Asklepios Kliniken Gesellschaft mit beschr¤nkter Haftung, Hamburg

Asklepios Kliniken Gesellschaft mit beschränkter Haftung, Hamburg

Asklepios Kliniken

Gesellschaft mit beschränkter Haftung, Hamburg

Consolidated interim report

as of 31 March 2013

in accordance with

International Financial Reporting Standards


Contents

Interim Group management report

Condensed consolidated interim financial statements as of 31 March 2013

Consolidated statement of financial position

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of cash flows

Statement of changes in consolidated equity

Condensed notes to the consolidated financial statements


Interim Group management report

Key business figures as of 31 March 2013

31 Mar.

2013

31 Mar.

2012 * +/-

Number of patients 520,334 483,524 +7.6% Number of beds 26,775 26,831 -0.2% Employees (headcount) 45,309 44,157 +2.6% Employees (full-time equivalents) 34,302 33,442 +2.6% Net cash from operating activities € m 18.0 46.0 -60.8% Revenue € m 760.9 748.7 +1.6% EBITDAR (earnings before interest, taxes, depreciation, amortisation and rent) € m 66.6 76.2 -12.6% EBITDAR margin in % 8.7 10.2

EBITDA € m 52.7 63.2 -16.6% EBITDA margin in % 6.9 8.4

EBIT € m 26.6 38.7 -31.3% EBIT margin in % 3.5 5.2

Consolidated net income € m 15.7 24.3 -35.4%

Return on sales in % 2.1 3.2

Investments in intangible assets and property, plant and equipment € m 55.5 52.5 +5.7%

of which financed through subsidies € m 27.6 20.5 +34.6%

31 Mar. 2013 31 Dec. 2012 +/-

Total assets € m 2,649.8 2,641.5 +0.3%

Equity € m 855.0 851.5 +0.4%

Equity in % 32.3 32.2 Financial liabilities (excluding subordinated capital) € m 646.6 652.9 -1.0%

Cash and cash equivalents € m 100.9 145.9 -30.6%

Net debt € m 545.7 507.0 +7.6%

Net debt/EBITDA** 2.1x 1.9x Financial liabilities (including subordinated capital) € m 765.0 771.3 -0.8%

Cash and cash equivalents € m 100.9 145.9 -30.6%

Net debt € m 664.1 625.4 +6.2%

Net debt/EBITDA** 2.5x 2.3x

Interest coverage factor (EBITDA/interest result) 8.3x 8.9x * Prior-year figure restated to allow comparability ** EBITDA for the last twelve months


Asklepios presents figures for the first three months of 2013

Slight revenue growth of 1.6%, decline in EBTIDA

In the first quarter of 2013, Asklepios is presenting a 7.6% rise in patient numbers and slight revenue growth of +1.6% compared with the same period of the previous year The number of inpatients treated was held at around the level of the previous year. The trend towards outpatient care is continuing. There was a slight increase in the case-based lump sum. As a leading private clinic operator, Asklepios has shown in the past that it can generate opportunities even when developments in the market environment are challenging. The market participants must face the challenge of generating revenue growth despite declining growth rates in the number of patients while expenses increase disproportionately, which relates primarily to personnel expenses due to wage increases and organic employee growth. The key aspects of our business performance in the first quarter of 2013 compared with the same period of the previous year are as follows:

Asklepios posted a 7.6% rise in patient numbers, which now total 520,334 (previous year: +18.5% to 483,524 patients).

Revenue rose slightly by 1.6% (previous year: +5.2%) to EUR 760.9 million, which was purely organic, as in the previous year.

The operating result on the basis of EBITDA declined by 16.7% to EUR 52.7 million on the back of a margin of 6.9% in the first quarter of 2013 (previous year: EUR 63.2 million on the back of a margin of 8.4%); this represents a decline in the margin of 1.5 percentage points. Including the rental and financing structure of the MediClin AG subgroup, EBITDAR in the first quarter of 2013 amounted to EUR 66.6 million on the back of a margin of 8.7% (previous year: EUR 76.2 million on the back of a margin of 10.2%).

Cost management again had an impact on the cost of materials in the first quarter. The cost of materials fell by 0.5% to EUR 168.7 million (previous year: -0.4%). The ratio of the cost of materials to revenue improved to 22.2% (previous year: 22.6%). The measures implemented with a view to cutting operating expenses (including implants and freelance staff) are taking effect.

In absolute terms, personnel expenses rose disproportionately by 5.5% to EUR 479.3 million. This development is primarily attributable to the wage increases and collective agreements for various professional groups already agreed in the previous year with the Marburger Bund and Verdi unions and to the steady increase in employees. This resulted in a 2.3 percentage point increase in the ratio of personnel expenses to revenue to 63.0% from 60.7% in the previous year.

EBIT amounted to EUR 26.6 million on the back of a margin of 3.5% (previous year: EUR 38.7 million and 5.2%). In absolute terms, EBIT declined by EUR 12.1 million or


31.3%, primarily due to the above mentioned operating developments and the 6.2% increase in depreciation and amortisation. The reasons for this are the relative decline in subsidies and the increase in completed investment measures.

Consolidated net income totalled EUR 15.7 million after EUR 24.3 million in the same period of the previous year. This represents a 35.5% decline, due in particular to the surprising earnings performance of the MediClin AG subgroup. The return on sales amounted to 2.1% (previous year: 3.2%).

Net cash from operating activities fell by 60.9% to EUR 18.0 million (previous year: EUR 46.0 million), primarily as a result of the operating result and the cross-sector rise in receivables due to payers‟ increasing reluctance to pay.

As of 31 March 2013, net debt amounted to EUR 664.1 million, of which EUR 118.4 million related to subordinated capital. The debt ratio is therefore 2.5 times EBITDA (as of 31 December 2012: 2.3 times). This means that Asklepios still has solid financial structures.

The equity ratio amounted to 32.3%. Cash and cash equivalents of EUR 100.9 million and unutilised credit facilities of more than EUR 208 million mean that the Group also has sufficient financial reserves for growth and capital expenditure.

In particular, the development of the operating result came under heavier pressure in the first quarter of 2013, mainly as a result of the downward trending increase in performance and the ongoing disproportionately high growth of personnel expenses. In the wake of the change in top management, Asklepios has analysed the operating situation and recently developed and launched a Group-wide programme, “nextStep”, to achieve the targets set for 2015 of countering market, industry and Group-specific challenges in a systematic and purposeful manner. After the successful phase of expansion („buy and build‟ strategy), primarily characterised by growth through acquisitions, the portfolio strategy is now focusing on integrating the different subareas and further standardising business processes.

