Thank you very much Christine. We would like to welcome all of you to the Fresenius Medical Care Earnings Call for the Second Quarter/First Half Year of 2015. And as always also a warm welcome to the ones joining us on the web today. I would like to start out the call by mentioning our cautionary language that is in our Safe Harbor Statement as well as in our presentation or the material that we have distributed today. For further details concerning risks and uncertainties, please refer to these filings, including our SEC filings. With us today again is Rice Powell, our CEO and Chairman of the Fresenius Medical Care management board, and Rice will give you a general business update and go through some of the highlights of the quarter and the half year. And we also have with us today, Mike Brosnan, our Chief Financial Officer, who will cover the financials and give you a little bit more detail on the outlook. So, Rice that is it, the floor is yours.

Thank you, Oliver. Welcome, everyone. We are glad to have you with us today as we go through second quarter and the first half of this year's results. My headline for the quarter is that the underlying performance of the business is quite strong and we're very pleased with what we’ve been able to accomplish in the second quarter. The organic growth in all segments of the business is extremely strong, yes the international business did have some operating earnings pressure as a result of currency impacts in the quarter and Mike will take you through some of that later in today's discussion. We are making very good progress in our care coordination segment in the second quarter and first half year. We will give you some more highlights on that shortly. And we are conforming the outlook for 2015 and we've had a slight alignment if you will and our revenue projections for the 2016 guidance and we will walk you through that today. We remain very confident with where we are with these guidance that we are providing for you. Not on my slide five, we are up against my comments I would like to just highlight to you looking at the first half of the year, this would be your slight 23, I believe in the investor news, but just very quickly when you look at the three key metrics and the fast half of the year performance for Fresenius Medical Care 16% constant currency growth in net revenue, just shy of $8.2 billion, our operating income is up by 5% and our net income is up 3%. So again we believe the underlying performance of the business is quite well in the quarter, additionally for the first half of the year as well. Turning to slide…

Thank you, Rice. Good morning and afternoon everyone. Rice spoke through the quarter in terms of revenues, so as customary I will move to the operating income. You can see on chart 12, I believe in your slide deck, our operating income declined by $9 million to $547 million, were 2% over last year in the quarter. As Rice noted, the half year is up 5%. Margins year-over-year dropped 150 basis points from 14.5% to 13%, and I will come back and talk about the details of that by segment in a later chart. Net interest income is up $4 million or roughly 4%, not surprisingly that’s reflecting the increase on our average debt levels year-over-year because of our acquisition activities in 2014 and that was partly offset by favorable translation of our euro denominated notes. Taxes, you can see on the page the effective tax rate is dropping from 34.8%, which is in adjusted number, we had an $18 million charge that we explained in the second quarter last year related to very specific case in the tax courts here in Germany, not involving us, but we had a transaction similar to the one were the tax court made its decision. So, we've adjusted for that to show the change year-over-year. I think the best way to talk about the tax rate is that if you looked at the first half, it’s slightly over 32%, last year and this year and I would say that we guided to 33% to 34% for the year so we’re essentially at the low end of our tax guidance for fiscal 2015. Non-controlling interest as you know we now present all the component tree of that by segments and by business, so there is no need for additional comments here in the overview.…

Right. Thank you very much Mike, thank you very much Rice for the comments and I think Christine we're ready to open up the lines for Q&A.

Thank you. Our first question comes from the line of Michael Jungling with Morgan Stanley, please proceed with your question.

Thank you very much and good afternoon, good morning. I have three questions. When it comes to net income guidance for 2015, your 0% to 5% growth, is it fair to say that after your first half performance you're more likely to come toward the bottom end of that 0% to 5% range? Question number two is on net interest costs for Q3 and Q4. Is Q1 and Q2 a guide, meaning the minus $102 million net? And then finally on minorities, hard to model, can you provide some guidance as to how minorities will look like for the full year as some sort of ratio as you desire, maybe minorities divided by EBIT or some sort of ratio that we can use? Thank you.

Okay it looks like those all may be for me Rice.

Go-ahead Mike.

