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As filed with the Securities and Exchange Commission on ~~December~~May 1730, ~~2001~~ 2002

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

~~Washington~~WASHINGTON, D.C. 20549

FORM ~~Report of Foreign Private Issuer Dated August 20, 2001~~6-K

Report of Foreign Private Issuer

For the period ended March 31, 2002

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

MESSER GRIESHEIM HOLDING AG

~~Fütingsweg~~Koogstraat ~~34,~~10 25870 ~~47805 Krefeld~~Norderfriedrichskoog, Germany

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F ~~/x/~~ ý Form 40-F ~~/ /~~ o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to ~~Rule~~ Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ~~/ /~~ o No ~~/x/~~ý

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

N/A

TABLE OF CONTENTS

Consummation of Exchange Offer
Report for the Nine Month Period Ended September 30, 2001
Business
Management's Discussion and Analysis of Financial Condition and Results of Operations
Messer Griesheim Holding AG
Unaudited Financial Information
	Unaudited Interim Condensed Consolidated Statements of Operations
	Unaudited Interim Condensed Consolidated Balance Sheets
	Unaudited Interim Condensed Consolidated Statements of Changes in Stockholders' Equity
	Unaudited Interim Condensed Consolidated Statement of Cash Flows
	Notes to Unaudited Interim Condensed Consolidated Financial Statements


Report for the Three Month Period Ended March 31, 2002
Business
Management's Discussion and Analysis of Financial Condition and Results of Operations
Messer Griesheim Holding AG
Unaudited Financial Information
Unaudited Interim Condensed Consolidated Statements of Operations
Unaudited Interim Condensed Consolidated Balance Sheets
Unaudited Interim Condensed Consolidated Statements of Changes in Stockholders' Equity
Unaudited Interim Condensed Consolidated Statement of Cash Flows
Notes to Unaudited Interim Condensed Consolidated Financial Statements

In this document:

"Messer Holding", "the Company", "we", "us" and "our" refers to Messer Griesheim Holding AG and, unless the context otherwise requires, its consolidated subsidiaries;

"Messer Griesheim" refer to the Messer Griesheim Holding AG's subsidiary, Messer Griesheim GmbH, which is the operating company whose business and results of operations are described in this Form 6-K, including, unless the context otherwise requires, its consolidated subsidiaries;

"Messer Griesheim Group" and "the Group" refer to the parent of Messer Griesheim Holding AG, Messer Griesheim Group GmbH & Co. KGaA, a German Partnership limited by shares, or Messer Griesheim Group GmbH prior to its conversion on November 1, 2001 to Messer Griesheim Group GmbH & Co. KGaA;

"Messer Employee GmbH" refers to Messer Employee GmbH & Co. KG, a company through which employees participating on our share purchase and option plan are to hold shares in Messser Griesheim Group.

"Messer Industrie" and "MIG" refers to Messer Industrie GmbH, a holding company for the Messer family's minority interest in Messer Griesheim Group.

REPORT ~~CONSUMMATION~~FOR OFTHE ~~EXCHANGE~~THREE ~~OFFER~~MONTH PERIOD ENDED MARCH 31, 2002

~~Messer~~ The ~~Griesheim~~accounts ~~Holding~~being AGreported ~~(the~~on ~~"Company")~~are ~~has exchanged, upon~~ the ~~terms~~consolidated ~~and~~results ~~subject~~of toMesser ~~the~~Griesheim ~~conditions~~Holding ~~set~~AG. ~~forth~~Our inobligation ato ~~prospectus~~file ~~dated~~this ~~November 14, 2001~~report ~~(the~~with ~~"Prospectus")~~The ~~and~~Bank ~~the accompanying Letter~~ of ~~Transmittal~~New ~~(which~~York ~~together constitute~~ (the "~~Exchange Offer~~Trustee"), ~~(1) E1,000 principal amount at maturity of its registered 10.375% Senior Notes due 2011~~ for ~~each~~the ~~E1,000~~benefit ~~principal amount at maturity~~ of ~~its~~our ~~unregistered 10.375% Senior Notes due 2011 that were issued May 16~~noteholders, ~~2001~~ and ~~initially sold to qualified institutional buyers in~~ the ~~United States in accordance with Rule 144A under the~~ U.S. Securities ~~Act~~and ofExchange ~~1933,~~Commission asarises ~~amended~~under (the ~~"Securities Act") (the "Initial Rule 144A Notes") and (2) E1~~indenture,~~000~~ ~~principal~~dated ~~amount~~as ~~at maturity~~ of ~~its registered 10.375% Senior Notes due 2011 for each E1,000 principal amount at maturity of its unregistered 10.375% Senior Notes due 2011 that were issued~~ May 16, 2001, ~~and~~between ~~initially sold outside~~ the ~~United~~Company ~~States~~and ~~in accordance with Regulation S under~~ the ~~Securities Act (the "Initial~~Trustee, ~~Regulation S~~pursuant ~~Notes").~~to ~~The~~which ~~exchange notes issued in exchange for~~ the ~~Initial~~Company ~~Rule 144A~~has ~~Notes and the exchange notes~~ issued inits ~~exchange~~10.375% ~~for~~Senior ~~the Initial Regulation S~~ Notes ~~are referred~~due ~~to collectively herein as the "Exchange Notes"~~2011.

An This ~~aggregate~~document ~~principal~~includes ~~amount~~forward-looking atstatements. ~~maturity~~We ofhave ~~E109,585,000~~based ofthese ~~the~~forward-looking ~~Exchange~~statements ~~Notes~~on ~~issued~~our incurrent ~~exchange~~expectations ~~for the Initial Rule 144A Notes~~ and ~~E438,214,000~~ ofprojections ~~the~~about ~~Exchange~~future ~~Notes~~events. ~~issued~~Although inwe ~~exchange~~believe that ~~for~~our ~~the~~expectations ~~Initial~~are ~~Regulation S~~based ~~Notes were issued,~~ on ~~and~~reasonable ~~the global note representing the Exchange Notes were deposited with~~assumptions, ~~The~~we ~~Bank~~cannot ofassure ~~New~~you ~~York~~that ~~Depository~~actual ~~(Nominees)~~results ~~Limited,~~will asnot ~~common~~be ~~depositary~~materially ~~(the~~different ~~"Common~~from ~~Depositary")~~our ~~for~~expectations. ~~Euroclear~~Factors ~~and~~that ~~Clearstream~~could ~~Banking,~~cause ~~société~~our ~~anonyme,~~actual ~~formerly~~results ~~Cedelbank~~to ~~("Clearstream~~differ ~~Luxembourg"),~~materially ~~and~~from ~~registered~~our inexpectations ~~the name of the Common Depositary~~include, onamong ~~December 17,~~other ~~2001.~~things:

•: the amount of proceeds that we realize from our divestiture program;
•: the timing of the receipt of proceeds that we realize from our divestiture program;
•: the amount of savings in operational costs that Messer Griesheim is able to achieve as a result of its cost-savings program;
•: the costs of implementing Messer Griesheim's cost-savings program;
•: the timing to achieve benefits of our cost-savings program;
•: anticipated trends and conditions in our industry, including regulatory developments;
•: our capital needs; and
•: our ability to compete.

~~Following~~ We ~~the~~are ~~Exchange~~under ~~Offer,~~ no ~~Initial~~obligation ~~Rule 144A~~to ~~Notes~~update ~~remain~~or ~~outstanding~~revise ~~and~~publicly E2any forward-looking statement. The forward-looking events discussed in this document might not happen. In addition,~~201,000~~ ofyou should not interpret statements regarding past trends or activities as promises that those trends or activities will continue in the ~~Initial~~future. ~~Regulation S~~All ~~Notes~~subsequent ~~remain~~written ~~outstanding~~and oral forward-looking statements ~~representing~~attributable ~~approximately~~to ~~0.4%~~us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement and the more detailed discussion of risks in the ~~aggregate~~section ~~amount~~entitled "Risk Factors" of 10the Company's Post-Effective Amendment No.~~375%~~ ~~Senior~~1 ~~Notes~~to ~~due~~its ~~2011~~Registration ~~issued~~Statement ~~May 16,~~on ~~2001~~Form byF-4 filed with the ~~Company~~Securities and Exchange Commission on April 30, 2002. Some numbers that appear in this document (including percentage amounts) have been rounded. Numbers in tables may not ~~exchanged~~sum ~~pursuant~~precisely to the ~~Exchange~~totals ~~Offer~~shown due to rounding.

~~The~~ Investors ~~Initial~~are ~~Rule 144A~~cautioned ~~Notes~~that ~~have~~forward-looking anstatements ~~ISIN~~contained ofin ~~XS0129587142~~this ~~and~~section ainvolve ~~Common~~both ~~Code~~risk ofand ~~012958714~~uncertainty. ~~The~~Several ~~Initial~~important ~~Regulation S~~factors ~~Notes~~could ~~have~~cause anactual ~~ISIN~~results to differ materially from those anticipated by these statements. Many of ~~XS0129586763~~these statements are macroeconomic in nature and aare, ~~Common~~therefore, ~~Code number~~beyond the control of ~~012958676~~management.

The Exchange Notes issued in exchange for the Initial Rule 144A Notes and the Initial Regulation S Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg with an ISIN of XS0136262275 and a Common Code of 013626327.

REPORT FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2001

The accounts being reported on are the consolidated results of Messer Griesheim Holding AG (the "Company"). Our obligation to file this report with The Bank of New York (the "Trustee"), for the benefit of our noteholders, and the U.S. Securities and Exchange Commission arises under the indenture, dated as of May 16, 2001, between the Company and the Trustee, pursuant to which the Company has issued its 10.375% Senior Notes due 2011.

This report may include forward-looking statements. In addition, from time to time, our representatives or we have made or may make forward-looking statements orally or in writing. All statements other than statements of historical facts included in this report regarding our financial condition, plans to increase revenues and statements regarding other future events or prospects, are forward-looking statements. We have used the words "may," "will," "expect," "anticipate," "believe," "estimate," "plan," "intend" or similar expressions in this report to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements.

We are not obliged to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified to their entirety by the cautionary statements contained in this report and the more detailed discussion of risks in the section entitled "Risk Factors" of the Company's Registration Statement on Form F-4 as filed with the Securities and Exchange Commission on November 8, 2001. Because of these risks, uncertainties and assumptions, investors should not place undue reliance on forward-looking statements.

BUSINESS

We are a producer and distributor of industrial gases, including oxygen, nitrogen, argon, helium, carbon dioxide, hydrogen, helium, specialty gases and acetylene. ~~The~~ The industrial gases we produce are used in a broad range of industries, ~~including~~such as the ~~steel~~industrial, ~~chemicals,~~chemical ~~electronics, pulp~~ and ~~paper,~~pharmaceutical ~~health-care~~manufacturers, ~~food~~ and ~~beverage,~~the ~~automotive,~~food ~~lighting~~processing and ~~glass~~ waste treatment industries.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the Company's unaudited interim condensed consolidated financial statements included elsewhere herein. The Company's financial statements are prepared in accordance with the International Accounting Standards of the International Accounting Standards ~~Committee~~Board, or IAS, which differ in certain significant respects from U.S. GAAP. You can find reconciliations of net income, ~~shareholder~~and shareholders's equity and ~~other financial statement items and~~ disclosures regarding differences between IAS and U.S. GAAP in note 2019 to the Company's unaudited interim condensed consolidated financial statements.

The Company calculates normalized EBITDA as operating profit before depreciation and amortization, after adding back charges for impairment of intangible assets and property, plant and equipment, restructuring and reorganization charges.

Normalized EBITDA is not a measure recognized by IAS or U.S. GAAP. This and similar measures are used by different companies for differing purposes and are often calculated in ways that reflect the unique situations of those companies. We urge you to be very cautious in comparing our normalized EBITDA data to the EBITDA data of other companies. Normalized EBITDA is not a substitute for operating profit as a measure of operating results. Likewise, normalized EBITDA is not a substitute for cash flow as a measure of liquidity.

Overview

We operate in ~~nearly~~48 60 countries through more than ~~500~~419 facilities, including production plants, distribution and filling stations and research centers. We have an estimated global market share of approximately 5% of the total industrial gases market, making us the seventh largest industrial gas producer worldwide, and leading market shares in Germany ~~and~~ and certain other countries in central and eastern Europe. We also have strong businesses in selected industrial areas of the United States and in selected niche markets in other ~~western~~Western European countries. In ~~2001~~the first quarter 2002, we generated ~~year-to-date~~ net sales of ~~E1,234~~EURO386.4 million and normalized EBITDA of ~~E297~~EURO97.3 million.

Our primary or core markets are ~~Germany,~~Europe ~~North America~~ and ~~the~~North ~~rest of Europe~~America. Our two largest markets, Germany and North America, collectively accounted for 6365.40% of our net sales and 7574.75% of our normalized EBITDA for ~~year-to-date~~the ~~2001~~first quarter 2002. Within each of our geographic markets, we generally organize our business based upon how we deliver industrial gases to our customers: delivery of large volumes from on-site production facilities or by pipeline, delivery in bulk tanks transported by truck or rail and delivery in gas cylinders. In addition to our core markets of Europe and North America, we also operate in Asia, Africa and Latin America. We ~~intend~~are toin ~~divest~~the process of divesting substantially all of the assets outside our core markets, along with ~~certain~~ certain non-strategic assets in our core markets. Other than our joint ventures in China, we anticipate completing these divestitures by year- end 2002.

The following is an overview of a number of significant factors that affect our results of operations or that may affect our future results of operations.

Acquisition Transactions, Refinancing and Divestiture Program

As discussed elsewhere in ~~note 3~~this ~~to our unaudited interim condensed consolidated financial statements contained herein~~document, the acquisition transactions have been accounted for at fair value and, accordingly, our assets and liabilities have been recorded at their estimated fair values as of April 30, 2001, the date of the acquisition transactions. As a result, the financial statements of Messer Griesheim for periods prior to the acquisition transactions are not comparable to our financial statements for periods subsequent to the acquisition transactions. To highlight this lack of comparability, a solid vertical line has been inserted, where applicable, between columns in the tables and schedules of this document, and in our unaudited interim condensed consolidated financial statements to distinguish information pertaining to the pre-acquisition and post-acquisition periods.

of the acquisition transactions. As a result, the financial statements of Messer Griesheim for periods prior to the acquisition transactions are not comparable to our financial statements for periods subsequent to the acquisition transactions. To highlight this lack of comparability, a solid vertical line has been inserted, where applicable, between columns in the tables and schedules of this document, and in our financial statements to distinguish information pertaining to the pre-acquisition and post-acquisition periods.

The Acquisition of Messer Griesheim

Prior to the completion of the acquisition transactions described below, Messer Griesheim was owned:

•: 33¹/3% by the Messer family through a holding company, Messer Industrie GmbH, and
•: 66²/3% by Hoechst AG, a subsidiary of Aventis S.A. Aventis was formed in December 1999 as the result of the merger of Hoechst AG and Rhône-Poulenc S.A., two of Europe's largest chemical companies.

On December 31, 2000, Messer Industrie, Hoechst and our parent company Messer Griesheim Group GmbH (formerly named Cornelia Verwaltungsgesellschaft mbH), entered into certain acquisition transactions.

As a result of the acquisition transactions, ~~the~~Messer ~~issuer~~Holding owns 100% of Messer Griesheim and ~~the~~Messer ~~issuer~~Holding is directly or indirectly wholly owned by Messer Griesheim Group. ~~The~~Messer Holding ~~issuer~~ and Messer Griesheim Group are both holding companies with no material assets other than their direct or indirect interests in Messer Griesheim (and, in ~~the~~Messer ~~issuer~~Holding's case, the payments under the intercompany loan to Messer Griesheim). AsDuring athe ~~result~~three ofmonth ~~the~~period ~~completion~~ended ofMarch 31, 2002, our employees purchased shares through the ~~acquisition~~share ~~transactions~~purchase and option plan. They hold their shares through Messer Employee GmbH & Co. KG. Consequently, Messer Griesheim Group is owned as of March 31, 2002:

•: 32.18% by the Messer family, through Messer Industrie;
•: 33.17% by Allianz Capital Partners;
•: 33.17% by six private equity funds managed by affiliates of The Goldman Sachs Group, Inc.; and
•: 1.48% by Messer Employee GmbH & Co. KG reflecting ownership interests of our employee participants in the share purchase and option plan.

In connection with these acquisition transactions, the main shareholders of Messer Griesheim Group entered into a shareholders' agreement governing their respective voting control and other ownership rights with respect to the issuer and Messer Griesheim.

Due to certain antitrust related considerations relating to the equity interest of Allianz AG in a competitor of Messer Griesheim, the agreement generally allocates the rights of the financial sponsors relating to corporate governance and management to the GS Funds until such time as the antitrust related considerations are no longer relevant. Accordingly, until then, members of the shareholders' committee appointed by the GS Funds will represent all votes of the financial sponsors constituting 66.34% of all votes in the shareholders' committee. Thereafter, the rights will be shared by Allianz Capital Partners and the GS Funds, with Allianz Capital Partners having a deciding vote in the event of a lack of consensus between Allianz Capital Partners and the GS Funds, subject to certain exceptions.

Transaction Structure

The following diagram shows our ownership structure and the structure of our principal indebtedness as of March 31, 2002 following completion of the acquisition transactions, ~~and~~on or about ~~after~~April 30, 2001, reflecting the issuance of the senior notes and the refinancing or repayment of our indebtedness asto ~~have~~the ~~been~~extent completed, including repayment in full of the ~~E400~~ EURO400 million mezzanine bridge facility and repayment of ~~E115~~EURO115 million of our senior term facilities: and subsequent share purchases by our employees through the share purchase and option plan mentioned above.

(1): The holding company for the Messer family's interests in Messer Griesheim.
(2): Certain private equity funds managed by affiliates of The Goldman Sachs Group, Inc.
(3): The employees participating in the stock option plan hold their shares through Messer Employee GmbH & Co. KG. The participant's voting rights are exercised by the managing partner of this company.
(4): Principal operating company in Germany and holding company for the remainder of our operations.
(5): EURO550.0 million aggregate principal amount.
(6): Messer Griesheim Group owns 100% of Messer Holding, 33.33% of which is owned directly and 66.67% of which is owned through the wholly owned subsidiary DIOGENES 20. Vermögensverwaltung GmbH.
(7): EURO1,340 million was the initial aggregate amount of senior term loan facilities. Messer Griesheim GmbH repaid EURO115 million principal amount of senior term facilities on or about May 16, 2001 with a portion of the proceeds from the sale of the senior notes. As of March 31, 2002, EURO922.9 million aggregate principal amount remained outstanding under the senior term facilities. The senior term facilities also include committed but undrawn funds totaling EURO297 million under revolving facilities. Certain of Messer Griesheim's subsidiaries are also direct borrowers under the senior term facilities.

Refinancing Program

In connection with the acquisition transactions described above, substantially all of Messer Griesheim's existing indebtedness was refinanced through the senior term facilities ~~described below~~ and the senior notes. Upon the initial closing of the acquisition, Messer Griesheim entered into a senior ~~facilities agreement with aggregate available funds of E1,650 million (E1,340 million of~~ term loan facilities and E310 million of revolving facilities) and a mezzanine bridge facility agreement in the aggregate amount of E400 million. Since that time Messer Griesheim has borrowed a portion of the term loans under the senior facilities and the entire mezzanine bridge facility. Upon the closing of the sale of the notes, the

~~issuer~~facilities agreement with aggregate available funds of EURO1,650 million ( EURO1,340 million of term loan facilities and EURO310 million of revolving facilities) and a mezzanine bridge facility agreement in the aggregate amount of EURO400 million. On May 16, 2001, the Company issued EURO550 million principal amount of 10.375% senior notes maturing on June 1, 2011. Upon the closing of the sales of the senior notes, Messer Holding made an intercompany loan to Messer Griesheim with the gross proceeds from the senior notes, and Messer Griesheim used the intercompany loan to repay the mezzanine bridge facility in full and repay ~~E115~~EURO115 million principal amount of the outstanding term borrowings under the ~~senior~~ facilities.

Business Practices

We believe the following selected business practices are important for a proper understanding of financial reporting risks.

Net Sales

We primarily earn revenues from:

•: sales of industrial gases and, to a lesser extent,
•: sales of hardware related to industrial gas usage.

