Ladies and gentlemen, thank you for standing by. My name is Jasmine, your Chorus Call operator. Welcome, and thank you for joining the Fresenius Medical Care Earnings Call on the Second Quarter 2017. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. I would now like to turn the conference over to Dominik Heger, Head of Investor Relations. Please go ahead, sir. Dominik Heger - Fresenius Medical Care AG & Co. KGaA: Thank you, Jasmine. We would like to welcome all of you to the Fresenius Medical earnings call for the second quarter 2017. I will start out the call by mentioning our cautionary language that is in our Safe Harbor statement as well as in our presentation and in all the materials that we have distributed earlier today. For further details concerning risks and uncertainties, please refer to these documents as well as to our SEC filings. For organizational reasons, this call is limited in time as we actually need to leave for the airport to see many of you in London tomorrow. Given the time restrictions, we kindly ask you to limit your questions to two questions without any sub-questions. We will answer only the first two questions, this way we would like to ensure that all of you have a fair chance to ask at least those two questions. We trust that you understand this. With us today is Rice Powell, our CEO and Chairman of the Management Board. Rice will give you a general business update and go through some of the highlights of the quarter. Also with us is Mike Brosnan, our Chief Financial Officer, who will give you an update on the financials and the outlook. I'll now handover to Rice. The…

Thank you. The first question comes from the line of Veronika Dubajova of Goldman Sachs.

Good afternoon, gentlemen, and thank you for taking my question. They are both about North America. The first one is on the revenue per treatment development. Obviously, there was quite a substantial sequential decline in the revenue per treatment from Q1 to Q2. And I was wondering, Rice, Mike, if you can give us a little bit of insight into what proportion of that was driven by mix? What proportion was driven by some of the new commercial contract rolling into the base? And third, was there anything else that happened here? And my second question is on Care Coordination. Mike, if I look at your guidance, assuming it still holds that the margin will be better in – slightly better in 2017 than 2016, it does imply that you'd have to deliver about €60 million of EBIT for Care Coordination in the second half of the year versus the €8 million that you delivered in the first half. Can you give us a bridge as to how you're going to get there and maybe talk about what some of the tailwinds will be for the second half? Thank you. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Sure, Veronika. In terms of revenue per treatment, just to highlight a couple of things. As Rice indicated, we're off about $1 year-over-year and the same is true of cost per treatment. And at that level, this literally is a rounding issue. So, we calculate this to the penny and we report in dollars. So, literally, both of these are essentially flat year-over-year just as a starting point for the discussion. In terms of detailing out the revenue rate per treatment, I'd say a couple things, Veronika. First, we had a lot of discussion last quarter about the fact that…

Fantastic. Thank you very much. Rice Powell - Fresenius Medical Care AG & Co. KGaA: You bet.

Next question comes from the line of Tom Jones of Berenberg. Please go ahead. Tom M. Jones - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Good afternoon. Thanks for taking my two questions. One is just on the vascular business. I just wonder whether you could give us an update on how you're thinking about that business. Things looked pretty bleak at the start of the year, although you put some measures in place. But then we've subsequently seen the rate proposals for the rate under your new structure and they touched off a little bit better than we might have expected. So, some commentary around how that restructuring is progressing and how you see the outlook there will be helpful. And then just pick up on a comment in the release. I wondered if you can give us a more detail on what you mean by consent agreement on pharma? Some color there would be useful too. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Okay, Tom, I'll take those. Thank you. So, yes, on the vascular side, I'd do it this way. From the conversion strategy going from (31:24) to the ASCs, we think we'll have about 40% of those facilities done at the end of 2017, and then we should be probably another 35% done at end of 2018. So we're kind of three-quarters of the way there. The remaining facilities are in some states or all of these are in states we have to get approvals in, but a couple states are a little harder, a little slower than others, but let's leave it at roughly 75% of what we want to see converted should be done by end of next year. It will progress as we go through this year. Now, let…

Next question comes from the line of Ian Douglas-Pennant of UBS. Please go ahead.

