Thank you very much, Patrick. We would like to welcome all of you to the Fresenius Medical Care earnings call for the first quarter of 2015. As always also, very warm welcome to the ones joining us on the web today. We very much appreciate your interest. As always, 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 our 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 we also have with us today, Mike Brosnan, our Chief Financial Officer, who will cover the financials and the outlook in more detail. So, with that Rice, the floor is all yours.

Thank you, Oliver. Welcome, everyone. I'm delighted that you're able to join us today as we review our Q1 performance. I'd like to begin my prepared remarks on Slide 5, if I may? I believe my headline for you today is simply, it's a great start into the year. We've had solid performance through the quarter. I know you've had the material for a number of hours yet today. So I'm not going to bother and walk you back through the financial features on right side of this slide. I'd like to make just the following comments if I may? All segments contribute to our performance in Q1. The revenue earnings growth was robust and we're pleased with that in each region. We had good cash flow generation as well and as we had promised you back in the later part of 2014 as well as in February of this year, Mike and I and Oliver had said we would bring in you more transparency on our segments and I believe we've done that and we would offer you new metrics for care coordination and a way to give you a framework of how we're looking at these businesses as we go forward. And I would say to you, as we go through today, allow Mike and I to have work with you on your questions about care coordination and some of the aspects of this, keeping in mind that we're still investing to build out the urgent care business. We are continuing to work on the integration with Cogent, and we're going to talk some about -- Mike's going to give you some color on the risk opportunities that we see particularly in the BPCI, or the ESCO's, where we're doing advanced work waiting to see when revenue will…

Thanks, Rice. So turning to Chart 12 and just continuing on through Rice has walked you through revenue. So as is customary, I’ll just move to the operating earnings. Our operating earnings were better at $504 million, up $59 million year-over-year, 13% increase. You’ve also noticed in our investor news that we’re reporting a new KPI, call the Delivered EBIT. Delivered EBIT is simply operating income less the non-controlling interest that has historically shown up at the bottom of the P&L. And the purpose for KPI is to give you an indication of the operating income that we feel is attributable to the FMC shareholders. We also added this indication for each segment to give effect to the weighting of our various business models on our operating earnings for each of the reported pieces of the business that you’ll see in the investor news. So I won’t belabor this now, but the information is available to you. So turning to margins, year-over-year margins improved 20 basis points from 12.5 to 12.7. Overall if you look at the margin contributions, there was a decline in margins weighted to the worldwide results. It contributed a 120 basis points. International margins had a positive contribution of a 160 basis points, with roughly equal contributions from EMEA and Asia Pacific and corporate costs reduced the margins by about 20 basis points. So if we walk through the segment; first in North America, operating income was up $4 million to $340 million, margins declined when you look at just the North American operations by a 170 basis points from 14% to 12.3%. The margin decline was strongly influenced by the comparatively lower margins in our Care Coordination activities and the fact that these activities have stronger growth when it's compared to our dialysis business. Our…

Great. Thanks, Mike. Thanks, Rice. And I think Patrick, we can now open up the call for questions.

[Operator Instructions] And our first question today comes from the line of Michael Jungling of Morgan Stanley. Please go ahead.

I have three. Please firstly on North America Care Coordination, can you provide some guidance on where the operating margin will go throughout 2015 and perhaps some guidance on 2016? Question two is North America dialysis. Can you comment whether we'll see a bottoming of the EBIT margin in one of the quarters in 2015 or whether we have to wait for 2016 for this? And then thirdly, when it comes to potential acquisitions, can you comment why for instance interventional cardiology would be a logical addition to your Care Coordination business? Thank you.

Michael hi, it's Rice. Bear with us and we'll do this in reverse order. I'll take the third one and I'll get to that now. Mike, I'll let you take one and two. Interventional Cardiology and why in the world did we do this, a couple of things. As you well know Michael that in the U.S. population the dialysis patients on average, not FMC's average, but just on the industry average, about 10 days to 12 days a year hospitalization. What we know is that of that 10 to 12 days, generally around 2.5 of those days are cardiac related; defibrillator, pacemakers, stent, something of that nature. So in our way of thinking, when you look at that opportunity and you're deciding to try to reduce hospitalizations, and you want to do it in holistic ways, you can, being able to do that on the cardiac side in combination with what we already do from what I'll call the pure renal side made some sense to us. Obviously in this business, National Cardiovascular Partners, they do more than just renal patients obviously, but they can certainly take on more renal patients. So we view this is another way of in the vascular space, dealing with a different part of the body yet, but a related part of the body because all of our dialysis patients generally have some [indiscernible] conditions around cardiology in addition to as you know diabetes and things of that nature. And I'll Mike, I'll turn it over to you for one and two.