Our sales of industrial gases, which ~~amounts~~amount to greater than 90% of our total ~~revenues~~revenue, are divided into three business units corresponding to their mode of delivery: on-site and pipeline sales, bulk delivery sales and cylinder delivery sales. Contracts in our on-site production and pipeline supply businesses in Europe and the United States typically have terms of 10 to 15 years and usually have "take-or-pay" minimum purchase provisions. In each of the last three years, the "take-or-pay" minimum purchase requirements in our on-site and pipeline supply contracts accounted for approximately 60% to 70% in Germany and 40% to 45% in the United States of the total amount of net sales that we generated under these contracts.

Contracts in our bulk business generally have terms of two to three years in Europe and five to seven years in the United States. Customers in our on-site and pipeline and bulk businesses have historically exhibited high renewal rates, with over 90% of customers whose contracts expired in the past five years renewing their contracts with us. Our on-site, pipeline and bulk businesses in Germany and the United States accounted for approximately 3339% of our total net sales and approximately 5051% of our normalized EBITDA in ~~2001~~the first quarter 2002. We generally sell our cylinder gases by purchase orders or by contracts with terms ranging between one to two years in Europe and three to five years in the United States.

Normalized EBITDA is not a measure recognized by IAS or U.S. GAAP. This and similar measures are used by different companies for differing purposes and are often calculated in ways that reflect the unique situations of those companies. One should be very cautious in comparing the Company`s normalized EBITDA data to the EBITDA data of other companies. Normalized EBITDA is not a substitute for operating profit as a measure of operating results. Likewise, normalized EBITDA is not a substitute for cash flow as a measure of liquidity.

Our net sales are dependent on the economic conditions in the markets in which we operate. However, we believe that we have limited exposure to the cyclical nature in demand of any particular industry because of the wide diversity of industries represented by our customer base.

Although industrial gas prices appear to have recently stabilized in many of the markets in which we operate, prices have consistently decreased for at least the last 10 years, especially in the bulk and commodity gas cylinder segments, due to aggressive efforts by most producers to increase market share. The profit margin impact of this price erosion has been partially offset by efficiency improvements throughout the supply chain and regional consolidation among large participants in the industry, permitting economies of scale. In addition, new applications for industrial gases have increased sales volumes and profit margins.

Cost of Sales

Our principal raw material is air, which is free and which we separate into its component gases. Cost of sales principally consists of:

•: capital costs of plants;
•: costs of energy required for production; and
•: labor costs relating to production.

Energy costs consist principally of electrical power costs. ~~Energy~~Electricity ~~costs~~represents ~~accounted for~~ approximately 2527% of ~~our~~cost ~~total~~of ~~operating~~sales ~~expenses~~ in ~~2001~~the first quarter of 2002. We are able to pass on a portion of increases in energy costs to many, but not all, of our on-site and pipeline customers with long-term supply contracts, although these adjustments in cost often occur only on an annual basis. The amount and other terms of these energy cost pass-through provisions vary by contract.

Labor costs relating to production consist principally of wages and salaries, social security contributions and other expenses related to employee benefits. Social security contributions include our portion of social security payments as well as our contributions to workers' insurance associations.

We depreciate fixed assets on a straight-line basis. Our depreciation rates assume a useful ~~life~~lives ofranging from 10 to 50 years for buildings, 10 to 20 years for ~~plant~~ plant and machinery and 3 to 20 years for other plant, factory and office equipment.

Currency Translation

During the periods presented, our operations were conducted principally in Europe and the United States, and to a lesser extent in other regions of the world. On January 1, 2000, we adopted the E as our reporting currency and translated all amounts previously denominated in Deutsche Mark (DM) at the fixed exchange rate of E1.00 = DM 1.95583, applicable since January 1, 1999, for all prior periods presented.

The balance sheet items of our group companies located outside the European Monetary Union are translated from their relevant local currencies into E at the closing exchange rate on our balance sheet date. The items on our income statement are translated into E using average annual exchange rates. Foreign currency gains and losses from current assets and current liabilities denominated in a currency other than the functional currency are included in "other operating income" or "other operating expense". Accordingly, exchange rate fluctuations can have a material impact on our income statement and balance sheet as presented in E.

Impairment of Intangible Assets and Property, Plant and Equipment

In the event facts and circumstances indicate that our long-lived assets, including property, plant and equipment and intangible assets, may be impaired, an evaluation of recoverability is performed. If an evaluation is required, the recoverable amount of the asset is compared to the asset's carrying amount to determine whether a write-down to the recoverable amount is required. The recoverable amount is based on the discounted cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The write-down of current and non-current assets, except for goodwill, are reinstated to the extent factors giving rise to the write-down reasons no longer exist.

Discontinuing Operations

In December 1999, Messer Griesheim transferred its cutting & welding division to its minority shareholder, Messer Industrie GmbH. As a result of this transaction, the operating results of the cutting & welding division have been classified as discontinuing operations on Messer Griesheim's consolidated 2000 income statement.

Divestiture Program

Our core markets are ~~Germany and elsewhere in~~ Europe and ~~the~~North ~~United States~~America. In May 2001, immediately following our change inof ownership ~~that~~resulting ~~resulted~~ from the acquisition transactions described elsewhere in this document, we adopted a divestiture program. Pursuant to the divestiture program, we ~~are~~intend ~~currently in negotiation~~ to sell substantially all of our assets and operations in our non-core markets in Asia, Africa and Latin America, as well as certain non-strategic assets and operations in our core markets. ~~Principally, the~~The proceeds from this divestiture program will be used to reduce our consolidated debt.

We Pursuant ~~estimate~~to ~~that~~ the ~~operations~~divestiture toprogram, beas ~~divested~~of ~~accounted~~March 31, ~~for~~2002, ~~approximately~~we ~~24%~~have completed disposals of our ~~net~~home ~~property~~care business in Germany, ~~plant~~our ~~and~~health ~~equipment~~care atbusiness ~~year-end~~in ~~2000~~Canada and ~~17%~~our non-cryogenic ofplant ~~our~~production ~~total~~operations ~~net~~in ~~sales~~Germany, ~~and 7%~~the ofUnited ~~normalized~~States, ~~EBITDA~~Italy ~~for~~and ~~2000~~China. We ~~expect~~also have completed disposals of our ~~divestitures~~operations ~~will~~in ~~permit~~Argentina, usBrazil, toMexico, ~~reduce~~South Africa, South Korea and Venezuela, our ~~consolidated~~nitric ~~debt~~oxide bybusiness ~~approximately~~in ~~E400 million.~~Germany, ~~Delays~~our carbon dioxide business in ~~divesting~~the ~~these~~United ~~assets could~~States ~~prevent~~and usour ~~from~~nitrogen ~~realizing~~services business in the ~~full~~United ~~benefit~~Kingdom. Subsequent to March 31, 2002 we disposed of our ~~program~~activities in Egypt and Trinidad & Tobago which enabled us to ~~reduce~~repay our ~~debt~~senior term disposal facility.

The remaining divestiture of certain of our assets and operations may require additional expenditures prior to their ~~divestiture~~disposal.

Cost-Savings Plan

We are implementing a plan to reduce our operating costs, principally in Europe. This plan involves eliminating ~~duplications~~duplication in support positions for certain process functions, reducing energy costs, centralizing key process functions and simplifying our management structure. We have identified amost ~~number~~ of the specific cost savings measures that we anticipate to achieve by year-end 2003. We expect that these measures will reduce the cost base of our operations in our core markets relative to its ~~current~~ level for the year 2000 by ~~E100~~approximately EURO100 million by year-end 2003. To implement these measures, we expect to ~~incur~~spend ~~one-time~~in ~~costs~~total of approximately ~~E84~~EURO84 million ~~over the next two years~~between April 30, ~~principally to be applied towards severance payments and information technology improvements.~~

~~Taxation~~ 8

~~In general, prior to~~ 2001 ~~retained (undistributed) German corporate income was initially subject to a federal corporation income tax at a rate of 40% for 2000 (40% for 1999~~ and ~~45%~~year ~~for~~end ~~1998)~~2003, ~~plus~~principally ~~a surcharge of 5.5% for each year. Giving effect~~ to ~~the~~be ~~surcharge,~~applied ~~the~~towards ~~federal~~severance ~~corporate~~payments ~~tax rate was 42.2% for 2000 (42.2% in 1999~~ and ~~47.475%~~efficiency ~~in 1998)~~improvements. Upon distribution of certain retained earnings generated in Germany to stockholders in 2001, the corporate income tax rate on the earnings was adjusted to 30%, plus a solidarity surcharge of 5.5% for a total of 31.65% for each year, by means of a refund for taxes previously paid. Under the current German corporate tax system, during a 15 year transition period beginning on January 1, 2001, we will continue to receive a refund or pay additional taxes on the distribution of retained earnings which existed as of December 31, 2000.

~~Deferred~~ For ~~taxes~~the ~~are~~eight ~~recognized~~month ~~for~~period ~~the~~ended ~~temporary~~December 31, ~~differences~~2001, ~~between~~we have reduced the ~~carrying~~cost ~~amount~~base of ~~assets~~our oroperations ~~liabilities~~ in ~~the~~our ~~balance~~core ~~sheet~~markets ~~and~~relative ~~their~~to ~~associated~~its ~~tax~~level ~~bases.~~for ~~Deferred~~the ~~taxes~~year 2000 by ~~are~~EURO27.0 million. ~~based~~As ona ~~the~~result ~~rates~~of ~~enacted~~implementation ~~for~~of ~~the~~these ~~subsequent~~measures, ~~periods~~we ~~when~~incurred ~~the~~total ~~temporary~~one ~~differences~~time ~~are~~costs ~~expected~~of toapproximately ~~reverse~~EURO25.7 million A(excluding EURO12.5 million ~~deferred~~of ~~tax~~costs ~~asset~~that iswere ~~recognized~~included ~~only~~as topart of the ~~extent~~purchase ~~that~~price itaccounting isadjustments) ~~probable~~for ~~that~~the ~~future taxable~~eleven ~~profits~~month ~~will~~period beended ~~available~~March 31, ~~against~~2002, of which EURO0.4 million was recorded in the ~~asset~~first ~~can~~quarter beof ~~utilized~~2002. We expect to incur an additional EURO46.2 million of one-time costs by year end 2003.

Critical Accounting Policies

The results of our operations and financial condition are dependent upon the utilization of accounting methods, assumptions and estimates that are used as a basis for the preparation of the unaudited interim condensed consolidated financial statements. We have identified the following critical accounting policies and related assumptions, estimates and uncertainties, which management believes are essential to understanding the underlying financial reporting risks and the impact that these accounting methods, assumptions, estimates and uncertainties have on our reported financial results. This information should be read in conjunction with the unaudited interim condensed consolidated financial statements.

Purchase Accounting

We accounted for the acquisition transactions similar to that of an acquisition of Messer Griesheim by Messer Holding. The accounting for this acquisition resulted in significant amount of long-lived intangible assets. Our accounting policy relating to purchase business combinations requires the use of the purchase method whereby the purchase price is allocated to identifiable tangible and intangible assets based upon their fair value. The allocation of purchase price is judgmental and requires the extensive use of estimates and fair value assumptions, which can have a significant impact on operating results. Changes in the industry conditions, technological advances and other economic factors could result in revisions to the judgments, estimates and valuation techniques utilized in the application of purchase accounting. Such differing allocations could impact future operating results.

Recoverability of Long-Lived Assets

Our business is capital intensive and, historically, required a significant investment in property, plant and equipment. At March 31, 2002, the carrying value of our property, plant and equipment was EURO1,676 million. At March 31, 2002 long-lived intangible assets amounted to EURO843 million. We review long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying value of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets. Estimated fair value is generally based on either appraised value or by discounted estimated future cash flows.

A continuation of the currently competitive economic conditions in the industrial gas industry could result in an increasingly adverse pricing environment due to significant industry over-capacity. This could result in decreased production and reduced capacity utilization. Such events could result in reductions of future estimates of net cash flows expected to be generated to the extent that both

long-lived ~~Results~~tangible ofand ~~Operations~~ intangible assets could be considered impaired, negatively impacting future operating results.

~~Certain~~Recoverability ~~reclassifications have been made to the presentation~~ of ~~prior~~Investments ~~periods~~in toSubsidiaries ~~conform~~Available to the current period classification. Consideration should be given to the effects of the acquisition transactions, the refinancing program, and the divestiture program, as discussed above, when comparing historical financial information for ~~periods prior to April 30, 2001 to periods thereafter.~~ Sale

~~Four~~ We ~~Months~~have ~~Ended~~made ~~April 30~~a series of investments in, ~~2001~~and advances to, companies that are principally engaged in the manufacture, sale and ~~Five~~distribution ~~Months~~of ~~Ended~~industrial ~~September~~gases which are located in regional markets which we no longer consider part of our core markets. At March 3031, ~~2001~~2002, ~~Compared~~the ~~with~~carrying ~~Nine~~amounts ~~Months~~of ~~Ended~~investments ~~September~~in subsidiaries available for sale aggregate EURO45 30million. Our accounting policy is to record an impairment of such investments to net realizable value when the decline in fair value below carrying value is other than temporary. In determining if a decline in value is other than temporary, ~~2000~~ we consider the length of time and magnitude of excess of carrying value, the forecasted results of the investee, the economic environment in the regional market and our ability and intent to hold the investment.

~~The~~ A slump ~~following~~in ~~table~~demand ~~sets~~for ~~forth~~industrial agases ~~summary~~could ofadversely ~~our~~impact ~~results, which are unaudited, for~~ the ~~nine~~operations ~~month~~of ~~period~~these ~~ended~~investments ~~September 30,~~to ~~2000,~~generate ~~the~~future ~~four~~net ~~month~~cash ~~period ended~~flows. ~~April 30~~Furthermore, ~~2001~~since ~~and~~these ~~the~~investments ~~five~~are ~~month~~not ~~period ended September 30~~publicly traded, further ~~2001.~~judgments ~~Financial~~and ~~information~~estimates ~~for~~are ~~periods~~required ~~prior~~ to ~~and~~determine ~~subsequent~~their tofair ~~the acquisition~~value. ~~transactions~~As ~~have~~a ~~been~~result, ~~separated~~potential inimpairment ~~the~~charges ~~following~~to ~~table~~write-down bysuch ~~inserting~~investments ato ~~solid~~net ~~vertical~~realizable ~~line~~value ~~between~~could ~~the~~adversely affect ~~columns~~future ~~for~~operating ~~such periods~~results.

	Predecessor
	Nine Months Ended September 30, 2000		Four Months Ended April 30, 2001
					Successor Five Months Ended September 30, 2001 Messer Griesheim Holding AG
	Messer Griesheim GmbH
	E (in millions)		E (in millions)		E (in millions)
Net sales	1,244.9		574.5		659.5
Cost of sales	(600.4	)	(293.4	)	(336.2	)
Gross profit	644.5		281.1		323.3
Distribution and selling costs	(433.7	)	(177.2	)	(192.0	)
General and administrative costs	(107.9	)	(45.0	)	(47.5	)
Other, net(1)	(93.8	)	(12.4	)	(33.0	)
Operating profit	9.1		46.5		50.8
Interest expense, net	(66.2	)	(36.4	)	(64.3	)
Loss before income taxes and minority interests	(247.4	)	(6.6	)	(29.9	)
Income tax benefit / (expense)	57.3		(4.8	)	(21.8	)
Net loss	(195.7	)	(13.5	)	(56.2	)
Normalized EBITDA	251.1		125.9		171.0

Realization of Deferred Tax Assets

~~As a~~ At ~~result~~March 31, of2002, ~~the~~we ~~acquisition~~had ~~transactions,~~total ~~the~~deferred ~~refinancing~~tax ~~program~~assets ~~and~~(net ~~the~~of ~~divestiture~~valuation ~~program,~~allowance) asof ~~described~~approximately ~~above,~~EURO193 million. aIncluded ~~comparison~~in ~~between~~this total are the ~~four~~benefit ~~months~~of ~~ended~~net ~~April 30,~~operating ~~2001~~ loss and ~~the~~tax ~~five~~credit ~~months~~carry ~~ended~~forwards ~~September~~of approximately EURO129 ~~30,~~million. ~~2001~~Such totax ~~the~~loss ~~nine~~and ~~months~~credit ~~ended~~carry ~~September 30,~~forwards ~~2000~~generally isdo not ~~meaningful.~~expire under ~~The~~current ~~acquisition~~law, ~~transactions~~except ~~were~~certain ~~accounted~~amounts ~~for~~attributable to operations in athe ~~manner~~United ~~similar~~States tothat ~~a "purchase"~~expire ~~business~~in ~~combination~~20 years. ~~and,~~Realization ~~accordingly,~~of ~~the~~these ~~cost~~amounts ofare ~~the~~dependent ~~acquisition~~upon ~~has~~the ~~been~~generation ~~allocated~~of tofuture taxable ~~the~~income ~~assets~~at ~~acquired~~a ~~and~~level ~~the~~sufficient ~~liabilities~~to ~~assumed~~absorb ~~based~~the onloss ~~their~~and ~~fair~~credit ~~values~~carry forwards. ~~The~~These ~~accounting~~deferred ~~treatment impacts~~tax ~~our~~assets ~~results~~were ofrecognized ~~operations~~to ~~for~~ the ~~five~~extent ~~months~~that ~~ended~~it ~~September 30,~~is ~~2001~~probable ~~primarily~~that byfuture ~~increasing~~taxable ~~amortization~~profit ofwill ~~goodwill,~~be available. ~~decreasing~~The ~~depreciation~~amount of ~~property,~~total ~~plant~~deferred ~~and~~tax ~~equipment,~~assets ~~and reduced~~considered ~~losses~~realizable ofprospectively ~~disposals~~could ofbe ~~subsidiaries~~reduced ~~and~~if ~~other~~our ~~assets~~estimates ~~included~~of inprojected ~~the~~future ~~divestiture~~taxable ~~program~~income ~~and~~are ~~correspondingly~~lowered ~~decreasing~~from ~~our~~present ~~operating~~levels ~~profit~~or ~~compared~~changes in tocurrent ~~all~~tax ~~periods~~regulations ~~prior~~are torevised ~~April 30, 2001.~~which ~~The~~could ~~refinancing~~impose ~~program~~restrictions ~~increased~~on ~~our~~the ~~interest~~time ~~expense~~or inextent ~~the~~of ~~five~~our ~~months~~ability ~~ended~~to ~~September 30,~~utilize ~~2001~~tax ~~compared~~loss toand ~~all~~credit ~~periods~~carry ~~prior~~forwards toin ~~April 30,~~the ~~2001~~future.

Restructuring Charges

Subsequent to the acquisition transactions, the management approved plans to restructure the Group and reduce costs. These changes were intended to, among other things, improve operational efficiencies and improve profitability. While the management approved a detailed restructuring plan, the calculation of the provision requires the use of estimates and management judgment. Additionally, if industry conditions continue to deteriorate or an economic downturn is experienced in the future, further restructuring charges may be incurred. Resulting variances from estimates previously utilized may adversely impact future financial results.

Reclassifications

Certain reclassifications have been made to the presentation of the prior period to conform to the current period classifications.

In ~~addition,~~ Results ~~certain subsidiaries to be sold as part~~ of ~~our divestiture program have been deconsolidated and thus excluded from the results of operations for the five months ended September 30, 2001.~~ Operations

~~Notwithstanding~~ When comparing the ~~lack~~three ofmonth periods ended March 31, 2002 and 2001, consideration should be given to the impact on comparability ~~between~~arising from the acquisition ~~periods~~transaction, ~~net~~the ~~sales~~refinancing ~~with~~program, ~~respect~~the todivestiture ~~our~~program ~~continuing~~and ~~operations~~the ~~remained~~other ~~relatively~~developments ~~constant~~described inabove. ~~most~~As a result of ~~our~~these ~~operating~~events, ~~regions~~comparability is impacted by a number of factors, ~~and~~the ~~operating~~most ~~profit~~significant ~~with~~of ~~respect~~which toare ~~our~~(i) the ~~continuing~~new ~~operations,~~cost ~~excluding~~base ~~impairment~~of ~~charges~~the Company's assets and ~~restructuring~~liabilities ~~charges,~~as ~~increased~~a inresult ~~Germany~~of ~~and~~the ~~Eastern~~acquisition ~~Europe~~program, ~~remained~~(ii) the ~~stable~~refinancing inprogram ~~Western~~and ~~Europe~~the resulting impact ~~(excluding~~on ~~Germany)~~financing costs and ~~declined~~(iii) the indivestiture ~~North~~program. ~~America~~All of these factors impacted the results presented for the three month period ended March 31, 2002.

