Thank you for joining Fresenius Medical Care’s Q4 full year 2008 analysts’ presentation. As normal, I have the easiest part up here actually for the next hour and a half. I just have to introduce you to the Safe Harbor statement. This presentation includes certain forward-looking statements. Actual results could differ materially from those included in the forward-looking statements due to various risk factors and uncertainties.

I am glad all you folks could join us today and a warm welcome to all of our employees and physician associates around the world, management board, and those who have joined us on the internet. I will cover the business update and Larry will cover the financials and then we will go back to questions and answers at the end of the program. Now, let me say before I start, this was a very interesting and difficult year. We ended up with significant headwinds at the end of the year in terms of currency fluctuations basically also in terms of pharmaceutical costs, but I am really proud to say that the team did an excellent job. We had another record year, and we are also going to propose our 12th consecutive dividend increase. We saw our organic growth grow through the year as the Heparin issues basically were tackled and put behind us. We ended up with a very strong organic growth of 9% in the fourth quarter. Now, through the year, in the last 2 years, we have been expanding our production facilities and also our de novo clinics, and I will talk a little more about that when we look at the different segments of our business but the reason for that was to be prepared to continue the growth that we see as we look forward into 2009 and 2010. We strengthened our renal pharmaceutical business with the agreement with Galenica. We are excited. We are actually in the process of delivering excellent iron products both in the international region and also in North America. So, I am very enthusiastic about 2009 and 2010. We continue to see very strong interest in our high-quality products and services, and we have the capacity both in the clinics…

I am very happy to review our successful finish to an excellent year in 2008 and also outline our guidance for what we are sure is going to be another record year in 2009. With that, let’s review on the next slide, our performance against all the guidance metrics for 2008. For revenues, Ben already told you that we had $10.6 billion of revenues for the year. This represented an organic growth of 7%. We are very pleased about that and we saw the organic growth accelerate through the years, so it is a really good trend on revenue. Net income at $818 million was more toward the upper end of the range despite some of the headwinds that Ben talked about and that I will talk about in some more detail especially on the cost inflation side. Debt to EBITDA, we ended the year below 2.7, our guidance was to be below 2.8, so we are really pleased about that. That stayed about constant as we invested a lot during the year in CapEx and acquisitions particularly geared to growth, but our EBITDA increased very significantly, and that allowed us to reduce leverage and leverage ratios, so we are very pleased about that. Our spending did come in at the guidance level of around $900 million combined. We are predicting $800 million through $1 billion, so we are pleased that we came in on target both for CapEx and acquisitions. Now, let’s take a look and go through in some detail for P&L for the full year. Ben talked quite a bit about, again about the revenues, and all the factors influencing growth and products and services in the different geographic segments. I won’t spend much more time on that, but I do want to spend some time talking…

We start with the questions here in the audience.

Two questions please. Could you give us some guidance for the sensitivity of the shift for the reimbursement rate from between public and private care? What a percentage shift would mean in terms of earnings and how much confidence do you have that COBRA will give you some resilience given the market outlook? How many people and what percentage of people have been laid off really go for COBRA? The second question would be how far are you with the negotiations on the comprehensive bundling services?

Actually, as far as the shift in commercial revenue versus Medicare, we will show it basically in the 20s. We actually went up 90 basis points in terms of commercial revenue, so as I showed you here, we are pretty comfortable at this point in time that we have not seen any activity that was essentially concerned with the unemployment in the US and people losing their insurance, so actually it is essentially up for the year, and we don’t expect to see that either. As far as COBRA, clearly that is available. We monitor that with our patients. We have a system where we keep track of their insurance, and I think we have discussed in the public sector that there is a foundation, an American Kidney Fund, that actually can assist the patients if they do not have the funds for secondary insurance or for COBRA, so this fund is very helpful in taking care of the patients. So quite frankly, at this point in time, we don’t see the sensitivity to the unemployment rate. Again, in a couple of years from now, if it stays in the mid teens it might be different but at this point in time, we don’t see that as an issue.

And on the comprehensive bundling?

Yes, again the dialysis bundling will start in 2011. The coalition is working very carefully with CMS to make sure that the actual payment rates in 2011 are essentially proper in terms of the numbers and CMS is very helpful, so that part of the bundling will start in the ASRD bundle. As far as the comprehensive program, the demonstration project, we were very pleased that they extended it another year. It was due to essentially stop at the end of 2009, and CMS has extended it through 2010, also for DaVita, so both of us have these programs, and we believe it is the right way to go forward, but it is still too early to comment about how that will evolve into that system, but we are both expanding our programs this year and are interested in discussing them with the new administration which we are in the process of doing.

