Fresenius Medical Care AG ("FMC") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS_p), the world's largest provider of Dialysis Products and Services, today announced the results for the second quarter and the first six months of 2002.

OPERATIONS

Second Quarter 2002:
Fresenius Medical Care AG reports a 17% increase in earnings after tax (EAT) after minorities to $ 74 million for the second quarter 2002.

Total revenue for the second quarter 2002 increased 4.4% (6% at constant currency) to $ 1,254 million. As in the first quarter of 2002 this growth was mainly driven by organic growth in both business segments. Same store revenue growth at constant exchange rates was 4.5%. Dialysis Care revenues grew by 3.3% to $ 912 million (+6% at constant currency) in the second quarter of 2002. External Dialysis Product revenues increased by 7.5% to $ 343 million (+6% at constant currency) in the same period.
North American revenue rose 3% to $ 928 million, compared to $ 902 million in the same period last year. Dialysis Care revenue in the US increased by 4% to $ 814 million. Same store treatment growth and same store revenue growth for the second quarter of 2002 were 4%. North American Dialysis Product revenue, including sales to company-owned clinics, increased 1% to $ 190 million. Product sales to the available external market grew by 3%.

International revenue was $ 326 million, up 15% adjusted for currency. Dialysis Care revenues reached $ 98 million in the second quarter 2002 (+17% at constant currency). Dialysis Products revenue, including sales to company-owned dialysis clinics, increased 13% to $ 245 million (12% currency adjusted).

Earnings before interest and taxes (EBIT) increased 1% to $ 170 million resulting in an operating margin of 13.6%. In the first quarter of 2002, the Company achieved an operating margin, adjusted for non-recurring items, of 14.2%. The reduction by around 60 basis points in the second quarter was mainly due to the move to single-use dialyzers in North America, higher bad debt expenses and currency effects. The operating margin did benefit slightly from lower staffing costs in the company's North American single-use dialysis clinics.

Earnings per share (EPS) in the second quarter 2002 rose 17% to $ 0.77 per ordinary share ($ 0.26 per ADS), compared to $ 0.66 ($ 0.22 per ADS) in the second quarter of 2001. The weighted average number of shares outstanding during the second quarter of 2002 was approximately 96.2 million, compared to 96 million in the same period of 2001.

In the second quarter of 2002, the Company generated $ 173 million in cash from operations. This is an all-time record for any single historical quarter and was mainly driven by improved accounts receivable collections in North America. A total of $ 39 million (net of disposals) was spent for capital expenditures, resulting in a Free Cash Flow for the second quarter 2002 of $ 134 million. Capital expenditures were $ 17 million lower than in Q2 2001. A total of $ 31 million in cash was spent for acquisitions. Free Cash Flow after acquisitions was $ 103 million. In the second quarter of 2001 the Free Cash Flow after acquisitions was $ minus 25 million.

First Half Year 2002:

For a complete overview of the first half year of 2002 please refer to the appendix.

In the first half of 2002, net income before extraordinary items was $ 149 million, up 27% from the first half year of 2001. Adjusted for currency, net income growth was 28%. Net revenue was $ 2.44 billion, up 3.4% from the first half of 2001. Currency adjusted, net revenue rose 6% in the first half of 2002. Earnings before interest and taxes (EBIT) increased 6% to $ 344 million resulting in an operating margin of 14.1%. In the first half of 2002, earnings per ordinary share before extraordinary items rose 27% to $ 1.55. Earnings per ordinary ADS for the first half of 2002 were $ 0.52.

Fresenius Medical Care generated $ 244 million cash from operations during the first six months of 2002 ($ 146 million in H1 2001). Net cash used for acquisitions was $ 40 million and capital expenditures (net of disposals) were $ 90 million. Free Cash Flow for the first half of 2002 was $ 154 million compared to $ 28 million in the first half of 2001.

As of June 30, 2002, the Company operated a total of 1,430 clinics worldwide (1,050 clinics/+4% in North America and 380 clinics/+7% International). Fresenius Medical Care AG performed approximately 7.9 million treatments, which represents an increase of 7% year over year. North America accounted for 5.7 million treatments (+4%) and the International segment for 2.3 million (+18%). At the end of the second quarter 2002 Fresenius Medical Care AG provided treatment to around 108,600 patients worldwide which represents an increase of 6%. North America accounted for ~78,000 patients (+3%) and the International segment for ~30,600 patients (+16%).

LEGAL UPDATE

Commercial Disputes (1996 Merger related)
Fresenius Medical Care AG finalized a settlement resolving the pending litigation with Aetna Life Insurance Company and its affiliates (Aetna), one of the leading US commercial insurance companies. Separately, Fresenius Medical Care has entered into a multi-year agreement with Aetna to offer provide disease state management (DSM) services for Aetna healthplan members served in FMC facilities.

All other 1996 merger-related legal issues are developing within the company's expectation and the company considers the charge taken in the fourth quarter 2001 to be adequate.

OUTLOOK 2002 / 2003

While the margin development is impacted temporarily by the North American single-use dialyzer initiatives and by currency issues in the International segment, the fundamentals of the Company remain strong. In North America additional revenue and profit opportunities are expected in the future following the implementation of the company's single-use and Disease State Management programs. Cash collection and cash flow were extremely strong in the second quarter in North America and the Company will continue to focus on cash generation going forward. The International business continues to grow significantly above the market, achieving 13.5% revenue growth (constant currency) in the first half year of 2002.

Despite the strong fundamentals, the Company feels that it is prudent to revise its guidance. For the full year 2002 the company now expects a revenue growth of 6% at constant currency exchange rates.

The target for the earnings after tax is revised to around $ 300 million after previously $ 350 million. All other targets (e.g. Capital Expenditure ~$ 220 million and Free Cash Flow >$ 200 million) remain unchanged. The three main reasons for this adjustment are a delay in the targeted single-use cost reduction, a temporary reduction in the projected revenue growth in North America while the single-use program is implemented and the currency devaluation and economic downturn in Latin America.

For the Year 2003, the Company expects revenue growth before acquisitions in the mid single digits (constant currency) and earnings after tax growth in the high single digit to low double digits range.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased to have finalized the settlement and developed a good working relationship with Aetna. Europe and Japan continue their strong financial performance. We are pleased with the record Free Cash Flow for the second quarter and we will continue to focus on accounts receivable collection and strong Free Cash Flow. However, I am personally disappointed with the recent operating margin developments and the projected delay in achieving our single use financial targets in North America. Therefore we must revise our guidance to ensure a conservative approach to financial planning. The Company has identified all necessary steps that have to be taken to finalize the successful implementation of the North American single-use dialyzer strategy."

Fresenius Medical Care AG is the world's largest, integrated provider of products and services for individuals with chronic kidney failure, a condition that affects more than 1,000,000 individuals worldwide. Through its network of approximately 1,430 dialysis clinics in North America, Europe, Latin America and Asia-Pacific, Fresenius Medical Care provides Dialysis Treatment to approximately 108,600 patients around the globe. Fresenius Medical Care is also the world's leading provider of Dialysis Products such as hemodialysis machines, dialyzers and related disposable products. For more information about Fresenius Medical Care, visit the Company's website at www.fmc-ag.com.

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Annual General Meeting May 29, 2002
Address to the shareholders of Fresenius AG

The spoken word is binding.

Good morning, Ladies and Gentlemen,

On behalf of the Supervisory Board and the Managing Board of Fresenius AG I welcome you most cordially to this year's Annual General Meeting. It is a pleasure to see so many of you here today and I thank you for your interest. I should also like to welcome our guests and the representatives of the press.

