Fresenius Medical Care Reports Third Quarter and Nine Months Results 2005; Outlook for 2005 Confirmed

Excellent Third Quarter 2005:

• Net Revenue: $ 1,717 million, + 9%
• Operating Income (EBIT): $ 237 million, + 11%
• Net Income: $ 116 million, + 14%

Excluding one-time costs

• Operating Income (EBIT): $ 244 million, + 14%
• Net Income: $ 120 million, + 18%

Fresenius Medical Care AG ("the Company") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS-p), the world's largest provider of Dialysis Products and Services, today announced the final results for the third quarter and nine months of 2005.


Third Quarter 2005:

Revenue

Total revenue for the third quarter 2005 increased by 9% (8% at constant currency) to $1,717 million. The total organic growth rate worldwide was 7%. Dialysis Care revenue grew by 9% to $1,247 million (8% at constant currency) in the third quarter of 2005. Dialysis Product revenue increased by 10% to $470 million (9% at constant currency) in the same period.

North America revenue increased by 8% to $1,168 million. Dialysis Care revenue increased by 7% to $1,037 million. Average revenue per treatment for the U.S. clinics increased by 2.5% to $299 in the third quarter 2005, as compared to $291 for the same quarter in 2004. Same-store treatment growth was 3.0% (U.S. operations). Dialysis Product revenue increased by 16% to $131 million led by strong sales of our 2008K hemodialysis machines and dialyzers.

International revenue was $549 million, an increase of 12% as compared to the third quarter of 2004, or 10% adjusted for currency. Dialysis Care revenue reached $210 million, an increase of 20% (17% at constant currency). Dialysis Products revenue increased by 8% to $338 million (6% at constant currency).

Earnings

Operating income (EBIT) increased by 11% to $237 million. Operating income in the third quarter 2005 includes $7 million of one-time costs related to the transformation of Fresenius Medical Care's legal form into a Kommanditgesellschaft auf Aktien (KGaA). As previously announced, the Company expects one-time costs for the full year 2005 to be approximately $10 million for the transformation. This amount includes the one-time costs in the third quarter 2005.

Excluding one-time costs, the operating income for the third quarter 2005 increased by 14% to $244 million. This very good performance resulted in an operating margin of 14.2% compared to 13.6% for the same quarter in 2004.

Compared with the third quarter 2004, the operating margin in North America increased by 40 basis points to 14.3%. In our International segment, the operating margin increased by 130 basis points to 15.9%. The strong operational performance in the International segment was positively impacted by better production efficiencies, sales of higher margin products, favorable reimbursement environment in major dialysis service countries and foreign currency gains.

Net interest expense decreased by 8% to $42 million for the third quarter of 2005. This positive development was mainly attributable to a lower debt level in combination with lower average interest rates.

Income tax expense was $79 million in the third quarter of 2005, compared to $67 million in the third quarter of 2004, reflecting effective tax rates of 40.3% and 39.8%, respectively.

Net income in the third quarter 2005 was $116 million, an increase of 14%. Excluding one-time costs, net income increased by 18%.

Earnings per share (EPS) in the third quarter of 2005 rose by 13% to $1.19 per ordinary share ($0.40 per ADS), compared to $1.06 ($0.35 per ADS) in the third quarter of 2004. The weighted average number of shares outstanding during the third quarter of 2005 was approximately 96.8 million.

Cash Flow

In the third quarter of 2005, the Company generated $202 million in net cash from operations, which is 11.8% of revenue – at the high end of our target.

A total of $65 million (net of disposals) was used for capital expenditures. Free Cash Flow before acquisitions was $137 million for the third quarter of 2005. Days Sales Outstanding (DSO) in the third quarter of 2005 were reduced by 1 day compared to the second quarter of 2005 as a result of strong cash collection efforts, especially in North America. A total of $34 million in cash was used for acquisitions.


Nine Months ended September 30, 2005:

Earnings and Revenue

For the nine months ended September 30, 2005 net income was $339 million, up 16% from the same period in 2004. Excluding one-time costs, net income increased by 17%.

Net revenue for the nine months 2005 was $4,999 million, up 9% compared to the same period in 2004. Adjusted for currency, net revenue rose 8%.

Operating income (EBIT) increased by 11% to $695 million. Operating income for the nine months ended September 30, 2005 includes $8 million of one-time costs related to the transformation of Fresenius Medical Care's legal form into KGaA. Excluding one-time costs, operating income increased by 13% to $703 million resulting in an operating margin of 14.1% as compared to 13.6% in the same period in 2004.

Net interest expenses for the nine months ended September 30, 2005 decreased by 8% to $127 million. Income tax expense was $227 million for the nine months compared to $193 million in the same period in 2004. This reflects an effective tax rate of 40.0% for 2005.