Market

In light of the forecasts of a slowdown in the German economy, the situation on the

healthcare market will remain difficult in the current year. In the healthcare industry,

especially in the area of acute care, earnings are being impacted by individual reductions in

income (negative price effect) and collective wage agreements with personnel expenses

increasing disproportionately. The German Federal Ministry of Health has announced that the average adjustment rate for the assessable income of all members of health insurance funds will be +2.03% from 2013. Starting from 2013, however, an adjustment value – replacing the adjustment rate in the area


of the German Hospital Remuneration Act (KHEntgG) and the German Federal Regulation on Hospital Charges (BPflV) – will be agreed between the contractual parties at federal level for the first time. This will introduce the “orientation value”, which is intended to represent hospital-specific costs and will be calculated by the German Federal Statistical Office. Up to a third of the adjustment value, which represents the difference between the adjustment rate used to date and the orientation value, is to be offset in somatic treatment – but only if this is necessary in order to guarantee medical care. The orientation value has now been set at 2.0% for 2013 and is still to be priced into the base rates at state level. It remains to be seen whether the possible increase in base rates at state level will extend to hospitals. In psychiatry, 40% of the difference (without further investigation) will be financed. This arrangement underlines the fact that payment for hospital services is being disconnected from actual cost increases.

According to the latest figures from the German Federal Statistical Office, 18.3 million

patients were treated in 2011, around 1.7% more than in the previous year. The average

length of stay decreased from 7.7 days in 2010 to 6.7 days. Despite the higher patient

numbers, however, hospital operators are still being forced to grant relatively high discounts

for additional services. On the other hand, social benefit institutions are reporting net income

in the billions. As such, profitability is suffering due to the price pressure resulting from

these discounts for additional services as well as high collective wage agreements.

Outlook Depending on performance in the further course of the year and the speed at which the measures taken are implemented, the targets for the 2013 financial year can still be achieved. In addition, we expect additional positive effects from budget negotiations with individual payers, which in our experience of the hospital business are predominantly positive and realised in the second half of the year.


Performance

January to March 2013 2012 Change

€ k € k € k +/- %

Revenue 760,877 748,652 +12,225 +1.6

Other operating income 7,554 8,925 -1,371 -15.4

Cost of materials 168,715 169,526 -811 -0.4

Personnel expenses 479,323 454,143 +25,180 +5.5

Other operating expenses (excluding rental expenditure)

53,748 57,663 -3,915 -6.8

EBITDAR 66,645 76,245 -9,600 -12.6

Rental expenditure 13,980 13,006 +974 +7.5

EBITDA 52,665 63,239 -10,574 -16.7

Depreciation, amortisation and impairment 26,093 24,575 +1,518 +6.2

EBIT 26,572 38,664 -12,092 -31.3

Interest result -6,383 -7,662 +1,279 +16.7

Income taxes -4,508 -6,691 +2,183 +32.6

Consolidated net income 15,681 24,311 -8,630 -35.5

Patient numbers for our medical services, which are in line with demand, increased from 483,524 in the same period of the previous year to their current level of 520,334 (+7.6%, of which -1.0% inpatients and +12.4% outpatients). Asklepios was able to conclude remuneration negotiations for around 16% of its clinics in the first quarter of 2013, meaning that income (above and beyond that resulting from the increase in the caseload) has been secured in good time. At clinics for which no agreement has been reached with providers of social services to date, a relatively high discount was again taken into account for additional services requested. At clinics that had already found themselves facing higher discounts for additional services in the previous year, we maintained these larger discounts as a precaution where no results had yet been achieved in negotiations with payers. Although this negative price effect is affecting growth in our performance, we believe there are opportunities in the remaining three quarters of 2013 based on the progress of negotiations with payers. The rise in patient numbers is reflected in slight revenue growth of 1.6% (previous year: +5.2%) to EUR 760.9 million, all of which was organic. The slight organic growth was achieved thanks to new medical offerings, occupancy management and performance-based compensation agreements. Utilisation saw a slight decline to 83.3% (previous year: 84.3%). 84.2% (previous year: 84.0%) of revenue was generated in acute-care hospitals, 11.9% (previous year: 12.6%) in rehabilitation clinics and 3.9% (previous year: 3.4%) in social and welfare facilities and in other facilities. The majority of other operating income of EUR 7.6 million (previous year: EUR 8.9 million) resulted from income from insurance claims, income from granting rights of usage, income


from the reversal of provisions/liabilities and income from clinical studies and research projects. On the cost side, we have seen increases in both personnel expenses and the cost of materials since last year due to quantitative and price effects. We have seen the first successes in terms of cost of materials thanks to strict cost management and the exploiting of synergies. By contrast, personnel expenses rose considerably due to wage increases, collective wage agreements and the increase of the headcount. The ratio of the cost of materials to revenue improved year-on-year to 22.2% (previous year: 22.6%). In absolute terms, the cost of materials fell by EUR 0.8 million year-on-year to EUR 168.7 million (-0.4%). The measures already implemented in the 2012 financial year with a view to cutting operating expenses (mainly implants and freelance staff) are taking effect, with the regulated use of external personnel service providers and management measures in the field of high-priced implants having a particular impact in these areas. With personnel expenses of EUR 479.3 million (previous year: EUR 454.1 million), the ratio of personnel expenses to revenue increased significantly from 60.7% to 63.0%. In absolute terms, personnel expenses rose by 5.5%. All in all, the increase in personnel expenses was attributable to a rise in the number of employees due to organic growth, wage increases and collective agreements. Asklepios reported a decline in other operating expenses (excluding rental expenditure) of EUR 3.9 million to EUR 53.7 million (previous year: EUR 57.7 million or -6.8%). The ratio improved significantly to 7.1% (previous year: 7.7%). The operating result on the basis of EBITDA declined by 16.7% to EUR 52.7 million on the back of a margin of 6.9% in the first quarter of 2013 (previous year: EUR 63.2 million on the back of a margin of 8.4%); this represents a decline in the margin of 1.5 percentage points. Including the rental and financing structure of the MediClin AG subgroup, EBITDAR in the first quarter of 2013 amounted to EUR 66.6 million on the back of a margin of 8.7% (previous year: EUR 76.2 million on the back of a margin of 10.2%). As of 31 March 2013, the depreciation and amortisation ratio amounted to 3.4% (previous year: 3.3%). The disproportionately high increase of depreciation and amortisation of 6.2% is primarily the result of the relative decline in subsidies and the increase in completed investment measures. EBIT amounted to EUR 26.6 million on the back of a margin of 3.5% (previous year: EUR 38.7 million and 5.2%). EBIT fell in line with the declining EBITDA and the increase in depreciation and amortisation, among other things. The interest result improved by EUR 1.3 million or 16.7%. While interest income declined by EUR 0.9 million, interest expenses also fell by EUR 2.2 million. Financing with higher interest rates, such as subordinated capital, was reduced by means of active treasury management, targeted liquidity management and optimised interest management. This led to lower interest expenses.


