Diagnóstico

In addition to the financial 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 December 31, 2015, the additional financial cushion resulting from unutilized credit facilities was approximately € 3.4 billion.

Syndicated credit facilities accounted for € 2.5 billion. This portion is comprised of the Fresenius Medical Care 2012 Credit Agreement in the amount of US$ 1,407 million (€ 1,292 million) and the 2013 Senior Credit Agreement in the amount of US$ 1,280 million (€ 1,176 million). Furthermore, bilateral facili ties of approximately € 950 million were available. They

include credit facilities which certain entities of the Fresenius Group have arranged with commercial banks. These credit facilities are used for general corporate purposes and are usu- ally unsecured.

In addition, Fresenius SE & Co. KGaA has a commercial paper program under which up to € 1,000 million in short-term notes can be issued. As of December 31, 2015, the commer- cial paper program was not utilized.

Additional financing of up to US$ 800 million can be pro-

vided using the Fresenius Medical Care Accounts Receivable Facility which had been utilized in the amount of US$ 68 mil- lion as of December 31, 2015.

22. SENIOR NOTES

As of December 31, Senior Notes of the Fresenius Group net of debt issuance costs consisted of the following:

Book value € in millions Notional amount Maturity Interest rate 2015 2014

Fresenius Finance B.V. 2014 / 2019 € 300 million Feb. 1, 2019 2.375% 297 297

Fresenius Finance B.V. 2012 / 2019 € 500 million Apr. 15, 2019 4.25% 497 495

Fresenius Finance B.V. 2013 / 2020 € 500 million July 15, 2020 2.875% 496 495

Fresenius Finance B.V. 2014 / 2021 € 450 million Feb. 1, 2021 3.00% 443 442

Fresenius Finance B.V. 2014 / 2024 € 450 million Feb. 1, 2024 4.00% 450 449

Fresenius US Finance II, Inc. 2009 / 2015 € 275 million July 15, 2015 8.75% 0 273

Fresenius US Finance II, Inc. 2009 / 2015 US$ 500 million July 15, 2015 9.00% 0 408

Fresenius US Finance II, Inc. 2014 / 2021 US$ 300 million Feb. 1, 2021 4.25% 275 246

Fresenius US Finance II, Inc. 2015 / 2023 US$ 300 million Jan. 15, 2023 4.50% 273 0

FMC Finance VI S.A. 2010 / 2016 € 250 million July 15, 2016 5.50% 249 248

FMC Finance VII S.A. 2011 / 2021 € 300 million Feb. 15, 2021 5.25% 295 294

FMC Finance VIII S.A. 2011 / 2016 € 100 million Oct. 15, 2016 variable 100 100

FMC Finance VIII S.A. 2011 / 2018 € 400 million Sept. 15, 2018 6.50% 396 394

FMC Finance VIII S.A. 2012 / 2019 € 250 million July 31, 2019 5.25% 244 243

Fresenius Medical Care US Finance, Inc. 2007 / 2017 US$ 500 million July 15, 2017 6.875% 457 408

Fresenius Medical Care US Finance, Inc. 2011 / 2021 US$ 650 million Feb. 15, 2021 5.75% 590 527

Fresenius Medical Care US Finance II, Inc. 2011 / 2018 US$ 400 million Sept. 15, 2018 6.50% 363 325

Fresenius Medical Care US Finance II, Inc. 2012 / 2019 US$ 800 million July 31, 2019 5.625% 732 655

Fresenius Medical Care US Finance II, Inc. 2014 / 2020 US$ 500 million Oct. 15, 2020 4.125% 456 408

Fresenius Medical Care US Finance II, Inc. 2012 / 2022 US$ 700 million Jan. 31, 2022 5.875% 639 572

Fresenius Medical Care US Finance II, Inc. 2014 / 2024 US$ 400 million Oct. 15, 2024 4.75% 364 325

Senior Notes 7,616 7,604

Financial Statements

The Senior Notes issued by Fresenius US Finance II, Inc. which were due on July 15, 2015 have been repaid as scheduled and refinanced with the issuance of commercial paper.

On September 25, 2015, Fresenius US Finance II, Inc.

issued US$ 300 million of unsecured Senior Notes with a

matu rity of seven years. The Senior Notes have a coupon of 4.50% and were issued at par. The proceeds from the offering of Senior Notes were used to refinance commercial paper.