~~Management~~ To ~~believes~~highlight ~~that~~this ~~the~~lack ~~following~~of ~~material~~comparability, ~~trends~~a ~~have~~solid ~~affected~~vertical ~~our~~line ~~net~~has ~~sales~~been ~~and operating profit with respect to our continuing operations for the nine months ended September 30~~inserted, ~~2001,~~where ~~compared to the nine months ended September 30~~applicable, ~~2000.~~between ~~Net~~columns ~~sales and operating profit~~ in ~~Germany during 2001 benefited from increased sales volume in our gas business. This benefit was offset by lower prices resulting from ongoing competition in response to market conditions and~~ the ~~overall~~tables ~~worsening economic conditions in Germany. Net sales and operating profit in North America declined~~below, ~~reflecting the adverse effects of the continuing economic downturn~~ in ~~U.S.~~our ~~markets,~~interim ~~partially~~condensed ~~offset~~consolidated ~~by the favorable effects of the appreciation of the dollar against the~~financial ~~Euro.~~statements ~~On a constant exchange rate basis, both net sales~~ and ~~operating~~elsewhere ~~profit decreased~~ in ~~North~~this ~~America.~~document ~~In Western Europe (other than Germany), net sales and operating profit remained selectively constant across all countries other than the United Kingdom, which experienced a slight decline~~ in ~~net~~order ~~sales due~~ to ~~lower~~distinguish ~~sales~~information pertaining to the ~~food~~pre-acquisition and ~~beverage~~post-acquisition ~~industry~~periods. ~~Net sales and operating profit in Eastern Europe decreased, primarily resulting from a major devaluation of the Yugoslavian currency against the Euro.~~

Three Months Ended ~~September~~March 3031, ~~2001~~2002 Compared with Three Months Ended ~~September~~March 3031, ~~2000~~2001

The following table sets forth a summary of ~~Messer~~the ~~Griesheim's~~ results of operations for the three month periods ended ~~September~~March 3031, ~~2000~~2002 and 2001, in terms of amounts as well as a percentage of net sales.

	Predecessor Three Months Ended September 30, 2000 Messer Griesheim GmbH				Successor Three Months Ended September 30, 2001 Messer Griesheim Holding AG
	Three Months Ended March 31, 2002 Messer Griesheim Holding AG				Three Months Ended March 31, 2001 Messer Griesheim GmbH
	E (in millions)		%		E (in millions)		%
	EURO (in millions)		%		EURO (in millions)		%
Net sales	~~397~~386.74		100.0		~~393~~435.61		100.0
Cost of sales	(~~183~~194.36	)	(4650.14	)	(~~206~~220.18	)	(5250.47	)
Gross profit	~~214~~191.48		5349.96		~~187~~214.53		~~47,6~~49.3
Distribution and selling costs	(~~153~~117.26	)	(3830.54	)	(~~112~~135.41	)	(2831.61	)
General and administrative costs	(3135.7	)	(89.02	)	(2834.75	)	(7.39	)
Other, net(1)	(3210.84	)	(8.2.7	)	(2110.47	)	(52.45	)
Operating profit (loss)	(3.3	)	(0.8	)	25.0		6.4
Operating profit	28.1		7.3		34.0		7.8
Interest expense, net	(2535.52	)	(69.41	)	(4025.1	)	(105.28	)
Loss before income taxes and minority interests	(79.0	)	(19.9	)	(17.5	)	(4.5	)
Profit (loss) before income taxes and minority interests	(7.7	)	(2.0	)	(0.8	)	(0.2	)
Income taxes	18(3.2	)	4(0.68	)	(203.9	)	(50.39	)
Net income (loss)	(63.2	)	(15.9	)	(41.3	)	(10.5	)
Net loss	(13.4	)	(3.5	)	(6.7	)	(1.5	)
Normalized EBITDA	7797.23		1925.42		9891.19		2421.91

(1): Amounts include total net of research and development costs, other operating income, other operating expense and restructuring and reorganization charges.

Net sales. Net sales decreased 111.02% to ~~E393~~EURO386.64 million in ~~the~~ ~~third-~~the first quarter ~~2001~~2002 from ~~E397~~EURO435.71 million in the same period ~~2000~~2001 based essentially on the factors described below.

	Predecessor Three Months Ended September 30, 2000 Messer Griesheim GmbH		Successor Three Months Ended September 30, 2001 Messer Griesheim Holding AG
	Three Months Ended March 31, 2002 Messer Griesheim Holding AG		Three Months Ended March 31, 2001 Messer Griesheim GmbH
	E (in millions)		E (in millions)
	EURO (in millions)		EURO (in millions)
Net sales (Business Areas)
Germany	~~141~~157.04		~~163~~173.91
Western Europe, excluding Germany	6166.12		64.72
Eastern Europe	5154.10		5453.25
North America	~~100~~93.46		9598.95
Others	5014.41		1445.74
Reconciliation / Corporate	(6.3	)	0.2
Reconciliation/Corporate	1.1		0.4
Total	~~397~~386.74		~~393~~435.61

•: Net sales in Germany decreased 9.1% to EURO157.4 million in the first quarter 2002 from EURO173.1 million in the same period 2001. The first quarter 2001 included EURO7.2 million of sales from the disposed businesses Homecare and Mahler. Excluding this effect, net sales for Germany decreased by 5.1% or EURO8.5 million, of which EURO6.5 million resulted from our industrial gas business and the remainder of the decrease resulted from our specialty gas business subsidiary for the semiconductor industry. This decrease is due to lower demand caused by an overall downturn in the business climate in Germany.
•: Net sales in Western Europe (excluding Germany) increased 3.1% to EURO66.2 million in the first quarter 2002 from EURO64.2 million in the same period 2001. This increase is primarily due to higher sales volumes from our activities in Spain and Italy more than offsetting lower sales in Benelux and the United Kingdom. In the first quarter 2002, the region benefited from our entering into the cylinder business in Spain and increased bulk CO2 sales in Italy. Lower sales occurred in the United Kingdom due to a decline in the beverage business and in Benelux from the cylinder business.
•: Net sales in Eastern Europe increased 0.9% to EURO54.0 million in the first quarter 2002 from EURO53.5 million in the same period 2001. The first quarter 2001 included a sale from an on-site plant in Austria amounting to EURO2.6 million. Excluding this effect, net sales for the region increased from EURO50.9 million in the first quarter 2001 by EURO3.1 million or 6.1% to EURO54.0 million in the same period 2002. Sales volumes in almost all countries in the region increased compared to the same period 2001. The only exception was Bulgaria where we had a temporary shortfall in product sourcing. The main sales increases arose from our businesses in Finland, Hungary, the Czech Republic and Yugoslavia, where new business was generated. This development confirms our leading position in Eastern Europe.
•: Net sales in North America decreased 5.0% to EURO93.6 million in the first quarter 2002 from EURO98.5 million in the same period 2001. This decrease results from the EURO12.2 million reduction in net sales as a result of the business disposals pursuant to the divestiture program (the sale of Generon, Healthcare Canada and CO2 business) and is partially offset by EURO4.6 million by the appreciation of the U.S. dollar against the Euro in the first quarter 2002. Excluding the effects of the business disposals in the first quarter 2002 and

~~Cost~~ appreciation of ~~sales. Cost~~the ~~of sales consists primarily of raw material costs, purchased parts and direct labor, as well as manufacturing overheads and depreciation~~U.S. ~~Cost~~dollar ofnet sales increased 12by 3.41% tofrom ~~E206~~EURO86.13 million in the ~~third-~~first quarter 2001 ~~from E183~~to EURO89.30 million in the ~~same~~first ~~period 2000~~quarter 2002. ~~The~~This ~~cost~~increase ofreflects ~~sales~~an asimproving abusiness ~~percentage~~climate ~~of net sales increased to 52.4%~~ in the ~~third-quarter 2001 from 46~~U.~~1% in the same period 2000~~S. ~~The increase~~and ~~primarily~~successful ~~results~~pricing ~~from higher energy costs in the United States that could not be passed on to customers. Furthermore~~increases, ~~our~~particularly ~~product~~within ~~mix in~~ the ~~third~~bulk ~~quarter was burdened by higher hardware-sales in the U.K.~~ and ~~Germany,~~pipeline ~~which have below average margins~~business.

•: Net sales in Other Business Areas decreased 68.9% to EURO14.1 million in the first quarter 2002 from EURO45.4 million in the same period 2001. This decrease primarily results from the divestiture program which resulted in the de-consolidation of our subsidiaries in Mexico, Brazil, Argentina, Peru, Venezuela, Trinidad & Tobago, South Africa, Singapore, Korea and Indonesia as of April 30, 2001. Therefore, the figures are not comparable.

~~Distribution~~ Cost ~~and selling costs. Distribution and selling costs consist primarily~~ of sales ~~organization~~. Cost ~~costs, transport~~ of ~~gases and cylinders from the production site or filling station to the customer, depreciation of the cylinders and tanks at the customer site, advertising and~~ sales ~~promotions,~~ ~~commissions and freight. Distribution and selling costs~~ decreased 2611.69% to ~~E112~~EURO194.46 million in the first ~~third-~~quarter ~~2001~~2002 from ~~E153~~EURO220.28 million in the same period ~~2000~~2001. ~~This~~Cost ~~decrease~~of issales ~~principally~~consist ~~due~~primarily ~~to the successful implementation~~ of ~~the~~raw ~~cost~~material ~~savings~~costs ~~program~~(e.g. ~~Distribution~~energy), ~~and~~purchased ~~selling~~parts ~~costs~~and asdirect alabor, ~~percentage of net sales decreased to 28.6% in~~as ~~the~~well ~~third-quarter~~as ~~2001~~manufacturing ~~from~~overheads ~~38.5%~~and ~~in the same period 2000~~depreciation.

~~General~~ The change ~~and~~in ~~administrative~~cost ~~costs. General~~of ~~and~~sales ~~administrative~~is ~~costs~~influenced ~~consist~~by ~~primarily~~an amount of ~~personnel~~ ~~costs~~EURO2.4 million ~~attributable~~representing toadditional ~~general~~depreciation ~~management,~~due ~~finance~~to ~~and~~step ~~human~~ups ~~resources~~related ~~functions,~~to asthe ~~well~~purchase asmethod ~~other~~of accounting. ~~corporate~~Excluding ~~overheads.~~the ~~General~~impact ~~and~~of ~~administrative~~the ~~expenses~~purchase ~~decreased~~method ~~9.5%~~of ~~to E28.7 million~~accounting, incost ~~the~~of ~~third-quarter~~sales ~~2001~~decreased ~~from~~by ~~E31~~13% to EURO192.72 million in the ~~same~~first quarter ~~period 2000~~2002. This decrease is ~~principally~~caused ~~due~~by to lower ~~staff~~sales ~~compensation~~as ~~costs and~~compared ~~operating~~to ~~efficiencies~~the infirst ~~eastern~~quarter ~~Europe,~~2002 ~~resulting~~and ~~from~~by the ~~consolidation~~effect of ~~local operations in~~ the ~~third~~de-~~quarter~~consolidation. ~~2001~~

~~Other~~ Furthermore, the ~~net. Other,~~decrease ~~net~~in ~~decreased~~cost ~~34.8%~~of tosales ~~E21.4 million~~also inresults ~~the third quarter 2001~~ from ~~E32.8 million~~our insuccessful ~~the~~cost ~~same~~saving ~~period~~initiatives ~~2000.~~as ~~Other, net in~~ the ~~third~~gross ~~quarter~~margin ~~2000~~improved ~~included~~from ~~impairment~~49.3% ~~charges relating~~ to ~~property,~~49.6% ~~plant and equipment~~ (~~E32~~50.3 ~~million)~~% ~~which~~excluding ~~were not incurred in~~ the ~~three~~impact ~~months ended September 30, 2001. This decrease was partially offset by the amortization of goodwill, which resulted~~ from purchase ~~the~~ accounting ~~for the acquisition transactions (E11.2 million~~)~~, restructuring and reorganisation charges (E5~~.~~0 million)~~ ~~and an increase of numerous other operating expenses for consulting services relating to the refinancing transaction in the second and third quarter 2001.~~

~~Operating~~ Distribution ~~profit~~and ~~(loss)~~selling costs. ~~Operating~~ Distribution ~~profit~~and ~~(loss)~~selling ~~increased~~costs todecreased a13% ~~profit of~~to ~~E25~~EURO117.06 million in the ~~third-~~first quarter ~~2001~~2002 from ~~a loss of E3~~EURO135.31 million in the same period ~~2000~~2001. ~~based~~Distribution ~~essentially~~and onselling costs consist primarily of sales organization costs, transport of gases and cylinders from the ~~factors~~production ~~described~~site ~~above~~or filling station to the customer, depreciation of the cylinders and tanks at the customer site, advertising and sales promotions, commissions and freight.

	Predecessor Three Months Ended September 30, 2000 Messer Griesheim GmbH		Successor Three Months Ended September 30, 2001 Messer Griesheim Holding AG
	E (in millions)		E (in millions)
Operating profit (loss) (Business Areas)
Germany	22.9		44.8
Western Europe, excluding Germany	5.7		5.8
Eastern Europe	10.1		9.9
North America	8.4		1.0
Others	(41.1	)	0.9
Reconciliation / Corporate	(9.3	)	(37.4	)
Total	(3.3	)	25.0

The change in distribution and selling costs is influenced by an amount of EURO9.7 million representing additional depreciation due to step ups related to the purchase method of accounting. Excluding the impact of the purchase accounting, distribution and selling costs decreased by 20.1% to EURO107.9 million in the first quarter 2002. This decrease is caused by lower sales as compared to the first quarter 2002 and by the effect of the de-consolidation. Additionally, the decrease in distribution and selling costs results from our successful cost saving initiatives as distribution and selling costs in relation to sales decreased from 31.1% to 30.4% (27.9% excluding the impact from purchase accounting).

General and administrative costs. General and administrative expenses increased by 3.5% to EURO35.7 million in the first quarter 2002 from EURO34.5 million in the same period 2001. General and administrative costs consist primarily of personnel costs attributable to general management, finance and human resources functions, as well as other corporate overhead charges.

~~Interest~~ Operating ~~expense, net~~profit. ~~Net~~ Operating ~~interest~~profit ~~expenses~~decreased ~~increased~~to 57EURO28.~~3% to E40.~~1 million in the ~~third-~~first quarter ~~2001~~2002 from ~~E25~~EURO34.50 million in the same period ~~2000.~~2001 ~~These~~based ~~expenses~~essentially ~~are~~on ~~principally~~ the ~~interest~~factors ~~charges~~described ~~associated with Messer Griesheim's debt~~below. ~~This increase in the third-quarter 2001 is due to our higher long-term debt balance as a result of the refinancing program of the Messer Group following the~~

	Three Months Ended March 31, 2002 Messer Griesheim Holding AG		Three Months Ended March 31, 2001 Messer Griesheim GmbH
	EURO (in millions)		EURO (in millions)
Operating profit (loss) (Business Areas)
Germany	24.3		32.5
Western Europe, excluding Germany	2.1		4.4
Eastern Europe	7.3		6.8
North America	4.7		5.8
Others	2.4		(4.1	)
Reconciliation/Corporate	(12.7	)	(11,4	)

Total	28.1		34.0

•: In Germany, the operating profit amounted to EURO24.3 million in the first quarter 2002 as compared to an operating profit of EURO32.5 million in the same period 2001. The operating profit in the first quarter 2002 includes additional depreciation and amortization of EURO11.4 million related to the purchase accounting. Excluding this effect, operating profit increased from EURO32.5 million by 9.8% to EURO35.7 million. This increase results primarily from cost savings more than offsetting the negative impact of lower sales.
•: In Western Europe, excluding Germany, the operating profit amounted to EURO2.1 million in the first quarter 2002 compared to an operating profit of EURO4.4 million in the same period 2001. The operating profit in the first quarter 2002 includes additional depreciation and amortization of EURO2.2 million related to the purchase method of accounting. Excluding this effect, operating profit decreased slightly by EURO0.1 million or 2.3% to EURO4.3 million in the first quarter 2002 compared to EURO4.4 million in the first quarter 2001. This decrease is primarily due to decreased margins in Switzerland.
•: In Eastern Europe, the operating profit amounted to EURO7.3 million in the first quarter 2002 compared to an operating profit of EURO6.8 million in the same period 2001. The operating profit in the first quarter 2002 included additional depreciation and amortization of EURO1.8 million related to the purchase accounting. The operating profit in the first quarter 2001 included a restructuring expense of EURO0.3 million which did not occur in the same period 2002. Excluding these effects, operating profit increased by EURO2.0 million or 28.2% to EURO9.1 million in the first quarter 2002 compared to EURO7.1 million in the same period 2001.
•: In North America, the operating profit amounted to EURO4.7 million in the first quarter 2002 as compared to EURO5.8 million in the same period 2001. The operating profit in the first quarter 2002 includes additional depreciation and amortization of EURO4.5 million related to the purchase accounting. In addition, the operating profit in the first quarter 2001 included restructuring expenses of EURO1.5 million which did not occur in the same period 2002. Excluding these effects, plus EURO0.4 million resulting from the effect of the appreciation of the U.S. dollar against the Euro in the first quarter 2002, operating profit increased by EURO1.5 million or 20.5% to EURO8.8 million in the first quarter 2002 as compared to EURO7.3 million for

the ~~acquisition~~same ~~transactions.~~period ~~The~~in ~~average~~2001. ~~interest~~This ~~rate~~increase ~~has~~reflects ~~increased~~the ~~from~~beginning ~~6.5%~~of toan ~~8.3%~~improving ~~per~~business ~~annum~~climate asin ~~a result of~~ the ~~aforementioned refinancing~~U.S.

•: Operating profit (loss) in Other Business Areas improved to a profit of EURO2.4 million in the first quarter 2002 compared to a loss of EURO4.1 million in the same period 2001. This improvement results primarily from the deconsolidation of loss making companies as well as a more efficient utilization of new plants in Asia which commenced operations during 2001. However, these figures are generally not comparable as a result of the de-consolidation of companies in Mexico, Brazil, Argentina, Peru, Venezuela, Trinidad & Tobago, South Africa, Singapore and Indonesia.

~~Income~~ Interest ~~taxes~~expense, net. An Net ~~income~~interest ~~tax~~ expense ofincreased ~~E20~~40.92% to EURO35.2 million ~~was recorded~~ in the ~~third-~~first quarter ~~2001,~~2002 ~~compared~~from ~~to an income tax benefit of E18~~EURO25.21 million in the same period ~~2000~~2001. This increase is ~~principally~~ due to ~~the~~our ~~utilization~~refinancing ofprogram ~~tax~~following ~~loss carryforwards in~~ the ~~third-quarter~~acquisition ~~2000.~~transactions ~~The~~which ~~income~~resulted ~~tax~~in ~~expenses~~an ~~for~~increase in the ~~2001~~average ~~period~~interest ~~result~~rate from ~~non~~6.5% ~~tax deductible goodwill amortization due~~ to ~~the~~8.2% ~~acquisition~~per ~~transactions and other non deductible expenses for tax purposes~~annum.

Income taxes. In the first quarter 2002 the Group recorded income tax expense of EURO3.2 million, compared to an income tax expense of EURO3.9 million in the same period 2001. This expense in 2002, despite our operating loss, is mainly due to non deductible interest expense and goodwill amortization.