In terms of net income for 2015, I wouldn't prognosticate the low end of the range, I’d just with the guidance from 0% to 5% at this time, net interest expense Mike I would say yes, I think first half is reasonably indicative and for minority interest, you know my suggestion because of all the additional granularity we now provide, the best way to think of that is probably to look at that trending in North America, particularly because we now provide Delivered EBIT for both the dialysis business, as well as the care coordination business and if you look at those relationships relative to the operating income I think that's probably the best approach.

Thank you very much.

Our next question comes from the line of Kevin Ellich with Piper Jaffray, please proceed with your question.

Hey, guys, thanks for taking the questions. I guess, Mike, going back to your comments on care coordination and the margins, I wanted to see if we could get some more color as to what's causing that to go down. And also, what initiatives are delayed in 2016 that brought the revenue bands down? Thanks.

Hi Kevin its Rice. I’ll let Mike answer on the care coordination Mark margin piece of this, but I would say quickly on the delay is just what we're hearing when we talk with our folks is that particularly in the case of BPCI data transfer from the government back to us is very slow, it is happening, but it is very slow we're anticipating that that's not going to go as smoothly as we at hoped. So that's going to cause some delay, the ESCO’s as Mike said fourth quarter, so there is going to be virtually no revenue coming out of there that late in the year if it sticks to even being fourth quarter. So we're just trying to take the knowledge we have and give you guys this close an estimate as we can that we're going to see some of that push out without much impact obviously on the bottom line. And Mike can you want to talk about care coordination margin.

Sure. Sure Kevin. I would say couple of things about the margin. When you look year-over-year, particularly when you think about first quarter 2014 and second quarter 2014 against marrying that up against the business that we call care coordination today, and you know that we were extraordinarily active in the back half of 2014 shaping the care coordination business that we’re now managing today. And consequently with that there was a change in margin that we talked about at - when we gave guidance in the last quarter. So, it’s a bit of apples and oranges because you're looking at a much smaller business with a different level of componentry in terms of what constituted our legacy care coordination business in the second quarter of 2014. I think with the additional disclosure we have now and your ability to trend for the business that we now look at, when you see, when you look at Q1 and Q2 you see a substantial improvement in margin from about 3.5% in the first quarter to the numbers we are reporting today and I alluded to in my comments that we’re seeing strong performance in each of the underlying businesses in care coordination and the margin improvement in Q1 to Q2 was also influenced by the timing associated with the operating investments we're making just to remind folks I indicated that we anticipated about $10 million of integration costs for the Sound integration - the Cogent integration into sound. We anticipated a doubling of our operating cost investment in the urgent care facilities from $10 million to $20 million and we anticipated a doubling of our investment in our healthcare risk management business from $20 million to $40 million. So those numbers for the full year 2015 are holding steady, but when you look at Q1 and Q2 in addition to strong performance in the underlying businesses we did have some timing effects in that that there was more of the Cogent integration in Q1 than in Q2 and there was a slightly lower investment in the healthcare risk management business in the second quarter, which has no bearing on our plans for the year, but did improve the margin. So it is really underlying organic performance of the businesses and the timing associated with the investments we're making that caused the margin improvement from Q1 to Q2 and care coordination.

Great. Just one quick follow-up for Rice, I guess could you tell us how much ESCO benefit did you guys, had you previously expected in 2016? And I guess also, on top of that, with the switch in ESA to Mircera, how much benefit should we expect in 2016 as well?

Kevin I had two things. There is a big difference in those two activities, I would tell you the ESCO contribution in 2016 I don't remember exactly, but it is not huge by any stretch. Now in the case of Mircera there is significant contribution there, we've guided you to that, that's why you see such big numbers in earnings growth, 2016 over 2015. So obviously that's a big piece of what's driving this guidance going into 2016 along with GEP and a couple of other things are really helping us there. So there is kind of night and day difference between those two.

Best quarter [ph] ever.

Great. Thank you. Sure.

Our next question comes from the line of Lisa Clive with Bernstein, please proceed with your question.