Thanks, Rice. Michael I think, and you may hear me say this a few times over the course of the call today, because we've given everybody a tremendous amount of new information, which I'm sure you realize doesn't mean I'm going to prognosticate on all of them. But just to make some general remarks, on Care Coordination, broadly in the February call, we talked about the fact that we were going to be investing in the businesses and Rice alluded to them just a few minutes ago. So when you look at that commentary, I talked about the fact that we were going to probably incur something in the order of 10 million in integration cost associated with the Sound Cogent integration, and that we were going to be doubling our investments in the urgent care business, and also in healthcare risk management business or the Fresenius health plan business. So, that's in part what you're seeing in the first quarter and I think that will continue over the course of the year. So I think that that's probably the way to look at the Care Coordination business at this point, investing in 2015 to prepare for a better 2016 in terms of margin performance for that business. In terms of dialysis bottoming out of EBIT margin, I think appreciate the comment, I just think when you look in terms of sequential quarter, I think we'll probably see some stability in the dialysis EBIT margins over the balance of this year.

And question when it comes to Care Coordination, so a low single-digit EBIT margin is probably the right way of think about for 2015, given the investments?

I think so, yes.

Okay. And then when it comes to interventional cardiology, can I assume that the logic that you've applied to the U.S. will also hold true outside the United States?

We see a walk across to that. We would, I think, I need to get little more facile with hospital days in AMEA and the contribution into those hospital days of cardiac event. But we know there is that same relationship Michael, but I probably need to do little more work to give you the exact numbers. But we think there is a walk across there potentially, yes.

Our next question comes from the line of Tom Jones of Berenberg. Please go ahead.

Three questions, but they're all pretty straightforward. The first one; I just wondered if you could give us a bit of an update on the commercial pricing dynamics you're seeing. If I tease the numbers back out, it doesn't look like there was a great deal of improvement in the average commercial price in Q1. We had expected some of the contracts to start feeding through into a little bit of price growth by now. So some color there would be helpful. Second question, just wondered whether you could give us an update on the efficiency program, roughly where you are with that versus the end of last year? And then finally, the provision for bad debt was I think $107 million this quarter. That was quite a bit higher than it's been running at for previous quarters. Is there a specific one-off effect that's pushed that number up, or is this a permanent kind of level we should be thinking about that reflects your new business mix?

It's Rice. Let me take your second question and Mike will do one and three. On the GEP, I think we may have talked about this a little bit in the last call, but we are looking at a sustained savings rate as we exit '15 of $200 million. And we're comfortable that that's achievable. We've obviously got some spending that we're doing in the year, but we think that exit rate makes sense and I think Mike and I both would tell you that we feel like we're on track with our plan as we look out over the next years to come here, '16 as well as '15. And then Mike, I'll turn it over to you on the commercial piece and the bad debt.

Yes, sure. Tom, yes, on the commercial pricing dynamics I think that, two things. One when you look at our U.S. revenue in the investor news you see we're up about $2 per treatment. And that is due what I would call largely to positive pair mix effects, or positive pair effects, which is inclusive of both mix and pricing. So we are seeing some positive effects in commercial pricing in 2015. And on the bad debt, one of the challenges we'll have when you look year-over-year, you've got many, many years of historical perspective with regard to the bad debt for the dialysis business. But now what you're seeing is the combined effect of the business model for the hospital side of the business, principally. So that's accounting for most of the increase year-over-year.

Sure. So would it be fair to think that that $100-plus-million is kind of the right run rate to be thinking of in that business? But it seems like quite a big jump, $40-odd-million spike in bad debt on a business that's only got $430-odd-million of revenue. It's a fairly punchy number.