Yeah. Thanks. Thanks for taking my question. I've just got a follow-up on Tom's answer just then on this consent agreement in pharma. If it's related to the JV, is that also related to the increase in income from equity methods, investments this quarter? So, can we assume that it's something of the order of €7 million or €8 million of income from that? Or am I just completely off in the way that I'm thinking about that? Rice Powell - Fresenius Medical Care AG & Co. KGaA: No, no, go ahead, Mike. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Yeah, Ian. Just to elaborate on what Rice said, it is related to JV activity but it is – the agreements were actually between Vifor and the parent company KGaA. So, when you're looking at equity income or income from equity method investees, it is not included in that growth. So, what I would tell you is when you're looking at the growth and I would specifically say if you look at the half year for equity method from investees, that's probably a good run rate to think of the back half of fiscal 2017. But it is not in that equity method of investee's figure.

Okay. So, what I'm really trying to get at is trying to gauge the rough size of it and the impact on the Dialysis margins in the quarter. I mean, can I assume that it's negligible, and you're just mentioning it for completion? Or is it – are we looking €5 million, €10 million there? Rice Powell - Fresenius Medical Care AG & Co. KGaA: Ian, just put it this way, it wasn't a core buster or maker, if you will. It's not huge, if that helps. I'm not going to tie you down to dollar amounts but it's not a big thing.

Okay. Fine. And then my other question, if that's okay, is the bad debt expense in Care Coordination. Again, I'm assuming that's a lot smaller than it was last quarter. Should we expect further bad debt expenses in the second half of this year or have you fixed that debt issue? I didn't notice a footnote still on the release. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Yes. No. I commented on Q1 as well. That's really a consequence of the fact that we did some acquisitions and started moving into the emergency medicine space at Sound. And the patient profile, the census is very different in the emergency room than it is in terms of patient admits for the general population. So, you tend to have a higher bad debt expense. So, you'll see that – until our acquisitions annualize out, you'll see an increase in Q3 and Q4 and then maybe by Q4, it will start to flatten out in terms of the year-over-year comparison. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Yeah, I mean, as you know, Ian, they're not going turn this people away, so it's a little bit – they come in, they get treated and we find out in the ER side of this, but we're not going to be able to collect it. The other issues on bad debt that we talked about some time ago (36:00), that's been cleared up.

Okay. Great. You should look and see whether you can write it off as a charitable donation in the community. Thank you. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Nice for an answer, not a question. Thank you.

Next question comes from the line of Patrick Wood of Citi. Please go ahead.

Hi, there. Thank you for taking my questions, everyone. The first one is probably a dumb question, and apologies if you've already covered it, but the EMEA margin change year-on-year on Q2. Could you give us a sort of sense of how much of that structurally was the FX side versus reimbursement and things like that half? The only reason I'm asking is because for the sort 300-ish that's delta, that seems quite a large amount for a margin change based on FX. And equally, would you expect that to come back a little bit at the back end of the year? That would be helpful. And the second one would be, just if you guys have any comments on the bipartisan letter that was sent through covering the CPA side of things? And whether you think that that's giving a direction in terms of politically where things are going on charitable premium assistance, so whether we shouldn't read too much into that? Rice Powell - Fresenius Medical Care AG & Co. KGaA: Sure, Patrick. Let me just answer one piece of your number one and we'll to let Mike answer the EMEA margin change in more detail. But we did see some reimbursement pressure on the service side of the business in EMEA. And that was we had some reductions in France, Poland, and UK. And you go ahead, Mike, on... Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Yeah. No. Absolutely. Yeah. But the big effects, as I indicated, were the transaction losses in the investments in cardio. And I'd say I look at it as two-thirds, one-third between those two in terms of margin. And what I'd say about currency is when you're looking at EMEA, you're looking at a business that incorporates about 40 countries. So, if you will, the complexity of that region is quite different than some of the other regions relative to the revenue and earnings. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Yeah. And Patrick, we're happy to see the bipartisan letter on charitable premium assistance. We felt good about that. We think it actually has some impact. Where we are, just quickly, we're still on a holding pattern of things as they were. We agreed with the government that they weren't going to do anything to try to upset the injunction. They've said that they want to do some rulemaking in the fall and so we are meeting with folks, talking with people, offering our thoughts on how this goes forward, et cetera. So, we're working DC monthly, weekly, and we're still just carrying forward. I'd say there's no big change right now but rest assured, we're working it, going through it. But we haven't seen any real change in direction one way or the other at this point.

