search results for 
Logo

33. Notes on the consolidated segment reporting

GENERAL

The consolidated segment reporting tables shown here are an integral part of the notes.

The Fresenius Group has identified the business segments Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed, which corresponds to the internal organizational and reporting structures (Management Approach) at December 31, 2011.

The key data disclosed in conjunction with the consolidated segment reporting correspond to the key data of the internal reporting system of the Fresenius Group. Internal and external reporting and accounting correspond to each other; the same key data and definitions are used.

Sales and proceeds between the segments are indicative of the actual sales and proceeds agreed with third parties. Administrative services are billed in accordance with service level agreements.

The business segments were identified in accordance with FASB ASC Topic 280, Segment Reporting, which defines the segment reporting requirements in the annual financial statements and interim reports with regard to the operating business, product and service businesses and regions. The business segments of the Fresenius Group are as follows:

  • Fresenius Medical Care
  • Fresenius Kabi
  • Fresenius Helios
  • Fresenius Vamed
  • Corporate/Other

The segment Corporate/Other mainly comprises the holding functions of Fresenius SE & Co. KGaA as well as Fresenius Netcare GmbH, which provides services in the field of information technology and Fresenius Biotech, which does not fulfill the characteristics of a reportable segment. In addition, the segment Corporate/Other includes intersegment consolidation adjustments as well as special items in connection with the fair value measurement of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

Details on the business segments are shown here.

Segment reporting by region takes account of geographical factors and the similarity of markets in terms of opportunities and risks. The allocation to a particular region is based on the domicile of the customers.

NOTES ON THE BUSINESS SEGMENTS

The key figures used by the Management Board to assess segment performance, have been selected in such a way that they include all items of income and expenses which fall under the area of responsibility of the business segments. The Management Board is convinced that the most suitable performance indicator is the operating income (EBIT). The Management Board believes that, in addition to the operating income, the figure for earnings before interest, taxes and depreciation/amortization (EBITDA) can also help investors to assess the ability of the Fresenius Group to generate cash flows and to meet its financial obligations. The EBITDA figure is also the basis for assessing Fresenius Group’s compliance with the terms of its credit agreements (e. g. the Fresenius Medical Care 2006 Senior Credit Agreement or the 2008 Senior Credit Agreement).

Depreciation and amortization is presented for property, plant and equipment, intangible assets with definite useful lives of the respective business segment.

Net interest comprises interest expenses and interest income.

Net income attributable to Fresenius SE & Co. KGaA is defined as earnings after income taxes and noncontrolling interest.

The operating cash flow is the cash provided by/used in operating activities.

The cash flow before acquisitions and dividends is the operating cash flow less net capital expenditure.

Debt comprises bank loans, senior notes, capital lease obligations, liabilities relating to outstanding acquisitions as well as intercompany liabilities. Until their maturity in 2011, trust preferred securities were also included in debt. The Mandatory Exchangeable Bonds and the Contingent Value Rights were not categorized as debt (see note 31, Supplementary information on capital management).

Capital expenditure mainly includes additions to property, plant and equipment.

Acquisitions refer to the purchase of shares in legally-independent companies and the acquisition of business divisions and intangible assets (e. g. licenses). The key figures shown with regard to acquisitions present the contractual purchase prices comprising amounts paid in cash (less cash acquired), debts assumed and the issuance of shares, whereas for the purposes of the statement of cash flows, only cash purchase price components less acquired cash and cash equivalents are reported.

The EBITDA margin is calculated as a ratio of EBITDA to sales.

The EBIT margin is calculated as a ratio of EBIT to sales.

The return on operating assets (ROOA) is defined as the ratio of EBIT to average operating assets. Operating assets are defined as total assets less deferred tax assets, trade accounts payable and advance payments from customers as well as guaranteed subsidies.

In addition, the key indicators “Depreciation and amortization in % of sales” and “Operating cash flow in % of sales” are also disclosed.

RECONCILIATION OF KEY FIGURES TO CONSOLIDATED EARNINGS


€ in millions 2011 2010
Total EBIT of reporting segments 2,608 2,464
General corporate expenses Corporate/Other (EBIT) -45 -46
Group EBIT 2,563 2,418
Interest expenses -587 -596
Interest income 56 30
Other financial result -100 -66
Income before income taxes 1,932 1,786

€ in millions 2011 2010
Total EBIT of reporting segments 2,608 2,464
General corporate expenses Corporate/Other (EBIT) -45 -46
Group EBIT 2,563 2,418
Interest expenses -587 -596
Interest income 56 30
Other financial result -100 -66
Income before income taxes 1,932 1,786

RECONCILIATION OF NET DEBT WITH THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION


€ in millions Dec. 31, 2011 Dec. 31, 2010
Short-term debt 171 606
Short-term loans from related parties 3 2
Current portion of long-term debt and capital lease obligations 1,852 420
Trust preferred securities of Fresenius Medical Care Capital Trusts (current) 0 468
Long-term debt and capital lease obligations, less current portion 3,777 4,919
Senior Notes 3,996 2,369
Debt 9,799 8,784
less cash and cash equivalents 635 769
Net debt 9,164 8,015

€ in millions Dec. 31, 2011 Dec. 31, 2010
Short-term debt 171 606
Short-term loans from related parties 3 2
Current portion of long-term debt and capital lease obligations 1,852 420
Trust preferred securities of Fresenius Medical Care Capital Trusts (current) 0 468
Long-term debt and capital lease obligations, less current portion 3,777 4,919
Senior Notes 3,996 2,369
Debt 9,799 8,784
less cash and cash equivalents 635 769
Net debt 9,164 8,015

The following table shows the non-current assets by geographical region:

1 The aggregate amount of net non-current assets is the sum of non-current assets less deferred tax assets and derivative financial instruments.
€ in millions Dec. 31, 2011 Dec. 31, 2010
Germany 3,715 3,574
Europe (excluding Germany) 2,588 1,984
North America 11,294 10,182
Asia-Pacific 1,008 882
Latin America 390 354
Africa 47 47
Total non-current assets1 19,042 17,023

1 The aggregate amount of net non-current assets is the sum of non-current assets less deferred tax assets and derivative financial instruments.
€ in millions Dec. 31, 2011 Dec. 31, 2010
Germany 3,715 3,574
Europe (excluding Germany) 2,588 1,984
North America 11,294 10,182
Asia-Pacific 1,008 882
Latin America 390 354
Africa 47 47
Total non-current assets1 19,042 17,023

In 2011, the Fresenius Group generated sales of €3,573 million (2010: €3,355 million) in Germany. Sales in the United States were €6,588 million at actual rates and €6,916 million in constant currency in 2011 (2010: €6,849 million).

Continue reading:
34. Stock options

QUICKFINDER

History

Tools