Yes, I think, when you think about the difference between the two business models, particularly with the changes required by GAAP a few years ago, the only thing that really ultimately ends up in our bad debt expense is a little bit of self-pay in the international business, whereas I think when you look at how the hospital's business is paid, it's more of a traditional relationship in terms of bad debt provisions to revenue of our U.S. healthcare business. In terms of the run rate, I'll say for now, I wouldn't disagree with it, and then as the year progresses, maybe I'll comeback with more specific guidance on that.

And our next question comes from the line of Veronika Dubajova. Please go ahead.

I have three, please, as well. The first one is just thinking about the care coordination business. And Rice, I appreciate the color you gave Michael on why you think you need to own National Cardiovascular Partners. But I think, more conceptually, what I'm wondering about is why you need to be owners of that business, as opposed to partnering with companies like that, whether it comes to urgent care or interventional cardiology. And maybe if you can give us some of your thoughts about why you're the better owner of it and, two, how much more you need to add to those businesses to scale them up to be sufficient for division of the business that you have? And I think I asked about this last quarter, and you said you needed to think about it. So I'm back asking about it again. The second question is just related to the net pharma costs in the U.S. dialysis business. I believe, Mike, you said they were down in the quarter. Is it fair to assume that being driven by the pilot, or is there something else that took place in the quarter? And then also, if you can give us an update on where you are with the Mircera pilot, that would be great.

Okay Veronika, let me try and take one and three, and Mike I'll let you do two. I have thought a little bit more and you don't forget, I appreciate that, from our conversation in first quarter. Here's what I would say. Keeping in mind that we don’t own all of national cardiovascular partners, we did go into this as a joint venture in a minority position whereas the physicians are a majority. But I do think it's important to just take a minute and let me give you some experience from what we’ve learned in vascular access on the renal side. As you build these centers and you want to attract physicians, interventional radiologists, nephrologists, on that side of the business, we’ve learned that high quality physicians, well repudiated makes a huge difference in your ability to get practicing physicians to send their patients to our centers. And wanting to improve the cardiovascular care for our patients and trying to do this as a de novo, I think would have been very difficult. We didn’t believe we had the ability attract the quality of cardiac folks that we needed. So we thought this was a way to step into and get started. Could we have done it more arm's length? Could we have done something different? Perhaps. But when we've got the experience that we’ve seen over the years of how when we control the vertical integrated parameters of the business, we just see outcomes much, much better than if we're totally depended on a partner, that we don’t necessarily always see eye to eye with. So we just felt like it was a better place for us to take a bigger step into this, than you perhaps look at something more transactional or arm's length away if you will, when you look at integration cardiology. Moving to your third question presentation the serum [ph], what I would say is we are somewhere around 7,000 patients with multiple doses of the drug and we are very pleased with the results of that. We’ve seen very little to any adverse event profile. Physicians are happy, the logistics of dosing the drug look good. So I would tell you we are just continuing to roll down the pilot path, and as you guys know, I learned and began to get lot more focused on multiple patients with -- or patients with multiple doses is a better way to really flush out the real story clinically. And so at this point with that type of performance, we feel very good about where we are at this stage and time with the pilot. And Mike, I’ll turn it over to you on the pharma cost.

Yes, I think you're correct, I just indicated when we went through dialysis business that not surprisingly it's a function of labor costs, pharmaceuticals and some of the other cost elements of the business. But those are typically two that I comment on almost every quarter. And it is net pharma costs. So you're looking at both price and utilization in terms of that benefit.

And if I can just follow up quickly, Mike with on, do you have any guidance for the net financial line item for the full year? Just because I think we were all surprised how low that came in, in Q1. Or at least I was?

Yes, Veronika, my advice in February was to just always look at the net effect because you have the book keeping effect associated with the equity neutral convertible bond in there. So we’ve got to separately price out the derivative and the call option. So I would continue to opine my guidance and you’ll see modest increases associated with money raising that we did last year and that will start to narrow when you get into Q3 and Q4 where we did most of our activity in the financial markets. But if you look at net interest expense, I think that gives you the best notion of what a run rate should be for our interest cost.

And our next question comes from the line of Ian Douglas-Pennant of UBS. Please go ahead.