To start with I should like to go into the figures of the past financial year, 2001, and about the 1st quarter 2002. Then, I want to explain how the health care group Fresenius is positioned in the various markets of the world with products and services, and I will tell you how we anticipate that the markets will develop in the future. At the same time, I should like to emphasise to you our strengths and opportunities in the coming years.

Sales and earnings 2001 and 1st quarter 2002
As I already said, I will start with the year 2001. This was a year in which we again achieved an excellent growth in sales of 20 %, but it was also a year in which we had to suffer setbacks and in which earnings did not grow faster than sales, as in the past years. The charges taken by Fresenius Medical Care in connection with the transaction to acquire National Medical Care from W.R. Grace in 1996, and the substantial restructuring measures made by Fresenius Kabi, had a negative impact on our earnings.

This chart shows that we increased sales by 20 % to 7.3 billion euros. This corresponds to a growth of 1.2 billion compared to the previous year. Thus, Fresenius is one of the largest companies in our segment, health care. As you can see, 11 % of the sales increase resulted from acquisitions, but 8 % also came from organic growth, that is growth due to our own efforts. This is an particularly important figure because it clearly shows that we are growing more strongly than the market, and it also means that we are gaining market shares. This 8 % organic growth corresponds to sales of around 500 million euros. Thus, we even exceeded the organic growth of the year 2000. Currency influences contributed only one percentage point to overall growth.

In the 1st quarter of 2002 – at this point I want to inform you about the current financial year - we met our sales target of 10 %. We increased sales to 1.85 billion euros, that is, by 11 %. Organic growth was 6 %, as anticipated. We increased sales with our products and services not only in our traditional markets Northern Europe and North America but also in the region Asia-Pacific. Here we achieved a strong organic growth of more than 20 %. Unfortunately, the difficult economic situation in Argentina, where the peso was strongly devalued, had a negative impact on our business, otherwise we would have achieved a double-digit increase rate in Latin America as well.

Back to 2001:
Despite the setbacks and the negative influences caused by Fresenius Kabi and by Fresenius Medical Care, we increased operating profit by 5 %, but not, as I already said, at a higher rate than sales. Earnings were affected by the restructuring of Fresenius Kabi, especially the start-up costs for the infusion solutions production lines in the Uppsala factory in Sweden, the restructuring measures in the Friedberg plant, the costs of closing the plant in Stockholm and the sale of the production facility in Limoges. All these measures were necessary in order to create the conditions to reduce manufacturing costs and increase the profitability of Fresenius Kabi in future.

Earnings were also affected because Fresenius Medical Care in the United States has started to convert dialysis from the re-use of dialysers to single use, which is normal in Europe. This is an important measure to further improve the quality of dialysis treatment and an investment for the future. In addition, the integration of the dialysis chain Everest Healthcare caused additional costs in the United States.

Nevertheless, we achieved a net income before extraordinary charges of 369 million euros, a plus of 39 %. Taking these charges into account, net income amounted to 179 millions.

We are convinced that these accruals of Fresenius Medical Care mean that all possible risks from the NMC transaction have been removed.

As far as earnings are concerned, the start into the new financial year was more onerous than expected. Although EBIT rose by 23 % in the first quarter of 2002, this earnings increase was favourably influenced by the change in the US GAAP accounting rules, and the fact that goodwill is no longer amortized. If these effects are not taken into account, operating profit, that is EBIT of the 1st quarter 2002, was at the same level as the previous year.

The fact that goodwill is no longer amortized puts an end to companies being discriminated if they make acquisitions in order to expand their market positions. This increases the comparability between the companies and will enable the financial situation of companies, Fresenius as well, to be better assessed.

The amortization of goodwill has been replaced by an annual impairment test. We are very pleased that the goodwill of Fresenius was not impaired in the past years, despite the large and difficult acquisitions which we have made.

I should like to comment on the fact that we have changed our accounting methods in the Group to US GAAP as from the beginning of 2002. The US GAAP accounting rules are more shareholder-oriented than German accounting methods in accordance with the Commercial Law (HGB). Furthermore, our largest company, Fresenius Medical Care, has reported in US GAAP since its foundation in 1996, so that it was a fairly obvious step for the Group to follow suit.

In order to set off for tax purposes the profits of the companies Fresenius Kabi AG and Fresenius Versicherungs-Vermittlungs GmbH with the costs of Fresenius AG, we have concluded profit transfer agreements. We ask you to give your approval to these profit transfer agreements in topic 6 of today's agenda.

I should like to comment on the dividend now:
Although net income has been influenced by the extraordinary charges which I have already explained, you, our shareholders, shall have a share in the positive operating earnings situation of the Group. We therefore propose to you that the dividend for the 2001 financial year be increased by 10 % to 1.03 euros per ordinary share, and to 1.06 euros per preference share. Altogether we shall distribute 42.8 million euros for the 2001 financial year. This means that we are carrying on with our earnings-linked dividend policy and can present to you another consecutive dividend increase.

2001 was also a difficult year for our employees who had an especially heavy workload. They had to cope with many difficult changes. Nevertheless, we were able to further increase our position in the markets. For this achievement of every single employee in our company, that means all employees in the numerous locations in the world, I should like to give special thanks. I should also like to thank the representatives of the employees' bodies for their constructive support and readiness to discuss issues frankly.

Investments
In the last financial year we reached new records in the level of investments by investing 1.2 billion euros, as you can see on the left hand side of the slide. 66 % of this investment total, which is around 800 million euros, was allocated to acquisitions, and 400 million euros to investments in tangible and intangible assets.

I should like to remind you of two major acquisition projects. One was the acquisition of the dialysis clinic chain Everest in the United States – Everest treats around 6,800 dialysis patients – and the other was the purchase of Wittgensteiner Kliniken AG, one of the largest hospital operators in Germany. You approved this acquisition in the last Annual General Meeting, for which I thank you. The acquisition of Wittgensteiner Kliniken in particular marked an important step towards the management and operation of hospitals in Germany, and created the nucleus of an international hospital organisation.
These two acquisitions are reflected in the breakdown of acquisitions by region, as you can see on the right hand diagram. Almost 50 % of total investments were made in North America and 40 % in Europe.

Concerning investments in tangible assets, I should like to give special mention to the construction of a completely new plant for peritoneal dialysis products in Japan, and investments in the extension of the dialyser production capacities in the United States and Germany. We also invested in Kabi, despite all the restructuring measures, in the building up and especially in the optimisation of production plants, both in Sweden and in Germany. This high level of investments means that we have invested in the future, so that we need to spend a significantly lower amount on investments and for acquisitions in this year, 2002.

Development of the business segments
I should like to close my report on the past year 2001 with a short review of the economic development of the individual business segments. You will find detailed reports in our annual report.

Fresenius Medical Care – and I deliberately remind you of this again – was created only five years ago from the dialysis division of Fresenius. FMC increased sales by 19 % to 5.4 billion euros. About half of this increase is due to organic growth and half to acquisitions. The effects from currency conversion amounted to about 2 %. Fresenius Medical Care increased EBIT by approximately 7 % in the 2001 financial year to 719 million euros. The increase in earnings, which is proportionately lower than the increase in sales, is mainly a result of the effects which I have already mentioned.