Liquidity and Capital Resources

Cash Flows for the ~~Nine~~Three Month Period Ended ~~September~~March 3031, ~~2000,~~2002 ~~the Four Month Period Ended April 30, 2001,~~ and the ~~Five~~Three Month Period Ended ~~September~~ March 3031, 2001

The following table summarizes our cash-flow activity during ~~nine~~the three month period ended ~~September~~March 3031, ~~2000,~~2002 and the ~~four~~three month period ended ~~April~~March 3031, 2001. Consideration should be given to the effects of the acquisition transactions, the refinancing program, and the ~~five~~divestiture ~~month~~program ~~period~~when ~~ended~~comparing ~~September~~historical financial information, for periods prior to April 30, 2001 to periods thereafter. The solid vertical line separates the information for periods prior to and subsequent to the acquisition transactions:

	Predecessor
	Three Months Ended March 31, 2002 Messer Griesheim Holding AG		Three Months Ended March 31, 2001 Messer Griesheim GmbH
	Nine months ended September 30, 2000		Four months ended April 30, 2001
	EURO (in millions)		EURO (in millions)
					Successor Five months ended September 30, 2001 Messer Griesheim Holding AG
Cash flow from operating activities	85.8		6.8
	Messer Griesheim GmbH
Cash flow used in investing activities	(21.6	)	(40.9	)
	E (in millions)
Cash flow from (used in) financing activities	(37.5	)	39.7
Cash flow from (used in) operating activities	167.0		(8.9	)	185.1
Cash and cash equivalents, end of period	214.0		57.4
Cash flow used in investing activities	(195.6	)	(66.0	)	(46.1	)
Cash flow from (used in) financing activities	37.9		247.6		(88.9	)
Cash and cash equivalents, end of period	59.3		226.6		258.3

Consideration should be given to the effects of the acquisition transactions, the refinancing program, and the divestiture program when comparing historical financial information, for periods prior to April 30, 2001 to periods thereafter.

Cash flow from (used in) operating activities. Our cash flow from operations was E167.0 million in the nine-months ended September 2000 compared with cash used in operating activities of E8.9 million in the four-month period ended April 30, 2001 and cash flow from operating activities of E185.1 million in the five-month period ended September 30, 2001. The cash flow from operations for the nine-months ended September 2000 principally reflects a loss before income taxes and minority interests of E247.4 million which was offset mainly by depreciation and amortization of property, plant and equipment and intangible assets and by changes in provisions. For the four months ended April 30, 2001 cash flow from operating activities principally reflects a decrease due to the Singapore operations and changes in working capital in the four-month period ended April 30, 2001. The increase of cash flow from operating activities in the five months ended September 30, 2001 principally results from decreased losses and changes in working capital.

Cash flow used in investing activities. In the nine-months ended September 30, 2000, our net cash used in investing activities was E195.6 million, compared with net cash used in investing activities of E66.0 million in the four-month period ended April 30, 2001 and E46.1 million in the five month period ended September 30, 2001. The negative figure for the nine months ended September 30, 2000 principally reflects E180.9 million in purchases of property, plant and equipment and intangible assets. For the four-months ended April 30, 2001 and the five months ended September 30, 2001, the cash

Cash flow from operating activities. The cash flows from operating activities increased to ~~used~~EURO85.8 million from EURO6.8 million. Operating cash flows in ~~investing~~the ~~activities~~first ~~principally~~quarter of 2002 reflects ~~capital~~a ~~expenditure~~net onloss ~~property~~of EURO13.4 million, ~~plant~~consisting of EBIT (earnings before income taxes) of EURO25.0, net of interest and ~~equipment~~taxes asof ~~well~~EURO35.2 asand EURO3.2, ~~investments~~respectively. Operating cash flows in the first quarter of 2001 reflects a net loss of EURO6.7 million, consisting of EBIT of EURO22.3 million, net of interest and ~~loans~~taxes toof ~~related~~EURO25.1 million ~~parties~~and EURO3.9 million, respectively. Significant non-cash items impacting operating activities included an increase in depreciation and amortization totaling EURO68.8 million in the first quarter of 2002, compared with EURO55.8 million in the first quarter of 2001.

Cash flow from ~~(used~~investing ~~in) financing~~ activities. ~~Our~~ The cash flow ~~from~~used ~~financing~~in investing activities ~~was~~decreased to ~~E37~~EURO21.96 million infrom ~~the~~EURO40.9 million. ~~nine-months~~The ~~ended~~decrease ~~2000~~mainly ~~compared~~resulted ~~with~~from ~~E247.6 million~~reductions in ~~the~~capital ~~four-month~~expenditures ~~period~~for ~~ended~~property ~~April 30,~~plant ~~2001~~ and ~~net~~equipment ~~cash~~and intangible ~~used~~assets into ~~financing~~EURO23.2 million ~~activities~~from ~~of E88~~EURO31.98 million, inand ~~the~~from ~~five-month~~reductions ~~period~~in ~~ended~~investments ~~September 30,~~in ~~2001.~~and ~~Cash~~loans ~~flow~~to ~~from~~related ~~financing~~parties ~~activities~~and ~~for the~~subsidiaries ~~four~~available ~~months~~for ~~ended~~sale ~~April~~to EURO8.5 ~~30,~~million ~~2001~~from ~~principally~~EURO13.2 million ~~reflects~~during ~~additional~~the ~~borrowings~~first ~~that~~quarter ~~resulted~~of in2002 anand ~~increase~~2001, ofrespectively. ~~cash~~In addition, ~~which~~investing ~~was~~cash ~~used~~flows during tothe ~~refinance~~first ~~debt~~quarter inof ~~addition~~2002 toincludes ~~establishing~~EURO6.9 million ~~restricted~~of ~~cash collateral~~proceeds onfrom ~~debt~~sales ~~that~~of ~~was~~investments ~~not~~and ~~refinanced~~property inplant ~~the~~and ~~five~~equipment ~~months~~and ~~ended~~intangible ~~September 30, 2001~~assets.

~~Anticipated~~ Cash ~~Expenditures~~flow from financing activities. The company used EURO37.5 million in cash for financing activities during the first quarter of 2002, and ~~Sources~~generated EURO39.7 million during the first quarter of ~~Funds~~ 2001. Cash flows for financing activities during the first quarter of 2002 included interest paid of EURO30.6 million and principal reductions of corporate debt of EURO5.1 million, whereas financing cash flows during the first quarter of 2001 include EURO74.0 of cash received arising from increases in corporate debt, reduced by interest paid of EURO25.3 million.

~~Operational~~Contractual capital expenditures as a percentage of net sales was 14.5% in the nine-months ended 2000, as compared to 8.6% in the four-month period ended April 30, 2001 and 7.3% in the five-month period ended September 30, 2001. A core component of our strategy is to reduce Messer Griesheim's historically high levels of capital expenditure. However, we will require funds to meet scheduled debt repayments and to fund the acquisition, if and when it happens, of the China assets described in "Current Transactions-China Transactions", with a purchase price of E32 million and the assumption of existing debt of the ACIC joint ventures (approximately E17.3 million at September 30, 2001). Obligations

~~We had total indebtedness (including finance leases) of E1,743.3 million at September 30, 2001, of which E1,510.1 million was long-term indebtedness.~~ The ~~indebtedness~~following ~~was~~table ~~primarily~~summarizes ~~due to banks and~~ our ~~bondholders~~contractual ~~and~~obligations ~~had~~as ~~an average rate~~ of ~~interest of approximately 7.8% at September~~December 3031, 2001.:

Messer Griesheim's principal sources of funds have been cash flow from operations and borrowings from banks. We expect that, going forward, we will finance on-going operations and implement our cost-savings measures and information-technology improvements with a combination of bank borrowings and operating cash flows. We are dependent on the proceeds from our divestiture program to meet our contractually scheduled debt repayment under our senior facilities on April 30, 2003. We expect that our other cash requirements will be met through operating cash flows.

	Payments Due by Period
	Less than 1 year	1-3 years	4-5 years	After 5 years	Total
	EURO (in millions)	EURO (in millions)	EURO (in millions)	EURO (in millions)	EURO (in millions)
Contractual Obligations
Long-Term Debt	42.6	103.2	112.6	1,266.3	1,524.7
Capital Lease Obligations⁽¹⁾	15.7	49.1	59.5	47.5	171.8
Operating Lease Obligations	8.1	16.3	14.8	52.0	91.2
Commitments
Other Long-Term Obligations⁽²⁾					32.0
ACIC Joint Ventures					32.0
Financial Guarantees⁽³⁾					206.7
Long-Term Purchase Agreements					68.6
Other⁽⁴⁾					22.8

(1): The capital lease obligations include an interest portion of EURO32.8 million.
(2): Other financial obligations not included in the consolidated balance sheet relate to long-term commitments for capital expenditures of EURO32.0 million at December 31, 2001.
(3): Financial guarantees mainly include guarantees for third party debt of deconsolidated subsidiaries included in assets available for sale from the divestiture program of EURO149.6 million and other at equity consolidated subsidiaries of EURO28.4 million.
(4): Commitments for capital to be funded to equity and cost method investees totaled EURO22.8 million at December 31, 2001.

~~As of September 30, 2001, we had in place unused credit lines totaling E305.5 million. In addition, certain of our subsidiaries have unused available credit lines under local facilities.~~ 16

Anticipated Uses/Expenditures and Sources of Funds

Capital expenditures in our core markets as a percentage of net sales was 6.0% in the three-month period ended March 31, 2002, as compared to 7.3% in the same period 2001. A core component of our strategy is to reduce Messer Griesheim's historically high levels of capital expenditure. However, we will require funds to meet scheduled debt repayments and to fund the acquisition, if and when it happens, of the China assets as elsewhere stated in this Form 6-K, with a purchase price of EURO32 million and the assumption of existing debt of the ACIC joint ventures (approximately EURO16.5 million at March 31, 2002).

We had total indebtedness (including finance leases) of EURO1,660.2 million at March 31, 2002, of which EURO1,610.6 million was long-term indebtedness. The indebtedness was primarily due to banks and our bondholders and had an average rate of interest of approximately 8.2% at March 31, 2002.

Messer Griesheim's principal sources of funds have been cash flow from operations and borrowings from banks. We expect that, going forward, we will finance on-going operations and implement our cost-savings measures and information-technology improvements with a combination of existing cash balances and operating cash flows, and available funds from our credit lines. We are dependent on the proceeds from our divestiture program to meet our contractually scheduled debt repayment under our senior facilities on April 30, 2003. We expect that our other cash requirements will be met through operating cash flows.

As of March 31, 2002, we had in place unused credit lines totaling EURO297.0 million. In addition, certain of our subsidiaries have unused available credit lines under local facilities.

Interest Rate Risk Management

We are exposed to interest rate risk mainly through our debt instruments. We manage interest rate risk on a group-wide basis with a combination of fixed and floating rate instruments designed to balance the fixed and floating interest rates. We have entered into interest rate swap agreements that effectively convert a major portion of our floating rate indebtedness to a fixed rate basis for the next ~~three~~two and one half years, thus reducing the impact of interest rate changes on future interest expense.

As of March 31, 2002, approximately 90% of our debt facilities were hedged to comply with the terms of our senior facilities agreement. The remaining 10% of our multicurrency debt facilities have floating rates. With respect to such portion of the debt facilities for each fluctuation in market interest rates of 1%, the interest expense related to such portion of the debt facilities would fluctuate by EURO1.5 million.

Foreign Exchange Risk Management

We also are exposed to foreign currency exchange risk related to foreign currency denominated assets and liabilities and debt service payments denominated in foreign currencies. We manage foreign currency exchange risk on a group-wide basis using exchange forward contracts. Our current policy with respect to limiting foreign currency exposure is to economically hedge foreign currency exposures when appropriate.

~~The~~ For ~~table~~the ~~below~~majority ~~provides~~of ~~information about~~ our ~~significant~~operations, ~~derivative~~we ~~financial~~have ~~instruments~~local ~~that~~production ~~are~~facilities ~~sensitive~~which togenerate ~~changes~~cash flows in ~~interest~~local ~~and~~currencies. ~~foreign~~These ~~currency~~cash ~~exchange~~flows ~~rates~~generally asmatch ~~of September 30,~~local ~~2001.~~expenditures ~~The~~and ~~table~~debt service ~~presents~~of ~~the~~these ~~notional~~operations, ~~amounts~~resulting ~~and~~in ~~the~~a ~~weighted~~95% ~~average~~or ~~contractual~~greater ~~foreign~~"natural ~~exchange~~hedge" ~~rates.~~as ~~The~~of ~~terms~~March 31, 2002.

16 The most significant foreign exchange rate risks exist in Central America, Eastern Europe and China where we produce locally. A portion of our debt serviced by these facilities is in Euros and U.S. dollars. Accordingly, we depend on the stability of currencies in these countries in order to

~~of our cross-currency exchange forward contracts generally do not exceed one year. At September 30, 2001, our interest rate swaps had remaining terms of nearly three years.~~ 17

service these debts. The total Euro and US dollar denominated debt in these countries is EURO29 million. The single largest debt is approximately EURO9 million in Poland. An increase or decrease of 10% of the PLN Zloty against the Euro would result in an impact of approximately EURO1 million on our results of operations. If all the currencies in these countries depreciate against the Euro and the U.S. Dollar, a 10% change would impact our consolidated net results by approximately EURO3 million on a pretax basis.

Our reporting currency is the Euro. The net assets outside the "Euro zone" are subject to currency fluctuations against the Euro. The most volatile currencies are those of Eastern Europe, China and Central America. Normally, we do not hedge the net assets of foreign subsidiaries. Except for our subsidiary located in Yugoslavia, a hyperinflationary economy, in the event the Euro significantly increases in value relative to other currencies, the accounting treatment would result in a charge against our equity without any effect on net income.

Derivative Financial Instruments

		Contract notional amount	Contractual rates	Fair value September 30, 2001
		(equivalent in thousands, except for contractual rates)
		E'000		E'000
Interest rate cap contracts
	Euro	25,565	5.50000	77
Interest rate swap contracts
	Euro	89,250	4.45500	(1,273	)
	Euro	285,000	4.69500	(5,855	)
	Euro	55,000	4.73000	(1,188	)
	Euro	45,000	4.65250	(918	)
	British pounds sterling	28,855	5.81000	(498	)
	U.S. dollar	272,628	5.00000	(8,034	)
	U.S. dollar	27,788	4.96500	(824	)
		Forward exchange rate
Foreign currency forward contracts
	Deutsche Mark/U.S. dollar	304	2.29650	23
	British pounds sterling/U.S. dollar	3,992	1.45230	51

The table below provides information about our significant derivative financial instruments that are sensitive to changes in interest and foreign currency exchange rates as of March 31, 2002. The table presents the notional amounts and the weighted average contractual foreign exchange rates. The terms of our cross-currency exchange forward contracts generally do not exceed one year. At March 31, 2002, our interest rate swaps had remaining terms of two and one half years.

		Contract Notional Amount	Contractual Rates		Fair value March 31, 2002
		( EURO equivalent in thousands, except for contractual rates)
		EURO'000	%		EURO'000)
Interest rate cap contracts
	Euro	25,565	5.50000	%	115	⁽¹⁾
Interest rate swap contracts
	Euro	87,911	4.45500	%	70
	Euro	285,000	4.69500	%	(1,469	)
	Euro	54,175	4.73000	%	(278	)
	British pounds sterling	28,956	5.81000	%	(323	)
	U.S. dollar	286,895	5.00000	%	(4,659	)
	U.S. dollar	28,804	4.96500	%	(413	)
	Euro	44,325	4.65250	%	(185	)
		Forward exchange rate
Foreign currency forward contracts
	Euro/U.S. dollar	28,689	0.87590		346	⁽¹⁾
	British pounds sterling/U.S. dollar	4,201	1.42008		12	⁽¹⁾

(1): Free standing derivatives, which are marked-to-market through earnings.

Commodity Price Risk

We are exposed to commodity price risks through our dependence on various raw materials, such as chemical and energy prices. We seek to minimize these risks through our sourcing policies, operating procedures and pass through clauses in our product pricing agreements. We ~~currently do not utilize derivative financial instruments to manage any remaining exposure to fluctuations in commodity prices.~~

currently do not utilize derivative financial instruments to manage any remaining exposure to fluctuations in commodity prices.

Risk Identification and Analysis

The identification and analysis of risks relating to our operations is conducted through the application of an enterprise-wide risk management system, encompassing all of our activities worldwide. The goal of this risk management system is to foster a group-wide culture of risk management using a common set of objectives and standards in the measurement and treatment of risk. As with any risk management system, the results are based on individual assessments that may be subject to error. There is no guarantee that this system will consistently identify all of the important risks or provide an adequate assessment of their potential impact.

We are exposed to market risk through our commercial and financial operations as described above. We are implementing a policy of economic hedging against some of these exposures at present, but we may still incur losses as a result of changes in currency exchange rates, interest rates and commodity risk. We do not purchase or sell derivative financial instruments for trading purposes.

Reconciliation to U.S. GAAP

~~Our~~Initial ~~results~~Adoption ~~as reported under IAS differ from our results as reconciled to U.S. GAAP, principally as a result~~ of ~~the~~Accounting ~~different treatment under U.S. GAAP of:~~ Policies

17 Effective July 1, 2001, the Group adopted Statement 141 "Business Combinations" and certain provisions of SFAS 142 "Goodwill and Other Intangible Assets". The Group adopted SFAS 142 in its entirety on January 1, 2002. SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, as well as all purchase method business combinations completed after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported separately from goodwill, and also indicates that any purchase price allocable to an assembled workforce may not be accounted for separately. Additionally, SFAS 141 required, upon adoption of SFAS 142 in its entirety, that the Group evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in SFAS 141 for recognition apart from goodwill. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead will be tested for impairment annually (or more frequently if impairment indicators arise) in accordance with the provisions of SFAS 142. Intangible assets with definite useful lives will be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets".

~~The~~ In ~~significant~~August 2001, ~~differences~~the ~~between~~FASB ~~IAS~~approved for issuance SFAS 144. This Statement addresses financial accounting and Ureporting for the impairment or disposal of long-lived assets.S. ~~GAAP~~This ~~applicable~~Statement tosupersedes SFAS 121 and the ~~historical~~accounting ~~financial~~and ~~statements~~reporting ~~are~~provisions ~~summarized~~of ~~below~~APB Opinion No. 30 "Reporting ~~Further~~the ~~discussion~~Results of ~~significant~~Operations—Reporting ~~differences~~the ~~between~~Effects ~~IAS~~of Disposal of a Segment of a Business, and UExtraordinary, Unusual and Infrequently Occurring Events and Transactions", for the disposal of a segment of a business (as previously defined in that Opinion).S This Statement also amends ARB No. 51 "Consolidated ~~GAAP~~Financial ~~applicable~~Statements" to eliminate the exception to ~~our~~consolidation ~~historical~~for ~~financial~~a ~~statements~~subsidiary ~~are~~for ~~summarized~~which incontrol ~~note 20~~is likely to ~~our~~be temporary. The Group adopted the provisions of this Statement on January 1, 2002. The adoption of the new pronouncement did not have a material effect on the unaudited interim condensed consolidated financial statements. ~~contained~~However, inthe ~~this~~Group ~~document~~has noted that certain provisions of SFAS 144 will potentially impact its accounting and reporting for the remaining subsidiaries to be sold under its divestiture program. The Group has also noted that

Three Months Ended September 31, 2001 Compared with Three Months Ended September 30, 2000

Net loss as reported under IAS was E41.3 million in third-quarter 2001 and E36.8 million as reconciled to U.S. GAAP, resulting in a reduction in net loss of E4.5 million as reconciled to U.S. GAAP. There were reconciling adjustments of E9.4 million in third quarter 2001 between IAS and U.S. GAAP relating to assets to be sold within one year of the date of the acquisition transaction. The remaining difference between net loss reported under IAS and net loss reported under U.S. GAAP is primarily due to the goodwill impact and thetax effect under U.S. GAAP associated with these adjustments.

In the third-quarter 2000, the net loss reported under IAS was E63.2 million and E58.9 million as reconciled to U.S. GAAP, resulting in a reduction in net loss of E4.3 million as reconciled to U.S. GAAP. During this period, the Group reported an impairment in accordance with IAS of E5.3 million related to a plant in Argentina, which is not impaired under U.S. GAAP. The remaining difference between net loss reported under IAS and net loss reported under U.S. GAAP is primarily due to financial instruments and to the tax effect under U.S. GAAP associated with these adjustments.

Five Months Ended September 30, 2001 and Four Months Ended April 30, 2001 Compared with Nine Months Ended September 30, 2000

Net loss as reported under IAS was E195.7 million in nine months ended September 2000 and E192.2 million as reconciled to U.S. GAAP, resulting in a reduction in net loss of E3.5 million as reconciled to U.S. GAAP. There were reconciling adjustments of E4.2 million in nine-months ended September 2000 between IAS and U.S. GAAP relating to property, plant and equipment. In addition, in the nine months ended September 2000 we recognized losses but not gains in the fair value of derivative financial instruments as required by IAS in effect prior to January 1, 2001. Under U.S. GAAP in effect prior to January 1, 2001, both the losses and gains on those instruments were recognized. This adjustment reflects the recognition of losses of E1.9 million in the nine month period ended September 2000. The remaining difference between net loss reported under IAS and net loss reported under U.S. GAAP is primarily due to the tax effect associated with these adjustments.