Hi. A few questions on care coordination. You've shown very strong organic growth the past two quarters. Could you just give us some clarity on where this is coming from? Is it specific areas like Fresenius Rx or the hospitalist business? Are you wining any new integrated care contracts ? That would just be helpful. And then also, your reduction in guidance, revenue guidance for next year, implies around a $300 million, $330 million revenue kick down. Is it fair to think of this as what you think the annual revenue could be for your hospitalist business from BPCI or are there sort of other things going into that?

Hi Lisa it is Rice. What I would tell you, I would take one and Mike if you want to take number two, relative to the care coordination it’s a fairly balanced approach, I mean we're seeing really good growth with Sound as well as the pharmacy, the other businesses don't scale as largely there, but vascular access is doing well. So it is a fairly I’d say spread around performance that we’re seeing there. So I wouldn't attribute it to anyone business keeping in mind NCP is there, it’s contributing as well. So, we're pretty comfortable we’re on a sound basis if you will across all those businesses. And Mike you want to talk about revenue guidance, takedown.

What I would say I guess to start is remind folks that when we were initially talking about our guidance for 2015 and 2016, I indicated that in the legacy dialysis business for both 2015 and 2016 where we are looking at about 3% of 5% constant currency revenue growth and I don't see any need to change that underlying prognostication today and so therefore obviously in 2015 the 10% to 12% had a lot to do with the fact that we had undertaken so many acquisitions in 2014. And then in 2016 similarly you know the balance was largely associated with all of our care coordination activities. So, just to remind folks of that because I think the growth figures for the legacy dialysis business looks very good relative to those indications. So, the $300 million, I wouldn't quibble with your numbers, it’s a little north of 300, it’s a 2% change in the range of revenue. I think, I wouldn't attribute it at all to be the BPCI and ESCO although I think that represents the lion's share because you’ve got major programs being undertaken by the U.S. government that build over time and so they are somewhat sensitive to what the start date is of the program. And then similarly in some of the risk management activities in care coordination, you are looking at working with our customers and developing risk sharing pilots and risk sharing full programs that build over time as well. So, I wouldn't say the $300 million is entirely due to BPCI and ESCO’s, but I think they represent the lion's share of it.

Okay, and then last question, just on your revenue per treatment, it was up nicely in the quarter for your U.S. business despite the fact that Medicare was again flat. Is this an indication that the private side of the business is back to that sort of historic 3% to 5% growth range? Is that something that we could get comfortable with? And maybe if you could just provide some commentary on your thoughts on the private rate outlook today?

Sure Lisa. I think we indicated at the beginning of the year we didn't have any major contracts up for renewal, so that continues to be the case and as you all know we do a number of multi-year contracts with escalators. We've also been indicating now for a number of quarters that we’re seeing positive payer mix effects in our revenue rate and I think that rather than give you a pricing or percentage guide line I think we would anticipate to continue to see those kinds of improvements on the payer mix side that are helping our revenue rate progression in fiscal 2015.

Lisa, it’s Rice. We’re continuing to see a nice increase and we measure commercial treatments per day and that continues to improve the guys are doing a really good job there.

Okay, thanks very much.

Our next question comes from the line of Gary Lieberman with Wells Fargo, please proceed with your question.

Thanks. Good morning and good afternoon. This is Brian Holstead on for Gary. I wanted to go back to Mircera. Just wanted to get a sense from you guys if you're comfortable where the current patient utilization is right now, do you think it can continue to increase? And just on the sequential improvement that you called out from the Pharma costs, was that all from Mircera or any sense of just the magnitude of what that, how that's benefitting cost per treatment?

Yes Brian, it is Rice. What I would tell you is we are pretty comfortable with the utilization that we’re seeing with Mircera among the patients. Yes there is a little bit of a calibration that had to go on between fast act, shot acting and long acting, but we're comfortable that we’ve pegged that the right way. So, we are okay there. So we feel pretty good about that and relative to the Pharma cost, what I would tell you is it’s kind of a combination we saw a little bit of dose drop, not a lot but a little bit of that part of it obviously is Mircera has a different price point sure than EPO does, but I would say in combination it is really no one big thing, but we feel pretty good about where we are these days and how we are progressing with Mircera and how patients are tolerating it, how it is being administered in the clinics that’s going well.