Fresenius Kabi achieved a remarkably strong sales increase of 14 % to around 1.3 billion euros. Organic growth at 7 % is very good in view of the fact that around three quarters of these sales were achieved in Europe, in a market region which is only growing at a rate of around 2-4 %. This emphasises what a great success the rise of 7% in organic growth represents. Despite all our exertions, we did not succeed in increasing the operating profit of Kabi. It amounted to 75 million euros and was therefore 15% lower than that of 2000. I explained the reasons to you at the beginning, they are largely the restructuring and reorganisation measures both in Germany and in Sweden. Furthermore, the costs of concentrating our production facilities are affecting our earnings. These were mainly the sale of the French factory in Limoges and the factory in Potenza in Italy. Also we have suffered considerable losses at the German subsidiary ProReha.

Fresenius ProServe, our third largest business segment, achieved sales of 452 million euros, following 284 million euros in the year before. This growth was influenced by the consolidation for the first time of Wittgensteiner Kliniken, abbreviated as WKA, which contributed 134 million euros to sales. But even without WKA, growth of ProServe, 12 %, would have been a double-digit percentage. Operating profit increased to 17 million euros.

We made good progress in the year under report with the integration of Wittgensteiner Kliniken. Nevertheless, we still need to implement measures this year to counteract the permanent cost pressure in the health systems and improve profitability.

Sales of Fresenius HemoCare amounted to 223 million euros. We are pleased to report that the operating profit, although it is still small, rose 29 %, significantly more than the increase in sales. I will go into more detail later about the promising fields of activity of Fresenius HemoCare, in my strategic outlook.

Expectation 2002
For 2002 as a whole we anticipate that we shall be able to further increase our position in the markets of the world with our life-sustaining and life-saving products and services, and we expect to increase sales over the whole year by approximately 10 %. Earnings should rise by a double-digit percentage and will be positively influenced by goodwill no longer being amortized. Further great efforts will be required to compensate for the low level of investment and the continuous price drops, especially in the European markets, by continuing to optimise costs.

The Fresenius Shares
The development of the share prices of many companies, and also of Fresenius, is disappointing and has certainly caused your displeasure. Our share price development, which you can see on the slide, was worse than that of the DAX and MDAX – this we freely admit. This was the result of the negative influences of Fresenius Kabi and the charges at Fresenius Medical Care. These effects are reflected in this index comparison.

I personally am convinced that in the end, share prices follow the economic development of a company, often not immediately, but certainly in the long term. I therefore conclude that the Fresenius shares will rise again in line with our targeted earnings , and you, and we as well, will again be satisfied with our share prices.

Strategic outlook
In my following strategic outlook I should like to present to you the strengths and opportunities of our four companies, the activities of which you can see here on the slide. Our field of activity is health care. Fresenius has products which save or sustain lives. We have a firm place in medical therapy with these products. Although we have to cope with strong changes in the health care systems, especially with the enormous pressure on the prices of our products, the demand for our products and services is steadily increasing. This demand is generated in particular by the demographic development and by the demand for higher quality and better therapies.

Now I shall briefly comment on the products, services and the market position of our business segments:

Our largest company, Fresenius Medical Care, which was created from our dialysis division, is the world's largest dialysis company and cares for around 106,000 patients in 1,400 clinics all over the world.

This slide gives you an idea of the number of patients in the various regions. You can see from the relatively low number of patients in Asia-Pacific what excellent growth opportunities this region offers.

Altogether there are more than one million patients with kidney failure in the world, and this number is increasing by 6 % a year; this also corresponds to the latest projections of the American health authorities.

Dialysis treatment is given to patients with chronic or acute kidney failure. Kidney failure without dialysis treatment results in death within a week. The only alternative to dialysis is transplantation, but the number of healthy organs available is limited. Fresenius Medical Care is setting the quality standard in dialysis today with its products and services. Fresenius Medical Care achieved a market share of 60 % in the United States with dialysers and dialysis machines. If you look at the number of patients treated by Fresenius Medical Care (FMC) in the United States, we are treating more than twice as many patients than our closest competitor. Even in the Asia-Pacific region, excluding Japan due to the special circumstances in this country, the market share of dialysers is 30 and dialysis machines over 40 %.

Fresenius Kabi, with its products for infusion and nutrition therapy, is an important partner of the hospital and the number 1 in Europe with a market share above 30 %. Patients who can no longer eat in the natural way, or who cannot eat sufficiently, e.g. after surgical operations, are given our products. Patients who continue to require medical care with products and services at home, when they have left hospital, are cared for by our Ambulatory Care division. These patients very often have to undergo long-term nutrition therapy, cancer patients for instance, or people who have undergone a stomach or bowl resection.

ProServe, our service division, the company which plans and builds hospitals and operates as well as manages them commercially and medically, took a major step towards integrated patient care through its acquisition of Wittgensteiner Kliniken. The changes which are making themselves felt, above all in the German health systems, to a large extent with the introduction of case-by-case reimbursement systems, and which will mean that more and more hospitals will be privatised, open up excellent future prospects for Fresenius ProServe. It is our aim to network health care services and to offer fully-integrated patient care, as you can see on this chart. Starting from acute care in hospital wards, care is to be extended to post-acute medical care and/or long-term care in specialised clinics and private care facilities. Today our network already consists of more than 8,000 beds. Ambulatory care at home is provided by Fresenius Kabi.

In addition, we are active in the project business and in hospital management in the region Asia-Pacific. As an example I will show you a project in Malaysia. There we are responsible for the management of a 350-bed acute hospital.

In showing you the activities of Fresenius HemoCare I will concentrate on the two promising fields adsorber technology and immune therapy. Adsorber technology is a comparatively new form of therapy which is not yet accepted as a real alternative to drugs in the treatment of specific diseases. In this new field of activity, pathogenic substances are removed from the blood of a patient by means of adsorbers, and they are bound to the adsorber material. As an example, patients with hereditary hypercholesteraemia are treated by this method and blood lipidscholesterol is bound in an adsorber. Or, and this is an example where the medical effectiveness has been proved, in the case of patients with severe rheumatoid arthritis, the immune complexes which cause rheumatism are removed from the patients' blood.

At present we have great hopes in an adsorber which is used for the treatment of patients with sepsis. Sepsis is a severe bacterial blood infection. Every year, thousands of people in Germany alone die from sepsis. The clinical trial which has just been concluded has shown good results so that we are now planning a follow-up trial in which sepsis will be treated with adsorbers over a longer period of time.

In the field of immune therapy we are proceeding with the project with Trion Pharma which concentrates on the use of bispecific trifunctional antibodies in various cancers. We are carrying out phase I and II clinical trials on patients with non-small cell lung cancer and cancer of the ovaries. In connection with our project with the university in Göttingen to treat renal cell cancer, we will commence a detailed clinical trial this year when we have finished all the preparatory work. Further studies on breast cancer and cancer of the pancreas are planned.

Projects in the field of cancer therapies are of a long term nature, and normally it requires many years before a product is ready for the market. However, we are very hopeful that our immune therapy projects for the treatment of cancer will lead to convincing results and that further enormous growth potential will result both for Fresenius HemoCare and also for Fresenius. To extend our activities in the field of immune therapy we have acquired two institutes which are involved in the modification of cells, Kitaro in Hanover and Eufets, which is the European Institute for Research and Development of Transplantation Strategies, in Idar-Oberstein. Thus we are in a position to offer the necessary cells for the immune therapy of cancer.

