - 152 336 339 210 11,430 5,155 2,153 110 189 34,917 2,921 111 2017 2 27 767 - 57 - 169 379 229 11,108 176 35,220 3,202 3,175 19% 145 622 395 4,785 2,193 151 1 37% Change 14% 14% 25% 15% 11% 16% - 1% - 21% 21% 107% - 3% - 1% - 6% - 11% 28% - 2% 3% 2016 7,942 7,930 12 1,406 338 1,068 - 186 - 275 477 767 25,504 8,132 5,658 454 365 68 116,120 56% 321 9,004 664 404 2017 9,019 15 376 1,235 - 188 - 332 577 1,052 24,715 8,045 5,322 468 67 119,629 53% 1,611 Cash fl ow before acquisitions and dividends shareholders of Fresenius SE & Co. KGaA contribution to consolidated sales Research and development expenses by business segment, € in millions (per capita on balance sheet date) 1 Acquisitions, gross / investments thereof intercompany sales Depreciation and amortization thereof contribution to Other operating liabilities 1 Net income attributable to Capital expenditure, gross consolidated sales Operating cash fl ow Income taxes Total assets 1 Net interest Employees EBITDA Debt 1 Sales EBIT		Change -- -- -- - 19% 0% - 18% 25% - 155% - 50% - 24% 2016 - 54 - 56 4 - 8 0 - 350 - 4 2 0% - 7 - 7 - 11	16,894 16,894 2017 0 3,088 705 2,383 - 329 - 585 907 1,683 998 100%	26% Change 19% 19% 19% 18% 20% - 13% - 22% 23% 54% 2016 14,218 14,218 0 2,586 599 1,987 - 480 736 1,333 649 100% - 291














		-- - 41	52,897	13% 46,697
		-- - 89	19,910	35% 14,780
		31% 361	10,651	5% 10,133
		-- 1	709	5% 674
		- 100% 1	6,421	505
		0	243	- 5% 257
	1% 8,198 8,256 44%	0% 951	268,508	15% 232,873
Key fi gures
4.4% 4.6% 14.7% 16.7% 25.1% 24.0% 17.7% 17.9% EBITDA margin			18.3% 2	18.2%
3.4% 3.5% 11.4% 12.6% 19.8% 19.4% 13.5% 13.7% EBIT margin			14.2% 2	14.0%
1.1% 1.0% 3.3% 4.1% 5.3% 4.5% 4.2% 4.2% Depreciation and amortization in % of sales			4.2%	4.2%
0.2% - 5.8% 7.9% 7.1% 11.5% 12.3% 9.7% 11.7% Operating cash flow in % of sales			10.0%	9.4%
10.5% 9.7% 8.5% 6.8% 11.7% 12.2% 10.6% 11.0% ROOA 1			9.8% 4	10.0%

CONSOLIDATED SEGMENT REPORTING FIRST HALF (UNAUDITED)

FRESENIUS SE & CO. KGAA

2 Before transaction costs for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business 3 After transaction costs for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business

4 The underlying pro forma EBIT does not include transaction costs for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business.

N ME G D SE ATE D OLI NS CO	T REP	RTI O	G SECO N	N	U D Q	ARTE	N R (U	DI AU	D) TE
		Fresenius Medical Care			Fresenius Kabi			Fresenius Helios			Fresenius Vamed			Corporate / Other			Fresenius Group
by business segment, € in millions	2017	2016	Change	2017 1	2016	Change	2017	2016	Change	2017	2016	Change	2017 2	2016	Change	2017	2016	Change
Sales	4,471	4,026	11%	1,598	1,476	8%	2,238	1,477	52%	258	254	2%	- 33	- 30	- 10%	8,532	7,203	18%
thereof contribution to consolidated sales	4,463	4,019	11%	1,584	1,463	8%	2,238	1,477	52%	245	243	1%	2	1	100%	8,532	7,203	18%
thereof intercompany sales	8	7	14%	14	13	8%	0	0		13	11	18%	- 35	- 31	- 13%	0	0
contribution to consolidated sales	52%	56%		19%	20%		26%	21%		3%	3%		0%	0%		100%	100%
EBITDA	770	744	3%	385	371	4%	377	221	71%	14	12	17%	- 18	- 3	--	1,528	1,345	14%
Depreciation and amortization	186	173	8%	76	92	- 17%	95	48	98%	3	3	0%	1	1	0%	361	317	14%
EBIT	584	571	2%	309	279	11%	282	173	63%	11	9	22%	- 19	- 4	--	1,167	1,028	14%
Net interest	- 96	- 90	- 7%	- 29	- 36	19%	- 42	- 9	--	- 1	0		- 4	- 4	0%	- 172	- 139	- 24%
Income taxes	- 150	- 149	- 1%	- 84	- 72	- 17%	- 47	- 25	- 88%	- 3	- 2	- 50%	7	- 3	--	- 277	- 251	- 10%
shareholders of Fresenius SE & Co. KGaA Net income attributable to	269	264	2%	188	163	15%	192	138	39%	7	6	17%	- 206	- 193	- 7%	450	378	19%

Operating cash fl ow	882	604	46%	203	212	- 4%	120	164	- 27%	16	19	- 16%	- 14	- 2	--	1,207	997	21%
Cash fl ow before acquisitions and dividends	689	381	81%	121	153	- 21%	41	99	- 59%	18	17	6%	- 19	- 3	--	850	647	31%

Capital expenditure, gross	206	227	- 9%	85	63	35%	81	67	21%	4	2	100%	5	0		381	359	6%
Acquisitions, gross / investments	318	275	16%	0	6	- 100%	20	19	5%	–	–	--	0	1	- 100%	338	301	12%
Research and development expenses	35	34	3%	87	109	- 20%	–	–	--	0	0		0	- 1	100%	122	142	- 14%
Key fi gures
EBITDA margin	17.2%	18.5%		24.1%	25.1%		16.8%	15.0%		5.4%	4.7%					18.0% 1	18.7%
EBIT margin	13.0%	14.2%		19.3%	18.9%		12.6%	11.7%		4.3%	3.5%					13.8% 1	14.3%
Depreciation and amortization in % of sales	4.2%	4.3%		4.8%	6.2%		4.2%	3.2%		1.2%	1.2%					4.2%	4.4%
Operating cash flow in % of sales	19.7%	15.0%		12.7%	14.4%		5.4%	11.1%		6.2%	7.5%					14.1%	13.8%

FRESENIUS SE & CO. KGAA

1 Before transaction costs for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business 2 After transaction costs for the acquisitions of Akorn, Inc. and Merck KGaA's biosimilars business

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

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

At a Glance Fresenius Share Management Report Financial Statements Notes 26

TABLE OF CONTENTS NOTES

28 General notes

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

33 Notes on the consolidated statement of income

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

34 Notes on the consolidated statement of fi nancial position

34 8. Cash and cash equivalents
34 9. Trade accounts receivable
34 10. Inventories
34 11. Other current and non-current assets
34 12. Goodwill and other intangible assets
35 13. Debt and capital lease obligations
39 14. Senior Notes
39 15. Convertible bonds
40 16. Pensions and similar obligations
40 17. Noncontrolling interest
41 18. Fresenius SE & Co. KGaA shareholders' equity

42 Other notes

42 19. Legal and regulatory matters
46 20. Financial instruments
49 21. Supplementary information on capital management
49 22. Supplementary information on the consolidated statement of cash fl ows
50 23. Notes on the consolidated segment reporting
50 24. Share-based compensation plans
51 25. Subsequent events
51 26. Corporate Governance
52 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, 2017:

▶ 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). Beginning with the 2017 fi scal year, the Fresenius Group is solely managed in accordance with IFRS and does no longer voluntarily prepare and publish the consolidated fi nancial statements in accordance with the United States Generally Accepted Accounting Principles (U.S. GAAP) which have been provided previously.

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 accounting policies underlying these interim fi nancial statements are mainly the same as those applied in the consolidated fi nancial statements as of December 31, 2016.

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, 2017 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, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS.

Except for the reported acquisitions (see note 2, Acquisitions 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, 2017 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, 2017 are not necessarily indicative of the results of operations for the fi scal year 2017.

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, 2017 in conformity with IFRS in force for the interim periods on January 1, 2017.

In the fi rst half of 2017, the Fresenius Group did not apply any new standard relevant for its business for the fi rst time.