Okay. Great to hear. Thanks for the answers, guys. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Sure.

Next question comes from the line of Lisa Clive of Bernstein. Please go ahead.

Hi. Good afternoon. First question on your products growth in the U.S., so you did mention through deferral of machine sales. I just want to check on that. Baxter had some pretty good growth in the quarter. Do you think you potentially lost any market share on the machine side of the business? I know you guys have like 90-plus-percent share. So, I'm just wondering if Baxter is maybe trying to make a bit of a push into that market. Second question, you mentioned in the prepared statements this morning, acquisition activity, I believe it was in China or was that Asia-Pacific more broadly. If you could just give us an update on what your thoughts are. And I know China is potentially a very interesting market but reimbursement is not quite there yet, so any update on that would be great. And then lastly, on the California bill that's sort of still hanging out there. If it does pass, and you do have much more strenuous staff ratios which I know you deal with in several other states so this is nothing new. But what in particular could you do to mitigate? Is there a straightforward way of shifting more patients to home dialysis? Would you keep centers open longer? Just trying to understand what are the sort of ways that you can mitigate something that could potentially increase your cost structure a bit in that state. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Sure. Lisa, so a couple of things. On the product side, it's not machines with Baxter. I can tell you exactly they took some dialyzer accounts. We haven't really seen anybody take machine share from us. And so, there are some dialyzer accounts out there that we swap from time to time and they took one back, but that's what it was and that one. Let me answer number three, because that's – we're all perplexed. We didn't make any acquisitions in Asia-Pacific beyond the Cura deal which was April last year...

Okay. Rice Powell - Fresenius Medical Care AG & Co. KGaA: ...unless it's just been some clinics or things like that, very small. So, maybe we misspoke or whatever but it's just been small stuff that wouldn't hit the radar screen. The California bill, so it is in committee at this point in time. Obviously, if it were to go through, the biggest issue that we see, because it has been redrafted and they took out some of the penalties and things that were in there that I complained bitterly about in the fourth quarter. What's still in there is they're asking for a 45-minute break for the staff after a dialysis treatment. And the issue for us is that, that's going to impede care mainly because our shift structure of a Monday, Wednesday, Friday, let's say, Tuesday, Thursday, Saturday, two shifts a day, if we have to implement that 45-minute break, we're going to end up having to stop those shifts and we can't get them back. So, it really is going to be a negative impact on capacity in what we do. So, we are talking to lots of folks about that and just making sure they understand the ins and outs of this proposal that sits in committee today. Now, in the big scheme of things, what could you do? Sure, you could look at more patients moving at home and how you would do that? You would have to look at do you have marginal clinics, are you going to keep them, what's going to happen. So, we're looking at both. We're a lot more focused on trying to educate legislators. We're getting good support from patients, we're getting support from some of our staff and physicians that guys, we can't just go in and start cutting off shifts and expect it's going to get better, in fact, it's going to get worse. So, stay tuned on that, Lisa. We're going to see where it goes. But we're working that from a fact base and a data base, if you will.

Thanks so much. Rice Powell - Fresenius Medical Care AG & Co. KGaA: You bet.

The next question comes from the line of Michael Jüngling of Morgan Stanley. Please go ahead. Michael K. Jüngling - Morgan Stanley & Co. International Plc: Yes, hi and thanks for taking my call, my questions. Firstly, on Care Coordination, when do you think you'll have a firmer grip on the doubtful debts? I think a discussion at CMD just recently indicated that the worst was behind us. Is that still the correct assumption? And question number two is on the 2017 net income growth guidance. Given the change in FX and also the transactional margin exposure, what does your constant currency growth mean for reported growth in 2017? Thank you. Rice Powell - Fresenius Medical Care AG & Co. KGaA: So, Michael, this will be strange. I'm going to take the first one because Mike has covered this a number of times. So, the doubtful debts we're talking about in Care Coordination, this is some acquisitions that were made in the Sound book of business in emergency medicine. And so, some of them were done late last year and some of them were done early this year. So we've got to cycle through that to see where we get to a natural level. But the rest of the bad debt in that book of business is stable and we're kind of through that. So, we're going to need a couple more quarters, I think, to average that out, if you will, or see where it's going to go. Mike, I'll turn over the net income guidance to you. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Yeah, Michael, I have to admit, I'm not quite sure I followed your question. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Yeah, could you re-ask that please, number…

The next question comes from the line of Ines Silva of Bank of America. Please go ahead.