Following this brief summary of our products and services I should like to explain to you our position in the various markets of the world. Currently, there is no other company which operates in the health care industry worldwide as Fresenius does. We generate almost 90 % of our sales outside Germany. More than half of sales are generated in North America, largely due to our activities in the dialysis field. Our second largest market is Europe with a 30 % share. Europe is our traditional home market. In Europe we are number 1 both in dialysis and in nutrition and infusion therapy. In these two large markets, United States and Europe, we achieved a growth rate of 20 % and 19 % respectively. In these two large regions, United States and Europe, which already provide comprehensive care of patients with a high standard of quality, there are further but limited growth opportunities, resulting from the increasing life expectancy of people and through new products and therapies. Very good opportunities result from long-term medical therapy being transferred from the hospital to the home environment of the patient. This significantly improves the quality of life of the patient, and also reduces costs for the health systems. We anticipate that the market for ambulatory therapies will grow annually by about 10 % in the years to come.

The growth markets of the regions Asia-Pacific and Latin America give a different picture. Here the shares of total sales, 6 % in Asia and 5 % in Latin America, are still small, but the growth rates are around 20 %.

The growth which we can achieve in these regions, especially in Asia-Pacific, will be largely determined by the following factors:
The increase in GDP, and the resulting increase in expenditure on health care. In China for instance, where we already employ more than 1,000 people, and have been manufacturing and selling for several years, GDP rose by about 7 %. Expenditure on health increased however by around 13 %, in a market which contains 1.3 billion people.

The demand for medical care is continually increasing. However, not nearly as many patients receive treatment as in the industrialised counties of the world. For instance, the number of patients receiving dialysis treatment in Japan is 1,400 per million population. In China, only around 20 patients per million population are treated. Also, better knowledge about treatment possibilities, to some extent by obtaining information from the Internet, will increase demand for our products.

We are concentrating our activities on the regions with high GDP growth and have created an excellent starting position in the important markets of the world in the past years by means of major acquisitions and a high level of investment.

We are convinced that Fresenius holds a unique strategic position worldwide. We have the right products, offer all-round services and are represented in all the growth regions of the world. This is the basis for our future sales and earnings growth.

Conclusion
I thank you, our shareholders, for being loyal to us in this tough year. I hope you will continue to put your trust in our long-term strategy of making Fresenius an international health care company.

Thank you for listening for so long.

The results in the year 2002 are based on the new accounting standards on Goodwill and Other Intangible Assets (FAS 142) which came into effect January 1, 2002. In order to facilitate a year-over-year comparison, goodwill adjusted key figures for the first nine months and the third quarter 2001 are provided in the appendix.

Bad Homburg, Germany -- October 29, 2002 -- Fresenius Medical Care AG ("FMC") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS_p), the world's largest provider of Dialysis Products and Services, today announced the results for the third quarter and the first nine months of 2002.

OPERATIONS
Third Quarter 2002:
Fresenius Medical Care AG reports a 6% increase in net income after minorities to $ 70 million for the third quarter 2002.

Total revenue for the third quarter 2002 increased 5% (6% at constant currency) to $ 1,285 million. Same store revenue growth at constant exchange rates was 3.4%. Dialysis Care revenue grew by 4% to $ 942 million (+7% at constant currency) in the third quarter of 2002. External Dialysis Product revenue increased by 7% to $ 344 million (+3% at constant currency) in the same period.

North American revenue rose 3% to $ 947 million, compared to $ 915 million in the same period last year. Dialysis Care revenue in the US increased by 5% to $ 834 million. Same store treatment growth was 4%. North American Dialysis Product revenue, including sales to company-owned clinics, increased 1% to $ 192 million. Product sales to the available external market grew by 4%.

International revenue was $ 338 million, up 11 % adjusted for currency. Dialysis Care revenue reached $ 108 million in the third quarter 2002 (+18% currency adjusted). Dialysis Products revenue, including sales to company-owned dialysis clinics, increased 13% to $ 252 million (8% currency adjusted).

Earnings before interest and taxes (EBIT) increased to $ 167 million resulting in an operating margin of 13.0%. The operating margin remained within the targeted range for the second half of 2002 as the Company completes its 2002 rollout of the UltraCare™ dialysis treatment concept, including single-use dialyzers, in North America.

Earnings per share (EPS) in the third quarter 2002 rose 5% to $ 0.72 per ordinary share ($ 0.24 per ADS), compared to $ 0.69 ($ 0.23 per ADS) in the third quarter of 2001. The weighted average number of shares outstanding during the third quarter of 2002 was approximately 96.2 million, compared to 96.1 million in the same period of 2001.

In the third quarter of 2002, the Company generated $ 151 million in cash from operations, an increase of 34% from the third quarter of 2001. A total of $ 67 million (net of disposals) was spent for capital expenditures, resulting in Free Cash Flow before acquisitions for the third quarter 2002 of $ 84 million. A total of $ 33 million in cash was spent for acquisitions. Free Cash Flow after acquisitions was $ 51 million. In the third quarter of 2001, Free Cash Flow after acquisitions was $ 33 million.

First Nine Months 2002:
For a complete overview of the first nine months 2002 please refer to the appendix.

In the first nine months of 2002, income before extraordinary item was $ 219 million, up 19% from the same period in 2001. Net revenue was $ 3.73 billion, up 4% from the nine months of 2001. Adjusted for currency, net revenue rose 6% from January to September of 2002 compared to 2001. Earnings before interest and taxes (EBIT)increased 4% to $ 511 million resulting in an operating margin of 13.7%. In the nine months of 2002, earnings per ordinary share before extraordinary item rose 19% to $ 2.27. Earnings per ordinary ADS for the first nine months of 2002 were $ 0.76.

Fresenius Medical Care generated $ 395 million in cash from operations during the first nine months of 2002, an increase of 53% from the first nine months of 2001. Net cash used for acquisitions was $ 73 million and capital expenditures (net of disposals) were $ 157 million. Free Cash Flow for the first nine months of 2002 was $ 238 million compared to $ 90 million in the first nine months of 2001. Free Cash Flow for the first nine months already exceeded the full year target set by the Company. This exceptional performance is primarily driven by strong improvements in working capital management, in particular accounts receivable collection, and by moderate capital expenditure.
As of September 30, 2002, the Company operated a total of 1,450 clinics worldwide [1,070 clinics (+5%) in North America and 380 clinics (+7%) International]. Fresenius Medical Care AG performed approximately 12.1 million treatments, which represents an increase of 8% year over year. North America accounted for 8.6 million treatments (+4%) and the International segment for 3.5 million (+17%). At the end of the third quarter 2002, Fresenius Medical Care served about 110,100 patients worldwide which represents an increase of 6%. North America accounted for ~78,700 patients (+3%) and the International segment for ~31,400 patients (+14%).

UltraCare™ Medical Outcomes Update
The Company has completed a one-year preliminary analysis of medical outcomes related to its UltraCare™ dialysis treatment concept, including the Optiflux-dialyzer for single-use. Comparing 4,810 UltraCare™ patients from the initial program implementation with 27,568 patients using standard therapy the company-internal data indicates significantly better medical outcomes for UltraCare™ patients.

On a fully lab and case mix adjusted basis, relative risk of mortality was reduced to 75% of the standard therapy population. This very encouraging preliminary data is in line with the Company's experience outside of the USA. The Company plans further studies and publications on the benefits of its UltraCare™ concept based on its comprehensive North American treatment database.

LEGAL UPDATE
Developments during the third quarter in the 1996 merger-related legal issues have not changed the Company's expectation and the Company continues to consider the charge taken in the fourth quarter of 2001 to be adequate. The Company's legal position on fraudulent conveyance claims relating to the 1996 merger with National Medical Care remains unchanged and the Company continues to believe its position is strong. The Company continues to look forward to an expeditious resolution of the case. The case remains stayed, however, as the court determines the proper plaintiffs to bring the legal action in light of a September appellate court ruling in an unrelated case.