In the four-month period ended April 30, 2001 (prior to the acquisition transactions), the net loss reported under IAS and U.S. GAAP was E13.5 million with no significant differences.

In the five-month period ended September 30, 2001, the net loss reported under IAS was E56.2 million and E52.9 million as reconciled to U.S. GAAP, resulting in a reduction in net loss of E3.3 million as reconciled to U.S. GAAP. During this period, there were reconciling adjustments of E8.2 million between IAS and U.S. GAAP relating to assets to be sold within one year of the date of the business combination. The remaining difference between net loss under IAS and net loss reported under U.S. GAAP is primarily due to the goodwill impact and the tax effect under U.S. GAAP associated with these adjustments.

MESSER GRIESHEIM HOLDING AG ("SUCCESSOR") UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in E thousands, unless otherwise stated)

	Successor July 1, 2001 to September 30, 2001		Predecessor July 1, 2000 to September 30, 2000
Net sales	393,565		397,680
Cost of sales	(206,074	)	(183,281	)
Gross profit	187,491		214,399
Distribution and selling costs	(112,395	)	(153,242	)
Research and development costs	(4,577	)	(8,323	)
General and administrative costs	(28,669	)	(31,704	)
Other operating income	8,685		9,548
Other operating expense	(20,505	)	(1,632	)
Impairment of intangible assets and property, plant and equipment	—		(32,319	)
Restructuring and reorganisation charges	(4,997	)	—
Operating profit (loss)	25,033		(3,273	)
Equity method investments income, net	2,676		1,379
Other investment income/(expense), net	3,088		(11,842	)
Interest expense, net	(40,127	)	(25,470	)
Changes in fair value of subsidiaries available for sale	(9,426	)	—
Other financial income, net	1,232		2,020
Non-operating expense	(42,557	)	(33,913	)
Loss from disposal of discontinuing operations, net	—		(41,815	)
Loss before income taxes and minority interests	(17,524	)	(79,001	)
Income tax benefit/(expense)	(20,914	)	18,162
Loss before minority interests	(38,438	)	(60,839	)
Minority interests, net of income taxes	(2,868	)	(2,368	)
Net loss	(41,306	)	(63,207	)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

the provisions of SFAS 144 would supersede certain provisions of EITF 87-11 as they relate to allocation of purchase price in a business combination where the acquirer intends to ~~MESSER~~sell ~~GRIESHEIM~~a ~~HOLDING~~portion of AGthe operations of the acquired enterprise (~~"SUCCESSOR"~~see note 40a) ~~UNAUDITED~~ ~~INTERIM~~and, ~~CONDENSED~~as ~~CONSOLIDATED~~a ~~STATEMENTS~~result, OFhad ~~OPERATIONS (Amounts~~SFAS 144 been applied in Eaccounting ~~thousands~~for the acquisition transactions, ~~unless~~certain ~~otherwise~~of ~~stated)~~the differences between U.S. GAAP and IAS relating to operations and entities included in the divestiture program would not have occurred.

			Predecessor
	Successor May 1, 2001 to September 30, 2001
			January 1, 2001 to April 30, 2001		January 1, 2000 to September 30, 2000
Net sales	659,538		574,463		1,244,934
Cost of sales	(336,171	)	(293,414	)	(600,426	)
Gross profit	323,367		281,049		644,508
Distribution and selling costs	(191,962	)	(177,182	)	(433,723	)
Research and development costs	(6,748	)	(6,599	)	(18,942	)
General and administrative costs	(47,514	)	(45,027	)	(107,993	)
Other operating income	9,498		10,242		24,176
Other operating expense	(26,623	)	(11,133	)	(21,034	)
Impairment of intangible assets and property, plant and equipment	—		(2,356	)	(77,852	)
Restructuring and reorganisation charges	(9,255	)	(2,540	)	—
Operating profit	50,763		46,454		9,140
Equity method investments expense, net	(5,302	)	(5,106	)	(163,303	)
Other investment expense, net	(2,199	)	(4,544	)	(9,860	)
Interest expense, net	(64,270	)	(36,364	)	(66,184	)
Changes in fair value of subsidiaries available for sale	(8,192	)	—		—
Other financial expense, net	(656	)	(6,990	)	(93	)
Non-operating expense	(80,619	)	(53,004	)	(239,440	)
Loss from disposal of discontinuing operations	—		—		(17,120	)
Loss before income taxes and minority interests	(29,856	)	(6,550	)	(247,420	)
Income tax benefit/(expenses)	(21,772	)	(4,813	)	57,331
Loss before minority interests	(51,628	)	(11,363	)	(190,089	)
Minority interests, net of income taxes	(4,580	)	(2,135	)	(5,653	)
Net loss	(56,208	)	(13,498	)	(195,742	)

Main Differences

~~The accompanying~~ Our ~~notes~~results ~~are~~as anreported ~~integral~~under ~~part~~IAS ofdiffer ~~these~~from ~~unaudited~~our ~~interim~~results ~~condensed~~as ~~consolidated~~reconciled ~~financial~~to ~~statements~~U.S. GAAP, principally as a result of the different treatment under U.S. GAAP of:

•: allocation of purchase price to assets to be sold,
•: restructuring costs,
•: transaction costs incurred by our parent on our behalf,
•: impairment of long lived assets,
•: assembled workforce (intangible asset),
•: foreign currency gains and losses on borrowing costs directly attributable to construction,
•: provisions for pensions and similar obligations, and
•: gains and losses related to financial instruments.

The significant differences between IAS and U.S. GAAP applicable to the historical financial statements are summarized below. Significant differences between IAS and U.S. GAAP applicable to our historical financial statements are further discussed elsewhere in this document.

Three Months Ended March 31, 2002 compared with Three Months Ended March 31, 2001

Net loss as reported under IAS was EURO13.4 million in first quarter 2002 and EURO5.3 million as reconciled to U.S. GAAP. There were reconciling adjustments of EURO0.7 million in first quarter 2002 between IAS and U.S. GAAP relating to assets to be sold within one year of the date of the acquisition transaction. The remaining difference between net loss reported under IAS and net loss reported under U.S. GAAP is primarily due to the discontinuation of goodwill amortization under U.S. GAAP upon adoption of SFAS 142 and the tax effect under U.S. GAAP associated with these adjustments.

In the first quarter 2001, the net loss reported under IAS was EURO6.7 million and EURO6.6 million as reconciled to U.S. GAAP. The difference between net loss reported under IAS and net loss reported under U.S. GAAP is primarily due to property, plant and equipment, provisions for pension and similar obligations and to the tax effect under U.S. GAAP associated with these adjustments.

MESSER GRIESHEIM HOLDING AG ~~("SUCCESSOR")~~ UNAUDITED INTERIM CONDENSED CONSOLIDATED ~~BALANCE~~STATEMENTS ~~SHEETS~~OF OPERATIONS (Amounts in EEURO thousands, unless otherwise stated)

	~~Successor~~		~~Predeccessor~~Successor		Predecessor
	As of September 30, 2001		As of April 30, 2001		As of December 31, 2000
	Note		January 1, 2002 to March 31, 2002		January 1, 2001 to March 31, 2001
Assets
Net sales			386,420		435,150
Intangible assets	750,418		126,190		130,817
Cost of sales			(194,628	)	(220,869	)
Property, plant and equipment	1,543,012		2,030,500		2,020,823
Gross profit			191,792		214,281
Equity method investments	61,553		42,510		47,616
Distribution and selling costs			(117,573	)	(135,119	)
Cost method and other investments	96,469		119,064		120,683
Research and development costs			(3,787	)	(5,089	)
Deferred tax assets	89,239		57,255		64,549
General and administrative costs			(35,655	)	(34,529	)
Other long-term receivables, net and other assets	56,398		9,231		11,031
Other operating income			6,636		6,256
Non-current assets	2,597,089		2,384,750		2,395,519
Other operating expense			(12,870	)	(9,724	)
Inventories	85,301		110,563		94,803
Restructuring and reorganization charges	8		(408	)	(2,123	)
Trade accounts receivable, net	306,432		322,844		320,031
Operating profit			28,135		33,953
Investments in subsidiaries available for sale	64,723		—		—
Equity method investments expense, net			(10	)	(2,993	)
Other receivables and other assets	83,625		145,587		115,015
Other investment income, net			309		767
Cash and cash equivalents	258,330		226,573		50,403
Interest expense, net	4		(35,234	)	(25,078	)
Current assets	798,411		805,567		580,252
Changes in fair value of investments in subsidiaries available for sale	9		(692	)	—
Total assets	3,395,500		3,190,317		2,975,771
Other financial expense, net			(220	)	(7,447	)
Stockholders` equity and liabilities
Non-operating expense			(35,847	)	(34,751	)
Issued capital and reserves	967,180		434,484		434,484
Loss before income taxes and minority interests			(7,712	)	(798	)
Accumulated deficit	(67,388	)	(93,327	)	(80,164	)
Income tax expense			(3,246	)	(3,872	)
Cumulative translation adjustment	(23,257	)	87,726		84,204
Loss before minority interests			(10,958	)	(4,670	)
Stockholders` equity	876,535		428,883		438,524
Minority interests, net of income taxes			(2,436	)	(2,023	)
Minority interests	88,988		87,021		86,594
Net loss			(13,394	)	(6,693	)
Provisions for pensions and similar obligations	142,312		141,793		139,230
Other provisions	75,727		71,949		76,522
Corporate debt, less current portion	1,510,076		1,334,157		1,215,501
Deferred tax liabilities	87,709		65,732		64,033
Other long-term liabilities	27,700		25,892		22,715
Non-current liabilities	1,843,524		1,639,523		1,518,001
Other provisions	101,742		113,993		177,711
Corporate debt	233,253		616,833		483,426
Trade accounts payable	112,092		130,440		143,533
Miscellaneous liabilities	139,366		106,662		127,982
Current liabilities	586,453		967,928		932,652
Advance towards capital contribution	—		66,962		—
Total stockholders` equity and liabilities	3,395,500		3,190,317		2,975,771

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

MESSER GRIESHEIM HOLDING AG ~~("SUCCESSOR")~~ UNAUDITED INTERIM CONDENSED CONSOLIDATED ~~STATEMENTS~~BALANCE ~~OF CHANGES IN STOCKHOLDERS' EQUITY~~SHEETS (Amounts in EEURO thousands, unless otherwise stated)

	Predecessor
	Note	As of March 31, 2002		As of December 31, 2001
	Subscribed capital	Additional paid-in capital		Accumulated deficit		Cumulative translation adjustment	Total stockholders` equity
Assets
Balance as of January 1, 2001	276,098	158,386		(80,164	)	84,204	438,524
Intangible assets		842,745		852,809
IAS 39 transition adjustment	—	—		335		—	335
Property, plant and equipment		1,675,587		1,697,679
Net loss	—	—		(13,498	)	—	(13,498	)
Equity method investments		19,199		19,186
Translation adjustment	—	—		—		3,522	3,522
Cost method and other investments		57,984		59,347
Balance as of April 30, 2001	276,098	158,386		(93,327	)	87,726	428,883
Deferred tax assets		4,741		4,546
Other long-term receivables, net and other assets	11	37,805		43,081
Non-current assets		2,638,061		2,676,648
Inventories	12	83,719		80,098
Trade accounts receivable, net		293,205		290,743
Investments in subsidiaries available for sale	9	45,122		42,183
Other receivables and other assets		74,332		71,796
Cash and cash equivalents	13	214,015		188,018
Current assets		710,393		672,838
Total assets		3,348,454		3,349,486
Stockholders` equity and liabilities
Issued capital and reserves		967,180		967,180
Accumulated deficit		(82,925	)	(69,531	)
Cumulative other comprehensive income		18,891		5,740
Stockholders` equity		903,146		903,389
Minority interests		90,238		88,138
Provisions for pensions and similar obligations		168,514		166,356
Other provisions	4	45,812		53,344
Corporate debt, less current portion		1,542,526		1,540,312
Deferred tax liabilities		140,711		135,933
Other liabilities		27,443		25,353
Non-current liabilities		1,925,006		1,921,298
Other provisions	4	146,568		159,215
Corporate debt		38,125		40,927
Trade accounts payable		110,019		118,344
Miscellaneous liabilities		135,352		118,175
Current liabilities		430,064		436,661
Total stockholders` equity and liabilities		3,348,454		3,349,486

	Successor
	Subscribed capital	Additional paid-in capital	Accumulated deficit		Cumulative translation adjustment		Total stockholders` equity
Balance as of May 1, 2001	90	967,090	0		0		967,180
Change in fair value of derivative financial instruments	—	—	(11,180	)	—		(11,180	)
Net loss	—	—	(56,208	)	—		(56,208	)
Translation adjustment	—	—	—		(23,257	)	(23,257	)
Balance as of September 30, 2001	90	967,090	(67,388	)	(23,257	)	876,535

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

MESSER GRIESHEIM HOLDING AG ~~("SUCCESSOR")~~ UNAUDITED INTERIM CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~CASH~~CHANGES ~~FLOWS~~ IN STOCKHOLDERS' EQUITY (Amounts in EEURO thousands, unless otherwise stated)

			Successor
		Predecessor
					Predecessor
							Other comprehensive income
			Five-months ended September 30, 2001
										Cumulative other comprehensive income
					Four-months ended April 30, 2001		Nine-months ended September 30, 2000
		Subscribed capital	Additional paid-in capital		Accumulated deficit		Hedging reserve		Translation reserve		Total stockholders' Equity
Loss before income taxes and minority interests			(29,856	)	(6,550	)	(247,420	)
Balance as of December 31, 2000		276,098	158,386		(80,164	)	—		84,204	84,204	438,524
Income taxes (paid) refunded			(8,147	)	6,964		11,944
IAS 39 transition adjustment		—	—		335		—		—	—	335
Results of discontinuing operations			—		—		17,120
Net loss		—	—		(6,693	)	—		—	—	(6,693	)
Depreciation and amortization of property, plant and equipment and intangible assets			111,011		76,923		241,919
Cumulative translation adjustment		—	—		—		—		403	403	403
Changes in fair value of subsidiaries available for sale			8,192		—		—
Balance as of March 31, 2001		276,098	158,386		(86,522	)	—		84,607	84,607	432,569
Reversal of write-down of property, plant and equipment and investments			—		—		(1,026	)
Losses/gains on disposals of property, plant and equipment and investments			—		7,186		(13,706	)
Non-cash changes in equity method investments			31,396		(5,106	)	41,056
Interest expense, net			64,270		36,364		66,184
Other financial expenses, net			656		6,990		93
Changes in inventories			8,726		(10,474	)	(13,458	)
Changes in receivables and other assets			20,692		(25,464	)	(18,442	)
Changes in provisions			(29,150	)	(68,752	)	126,398
Changes in accounts payable and other liabilities			7,349		(26,991	)	(43,618	)
Cash flow from (used in) operating activities			185,139		(8,910	)	167,044
Purchases of property plant and equipment and intangible assets			(47,979	)(1)	(49,467	)	(180,928	)
Purchases of investments and loans to related parties			(60,973	)	(35,429	)	(71,926	)
Proceeds from the sales of property plant and equipment and intangible assets			30,916		68		26,887
Proceeds from the sales of investments			19,630		13,746		23,989
Interest received			12,293		5,086		6,398
Cash flow used in investing activities			(46,113	)	(65,996	)	(195,580	)
Capital increases			30		66,962		—
Net proceeds from additions to non-current corporate debt			553,747		118,656		82,961
Net (repayment of) proceeds from current corporate debt			(547,277	)	133,407		27,600
Dividends paid			—		(4,012	)	—
Interest paid			(47,300	)	(60,469	)	(72,582	)
Increase in cash collateral			(47,400	)	—		—
Other financial expenses, net			(656	)	(6,990	)	(93	)
Cash flow from (used in) financing activities			(88,856	)	247,554		37,886
Cash flow from operating, investing and financing activities activities			50,170		172,648		9,350
Effect of exchange rate changes on cash			(3,601	)	3,522		2,201
Cash balances included in investments in subsidiaries available for sale			(14,812	)	—		—
Changes in cash and cash equivalents			31,757		176,170		11,551
Cash and cash equivalents
	at beginning of reporting period		226,573		50,403	(2)	47,718
	at end of reporting period		258,330		226,573		59,269
Supplemental cash flow information:
	Non-cash financing and investing activities
		Transfer of Cutting & Welding Division	—		—		37,912
		Fair value of assets acquired in acquisitions, other than cash	2,732,025		—		—
		Fair value of liabilities assumed in acquisitions	2,734,628		—		—
		Increase in stockholders' equity	967,180		—		—

	Successor
					Other comprehensive income
					Other comprehensive income			Cumulative other comprehensive income
	Subscribed capital	Additional paid-in capital	Accumulated deficit		Hedging reserve		Translation reserve	Cumulative other comprehensive income	Total stockholders' Equity
Balance as of December 31, 2001	90	967,090	(69,531	)	(9,199	)	14,939	5,740	903,389

Change in fair value of derivatives	—	—	—		4,817		—	4,817	4,817
Net loss	—	—	(13,394	)	—		—	—	(13,394	)
Cumulative translation adjustment	—	—	—		—		8,334	8,334	8,334

Balance as of March 31, 2002	90	967,090	(82,925	)	(4,382	)	23,273	18,891	903,146

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

MESSER GRIESHEIM HOLDING AG ~~NOTES TO~~ UNAUDITED INTERIM CONDENSED CONSOLIDATED ~~FINANCIAL~~ STATEMENTS OF CASH FLOWS (Amounts in EEURO thousands, unless otherwise stated)

	Successor		Predecessor
	January 1, 2002 to March 31, 2002		January 1, 2001 to March 31, 2001
Losses before income taxes and minority interests	(7,712	)	(798	)

Income taxes (paid) refunded	(3,784	)	827
Depreciation and amortization of property, plant and equipment and intangible assets	68,755		55,843
Changes in fair value of investments in subsidiaries available for sale	692		—
Write-down of investments	803		—
(Gain)/losses on disposals of property, plant and equipment and investments	(363	)	398
Non-cash changes in equity method investments	10		2,993
Interest expense, net	35,234		25,078
Other financial expense, net	220		7,447
Changes in inventories	(3,378	)	(12,461	)
Changes in receivables and other assets	2,849		(26,605	)
Changes in provisions	(11,145	)	(28,354	)
Changes in accounts payable and other liabilities	3,605		(17,575	)

Cash flow from operating activities	85,786		6,793

Purchases of property plant and equipment and intangible assets	(23,189	)	(31,796	)
Purchases of investments and loans to related parties	(2,846	)	(13,152	)
Investments in subsidiaries available for sale for extinguishment of debt	(5,655	)	—
Proceeds from the sales of property plant and equipment and intangible assets	1,666		59
Proceeds from the sales of investments	5,272		20
Interest received	3,115		3,930

Cash flow used in investing activities	(21,637	)	(40,939	)

Net proceeds from additions to non-current corporate debt	—		12,041
Repayments of non-current corporate debt	(1,854	)	—
Net (repayment of) proceeds from current corporate debt	(3,247	)	61,914
Dividends paid to minorities	(1,514	)	(1,514	)
Interest paid	(30,620	)	(25,308	)
Other financial expenses, net	(220	)	(7,447	)

Cash flow from (used in) financing activities	(37,455	)	39,686

Cash flow from operating, investing and financing activities	26,694		5,540

Effect of exchange rate changes on cash and cash equivalents	(697	)	1,448
Changes in cash and cash equivalents	25,997		6,988

Cash and cash equivalents
at beginning of reporting period	188,018		50,403
at end of reporting period	214,015		57,391

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

MESSER GRIESHEIM HOLDING AG

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in EURO thousands, unless otherwise stated)

1. Background and basis of presentation

Messer Griesheim Holding AG ("the Company" or "Successor") is a supplier of industrial gases. The Company produces and markets industrial gases (including oxygen, nitrogen, argon, helium, carbon dioxide, hydrogen and rare and high-purity gases), gas application processes and customer-site gas production systems. The Company's ~~primary~~ primary customers include major industrial, chemical and pharmaceutical manufacturers, and the food processing and waste treatment industries. Messer Griesheim Group GmbH & Co. KGaA owns 100% of the shares of Messer Griesheim Holding AG, 33.33% of which is owned directly and 66.67% which is owned through the wholly owned Diogenes 20.Vermögensverwaltung GmbH.