Income taxes fell by around 33% from EUR 2.2 million in the same period of the previous year to EUR 4.5 million, due to declining earnings. Overall, consolidated net income for the year declined in comparison with the same period of the previous year due in particular to the significant increase in personnel expenses in proportion to revenue and the surprising earnings performance of the MediClin AG subgroup. Consolidated net income fell from EUR 24.3 million in the same period of the previous year to EUR 15.7 million in the period under review. The return on sales amounted to 2.1% in the first quarter of 2013 (previous year: 3.2%).


Asset, capital and financing structure

Summarised statement of financial

position 31 Mar. 2013 31 Dec. 2012 € k € k

Non-current assets 1,966.8 74.2% 1,966.2 74.4%

Current assets 683.0 25.8% 675.3 25.6%

ASSETS 2,649.8 100.0% 2,641.5 100.0%

Equity 855.0 32.3% 851.5 32.2%

Participation capital/subordinated capital 118.4 4.5% 118.4 4.5%

Non-current liabilities and provisions 1,098.4 41.4% 1,106.6 41.9%

Current liabilities and provisions 578.0 21.8% 565.0 21.4%

EQUITY AND LIABILITIES 2,649.8 100.0% 2,641.5 100.0%

Our balance sheet and financing structures are sound. In the same way as at 31 December 2012, non-current assets are financed at a rate of over 100% with matching maturities via equity or long-term borrowings. Equity rose by EUR 3.5 million to EUR 855.0 million in the period under review. The equity ratio increased slightly to 32.3% of total assets (31 December 2012: 32.2%). Asklepios also has permanent interest-free and redemption-free access to subsidies of approximately EUR 1,288.5 million (31 December 2012: EUR 1,290.1 million). As these subsidies will only fall due for repayment in the hypothetical event of no longer being included in the hospital plan, these funds are in effect similar to equity. The following table shows the areas in which cash and cash equivalents have changed over the course of the year: January to March 2013 2012

€ m € m

EBITDA 52.7 63.3

Net cash from operating activities 18.0 46.0

Net cash used in investing activities -27.2 -42.3

Net cash from/used in financing activities -35.8 -33.3

Change in cash and cash equivalents -45.0 -29.6

Cash and cash equivalents on 1 January 145.9 182.6

Cash and cash equivalents on 31 March 100.9 153.0

The debt ratio – measured as net debt/EBITDA – is at a higher level than on 31 December 2012. The following table illustrates how this performance indicator was calculated in the period under review. Net debt/EBITDA amounted to 2.1x in the period under review (31 December 2012: 1.9x):


31 Mar.

2013 31 Dec.

2012 € m € m Excluding subordinated capital

Financial liabilities (excluding subordinated capital) 646.6 652.9

Cash and cash equivalents 100.9 145.9

Net liabilities (excluding subordinated capital) 545.7 507.0

EBITDA (for the last four quarters) 256.6 267.2

Net debt/EBITDA 2.1x 1.9x Taking into account subordinated capital, the indicator amounted to 2.5x (31 December 2012: 2.3x):

31 Mar.

2013

31 Dec.

2012

€ m € m

Including subordinated capital

Financial liabilities (including subordinated capital) 765.0 771.3

Cash and cash equivalents 100.9 145.9

Net liabilities (including subordinated capital) 664.1 625.4

EBITDA (for the last four quarters) 256.6 267.2

Net debt/EBITDA 2.5x 2.3x

The interest coverage factor of EBITDA/interest result (including interest on participation capital) amounted to 8.3x (31 December 2012: 8.9x). As a conservative company in terms of finance, the Group's financing structure is generally long-term in nature. Accordingly, some of the underlying credit volumes are hedged against interest fluctuation risks in the long term. The operating management of cash and cash equivalents and the financing of Group entities are performed via the Group holding company on the basis of careful investment and with a view to creditworthiness, involving broad diversification across banks within the three major deposit protection systems in Germany. In addition to cash and cash equivalents of EUR 100.9 million, the Group has unutilised credit facilities in the amount of EUR 208 million at its disposal. As previously, internal financing power is strong. In light of this situation and the relatively moderate level of net debt, the Group is protected from further financial market risks. One of the central elements of the Group's financing strategy consists of sustainably optimising capital costs. The starting point for this approach is the long-term limitation of financial risks in the organisation of the operating business. Accordingly, sound financial structures are considered to form an important basis for all significant stages of growth.

Capital expenditure and maintenance

After deducting subsidised capital expenditure, net capital expenditure totalled EUR 27.9 million (previous year: EUR 32.0 million), or 3.7% of revenue (previous year: 4.3%). It thus


decreased by EUR 4.1 million year-on-year. Without deducting subsidies, capital expenditure amounted to EUR 55.5 million (previous year: EUR 52.5 million), or 7.3% of revenue (previous year: 7.0%). Capital expenditure measures were primarily allocated to the following locations:

January to March 2013

€ m AK Harburg 4.7

AK St. Georg 3.7

Südpfalz 2.0

Corporate headquarters, service operations and facilities 0.9

AK Wandsbek 0.8

AK Altona 0.8

ZIT GmbH 0.8

Harzkliniken 0.7

Brandenburg 0.6

Salzungen 0.6

Other locations 12.3

Total 27.9

Maintenance and servicing expenses decreased year-on-year from EUR 22.4 million to EUR 21.4 million. Expressed as a percentage of revenue, 2.8% (previous year: 3.0%) was invested in ongoing maintenance. This means that Asklepios used 6.4% (previous year: 7.3%) of revenue for internally funded capital expenditures and maintenance work.


Employees The number of full-time equivalents employed as of 31 March 2013 averaged 34,302. Compared with the same date in the previous year, when 33,442 full-time equivalents were employed, the workforce has therefore increased by 2.6% or 860 full-time equivalents – a development that is largely attributable to organic growth.