OUTLOOK 2002 / 2003
The Company expects to operate within the targeted operating margin range of 13-14% for the remainder of 2002 and expects the income before extraordinary item to be close to its 2002 target of $300 million. Having completed the 2002 UltraCare™ concept rollout in North America, the Company will continue to focus on cost improvements and same-store treatment growth in its North American dialysis care business. For the year 2003, the Company expects constant currency revenue growth before acquisitions in the mid single digits and net income growth in the high single digit to low double digits range.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased with the record Free Cash Flow for the first nine months. We are pleased that we do not face an impairment of our Latin America goodwill at this time. With respect to North America our strategy is to develop and implement a unique dialysis therapy based on Fresenius Medical Care's technology. Financial success with this strategy is expected with the demonstrated better medical outcomes and our clear path to cost neutrality. With the United States net patient growth rate currently in the range of 4-5%, this strategy provides for growth opportunities above market and new opportunities for future margin expansion. We are also positioned to succeed in a reimbursement environment that allows the provider to share in the healthcare savings achieved."

Fresenius Medical Care AG is the world's largest, integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,100,000 individuals worldwide. Through its network of approximately 1,450 dialysis clinics in North America, Europe, Latin America and Asia-Pacific, Fresenius Medical Care provides Dialysis Treatment to approximately 110,100 patients around the globe. Fresenius Medical Care is also the world's leading provider of Dialysis Products such as hemodialysis machines, dialyzers and related disposable products. For more information about Fresenius Medical Care, visit the Company's website at www.fmc-ag.com.

• Sales: + 3% to € 5.55 billion
• currency-adjusted: + 8%
• EBIT: + 7% to € 617 million
• Net income: + 31% to € 85 million

The Fresenius health care group increased sales by 3% to € 5.552 billion in the first nine months of 2002. Changes in exchange rates had a negative impact on currency conversion. Calculated at the exchange rates of the previous year, the sales increase amounted to 8% and is thus in line with the company's targets for the full year 2002. Net income of the Fresenius Group increased by 31% to € 85 million. The development of earnings was favourably influenced by the change in the US GAAP accounting rules effective January 1, 2002 which means that goodwill is no longer amortized.*

Sales
Fresenius increased consolidated sales to € 5.552 million (+ 3%) in the first nine months of 2002. The continued strong organic growth of 6% once again
confirms the good position of Fresenius in the markets. Acquisitions increased growth by 3 percentage points. The changes in exchange rates, especially the devaluation of the Peso in Argentina and the weakening of the US dollar compared to the euro, had a negative impact of -5 percentage points in the currency conversion. Disinvestments had an effect of -1 percentage point.

In Europe, the Group achieved a sales growth of 14%. Sales also developed positively in the Asia-Pacific region, with a plus of 15%. The devaluation of the Argentinean peso and the Brazilian real compared to the dollar was the main cause of the 32% drop in sales in Latin America. Calculated at constant exchange rates, the Fresenius Group achieved a good sales growth of 6% in Latin America despite the difficult economic situation. Currency conversion effects also had an impact on North American sales which were at the same level as the previous year. Currency adjusted, the increase in North America amounted to 3%.

The contributions of the business segments to total sales changed compared to the previous year in favour of Fresenius ProServe as a result of the acquisition of Wittgensteiner Kliniken AG:

Earnings
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to € 874 million and was thus 7% (currency-adjusted: 3%) lower than the previous year's figure of € 940 million. EBIT increased by 7% to € 617 million (1st-3rd quarters 2001: € 578 million). The EBIT margin amounted to 11.1% (previous year: 10.8%). The impact from the US GAAP FAS rule 142, whereby goodwill is no longer amortized, amounted to € 116 million. If this effect is not taken into account, EBIT would have been 11% lower than the previous year due to the business development of Fresenius Medical Care (see table on page 10 with adjusted figures for the previous year).

Net interest expense of the Group amounted to € -209 million and was thus just below the level of the previous year (€ -210 million). The tax ratio dropped from 45.7% in the first nine months of 2001 to 38.5% in the period under report, largely due to goodwill not being amortized. The share of profits allocated to minority interests increased to € 161 million following € 134 million in the 1st-3rd quarters 2001.

Net income of the Group amounted to € 85 million in the first nine months of 2002, an increase of 31% (1st-3rd quarters 2001: € 65 million).

The change in exchange rates, in particular of the Latin American currencies and the US dollar, had a negative impact on the earnings of the Group. On the basis of constant exchange rates, i.e. calculated at the exchange rates of the previous year, EBIT rose by 11% and net income by 38%.

Earnings per share amounted to € 2.07 (previous year: € 1.61), a plus of 29%.

Capital expenditure and acquisitions
Compared to the previous year which was marked by strong acquisition activities (Everest Healthcare Corp. and Wittgensteiner Kliniken AG), Fresenius substantially reduced investments in the period under report to € 393 million (1st-3rd quarters 2001: € 1,042 million). Tangible assets amounting to € 283 million in the first nine months of 2002 were the same as previous year. However, the amount spent on acquisitions decreased to € 110 million compared to € 759 million in the same period of the previous year. 79% of this figure was invested in the purchase of new dialysis clinics.

Investments in tangible assets concerned mainly the equipping of dialysis clinics, the expansion of production capacities and the optimisation of the production processes.

Cash flow
The operating cash flow of the Fresenius Group amounted to € 507 million in the first nine months of 2002 (previous year: € 294 million). The strong increase resulted from the change in working capital mainly due to improved management of accounts receivables. The operating cash flow fully covered financing requirements for investment activities before acquisitions and dividends totalling € 235 million. The free cash flow before acquisitions and dividends amounted to € 272 million and was substantially higher than the previous year's figure of € 44 million. The free cash flow of € 72 million after acquisitions and dividends was positive.

Asset and equity structure
The balance sheet total dropped compared to 31.12.2001 to € 9,191 million (31.12.2001: € 9,867 million; - 7%). This reduction is largely a result of the change in exchange rates. The equity ratio including minority interests amounted to 37% and was thus at the same level as the previous year.

Bank loans, Eurobonds, commercial papers and trust preferred securities dropped from € 3,737 million on 31.12.2001 to € 3,483 million on 30.9.2002. The reduction compared to the end of 2001 results from the conversion into euros of the financial liabilities reported in US dollars as well as from the positive free cash flow after acquisitions and dividends. Net debt dropped on 30.9.2002 to € 3,307 million (31.12.2001: € 3,556 million).

The business segments
Fresenius Medical Care
Fresenius Medical Care has further expanded its leading global position. Altogether, around 110.100 dialysis patients (+ 6%) were cared for in 1,450 clinics on 30.9.2002.
Sales rose by 4% to US$ 3,726 million; currency adjusted: 6% (1st-3rd quarters 2001: US$ 3,589 million).
73% of sales, US$ 2,735 million (1st-3rd quarters 2001: US$ 2,639 million) were generated by dialysis care. This business grew by 4% in the period under report (currency adjusted: 6%). Growth mainly resulted from the increased number of dialysis treatments. Fresenius Medical Care performed approximately 12.1 million treatments in the first nine months of 2002, 8% more than in the same period of the previous year. In North America, the number of treatments increased by 4% to 8.6 million. Outside North America, 3.5 million treatments were performed, 17% more than in the first nine months of 2001.

Sales of dialysis products, including sales to the company's own clinics, amounted to US$ 1,278 million in the period under report, a growth of 5% (currency adjusted: 6%).