The ~~Successor,~~unaudited ~~incorporated~~interim oncondensed ~~November 6,~~consolidated ~~1996,~~financial ~~was~~statements ahave ~~dormant~~been ~~company~~prepared ~~until~~in ~~April 30,~~accordance ~~2001,~~with ~~when~~International itAccounting ~~was~~Standards ~~activated to become the holding company for the shares of Messer Griesheim GmbH~~ ("~~MGG~~IAS" ~~or "Predecessor"~~). Asas ofadopted ~~December 31, 2000, the Successor had net assets aggregating E44.9, represented~~ by ~~current assets of E50.7 and current liabilities of E5.8. The Predecessor was recapitalized to effect~~ the ~~acquistion transactions discussed in note 3. As discussed in note 3, the acquisition~~International ~~transactions~~Accounting ~~have~~Standards ~~been~~Board ~~accounted for at fair value~~ and, ~~accordingly,~~include the ~~assets~~accounts ~~and liabilities~~ of ~~the~~all ~~Group~~companies ~~have~~which ~~been~~it ~~recorded at~~controls ~~their estimated fair values as of April 30~~(collectively, ~~2001,~~ "the ~~date~~Messer ~~of the acquisition transactions. As a result, the financial statements of the~~ Group ~~for periods prior to the acquisition are not comparable to the Group's financial statements for periods subsequent to the acquisition. To highlight this lack of comparability~~", a"Messer" ~~solid~~or ~~line~~"Messer ~~has~~Griesheim ~~been~~GmbH" ~~inserted,~~or ~~where applicable, to distinguish information pertaining to~~ the ~~pre-acquisition and post-acquisition periods. The refinancing transactions and the divestiture program adopted by the~~ "Group ~~are described in notes 4 and 10, respectively~~").

The ~~unaudited~~Successor, ~~condensed~~incorporated ~~consolidated~~on ~~financial~~November 6, ~~statements~~1996, ~~have~~was ~~been~~a ~~prepared~~dormant incompany ~~accordance~~until ~~with~~April 30, ~~International~~2001, ~~Accounting~~when ~~Standards~~it was activated to become the holding company for the shares of Messer Griesheim GmbH ("~~IAS~~Predecessor"). asAs ~~adopted~~of byDecember 31, 2000, the ~~International~~Successor ~~Accounting~~had net assets aggregating EURO44.9, represented by current assets of EURO50.7 and ~~Standards~~current ~~Board~~liabilities ~~(formerly~~of ~~known~~EURO5.8. asAs discussed in note 3 the Predecessor ~~International~~was ~~Accounting~~recapitalized ~~Standards~~to ~~Committee~~effect orthe ~~"IASC")~~acquistion transactions which have been accounted for at fair value. Accordingly, the assets and ~~include~~liabilities of the ~~accounts~~Group have been recorded at their estimated fair values as of ~~all~~April 30, ~~companies~~2001, ~~which~~the date of the ~~Successor~~acquisition ortransactions. ~~Predecessor~~As ~~controls~~a ~~(collectively~~result, " the ~~Messer~~financial statements of the Group" for periods prior to the acquisition are not comparable to the Group's financial statements for periods subsequent to the acquisition. To highlight this lack of comparability, ~~"Messer"~~a orsolid "line has been inserted, where applicable, to distinguish information pertaining to the pre-acquisition and post-acquisition periods. The refinancing transactions and the divestiture program adopted by the Group") are described in notes 4 and 9, respectively.

The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments of a normal, recurring nature necessary to present fairly the ~~financial~~ financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with IAS have been condensed or omitted. These unaudited interim condensed consolidated financial statements have been prepared using similar accounting principles and should, therefore, be read in conjunction with the ~~Predecessor~~successors's December 31, ~~2000~~2001 consolidated financial statements and notes thereto. The results of operations for the interim ~~2001~~2002 periods presented are not necessarily indicative of the operating results to be expected for the full year.

The preparation of unaudited interim condensed consolidated financial statements in conformity with IAS requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Additionally, as discussed in note 3, the allocation of the purchase price in the acquisition transactions to the assets acquired and liabilities assumed is preliminary, and certain revisions to such allocation may be necessary upon completion of the allocation process.

Certain reclassifications have been made to the presentation of prior periods to conform to the current period classification.

2425

2. New IAS accounting standards

The Group has adopted each of the following standards effective January 1, 2001. Unless otherwise stated, adoption of these standards did not have a material impact on the Group's financial position or results of operations.

In 1998 the IASC issued IAS 39 "Financial Instruments: Recognition and Measurement". IAS 39 was effective for fiscal periods beginning after December 31, 2000. The standard significantly increases the use of fair values in accounting for financial instruments. In addition, it establishes specific criteria relating to hedge accounting. Adoption of this standard on January 1, 2001 resulted in a ~~E335~~ EURO335 cumulative effect of change in accounting principles, net of deferred taxes totaling ~~E223~~ EURO223, reported in other comprehensive income.

In 2000 the IASC ~~revised~~issued IAS 1940 "~~Employee~~Investment ~~Benefits~~Property". IAS 1940 ~~(revised 2000)~~ was effective for ~~fiscal~~financial statements covering periods beginning on or after January 1, 2001. ~~The~~IAS ~~standard~~40 ~~changes~~prescribes the ~~definition~~accounting oftreatment ~~plan~~for ~~assets~~investment property and ~~introduces~~related ~~recognition,~~disclosure ~~measurement~~requirements and ~~disclosure~~replaces previous requirements in IAS 25 "Accounting for ~~reimbursements~~Investments". Under IAS 40, investment property is defined as property held to earn rentals or for capital appreciation or both rather than for use in the production or supply of goods or services or for administrative purposes or for sale in the ordinary course of business. The Group has opted for the cost model under which investment property is measured at depreciated cost less any impairment losses.

In 2000 the IASC revised IAS 19 "Employee Benefits". IAS 19 (revised 2000) was effective for fiscal periods beginning on or after January 1, 2001. The standard changes the definition of plan assets and introduces recognition, measurement and disclosure requirements for reimbursements. The standard prescribes the accounting and disclosure by employers for employee benefits, post employment benefits, other long-term employee benefits, termination benefits and equity compensation benefits.

3. Acquisition transactions

On December 31, 2000, Aventis S.A. (parent company to Hoechst AG ("Hoechst")) entered into an agreement with Allianz Capital Partners ("ACP") and six private equity funds managed by affiliates of The Goldman Sachs Group, Inc. (the "GS Funds"), regarding the purchase of Hoechst's shares in ~~MGG~~Messer Griesheim. The transaction was consummated on April 30, 2001.

In order to facilitate the purchase of Hoechst's shares in ~~MGG~~Messer Griesheim by ACP and the GS Funds, Hoechst transferred its 662/3% share interest in ~~MGG~~Messer Griesheim to the Company. on On April 30, 2001. ~~In addition, on the same date~~ Messer Industrie GmbH ("MIG") transferred its 331/3% equity interest in ~~MGG~~Messer Griesheim to the Company for nominal cash and a 331/3% equity interest in the Company. As explained in the following paragraph, ~~100% of~~ the Company was then immediately acquired by Messer Griesheim Group GmbH.

ACP and the GS funds formed a new company, Messer Griesheim Group GmbH & Co KGaA. On April 30, 2001, through Messer Griesheim Group GmbH & Co KGaA, ACP and the GS Funds acquired Hoechst's share of the Company for ~~E618~~EURO618 million, payable in cash (~~E388~~ EURO388 million) and deferred notes (~~E230~~ EURO230 million). The ~~E230~~ EURO230 million note is due from Messer Griesheim Group GmbH & Co KGaA on November 11, 2011, together with interest which, although not currently payable, will accrue thereon at a rate of 250 basis points above the three month EURIBOR. In certain circumstances, the deferred purchase price may be payable earlier. Further, Hoechst has been issued 300,000 bonds (E300) which are convertible into 3% of the equity shares of Messer Griesheim Group GmbH upon the occurrence of certain events at a nominal conversion price. In addition, MIG transferred its share in the Company for a 32.67% share in Messer Griesheim Group GmbH and cash of E33.2 million. MIG is also entitled to receive additional cash consideration of up to E35.8 million upon the occurrence of certain events. As a result of the foregoing transactions, the Company is 100% owned by Messer Griesheim Group GmbH, which in turn is owned by ACP (33.665%), the GS Funds (collectively 33.665%) and Messer Industrie GmbH (32.67%).

~~Also as a result of the foregoing transactions, the Company owns 100% of MGG.~~ 26

~~The~~ ~~foregoing~~circumstances, ~~transactions~~the ~~have~~deferred purchase price may be payable earlier. Further, Hoechst has been ~~accounted~~issued ~~for~~300,000 bonds ( EURO300) which are convertible into 3% of the equity shares of Messer Griesheim Group GmbH & Co KGaA upon the occurrence of certain events at a nominal conversion price. In addition, MIG transferred its share in the Company for a ~~manner~~32.67% ~~similar~~share in Messer Griesheim Group GmbH & Co KGaA and cash of EURO33.2 million. MIG is also entitled to anreceive ~~acquisition~~additional cash consideration of ~~MGG~~up to EURO35.8 million ~~Accordingly,~~upon the ~~purchase~~occurrence ~~consideration~~of ~~for~~certain events. As a result of the ~~acquisition~~foregoing ~~transaction~~transactions, ~~has~~the ~~been~~Company was 100% owned by Messer Griesheim Group GmbH & Co KGaA, ~~allocated~~which toin turn is owned by ACP (33.665%), the GS Funds (collectively 33.665%) and Messer Industrie GmbH (32.67%) at April 30, 2001.

25 Also as a result of the foregoing transactions, the Company owns 100% of Messer Griesheim.

The ~~assets~~foregoing ~~acquired~~transactions ~~and~~have ~~liabilities~~been ~~assumed~~accounted asfor ofin ~~April 30,~~a ~~2001,~~manner ~~the~~similar ~~date~~to ofan ~~consummation~~acquisition of ~~the~~Messer ~~transactions, based on their estimated fair values~~Griesheim. ~~The~~Accordingly, ~~Company has engaged~~ the ~~services of an outside specialist to assist in allocating its~~ purchase ~~price,~~consideration ~~and~~for the ~~results~~acquisition oftransaction ~~the~~has been ~~outside~~allocated ~~specialist's work is not expected~~ to ~~be complete until early 2002. Finalization of~~ the ~~purchase~~assets ~~price allocation,~~acquired ~~which~~and isliabilities ~~expected~~assumed toas beof ~~completed within one year from~~ April 30, 2001, ~~may~~the ~~result~~date inof ~~certain~~consummation ~~adjustments~~of tothe ~~such~~acquisition ~~allocations.~~transactions, ~~The~~based ~~initial~~on ~~purchase~~their ~~price~~estimated ~~allocation~~fair ~~was~~values. ~~as follows:~~

Cash paid and notes issued to Aventis/Hoechst		618,000
Cash paid and equity issued to Messer Industrie		349,180
		967,180
Current assets (including cash of E226,573)		805,567
Non-current assets, including other intangibles		2,153,031
Goodwill		743,210
	Total assets	3,701,808
Current liabilities		1,012,253
Non-current liabilities		1,722,375
Equity		967,180
	Total liabilities and equity	3,701,808

As part of the business combination agreement, Hoechst and Messer Griesheim Group GmbH & Co. KGaA received a "call" option and a "counter-call" option, respectively, on 66²/3% of the shares of the Company. During January 2002, a subsidiary of Hoechst exercised its "call" option to acquire the 66²/3% of the Company for a promissory note in the amount equal to the purchase price paid by Messer Griesheim Group GmbH & Co. KGaA for its interest in the Company. Messer Griesheim Group GmbH & Co. KGaA subsequently exercised its "counter-call" option to acquire the Hoechst subsidiary (and re-acquire indirectly the shares of the Company) for a nominal amount. The "call" and "counter-call" provisions were included as part of the business combination agreement to meet German tax planning requirements of Hoechst.

~~Goodwill~~ The purchase price allocation resulted in a goodwill amounting to EURO581.3 million as of April 30, 2001. Goodwill represents the excess of the cost of the acquisition ~~transaction~~transactions over the fair value of the assets acquired and liabilities assumed. Goodwill arising from the acquisition ~~transaction~~ transactions is being amortized on a straight- line basis over an the estimated useful life of 15 twenty years.

4. Financing transactions

Refinancing transactions

Pursuant to the debt covenants, a substantial portion of ~~MGG~~Messer Griesheim's existing debt became due and payable upon the change in control, which occurred on April 30, 2001 (see note 3). As a result, ~~MGG~~Messer Griesheim entered into refinancing transactions with a consortium of banks during April and May 2001. The refinancing transactions ~~involved~~ involved borrowings under a senior facilities agreement with aggregate available funds of E1EURO1,650 million (E1 EURO1,340 million of term loan facilities ~~and~~ ~~E310~~and EURO310 million under a revolving facility), and a mezzanine bridge facility in the aggregate amount of ~~E400~~EURO400 million.

The amounts borrowed under the ~~refinancing~~senior facilities agreement (E1 EURO1,160.320 million) and under the mezzanine bridge facility (~~E400~~ EURO400.0 million) were used to repay ~~MGG~~Messer Griesheim's existing debt obligations of E1EURO1,~~302~~303.860 million. As the existing debt was repaid in connection with the acquisition transactions, the prepayment penalties aggregating E19.1 million have been reflected as part of the purchase accounting adjustments. No part of the existing debt or the refinanced debt was used to finance the acquisition transactions. Refinancing costs of E91.0 million were capitalized, and are being amortized over the period of maturities of the borrowings using the effective interest rate method.

The senior facilities agreement contains certain covenants that require MGG, among other things, to maintain certain specified financial ratios, to observe capital expenditure limits, and to ensure that the combination of the repayment of the senior term disposal facility and the assumption of indebtedness by third parties in connection with the divestment of assets will result in the reduction of the aggregate indebtedness of MGG and its consolidated subsidiaries by at least E255 million by April 2003.

Senior Notes

On May 16, 2001, the Company issued E550 million principal amount of 10.375% Senior Notes maturing on June 1, 2011. At any time prior to June 1, 2006, the Company may redeem all but not part of the Senior Notes at a redemption price equal to 100% of the principal amount thereof, plus a redemption premium and unpaid interest, and special interest, if any, to the redemption date. At any time on or after June 1, 2006, the Company may redeem all or part of the Senior Notes at specific redemption prices, expressed as percentages of the principal amount, accrued and unpaid interest, special interest, if any, and additional amounts, if any, to the applicable redemption date on a sliding scale. In addition, prior to June 1, 2004, the Company may redeem up to 35% of the Senior Notes with the proceeds of one or more public equity offerings of its or its parent company's equity at a redemption price equal to 110.375% of the principal amount of the Senior Notes redeemed.

The proceeds from these Senior Notes have been used by the Company to make an inter-company loan to MGG. MGG used the inter-company loan to extinguish the mezzanine bridge facility of E400 million, prepay E115 million principal of the outstanding term borrowings under the senior facilities agreement, and the balance for general corporate purposes. The issuance cost of the Senior Notes of E14.4 million has been capitalized and is being amortized over the period to maturity under the effective interest rate method. The Company will rely on payments it receives under the inter-company loan to make interest and repayments on the Senior Notes. The claims of the Company under the inter-company loan are subordinated to the claims of the lenders under the senior facilities. Payments on the inter-company loan are not permitted in certain cases involving payment and non-payment defaults under the senior facilities.

~~The~~transactions, ~~aggregate~~the ~~facilities,~~prepayment ~~amounts~~penalties ~~borrowed~~aggregating EURO19.1 million have been reflected as part of ~~September~~the purchase accounting adjustments. No part of the existing debt or the refinanced debt was used to finance the acquisition transactions. Refinancing costs of EURO90.0 ~~30,~~million ~~2001~~were capitalized, and are being amortized over the ~~maturity~~period ~~profile~~of ismaturities of ~~given~~the ~~below:~~borrowings using the effective interest rate method.

	Interest rate		Available facilities		Amounts borrowed		Maturity date
			(in E millions)		(in E millions)
$198 Million Senior Term Disposal facility(5)	5.73	%(3)	182.0	(1)	182.0		April 30, 2003
E300 Million Senior Term A facility(5)(6)	6.53	%(3)	295.3	(1)	295.3		April 20, 2008
E170 Million Senior Term B facility(5)	7.07	%(3)	170.0		170.0		April 30, 2009
$124 Million Senior Term B facility(5)	6.42	%(3)	135.2	(1)	135.2		April 30, 2009
E115 Million Senior Term C facility(5)	7.57	%(3)	115.0		115.0		April 30, 2010
$162 Million Senior Term C facility(5)	6.92	%(3)	176.7	(1)	176.7		April 30, 2010
E260 Million Senior Revolving facility I			255.5	(4)	—		April 30, 2008
E50 Million Senior Revolving facility II			50.0		—		April 30, 2008
Senior Notes	10.375	%	550.0		550.0		June 1, 2011
Other existing debt	6.69	%			198.0
					1,822.2
Unamortized debt issuance costs					(78.9	)
Total(2)			1,929.7		1,743.3

The senior facilities agreement contains certain covenants that require Messer Griesheim, among other things, to maintain certain specified financial ratios, to observe capital expenditure limits, and to ensure that the combination of the repayment of the senior term disposal facility and the assumption of indebtedness by third parties in connection with the divestment of assets will result in the reduction of the aggregate indebtedness of Messer Griesheim and its consolidated subsidiaries by at least EURO255.0 million by April 2003.

~~Interest expense~~Senior for the three month periods ended September 30, 2001 and 2000 was E46.5 million and E29.4 million, respectively. Interest expense for the three month period ended September 30, 2001 included amortization of capitalized debt issuance costs of E2.7 million. Notes

~~Interest expense~~ On ~~for~~May 16, 2001, the ~~five~~Company ~~month~~issued ~~period~~EURO550.0 million ~~ended~~principal ~~September~~amount of 10.375% Senior Notes maturing on June 301, ~~2001~~2011. At any time prior to June 1, 2006, the ~~four~~Company ~~month~~may ~~period~~redeem ~~ended~~all ~~April 30,~~but ~~2001~~not ~~and~~part of the ~~nine~~Senior ~~month~~Notes ~~period~~at ~~ended~~a ~~September 30~~redemption price equal to 100% of the principal amount thereof, ~~2000~~plus a redemption premium and ~~was~~unpaid ~~E76.6 million~~interest, ~~E41~~and special interest, if any, to the redemption date.5 At any time on or after June ~~million~~1, 2006, the Company may redeem all or part of the Senior Notes at specific redemption prices, expressed as percentages of the principal amount, accrued and ~~E72.6 million~~unpaid interest, ~~respectively.~~special ~~Interest~~interest, ~~expense~~if ~~for~~any, and additional amounts, if any, to the ~~five~~applicable ~~month~~redemption ~~period~~date ~~ended~~on a sliding scale. ~~September~~In addition, prior to June 301, ~~2001~~2004, ~~included~~the ~~amortization~~Company may redeem up to 35% of ~~capitalized~~the ~~debt~~Senior ~~issuance~~Notes ~~costs~~with the proceeds of E4one or more public equity offerings at a redemption price equal to 110.~~6 million~~375% of the principal amount of the Senior Notes redeemed.

The proceeds from these Senior Notes have been used by the Company to make an inter-company loan to Messer Griesheim. Messer Griesheim used the inter-company loan to extinguish the mezzanine bridge facility of EURO400.0 million, prepay EURO115.0 million principal of the outstanding term borrowings under the senior facilities agreement, and the balance of EURO35.0 million for general corporate purposes. The issuance cost of the Senior Notes of EURO14.4 million has been capitalized and is being amortized over the period to maturity under the effective interest rate method. The Company is dependent upon the payments it receives under the inter-company loan to make interest and repayments on the Senior Notes. The claims of the Company under the inter-company loan are subordinated to the claims of the lenders under the senior facilities. Payments on the inter- company loan are not permitted in certain cases involving payment and non-payment defaults under the senior facilities.