Just two questions on disease management programs, how much do you expect an uplift here now? You indicated that going forward, what would be the number which you can think of in 2009 and 2010 and the same, although kind of guidance for your renal devices. What kind of revenues do you target this year and next year?

Okay thanks, Holger. Again, the demonstrate project where we have about 1000 patients in the program now. We will increase it to probably 3000 patients this year and then beyond that, it will depend on what sort of arrangements that we work out with the CMS and the government. That does, because the margin is less on the disease management, than on the normal dialysis business, that probably has an impact in 2009 of 10 to 15 basis points over the margin, but clearly long-term, it is a very interesting program. Now, along the same lines in international, we have the ESRD bundle operating in Portugal and basically doing very well in terms of meeting the quality standards. We are getting close. I think it has been very successful. Manuel is sitting there nodding his head. Everything I see then is we are getting clear indication and following of that program as we go forward, so we think this, in international, it is primarily in Portugal. It the US it’s the demonstrate body. Now are far as the renal pharma, I believe we are about $250 million in sales this year and our target is $400 million in 2010, and I believe we are on target to get to reach that. I don’t know the exact target for 2009, but we said when we signed the iron deal that we would be at about a $200 million run rate in the US and of course, in international, we need to country by county move into the program, and that is going to take a little longer, but clearly, it will be in the range of a couple of 100 million additional pharma sales, I think, in 2009.

Coming back to Martin’s question about insurance coverage and so forth, just that I noticed, the debt expenses are clearly going up apparently year over year, so we have more than a 10% surge in those. Is that something we should worry about that people cannot co-pay any longer and probably look at a higher run rate going forward? And secondly, I am still trying to understand why are you using the 2008-T first in your own clinics? Are there any efficiency gains also associated with those? Is that standard really standard procedure that you’re testing the machine while in a couple of years, whatever in your own clinics before releasing it into the broader market?

So let me answer the question on bad debt. It did take up slightly in the US in Q4, but I think it’s worth noting that both in Q4 and for the full year, it stayed very close to the 2% level where it has been for a number of years. We did change our accruals slightly, but what I want to impress is that there is no underlying trend in the US business that is indicated that we have a bad debt issue or that bad debt is going up. We have just gone through a bit more conservative accrual policy and I don’t think that is any reason to conclude that there is any underlying trend going on.

With respect to introducing new machines, that is one of the benefits of being vertically integrated is the 5008, I think Emanuel, that we ran it for a couple of years in our clinics, and then when you go to the open market, you’re clearly at the same level of reliability of all your other machines that have been around for 8 or 9 years, and so, in the US, the K machine, we measured in terms of calls per month per thousand machine, in other words, they can call about anything, but it has to go down as a complaint. We are in the range of 10 to 15 calls per month per thousand machines, and so by running in our own clinics for a couple of years, we will get down in that range, so that when it comes into the market, it is totally reliable, and everybody is very comfortable, so it takes about 2 years to bring a new machine to the market no matter where you develop it and we usually do that within our own clinics because we clearly can get the data back very quickly.

Three quick questions, the first one is on the nurse cost, so if you can remind us what is the percentage of the total cost and what kind of inflation you are seeing currently? The second question is if you can give us a little bit more detail on this new regulation for the US clinics and also about what kind of costs does this imply? The last question is you mentioned head wind from energy cost. Is this because you had some hedges and when will we see some positive?

I will take a couple of those and Larry will take one of them. As far as the nursing, we have seen, I think if you look at our score card, we can see that labor has gone up this year, and again, we had quite and inflationary spiral starting mid year with everything in the US increasing with oil based on the oil prices, and of course, the easiest way for that to happen is the agencies raise their price immediately, and so we always use agencies, and that is why we are developing our own source through the Philippines. So, we saw a disproportionate rise in the agency nursing staff. That is starting to slow down a little bit. It is certainly not out of the system. It will take another 6 months, because with the decreasing 401-K’s and a lot of people losing their jobs, we are finding a number of nurses are coming back into the workforce, and our workforce in our times are very predictable, so they can basically come back and work one a week or two days a week, whatever they want to, they don’t have to worry about schedules, so I think, we are seeing that will drop off, but it will be about mid year, and we have got our own, so we are going to be brining our own nurses in this year, so I think that we will handle that. Now, the conditions of coverage which we have had a change in the conditions of coverage in the US for 25 years, but because, I guess, it was due, and what this is CMS inspects our clinics every 2 years, and they have a complete list that they inspect to and so this has been developed and you have to train the technicians, they have to pass a test, there are a whole bunch of about 60 things that you now have to do that we didn’t do. I mean, most of them, if they were important, we did them, but now it is part of the law, and so we are doing them, and as Larry said, that all started fourth quarter, because they started inspecting to that, so we have got some start up costs. The guys are doing a great job. It will carry over into 2009, and eventually, we will become very efficient at it, but it is one of those things that basically CMS and the industry agreed that is probably worth doing, it is just that it is painful at the time, so that is the new conditions of coverage, and it will be 25 years before we have a new one, so we will get use to it.