In North America, Fresenius Medical Care achieved a sales increase of 3% to US$ 2,768 million (1st-3rd quarters 2001: US$ 2,684 million). The international business generated sales of US$ 958 million (1st-3rd quarters 2001: US$ 905 million). Currency adjusted, growth amounted to 13% in the international business.

Fresenius Medical Care increased EBIT by 4% from US$ 492 million in the first nine months of 2001 to US$ 511 million in the period under report. Net income before extraordinary expenses rose by 19% from US$ 184 million in the 1st-3rd quarters 2001 to US$ 219 million in the same period of 2002. Earnings were affected by the delay in the introduction of single-use dialysers in the United States.
(For further information please see detailed press release of Fresenius Medical Care AG).


Fresenius Kabi
Earnings of Fresenius Kabi in the first nine months of 2002 developed in accordance with our expectations. Fresenius Kabi achieved an EBIT of € 60 million compared to € 37 million in the same period of the previous year. Earnings were impacted by measures to increase profitability in the Uppsala facility, in particular provisions in connection with job reductions, on-going measures to optimise production and the focusing of the facility on production, as well as by losses caused by the company ProReha, which has now been sold.
The integration of the research and development activities of Uppsala into these activities in Germany and Austria was completed in the 3rd quarter of 2002. As expected, the company succeeded in increasing the production quantities in the Uppsala facility.

The earnings situation of Fresenius Kabi improved substantially in the 3rd quarter: While the EBIT margin was 5.6% in the first half of 2002, it amounted to 8.1% in the 3rd quarter (1st-3rd quarters 2002 accumulated: 6.4%). Due to the measures which have been carried out a further improvement of the EBIT margin is expected in the 4th quarter.

Sales in the first nine months of Fresenius Kabi totalling € 935 million were 1% lower than the previous year's figure (1st-3rd quarters 2001: € 942 million).

Sales development was mainly influenced by the drop in sales of the company ProReha and in the contract manufacturing business. If these effects are not taken into account, Fresenius Kabi achieved a strong organic growth of 7%. Currency conversion, especially of the Latin American currencies and the South African Rand, had an negative impact of 2 percentage points on the sales development of Fresenius Kabi, considerably more than in the first half of 2002.

The company ProReha, with the auxiliary medical products business, was sold effective August 1, 2002. The medical therapies business remains with Fresenius Kabi. In this field Fresenius Kabi will focus on enteral nutrition, wound care, respiratory therapies and incontinence in the ambulatory care area.

The breakdown of Fresenius Kabi's sales is as follows: The hospital business achieved sales of € 710 million (1st-3rd quarters 2001: € 709 million). In the ambulatory care business, Fresenius Kabi achieved sales of € 225 million (1st-3rd quarters 2001: € 233 million).



Fresenius ProServe
Sales of Fresenius ProServe rose to € 475 million in the first nine months of 2002 and thus exceeded the previous year's figure of € 304 million by 56%. 79% of sales were generated by the healthcare business and 21% by the pharma industry business.

Sales of the healthcare business increased from € 252 million in the 1st-3rd quarters 2001 to € 377 million in the 1st-3rd quarters of 2002. 74% of sales were generated by services and 26% by projects. The increase in sales of services to € 277 million was to a large extent due to the acquisition of Wittgensteiner Kliniken AG (same period previous year: € 159 million). Sales of projects, € 100 million, were 8% higher than sales of the 1st-3rd quarters 2001 amounting to € 93 million.

Sales of the pharma industry business amounting to € 98 million in first nine months of 2002 also showed, supported by acquisitions, a good increase (1st-3rd quarters 2001: € 52 million).

EBIT of Fresenius ProServe increased from € 5 million in the 1st-3rd quarters of 2001 to € 16 million in the first nine months of 2002. The strong increase of € 8 million in the 3rd quarter 2002 mainly results from the positive development in the healthcare business.

Orders received and orders on hand of the project business developed as follows:

Orders on hand dropped slightly due to the good increase in sales in the period under report. Due to the nature of the business, orders received and orders on hand are subject to fluctuation from quarter to quarter, depending on when project orders are received. For the whole of 2002, Fresenius ProServe expects another double-digit increase rate in orders received and orders on hand.


Fresenius HemoCare
Fresenius HemoCare increased sales by 6% in the first nine months of 2002 to € 169 million (1st-3rd quarters 2001: € 160 million). This increase was achieved both through organic growth as well as due to the consolidation for the first time of the acquisitions made in 2001. The major sales drivers were the divisions Transfusion Technology and Infusion Technology.

EBIT of Fresenius HemoCare rose to € 7 million in 1st-3rd quarters 2002 from € 6 million in the same period of the previous year. Fresenius HemoCare is continuing to undertake strong efforts to build up its sales organisations.

Group outlook on 2002
The Fresenius Group, with its four business segments, is exceptionally well positioned worldwide. The demand for the companys' life-saving products and services continues to be strong, despite sustained pressure to save costs, price pressure and delayed investments, particularly in the health markets of the West. The markets of the Asia-Pacific region offer especially good growth prospects for Fresenius.

On the basis of the first nine months, Fresenius confirms its target of achieving a high single-digit growth rate in sales at the end of 2002 assuming constant exchange rates. Earnings are expected to grow at a higher rate than sales. This growth is due to the goodwill effect, which mainly concerns Fresenius Medical Care, as a result of the change in the US GAAP accounting standards which came into effect at the beginning of the 2002 financial year.

^* The accounts of the Fresenius Group have been based on US GAAP since January 1, 2002. The figures for the previous year therefore correspond to the US GAAP accounting rules in force in 2001, i.e. the figures for 2001 include amortization of goodwill.

Bad Homburg, Germany -- March 05, 2002 -- Fresenius Medical Care AG (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS_p), the world's largest provider of dialysis products and services, today announced earnings after taxes of $ 245 million (+15%) for the year ended December 31, 2001 (before the special charge/expenses). Including the previously announced special charge for 1996 merger-related legal matters of $ 258 million ($ 177 million after tax) and related prior quarter expenses of $ 7 million ($ 4 million after tax) net income for 2001 was $ 63 million. The Company has announced this special charge on February 13, 2002 and confirms its belief that this financially resolves the remaining merger-related legal matters pending at this time.

Net revenues for 2001 increased to $ 4,859 million from $ 4,201 million, an increase of 16% (17% constant currency). Organic sales growth in 2001 was 9%, whereas 8% sales growth came from acquisitions, mainly based on the acquisition of Everest Healthcare Services Corporation.

Earnings before interest and taxes (EBIT) for 2001 increased 4% to $ 644 million (before the special charge/expenses) from $ 621 million last year. EBIT including the special charge/expenses was $ 379 million. This resulted in an operating margin (before special charge/expenses) of 13.3% compared to 14.8% in 2000. The operating margin was mainly influenced by currency (0.3%), higher bad debt expenses (0.3%) and strategic initiatives including the roll-out of single-use dialyzers in FMC's North American clinics (0.4%).

Earnings per share (EPS) were up 7% to $ 2.53 for 2001 (before special charge/expenses), compared to an EPS of $ 2.37 for 2000. Including the special charge/expenses EPS were $ 0.65 per share. The weighted average number of shares outstanding during 2001 was 96 million compared with 89 million in 2000. Earnings per American Depositary Share (ADS) for 2001 were $ 0.84 per ADS versus earnings of $ 0.79 per ADS for 2000. Including the special charge/expenses the earnings per ADS were $ 0.22 per share. Three ADS's are equivalent to one share.