Risk and opportunity management

The Asklepios Group is one of the three largest private operators of hospital and healthcare facilities in Germany. The Group pursues a responsible, sustainable growth strategy that is geared towards high quality and innovative strength. With this approach, Asklepios has enjoyed dynamic development since its formation more than 25 years ago. Together with MediClin AG, the Asklepios Group enjoys a nationwide presence. As such, this has laid the best possible foundations for generating considerable value added and further growth via regional structures. As of 31 March 2013, Asklepios has wide coverage with 108 clinics and 33 additional healthcare facilities. The Asklepios Group covers the entire range of medical services: in addition to primary, regular and advanced care, it operates specialist hospitals with specific areas of expertise. As an operator of rehabilitation clinics, Asklepios is able to offer the entire range of inpatient care from a single source. Its service range is supplemented by care facilities and health centres. The nationwide presence of Asklepios clinics means that the Group's economic risk is spread comfortably across a large number of units and regions. In the first three months of 2013, 84% of the business volume related to acute-care hospitals and around 12% to the rehabilitation sector, with the remaining revenue attributable to other medical facilities. Asklepios treats almost two million people at its facilities every year and, as a prominent private-sector clinic operator with high innovative strength, provides important responses in terms of concepts to ensure that inpatient care is arranged on a socially responsible, cost-efficient and patient-oriented basis. This builds on the three key pillars of Asklepios' quality management: patient orientation, patient safety and excellent quality of treatment. Sustainable concepts ensure that high quality standards are upheld and allow us to provide our patients with a quality promise. In the 2012 financial year, Asklepios published its 2012 report on medical service quality, the aim of which is to present the results of clinical treatment in a transparent manner. The report focuses on strokes, which are presented in detail using diagrams and figures. It also discusses the areas of cardiovascular disease, obstetrics and gynaecological operations, breast cancer, endoprosthetics, gallbladder removal, bedsores and pulmonary inflammations. In Germany, every hospital is required to publish the results of its medical treatment. We are committed to publishing this information in an easily understandable form so that detailed information is made available not only to referring doctors, but also to interested patients. We see quality management as a permanent process of learning and improvement. This is why Asklepios stands for comprehensive quality in economically healthy clinics for the benefit of the patient. In the first three months of the 2013 financial year, there were no changes to the opportunities and risks reported as of 31 December 2012. The main risks are:


In the area of liability insurance, we are seeing substantial increases in premiums. By extending the established deductible model, Asklepios has an opportunity – compared to its competitors in the hospital market – to obtain greater independence from the insurance market and partly disengage itself from the trend towards rising premiums.

We anticipate constantly decreasing subsidy ratios, with corresponding consequences for investing activities.

The high level of state regulation means that Asklepios is exposed to risks in the day-to-day documentation and billing of cases as well as in the medium-term developments in income budgets. This currently applies not only to the fact that the health insurance funds are slower to pay but primarily to details of budgetary law, such as differing opinions on case specifications and remuneration; pending arbitration proceedings, where in some cases the outcome is impossible to predict; delayed budget negotiations; and potential changes to budgetary law and the supplementary billing regulations. The risks named may cause the financial position, financial performance and cash flows to deteriorate.

Asklepios proactively counters the risk of not having sufficient qualified personnel both centrally and locally by means of extensive recruiting campaigns and personnel development programmes. The structured development of new attractive professions in the field of nursing and special approaches to recruiting and retaining physicians puts the Company in a position to hire a sufficient number of trainees and staff to offset employee turnover. Furthermore, the general shortage of specialist clinic staff can be addressed by means of targeted recruiting measures.

On the cost side, there is a significant risk inherent in how collectively bargained clinic staff wages develop. To reduce external dependency and to actively shape developments, the Group has significantly reduced the risks by using more flexible company agreements adopted to fit local circumstances and other alternative compensation models. These models are reviewed by the relevant group departments before the agreements are concluded. In light of the increasing stringent labour law and social security law framework (e.g. German Employee Assignment Act, German Labour Leasing Act), it cannot be ruled out that certain models may in future prove to require adjustments or to be incorrect despite having been reviewed by the relevant group departments. We have taken account of risks requiring recognition that we are aware of by setting aside provisions.

As a hospital group, Asklepios is dependent on a functioning IT structure. The successful course of treatment of a patient (from admission through diagnosis and treatment to documentation) depends to a large extent on an integrated IT system. Disruptions in IT integration or in related processes (e.g. authorisation concepts) may have a significant impact on the net assets, financial position and results of operations. At the same time, we see an opportunity here to enhance efficiency by means of intelligent use of IT possibilities.

There are also tax risks arising from the transaction structure for the acquisition of companies and the acquired processes. As the tax audits for the years 2005 to 2008 are not yet complete, appropriate risk provisions were formed.

We still do not anticipate any individual or aggregate risks that could materially endanger the Group's ability to continue as a going concern.


Report on post-balance sheet date events and expected developments According to the RWI's Hospital Rating Report for 2012, hospital care has reached a watershed. Firstly, suitable instruments need to be found to curb the growth in volumes and hence reduce the burden on the healthcare system. Secondly, the ability of hospitals to invest needs to increase. The conversion of investment subsidies at federal state level into lump-sum grants has been under discussion for some time. And thirdly, the initial signs of accelerated market consolidation are now emerging, with national hospital groups continuing to reinforce their position and working in close cooperation with strong municipal and university partners. The report states that the proportion of hospitals at increased risk of insolvency is forecast to rise to 15%. Costs are expected to continue to increase at a faster rate than income in the long term, meaning that the situation is likely to remain strained. Smaller hospitals in particular are set to suffer more than large- or medium-sized facilities. Clinics with a high degree of specialisation are generally significantly better off than those without. For the first time, the report also investigated the connection between management structures and hospital ratings, coming to the conclusion that better management structures result in improved economic performance. According to the latest press reports, the federal states are cutting their expenditure on hospitals. Payments at state level fell by more than 20% between 2001 and 2011. In addition, the revenue situation of hospitals was improved only slightly by the German Statutory Health Insurance Financing Act for 2011 and 2012, which was passed at the end of 2010, while there has been a larger increase in wages and salaries and the cost of materials. The only way to offset higher costs will be to increase the number of patients and improve productivity. In January 2013, the German Federal Government once again significantly reduced its growth forecast for the current year from 1.0% to 0.4% in light of the crisis in the euro zone and an anticipated decline in foreign trade. The International Monetary Fund also expects the recovery from the global economic and financial crisis to be longer and harder than expected. Hospitals are also under enormous financial pressure which has not abated in spite of the injection of EUR 300 million granted by the German Federal Government to refinance the increased personnel costs. We expect the economic situation of hospitals to deteriorate further. The German Federal Ministry of Health has announced that the average adjustment rate for the assessable income of all members of health insurance funds will be +2.03% from 2013. Starting from 2013, however, an adjustment value – replacing the adjustment rate in the area of the German Hospital Remuneration Act (KHEntgG) and the German Federal Regulation on Hospital Charges (BPflV) – will be agreed between the contractual parties at federal level for the first time. This will introduce the “orientation value”, which is intended to represent hospital-specific costs and will be calculated by the German Federal Statistical Office. Up to a third of the adjustment value, which represents the difference between the adjustment rate used to date and the orientation value, is to be offset in somatic treatment – but only if this is necessary in order to guarantee medical care. The orientation value has now been set at 2.0%