Okay, great. And then on the proposed ESRD rule in the U.S., I was just curious for your thoughts on the changes proposed, the reduction to the base rates were offset by the increasing adjustment factors. Just wondering, why do you think CMS is approaching reimbursement, the rate this way? And how those changes might affect your guys' business?

Well what I would say Brian is that we have seen how they did the math, we've gone through it, we're preparing our comments, commentary period is still open for about another month. The drop in the base rate is a little concerning looking at all the attention they are paying to the adjusters seems a little strange to us, but we're going to cover that all that in our commentary when we go back to them and obviously we're spending a fair amount of time down in DC talking with folks, but at the surface level on the big picture if they are telling us three-tenths of percent increase we’re happy to take it, we'd like to see that come to fruition and our commentary and our questions are going to be around making sure that we can be comfortable and clear that that's going to be the case in the way they did the math.

Okay, but – and you are comfortable with their estimate for how it would impact the industry?

Well what I, you never are going to hear me say I am comfortable with something coming out of the math, but what I would say is we understand math, it seems logical, but we have some questions that will build into our commentary to try to raise our comfort level, let me put it that way.

Okay, yeah, I guess I was just trying to confirm that the percent change that they estimated seems consistent with how you guys are feeling about it. It sounds like that's what you're answering. So, thank you for taking my questions.

Sure.

Our next question comes from the line of Alex Kleban with Barclays, please proceed with your question.

Hi, thanks. I was going to ask two actually. The first is on Mircera and the distribution structure. Just wondering what impact we might be able to think about in terms of tax rates. And seeing as how the product will be flowing from a low tax jurisdiction into a higher tax jurisdiction, are there any ways that you can work with that to do that in a more tax efficient manner? And then the second question is about biosimilar and it's more of an historical question. But in the European side of the business, what kind of conversion rate did you experience historically when you converted initially from Amgen over to biosimilar in those times and how does that influence your thinking about what you can do in the U.S. or what you might see in the U.S. potentially next year? Thanks.

Alex let me take number two and then I will let Mike comment if we have any commentary else on tax rate opportunities. Just a little history, we had FMC in Europe were not big users, we never made a diversion to biosimilars. The conversion work that we have done was going from Aranesp to NeoRecormon, which is a Roche product, we've had some of that conversion go on quite well no issues. The biosimilars never really got much traction here in Europe, mainly because there were so many other branded products that were out there for people to choose from the biosimilar section of the business is just not that large. So, I can't tell you we've got much experience with that, but we're pretty comfortable moving within branded products is what I would say. And then on the Miscera distribution structure and the tax rate, I would be curious to see what Mike's going to say about that.

Yes. I will make a couple of comments that might be helpful to you because I’m not going to go through the distribution structure in terms of ports, but you know this is an arrangement between the Vifor Fresenius Medical Care joint venture, which is a Swiss company and North America and consistent with our existing arrangement with the joint venture, you don't see the tax rate of the joint venture showing up in our financial statements because we receive a dividend from the joint venture and those dividends are 95% tax exempts here in Germany. So 5% of the dividend is taxed at the normal tax rate here in Germany. So it is a beneficial structure from a tax perspective, but you wouldn't find all the pieces in our financials because it’s the dividend from the JV’s.

Okay, thanks. I know this is technical I'm just going to try to push a little bit more. But will this be the JV selling directly to Fresenius Medical North America or would it be the JV selling to potentially European Fresenius Medical Care Company that then sells into the U.S. Fresenius Medical Company?

Yes the flow will be from the JV and the North America.

Directly?

Yes, exactly.

Okay, thanks a lot for clarifying that. I appreciate it and sorry for the technicalities.

No worries. Thanks.

Our next question comes from the line of Tom Jones with Berenberg, please proceed with your question.