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 improves 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 Customers. The Fresenius Group expects a balance sheet extension due to the on balance sheet recognition of right-ofuse assets and liabilities for agreed lease payment obligations, currently classifi ed as operating leases, resulting in particular from leased clinics and buildings. Based on a fi rst impact analysis as of December 31, 2015, 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 Leverage Ratio will increase by 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 fi rst impact analysis, the Fresenius Group decided to apply the modifi ed retrospective method. Currently, the Fresenius Group evaluates accounting policy options of IFRS 16.

In January 2016, the IASB issued Amendments to IAS 7, Statement of Cash Flows. The amendments are intended to improve the information related to the change in a company's debt by providing additional disclosures. The standard is effective for fi scal years beginning on or after January 1, 2017. Earlier application is permitted. The Fresenius Group will initially apply the amendments to IAS 7 in the consolidated fi nancial statements as of December 31, 2017.

In May 2014, the 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. Earlier adoption is permitted. The Fresenius Group decided that IFRS 15 will not be adopted early and is currently evaluating the impact of IFRS 15, in conjunction with all amendments to the standard, on its consolidated fi nancial statements. Based on fi ndings the Fresenius Group obtained so far, it expects differences from the current accounting

mainly in the calculation of the transaction price for health care services provided. IFRS 15 requires the consideration of implicit price concessions when determining the transaction price. This will lead to a corresponding decrease of revenues from health care services and thus the implicit price concessions will no longer be included in selling, general and administrative expenses as an allowance for doubtful accounts. The fi rst analysis of this issue showed a decrease of revenue by approximately 1% to 2% without any effect on net income. A more detailed quantifi cation of the impact of IFRS 15 is not yet possible. The Fresenius Group expects to implement IFRS 15 using the cumulative effect method and is continuing to evaluate accounting policy options. The Fresenius Group intends to apply IFRS 15 only to open contracts as of January 1, 2018.

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 two 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. 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 (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. Earlier adoption is permitted. The Fresenius Group decided that IFRS 9 will not be adopted early and is currently evaluating the impact on its consolidated fi nancial statements. In accordance with IAS 39, the majority of the non-derivative fi nancial assets are measured at amortized costs. The analysis on the business model and the contractual cash fl ow characteristics of each instrument is still ongoing. The requirements for the classifi cation and measurement of non-derivative fi nancial liabilities have not changed signifi cantly. Thus, the Fresenius Group expects a limited impact on its 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 intends to implement the simplifi ed method to determine the provisions for risks from trade accounts receivable, receivables from lease contracts and capitalized contract costs according to IFRS 15. A quantifi cation of the impact is not yet possible.

Based on currently available information, derivative fi nancial instruments presently designated as hedging instruments are also qualifi ed for hedge accounting according to the requirements of IFRS 9.

The Fresenius Group also evaluates accounting policy options and transition methods of IFRS 9.

The EU Commission's endorsement of IFRS 16, IFRS 17 and of the amendments to IAS 7 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 AND INVESTMENTS

The Fresenius Group made acquisitions, investments and purchases of intangible assets of € 6,421 million and € 505 million in the fi rst half of 2017 and 2016, respectively. Of this amount, € 5,863 million was paid in cash and € 558 million was assumed obligations in the fi rst half of 2017.

FRESENIUS MEDICAL CARE

In the fi rst half of 2017, Fresenius Medical Care spent € 468 million on acquisitions, mainly on the purchase of dialysis clinics and a care coordination acquisition.

FRESENIUS KABI

In the fi rst half of 2017, Fresenius Kabi spent € 1 million on acquisitions, mainly on subsequent purchase price payments for acquisitions of the past year.

Acquisition of Akorn, Inc.

The purchase price will be fi nanced by a broad mix of Euro and US-Dollar denominated long-term debt instruments.

Although Akorn has experienced lower revenue and earnings in the second quarter of 2017, Fresenius Kabi has left its expectations for Akorn's 2018 fi scal year unchanged.

Acquisition of the biosimilars business of Merck KGaA

The purchase price will be up to € 670 million. Thereof, € 170 million will be paid in cash upon closing. Approximately € 500 million are milestone payments strictly tied to achievements of development targets. Analytical testing, clinical studies, quality requirements specifi c to biosimilars as well as marketing and sales activities are expected to result in increased costs for Fresenius Kabi. These costs are expected to occur in uneven tranches. The total expected cash-out and self-imposed investment ceiling is estimated to be up to € 1.4 billion until 2022.

The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the third quarter of 2017.

The total investment in the biosimilars business will be mainly cash fl ow fi nanced.

FRESENIUS HELIOS

In the fi rst half of 2017, Fresenius Helios spent € 5,952 million on acquisitions, mainly for the acquisition of 100% of the share capital in IDCSalud Holding S.L.U. (Quirónsalud), Spain.

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 44 hospitals, 44 outpatient centers and about 300 Occupational Risk Preven tion centers located in all economically important areas 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 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

Trade accounts receivable	812
Working capital and other assets	73
Property, plant and equipment and other non-current assets	1,759
Intangible assets	1,303
Liabilities	- 1,227
Goodwill	3,232
Noncontrolling interest	- 21
Consideration transferred	5,931

The goodwill in the amount of € 3,232 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 centres 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.

From February to June 2017, the acquired hospitals and outpatient facilities have contributed € 1,218 million to sales and € 178 million to the operating income (EBIT) of the fi rst half of 2017 of the Fresenius 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 2017 in the amount of € 907 million includes special items due to the announced acquisitions of Merck KGaA's biosimilars business and shares of 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.

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

6. TAXES

During the fi rst half of 2017, there were no material changes relating to tax audits, accruals for income taxes as well as recognized and accrued payments for interest and penalties. Explanations regarding the tax audits and further information can be found in the consolidated fi nancial statements as of December 31, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS.

7. EARNINGS PER SHARE

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

Earnings H1 / 2017 according to IFRS	2,383	- 329	907
Transaction costs biosimilars and Akorn	- 10	- 3	- 9
Earnings H1 / 2017, adjusted	2,393	- 326	916
€ in millions	EBIT	Interest expenses	Net income attributable to share holders of Fresenius SE & Co. KGaA

4. SALES

Sales by activity were as follows:

€ in millions	H1 / 2017	H1 / 2016
Sales of services	11,966	9,660
Sales of products and related goods	4,739	4,360
Sales from long-term production contracts	185	196
Other sales	4	2
Sales	16,894	14,218

5. RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses of € 243 million (H1 / 2016: € 257 million) included expenditures for research and non- capitalizable development costs as well as depreciation and amortization expenses relating to capitalized development costs of € 8 million (H1 / 2016: € 8 million). Furthermore, in the fi rst half of 2016, research and development expenses included impairments on capitalized development expenses of € 25 million. These related to in-process R & D of product approval projects, which were acquired through the acquisition of Fresenius Kabi USA, Inc.

	H1 / 2017	H1 / 2016
Numerators, € in millions
Net income attributable to
shareholders of
Fresenius SE & Co. KGaA	907	736
less effect from dilution due to
Fresenius Medical Care shares	–	–
Income available to
all ordinary shares	907	736
Denominators in number of shares
Weighted-average number of
ordinary shares outstanding	553,705,886	545,945,575
Potentially dilutive
ordinary shares	3,916,335	4,102,887
Weighted-average number
of ordinary shares outstanding
assuming dilution	557,622,221	550,048,462

Basic earnings per share in €	1.64	1.35
Fully diluted earnings per share in €	1.63	1.34

NOTES ON THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

8. CASH AND CASH EQUIVALENTS

As of June 30, 2017 and December 31, 2016, cash and cash equivalents were as follows:

€ in millions	June 30, 2017	Dec. 31, 2016
Cash	1,195	1,359
Time deposits and securities (with a maturity of up to 90 days)	176	220
Total cash and cash equivalents	1,371	1,579

As of June 30, 2017 and December 31, 2016, earmarked funds of € 68 million and € 61 million, respectively, were included in cash and cash equivalents.

9. TRADE ACCOUNTS RECEIVABLE

As of June 30, 2017 and December 31, 2016, trade accounts receivable were as follows:

€ in millions	June 30, 2017	Dec. 31, 2016
Trade accounts receivable	6,768	5,752
less allowance for doubtful accounts	831	700
Trade accounts receivable, net	5,937	5,052

The increase is mainly attributable to the acquisition of Quirónsalud.