for 2013 and is still to be priced into the base rates at state level. It remains to be seen whether the possible increase in base rates at state level will extend to hospitals. In psychiatry, 40% of the difference (without further investigation) will be financed. This arrangement underlines the fact that payment for hospital services is being disconnected from actual cost increases. In the medium term, it remains to be seen whether this will lead to a convergence of base rates, which currently still vary among the federal states. Furthermore, we expect additional states to announce plans to convert their investment subsidies into investment grants. Asklepios will continue to face increasing competition for specialist staff in the near future. In this respect, the consistent implementation of the measures that have been initiated will be particularly important. In addition to the key issue of attracting staff, the focus will increasingly be on retaining existing employees by making further improvements to working conditions. To this end, Asklepios will utilise and emphasise the benefits that only a large group can offer its employees. In light of the tightening of the market for hospital professional liability risks, the insurance structure in the healthcare liability sector is currently being adjusted. Across the industry, insurance premiums for healthcare liability insurance have increased dramatically on the back of a contracting market, meaning that it would only be possible to conclude new policies at significantly higher premiums. Accordingly, Asklepios has decided to expand the Asklepios Kliniken Hamburg GmbH deductible model that has been established since 1995 to the Group holdings of Asklepios Kliniken Verwaltungsgesellschaft mbH. Under this model, a (Group) healthcare liability insurance policy is concluded with an insurance company for all Asklepios clinic companies, but this policy only comes into effect to the extent that the total of all reimbursable healthcare damages exceeds a deductible that is selected at a high level. Furthermore, each clinic company is responsible for the healthcare damages that arise at its facilities. This ensures greater independence from the insurance market and means that Asklepios is not affected by the trend towards rising premiums, which generally increase significantly every year. In response to these economic challenges, we are intensifying Group-wide efforts to systematically leverage cost and efficiency potential at our clinics. Restructuring programmes are ongoing at the most recently acquired hospitals in our portfolio to provide complementary approaches to increasing operating margins. Within specialist medical areas, we offer services with a focus on orthopaedics, cardiology, neurology, psychiatry, geriatrics and pulmonology, as well as general acute care. In our opinion, diseases of modern life and new medical procedures are associated with growing demand and further growth prospects in these disciplines in particular.

We have already entered into the current debate regarding the legal regulation of caseload-

based bonus payments with senior consultants. Under these regulations, hospitals must in

future state whether they comply with the recommendations of the Hospital Association

(DKG) on performance-related target agreements in their contracts with senior consultants. If

this is not the case, they must provide information in the quality report on the types of

performance for which performance-related target agreements are concluded. The aim of

http://www.dkgev.de/


these regulations is to influence the quality of care in the facilities while also ensuring that

medical decisions are made independently. The statements in the hospitals' quality reports

are intended to give patients and other interested parties the possibility to find out whether

and for what types of performance the hospital has concluded target agreements that are not

covered by the DKG's recommendations. The regulations are to be drawn up by the DKG

together with the German Medical Association (BÄK) by the end of April 2013. Asklepios

has reacted to the expected change at an early stage and has already included qualitative

targets in the target agreements. In terms of acquisitions, we will continue to acquire medical facilities in the future only if they are absolutely right for us. From a commercial perspective, the available properties mostly have problems, but it is precisely here that we can demonstrate our turnaround expertise. With these measures, we are laying the foundations for the continuous improvement in our cash flow and margins, as the process will take some years. In mid-2012 we took the step of acquiring 5.01% of the voting rights in Rhön-Klinikum AG, allowing us to keep all options open. As a family business, we are geared towards the long term. On the basis of this analysis and the opportunities that it reveals, we consider our prospects with regard to our financial position and financial performance in light of the assumptions on the general economic and industry-specific environment as follows. Depending on performance in the further course of the year and the speed at which the measures taken are implemented, the targets for the 2013 financial year can still be achieved. In addition, we expect additional opportunities/positive effects from budget negotiations with individual payers, which in our experience of the hospital business are predominantly positive and realised in the second half of the year.


Condensed consolidated interim financial statements Consolidated balance sheet as of 31 March 2013

Note 31 Mar. 2013 31 Dec. 2012 no. € k € k

ASSETS

Non-current assets

Goodwill and other intangible assets VI. 1 390,238 390,429

Property, plant and equipment VI. 2 1,284,009 1,282,875

Investments accounted for using the equity method 1,922 1,922

Other financial assets 240,643 241,121

Trade receivables 357 870

Non-current income tax assets 2,185 2,202

Other assets 16 84

Deferred taxes 47,385 46,679

Total non-current assets 1,966,755 1.966.182

Current assets

Inventories 91,656 87,372

Trade receivables 392,400 363,168

Current income tax assets 1,868 1,583

Other financial assets 83,851 72,154

Other assets 12,345 5,067

Cash and cash equivalents VI. 5 100,930 145,945

Total current assets 683,050 675,289

Total ASSETS 2,649,805 2,641,471

EQUITY AND LIABILITIES

Equity attributable to the parent company

Issued capital 1,022 1,022

Reserves 636,651 553,893

Consolidated net income 14,352 90,394

Non-control-ling interests 202,995 206,218

Total equity VI. 3 855,020 851,527

Non-current liabilities

Trade payables 190 224

Participation capital/subordinated capital VI. 4 27,845 55,100

Financial liabilities 611,747 616,986

Finance lease liabilities 9,437 9,621

Pensions and similar obligations 92,377 80,438

Other provisions 231,223 236,515

Deferred taxes 27,438 28,858

Other financial liabilities 107,759 119,790

Other liabilities 18,192 14,148

Total non-current liabilities 1,126,208 1,161,680

Current liabilities

Trade payables 65,115 74,809

Participation capital/subordinated capital VI. 4 90,580 63,295

Financial liabilities 34,849 35,949

Finance lease liabilities 148 126

Pensions and similar obligations 2,011 1,643

Other provisions 142,453 135,220

Current income tax liabilities 6,904 9,236

Other financial liabilities 111,284 114,906

Other liabilities 215,233 193,080

Total current liabilities 668,577 628,264


Total EQUITY AND LIABILITIES 2,649,805 2,641,471

Consolidated income statement

January to March Note 2013 2012

no. € k € k

Revenue V.1 760,877 748,652

Other operating income V.2 7,554 8,925

768,431 757,577

Cost of materials 168,715 169,526

Personnel expenses 479,323 454,143

Other operating expenses V.3 67,728 70,669

Operating result/EBITDA 1) 52,665 63,239

Depreciation, amortisation and impairment - of intangible assets and depreciation and impairment of Property, plant and equipment

26,093 24,575

Operating result/EBIT 2) 26,572 38,664

Interest and similar income 280 1,212

Interest and similar expenses -6,663 -8,874

Financial result V.4 -6,383 -7,662

Earnings before income taxes 20,189 31,002

Income taxes V.5 -4,508 -6,691


of which attributable to the parent company 14,352 20,168

of which attributable to non-controlling interests 1,329 4,143

1) Earnings before financial result, taxes, depreciation, amortisation and impairment. 2) Earnings before financial result and taxes.