Revenues in North America, which accounted for 74% of total revenue, increased 17% to $ 3,602 million, with dialysis care increasing 20% to $ 3,131 million and dialysis products up 5% to $ 748 million (incl. internal sales of $ 277 million). Excluding internal sales dialysis products revenues were flat compared to 2000.

International revenues rose 12% to $ 1,257 million compared to last year. In constant currency International revenues advanced 18% compared to 2000. International dialysis care revenues, which increased by 31% to $ 426 million on a constant currency basis, once again reflected the successful expansion of the International dialysis care business in key areas. The 14% constant currency growth rate in International dialysis product revenues (incl. internal sales) is in excess of the average growth rate in these markets.

As of December 31, 2001, the Company operated a total of 1,400 clinics worldwide, of which 370 clinics were outside of North America. In the year 2001, 88 clinics were added via acquisitions and more than 70 new clinics (de novo) were opened by the Company. In 2001, Fresenius Medical Care AG performed approximately 15.2 million dialysis treatments, which represents an increase of 18% over last year. North America accounted for 11.1 million treatments (+16%) and the International segment for 4.1 million treatments (+24%).

The Company generated a record $ 424 million of cash from operations in 2001 being up 8% from the year 2000. A total $ 251 million (net of disposals) was spent for capital expenditures during 2001. Free Cash Flow (cash from operations less capital expenditures) for 2001 reached $ 173 million supported by a record Free Cash Flow in the fourth quarter 2001 of $ 83 million (+13%). The Company has seen a very strong cash collection in the fourth quarter of 2001 with days of sales outstanding down by one day for the full year 2001. Acquisitions totaled $ 461 million of which $ 217 million was paid in cash.

Consistent with prior years the Company will continue to follow an earnings driven dividend policy. The dividend proposal will be calculated on the earnings before the special charge for 1996 merger-related legal matters. Shareholders can, for the fifth year in a row, expect increasing dividends for the year 2001. The Managing Board will propose to the Supervisory Board a dividend of € 0.85 per ordinary share (2000: € 0.78) and € 0.91 per preference share (2000: € 0.84) for shareholder approval at the annual general meeting on May 22, 2002.

Fourth Quarter Results
Net revenues for the fourth quarter of 2001 increased 17% to $ 1,270 million (18% constant currency) from $ 1,082 million. This development was mainly based on a strong same store dialysis care revenue growth of 10% and a same store treatment growth of 9% in the fourth quarter 2001.

Earnings before interest and taxes (EBIT) in the fourth quarter of 2001 decreased 1% to $ 152 million (before special charge) from $ 153 million in the same period last year.

Fresenius Medical Care AG achieved an operating margin (before special charge) of 12.0% in the fourth quarter of 2001. On a comparable basis the EBIT margin in the fourth quarter 2000 was 14.1%. The difference of 2.1% is mainly due to the Company's investments in single-use dialyzers in FMC's North American clinics (0.6%), higher bad debt expenses (0.4%), higher personnel expenses (0.2%) and higher expenses for the certification of de novo clinics (0.2%).
Earnings per share (EPS) were $ 0.62 for the fourth quarter of 2001, down 2% compared with EPS of $ 0.63 for the fourth quarter of 2000. Including the special charge EPS were minus $ 1.21 per share for the fourth quarter of 2001. The weighted average number of shares outstanding during the fourth quarter of 2001 was approximately 96.1 million compared with 93.8 million in the fourth quarter 2000. Earnings per American Depository Share (ADS) before special charge for the fourth quarter were $ 0.21 versus US$ 0.21 per ADS for the same period in 2000. Three ADS's are equivalent to one share.

The Company generated $ 165 million in cash from operations in the fourth quarter 2001, representing an increase of 6% over the fourth quarter of 2000. As a result, the company's Free Cash Flow was particularly strong in the fourth quarter of 2001 with $ 83 million. Capital expenditures in the fourth quarter 2001 were $ 82 million, on the same level as in the fourth quarter of 2000.

Revenues in North America, which accounted for 72% of total revenue, increased 17% to $ 918 million, with dialysis care increasing at 20% and dialysis products revenues up 8% (including internal sales). The introduction of the UltraCare Ô therapy in North America is on target. The core element of UltraCare Ô is the introduction of single-use dialyzers in the US. With this new therapy FMC is setting new standards for tangibly better hemodialysis outcomes in the United States.

International revenues rose 20% to $ 352 million compared to the fourth quarter of last year. On a currency-adjusted basis, International revenues advanced 21% compared to the fourth quarter of 2000. Growth in International dialysis care revenues, which increased by 26% (currency-adjusted), once again reflected the successful expansion of the International dialysis care business in key areas. In the fourth quarter 2001, the Company performed around 1.1 million dialysis treatments. Patient growth was 22% year over year. Additionally, the Company expanded its European Clinical Database where data of more than 13,000 patients are stored. In the UK and in Spain the conversion of patients to the new FX-class dialyzer is completed. The targeted conversion of patients in FMC centers to the FX-class filter at this point in time was completed.

In Argentina Fresenius Medical Care achieved sales growth of 19% and an earnings after tax growth of 30% in the fiscal year 2001. Judging from today's situation the Company does not expect impairment issues in the group financial statements relating to its investment in Argentina.

Guidance 2002 / 2003
Fresenius Medical Care AG expects an organic revenue growth for 2002 of around 6%. This includes the recent adverse currency impact in Argentina. Excluding the devaluation in Argentina revenues are expected to grow by about 8%. The Company expects to report earnings after tax (EAT) of more than $ 350 million based on the new US-GAAP goodwill accounting rules in 2002. This expected result includes the anticipated impact of the Peso devaluation in Argentina and the expenses related to the roll-out of single-use dialyzers in the U.S. Not included are extraordinary expenses of approximately $ 12 million after taxes related to the early redemption of the 9% Trust Preferred Securities in February 2002.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented "We successfully completed a challenging year. We achieved a record cash flow from operations of $ 424 million and made strategic investments that allow us to build on our fundamentally strong position in the market place as well as, we believe, improving the quality of patient care. We put behind us financially the legal issues remaining from the 1996 NMC acquisition. During 2002 our major focus will be directed towards returning our North American margin to pre 2001 levels. We see opportunities of growth in North America in the renal business beyond the continued patient growth in the area of disease state management for which we are well prepared and positioned. In the International region we continued to expand our dialysis care network of clinics, introduced new innovative products, both in the dialysis machine and dialyzer membrane technologies. Furthermore, we are increasing dialyzer manufacturing capacity by 200% at our Ogden, Utah plant and opened a plant in Buzen, Japan. The global same-store patient care revenues accelerated to 10% and the same store treatment growth was 7%, which clearly demonstrates the strength of our renal business. We made solid progress in our global leadership position and we took clear measures positioning us as the world's leading renal therapy company."

With effect from 1 January 2003, the Fresenius healthcare group will rebundle its activities: The four divisions of the business segment Fresenius HemoCare are being reallocated within the Fresenius group. As a consequence, the Fresenius group will be divided into three independent business segments - Fresenius Medical Care, Fresenius Kabi and Fresenius ProServe.

This is a decisive step to increase the efficiency of the whole group: The individual business segments will be strengthened as a result of this measure; they will operate more effectively and be better able to meet the needs of the market. Also, the existing experience and knowledge can be better leveraged.

In detail, the following changes will be implemented:
Due to their technological similarities, the Infusion Technology and the Transfusion Technology Divisions of Fresenius HemoCare will be gathered under one uniform management and assigned to Fresenius Kabi. The steadily growing link of products to systems offered to hospitals, including infusion solutions and applications systems, will generate clear market advantages in the future, particularly in this field, and will open up new opportunities for growth. Through the new structure, the infusion and transfusion technology products will be able to be marketed more intensively in future via Fresenius Kabi's international distribution network.