Just on that note, of the patient encounters there, or the cost under management, Medicare Advantage management that you talk about, what proportion of those patients roughly, are also having dialysis in one of your clinics? I'm just trying to work out what the overlap is there between the acquired business and your traditional one? And a quick follow-up on Mircera. Given your positive comments just then, would you consider rolling it out more aggressively, more widespread across your clinics now now than you have previously, and how quickly could you do that? Thank you.

It's Rice, I’ll take those. I would tell you that percent of dialysis patients that are in those metrics, I would say probably very little. At this point in time as we told you guys, we’ve got work to do to see how we cross those barriers if you will or bring those patients in to some of those encounter. So at this point I would just say we think there is very little there at this point in time. That should change as we go through time. But right now that’s not the direct focus that we have at this point in time in Care Coordination, as we’re still trying to integrate and do a few other things. On the Mircera pilot, I don’t control that. If it were me I'd probably give you a different answer, but when I talk to Frank Maddux, our Chief Medical Officer, and I talk with folks from the Medical Advisory Board, they are pretty comfortable. I think we believe this was going to go well. So there is a path and pace that they want to go through. And I think rather than give you a lot of detail on that, I would just simply tell you the more data we get, the better it goes, the faster we probably can go, but I'm going to let them figure out exactly what their pace is because obviously I don’t want to overload what they're willing to do. But let just say right now, all the news is good news and we'll continue on with that, and we'll stick with the discipline or medical office driving the path and the space of that.

Okay. Just quick follow up on the first question, the overlap. What could that be? What's your kind of target? Are we talking maybe if you get a 10% overlap or that's way too low or way too high or?

Well, what I would say is, if you look at those businesses, there are several different pieces of that. I think the overlap could perhaps be higher in some places than other. Interventional cardiology probably has a chance for a higher overlap given we know the percentage of those patients and their hospital days that are attributed to cardiac issues. I'm not going to speculate on that though. That's something clearly we can talk about as go through time. Let me not guess as to what the rest of those aspects would be because I think I'd probably guess well.

And our next question comes from the line of Gunnar Romer of Deutsche Bank. Please go ahead.

First one would be with regard to organic growth and your Care Coordination business. You've reported very strong 39% in the first quarter. I was just wondering whether you can remind us of where the organic growth has been in 2014 and where you see it for 2015 as a whole and possibly also into 2016 and further to that obviously how this relates to the acceleration of growth you're basically implying with your guidance for '16. And second question would be with regard to your international margin, which has obviously seen quite a pick up against a relatively easy com -- I was just wondering whether you can provide any color of where the margin is expected to go in the coming quarters, and how we should think about the margins here going forward?

The organic growth care coordination, I guess I'm going to respond to that in two ways. One I think, Rice was appropriately cautionary because he didn't want folks to use that figure and put it into the modeling assuming that that was in perpetuity. And the reason for that obviously is that the historical Care Coordination, when you think in terms of 2014, we typically put in organic growth businesses in the calendar year following the year that they annualize. So the only thing you have in the organic Care Coordination growth is the pharmacy, the vascular access business and the specialty lab shield in Europe, because that was closed in the fourth quarter of 2013. So it's those three businesses, not to be confused with the expended franchise we have based on the activity in the back half of last year, which would be -- these would not be in the organic growth rate. That would be the urgent care business, the Sound and Cogent business, the National Cardiovascular Partner business. The legacy growth in care coordination, I should say also included the healthcare risk management activities, the Fresenius health plan. So 39 is not number I would use in terms of a go forward model. For '15 and '16, what we had said in February, and I think I'm going to stick with that at this point is we gave an indication that the business excluding care coordination on a global basis would grow 3% to 5% in both '15 and '16. And that the balance of that, when you look at the outlook and the projection we've provided in February would be attributable to Care Coordination. It's probably a better way to do it, simply because you have so many moving parts in the Care Coordination business. On the international margins, I know, I responded to the margin with regard to North America. I'm not inclined because we're doing with much smaller businesses in comparison to North America and several of them. So not sure I'm really going to be inclined to provide much other than to say, maybe just repeat the comment that we do have to think in terms of the currency effects but I think the underline margins in the core business, if you're looking at international in total should be fairly stable. There may be some volatility amongst the individual segments we're now reporting, but I think the totals would be fairly stable.