Consolidated statement of comprehensive income

January to March 2013 2012

€ k € k

Consolidated interim income 15,681 24,311

Change in fair value of cash flow hedges 282 -473

Measurement of financial assets 70 0

Income taxes -56 75

Total changes in value reclassified to profit or loss if certain conditions are met 296 -398

Change in actuarial gains (+)/losses (-) from defined benefit pension commitments and similar obligations -11,764 -1,683

Income taxes 1.862 266

Total changes in value not reclassified to profit or loss -9,902 -1,417

Total changes in value recognised in equity (other comprehensive income) -9,606 -1,815

Total comprehensive income (total consolidated interim income and other comprehensive income) 6,075 22,496

of which attributable to the parent company 7,689 18,709

of which attributable to non-controlling interests -1,623 3,787


Consolidated statement of cash flows

January to March Note 2013 2012

no. € k € k


Income taxes 4,508 6,691

Interest result 6,383 7,662

Amortisation and impairment of intangible assets and depreciation and impairment of property, plant and equipment

26,093 24,575

Gross cash flow (EBITDA) 52,665 63,239

Other non-cash transactions 62 201

Changes in inventories, receivables and other assets -46,569 -27,784

Changes in liabilities and provisions 19,583 13,303

Interest income 224 568 Income taxes paid V.5 -7,967 -3,560

Net cash from operating activities 17,998 45,967

Investments in property, plant and equipment and intangible assets -27,909 -31,966

Proceeds from the disposal of non-current assets 709 392

Acquisitions of subsidiaries, equity investments and financial assets 0 -10,713

Net cash used in investing activities -27,200 -42,287

Assumption (+)/repayment (-) of financial obligations -10,800 -19,508

Net cash used in hospital financing -15,231 -9,787

Interest expenses V.4 -3,103 -3,951

Distributions -4,012 0

Additional acquisition of non-controlling interests -2,667 0

Net cash used in financing activities -35,813 -33,246

Change in cash and cash equivalents -45,015 -29,566

Cash and cash equivalents at the start of the period 145,945 -182,560

Cash and cash equivalents at the end of the period VI.5 100,930 152,994


Statement of changes in consolidated equity

2013 Equity attributable to

the parent company

Non-

controlli

ng

interests Equity

Issued

capital

€ k

Revenue

reserves

€ k

Fair value

reserves

€ k

Consolid

ated net

income

€ k

Total

€ k

€ k

€ k As of 1 January 2013 1,022 556,248 -2,355 90,394 645,309 206,218 851,527

Consolidated interim income 0 0 0 14,352 14,352 1329 15,681

Other comprehensive income 0 -6,950 296 0 -6,654 -2,952 -9,606

Total comprehensive income 31 March 2013 0 -6,950 296 14,352 7,698 -1,623 6,075

Change in equity interests in consolidated companies 0 -982 0 0 -982 -1,685 -2,667

Compensation payment obligations 0 0 0 0 0 85 85

Allocations to reserves 0 90,394 0 -90,394 0 0 0

Total transactions recognised directly in equity 0 89,412 0 -90,394 -982 -1,600 -2,582

As of 31 March 2013 1,022 638,710 -2,059 14,352 652,025 202,995 855,020

2012 Equity attributable to

the parent company

Non-

controlli

ng

interests

Equity

Issued

capital

€ k

Revenue

reserves

€ k

Fair value

reserves

€ k

Consolid

ated net

income

€ k

Total

€ k

€ k

€ k As of 1 January 2012 (as reported) 1,022 555,383 -664 15,663 571,404 192,640 764,044

Change in accounting and measurement methods 0 2,026 0 634 2,660 277 2,937

As of 1 January 2012 (adjusted) 1,022 557,409 -664 16,297 574,064 192,917 766,981

Consolidated interim income 0 0 0 20,168 20,168 4,143 24,311

Other comprehensive income 0 -1,061 -398 0 -1,459 -356 -1,815

Total comprehensive income as of 31 March 2012 0 -1,061 -398 20,168 18,709 3,787 22,496

Change in equity interests in consolidated companies 0 0 0 0 0 1,300 1,300

Compensation payment obligations 0 0 0 0 0 68 68

Allocations to reserves 0 16,297 0 --16,297 0 0 0

Total transactions recognised directly in equity 0 16,297 0 -16,297 0 1,368 1,368

As of 31 March 2012 1,022 572,645 -1,062 20,168 592,773 198,072 790,845


Condensed notes to the consolidated financial statements

I. Basis of the consolidated financial statements The Company is named Asklepios Kliniken Gesellschaft mit beschränkter Haftung (hereinafter also referred to as “AKG”, the “Company” or the “Group”), Rübenkamp 226, 22307 Hamburg (Germany), and is entered in the commercial register of the Hamburg District Court under HRB 98981. The Company was formed on 19 June 1985. Asklepios Kliniken Gesellschaft mit beschränkter Haftung and its subsidiaries operate primarily on the German market in the clinical acute care and rehabilitation sectors as well as, to a very limited extent, in the nursing sector. The purpose of the Company is the acquisition and operation of and the provision of consulting services for healthcare institutions. We operate facilities in numerous federal states in Germany. Our Group structure is geared towards regional differences in terms of personnel and company law. The operating entities are mainly equity interests in the three sub-group interim financial statements of Asklepios Kliniken Verwaltungsgesellschaft mbH (“AKV”), Königstein (100% equity interest), Asklepios Kliniken Hamburg GmbH (“AKHH”), Hamburg (74.9% equity interest), and MediClin Aktiengesellschaft, Offenburg (52.73% equity interest), that are included in the consolidated interim financial statements. We also have selected foreign operations; to date, this relates almost exclusively to our investment in Greece (Athens Medical Center S.A., Athens).