10. INVENTORIES

As of June 30, 2017 and December 31, 2016, inventories consisted of the following:

€ in millions	June 30, 2017	Dec. 31, 2016
Raw materials and purchased components	661	667
Work in process	624	620
Finished goods	2,034	2,044
less reserves	124	142
Inventories, net	3,195	3,189

11. OTHER CURRENT AND NON-CURRENT ASSETS

At equity investments as of June 30, 2017 in the amount of € 628 million (December 31, 2016: € 598 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 2017, income of € 38 million (H1 / 2016: € 29 million) resulting from this valuation was included in selling, general and administrative expenses in the consolidated statement of income. Securities and longterm loans included € 251 million fi nancial assets available for sale as of June 30, 2017 (December 31, 2016: € 258 million) mainly relating to shares in funds.

12. GOODWILL AND OTHER INTANGIBLE ASSETS

As of June 30, 2017 and December 31, 2016, intangible assets, split into amortizable and non-amortizable intangible assets, consisted of the following:

AMORTIZABLE INTANGIBLE ASSETS

		June 30, 2017			December 31, 2016
€ in millions	Acquisition cost	Accumulated amortization	Carrying amount	Acquisition cost	Accumulated amortization	Carrying amount
Patents, product and distribution rights	699	384	315	748	392	356
Tradenames	649	15	634	0	0	0
Capitalized development costs	403	225	178	425	232	193
Technology	441	147	294	462	141	321
Customer relationships	855	99	756	332	98	234
Software	529	312	217	474	290	184
Non-compete agreements	323	267	56	347	278	69
Other	506	290	216	469	293	176
Total	4,405	1,739	2,666	3,257	1,724	1,533

The increase of tradenames and customer relationships mainly results from the acquisition of Quirónsalud.

Estimated regular amortization expenses of intangible assets for the next fi ve years are shown in the following table:

€ in millions	Q3 – 4 / 2017	2018	2019	2020	2021	Q1 – 2 / 2022
Estimated amortization expenses	151	294	290	281	272	135

NON-AMORTIZABLE INTANGIBLE ASSETS

	June 30, 2017			December 31, 2016
€ in millions	Acquisition cost	Accumulated amortization	Carrying amount	Acquisition cost	Accumulated amortization	Carrying amount
Tradenames	211	0	211	227	0	227
Management contracts	3	0	3	3	0	3
Goodwill	25,289	0	25,289	22,901	0	22,901
Total	25,503	0	25,503	23,131	0	23,131

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, 2016	11,962	5,142	4,437	99	6	21,646
Additions	586	5	101	0	–	692
Disposals	0	0	–	0	–	–
Reclassifi cations	3	0	0	0	0	3
Foreign currency translation	405	155	0	0	0	560
Carrying amount as of December 31, 2016	12,956	5,302	4,538	99	6	22,901
Additions	385	0	3,245	0	0	3,630
Disposals	0	- 1	0	0	0	- 1
Foreign currency translation	- 903	- 338	0	0	0	- 1,241
Carrying amount as of June 30, 2017	12,438	4,963	7,783	99	6	25,289

The increase of goodwill mainly results from the acquisition of Quirónsalud.

As of June 30, 2017 and December 31, 2016, the carrying amounts of the other non-amortizable intangible assets were € 187 million and € 202 million, respectively, for Fresenius Medical Care as well as € 27 million and € 28 million for Fresenius Kabi.

13. DEBT AND CAPITAL LEASE OBLIGATIONS

SHORT-TERM DEBT

As of June 30, 2017 and December 31, 2016, short-term debt consisted of the following:

		Book value
€ in millions	June 30, 2017	December 31, 2016
Fresenius SE & Co. KGaA Commercial Paper Program	365	178
Fresenius Medical Care AG & Co. KGaA Commercial Paper Program	880	476
Other short-term debt	236	193
Short-term debt	1,481	847

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

As of June 30, 2017 and December 31, 2016, long-term debt and capital lease obligations net of debt issuance costs consisted of the following:

	Book value
€ in millions	June 30, 2017	December 31, 2016
Fresenius Medical Care 2012 Credit Agreement	2,048	2,244
2013 Senior Credit Agreement	2,601	1,574
Schuldschein Loans	2,014	1,186
Accounts Receivable Facility of Fresenius Medical Care	43	165
Capital lease obligations	240	146
Other	508	344
Subtotal	7,454	5,659
less current portion	872	611
Long-term debt and capital lease obligations, less current portion	6,582	5,048

Fresenius Medical Care 2012 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 period with a large group of banks and institutional investors on October 30, 2012.

On November 26, 2014, the Fresenius Medical Care 2012 Credit Agreement was amended to increase the total credit facility to approximately US\$ 4,400 million and extend the term for an additional two years until October 30, 2019.

The following tables show the available and outstanding amounts under the Fresenius Medical Care 2012 Credit Agreement at June 30, 2017 and at December 31, 2016:

		June 30, 2017
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit (in US\$)	US\$ 1,000 million	876	US\$72 million	63
Revolving Credit (in €)	€ 400 million	400	€ 0 million	0
US\$ Term Loan	US\$ 2,000 million	1,753	US\$2,000 million	1,753
€ Term Loan	€ 240 million	240	€ 240 million	240
Total		3,269		2,055
less fi nancing cost				7
Total				2,048

December 31, 2016

	€ in millions		€ in millions
US\$ 1,000 million	949	US\$10 million	10
€ 400 million	400	€ 0 million	0
US\$ 2,100 million	1,992	US\$2,100 million	1,992
€ 252 million	252	€ 252 million	252
	3,593		2,254
			10
			2,244
		Maximum amount available	Balance outstanding

At June 30, 2017 and December 31, 2016, Fresenius Medical Care had letters of credit outstanding in the amount of US\$ 2 million and US\$ 4 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, 2017, FMC-AG & Co. KGaA and its subsidiaries were in compliance with all covenants under the Fresenius Medical Care 2012 Credit Agreement.

On July 11, 2017, FMC-AG & Co. KGaA further amended and extended its syndicated credit agreement resulting in a total credit facility of US\$ 3,916 million with maturities of three and fi ve years on an unsecured basis. The amended Fresenius Medical Care 2012 Credit Agreement now refl ects a simplifi ed, unsecured structure consistent with the investment grade rating of Fresenius Medical Care and lower tiered pricing.

2013 Senior Credit Agreement

On December 20, 2012, Fresenius SE & Co. KGaA and various subsidiaries entered into a delayed draw syndicated credit agreement (2013 Senior Credit Agreement) in the original amount of US\$ 1,300 million and € 1,250 million. Since the initial funding of the 2013 Senior Credit Agreement in June 2013, additional tranches were added. Furthermore, scheduled amortization payments as well as voluntary repayments have been made.

On October 14, 2016, the Senior Credit Agreement 2013 has been increased by an incremental term loan of € 900 million and an incremental revolving facility of € 300 million. The incremental facilities were used to fund the acquisition of IDCSalud Holding S.L.U. (Quirónsalud) by Fresenius Helios. The incremental facilities were funded on January 31, 2017.

The following tables show the available and outstanding amounts under the 2013 Senior Credit Agreement at June 30, 2017 and at December 31, 2016:

		June 30, 2017
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit Facilities (in €)	€ 1,200 million	1,200	€ 300 million	300
Revolving Credit Facilities (in US\$)	US\$ 300 million	263	US\$ 0 million	0
Term Loan A (in €)	€ 1,752 million	1,752	€ 1,752 million	1,752
Term Loan A (in US\$)	US\$ 643 million	563	US\$ 643 million	563
Total		3,778		2,615
less fi nancing cost				14
Total				2,601

	December 31, 2016
	Maximum amount available		Balance outstanding
		€ in millions		€ in millions
Revolving Credit Facilities (in €)	€ 900 million	900	€ 0 million	0
Revolving Credit Facilities (in US\$)	US\$ 300 million	284	US\$ 0 million	0
Term Loan A (in €)	€ 933 million	933	€ 933 million	933
Term Loan A (in US\$)	US\$ 689 million	654	US\$ 689 million	654
Total		2,771		1,587
less fi nancing cost				13
Total				1,574

Does not include the incremental facilities in the amount of € 1.2 billion which were funded in January 2017

As of June 30, 2017, the Fresenius Group was in compliance with all covenants under the 2013 Senior Credit Agreement.