It is intended that the Adsorber Technology Division of Fresenius HemoCare will be transferred to Fresenius Medical Care. The combination of medical and technological know-how in the field of extracorporeal blood treatment will generate further therapy impulses. At the same time, this measure is in line with Fresenius Medical Care's strategy to further strengthen extracorporeal therapies outside dialysis, both in the USA and internationally. Through this combination, Fresenius Medical Care's worldwide network of dialysis clinics can be utilized for adsorber treatment - the extracorporeal removal of pathogenic substances from the blood - e.g. for patients suffering from rheumatoid arthritis.

The Immune Therapy Division of Fresenius HemoCare concentrates on the development of products and procedures for immune and cell therapies. Due to the importance of the related research and development projects, this division requires intensive management attention and control. In order to foster developments in an even more targeted way, Immune Therapy will, therefore, be allocated directly to Fresenius AG, under the responsibility of the Chairman of the Managing Board.

Fresenius HemoCare generated sales of € 169 million in the first nine months of the year 2002, of which 82% were achieved by the Infusion Technology and Transfusion Technology Divisions, 10% by the Adsorber Technology Division and 8% by Immune Therapy.
EBIT amounted to € 7 million in the first three quarters of 2002.

As of the first quarter of 2003, the financial reporting system of the Fresenius Group will be based on this new structure.

The Company will stay within the therefore accrued Q4 2001 reserve

Fresenius Medical Care AG ("FMC") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS_p), the world's largest provider of Dialysis Products and Services, today announced that it has reached an agreement in principle for the settlement of all the fraudulent conveyance claims against it and other claims related to the Company that arise out of the bankruptcy of W.R. Grace & Co.

Under the terms of the agreement in principle, fraudulent conveyance and other claims raised on behalf of asbestos claimants will be dismissed with prejudice and the Company will receive protection against all existing and potential future asbestos-related claims upon confirmation of the W.R. Grace & Co. bankruptcy reorganization plan. The Company will retain responsibility to resolve the outstanding pre-merger income taxes of the W.R. Grace & Co. consolidated tax group and has agreed to pay $15 million to the W.R. Grace bankruptcy estate upon plan confirmatioa. No admission of liability has been or will be made. The total tax and settlement payments pursuant to the terms of the agreement in principle are not expected to exceed the amount reserved for tax payments by the Company in the fourth quarter 20011). A definitive settlement agreement is expected before the end of the year 2002.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are clearly pleased to be able to reach agreement on financial terms that are well within our existing reserves for pre-merger liabilities and that provide for a prompt, full and final resolution of these matters. Although we remain confident that there was no fraudulent conveyance in our 1996 transaction, it was in the best interests of the Company and its shareholders to put any asbestos-related questions to rest permanently. This settlement avoids the costs of expensive and distracting litigation that could have taken years to resolve, and that would have drawn our attention and energy away from our focus to accomplish the financial objectives of our US strategic plans and providing outstanding medical care to our thousands of patients worldwide, first rate clinical support to our affiliated physicians and clinicians and the highest clinical outcomes for health plans."

The British government wants to make use of external know-how in the management of its struggling state-owned hospitals in the future. A governmental register of experts chose 8 private sector hospital management organisations from a multitude of applicants after an eight-month test process, which will be able to participate in tenders for the management franchises as of January 2003.The only German company to be one of the three registered companies from abroad is hospitalia activHealth gmbH, Oberursel, the Healthcare Company Fresenius' subsidiary specialising in international hospital management.

As published by the British Government on Thursday this week Health Secretary Alan Milburn said: "The Register of Experts will enable the best managers from outside the NHS to join the best managers within the NHS in turning around struggling hospitals and raising standards for patients."

hospitalia activHealth operates hospitals abroad and offers professional management and services to owners of health facilities worldwide. The company provides state-of-the-art hospital management. Its core parameters are consistent quality management, process-optimised teams, international supply-chain management, a comprehensive medical network and patient-focused care.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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Fresenius Medical Care AG & Co. KGaA (the "Company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced the signing of a purchase agreement to acquire International Dialysis Centers ("IDC"), Euromedic International's ("Euromedic") dialysis service business. Euromedic has decided to prioritize its investments in the diagnostics and cancer treatment fields. Fresenius Medical Care is taking advantage of this opportunity to expand its activities in the dialysis care market, especially in Eastern Europe, where IDC is the market leader.

The transaction remains subject to necessary regulatory approvals by the relevant anti-trust authorities and is expected to close in the first half of 2011. On completion, the acquired operations will add approximately $180 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction. The purchase price will be €485 million. The transaction will be financed initially from cash flow from operations and available borrowing capacity. After closing, Fresenius Medical Care expects to refinance the acquisition on a long-term basis.

IDC currently treats over 8,200 hemodialysis patients predominantly in Central and Eastern Europe and operates a total of 70 clinics in nine countries. Fresenius Medical Care, the world leader in renal therapy, currently serves more than 210,000 patients globally and more than 17,000 patients in Eastern Europe.

Ben Lipps, chief executive officer of Fresenius Medical Care, said: "Eastern Europe is a key component of our overall growth strategy, and we are convinced that Euromedic's clinic network will be an excellent fit with those of Fresenius Medical Care. Bringing together the experienced teams of both companies and our focus on high-quality patient care will give us a unique opportunity to meet the growing needs of the public sector in these fast-growing markets."

Richard di Benedetto, chief executive officer of Euromedic, said: "We are very proud of what we have built up in the dialysis services space. We strongly believe that Fresenius Medical Care will be an excellent home for IDC and will enable IDC to build on its current strength across Eastern Europe and to continue its longstanding track record of success."

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

Text as PDF document (PDF, 27 KB)

Fresenius Medical Care AG & Co. KGaA ("the Company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced a cooperation agreement with the public health authorities in the Murcia region of Spain for the country's first comprehensive dialysis care and performance-oriented reimbursement model. Under this agreement, Fresenius Medical Care will provide dialysis therapy to approximately 200 renal patients in the region. The contract will be effective from mid-2011.

Similar to the system introduced in Portugal three years ago, reimbursement will be converted to an all-inclusive "bundled" rate that is tied to Fresenius Medical Care's quality performance. The Company currently provides dialysis treatment and related products to patients in the region of Murcia on a "fee-for-service" basis.

Dr. Emanuele Gatti, chief executive officer for Europe, Latin America, Middle East and Africa as well as global chief strategist of Fresenius Medical Care said: "As a vertically integrated dialysis company with longstanding experience, we are the right partner for successful, long-term cooperation with public health authorities such as those in Murcia and other payors. Together we can make a lasting improvement in the quality of dialysis patients' lives while helping ease the current strain on budgets by making health care spending more efficient."

Fresenius Medical Care is the largest private dialysis provider in Spain, with annual revenues of approximately $270 million from patient care and dialysis products. Currently, the Company provides dialysis treatment to more than 5,500 patients in 64 dialysis clinics. According to the Spanish Society of Nephrology, about 1,100 patients per 1 million individuals need renal replacement therapy in Spain in the form of dialysis or transplantation to survive. The Murcia region, located on the Mediterranean coast in the southeast, is one of the Company's key markets on the Iberian Peninsula. The region is one of the country's 17 autonomous communities. In Spain, regional governments are responsible for the administration of health, social and other services.