Hi. Good afternoon, and thank you for taking my question. I essentially have one left. On the costing, the dialysis in North America, the cost per treatment, the inflation was still below around 1%. So, my question is were there things that sort of offset the wage inflation? And should we expect the wage inflation to – the negative impact to annualize in the third quarter of 2017? Rice Powell - Fresenius Medical Care AG & Co. KGaA: Yes, Ines. It's Rice. So, we think the wage inflation is fairly stable. Unfortunately, we don't think it's going to wane, but where we're getting traction, and we talked about this a little bit last quarter, is the things that we're trying to countermeasure that with. So, first thing is we've actually purchased fairly rigorous scheduling software and we're using it in the clinics and it's really helping us to be a lot more efficient in how we schedule things. We're learning that we spent too much time doing some jobs, if you will, or activities we shouldn't have. And so, we're able to do this in a more effective or efficient way, if you will. That was one. Secondly, we've gotten down, we've cut our temp labor because that's always inefficient and expensive. So that has helped us. And thirdly, we've realized that where we are hiring, if we can hire experienced staff versus bringing new staff in that requires more training and that we spend a lot more time with training and have to refresh, it does make a difference. So, you may pay a little more for an experienced person coming in but then you don't spend nearly the amount of money on training. So, those are some of the things that we are working on. It's going to continue to be work in the coming quarters but we hope that we can keep making enough progress that we can have some impact or some leverage against the inflation that's out there.

Thank you very much. So, just to confirm, you don't think the negative impact you've been seeing from this wage inflation will decrease in the second half because you started seeing it last year? Rice Powell - Fresenius Medical Care AG & Co. KGaA: Yes. I think it's going to be there, particularly as I am saying is we're hiring more experienced people, we're going to have to work hard to avoid that inflation creeping up. But I don't think we're going to see it really tail off in a big way in the back half of this year.

Very clear. Thank you very much. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Michael, coming back to you, and I'll give you an indication, I guess, I wouldn't call it a guidance. But as we look at an indication for current currency earnings growth and, specifically, if I look at the rates that were prevailing at the end of the second quarter, I would say current currency probably would be in the 8% to 10% range. Rice Powell - Fresenius Medical Care AG & Co. KGaA: That's helpful.

So, the next question comes from the line of Ed Ridley of Redburn. Please go ahead. Ed Ridley-Day - Redburn (Europe) Ltd.: Hi. Good afternoon. Firstly, on the U.S., Rice, you kindly updated us both at the Capital Markets Day and earlier results this year on how many of the private counterparts you renegotiated with. Is it still three of the majors? Or have you concluded any further agreements? That would be my first question. Just a follow-up on the European reimbursement, just so my understanding is clear. Mike, it still seems that you're saying that basically the bulk of the margin effect was transactional effects in Xenios. Is that correct? Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Yes. Maybe if I take the second question first, Ed. Yes, the way I described the margin effect, I said it's essentially transaction losses and the investment we're making in Xenios. And beyond that, the margins were flat. As always, in every region, we've got pluses and minuses relative to the margin. So, in effect, when you talk about that reimbursement pressure that Rice mentioned, we just mitigated that by managing the rest of the P&L in Europe. Rice Powell - Fresenius Medical Care AG & Co. KGaA: On the payer side, as I said at the Capital Markets Day, Ed, so the three big ones are done. So, we've got some smaller ones that we'll probably end up getting done over the course of the back half of the year. Generally most of them get done fourth quarter, but some will be a little bit earlier than that. But the big ones are done, as I'd indicated in the Capital Markets Day. Ed Ridley-Day - Redburn (Europe) Ltd.: And to be – if you want to answer this, but in terms of the second quarter, did we see the full quarterly impact from those three or not? Rice Powell - Fresenius Medical Care AG & Co. KGaA: I don't think I'm going to answer that one for you. It gets a little ticklish for me if we do. So, let's just leave it at that. Ed Ridley-Day - Redburn (Europe) Ltd.: Fair enough. Thanks. Rice Powell - Fresenius Medical Care AG & Co. KGaA: You're welcome.