Schuldschein Loans

As of June 30, 2017 and December 31, 2016, Schuld schein Loans of the Fresenius Group net of debt issuance costs consisted of the following:

				Book value € in millions
	Notional amount	Maturity	Interest rate fi xed / variable	June 30, 2017	Dec. 31, 2016
Fresenius SE & Co. KGaA 2013 / 2017	€ 125 million	Aug. 22, 2017	2.65% /variable	125	125
Fresenius SE & Co. KGaA 2014 / 2018	€ 97 million	April 2, 2018	2.09%	97	97
Fresenius SE & Co. KGaA 2014 / 2018 1	€ 141 million	April 2, 2018	variable	0	141
Fresenius SE & Co. KGaA 2012 / 2018	€ 72 million	April 4, 2018	4.09%	72	72
Fresenius SE & Co. KGaA 2015 / 2018	€ 91 million	October 8, 2018	1.07% / variable	91	91
Fresenius SE & Co. KGaA 2014 / 2020	€ 262 million	April 2, 2020	2.67% / variable	262	260
Fresenius SE & Co. KGaA 2017 / 2022	€ 372 million	Jan. 31, 2022	0.93% / variable	371	0
Fresenius SE & Co. KGaA 2015 / 2022	€ 21 million	April 7, 2022	1.61%	21	21
Fresenius SE & Co. KGaA 2017 / 2024	€ 421 million	Jan. 31, 2024	1.36% / variable	419	0
Fresenius SE & Co. KGaA 2017 / 2027	€ 207 million	Jan. 29, 2027	1.96% / variable	206	0
Fresenius US Finance II, Inc. 2016 / 2021	US\$ 342 million	March 10, 2021	2.66% / variable	298	323
Fresenius US Finance II, Inc. 2016 / 2023	US\$ 58 million	March 10, 2023	3.12% / variable	52	56
Schuldschein Loans				2,014	1,186

1 terminated tranches repaid on April 3, 2017

On December 19, 2016, Fresenius SE & Co. KGaA issued € 1,000 million of Schuldschein Loans in tranches of 5, 7 and 10 years with fi xed and variable interest rates. The transaction was closed on January 31, 2017. Proceeds were used for general corporate purposes and to fi nance the acquisition of IDCSalud Holding S.L.U. (Quirónsalud) by Fresenius Helios.

In order to optimize the capital structure and to further reduce fi nancing costs, two existing fl oating rate tranches of Schuldschein Loans due originally on April 2, 2018 in the amount of € 76 million and € 65 million have been terminated and prepaid as per April 3, 2017.

The Schuldschein Loans issued by Fresenius SE & Co. KGaA in the total amount of € 125 million which are due on August 22, 2017 as well as the Schuldschein Loans issued by Fresenius SE & Co. KGaA in the amount of € 97 million and € 72 million which are due on April 2, 2018 and April 4, 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, 2017, 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, 2017, the additional fi nancial cushion resulting from unutilized credit facilities was approximately € 3.3 billion. Thereof approximately € 2.4 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. It is planned to replace or refi nance the facility with a broad mix of Euro and US-Dollar denominated longterm debt instruments.

The Bridge Financing Facility in the original amount of € 3,750 million, which Fresenius SE & Co. KGaA entered into in September 2016 for the purpose of the acquisition of IDCSalud Holding S.L.U. (Quirónsalud), was cancelled prematurely in January 2017 without having been utilized.

14. SENIOR NOTES

As of June 30, 2017 and December 31, 2016, Senior Notes of the Fresenius Group net of debt issuance costs consisted of the following:

				Book value € in millions
	Notional amount	Maturity	Interest rate	June 30, 2017	Dec. 31, 2016
Fresenius Finance Ireland PLC 2017 / 2022	€ 700 million	Jan. 31, 2022	0.875%	695	0
Fresenius Finance Ireland PLC 2017 / 2024	€ 700 million	Jan. 30, 2024	1.50%	695	0
Fresenius Finance Ireland PLC 2017 / 2027	€ 700 million	Feb. 1, 2027	2.125%	692	0
Fresenius Finance Ireland PLC 2017 / 2032	€ 500 million	Jan. 30, 2032	3.00%	493	0
Fresenius SE & Co. KGaA 2014 / 2019	€ 300 million	Feb. 1, 2019	2.375%	299	299
Fresenius SE & Co. KGaA 2012 / 2019	€ 500 million	Apr. 15, 2019	4.25%	498	498
Fresenius SE & Co. KGaA 2013 / 2020	€ 500 million	July 15, 2020	2.875%	498	497
Fresenius SE & Co. KGaA 2014 / 2021	€ 450 million	Feb. 1, 2021	3.00%	445	445
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%	261	283
Fresenius US Finance II, Inc. 2015 / 2023	US\$ 300 million	Jan. 15, 2023	4.50%	261	281
FMC Finance VII S.A. 2011 / 2021	€ 300 million	Feb. 15, 2021	5.25%	295	295
FMC Finance VIII S.A. 2011 / 2018	€ 400 million	Sept. 15, 2018	6.50%	398	397
FMC Finance VIII S.A. 2012 / 2019	€ 250 million	July 31, 2019	5.25%	244	244
Fresenius Medical Care US Finance, Inc. 2007 / 2017	US\$ 500 million	July 15, 2017	6.875%	438	473
Fresenius Medical Care US Finance, Inc. 2011 / 2021	US\$ 650 million	Feb. 15, 2021	5.75%	565	611
Fresenius Medical Care US Finance II, Inc. 2011 / 2018	US\$ 400 million	Sept. 15, 2018	6.50%	349	377
Fresenius Medical Care US Finance II, Inc. 2012 / 2019	US\$ 800 million	July 31, 2019	5.625%	699	757
Fresenius Medical Care US Finance II, Inc. 2014 / 2020	US\$ 500 million	Oct. 15, 2020	4.125%	436	471
Fresenius Medical Care US Finance II, Inc. 2012 / 2022	US\$ 700 million	Jan. 31, 2022	5.875%	611	661
Fresenius Medical Care US Finance II, Inc. 2014 / 2024	US\$ 400 million	Oct. 15, 2024	4.75%	348	376
Senior Notes				9,669	7,414

All Senior Notes included in the table are unsecured.

On January 30, 2017, Fresenius Finance Ireland PLC, a wholly owned subsidiary of Fresenius SE & Co. KGaA, issued Senior Notes with an aggregate volume of € 2.6 billion. The Senior Notes consist of four tranches with maturities of fi ve, seven, ten and fi fteen years. The proceeds were used to fund the acquisition of IDCSalud Holding S.L.U. (Quirónsalud) and for general corporate purposes.

The Senior Notes issued by Fresenius Medical Care US Finance, Inc. were redeemed at maturity on July 17, 2017. As of June 30, 2017 they are shown as current portion of Senior Notes in the consolidated statement of fi nancial position.

As of June 30, 2017, the Fresenius Group was in compliance with all of its covenants under the Senior Notes.

15. CONVERTIBLE BONDS

As of June 30, 2017 and December 31, 2016, 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, 2017	Dec. 31, 2016
Fresenius SE & Co. KGaA 2014 / 2019	€ 500 million	Sept. 24, 2019	0.000%	€ 49.3599	478	474
Fresenius SE & Co. KGaA 2017 / 2024	€ 500 million	Jan. 31, 2024	0.000%	€ 107.0979	444	0
Fresenius Medical Care AG & Co. KGaA 2014 / 2020	€ 400 million	Jan. 31, 2020	1.125%	€ 73.4408	384	380
Convertible bonds					1,306	854

The fair value of the derivatives embedded in the convertible bonds of Fresenius SE & Co. KGaA was € 318 million at June 30, 2017. 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 € 95 million at June 30, 2017. 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, 2017, the call options had a corresponding aggregate fair value of € 318 million and € 95 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.

On January 31, 2017, Fresenius SE & Co. KGaA issued € 500 million of equity-neutral convertible bonds due 2024. The convertible bonds will not bear any interest. The issue price was fi xed at 101% of the nominal value, corresponding to an annual yield to maturity of - 0.142%. The initial conversion price is € 107.0979. This represents a 45% premium over the reference share price of the Fresenius share of € 73.8606. The proceeds were used to fund the acquisition of IDCSalud Holding S.L.U. (Quirónsalud) and for general corporate purposes.

16. PENSIONS AND SIMILAR OBLIGATIONS

DEFINED BENEFIT PENSION PLANS

At June 30, 2017, the pension liability of the Fresenius Group was € 1,199 million. The current portion of the pension liability of € 21 million is recognized in the consolidated statement of fi nancial position within short-term accrued expenses and other short-term liabilities. The non-current portion of € 1,178 million is recorded as pension liability.

Contributions to Fresenius Group's pension fund were € 6 million in the fi rst half of 2017. The Fresenius Group expects approximately € 11 million contributions to the pension fund during 2017.