II. Accounting principles The condensed consolidated interim financial statements for the period ended 31 March 2013 have been prepared in condensed form for the results of the first three months of 2013 in accordance with the requirements of IAS 34 and, pursuant to section 315a of the German Commercial Code (HGB), in accordance with the requirements of the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board in force on the reporting date and recognised by the European Union in the versions that are required to be applied from 2012. In the present financial statements, the change in pension and partial retirement accounting in accordance with IAS 19 means that various figures for the same period of the previous year have been restated. Additional adjustments aimed at achieving a better presentation of the Group's net assets, financial position and results of operations did not have a material impact. The retroactive application of IAS 19 in the comparative period resulted in a EUR 331 thousand decrease of interest expenses, a EUR 91 thousand increase in tax expenses and a

EUR 79 thousand increase in personnel expenses. Because interest rates on the capital market


are generally sinking, the interest rate for discounting the pension obligation according to IAS

19 was lowered to 4% (31 December 2012: 4.25%). The fair value reserve changed by EUR 296 thousand in the reporting period, with a balance of EUR -2,059 thousand as of 31 March 2013 (previous year: EUR -1,062 thousand). The change in the fair value of cash flow hedges of EUR -1,159 thousand (previous year: EUR -1,062 thousand) and the measurement of financial assets of EUR 900 thousand (previous year: EUR 0 thousand) are recognised in this reserve. The condensed consolidated interim financial statements do not contain all of the information that is required in the consolidated financial statements prepared at the end of the financial year and should therefore be read in conjunction with the consolidated financial statements for the year ended 31 December 2012. In order to prepare the condensed consolidated interim financial statements, the accounting policies presented in detail in the 2012 consolidated financial statements were applied unchanged with the exception of the following IFRSs that were required to be applied for the first time as of 1 January 2013. For details, please refer to the corresponding explanations. The following new versions and amendments of IFRS standards and interpretations have come into force but did not have any impact on the figures and disclosures made in the consolidated interim financial statements of the Group when they were applied for the first time, with the exception of the description of accounting policies:

Amendments to IFRS 1 – First-time Adoption of International Financial Accounting Standards – Severe Hyperinflation and Removal of Fixed Dates

Amendments to IAS 12 – Deferred Tax – Recovery of Underlying Assets

Amendments to IFRS 7 – Financial Instruments – Disclosures – Offsetting Financial Assets and Financial Liabilities

Amendment to IFRS 13 – Fair Value Measurement

IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine

The IASB draft on accounting for leases will result in a significant increase of the finance lease arrangements to be recognised in the Asklepios Group. We expect this to lead to an increase of non-current assets, standard market financial liabilities, total assets and, because of the omission of rental expenditure, an increase in EBITDA.

III. Basis of consolidation In addition to AKG as the ultimate parent, the consolidated group also includes the subsidiaries over which AKG exercises control, either directly or indirectly. Subsidiaries are included in the consolidated financial statements by way of full consolidation from the date on which the Group obtains control, directly either or indirectly, meaning that it can control the financial and operating policy of the respective subsidiary.


Associates are entities over which the Group has significant influence but no control. Investments in associates are reported using the equity method. As of 31 March 2013, Asklepios still operates a total of 108 clinics and 33 additional healthcare facilities such as nursing homes, medical centres for shared practices and other medical centres. Asklepios also has management responsibilities for a further nine facilities. We have retained our investment in the Greek-based Athens Medical Center S.A. as a purely financial investment recognised using the equity method. As part of a transaction between the shareholders of the Group, 18.825% of the shares in Sächsische Schweiz Kliniken GmbH, Sebnitz, which were previously held by the Group‟s minority shareholders, were indirectly transferred to the parent company effective 4 March 2013. In addition, the parent company was granted a call option on the remaining 6.275% of the shares. A shareholder resolution of Asklepios Klinik Lindenlohe GmbH of 19 February 2013 resolved to close the clinic in Nabburg as of 31 March 2013. The management was tasked with carrying out the measures necessary to do so, which were accounted at EUR 1.2 million for in this consolidated interim report.


IV. Accounting methods

1) Goodwill and investments measured using the equity method Goodwill and the carrying amounts of investments recognised using the equity method are tested for impairment once a year (as of 31 December). Impairment testing also takes place if circumstances indicate that the carrying amount may be impaired. The key assumptions used to determine the recoverable amount are explained in the consolidated financial statements as of 31 December 2012.

2) Sensitivity in relation to changes to the assumptions made

There were no significant changes compared with the end of 2012 with regard to the calculation of value in use, the assumptions applied when calculating provisions, etc., with the exception of the change in the interest rate.


V. Selected notes to the consolidated interim income statement 1) Revenue Revenue is broken down by business segment and region as follows: January to March 2013 2012

€ m € m Business segments Acute clinic treatment 640.2 628.8

Post-acute and rehabilitation treatment 90.7 94.2

Social and welfare facilities 4.8 4.7

Other 25.2 21.0

Total 760.9 748.7

2) Other operating income Other operating income is broken down as follows: January to March 2013 2012

€ m € m Income from insurance claims 1.3 0.6

Income from usage rights 0.9 1.4

Income from the reversal of provisions/liabilities 0.9 3.9

Income from clinical studies and research projects 0.9 0.7

Income from cooperation agreements 0.6 0.3

Income from training seminars 0.4 0.2

Income from student supervision and childcare 0.4 0.2

Income from the disposal of assets 0.2 0.3

Administrative services 0.1 0.1

Miscellaneous 1.9 1.2

Total 7.6 8.9

Income from the reversal of provisions/liabilities in the previous year relates primarily to the reversal of variable purchase price liabilities amounting to EUR 3.5 million). Miscellaneous other income comprises various items from current operations. This includes income from other refunds and income relating to prior periods.


3) Other operating expenses Other operating expenses relate to: January to March 2013 2012

€ m € m Maintenance and servicing 21.4 22.4

Rental expenditure 14.0 13.0

Taxes, duties and insurance (including damage claims) 6.1 5.8

Contributions, consulting and audit fees 6.0 4.6

Office supplies, postage and telephone charges 5.1 5.2

Training expenses 3.6 3.4

Advertising and travel expenses 2.7 3.9

Other administrative expenses 2.0 1.7

IT expenses 1.7 2.0

Expenses relating to prior periods 1.2 2.5

Contract workers 1.1 1.1

Recruitment costs 1.0 1.5

Waste disposal expenses 0.7 0.9

Miscellaneous 1.1 2.7

Total 67.7 70.7

Miscellaneous other expenses comprise various items from current operations. 4) Financial result The financial result is broken down as follows: January to March 2013 2012 € m € m

Interest income 0.3 1.2

Interest and similar expenses -6.7 -8.9 of which interest and expenses from subordinated loans -1.4 -2.5

Financial result -6.4 -7.7


5) Income taxes Income taxes are broken down as follows:

January to March 2013 2012 € m € m Current income taxes -4.8 -4.9

Deferred income taxes 0.3 -1.8

Total -4.5 -6.7

The taxes paid in the period under review amount to EUR 8.0 million (previous year: EUR 3.6 million). In the previous year, deferred tax expenses included an extraordinary item of EUR -1.3 million.