Good afternoon. I've got a few. First, I was wondering if you could just make a bit more comment about the corporate costs in H1. And particularly around what's going on around your Granuflo case. Was there a significant pickup in current core case preparation costs in H1 or something of that nature that despite those costs, that we should then expect it to kind of tail off as we go through the rest of this and into next year? So that would be question number one. Question number two, on the care coordination, we've talked quite a bit about BPCI and ESCO, but haven't really talked a huge amount about the Medicare Advantage Chronic Special Needs Plan program. I wonder if you can give us some color on what you're thinking on that kind of part of the Care Coordination venture and what that might mean in terms of revenues, margins, that kind of thing. Then I've got one follow-up for Mike after that.

Okay Tom, its Rice. So corporate cost H1, we can answer this we are talking about Granuflo, generally where we are at this point in time. We have a small number of cases that are going to court in September in Saint Louis Missouri. These were cases that did not get swept up and placed into the multi District litigation, which is going to take place in Boston. So, we’re going to sort of get our first bite at this in September and then I would tell you in the overall big schedule of things we are right now booked for the trials in the Boston area that began sometime in the mid-to late part of fourth quarter. So, this is really kind of coming right here to us so obviously as we have continued to get ready with discovery and witness prep and all of that we’re spending a lot of money on this, but to give you a sense of timing this is all going to be upon us. In September in a small way with a few cases and then with a much bigger situation in the fourth quarter, but we are comfortable with where we are, we like our defense, we like what this looks like it is going to be for us, but to be, you don’t know you get into it. So that’s really what we’ve done is prepare ourselves for it. And then on the Medicare advantage seasoning out what I would tell you there is we’ve made application so we’ve got a couple of places that we are looking at those applications coming back to us. We think probably Q3 will have a better idea of where we are going to be, remember that this new business venture we are thinking we’re going to start somewhere in the 900 maybe 2000 patient range, so I’m not sure unless Mike has got any commentary on revenue that we can really give you anything there, but we probably should tell you to hold that questioning and come back to us in Q3 because we think we’re going to know some more than as a result to just the process we’re going to through with the government.

I noticed you applied for a few HMO and PPO licenses. Is that just the old state here and there where you've done that as kind of a trial basis? This isn't something you've started to roll out across the whole of the U.S., is that fair?

Yes we’ve been very selective, you know we have our states that we really like that we’re really strong in and so we’ve tried to be thoughtful about where we would do it, but we are not looking at the blank the country for sure, you are on that we’re going to be very particular about where we go, but we do think it’s time for us to move into a couple of those areas and get our feet well.

Perfect. And then the follow-up question for Mike. Thanks for the FX transaction/translation chart, it's quite helpful. But I just wondered if you could give us an indication of where the minuses and plusses sit for Q3 and Q4 at current FX rates. Then maybe just jump around, the Venezuela business, yes, you're going to take a charge when you sell it, but what kind of losses are going to disappear off your P&L as a result of the sale of that business?

Okay. I think you are combining FX and Venezuela.

Oh no, two separate questions.

I had to listen carefully.

He is effective.

Okay well all of our FX is not related to Venezuela, so that may be comforting. Yes, I think the best way to deal with the exchanges, you know we’ve refreshed our guidance for 2015 and we indicated on the chart that that’s the current rate. So, I think to the extent to which you know folks are looking at 2015 today and saying there is a little bit of headwind is in July than there was in February I would view that as a positive that we think is within our bandwidth to deal with that in our full year guidance, I would be reluctant to prognosticate the pieces for Q3 and Q4 for the very reason that when you look at shorter period this time is very hard to nail down how those two are going to behave in a particular quarter.

And then Venezuela, what kind of losses should we be thinking about disappearing as a result of the sale of that business?

I was just going to see Venezuela we’re doing more because we’ve had over time I think the first one in 2010 and then another one a couple of years later with regard to the devaluations and when you look at, what it takes to manage a business and country in Venezuela today was kind of the infrastructure that’s in place. It is more operational than to avoid any kind of significant earnings yet. So, I’d say the earnings hit is de minimis, but when we looked at how effectively we can manage the business in country and the quality of the services are being provided we thought it was better to divest.

Sure. Are you still going to sell products there?