Defi ned benefi t pension plans' net periodic benefi t costs of € 42 million (H1 / 2016: € 43 million) were comprised of the following components:

€ in millions	H1 / 2017	H1 / 2016
Service cost	30	28
Net interest cost	12	15
Net periodic benefi t cost	42	43

17. NONCONTROLLING INTEREST

As of June 30, 2017 and December 31, 2016, noncontrolling interest in the Fresenius Group was as follows:

€ in millions	June 30, 2017	Dec. 31, 2016
Noncontrolling interest in Fresenius Medical Care AG & Co. KGaA	6,688	6,903
Noncontrolling interest in VAMED AG	56	55
Noncontrolling interest in the business segments
Fresenius Medical Care	1,034	1,073
Fresenius Kabi	75	90
Fresenius Helios	83	57
Fresenius Vamed	8	7
Total noncontrolling interest	7,944	8,185

Noncontrolling interest changed as follows:

€ in millions	H1 / 2017
Noncontrolling interest as of January 1, 2017	8,185
Noncontrolling interest in profi t	562
Stock options	31
Purchase of noncontrolling interest	59
Dividend payments	- 452
Currency effects and other changes	- 441
Noncontrolling interest as of June 30, 2017	7,944

18. FRESENIUS SE & CO. KGAA SHAREHOLDERS' EQUITY

SUBSCRIBED CAPITAL

As of January 1, 2017, the subscribed capital of Fresenius SE & Co. KGaA consisted of 547,208,371 bearer ordinary shares.

In the course of the acquisition of Quirónsalud, on January 31, 2017, 6,108,176 new shares of Fresenius SE & Co. KGaA were issued from Authorized Capital excluding subscription rights. These new shares had full dividend entitlement for the fi scal year 2016.

During the fi rst half of 2017, 979,084 stock options were exercised. Consequently, as of June 30, 2017, the subscribed capital of Fresenius SE & Co. KGaA consisted of 554,295,631 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

As of December 31, 2016, the general partner, Fresenius Management SE, was authorized, with the approval of the Supervisory Board, until May 15, 2019, to increase Fresenius SE & Co. KGaA's subscribed capital by a total amount of up to € 120,960,000 through a single or multiple issues of new bearer ordinary shares against cash contributions and / or contributions in kind (Authorized Capital I). Thereof, on January 31, 2017, € 6,108,176 was utilized through the issuance of 6,108,176 shares, thereby reducing the Authorized Capital I to € 114,851,824.

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 I (Stock Option Plan 2003), Conditional Capital II (Stock Option Plan 2008) and Conditional Capital IV (Stock Option Plan 2013) (see note 24, Share-based compensation plans). Another Conditional Capital III exists for the authorization to issue option bearer bonds and / or convertible bonds.

The following table shows the development of the Conditional Capital:

in €	Ordinary shares
Conditional Capital I Fresenius AG Stock Option Plan 2003	5,017,585
Conditional Capital II Fresenius SE Stock Option Plan 2008	5,980,888
Conditional Capital III option bearer bonds and / or convertible bonds	48,971,202
Conditional Capital IV Fresenius SE & Co. KGaA Stock Option Plan 2013	25,200,000
Total Conditional Capital as of January 1, 2017	85,169,675
Fresenius AG Stock Option Plan 2003 – options exercised	- 280,180
Fresenius SE Stock Option Plan 2008 – options exercised	- 698,904
Total Conditional Capital as of June 30, 2017	84,190,591

As of June 30, 2017, the Conditional Capital was composed as follows:

in €	Ordinary shares
Conditional Capital I Fresenius AG Stock Option Plan 2003	4,737,405
Conditional Capital II Fresenius SE Stock Option Plan 2008	5,281,984
Conditional Capital III option bearer bonds and / or convertible bonds	48,971,202
Conditional Capital IV Fresenius SE & Co. KGaA Stock Option Plan 2013	25,200,000
Total Conditional Capital as of June 30, 2017	84,190,591

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 2017, a dividend of € 0.62 per bearer ordinary share was approved by Fresenius SE & Co. KGaA's shareholders at the Annual General Meeting and paid. The total dividend payment was € 343 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, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS. In the following, only the changes during the fi rst half ended June 30, 2017 compared to the information provided in the consolidated fi nancial statements are described (except for the description headed "Subpoena "American Kidney Fund" / CMS Litigation" which has been revised and contains information already described in the consolidated fi nancial statements). These changes should be read in conjunction with the overall information in the consolidated fi nancial statements as of December 31, 2016 applying Section 315a HGB (in the version in

force before April 19, 2017) in accordance with IFRS; defi ned terms or abbreviations having the same meaning as in the consolidated fi nancial statements as of December 31, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS.

PRODUCT LIABILITY LITIGATION

Fresenius Medical Care Holdings (FMCH) may elect to void the settlement if the 97% threshold is not achieved or if plaintiffs' non-participation falls into suspect patterns.

The deadlines for plaintiffs to elect participation in the settlement or comply with Lone Pine orders have passed. Based on participation elections already received and Lone Pine dismissal orders already entered, the plaintiff committee and FMCH expect, and have advised the courts that they expect, the settlement to be consummated. However, in the Middlesex County coordinated proceeding, many counsel for many plaintiffs have moved to withdraw from representing their clients and the court has granted extensions of time to allow plaintiffs to obtain new counsel or proceed pro se. In addition, diffi culties and delays have occurred in the plaintiff committee's assembling and verifying individual participation elections. The plaintiff committee and FMCH have therefore agreed, with court approval, that consummation will occur promptly upon suffi cient verifi cation of fulfi llment of the participation threshold, providing only that consummation must occur by February 28, 2018.

FMCH believes that plaintiffs in fewer than 1% of all cases in all jurisdictions will make fi nal strategic elections not to participate in the master settlement and will engage in additional litigation activity, and that all such cases are pending in the U.S. District Court for Massachusetts (Boston); Los Angeles, California county court; or Birmingham, Alabama county court.

FMCH's affected insurers have agreed to fund US\$ 220 million of the settlement fund if the settlement is not voided, with a reservation of rights regarding certain coverage issues between and among FMCH and its insurers. FMCH has accrued a net expense of US\$ 60 million for consummation of the settlement, including legal fees and other anticipated costs.

Following entry of the agreement in principle, FMCH's insurers in the AIG group and FMCH each initiated litigation against the other, in New York and Massachusetts state courts respectively, relating to the AIG group's coverage obligations under applicable policies. The affected carriers have confi rmed that the coverage litigation does not impact their commitment to fund US\$ 220 million of the settlement with plaintiffs. In the coverage litigation, the AIG group seeks to reduce its obligation to less than US\$ 220 million and to be indemnifi ed by FMCH for a portion of its US\$ 220 million outlay; FMCH seeks to confi rm the AIG group's US\$ 220 million funding obligation, to recover defense costs already incurred by FMCH, 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.

FRESENIUS MEDICAL CARE HOLDINGS – QUI TAM COMPLAINT (MASSACHUSETTS)

Although the United States initially declined to intervene in the case, the government subsequently changed position. On April 3, 2017, the court allowed the government to intervene with respect only to certain hepatitis B surface antigen tests performed prior to 2011, when Medicare reimbursement rules for such tests changed. The court rejected the government's request to conduct new discovery, but is allowing Fresenius Medical Care Holdings, Inc. to take discovery against the government as if the government had intervened at the outset.

INTERNAL REVIEW

Fresenius Medical Care has identifi ed and reported to the government, and has taken remedial actions including employee disciplinary actions with respect to, conduct that may result in monetary penalties or other sanctions under the U.S. Foreign Corrupt Practices Act (FCPA) or other antibribery laws. In addition, Fresenius Medical Care's ability to conduct business in certain jurisdictions could be negatively impacted. Fresenius Medical Care has recorded in prior periods a non-material accrual for an identifi ed matter. Fresenius Medical Care has substantially concluded its investigations and has entered into discussions toward a possible resolution

with the government agencies. There is no timetable for a possible resolution. Given the current status of the resolution discussions and remediation activities, Fresenius Medical Care cannot reasonably estimate the range of possible loss that may result from identifi ed matters or from the resolution or remediation activities.

Fresenius Medical Care continues to implement enhancements to its anti-corruption compliance program, including internal controls related to compliance with international antibribery laws. Fresenius Medical Care continues to be fully committed to FCPA and other anti-bribery law compliance.

