2.9. TECNOLOGÍA DE MERMELADAS

REVISION DE LITERATURA

The Fresenius Group adopted FASBInterpretation No. 48 (FIN48), Accounting for Uncertainty in Income Taxes – an interpretation of FASBStatement No. 109, Accounting for Income Taxes (FAS109) as of January 1, 2007. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FAS109. FIN48 prescribes a two step approach to the recognition and measurement of all tax positions taken or expected to be taken in a tax return. The enterprise must determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If the threshold is met, the tax position is measured at the largest amount of benefit that is greater than 50 % likely of being realized upon ulti- mate settlement and is recognized in the financial statements. The implementation of this interpretation had no impact on the assets and liabilities of the Fresenius Group.

Fresenius SEand its subsidiaries are subject to tax audits on a regular basis.

In Germany, the tax audit for the years 1998 until 2001 has substantially been finalized and the results of this tax audit are sufficiently recognized in the financial statements as of December 31, 2006. The fiscal years 2002 to 2005 are currently under audit. With respect to HELIOS-Kliniken-Group, the years 2001 to 2004 are currently under audit. For the Group, all further fiscal years are open to tax audits. Fresenius Medical Care filed a lawsuit against the decision of the tax authority regarding the disallowance of certain deductions taken for fiscal year 1997 and has included the related unrecognized tax benefit in the total unrecognized tax benefit noted on the following page.

In the United States, except for refund claims Fresenius Medical Care has filed relative to the disallowance of tax deductions with respect to certain civil settlement payments for 2000 and 2001, the federal tax audit for the years 1999 through 2001 is completed. The tax has been paid and all results are recognized in the consolidated financial statements as of December 31, 2006. The unrecognized tax benefit relating to these deductions is included in the total unrecognized tax benefit noted on the following page. The Federal tax audit for the years 2002 through 2004 has been completed and the Internal Revenue Service has issued its report. The audit report includes disallowance of a material amount of deductions taken during the audit period for interest expense related to intercompany mandatorily redeemable preferred securities. Fresenius Medical Care has filed a protest over the dis- allowed deductions and will avail itself of all remedies. An adverse determination with respect to any of the disputed disallowances could have a material adverse effect on Fresenius Group’s cash flows, tax expenses, net income and earnings per share. Fiscal years 2005 and 2006 are currently under audit. There are a number of state audits in progress and various years are open to audit in other states. All expected results have been recognized in the consolidated financial statements.

Notes

Subsidiaries of Fresenius SEin a number of countries outside of Germany and the United States are also subject to tax audits. The Fresenius Group estimates that the tax effects of such audits are not material to the consolidated financial statements.

Upon adoption of FIN48, the Fresenius Group had € 250 million of unrecognized tax benefits including the amounts relating to the tax audit items for Germany and the United States noted before. The following table shows the changes to unrecognized tax benefits during the year 2007:

in million € 2007

Balance at January 1, 2007 250

Increase in unrecognized tax benefits prior periods 25 Decrease in unrecognized tax benefits prior periods - 7 Increase in unrecognized tax benefits current periods 15 Changes related to settlements with tax authorities - 2 Reduction as a result of a lapse of the statute of limitations 0

Foreign currency translation -12

Balance at December 31, 2007 269

The vast majority of these unrecognized tax benefits would reduce the effective tax rate if recognized. The Fresenius Group is currently not in a position to forecast the timing and magnitude of changes in the unrecognized tax benefits.

It is Fresenius Group’s policy to recognize interest and penalties related to its tax positions as income tax expense. During the fiscal year 2007, the Fresenius Group recognized € 15 million in interest and penalties. Fresenius Group had € 53 million for the payment of interest and penalties accrued at December 31, 2007.

Notes

10. EARNINGS PER SHARE

The following table is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and shows the basic and fully diluted earnings per ordinary and preference share, retroactively considering the share split of Fresenius SE(formerly: Fresenius AG) entered into the commercial register on January 24, 2007, for the years ending December 31.

The owners of preference shares are entitled to a preference of € 0.01 per bearer preference share per fiscal year.

in million €, except amounts per share (€) 2007 2006

Numerators

Net income 410 330

less preference on preference shares 1 1

less effect from dilution due to Fresenius Medical Care shares 1 1

Income available to all classes of shares 408 328

Denominators (number of shares)

Weighted-average number of ordinary shares outstanding 77,394,080 76,503,006 Weighted-average number of preference shares outstanding 77,394,080 76,503,006 Weighted-average number of shares outstanding of all classes 154,788,160 153,006,012

Potentially dilutive ordinary shares 792,851 758,400

Potentially dilutive preference shares 792,851 758,400

Weighted-average number of shares outstanding of all classes assuming dilution 156,373,862 154,522,812 Weighted-average number of ordinary shares outstanding assuming dilution 78,186,931 77,261,406 Weighted-average number of preference shares outstanding assuming dilution 78,186,931 77,261,406