The aggregate ~~Group has entered into interest rate swaps in order to hedge future interest rate variability for its senior term~~ facilities~~. Approximately~~, ~~E803.5 million of the Group`s~~ outstanding ~~indebtedness~~amounts ~~was~~borrowed ~~designated~~ as ~~hedged~~of ~~due~~March 31, to2002 ~~interest~~and ~~rate~~the ~~swap~~maturity ~~agreements~~profile asis ofgiven ~~September 30,~~below: ~~2001.~~

5. Singapore transactions

Description	Interest rate		Available amount		Amounts outstanding		Maturity date⁽¹⁰⁾
			EURO (in millions)		EURO (in millions)
$198 Million Senior Term Disposal facility⁽⁵⁾	4.16%	⁽³⁾	14.6	⁽¹⁾	14.6		April 30, 2003⁽⁹⁾
EURO300 Million Senior Term A facility^(5)(6)(8)	5.51%	⁽³⁾	295.1	⁽¹⁾	295.1		April 20, 2008
EURO170 Million Senior Term B facility⁽⁵⁾	6.16%	⁽³⁾	170.0		170.0		April 30, 2009
$124 Million Senior Term B facility⁽⁵⁾	4.78%	⁽³⁾	142.3	⁽¹⁾	142.3		April 30, 2009
EURO115 Million Senior Term C facility⁽⁵⁾	6.66%	⁽³⁾	115.0		115.0		April 30, 2010
$162 Million Senior Term C facility⁽⁵⁾⁽⁸⁾	5.25%	⁽³⁾	185.9	⁽¹⁾	185.9		April 30, 2010
EURO260 Million Senior Revolving facility I			255.5	⁽⁴⁾	—		March 31, 2008
EURO50 Million Senior Revolving facility II			41.5	⁽⁷⁾	—		March 31, 2008
Senior Notes	10.375%		550.0		550.0		June 1, 2011
Other existing debt⁽⁸⁾	5.92%		187.3		187.3

					1,660.2
Unamortized debt issuance costs					(79.5	)

Total⁽²⁾			1,957.2		1,580.7

(1): U.S. Dollar (US-$) amounts under the facility have been converted into EURO at the rate of EURO1 = US$ 0.8714, British Pound (GBP) amounts at the rate of EURO1 = GBP 0.6123, the exchange rates at March 31, 2002.
(2): The total amount borrowed as March 31, 2002 is reflected net of unamortized debt issuance costs of EURO79.5 million as of March 31, 2002.
(3): Variable interest rates as of March 31, 2002.
(4): EURO4.5 million drawn as guarantee.
(5): The Senior Term Facilities (Disposal and Tranches A, B and C) are non-revolving credit facilities, i.e. the available facilities are reduced by the amount of repayments.
(6): Tranche A is a multicurrency facility. Interest rate is a weighted rate.
(7): EURO8.5 million drawn as guarantee.
(8): Interest rate is a weighted rate.
(9): During April 2002, the senior term disposal facility was repaid in full.
(10): The Company is required to use 75% of the excess cash flow, as defined under the senior facilities agreement, in any given year to repay the outstanding loans.

AsInterest aexpense precondition to the acquisition transactions, the Group was required to limit its exposure to its Singapore investments. On April 30, 2001, the Group transferred its 100% interest in Messer Singapore Pte. Ltd. and ~~its 50%~~ interest inswap Singapore Syngas Pte. Limited ("Syngas") to Messer Singapore Holding GmbH. The Group has a non controlling 39% equity interest in Messer Singapore Holding GmbH. The other shareholders are Hoechst AG (39%), Bandinelli GmbH, a special purpose company owned by MIG (11%), and management (11%). On June 20, 2001, Texaco Nederland B.V. ("Texaco") transferred half of its 50% interest in Syngas to Messer Singapore Holding GmbH. As a result of these transactions, MGG holds an indirect 29.25% interest in Syngas through its equity interest in Messer Singapore Holding GmbH. agreements

~~Concurrently with~~ Interest ~~the~~expense ~~transfer of the Syngas business, Messer Singapore Holding GmbH indemnified the Group~~ for ~~its outstanding guarantee obligations in connection with~~ the ~~Singapore operations.~~three Tomonth ~~finance~~periods ~~Messer~~ended ~~Singapore Holding GmbH~~March 31, ~~the~~2002 ~~Group~~ and ~~Hoechst~~2001 ~~have~~was ~~made shareholder loans~~EURO38.3 million ~~The loans are allocated two-thirds to Hoechst~~ and ~~one-third to the~~ ~~Group~~EURO29.0 million, asrespectively. ~~per~~Interest ~~the~~expense ~~shareholders'~~for ~~agreement. Although~~ the ~~transfer~~three tomonth ~~Messer~~period ~~Singapore~~ended ~~Holding~~March 31, ~~occurred~~2002 onand ~~April~~March 3031, 2001, ~~this~~included ~~funding~~amortization ~~arrangement takes account~~ of ~~all~~capitalized ~~funding of MGG to its~~debt ~~Singapore~~issuance ~~operations~~costs ~~since~~of ~~September 1, 2000~~EURO2. ~~Under the shareholders' agreement, the Group's funding obligations (shareholder loans and other financial support including funding provided by the Group to its Singapore operations since September~~9 ~~1, 2000) is limited to E92~~ million. ~~MGG~~and ~~received from Hoechst a E26~~EURO0.40 million ~~cash payment representing two-thirds of the funding by the Group for the Singapore operations since September 1~~, ~~2000 and has accounted for the receipt as an advance towards a capital contribution in the Predecessor balance sheet at April 30, 2001~~respectively. This payment excludes amounts funded by Hoechst with respect to payments to Celanese and Texaco as described below. Further, as of May 1, 2001, the Successor's obligations to fund loss commitments of Syngas have been revalued to give effect to the portion which are expected to be funded by Hoechst.

In The ~~March 2001,~~Group ~~Texaco~~has ~~and MGG~~ entered into ~~settlement~~interest ~~arrangements~~rate ~~with~~swaps Celanese Singapore Pte Ltd ("Celanese") which settled the claims of Celanese under the completion guarantee provided by MGG, and amended the existing gas supply agreement between Syngas and Celanese. These amendments and modifications involved, among other things, cash payments by MGG to Celanese, the liability for which is included in ~~the~~order ~~overall allocation of Syngas exposures of one-third~~ to ~~MGG~~hedge ~~and~~future ~~two-thirds~~interest torate ~~Hoechst. The~~variability ~~settlement~~for ~~amount~~its ~~allocated~~senior toterm ~~and paid by MGG was E28~~facilities.~~6 million~~ Approximately, ~~of which E19~~EURO816.81 million ~~was financed by Hoechst as an advance towards a capital~~ ~~contribution~~of in the ~~Predecessor~~Group`s ~~balance~~outstanding ~~sheet~~indebtedness ~~at April 30, 2001. The repayment claim against MGG for this financing was waived by Hoechst on April 30, 2001.~~

In conjunction with the Celanese settlement, a put-option agreement dated December 20, 1999 between MGG, and Texaco was modified by an agreement dated March 29, 2001. The original put-option agreement gave Texaco an option to sell 25% of the shares in Syngas to MGG. Under the

~~modified~~was ~~put-option~~designated ~~agreement,~~as ~~MGG~~hedged ~~purchased~~due ~~from Texaco the outstanding shareholder loans made by Texaco~~ to ~~Syngas in excess of Texaco's remaining 25% equity~~ interest inrate ~~Syngas~~swap ~~and related~~agreements ~~funding~~as ~~obligations. MGG paid a purchase price~~ of ~~E17.2~~March ~~million for the loans. Of that amount~~31, ~~Hoechst loaned E11~~2002.~~3 million~~ Due to ~~MGG as an advance towards a capital contribution in~~ the ~~Predecessor~~refinancing ~~balance sheet at April 30~~agreements, ~~2001.~~the InGroup ~~exchange, Texaco~~ agreed ~~that Aventis can require Texaco~~ to ~~exercise~~enter ~~the~~into ~~put~~loan ~~option~~agreements with ~~respect~~fixed tointerest ~~25% of~~rates, ~~the~~interest ~~shares~~swap inagreements, ~~Syngas~~caps ~~at any time on~~ or ~~after~~other ~~May 1,~~instruments ~~2001~~so ~~and~~as noto ~~later~~ensure ~~than~~that ~~June 30,~~interest ~~2001~~payments ~~for a consideration of US$1. The put was exercised~~ on ~~June 20, 2001,~~ at ~~which~~least ~~time~~75% ~~the Syngas shares acquired from Texaco were transferred directly to Messer Singapore Holding GmbH. As a result~~ of the ~~change~~Group's intotal ~~ownership~~debt ~~that~~is ~~occurred~~hedged. ~~when~~Had the ~~Texaco~~Company ~~put~~not ~~option~~entered ~~was~~into ~~exercised,~~interest ~~Syngas was~~swap ~~required~~agreements, tothe ~~repay~~interest ~~its~~expense ~~outstanding~~would ~~bank~~have ~~credit~~been ~~facilities,~~reduced ~~which~~by ~~became due on June 30~~EURO3, ~~2001~~287.0 ~~Shareholder~~and ~~loans~~EURO0 ~~were extended to Syngas~~ for ~~this~~the ~~purpose.~~three Ofmonths ~~these~~period ~~shareholder~~ended ~~loans~~March 31, ~~75%~~2002 ~~were funded by Messer Singapore Holding GmbH~~ and ~~25%~~March 31, ~~were funded by Texaco~~2001 respectively.

~~6. Divestment of Cuban subsidiaries~~Pledges

As In aconnection ~~precondition~~with to the ~~consummation~~refinancing ~~of the acquistion transaction~~program, ~~on April 24, 2001,~~ the ~~Group~~Company ~~sold~~has ~~its~~given ~~interest~~several inpledges ~~a holding company that controls three operating companies in Cuba~~ to ~~an entity which is controlled by Mr. Stefan Messer, a member of~~ the ~~management~~lenders ~~board~~ of the ~~Group.~~senior Mrfacilities. ~~Stefan~~ ~~Messer~~Substantially isall ~~also a director and minority shareholder in MIG. The total purchase price for the Cuban holding company was E7.8 million,~~ of ~~which E1.3 million was paid in cash and~~ the ~~remainder~~assets ~~by an unsecured note in the principal amount~~ of ~~E6.5 million,~~ ~~which matures in 2006 and accrues interest at~~ the ~~rate of 5.5% per year. The sale resulted in a pre tax loss of E5.6 million, which has~~ ~~been~~Group ~~reflected~~are inpledged ~~the~~as ~~statement of operations for the period ended April 30, 2001~~collateral.

In addition, the lenders of the senior facilities have obtained irrevocable and unconditional guarantees from certain subsidiaries of the Company. These guarantees will remain outstanding until the repayment of the Senior Facilities.

Additionally, in connection with the refinancing program, Messer Griesheim Holding AG has pledged all of its shares in Messer Griesheim to the senior lenders as security for the senior facilities. Moreover, Messer Griesheim Holding AG has agreed that if the senior lenders foreclose on that share pledge following an event of default and seek to sell the Company's shares of Messer Griesheim, the Company will release its claims for payment of the inter-company loan. If the Company is ever required to release its claims for repayment of the inter-company loan, its only source of repayment for the notes will be net proceeds, if any, from a foreclosure sale of the Messer Griesheim shares after the senior lenders have been repaid in full. In addition, the inter-company loan is effectively subordinated to all existing and future debt of Messer Griesheim's subsidiaries.

5. Singapore transactions

As a precondition to the acquisition transactions, the Group was required to limit its exposure to its Singapore investments. On April 30, 2001, the Group transferred its 100% interest in Messer Singapore Pte. Ltd. and its 50% interest in Singapore Syngas Pte. Limited ("Syngas") to Messer Singapore Holding GmbH. The Group has a non controlling 39% equity interest in Messer Singapore Holding GmbH. The other shareholders are Hoechst AG (39%), Bandinelli GmbH, a special purpose company owned by MIG (11%), and members of the Group's senior management (11%). On June 20, 2001, Texaco Nederland B.V. ("Texaco") transferred half of its 50% interest in Syngas to Messer Singapore Holding GmbH. As a result of these transactions, Messer Griesheim holds an indirect 29.25% interest in Syngas through its equity interest in Messer Singapore Holding GmbH.

Concurrently with the transfer of the Syngas business, Messer Singapore Holding GmbH indemnified the Group for its outstanding guarantee obligations in connection with the Singapore operations. To finance Messer Singapore Holding GmbH, the Group and Hoechst have made shareholder loans. The loans have been allocated two-thirds to Hoechst and one-third to the Group, as per the shareholders' agreement. Although the transfer to Messer Singapore Holding occurred on April 30, 2001, this funding arrangement takes account of all funding of Messer Griesheim to its

Singapore operations since September 1, 2000. Under the shareholders' agreement, the Group's funding obligations (shareholder loans and other financial support including funding provided by the Group to its Singapore operations since September 1, 2000) are limited to EURO92.0 million. Messer Griesheim received from Hoechst a EURO26.4 million cash payment representing two-thirds of the funding by the Group for the Singapore operations since September 1, 2000 and has accounted for the receipt as an advance towards a capital contribution in the Predecessor balance sheet at April 30, 2001. This payment excludes amounts funded by Hoechst with respect to payments to Celanese Singapore Pte Ltd ("Celanese") and Texaco as described below. Further, as of May 1, 2001, the Successor's obligations to fund loss commitments of Syngas have been revalued to give effect to the portion which are expected to be funded by Hoechst. Accordingly, Messer Griesheim's remaining funding obligations under this cap, net of 33¹/3% of various shareholder loans and other financial support already provided by Messer Griesheim to its Singapore operations since September 1, 2000, were EURO63.2 million as of April 30, 2001 and 13.8 million as of March 31, 2002.

In March 2001, Texaco and Messer Griesheim entered into settlement arrangements with Celanese which settled the claims of Celanese under the completion guarantee provided by Messer Griesheim, and amended the existing gas supply agreement between Syngas and Celanese. These amendments and modifications involved, among other things, cash payments by Messer Griesheim to Celanese, the liability for which is included in the overall allocation of Syngas exposures of one-third to Messer Griesheim and two-thirds to Hoechst. The settlement amount allocated to and paid by Messer Griesheim was EURO28.6 million, of which EURO19.8 million was financed by Hoechst as an advance towards a capital contribution in the Predecessor balance sheet at April 30, 2001. The repayment claim against Messer Griesheim for this financing was waived by Hoechst on April 30, 2001.

In conjunction with the Celanese settlement Messer Griesheim and Texaco modified their put option. The original put-option agreement gave Texaco an option to sell 25% of the shares in Syngas to Messer Griesheim. Under the modified put-option agreement, Messer Griesheim purchased from Texaco the outstanding shareholder loans made by Texaco to Syngas in excess of Texaco's remaining 25% equity interest in Syngas and related funding obligations. Messer Griesheim paid a purchase price of EURO17.2 million for the loans. Of that amount, Hoechst loaned EURO11.3 million to Messer Griesheim as an advance towards a capital contribution in the Predecessor balance sheet at April 30, 2001. In exchange, Texaco agreed that Hoechst can require Texaco to exercise the put option with respect to 25% of the shares in Syngas at any time on or after May 1, 2001 and no later than June 30, 2001 for a consideration of US$1. The put was exercised on June 20, 2001, at which time the Syngas shares acquired from Texaco were transferred directly to Messer Singapore Holding GmbH. As a result of the change in ownership that occurred when the Texaco put option was exercised, Syngas was required to repay its outstanding bank credit facilities, which became due on June 30, 2001. Shareholder loans were extended to Syngas for this purpose. Of these shareholder loans, 75% were funded by Messer Singapore Holding GmbH and 25% were funded by Texaco.

During December 2001 Messer Griesheim transferred its 39% interest in Messer Singapore Holding to Messer International GmbH, a wholly owned subsidiary of Messer Griesheim GmbH.

5. Singapore transactions (Continued)

In February 2002, Aventis, Messer Griesheim and Messer Singapore Holding reached an agreement with Celanese and Celanese Singapore (Pte) Ltd. in which Messer Singapore Holding agreed to pay US$12.5 million to Celanese Singapore on settlement of a prior agreement requiring Messer Griesheim to pay Celanese certain concession fees. One third of the US$12.5 million will apply towards the EURO92.0 million funding limit by Messer Griesheim to the Singapore operations.

6. Divestment of Cuban subsidiaries

As a precondition to the consummation of the acquisition transactions, on April 24, 2001, the Group sold its interest in a holding company that controls three operating companies in Cuba to an entity which is controlled by Mr. Stefan Messer, a member of the management board of the Group. Mr. Stefan Messer is also a director and minority shareholder in MIG. The total purchase price for the Cuban holding company was EURO7.8 million, of which EURO1.3 million was paid in cash and the remainder by an unsecured note in the principal amount of EURO6.5 million, which matures in 2006 and accrues interest at the rate of 5.5% per year.

7. Segment information

The accounting policies utilized for the reporting of interim segment information are the same as those described in the Group's annual consolidated financial statements.

The following tables present selected segment data as of and for the three months ended March 31, 2002 and 2001.

Profit and loss segment disclosures

Business Areas		Germany		Western Europe		Eastern Europe		North America		Others *		Reconciliation/ Corporate		Total
Successor
Three months ended September 30, 2001
Total sales		171,738		71,521		57,285		96,115		14,735		1,189		412,583
Inter-segment sales		7,864		6,802		3,133		207		71		941		19,018
Net sales		163,874		64,719		54,152		95,908		14,664		248		393,565
Operating (loss) profit		44,777		5,808		9,867		1,005		942		(37,366	)	25,033
Depreciation, amortization and impairment of intangibles and property, plant and equipment		16,544		8,020		6,022		16,019		2,389		19,101		68,095
	thereof impairment losses	—		—		—		—		—		—		—
Interest income		182		43		665		5,850		147		4,113		11,000
Interest expense		4,062		1,228		1,879		10,857		1,030		32,071		51,127
Share of profit (loss) in equity investments		2,231		—		—		(830	)	1,275		—		2,676
Income taxes		(17,725	)	(1,582	)	(2,594	)	(30	)	(187	)	1,204		(20,914	)

Successor
Three months ended March 31, 2002

Business Areas		Germany	~~Germany~~	Western Europe	~~Western Europe~~	Eastern Europe	~~Eastern Europe~~	North America	~~North America~~	Others(*)	~~Latin America~~	Reconciliation/ Corporate	~~Asia/ Africa~~	Total	~~Reconciliation/ Corporate~~		~~Total~~
Predecessor
Total sales		170,059		70,689		59,510		93,922		14,196		2,931		411,307
Three month ended September 30, 2000
Inter-segment sales		12,612		4,509		5,535		269		100		1,862		24,887
Total sales			183,527		65,450		57,216		103,827		21,987		29,277		(6,284	)	455,000
Net sales		157,447		66,180		53,975		93,653		14,096		1,069		386,420
Inter-segment sales			42,571		4,315		6,119		3,423		790		102		—		57,320
Operating profit (loss)		24,314		2,127		7,260		4,714		2,377		(12,657	)	28,135
Net sales			140,956		61,135		51,097		100,404		21,197		29,175		(6,284	)	397,680
Depreciation, amortization of intangibles and property, plant and equipment		22,930		12,158		9,238		20,404		2,311		1,714		68,755
Operating (loss) profit			22,914		5,690		10,149		8,415		(19,675	)	(21,414	)	(9,352	)	(3,273	)
Interest income		—		23		1,031		349		160		1,552		3,115
Depreciation, amortization and impairment of intangibles and property, plant and equipment			12,939		10,238		6,647		11,354		16,353		22,421		485		80,437
Interest (expense)		(740	)	(564	)	(382	)	(6,855	)	(582	)	(29,226	)	(38,349	)
	thereof impairment losses		240		—		—		—		9,992		22,087		—		32,319
Equity method investments income (expense), net		302		—		—		(312	)	—		—		(10	)
Interest income			1,261		291		667		1,403		68		199		—		3,889
Income tax benefit (expense)		(9,509	)	(473	)	(1,587	)	(83	)	(267	)	8,673		(3,246	)
Interest expense			11,589		1,318		1,107		7,547		5,765		2,143		(110	)	29,359
Share of profit (loss) in equity investments			524		—		(571	)	—		3,237		(2,651	)	840		1,379
Income taxes			21,891		(1,855	)	(1,163	)	1,077		290		(679	)	(1,399	)	18,162