In the nine months ended September 30, 2005 earnings per ordinary share rose by 15% to $3.50 ($1.17 per ADS).

Cash Flow

Cash from operations for nine months of 2005 was $470 million compared to $560 million in the same period of 2004. This reduction was mainly due to higher income tax payments in North America, fluctuations in collections of other receivables and a slower rate of DSO improvement this year.

A total of $162 million was used for capital expenditures, net of disposals. Free Cash Flow before acquisitions for the nine months of 2005 was $308 million as compared to $417 million in the same period of 2004. Net cash used for acquisitions was $86 million in the nine months ended September 30, 2005.

Patients - Clinics - Treatments

As of the end of the third quarter in 2005, Fresenius Medical Care served approximately 130,400 patients worldwide, which represents an increase in patients of 6%. North America provided dialysis treatments for more than 88,800 patients (+4%) and the International segment served approximately 41,600 patients (+11%).

As of September 30, 2005, the Company operated a total of 1,670 clinics worldwide, comprised of 1,155 clinics (+2%) in North America and 515 clinics (+11%) in the International segment.

Fresenius Medical Care delivered approximately 14.66 million treatments in the nine months ended September 30, 2005, which represents an increase of 5% year over year. North America accounted for 10.04 million treatments (+4%) and the International segment for 4.63 million treatments (+7%).


Renal Care Group Acquisition

Shareholders of Renal Care Group, Inc. (NYSE: RCI) voted overwhelmingly at its special meeting on August 24, 2005, to adopt the merger agreement under which Fresenius Medical Care AG will acquire Renal Care Group, Inc. for $48.00 per common share.

The transaction remains subject to other customary closing conditions, including the expiration of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act. The Company and Renal Care Group are in the process of responding to the Federal Trade Commission's (FTC) request for additional information related to the acquisition. The Company is still working toward closing the transaction by the end of 2005. However, our ability to complete the acquisition is dependent upon the FTC's review process and it is possible that the closing date could move into early 2006.


Change of the Legal Form to a KGaA and the Conversion of Preference Shares into Ordinary Shares

Ordinary and preference shareholders of Fresenius Medical Care approved by an overwhelming majority the proposed transformation of the Company's legal form into a partnership limited by shares (Kommanditgesellschaft auf Aktien - "KGaA") as well as the plan for a voluntary exchange offer to convert the Company's preference shares into ordinary shares. At the Extraordinary General Meeting (EGM) on August 30, 2005, the transformation was approved by nearly 91% of the represented ordinary share capital, and the conversion was approved by nearly 94% of the represented ordinary share capital. At the Separate Meeting of Preference Shareholders, which was held immediately following the EGM, the preference share conversion proposal was approved by nearly 85% of the represented preference share capital.

On October 10, 2005 Fresenius Medical Care announced that the Company has been named in certain civil actions by a small number of shareholders contesting the resolutions of the EGM. The Company believes that these actions are without merit and it will defend vigorously the resolutions adopted by the EGM in an appropriate way.

As a result of the acceptance of these capital structure changes by the majority of the shareholders and the scope of the lawsuits, Fresenius Medical Care will continue its preparation to accomplish these value-enhancing transactions with determination.

Additional information related to the anticipated change of the legal form and the planned conversion of preference shares into ordinary shares can be accessed on the website of Fresenius Medical Care at www.fmc-ag.com or www.fmc-ag.de. Form F-4 can be accessed at the Securities and Exchange Commission's website at www.sec.gov.


Outlook 2005 – Confirmed

For the full year 2005, the Company reconfirms its outlook and expects top-line revenue growth at constant currency between 6% and 9% and net income growth between 12% and 15%. The Company expects to achieve the upper end of the net income guidance. This guidance does not take into effect the impact of the Renal Care Group acquisition or the one-time costs for the full year 2005 in connection with the transformation of the Company's legal form, nor the conversion of the preference shares into ordinary shares.

Furthermore, the Company now expects capital expenditures of about $250-300 million and spending on acquisitions of about $125-175 million. Previously, the Company anticipated capital expenditures of about $350-400 million and spending on acquisitions of about $200-250 million.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "Europe and North America, with solid performance from our Latin America and Asia Pacific regions, contributed to our excellent third quarter and nine months financial results, and exceeded expectations. As a result we now expect net income for the year to be at the upper end of our guidance for 2005. Our financial performance shows the continued strength of our business segments worldwide. We have clearly maintained our operational focus while advancing our three major initiatives – the acquisition of Renal Care Group, the corporate structure transformation, and the movement towards one share class, resulting from the preference share conversion offer."


Video Webcast

Fresenius Medical Care will hold an analyst meeting at its headquarters in Bad Homburg, Germany, to discuss the results of the third quarter and nine months on November 3, 2005 at 2.45pm CET / 8.45am EST. The Company invites investors to view the live video webcast of the meeting at the Company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the meeting.