Yes Tom that was what I was going to say. Let me say give you a little bit of scope here. So, we will stay in the products business we’ve been in that business for the long-term distributor that we’ve got a great relationship with, but to give you a little bit of sense this is 16 clinics, it is about 3300, 3200 patients that are affected, but it really is as Mike said we got to the point that regulation and reimbursement was very difficult, we’re hearing about reuse of bloodlines, reuse of dialyzers which has always been the case, we just got a little nervous that we weren’t going to able to maintain the kind of levels of quality that we wanted. So, this is little more preemptory if you will than reactionary but I guess I would leave it at that.

Fair enough. I wouldn't want to do business there.

Our next question comes from the line of Ed Ridley-Day with Bank of America/Merrill Lynch, please proceed with your question.

Good afternoon. Thank you. First of all, Mike, I understand what you're saying about Care Coordination. Can you give us any additional clarity on the growth rate say at NCP versus Sound and Cogent in the period that we just had?

No. As we’ve said before with all the granularity we’re providing we’re kind of staying firm on not going through each of the component businesses in health care coordination other than I indicated in the second quarter that although the underlying businesses had good growth in the second quarter.

Okay. In terms of the international business, obviously we know you're looking for acquisitions. Can you give us any update on that?

Ed what I would say is we love the fish, so we are always fishing, we’ve looked at some things and I guess I will leave it did there, we want to be good stewards of our investor investment monies and I would say if you were to really strip into the P&L and look at things you would see that we have deal expense there because we are looking at things, but we will tell you when we got something on the line. Go ahead Mike.

Yes I was just going to say we haven’t changed our guidance on acquisitions, so yes still guiding to 400 and we’ve spent considerably less than through June.

So, I would say stay tuned on that on Ed, to be honest.

Okay, that's helpful. And in terms of just organic performance in international services, clearly very strong. Is there anything sort of exceptional there? I mean is there any reason why that you would highlight that that should slow going into 2016?

I think we’re pretty comfortable with the rates that we see, our same store growth will looks good. I think we’re winning as many as I would say reimbursement battle as we lose, so I think at this point we would say probably might steady as she goes.

Yes, I think that’s fair. Great. Thanks.

Sure.

Our next question comes from the line of Vernoika Dubajova with Goldman Sachs, please proceed with your question.

Good afternoon, gentlemen, and thank you for taking my questions. I only have two as most have been answered. And they're both for Mike. The first one is, can you give us any guidance on the investee income for the P&L for the full year, especially with Mircera ramping up? Obviously I think we've got to be thinking about different numbers than what you reported in recent years for that, so that would be quite helpful. And the second one is, if you have any guidance on the share count for the full year. Thank you.

What was the last one Veronika?

Share count for the full year.

Share count for the full year. Okay. At this point I wouldn’t want pass out the investee income any more than just conforming the guidance that we have for the year. I think it wouldn’t, I am not sure it would be particularly helpful for folks. On the share count, I think you are asking me to prognosticate how many shares we have outstanding at the end of the year?

Yes. I mean it seems like you've had some options that have been taken up and the share count didn't increase in the quarter and I'm just wondering if you have a sense for how much more there is to go before the end of the year?

Well I think relative to the stock option exercises with all of our legacy stock option plans as folks know if you did a deep dive into this, we have a period of time where we still have some 10 year stock options that were outstanding so they are literally you’re talking about 2005, 2006 and then in the more current plans shorter term options. So, I think what you’re seeing now and in terms of some of the exercises is people are addressing the expiration dates of those two tranches. The 10 year tranches and the four-year tranches and that’s why you’re seeing a little bit more in terms of share activity for the stock options. It is typically a couple of million shares a year. I can’t predict what individual decisions people will make, but I think when you look literally at the kind of shares that are available to trade in the options program, it is because you’re dealing with 10 and four year lives associated with the programs that have been placed in the last 10 years.

And Mike, any plans from you to maybe start a little bit of buyback to offset that dilution? Or should we be thinking about no buyback from you guys given the M&A opportunities you see on the horizon for the next couple of years?

I figured that’s where you were ultimately heading with your question. I haven’t indicated anything relative to share buyback, so I wouldn’t comment further on that today.