SUBPOENAS "COLORADO, NEW YORK AND TENNESSEE"

On August 31 and November 25, 2015, respectively, Fresenius Medical Care Holdings, Inc. (FMCH) received subpoenas under the False Claims Act from the United States Attorneys for the District of Colorado and the Eastern District of New York inquiring into FMCH's participation in and management of dialysis facility joint ventures in which physicians are partners. On March 20, 2017, FMCH received a subpoena in the Western District of Tennessee inquiring into certain of the operations of dialysis facility joint ventures with the University of Tennessee Medical Group, including joint ventures in which FMCH's interests were divested to Satellite Dialysis in connection with FMCH's acquisition of Liberty Dialysis in 2012. FMCH is cooperating in these investigations.

SUBPOENA "NEW YORK"

The terminated employee's conduct may subject Fresenius Medical Care Holdings, Inc. (FMCH) to liability for overpayments and penalties under applicable laws. FMCH continues to cooperate in the government's ongoing investigation.

SUBPOENA "AMERICAN KIDNEY FUND" / CMS LITIGATION

On December 14, 2016, the Centers for Medicare & Medicaid Services (CMS), which administer the federal Medicare program, published an Interim Final Rule (IFR) titled "Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities-Third Party Payment." The IFR would have

amended the Conditions for Coverage for dialysis providers, like Fresenius Medical Care Holdings, Inc. (FMCH) and would have effectively enabled insurers to reject premium payments made by or on behalf of patients who received grants for individual market coverage from the American Kidney Fund (AKF or the Fund). The IFR could thus have resulted in those patients losing individual insurance market coverage. The loss of coverage for these patients would have had a material and adverse impact on the operating results of FMCH.

On January 25, 2017, a federal district court in Texas responsible for litigation initiated by a patient advocacy group and dialysis providers including FMCH preliminarily enjoined CMS from implementing the IFR. Dialysis Patient Citizens v. Burwell, 2017 Civ. 0016 (E.D. Texas, Sherman Div.). The preliminary injunction was based on CMS' failure to follow appropriate notice-and-comment procedures in adopting the IFR. The preliminary injunction remains in place in the absence of a contrary ruling by the district or appellate courts.

On June 22, 2017, CMS requested a stay of proceedings in the litigation pending further rulemaking concerning the IFR. CMS stated, in support of their request, that they expect to publish a Notice of Proposed Rulemaking in the Federal Register and otherwise pursue a notice-and-comment process in the fall of 2017. Plaintiffs in the litigation, including FMCH, consented to the stay, which was granted by the court.

The operation of charitable assistance programs like that of the AKF is also receiving increased attention by state insurance regulators. The result may be a regulatory framework that differs from state to state. Even in the absence of the IFR or similar administrative actions, insurers are likely to continue efforts to thwart charitable premium assistance to the patients of FMCH for individual market plans and other insurance coverages. If successful, these efforts would have a material adverse impact on FMCH's operating results.

On January 3, 2017, FMCH received a subpoena from the United States Attorney for the District of Massachusetts under the False Claims Act inquiring into FMCH's interactions and relationships with the AKF, including FMCH'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 FMCH understands to be part of a broader investigation into charitable contributions in the medical industry.

In early May 2017, the United States Attorney for the Middle District of Tennessee (Nashville) issued identical subpoenas to FMCH and two subsidiaries under the False Claims Act concerning FMCH's retail pharmaceutical business. The investigation is exploring allegations of improper inducements to dialysis patients to fi ll oral prescriptions through FMCH's pharmacy service and of improper billing for returned pharmacy products. FMCH is cooperating in the investigation.

SUBPOENA "NEW YORK (BROOKLYN)"

In 2011, Fresenius Medical Care Holdings, Inc. (FMCH) received a subpoena from the United States Attorney for the Eastern District of New York (Brooklyn) requesting information under the False Claims Act concerning an assay manufactured by Bayer Diagnostics. Bayer Diagnostics was later acquired by Siemens. The assay is used to test for the serum content of parathyroid hormone (PTH). The assay has been widely used by FMCH and others in the dialysis industry for assessment of bone mineral metabolism disorder, a common consequence of kidney failure. FMCH responded fully and cooperatively to the subpoena, but concluded that it was not the focus or target of the US Attorney's investigation. On March 16, 2017, the US Attorney elected not to intervene on a sealed relator (whistleblower) complaint fi rst fi led in January 2011 that apparently underlay the investigation. After the US Attorney declined intervention, the United States District Court for the Eastern District unsealed the complaint and ordered the relator to serve and otherwise proceed on his own. FMCH was served on June 15, 2017. The plaintiff-relator is a salesperson employed by Scantibodies, a company that manufactures a competing PTH assay. Relator alleges in essence that Siemens improperly colluded with Fresenius, DaVita, and another dialysis provider to bar the Scantibodies' product from the market in favor of the allegedly inferior Siemens product.

Siemens and DaVita are named as defendants, together with FMCH. Patriarca v. Bayer Diagnostics n / k / a Siemens et alia, 2011 Civ. 00181 (E.D.N.Y.).

Management regularly analyzes current information including, as applicable, the Fresenius Group's defenses and insurance coverage and, as necessary, provides accruals for probable liabilities for the eventual disposition of these matters.

The Fresenius Group, like other health care providers, insurance plans and suppliers, conducts its operations under intense government regulation and scrutiny. It must comply with regulations which relate to or govern the safety and effi cacy of medical products and supplies, the marketing and distribution of such products, the operation of manufacturing facilities, laboratories, clinics and other health care facilities, and environmental and occupational health and safety. With respect to its development, manufacture, marketing and distribution of medical products, if such compliance is not maintained, the Fresenius Group could be subject to signifi cant adverse regulatory actions by the U.S. Food and Drug Administration (FDA) and comparable regulatory authorities outside the United States. These regulatory actions could include warning letters or other enforcement notices from the FDA, and / or comparable foreign regulatory authority, which may require the Fresenius Group to expend signifi cant time and resources in order to implement appro priate corrective actions. If the Fresenius Group does not address matters raised in warning letters or other enforcement notices to the satisfaction of the FDA and / or comparable regulatory authorities outside the United States, these regulatory authorities could take additional actions, including product recalls, injunctions against the distribution of products or operation of manufacturing plants, civil penalties, seizures of Fresenius Group's products and / or criminal prosecution. Fresenius Medical Care Holdings, Inc. is currently engaged in remediation efforts with respect to one pending FDA warning letter, Fresenius Kabi with respect to two pending FDA warning letters. The

Fresenius Group must also comply with the laws of the United States, including the federal Anti-Kickback Statute, the federal False Claims Act, the federal Stark Law, the federal Civil Monetary Penalties Law and the federal Foreign Corrupt Practices Act as well as other federal and state fraud and abuse laws. Applicable laws or regulations may be amended, or enforcement agencies or courts may make interpretations that differ from Fresenius Group's interpre tations or the manner in which it conducts its business. Enforcement has become a high priority for the federal government and some states. In addition, the provisions of the False Claims Act authorizing payment of a portion of any recovery to the party bringing the suit encourage private plaintiffs to commence whistleblower actions. By virtue of this regulatory environment, Fresenius Group's business activities and practices are subject to extensive review by regulatory authorities and private parties, and continuing audits, subpoenas, other inquiries, claims and litigation relating to Fresenius Group's compliance with appli cable laws and regulations. The Fresenius Group may not always be aware that an inquiry or action has begun, particularly in the case of whistleblower actions, which are initially fi led under court seal.

The Fresenius Group operates many facilities and handles protected health information (PHI) of its patients and benefi ciaries throughout the United States and other parts of the world, and engages with other business associates to help it carry out its health care activities. In such a decentralized system, it is often diffi cult to maintain the desired level of oversight and control over the thousands of individuals employed by many affi liated companies and its business associates. On occasion, the Fresenius Group or its business associates may experience a breach under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule when there has been impermissible use, access, or disclosure of unsecured PHI, a breach under the HIPAA Security Rule when the Fresenius Group or its business associates neglect to implement the required administrative, technical and physical safeguards of its electronic systems and devices, or a data

breach that results in impermissible use, access or disclosure of personal identifying information (PII) of its employees, patients and benefi ciaries. On those occasions, the Fresenius Group must comply with state and federal breach notifi cation requirements. The Fresenius Group relies upon its management structure, regulatory and legal resources, and the effective operation of its compliance program to direct, manage and monitor the activities of its employees. On occasion, the Fresenius Group may identify instances where employees or other agents deliberately, recklessly or inadvertently contravene the Fresenius Group's policies or violate applicable law. The actions of such persons may subject the Fresenius Group and its subsidiaries to liability under the Anti-Kickback Statute, the Stark Law, the False Claims Act, HIPAA, the Health Information Technology for Economic and Clinical Health

Act and the Foreign Corrupt Practices Act, among other laws and comparable state laws or laws of other countries.