And maybe if I can just have one follow up again on the Care Coordination. I think you pointed to 1.7 billion revenues in 2015. Is that number -- you should go to that number already simply based on first time consolidation benefit. So if you're seeing some organic growth, and I appreciate that the mix is changing over the coming quarters as the basis and for which is to use organic growth, it's different as we go along in 2015, but nonetheless wouldn't that mean, if you show organic growth in that business, that should come on top of the 1.7 billion?

The way I would answer that Gunnar is, Rice did indicate $1.7 billion, but I would say because again with the moving parts to this business and the extent of our activities last year, the way I'd look at it is, if I look at Q1 versus Q4 in terms of sequential growth of Care Coordination, that level of growth is too high to project for the balance of 2015. I think that, because that would get you into that range, could be that Rice might have been a little conservative in his $1.7 billion estimate, but I think the base business in Care Coordination should grow over the course of '15, but the higher -- and in fact, when you look at our forecast for '15, the growth year-over-year is largely as a consequence of the annualization of the base businesses. And then when you see the acceleration of growth in '16, given the metrics I just gave a few minutes ago, then you're seeing a substantially higher growth in Care Coordination and that's largely going to be driven by the BPCI program, the ESCO program and the healthcare risk management activities that we are investing, in '15 in order to deliver the higher revenue growth in '16.

Yes, Gunnar, it's Rice. I think Mike's right. And part of my conservative nature on the $1.7 billion was we were beginning to already hear that BPCI was going to be delayed. The ESCO's have slipped some too. So I'll take the comment, I was being conservative. But part of it was we knew some of these businesses did not look like they were going to hit the ground at the timing we had. In fact it turned out to be the case.

That was a complimentary.

Our next question comes from the line of Richard Vilachowski of AB Bernstein. Please go ahead.

Just two questions. You just touched on the ESCO program there. Maybe if you could give us a bit more color around how that's looking? And also maybe if there's any move towards integrated care with any if the Medicare Advantage plans? And then a second question, maybe a bit more open ended. We've seen some stuff about the potential for dialysis clinics to treat patients with acute kidney injury. Is that a big market opportunity? Do you think that's something that you'll get into? And how big could that be? It is relative to the ASRD market at the moment? Thanks.

It's Rice. So what I can say on progress with the ESCO program is that we are still optimistic. We hope that this will kick off in July. At this point we are awaiting -- not just we Fresenius, but I think the industry, we're waiting to get some more information, we're looking for some claims data that we need from the government and then we're looking for couple other things that we need relative to waivers or details of the programs, what will be allowable or not and we're expecting that to come here sometime very shortly in order for us to make a June-July kickoff of the program. And then relative to the acute kidney injury program, I would say that generally we believe that to be fairly small. The preponderance of that work these days is done in the hospital but we certainly will be equipped to do that in the clinic, but it's not something that's large enough on a global basis or in the big well developed countries at this point, Germany or the U.S., that we've seen a lot of that, but we know we would keep our ear to the ground and we certainly would be capable of doing it, but it's not a strategy or a tactic, if you will, through the course of this year that we think is going to come to fruition.

Okay. And then you move from signing something similar, as you did with Aetna, with anyone else, in integrated care?

I would tell you that we are looking and exploring opportunities but probably not at the right juncture for me to say anything at this point about what that might be.

The next question comes from the line of Gary Lieberman of Wells Fargo. Please go ahead.

So just going back to the comment on the pharmaceutical cost and the data on Mircera use; is the decrease in the pharma cost due to the lower cost associated with Mircera? Or is there something else going on?

Gary, I would say it's all the pharmaceuticals we use in the business in North America.

Okay. And then have you seen any price competition from the company with the largest market share in the ESA market?

I think we'd say steady as it goes. I think Mike is right. We had committed you guys some time ago that we were going to continue to look at opportunities on other drugs. IV is not just equal and we've done that. The dose is pretty well managed. I think we're just making good progress at this point, Gary. I don't want to get too much into one ESA versus the others if I can at this juncture.

Okay. And is there an official launch from Mircera? Or is it still a pilot project?