On January 23, 2014, Fresenius Finance B.V. issued unsecured Senior Notes of € 750 million. The € 300 million tranche due 2019 has a coupon of 2.375% and was issued at a price of 99.647%. The € 450 million tranche which has a coupon of 3.00% was issued at a price of 98.751% and is due in 2021.

Moreover, Fresenius Finance B.V. placed € 300 million of unsecured Senior Notes with a maturity of 10 years on Janu- ary 28, 2014. The Senior Notes have a coupon of 4.00% and were placed at par. On February 6, 2014, these Senior Notes were increased by an amount of € 150 million at a price of 102%. The Senior Notes in the nominal amount of € 450 mil- lion were issued on February 11, 2014.

Furthermore, on February 14, 2014, Fresenius US Finance

II, Inc. issued US$ 300 million of unsecured Senior Notes with a maturity of seven years. The Senior Notes have a cou- pon of 4.25% and were issued at par.

Net proceeds of the Senior Notes issued in January and February 2014 were used to partially refinance the drawing under a Bridge Financing Facility.

All Senior Notes of Fresenius Finance B.V. and of Fresenius US Finance II, Inc. are guaranteed by Fresenius SE & Co. KGaA,

Fresenius Kabi AG and Fresenius ProServe GmbH. The hold-

ers have the right to request that the issuers repurchase the Senior Notes at 101% of principal plus accrued interest upon the occurrence of a change of control followed by a decline in the rating of the respective Senior Notes. All Senior Notes of Fresenius Finance B.V. and of Fresenius US Finance II, Inc. may be redeemed prior to their maturity at the option of the issuers at a price of 100% plus accrued interest and a pre- mium calculated pursuant to the terms of the indentures under observ ance of certain notice periods.

Fresenius SE & Co. KGaA has agreed to a number of cove - nants to provide protection to the bondholders, which partly restrict the scope of action of Fresenius SE & Co. KGaA and its sub sidiaries (excluding Fresenius Medical Care AG & Co.

KGaA (FMC-AG & Co. KGaA) and its subsidiaries). These cove-

nants include restrictions on further debt that can be raised, the mort gaging or sale of assets, the entering into sale and leaseback transactions as well as mergers or consolidations with other companies. Some of these restrictions are lifted auto matically when the rating of the respective Senior Notes reaches investment grade. In the event of non-compliance with certain terms of the Senior Notes, the bondholders (owning in aggregate more than 25% of the outstanding Senior Notes) are entitled to call the Senior Notes and demand immediate repayment plus interest. As of December 31, 2015, the Fresenius Group was in compliance with all of its covenants.

The Senior Notes issued by FMC Finance VI S.A. which

are due on July 15, 2016 and the Senior Notes issued by FMC

Finance VIII S.A. which are due on October 15, 2016 have

been reclassified as short-term debt andare shown as current

portion of Senior Notes in the consolidated statement of financial position.

On October 29, 2014, Fresenius Medical Care US Finance

II, Inc., issued US$ 500 million and US$ 400 million unsecured Senior Notes to repay a short-term loan under the Fresenius Medical Care 2012 Credit Agreement as well as other short-term debt, and for acquisitions and general corporate purposes. The Senior Notes were issued at par.

The Senior Notes of Fresenius Medical Care US Finance,

Inc., Fresenius Medical Care US Finance II, Inc., FMC Finance VI S.A., FMC Finance VII S.A. and FMC Finance VIII S.A. (wholly owned subsidiaries of FMC-AG & Co. KGaA) are guaranteed on a senior basis jointly and severally by FMC-

AG & Co. KGaA, Fresenius Medical Care Holdings, Inc. and

Fresenius Medical Care Deutschland GmbH. The holders have the right to request that the respective issuers repurchase the respective Senior Notes at 101% of principal plus accrued interest upon the occurrence of a change of control

of FMC-AG & Co. KGaA followed by a decline in the rating

of the res pec tive Senior Notes. The issuers may redeem the Senior Notes (except for the floating-rate Senior Notes of FMC Finance VIII S.A.) at any time at 100% of principal plus accrued interest and a premium calculated pursuant to the terms of the indentures.