On energy, you have a couple of different effects. You have the diesel to run the trucks to deliver your products and there you kind of see the impact right away. You also have the utility costs, electricity costs usually to operate the clinics, and then the utilities to run our plants, and there it is a little more sticky. We are just starting now to see some impacts in the plants we have. We don’t have hedges, but we sometimes have one-year contracts and so it takes a little while to really get the full impact of the energy cost decline that we have seen.

Just maybe on the cost for treatment which increased quite dramatically in 2008, I guess mainly related to heparin, the increase was 6%, so may be twice the rate of the revenue for treatment, so may be you can speak about the heparin issue and how do you expect the cost for treatments to develop and may be also how you can may be solve the heparin issue?

Well let me take at least the first couple of parts of that question. You know, if you look at the whole year, the cost increase was about 2% average year to average year, so the 6% was really only the fourth quarter, and there were a couple of special things that came together to make it a bigger than usual increase. One was clearly again the start-up costs, the initiation costs for these new conditions of coverage that was a significant issue in Q4. As well, we did have pharmaceutical cost increase that was probably the second most important fact along with the labor costs increases. We believe for 2009, the year average, we are again going to have about a 1.5% to 2% increase in costs in the US and reasonably similar in the international arena.

I will say just a little bit of discussion on the heparin. In our guidance for next year, we built it in at the same. Basically, we didn’t assume that we would use less, and we didn’t assume the price will go down, so it is essentially there at the rate that it is running at this point.

I know they had some questions lined up actually on the telephone lines, so I think at this point in time, operator, we can open up the lines for questions.

We will now take our first question from Tom Jones from J.P. Morgan.

Good afternoon. I was just wondering if you can just clarify one thing for me and then the follow-up question after that. On the US revenue per treatment, you talked about doing 2% growth in 2009 on the average of 2008. Well, the average of 2008, if my calculations are right, is about $330 per treatment which a 2% growth will get you to $337 by the end of 2009 which is only a relatively small, just over 0.5% increase on where you were in Q4. Am I doing that right or should we be assuming something is going on over on the manage care side, because with the 1% increase in Medicare rates, you would expect a slightly better than 2% year-on-year increase given where you were in Q4?

With the average being $330 for 2008, we are saying will be $337 for 2009, not necessarily the year end. So, if we start the year slightly below that you will end the year slightly above it to get to the average of around $337. That is where we think we will come out in 2009.

And Tom, one other thing, the increase in Medicare is only on the composite rate, so it is 1%, but I think Larry, it translates to about 0.5%, and none of that is to signal anything changing in the commercial area.

You made your comments about pair mix, but would you say the commercial pricing, you state it is sort of historic mid single digit year on year price growth in manage care has been the current, kind of, pricing environment?

We are trying to signal that we don’t see any major changes, but we don’t have the EPO effect, so we ought to look at it on a year over year, rather end of the year, and so we are not signaling any changes in the manage care environment next year.

The second question, Kenn, on his calls mentions some issues about some backlogs in getting new clinics approved, particularly in Texas, and Texas is a fairly big market for you in the US. Are you saying similar issues in that state or any other that are limiting your ability to open clinics at the moment?

Yes. We have having the same issues that DaVita is having. I believe he commented that he had about 54 clinics waiting for certification. We are clearly in the same range, I think 48 or 50, and Texas appears to be the lead state, but clearly, all of them are 6 to 8 months slower than it has been in the past for manpower reasons. So, yes, we all have a number of clinics that are basically ready for certification.

And I assume that you have kind of baked in that slower approval into your guidance for 2009?

Yes, we have, and it sort of hits in a couple of areas, obviously while you’re waiting for approval, you will need to dialyze patients, essentially you can’t get approved unless you’re actually dialyzing patients, so there is an additional cost to the de novos, but yes, this is all baked in, and we don’t expect it to get any worse quite frankly, but it clearly is a fairly major backlog for both of us.

Our next question comes from Kevin Ellis from RBC Capital Markets.

The first question that I have is looking at your 2009 acquisition expenditure guidance, it looks to be a little bit higher than 2008. I was wondering if you can talk about your pipeline and where you see the biggest opportunities, and DaVita also talked about how some of the privately-backed MDOs in the US are interested in selling, have you been approached to ask or asked to put in a bid yet?