Okay, thanks very much.

Thank you, Veronika.

Our next question is a follow-up question from Gunnar Romer with Deutsche Bank, please proceed with your question.

Good afternoon, everyone. Gunnar Romer with Deutsche Bank. Thanks for taking my questions. The first one with regard to care coordination and the margin development, I was wondering whether you can comment around the margin development in the upcoming quarters. We've now seen quite a substantial sequential pickup I think you've alluded to, although there's different drivers. I was wondering whether you can guide us to the progress in the second half and also into next year. Then second question would be with regards to the margin on the delayed revenues, whether that's in line with what you've guided previously for 2016. I can recall it was a high single digit margin, so I was just wondering whether on the delayed revenues you would have expected kind of a similar margin here. And then last, but not least, again, on care coordination, what's your expectations around organic growth now given the delay when you look into 2016? Thank you.

Okay, thanks Gunnar. The question was asked earlier in terms of prognosticating care coordination margins for Q3, Q4 this year, so I think there is enough moving parts I’m not inclined to do that other than providing the inset that I already have relative to where that business stands today. The margin on the delayed revenues I think the best way to look at 2016 is as we indicated we tweaked the revenues a bit couple of percentage points, we’ve made no change with regard to our earnings forecast, so I think consistent with what you might expect with programs of this type, they represent a significant opportunity for the company, but in the early years of the program you wouldn’t necessarily expect high margin performance. So that is why we can adjust our revenue figures and have really no consequential efforts effect on our earnings after tax projection forced 2016. The other thing you mentioned about organic growth, if I understood your question correctly you’re really asking about the core legacy dialysis business, if I understood you and in that case for 2016 as I indicated earlier in the call, I think we are still considering 3% to 5% organic growth revenue growth for the legacy dialysis business in 2016 and that’s all.

Just one follow-up up if I may, I mean basically you're trailing rather towards the upper end of that 3% to 5% range currently, and I guess you've been indicating that you're quite comfortable with current run rates here. Now thinking about 2016 again, the remainder would then purely come from growth in your care coordination business, if that's right?

No, when you think about incremental revenue growth in 2016 and I say 3% to 5% in 2015 and 2016 that’s 3% to 5% in 2015 and then an additional 3% to 5% in 2016 in the core business. If I, unless I misunderstand your question, so all of the incremental growth in 2016 is not related to care coordination.

The core business is all still growing.

The core business is still growing.

That makes perfect sense there. I was just wondering whether beyond the 3% to 5% growth you're expecting for the legacy business, that's all organic growth in your care coordination business.

Yes, we agree.

All right. Thank you.

Our next question comes from the line of Oliver Reinberg with Kepler Cheuvreux, please proceed with your question.

Good afternoon. Three questions if I may. Firstly, coming back to corporate costs, I think in your prepared remarks you talked about at what we currently see is mostly the annualization of the cost increase from the second half last year. I think you so far also guided for a total reduction of corporate costs in the full year. So should we actually expect a significant reduction in the second half? Or can you just update your full year guidance on corporate costs here, in particular what has changed? And secondly, also on costs, and I think you alluded to three factors that have higher cost investments. The Cogent integration, more costs for risk management, as well as urgent care. In total, we talked about an increase of costs of $40 million. How much of this have you actually booked in the first half? And third question, I mean obviously we see kind of consolidation in the US insurance space. Can you just generally talk about your first impression feeling and thinking about this? And can you also indicate whether the slight adjustment to the 2016 sales guidance also refers to potential delay of any kind of partnership model that you had in mind? Thank you.

Oliver I think Mike will take one and two and then I’ll speak to the insurance consolidations, question three.