VI. Selected notes to the consolidated interim statement of financial position 1) Goodwill and other intangible assets

2013

€ k

Goodwill Other

intangible

assets

Prepayments for

intangible assets Total

Cost As of 1 January 2013 362,540 74,396 6,913 443,849 Additions 183 903 598 1,684 Disposals 0 -163 -33 -196 Reclassification 0 169 -28 141

As of 31 March 2013 362,723 75,305 7,450 445,478

Accumulated amortisation and impairment As of 1 January 2013 -15,565 -37,855 0 -53,420 Additions 0 -1,974 0 -1,974 Disposals 0 154 0 154 As of 31 March 2013 -15,565 -39,675 0 -55,240

Residual carrying amounts

As of 31 December 2012 346,975 36,541 6,913 390,429 As of 31 March 2013 347,158 35,630 7,450 390,238

2) Property, plant and equipment

2013

€ k

Land and

buildings

including

buildings on

third-party

land

Technical

equipme

nt and

machiner

y

Operating

and office

equipme

nt

Assets

under

constructio

n

Property,

plant and

equipment

under

finance

leases

Total

Cost As of 1 January 2013 1,367,894 83,994 370,166 69,828 1,359 1,893,241 Additions 2,703 383 8,653 14,486 0 26,225 Disposals -29 -7 -1,360 -714 0 -2,110 Reclassification 3,890 693 1,019 -5,743 0 -141

As of 31 March 2013 1,374,458 85,063 378,478 77,857 1,359 1,917,215

Accumulated amortisation and impairment

As of 1 January 2013 -376,643 -36,273 -197,307 0 -143 -610,366 Additions -10,677 -1,782 -11,654 0 -6 -24,119 Disposals 30 7 1,242 0 0 1,279 As of 31 March 2013 -387,290 -38,048 -207,719 0 -149 633,206

Residual carrying amounts

As of 31 December 2012 991,251 47,721 172,859 69,828 1,216 1,282,875 As of 31 March 2013

987,168 47,015 170,759 77,857 1,210 1,284,009


3) Equity In accordance with IAS 1 (revised 2011), the development of equity is presented in a statement of changes in consolidated equity, which is a separate component of the interim financial statements.

4) Subordinated capital

Participation certificates issued by the Company with an average term to maturity of around nine years are recognised in subordinated capital. These are subordinated to all non-subordinated creditors but have the same standing as other participation certificate holders and rank above the shareholders, including shareholder loans made in lieu of equity. The holder of the participation certificates can change the interest rate depending on the form of a key financial covenant for a portion of the participation capital if certain key financial covenants are not complied with. EUR 30.4 million of the participation capital is subject to a variable interest rate. Participation capital is subject to a nominal and effective interest rate of between 4.2% and 7.3%. On 5 March 2013, the WestLB profit participation certificates (EUR 30.4 million) were terminated as of the end of the three-month period defined in the agreement. They are reported as of 31 March 2013 under current liabilities. The other subordinated capital includes a subordinated loan in the amount of EUR 16.1 million and a subordinated shareholder loan of EUR 24.9 million. 5) Cash and cash equivalents

Cash and short-term deposits are subject to variable interest rates. Short-term deposits are made for different periods of time depending on the Group's liquidity requirements. Interest is charged at the respective interest rates applicable for short-term deposits. The fair value of cash and cash equivalents corresponds to their carrying amount.


Other notes 1) Contingent liabilities and other financial obligations Other financial obligations are broken down as follows:

31 Mar.

2013

31 Dec.

2012

€ k € k

Rental and lease agreements 483,574 490,832

Capital commitments 67,833 73,401

Purchase commitments 49,113 65,304

Maintenance and supply agreements 46,661 44,625

Insurance contracts 1,717 2,810

Miscellaneous 17,275 17,564

Total 666,173 694,536

The obligation arising from rental and lease agreements primarily relates to the real property of MediClin AG that is rented on a long-term basis, excluding obligations already recognised during purchase price allocation. The underlying rental agreements have a term until 31 December 2027. The agreements provide for an annual rent adjustment in the amount of the change in the German Consumer Price Index, but in any case no more than 2% p.a. All other financial obligations are carried at their nominal amount and are due as follows:

€ k

Less than one year 132,398

Between 2 and 5 years 210,888

More than 5 years 322,887

Total 666,173


2) Related party disclosures For Asklepios Kliniken Gesellschaft mit beschränkter Haftung, related parties within the meaning of IAS 24.20 include entities controlled by the Group and/or entities over which the Group has a significant influence and vice versa. In particular, subsidiaries and equity investments are therefore defined as related parties. Transactions with these companies are conducted at arm's-length conditions. Dr Bernard gr. Broermann, Königstein-Falkenstein, is the sole shareholder of Asklepios Kliniken Gesellschaft mit beschränkter Haftung. Compared with the consolidated financial statements as of 31 December 2012, there has been no change to the group of related parties and transactions with these parties in terms of the transaction type and the amount of the proportionate business volume. The same applies to the financial receivables and liabilities that existed with related parties.


3) Consolidated statement of cash flows In the first three months of 2013, cash and cash equivalents fell by EUR 45.0 million to EUR 100.9 million. Net cash from operating activities amounted to EUR 18.0 million. The decline is primarily the result of the operating development and the cross-sector rise in receivables due to payers‟ increasing reluctance to pay. In addition, cash flow was negatively affected by subsidy-related payments. Net cash used in investing activities in the amount of EUR 27.2 million primarily related to acquisitions and capital expenditure. In addition, net cash used in financing activities amounted to EUR 35.8 million, largely as a result of scheduled repayments.

Disclaimer

This interim report includes forward-looking statements. Such forward-looking statements are based on certain assumptions

and expectations at the time of publication of this report. They therefore involve risks and uncertainties, and the actual results

may diverge considerably from those described in the forward-looking statements. Many of these risks and uncertainties are

affected by factors that lie beyond Asklepios Kliniken GmbH's sphere of influence and that cannot be estimated with

certainty from today's perspective. This includes future market conditions and economic developments, the conduct of other

market participants, the achievement of expected synergy effects as well as decisions by legislators and policy makers.

Asklepios Kliniken GmbH is not obliged to publish corrections to these forward-looking statements in order to reflect events

or conditions occurring after the publication date of this material.

Asklepios Kliniken Gesellschaft mit beschr¤nkter Haftung, Hamburg

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