We do see good opportunities for acquisitions both in the US and in several areas in the international markets. In addition, we have not seen EBITDA multiples or evaluation come dramatically down yet, but we have seen them slightly soften and so, we think doing acquisitions in this environment or how we think the environment might be in 6 or 9 months is potentially quite an attractive thing. I think in terms of discussions or approaches that we may or may not have with medium-sized companies, I think we are generally talking to a lot of people in the markets, and you know, I wouldn’t want to comment on any specific discussions that we may or may not have had.

Okay, fair enough, and the may be a question for Ben. You know, with some of the upcoming alternatives to EPO, such as CERA and Affymax’s Hematide, I was wondering what your opinion is of going to may be a once in a month EPO, if indeed, that is approved since it is in phase 3, do you think a nephrologists would be receptive to this, and how do you see it playing out?

Well, I’m certainly not an expert on EPO, but we have clearly looked at that a few years ago when we had the opportunity to have Aranesp in the US for the renal dialysis market very the EPO Alpha, and one of the things with the reimbursement situation where you essentially no longer get paid after 3 months above 13, it becomes really, from what we can tell, really dangerous to night titer. In fact, what we are doing now, is we are taking hemoglobins every week and the physicians are tittering the dose, so in that economic environment, I think it is very risky to bring, and that is essentially why it has not come to the US. Now, if you don’t have that upper limit, then obviously if there is a valued offering at once every two weeks or once a month that certainly is open at that point. I believe that as you go to the bundle that might be less of an issue, but that is 2011 and 2012 and going forward, so we are very pleased. We think anemia management is pretty much solved. The only area opened is optimizing essentially the IV iron, but we have excellent result with the EPOs that are on the market around the world, and so we don’t see that as a medical need at this point.

Our next question comes from Ilan Chaitowitz from Redburn Partners

A few questions; on the international business, you have had very robust growth in your revenue per treatment on an underlying basis, I would make it about 6% revenue increase, is that sustainable into 2009 and beyond, and can you give some insight into which countries are really driving that? Second question relates to your new clinics, and we have seen a 5% increase in North America, will that translate into a 5% patient growth over 2009 in North America? The final question is relating to the corporate expenses. We have seen that jack up quite aggressively over 2008. Can you give some sort of feel as to how that might end up in 2009?

I will take the first two and let Larry handle the corporate expenses. Basically, I think we are just absolutely excited about the revenue per treatment growth that we have seen in the international and again, it was driven by Portugal and a number of countries where we have got good relationships with the pairs. Clearly, I don’t think we expect to continue to grow at that level. Again, we do expect that they will value the excellent outcomes that we provide them, but again, you have also the effect of the labor cost, so it is a balancing type of act if there clearly is a reduction in raises around the world, then clearly there will be probably, an also we don’t need the 7% growth in terms of revenue per treatment, so our target over time has been between 2% and 4% and the fact that it is 7% is just overachievement. As far as the North America patient growth, yes we have built 5% of the clinics, but obviously, they are all not operating yet, as if we have got a backlog of 50 of them waiting to operating, so I think that our target and what we have built in the model is in the low 3’s in terms of percent growth not to 5% because those clinics are not available to us and I think this is essentially probably not doable with respect to the growth rate in North America which is about 3%, so we clearly have those waiting but we don’t expect to grow much more than the low 3’s.

I think there are a couple of factors. One is that we have indeed increased corporate expense, in particular, again in investing for the future. One factor is the increase in the number and amount spent for global R&D projects, another was the acquisition we did in late 2007 of RSI. Again, looking at sorbents as a technology in particular for the home markets, that we think is really going to be a great product for that market, and we are still in primarily the research and testing phase and expect to have some products out probably in 2010. The third factor is if you look at the whole year, certainly currency was a factor in terms of corporate costs. I think if you look at underlying corporate cost, we would not expect them to continue to increase at the rate that they did in 2008, but flatten out significantly more from this point forward.

Can you give some insight as to what the weighting of the Euro is then in the corporate cost line item, so we get a feel for the underlying growth rate?

I think if I understood the question correctly, what’s the weighting of the Euro, it is heavily weighted toward Euro in terms of that line.

Our next question comes from Michael (inaudible) from Bank of America.

Firstly, on the dialysis equipment, can you give us an indication of what you’re seeing with respect to the demand profile amongst the independents in the US particularly with respect to the capital equipment machines and secondly, can you highlight what the single-user dialyzer penetration is in the US amongst the independent as well as at the end of Q4.