As of June 30, 2017, contingent liabilities from future operating leases and rental payments increased by approximately € 0.5 billion due to the acquisition of Quirónsalud. In addition to that and other than those individual contingent liabilities mentioned in the consolidated fi nancial statements as of December 31, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS, the current estimated amount of Fresenius Group's other known individual contingent liabilities is immaterial.

For information regarding the acquisition of Akorn, Inc. and the biosimilars business of Merck KGaA announced on April 24, 2017, see note 2, Acquisitions and investments.

20. FINANCIAL INSTRUMENTS

VALUATION OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values as well as the fair value hierarchy levels of Fresenius Group's fi nancial instruments as of June 30, 2017 and December 31, 2016, classifi ed into classes:

		June 30, 2017	December 31, 2016
€ in millions	Fair value hierarchy level	Carrying amount	Fair value	Carrying amount	Fair value
Cash and cash equivalents	1	1,371	1,371	1,579	1,579
Assets recognized at carrying amount	2	7,149	7,149	5,926	5,926
Assets recognized at fair value	1	251	251	258	258
Liabilities recognized at carrying amount	2	23,853	25,068	18,369	19,349
Liabilities recognized at fair value	3	631	631	586	586
Noncontrolling interest subject to
put provisions recognized at fair value	3	870	870	1,029	1,029
Derivatives for hedging purposes	2	406	406	359	359

Explanations regarding the signifi cant methods and assumptions used to estimate the fair values of fi nancial instruments and classifi cation of fair value measurements according to the three-tier fair value hierarchy as well as explanations with regard to existing and expected risks from fi nancial instruments and hedging can be found in the consolidated fi nancial statements as of December 31, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS.

Following is a roll forward of noncontrolling interest subject to put provisions:

€ in millions	H1 / 2017
Noncontrolling interest subject to put provisions as of January 1, 2017	1,029
Noncontrolling interest subject to put provisions in profi t	86
Sale of noncontrolling interest subject to put provisions	- 30
Dividend payments	- 79
Currency effects and other changes	- 136
Noncontrolling interest subject to put provisions as of June 30, 2017	870

As of June 30, 2017, there was no indication for further possible signifi cant risks from fi nancial instruments or that a decrease in the value of Fresenius Group's fi nancing

FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS

receivables (other current and non-current assets) was probable and the allowances on credit losses of fi nancing receivables are immaterial.

		June 30, 2017		December 31, 2016
€ in millions	Assets	Liabilities	Assets	Liabilities
Interest rate contracts (non-current)	3	1	5	1
Foreign exchange contracts (current)	17	9	14	24
Foreign exchange contracts (non-current)	1	0	–	1
Derivatives designated as hedging instruments 1	21	10	19	26
Interest rate contracts (current)	–	–	0	–
Interest rate contracts (non-current)	0	–	–	1
Foreign exchange contracts (current) 1	13	31	27	23
Foreign exchange contracts (non-current) 1	0	0	–	–
Derivatives embedded in the convertible bonds	0	413	0	362
Call options to secure the convertible bonds 1	413	0	362	0
Derivatives not designated as hedging instruments	426	444	389	386

Derivatives designated as hedging instruments, foreign exchange contracts and call options to secure the convertible bonds

not designated as hedging instruments are classifi ed as derivatives for hedging purposes.

Derivative fi nancial instruments are marked to market each reporting period, resulting in carrying amounts equal to fair values at the reporting date.

Derivatives not designated as hedging instruments, which are derivatives that do not qualify for hedge accounting, are also solely entered into to hedge economic business transactions and not for speculative purposes.

Derivatives for hedging purposes as well as the derivatives embedded in the convertible bonds were recognized at gross value within other assets in an amount of € 447 million and other liabilities in an amount of € 454 million.

The current portion of derivatives indicated as assets in the preceding table is recognized within other current assets in the consolidated statement of fi nancial position, while the current portion of those indicated as liabilities is included in short-term accrued expenses and other short-term liabilities. The non-current portions indicated as assets or liabilities are recognized in other non-current assets or in long-term accrued expenses and other long-term liabilities, respectively. The derivatives embedded in the convertible bonds and the call options to secure the convertible bonds are recognized in other long-term liabilities / non-current assets in the consolidated statement of fi nancial position.

EFFECT OF DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS ON THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	H1 / 2017
€ in millions	Gain or loss recognized in other comprehensive income (loss) (effective portion)	Gain or loss reclassifi ed from accumulated other comprehensive income (loss) (effective portion)	Gain or loss recognized in the consolidated statement of income
Interest rate contracts	- 1	18	0
Foreign exchange contracts	10	3	0
Derivatives in cash fl ow hedging relationships 1	9	21	0

	H1 / 2016
€ in millions	Gain or loss recognized in other comprehensive income (loss) (effective portion)	Gain or loss reclassifi ed from accumulated other comprehensive income (loss) (effective portion)	Gain or loss recognized in the consolidated statement of income
Interest rate contracts	–	16	0
Foreign exchange contracts	- 9	–	0
Derivatives in cash fl ow hedging relationships 1	- 9	16	0

The amount of gain or loss recognized in the consolidated statement

of income solely relates to the ineffective portion.

EFFECT OF DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS ON THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Gain or loss recognized in the consolidated statement of income
€ in millions	H1 / 2017 H1 / 2016
Interest rate contracts	–	–
Foreign exchange contracts	- 31	- 22
Derivatives embedded in the convertible bonds	11	31
Call options to secure the convertible bonds	- 11	- 31
Derivatives not designated as hedging instruments	- 31	- 22

Gains from foreign exchange contracts not designated as hedging instruments recognized in the consolidated statement of income are faced by losses from the under lying transactions in the corresponding amount.

Gains and losses from foreign exchange contracts and the corresponding underlying transactions are accounted for as cost of sales, selling, general and administrative expenses and net interest. Gains and losses resulting from interest rate contracts are recognized as net interest in the consolidated statement of income.

In the fi rst half of 2017 and 2016, losses in an immaterial amount for available for sale fi nancial assets were recognized in other comprehensive income (loss).

MARKET RISK

Derivative fi nancial instruments

Classifi cation

The existing master netting agreements do not provide a basis for offsetting the fair values of derivative fi nancial instruments in the consolidated statement of fi nancial position as the offsetting criteria under International Financial Reporting Standards are not satisfi ed.

At June 30, 2017 and December 31, 2016, the Fresenius Group had € 33 million and € 45 million of derivative fi nancial assets subject to netting arrangements and € 41 million and € 46 million of derivative fi nancial liabilities subject to netting arrangements. Offsetting these derivative fi nancial instruments would have resulted in net assets of € 19 million and € 28 million as well as net liabilities of € 27 million and € 29 million at June 30, 2017 and December 31, 2016, respectively.

Foreign exchange risk management

As of June 30, 2017, the notional amounts of foreign exchange contracts totaled € 2,146 million. These foreign exchange contracts have been entered into to hedge risks from operational business and in connection with loans in foreign currency. The fair value of the foreign exchange contracts designated as cash fl ow hedges was € 9 million.

As of June 30, 2017, the Fresenius Group was party to foreign exchange contracts with a maximum maturity of 13 months.

Interest rate risk management

As of June 30, 2017, euro denominated interest rate swaps had a notional volume of € 244 million and a fair value of - € 2 million. These euro interest rate swaps expire in the years 2018 to 2022. Furthermore, the Fresenius Group had U.S. dollar denominated interest rate swaps in the amount of US\$ 200 million (€ 175 million) with a fair value of US\$ 4 million (€ 4 million). They expire in 2021. The interest rate options outstanding as of June 30, 2017 with a notional amount of € 200 million and a fair value of less than € 1 thousand expire in 2018.

At June 30, 2017 and December 31, 2016, the Fresenius Group had losses of € 32 million and € 45 million, respectively, related to settlements of pre-hedges deferred in accumulated other comprehensive income (loss), net of tax.

21. SUPPLEMENTARY INFORMATION ON CAPITAL MANAGEMENT

The Fresenius Group has a solid fi nancial profi le. As of June 30, 2017, the equity ratio was 39.7% and the debt ratio (debt / total assets) was 37.6%. As of June 30, 2017, the leverage ratio on the basis of net debt / EBITDA was 2.9.