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

Gunnar Romer, Deutsche Bank. Thanks for taking my questions. The first one on Care Coordination international, if you can just briefly update us on the integration of Cura? And also I think you are now recognizing some smaller activities in other countries. Just out of curiosity what that is and whether you're pushing those for more growth going forward. And then second question would be on the pharmacy business. Maybe you can just update us on where you stand here given the pressures you're seeing, how you're working through that, and what we should expect for the second half. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Okay. So, Gunnar, in the Care Coordination international, the Cura integration is working well. We're pretty much on track with where we thought we would be. I don't really know how to give you anything closer, maybe a better way to say this is we've got an integration think team of Cura management and our management in Australia, and they're working and meeting monthly, all the blocking and tackling you do for an integration. And at this point, we're hearing all of that is going smoothly. So, no issues. Now, the other pieces of Care Coordination and I'm going to look at Mike, but I think I got this right. We have a little bit in Taiwan, it's a vascular access business and then we've got some in a couple of the other countries but it's really no more than like three countries they were in. So, it's not a real big contributor here. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Yes. Three or four countries, but consistent with what I've said about our activities in Asia, we're not going to go to the country level detail because we, frankly, don't want to signal to other folks interested in where we to go next where we already are. But it's a number of countries in Asia where we've had some legacy Care Coordination activities. Rice Powell - Fresenius Medical Care AG & Co. KGaA: And then on the pharmacy side, I'd say there's two things we continue to push back on what we call these direct and indirect fees that we're getting from the pharmacy benefit managers. And that's really kind of a door-to-door fight, but that has had some impact. I think as we've mentioned that previously. And I think everybody, if you've watched, you've seen that one of our branded drugs, sevelamer, there's a generic coming out and that's going to have impact on us as well, but those are mainly the things that we're looking at.

Okay. Thanks. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Sure.

The next question comes from the line of Oliver Metzger, Commerzbank. Please go ahead.

Yes. Hi. Thanks a lot for taking my questions. The first one is on the product business. You gave already some explanation so it's definitely a nice acceleration of first half to the previous year. So, would you describe a good performance rather as medical care specific, or do you see, in general, more accelerating market environment? And to my second question, very simple definition, so the European non-dialysis product are mainly Xenios, is this correct? Rice Powell - Fresenius Medical Care AG & Co. KGaA: Yeah, Oliver. So, the non-healthcare products, that is XENIOS, that's correct. And I think we've talked about this previously. That's membrane oxygenation. Predominantly, we see that in the cardiac space as well as it's becoming more prevalent in chronic obstructive pulmonary disorder or COPD. But that's what that is. If I understand your question correctly, your first question, what I would say is acceleration that we're seeing in the growth, I think it's more – it's good products but we are seeing markets pick up, meaning that tenders that we won, they're now calling for products to be shipped and we're just getting into all of the spaces that we want to be in, if you will, selling our products. So, I don't think it's any one thing in particular, but I do think we're seeing some of the problem spots from tenders in EMEA and things like that. Russia wasn't tender-related but they just didn't buy much in the first quarter. We're seeing those things pick up. So, I would say it's a combination of what we're doing and what the markets are demanding.

Okay. Great. Thank you. Rice Powell - Fresenius Medical Care AG & Co. KGaA: Sure. Dominik Heger - Fresenius Medical Care AG & Co. KGaA: So, thank you, everyone, for taking part in the call and for speaking with us. And we thank you for the discipline with the two questions. That was good. And we'll say goodbye. Rice Powell - Fresenius Medical Care AG & Co. KGaA: All right, thank you. Thank you very much. Michael Brosnan - Fresenius Medical Care AG & Co. KGaA: Take care. Bye-bye.

Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.