Yes, we have not seen any slow down anywhere in the world yet in terms of equipment, and again, as I mentioned a couple of analyst’s calls before, 5 years ago, we did see that and again, these are valuable customers, they need the machines because they growing, so we usually offer them some sort of bundle because they usually are people that are using our disposable products, so during that time, essentially still keep moving the machines but you just arrange some sort of payment program for them that is conducive to whatever they need. Now again, we don’t see that because obviously we have just not been that far into it, and I don’t expect to see too much of it either, and it won’t have much impact on us because machine business is less than 5% of our revenues, so it is not something that we worry about at night, but it is important to maintain our market share with machines because so many things are built on that machine going forward. So, we are very protective of our market share in the machine area which is growing in international and is at an all-time high in North America. The second question, could you repeat that one, I have a note here, but I can’t read it.

It is just a question about the penetration of single-use dialyzers in the US at the end of Q4 with the independence?

Actually I wrote the number down, but I couldn’t remember the question. 65% is what the penetration is in the independent market, anyhow, that is where we are, and we are quite pleased, and I think again, I want to mention that, and I didn’t in the quality, we have seen almost a 350 basis point improvement in our mortality over the last 5 years, and again, I think it is really quite impressive, and so, I believe at the end of the day, we probably made the right move many years ago, but we do see it at about 65% in the independent market.

Next question comes from Lisa Bedell from Sanford Bernstein.

Two questions, both related to bundle pricing. The first is could you walk us through some areas where you see potential cost savings under bundle pricing and secondary do you think your home dialysis patient population would change, I think in the past you have said that you may want to expand you home dialysis treatment, and if you could just talk through that opportunity a little bit?

Yes. When it comes to the bundle and where do we get the 2% administrative savings that it will be imposed in 2011, if you join the bundle, we see that there is probably administrative activities that will get us the 2%. Beyond that, we really have not identified or basically spent much time looking at where the savings are and again at this point in time, we are in the process with CMS, developing what is a fair reimbursement for the bundle, so you really cannot comment about what you’re going to do with the bundle until it gets priced, and I think that will happen some time early 2010. As far as what will the bundle do as far as home, again, we see on home hemodialysis, there are a number of papers showing up, it is really quite an imposition on the spouses and on the care givers, I think, when the new papers come out. We see long term. Yes, there might be a market there, but we see really peritoneal dialysis has been accepted. It is just not efficient enough, and so we see the opportunity for peritoneal dialysis as being a preferred home therapy if we can use the sorbents and get enough capacity in peritoneal, so our focus in 2011 is to see if we can come up with an improved peritoneal dialysis device that really gives adequate therapy to the patient.

Are there any further questions?

There are no further questions at this time.

I have one more from the internet which might be one for Larry. Our FMC’s Clinic activities in central Europe are affected by the downturn of the economies and will that reduce FMC’s growth pipeline?

I would say generally, we do not think about changing our overall strategy towards central and Eastern Europe. We believe that in medium and long-term, it is a very attractive market and many of the countries continue to be attractive even today. I would say we would be somewhat more selective as we think about where to place new investments in the region and if we see that countries are unable or completely unwilling to give a fair reimbursement, then clearly we might slow down investment in those countries and invest more in others that seem more attractive in the mid term, but overall, I think the strategy is completely intact. We do believe it is a very attractive region and will continue to invest there generally going forward.

Are there any further questions here in the audience?

I have a question concerning the demographics that were mentioned in the scorecard segment of the report. Are there any significant differences between the US dialyzers population and the international population if it concerns, for instance, prevalence of diabetes, age, weight, and so on, and I will make another follow up on this, what are beyond diabetes the most important underlying renal condition for dialysis, one or two or three?

Yes. I think the US certainly leads in the prevalence of diabetes. You can see that we have stabilized that about 53% of our patients are diabetic. They carry, and again we are working very hard and we have made improvements, but the mortality is about 200 basis points higher with basically for the diabetics. Now, we are doing foot checks and a number of things, but I do believe in the international, I have to look at it, I do believe that we are starting to see, in Europe, an increase in diabetics, and it’s 35%, so it really is a common problem in both areas. I think the other area that we are all focusing on is really malnutrition. This is one of the areas that quite frankly it is very, very important and that is why we always put out basically the albumin levels, because that defines malnutrition, so we think there is a lot of good things that could be done there if our hands were untied, and finally, I think the age is a little about the same between the two, around the early 60s, might be slightly less in Europe, which is about 50, so the age in the US is basically about 10 years more on average.

Okay. Thank you very much, everybody. That is going to close the presentation for Fresenius Medical Care for Q4 and the full year. Thanks for joining us today, here in the audience and also on the web.