The aims of the capital management and further information can be found in the consolidated fi nancial statements as of December 31, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) 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, 2017	Dec. 31, 2016
Standard & Poor's
Corporate Credit Rating	BBB -	BBB -
Outlook	stable	stable
Moody's
Corporate Credit Rating	Baa3	Baa3
Outlook	stable	stable
Fitch
Corporate Credit Rating	BBB -	BBB -
Outlook	stable	stable

Following Fresenius' announcement on April 24, 2017 to acquire Akorn, Inc. and Merck KGaA's biosimilars business, the rating agencies Standard & Poor's, Moody's and Fitch confi rmed the corporate credit ratings of Fresenius.

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 / 2017	H1 / 2016
Assets acquired	7,345	536
Liabilities assumed	- 1.255	- 53
Noncontrolling interest	- 84	- 52
Notes assumed in connection with acquisitions	- 158	- 108
Cash paid	5,848	323
Cash acquired	- 7	- 23
Cash paid for acquisitions, net	5,841	300
Cash paid for investments, net of cash acquired Cash paid for intangible assets, net	15 7	92 5
Total cash paid for acquisitions and investments, net of cash acquired, and net purchases of intangible assets	5,863	397

23. NOTES ON THE CONSOLIDATED SEGMENT REPORTING

GENERAL

The consolidated segment reporting shown on pages 25 and 26 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, 2017.

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, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) 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, 2016 applying Section 315a HGB (in the version in force before April 19, 2017) in accordance with IFRS.

RECONCILIATION OF KEY FIGURES TO CONSOLIDATED EARNINGS

€ in millions	H1 / 2017	H1 / 2016
Total EBIT of reporting segments	2,411	1,998
Special items	- 10	0
General corporate expenses
Corporate / Other (EBIT)	- 18	- 11
Group EBIT	2,383	1,987
Net interest	- 329	- 291
Income before income taxes	2,054	1,696

RECONCILIATION OF NET DEBT WITH THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

€ in millions	June 30, 2017	Dec. 31, 2016
Short-term debt	1,481	847
Short-term debt from related parties	–	6
Current portion of long-term debt and capital lease obligations	872	611
Current portion of Senior Notes	438	473
Long-term debt and capital lease obligations, less current portion	6,582	5,048
Senior Notes, less current portion	9,231	6,941
Convertible bonds	1,306	854
Debt	19,910	14,780
less cash and cash equivalents	1,371	1,579
Net debt	18,539	13,201

24. SHARE-BASED COMPENSATION PLANS

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

As of June 30, 2017, Fresenius SE & Co. KGaA had three share-based compensation plans in place: the Fresenius AG Stock Option Plan 2003 (2003 Plan) which is based on convertible bonds, 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 2003 Plan expired. The 2013 LTIP is the only program under which stock options and phantom stocks can be granted.

Transactions during the fi rst half of 2017

During the fi rst half of 2017, Fresenius SE & Co. KGaA received cash of € 21 million from the exercise of 979,084 stock options.

3,882 convertible bonds were outstanding and exercisable under the 2003 Plan at June 30, 2017. The members of the Fresenius Management SE Management Board held no more convertible bonds. At June 30, 2017, out of 1,847,797 outstanding and exercisable stock options issued under the 2008 Plan, 133,140 were held by the members of the Fresenius Management SE Management Board. 8,047,013 stock options issued under the 2013 LTIP were outstanding at June 30, 2017. The members of the Fresenius Management SE Management Board held 1,046,250 stock options. 1,055,218 phantom stocks issued under the 2013 LTIP were outstanding at June 30, 2017. The members of the Fresenius Management SE Management Board held 202,055 phantom stocks. As of June 30, 2017, 1,851,679 options for ordinary shares were outstanding and exercisable.

On June 30, 2017, total unrecognized compensation cost related to non-vested options granted under the 2013 LTIP was € 45 million. This cost is expected to be recognized over a weighted-average period of 2.5 years.

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

During the fi rst half of 2017, 639,232 stock options were exercised. Fresenius Medical Care AG & Co. KGaA received cash of € 29.4 million upon exercise of these stock options and € 5.9 million from a related tax benefi t.

25. SUBSEQUENT EVENTS

There have been no signifi cant changes in the Fresenius Group's operating environment following the end of the fi rst half of 2017. No other events of material importance on the assets and liabilities, fi nancial position, and results of operations of the Group have occurred following the end of the fi rst half of 2017.

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 3, 2017

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 2017 Conference call, Live webcast November 2, 2017 Annual General Meeting, Frankfurt am Main Live webcast of the speech of the Chairman of the Management Board May 18, 2018

Subject to change

FRESENIUS SHARE / ADR

	UTUILID IV SHATE
Securities identification no.	578 560
Ticker symbol	FRF
ISIN	DE0005785604
Bloomberg symbol	FRE GR
Reuters symbol	FREG.de
Main trading location	Frankfurt/Xetra

	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

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: [email protected]

Contact for journalists

Corporate Communications Telefon: ++ 49 61 72 6 08-23 02 Telefax: ++ 49 61 72 6 08-22 94 E-mail: [email protected]

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, 2016 applying Section 315a HBG (in the version in force before April 19, 2017) 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.

AI Terminal

Fresenius SE & Co. KGaA

166_10-q_2017-08-03_2a90bdfb-fb16-47b3-a98c-bb0b89ceac34.pdf

Quarterly Financial Report of Fresenius Group

TABLE OF CONTENTS

3 Fresenius Group fi gures at a glance

5 Fresenius share

20 Consolidated fi nancial statements

27 Notes

FRESENIUS GROUP FIGURES AT A GLANCE

SALES, EARNINGS, AND CASH FLOW

BALANCE SHEET AND INVESTMENTS

RATIOS

INFORMATION BY BUSINESS SEGMENT

FRESENIUS MEDICAL CARE – Dialysis products, Dialysis services

FRESENIUS KABI – IV drugs, Clinical nutrition, Infusion therapy,

FRESENIUS HELIOS – Hospital operations

FRESENIUS SHARE

FIRST HALF OF 2017

KEY DATA OF THE FRESENIUS SHARE

MANAGEMENT REPORT

FRESENIUS CONFIRMS ITS GUIDANCE AFTER A STRONG SECOND QUARTER WITH DOUBLE-DIGIT SALES AND EARNINGS GROWTH

HEALTH CARE INDUSTRY

RESULTS OF OPERATIONS, FINANCIAL POSITION, ASSETS AND LIABILITIES

SALES

EARNINGS

EARNINGS

SALES BY REGION

SALES BY BUSINESS SEGMENT

RECONCILIATION

INVESTMENTS

RECONCILIATION

INVESTMENTS BY BUSINESS SEGMENT

CASH FLOW

ASSET AND LIABILITY STRUCTURE

SECOND QUARTER OF 2017

CASH FLOW STATEMENT (SUMMARY)

ANNUAL GENERAL MEETING 2017

BUSINESS SEGMENTS

FRESENIUS MEDICAL CARE

FIRST HALF OF 2017

SECOND QUARTER OF 2017

FRESENIUS KABI

FIRST HALF OF 2017

SECOND QUARTER OF 2017

FRESENIUS HELIOS

FIRST HALF OF 2017

SECOND QUARTER OF 2017

FRESENIUS VAMED

FIRST HALF OF 2017

SECOND QUARTER OF 2017

EMPLOYEES

EMPLOYEES BY BUSINESS SEGMENT

CHANGE TO THE MANAGEMENT BOARD

RESEARCH AND DEVELOPMENT

RESEARCH AND DEVELOPMENT EXPENSES BY BUSINESS SEGMENT

DIALYSIS

INFUSION THERAPIES, CLINICAL NUTRITION, GENERIC IV DRUGS, AND MEDICAL DEVICES

OPPORTUNITIES AND RISK REPORT

RATING

ANNOUNCED ACQUISITIONS

OUTLOOK 2017

FRESENIUS GROUP

FRESENIUS MEDICAL CARE

FRESENIUS KABI

FRESENIUS HELIOS

FRESENIUS VAMED

INVESTMENTS

EMPLOYEES

RESEARCH AND DEVELOPMENT

GROUP FINANCIAL OUTLOOK 2017

OUTLOOK 2016 BY BUSINESS SEGMENT

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

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

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

ASSETS

LIABILITIES AND SHAREHOLDERS' EQUITY

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

ADDITIONAL INFORMATION ON PAYMENTS

THAT ARE INCLUDED IN NET CASH PROVIDED BY OPERATING ACTIVITIES