Well for us, we're still on a pilot base. So that's how we're continuing to go forward. The second part of that is if there is an upcoming launch with Roche, or what their process is going to be, I can't answer that, but for us, at this point in time, we're still approaching this as a pilot, that can and will expand.

Okay. So if there were an official launch, would you be able to accelerate your rollout, or it doesn't have any bearing on how quickly you guys can move towards Mircera?

Yes, I would say that, launch plans are immaterial to us. As long as long medical advisory board and our guys feel good about it, and the logistics are looking good, we can work at the pace we want to work toward. I think that’s the way I would say that.

And maybe just finally, you mentioned the ESCO. Can you make some comments on the BPCI and sort of where is that? Is that on track for where you'd expect it to be? And are you still planning to participate in the same way?

Yes, what I would tell you is we do plan to participate. As you well know, it's been pushed out, I think until April. But we’re doing to work we need to do. We’re making progress on how we’re going to go there, but we’ll be live as it on course.

There are some further registers, yes, there is some further questions. Then our next question comes from the line of Frank Morgan of RBC Capital Markets. Please go ahead.

On that subject, I was hoping you could tell me which of the particular BPCI programs you're participating in, and which of the timeframes have you chosen, the 30, 60 or 90 day participations?

Sure Frank, let me turn that over to Mike. He’s probably got a better graph for those details than I do, but -- sure we can do that.

Yes, I think that because it is a program that has multiple dates of which you can sign up for various thesis, I would say that we’re looking at model two and model three, and I would think that our choices would most likely be weighted more towards model two initially. And second part of your question, I've lost.

Yes, just the 30, 60 or 90 day, I know there's different…

Its 90 days.

And then also, could you tell us what particular DRGs and what would be the aggregate kind of value of those DRGs in which you would participate?

Well, I would say I know that there is material circulating in terms of folks looking at this and I think many of them are describing this is a program that’s just beginning to get airborne. So I think not only for Fresenius, but I think most of the participants are starting out exactly what they want to do where. We feel that [indiscernible] particularly post the acquisition of Cogent is well positioned to participate in this program in a very thoughtful and broad way relative to the 48 bundles that are available and multiple locations that they could choose to participate in. But that’s probably as far as I could go today in terms of any additional -- going into any additional detail beyond that.

And just to clarify, are you a convener, or are you using another person for your convener?

We have -- it's on the CMS website. We have several folks we’re working with in terms of convener. So we’re not acting as our own convener in the program.

Our next question comes from the line of Ed Ridley-Day of Bank of America/Merrill Lynch. Please go ahead.

I just have a couple of additional questions. Going back to Care Coordination and particularly cardiology, I'm going to turn it around. Given the profitability and the long-term growth of that market, why is it not in your interest actually to try and buy out your minorities and to adopt a more fully controlled model?

It's Rice. Let me say that that certainly could be a possibility. We started one-way, what to say the way we will also be end up, but obviously it's a partnership there. So I don’t want to stir up the water if you will. I would say we’re open to that, but we’re very happy with the folks we’re working with and I’ll leave it at that.

Fair enough. And internationally, and just related to an FX question, but I'll ask them together; clearly, you have benefit in the second half from the major acquisition you made in the middle of last year in Asia. That market is highly profitable. Just going back to an earlier question on the Asian margin development which you, Mike, have very kindly given us, surely there is a mix benefit in that margin, and can you detail what that is relative to the FX benefit?

I would not be tempted to -- I am not that nice, largely because when you look at our business big picture as we’ve said for many, many years, the guidance we provide largely indicates that changes in the major currency pairs tend to offset as you work through the P&L, just given the footprint we have globally. So I think that’s the right view when you look at the Company overall and I think if we try to get more granular, particularly on FX around the world, it would not be helpful to you and sorting out expectations for the business on FX, because we largely mitigate as we drop through.

Okay, no, understood. But also I think it's worth saying, thanks very much for the extra clarity. I think it is very helpful for everyone and please don't take any of it away again.

(Operator Instructions) Okay. It seem like there are no further questions from the phone line gentlemen.

Great. Thank you so much Patrick. So we appreciate actually your participations, your questions and your interest. Thank you so much, talk to you soon.