Okay. Thanks Rice. Oliver, in terms of corporate cost in February I did indicate that we saw the ramp and to provide some benchmark to everyone I indicated that while we had seen the increase I didn’t anticipate that corporate cost would be more than $360 million in fiscal 2015, and I pointed out that it is a little hard to provide a benchmark relative to the three individual costs because some of those are incurred in North America and some of those are incurred in the corporate cost. So the guidance I gave actually related to total corporate costs of the company for fiscal 2015 and I indicated that I did not expect it to exceed $360 million. And then we’re poking a bit here with regards to your second question, so why don’t I let Rice answer your third question and then we will come back and comment on…

Oliver, this merger mania as I would call it in the insurance industry in the U.S., we don’t proceed that there should be a big impact there, I mean the contracting that we’ve done with the big players that are in this merger mania if you will, those contracts are fairly consistently structured between the big folks and so we don’t see a merger really changing that dramatically, but we think the dynamics are going to probably be pretty much the same. What we don’t know is what the Federal Trade Commission will do not do with some of these megamergers. So, we will see where that goes, but we don’t think it has a huge impact on our business and as you look at health plans and negotiations and things we might be doing generally those are with subsidiaries or some of these larger companies that I don’t think it will slow us down particularly, but we’ll have to look at that and make sure that’s the case, but at this point we think we can continue on in spite what we see in some of these big mergers taking place.

And Oliver I would say roughly half has been incurred in the first half.

Great. And the corporate cost of $360 million for the full year still applies as guidance?

Yes.

Thanks a lot.

Sure.

Our next question comes from the line of David Adlington with JPMorgan, please proceed with your question.

Good afternoon, guys. One question and one request. The question is around your North American dialysis margins, obviously down a little bit despite those mix benefits and cost savings coming through and early Mircera. I was hoping you could help with some color in terms of how you expect margins in North American dialysis to develop for the rest of this year and beyond and maybe at what point we'll get some year over year stabilization. And the request was really, the way you disclose your data now, could we get that historically for Q3 and Q4 just to help us rebuild our models? Thanks.

David you need Q3, Q4 2014?

Yes, please.

It’s in the investor news.

Perfect. My mistake.

No it is okay. Mike and you want to go ahead.

It is in the tables in the back. With regard to the dialysis margins, I guess I would say because you can see from just the way that the year is unfolding that we would expect some improvement in the back half of the year relative to the dialysis margins and we see that both from the point of view of seeing some of the positive trending on revenue per treatment and also some positive trending on the cost per treatment to improve the margins.

And if you look at a sequential quarters, David you will see that that improvement bares itself out.

Great. Thanks, guys.

Sure.

Our next question comes from the line of Frank Morgan with RBC Capital Markets, please proceed with your question.

Thank you. I was curious given your appetite, what sounds like your appetite to do acquisitions and lack of interest in share repurchase, could you talk a little bit about your leverage and your leverage targets, where you see those levels going over say the next year or two? Thanks.

I’ll let Mike take that one.

We typically don’t get multi-year guidance on levers other than to say that we see ourselves as a high-quality high yield company, we are officially with one rating agency rating us investment grade, we are a crossover. We typically have no difficulty attracting the investors from all walks of life to give us a very reasonable average cost of debt. Also typically what I add to that in terms of managing prudently as high-quality high levered, high yield company is that we will be opportunistic. So, when you look at our guidance on acquisitions over many, many, many years, I would say a decade or more we give us some indication because we believe acquisitions are part of for business model, but if we see assets on the market, we will be opportunistic and we think we can manage to increase leverage very effectively. So given all that I typically stick to just the current year in terms of leverage guidance and point people to our demonstrated corporate history where if we do lever up, we can bring that leverage down back into three plus range within 12 months to 18 months after a major transaction.

Okay, that's fine. Thank you.

Ladies and gentlemen, due to time constraints we have reached the end of the question and answer session. Mr. Maier I would now like to turn the floor back over to you for closing or additional comments. End of Q&A

Great. Thank you so much. Very much appreciated. The only further comment I would have is actually that in the back of the presentation we’re indicating that in November we are planning to have a, what we call meet the management on care coordination. One meeting will be in New York on November 18 and there will be another one in London on November 28. We will send out [indiscernible] the dates recently, but I thought I got to give you a heads up that we will have an event at the end of the year on care coordination, which is not a capital markets day, but we will discuss more educational you know what care coordination is all about, strategy et cetera et cetera. So, with that thank you so much for participating and looking forward talking to you soon. Take care. Thank you.

Bye folks.