Financial Statements

FMC-AG & Co. KGaA has agreed to a number of covenants to

provide protection to the holders which, under certain circumstances, limit the ability of FMC-AG & Co. KGaA and its subsidiaries to, among other things, incur debt, incur liens,

engage in sale and leaseback transactions and merge or con- solidate with other companies or sell assets. As of Decem- ber 31, 2015, FMC-AG & Co. KGaA and its subsidiaries were in compliance with all of their covenants under the Senior Notes.

23. CONVERTIBLE BONDS

As of December 31, the convertible bonds of the Fresenius Group net of debt issuance costs consisted of the following:

Book value € in millions Notional amount Maturity Coupon conversion priceCurrent 2015 2014

Fresenius SE & Co. KGaA 2014 / 2019 € 500 million Sept. 24, 2019 0.000% € 49.6611 464 454

Fresenius Medical Care AG & Co. KGaA 2014 / 2020 € 400 million Jan. 31, 2020 1.125% € 73.6354 374 368

Convertible bonds 838 822

The fair value of the derivative embedded in the convertible bonds of Fresenius SE & Co. KGaA was € 228 million at Decem ber 31, 2015. The derivative embedded in the convert- ible bonds of Fresenius Medical Care AG & Co. KGaA (FMC-

AG & Co. KGaA) was recognized with a fair value of € 107

million at December 31, 2015. Fresenius SE & Co. KGaA and

FMC-AG & Co. KGaA have purchased stock options (call

options) to secure against future fair value fluctuations of these derivatives. The call options also had an aggregate fair value of € 228 million and € 107 million, respectively, at December 31, 2015.

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 correspond- ing 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 financial position.

Financial Statements

24. PENSIONS AND SIMILAR OBLIGATIONS

GENERAL

The Fresenius Group recognizes pension costs and related pension liabilities for current and future benefits to quali- fied current and former employees of the Fresenius Group. Fresenius Group’s pension plans are structured in accor- dance with the differing legal, economic and fiscal circum- stances in each country. The Fresenius Group currently has two types of plans, defined benefit and defined contribution plans. In general, plan benefits in defined benefit plans are based on all or a portion of the employees’ years of services and final salary. Plan benefits in defined contribution plans are determined by the amount of contribution by the employee and the employer, both of which may be limited by legis- lation, and the returns earned on the investment of those con- tributions.

Upon retirement under defined benefit plans, the Fresenius Group is required to pay defined benefits to former employ- ees when the defined benefits become due. Defined benefit plans may be funded or unfunded. The Fresenius Group has funded defined benefit plans in particular in the United States, Norway, the United Kingdom, the Netherlands and Austria. Unfunded defined benefit plans are located in Germany and France.

Actuarial assumptions generally determine benefit obliga- tions under defined benefit plans. The actuarial calculations require the use of estimates. The main factors used in the actuarial calculations affecting the level of the benefit obliga- tions are: assumptions on life expectancy, the discount rate and future salary and benefit levels. Under Fresenius Group’s funded plans, assets are set aside to meet future payment obligations. An estimated return on the plan assets is recog- nized as income in the respective period. Actuarial gains and losses are generated when there are variations in the actu- arial assumptions and by differences between the actual and the estimated projected benefit obligations and the return on plan assets for that year. A company’s pension liability is impacted by these actuarial gains or losses.

Related to defined benefit plans, the Fresenius Group is exposed to certain risks. Besides general actuarial risks, e. g. the longevity risk and the interest rate risk, the Fresenius Group is exposed to market risk as well as to investment risk. In the case of Fresenius Group’s funded plans, the defined benefit obligation is offset against the fair value of plan assets (funded status). A pension liability is recognized in the con- solidated statement of financial position if the defined benefit obligation exceeds the fair value of plan assets. An asset is recognized and reported under other assets in the consolidated statement of financial position if the fair value of plan assets exceeds the defined benefit obligation and if the Fresenius Group has a right of reimbursement against the fund or a right to reduce future payments to the fund.

Under defined contribution plans, the Fresenius Group pays defined contributions to an independent third party as directed by the employee during the employee’s service life which satisfies all obligations of the Fresenius Group to the employee. The employee retains all rights to the contribu- tions made by the employee and to the vested portion of the Fresenius Group paid contributions upon leaving the Fresenius Group. The Fresenius Group has a main defined contribution plan in the United States.

Financial Statements