(*): includes Latin America and Africa/Asia

Business Areas		Germany		Western Europe		Eastern Europe		North America		Others *		Reconciliation/ Corporate		Total
Successor
Five months ended September 30, 2001
Total sales		283,093		119,631		97,124		166,602		30,791		1,285		698,526
Inter-segment sales		20,938		7,867		7,211		2,584		163		225		38,988
Net sales		262,155		111,764		89,913		164,018		30,628		1,060		659,538
Operating (loss) profit		62,104		10,453		17,312		5,358		7,232		(51,696	)	50,763
Depreciation, amortization and impairment of intangibles and property, plant and equipment		27,703		13,468		11,220		27,828		4,323		26,469		111,011
	thereof impairment losses	—		—		—		—		—		—		—
Interest income		382		124		973		5,850		324		4,648		12,301
Interest expense		4,341		1,950		2,111		17,276		7,770		43,123		76,571
Share of profit (loss) in equity investments		2,231		—		—		(818	)	(6,715	)	—		(5,302	)
Income taxes		(11,774	)	(2,834	)	(3,633	)	1,011		(257	)	(4,285	)	(21,772	)

Business Areas		Germany		Western Europe		Eastern Europe		North America	Latin America		Asia/ Africa		Reconciliation/ Corporate		Total
Predecessor
Four month ended April 30, 2001
Total sales		241,280		91,423		74,802		131,785	26,395		35,707		2,003		603,395
Inter-segment sales		16,173		5,813		4,357		125	1,279		275		910		28,932
Net sales		225,107		85,610		70,445		131,660	25,116		35,432		1,093		574,463
Operating (loss) profit		50,314		5,871		9,197		7,446	(4,258	)	(814	)	(21,302	)	46,454
Depreciation, amortization and impairment of intangibles and property, plant and equipment		16,072		11,119		9,858		22,729	10,122		4,214		2,809		76,923
	thereof impairment losses	2,356		—		—		—	—		—		—		2,356
Interest income		—		75		959		384	245		368		3,055		5,086
Interest expense		2,558		1,781		1,691		6,891	2,041		3,476		23,012		41,450
Share of profit (loss) in equity investments		—		—		—		—	(1,966	)	(3,140	)	—		(5,106	)
Income taxes		(29,398	)	(1,229	)	(1,807	)	3,756	544		(3,144	)	26,465		(4,813	)

Business Areas		Germany	Western Europe		Eastern Europe		North America		Latin America		Asia/ Africa		Reconciliation/ Corporate		Total
Predecessor
Nine month ended September 30, 2000
Total sales		559,432	205,821		175,479		309,827		56,012		67,029		(5,492	)	1,368,108
Inter-segment sales		77,978	11,971		12,101		18,078		2,499		547		—		123,174
Net sales		481,454	193,850		163,378		291,749		53,513		66,482		(5,492	)	1,244,934
Operating (loss) profit		66,542	16,772		24,240		374		(38,055	)	(27,525	)	(33,208	)	9,140
Depreciation, amortization and impairment of intangibles and property, plant and equipment		52,369	25,975		21,850		70,619		33,537		37,084		485		241,919
	thereof impairment losses	15,756	—		—		22,111		16,256		23,729		—		77,852
Interest income		1,690	572		1,578		1,949		68		541		—		6,398
Interest expense		30,654	4,059		3,020		18,455		12,733		3,771		(110	)	72,582
Share of profit (loss) in equity investments		—	—		—		—		3,610		(166,913	)	—		(163,303	)
Income taxes		71,123	(4,458	)	(4,787	)	(1,057	)	(556	)	(1,314	)	(1,620	)	57,331

Predecessor
Three months ended March 31, 2001

Business Areas	Germany		Western Europe		Eastern Europe		North America		Latin America		Asia/ Africa		Reconciliation/ Corporate		Total
Total sales	186,035		68,672		57,451		98,545		23,439		23,256		1,164		458,562
Inter-segment sales	12,894		4,512		3,961		55		1,011		235		744		23,412

Net sales	173,141		64,160		53,490		98,490		22,428		23,021		420		435,150

Operating profit (loss)	32,518		4,351		6,776		5,797		(3,237	)	(855	)	(11,397	)	33,953
Depreciation, amortization of intangibles and property, plant and equipment	11,717		8,705		7,058		17,078		8,019		3,180		86		55,843
Interest income	296		195		714		2,228		206		125		165		3,929
Interest (expense)	(1,749	)	(1,261	)	(1,235	)	(7,397	)	(5,675	)	(1,130	)	(10,560	)	(29,007	)
Equity method investments income (expense), net	—		—		—		—		283		(3,276	)	—		(2,993	)
Income tax benefit (expense)	(12,149	)	(1,597	)	(1,507	)	(503	)	(520	)	(134	)	12,538		(3,872	)

Balance sheet segment disclosures

Business Areas	Germany	Western Europe	Eastern Europe	North America	Others *	Reconciliation/ Corporate	Total
Successor
Operating assets as of September 30, 2001	669,907	326,207	291,501	659,602	121,207	56,289	2,124,713
Operating liabilities as of September 30, 2001	174,826	60,007	33,658	54,370	12,577	132,173	467,611

Successor
March 31, 2002

Business Areas	Germany	Western Europe	Eastern Europe	North America	~~Latin America~~Others(*)	~~Asia~~ Reconciliation/ ~~Africa~~Corporate	~~Reconciliation/ Corporate~~Total	~~Total~~
Predecessor
Operating assets	1,064,790	427,307	392,984	788,292	121,912	164,314	2,959,599
Operating assets as of December 31, 2000	662,879	334,297	297,625	699,164	395,759	196,986	51,175	2,637,885
Operating liabilities	186,933	61,610	37,805	58,631	12,066	166,925	523,970
Operating liabilities as of December 31, 2000	74,782	57,965	39,533	57,545	30,909	99,971	218,218	578,923

*: includes Latin America and Africa/Asia

~~The~~ ~~column~~ ~~reconciliation/corporate primarily includes income and expenses related to corporate~~ ~~items~~Sucessor December ~~that are included separately within the Group~~31, ~~which are not allocated to the segments.~~ 2001

Business Areas		Germany		Western Europe		Eastern Europe		North America		*Others^()**		Reconciliation/ Corporate		Total
Operating assets		1,226,126		437,976		393,116		785,652		122,540		18,425		2,983,835
Operating liabilities		175,451		64,805		40,651		61,707		12,236		168,054		522,904

*: includes Latin America and Africa/Asia

The column reconciliation/corporate primarily includes income and expenses as well as assets and liabilities related to corporate items that are included separately within the Group, which are not allocated to the segments.

Segment operating assets are defined as total assets excluding investments, deposits, certain receivables and deferred tax assets. Segment operating liabilities are defined as total liabilities excluding deferred tax liabilities, certain provisions, derivative financial instruments, minority interests, corporate debt and taxes payable.

8. ~~Segment~~Restructuring ~~operating assets are defined as total assets excluding investments, deposits, certain receivables~~ and ~~deferred~~reorganization ~~tax assets. Segment operating liabilities are defined as total liabilities excluding deferred tax liabilities, certain provisions, derivative financial instruments, corporate debt and taxes payable.~~ charges

~~The reconciliation~~ During fiscal 2000 as a direct result of ~~segment~~the ~~operating~~anticipated ~~profit~~changes toin the ~~consolidated~~Group's ~~net~~ownership, ~~loss~~the ~~for~~Group ~~each~~has ~~period~~realigned isitself asand ~~follows:~~was planning to exit from the Asian, African and Latin American markets.

	Successor		Predecessor
	July 1, 2001 to September 30, 2001		July 1, 2000 to September 30, 2000
Segment operating profit (loss) for total reportable business segments	25,033		(3,273	)
Items excluded from segment operating profit	(37,366	)	(9,352	)
Other corporate income and expense	(28,973	)	(50,582	)
Total net loss	(41,306	)	(63,207	)

As of April 30, 2001, the Company was in the process of developing the main features of a restructuring plan involving, among other things, providing compensation to employees of Messer Griesheim, based in Europe, for involuntarily termination of their employment. The Group announced the main features of the plan to its employees subsequent to March 31, 2001 but prior to the acquisition transactions.

	Successor		Predecessor
	May 1, 2001 to September 30, 2001		January 1, 2001 to April 30, 2001		January 1, 2000 to September 30, 2000
Segment operating profit for total reportable business segments	50,763		46,454		9,140
Items excluded from segment operating profit	(51,696	)	(21,302	)	(33,208	)
Other corporate income and expense	(55,275	)	(38,650	)	(171,674	)
Total net loss	(56,208	)	(13,498	)	(195,742	)

In May 2001, the Company finalized the terms of the restructuring plan and recognized restructuring provisions aggregating EURO13,562 as part of the purchase price allocation which meets the criteria of IAS 22 "Business Combinations".

8 Total restructuring and reorganization charges amount to EURO408 and EURO2,123 during the three month periods ended March 31, 2002 and March 31, 2001, respectively. ~~Impairment~~ For the three months ended March 31, 2002 restructuring and reorganization charges mainly relate to severance costs for the operations in the U.K. and Germany. For the first quarter 2001 restructuring and reorganization charges consist mainly of ~~long-lived~~reorganization ~~assets~~ charges relating to the Group's corporate functions and to the operations in the U.S., U.K. and Yugoslavia.

9. ~~During~~Divestiture ~~the nine months ended September 30, 2000, the Group recorded impairment charges relating to property, plant and equipment aggregating E77,852, as follows:~~ program

34Investments in subsidiaries available for sale

future cash flows, which were no longer deemed adequate to support the value of the goodwill associated with the business.

In April, 2001 the Group recorded an impairment charge of E2,356 relating to goodwill for Mahler AGS GmbH, Germany, as a consequence of the transfer of the company to GS Mahler Holding (formerly known as MWW Vierundachtzigste Vermögensverwaltungs GmbH) (see note 18).

9. Restructuring and reorganisation charges

As of April 30, 2001, the Company was in the process of developing the main features of a restructuring plan involving, among other things, providing compensation to employees of MGG, based in Europe, for involuntarily termination of their employment. The Group had announced the main features of the plan prior to April 30, 2001 to its employees.

In May 2001, the Company finalized the terms of the restructuring plan and recognized restructuring provisions aggregating E13,562 as part of the purchase price allocation.

Prior to the acquisition transaction, the Group recorded restructuring charges totaling E2,540 related primarily to severance payments made to the Group's corporate functions, in addition to the U.S., U.K. and Yugoslavian operations. Reorganisation charges related to the Group's corporate functions. Total restructuring and reorganisation charges amount to E4,997 and E9,255 during the three month and five month periods ended September 30, 2001 and consist mainly of reorganisation charges relating to the group corporate function.

10. Divestiture program and results from discontinuing operations

Divestiture program

As described in note 3, a change in ownership of the Group occurred on April 30, 2001. Following the acquisition, in May 2001, the Group adopted a divestiture program pursuant to which it intends to sell substantially all of the assets and operations in its non-core markets, located in Asia, Africa and Latin America, as well as certain non-strategic operations in its core markets.

As further described in note 3, the acquisition transaction was accounted for in a manner similar to a "purchase" business combination and, accordingly, the cost of the acquisition has been allocated to the assets acquired and liabilities assumed, including those to be disposed of under the divestiture program, based on their estimated fair values as of April 30, 2001, the date of the acquisition transaction.

35 The assets and operations included in the divestiture program include certain subsidiaries, and net assets comprising other operations. Management expects to divest of all of these assets and operations by no later than the end of calendar year 2002 (except its investments in China). The subsidiaries and net assets included in the divestiture program are being accounted for in the following manner:

Subsidiaries ~~program,~~expected ~~based~~to onbe ~~their~~sold ~~estimated~~within ~~fair~~twelve ~~values~~months asfrom the date of the acquisition transactions (i.e., by no later than April 30, ~~2001~~2002) are not consolidated, as control is intended to be temporary. The Group's interests in such subsidiaries are classified as financial instruments and are reflected in the ~~date~~Group's ofbalance sheet at their estimated fair value in current assets, under the ~~acquisition~~caption: ~~transaction~~"Investments in subsidiaries available for sale". Current period changes in the estimated

The assets and operations included in the divestiture program include certain subsidiaries, and net assets comprising other operations. Management expects to divest of all of these assets and operations by no later than the end of calendar year 2002. The subsidiaries and net assets included in the divestiture program are being accounted for in the following manner: 34

~~Subsidiaries~~ expected to be sold within one year of the date of the acquisition transaction (i.e., by no later than April 30, 2002) are not consolidated, as control is intended to be temporary. The Group's interests in such subsidiaries are classified as financial instruments and, as such, are reflected in the Group's balance sheet at their estimated fair value ~~in current assets, under the caption: "Investments in subsidiaries available for sale". Current period changes in the estimated fair value~~ of such subsidiaries resulting from operating results are reflected in the consolidated statements of operations under the caption: "Changes in fair value of subsidiaries available for sale".

Subsidiaries expected to be sold beyond April 30, 2002, as well as the net assets of other operations held for sale, are consolidated.

As of ~~September~~March 3031, 2002 and December 31, 2001, the Group has determined the fair value of the investments in subsidiaries available for sale to be approximately EURO45,122 ~~E64~~and EURO42,~~723~~183. This amount is comprised of the following:

		March 31, 2002		December 31, 2001
Net assets of investments in subsidiaries available for sale		E115,189
Advances to subsidiaries (net of impairment)		57,593
Net assets of investments in subsidiaries available for sale		36,198		41,623
Provision for obligations which have been recorded at the Group level		(108,059	)
Advances to subsidiaries (net of impairment)		13,415		7,760
	Total	E64,723
Provision for obligations		(4,491	)	(7,200	)
	Total	45,122		42,183

Set forth below is summarized financial information relating to the net assets of the subsidiaries which are classified as "investments in subsidiaries available for sale" as of ~~September~~March 3031, 2002 and December 31, 2001:

		March 31, 2002	December 31, 2001
Current assets		E317,156
Non-current assets		95,299
Current assets		41,849	42,960
	Total assets	412,455
Non-current assets		204,000	220,607
Current liabilities		241,127
	Total assets	245,849	263,567
Non-current liabilities		56,139
Current liabilities		88,774	90,486
	Total liabilities	297,266
Non-current liabilities		120,877	131,458
	Total net assets	E115,189
	Total liabilities	209,651	221,944
	Total net assets	36,198	41,623

In connection with the funding of the working capital of non-consolidated subsidiaries available for sale ~~(nonconsolidated subsidiaries)~~, ~~MGG~~Messer Griesheim has entered into credit agreements ~~making~~with ~~loans to~~ several of of its subsidiaries, with a total of ~~E36~~EURO13,~~448~~415 and EURO7,760 outstanding as of ~~September~~March 3031, 2002 and December 31, 2001, respectively. The interest ~~rates~~rate on these credit agreements ~~vary~~is ~~between~~ 5.577% ~~and 7.15%,~~ with the exception of four such facilities that are interest free. The interest free facilities were extended to Messer Trinidad & Tobago and Messer Peru and Messer Argentina. None of the facilities extended by Messer Griesheim have stated maturity dates, except the loan to Messer Trinidad & Tobago, which is repayable upon sale. In addition to the credit agreements provided to several subsidiaries for working capital, Messer Griesheim made cash investments in subsidiaries available for sale for the purpose of extinguishing the subsidiary's debt as part of the divestiture program.

During the three month period ended March 31, 2002, pursuant to its divestiture program, the group completed the disposal of its business activities in Venezuela and of its Nitrogen services business in the U.K.

Divestiture of Messer Gases S.A. in Venezuela

In February, 2002 the Group sold all of the outstanding shares of Messer Gases S.A. in Venezuela to Air Liquide. The impact of this transaction on the unaudited interim condensed consolidated financial statements was not significant.

Divestiture of Nitrogen services business in the U.K.

In March 2002 the Group sold all assets as well as the existing customer contracts and contacts of the Nitrogen service business in the U.K. to Weatherford U.K. Ltd. The impact of this transaction on the unaudited interim condensed consolidated financial statements was not significant.

Change in fair value of investments in subsidiaries available for sale

During the three month period ended March 31, 2002, changes in the estimated fair value of investments in subsidiaries available for sale amounted to a loss of ( EURO692), which has been reflected as "changes in fair value of subsidiaries available for sale" in the unaudited interim condensed consolidated statement of operations.

Other subsidiaries included in the divestiture program

The Group continues to consolidate in its financial statements the subsidiaries included in the divestiture program which are expected to be sold subsequent to April 30, 2002 (see note 19 "Reconciliation to U.S. GAAP for a discussion of SFAS 144). These operations are reflected in the "Others" segment in the Successor's financial statements. Summarized condensed financial

~~interest~~information ~~free.~~related ~~The~~to ~~interest~~these ~~free~~subsidiaries ~~facilities~~and ~~were~~net ~~extended~~assets toat ~~Messer Trinidad~~March ~~& Tobago~~31, ~~Messer~~2002 ~~Peru~~ and ~~Messer Argentina. None of the facilities extended by MGG have stated maturity dates, except the loan to Messer Trinidad~~December ~~& Tobago~~31, ~~which~~2001 ~~matures~~is onset ~~September 30,~~forth ~~2011.~~below:

During the three months period ended September 30, 2001, pursuant to its divestiture program, the group completed disposals of its home care business Germany and its health care businesses in Canada.

		March 31, 2002	December 31, 2001
Balance Sheet:
	Current assets of other operations held for sale	33,640	38,091
	Non-current assets of other operations held for sale	104,337	100,686

	Total assets	137,977	138,777

	Current liabilities of other operations held for sale	28,715	30,946
	Non-current liabilities of other operations held for sale	12,643	13,221

	Total liabilities	41,358	44,167

Divestiture of Messer Medical GmbH

		January 1, 2002 to March 31, 2002
Results of operations, included in consolidated totals:
	Net sales	14,150
	Cost of sales	(8,297	)
	Other expenses (net)	(3,749	)
	Income tax expense	(267	)

	Net income	1,837

On July 5, 2001 the Group entered into a sale and purchase agreement to sell all of the outstanding shares of Messer Medical GmbH (Germany), the leading company for the home care business in Germany, to Air Products GmbH (Germany). The difference between the net sale consideration received and the initial purchase price allocation was recorded as an increase to goodwill in the amount of E0.5 million.

		January 1, 2002 to March 31, 2002
Cash inflows (outflows) from:
	Operating activities	4,830
	Investing activities	(2,436	)
	Financing activities	(2,151	)

	Net cash inflow	243

~~Divestiture~~ Results of ~~healthcare~~operations ~~business~~for all subsidiaries and net assets included in ~~Canada~~ the divestiture program for all periods prior to the acquisition transactions are included in the consolidated totals in the

On August 1, 2001 the Group entered into a asset purchase agreement to sell all assets of the healthcare business within Messer Griesheim Industries Canada Inc. (Canada) to Praxair Canada, Inc. The difference between the net sale consideration received and the initial purchase price allocation, was recorded as a decrease to goodwill in the amount of E1.0 million.

Other divestitures

Subsequent to September 30, 2001, the Group entered into an agreement to sell a majority of the subsidiaries which are classified as subsidiaries available for sale, for an amount which approximates its then-allocated fair value amounts (see note 18). The sales consideration will be received in cash, which management plans to use to redeem a portion of the existing borrowings. In addition, certain intercompany and third party debt will be transferred. These operations of the aforementioned divestitures are reflected in the Predecessor's segment information under the geographical areas of North America, Latin America and Asia/Africa.

During the three months and five months periods ended September 30, 2001, changes in the estimated fair value of investments in subsidiaries available for sale were E9,426 and E8,192, respectively, which are reflected as "changes in fair value of subsidiaries available for sale" in the unaudited interim condensed consolidated statement of operations.

~~The~~Company's ~~Group~~consolidated ~~continues to consolidate in its~~ financial statements the subsidiaries included in the divestiture program which are expected to be sold subsequent to April 30, 2002, as well as the net assets of other operations held for sale which are included in the divestiture program. ~~These operations are reflected in the "Others" segment in the Successor's financial statements.~~ Summarized condensed ~~financial~~results ~~information~~of operations related to ~~these~~such subsidiaries and net assets ~~at September 30, 2001 and for the three and five month periods then ended~~ are set forth below:

		January 1, 2001 to March 31, 2001
Balance Sheet (as of September 30, 2001):
	Current assets of other operations held for sale	34,280
	Net sales	64,880
	Non-current asset of other operations held for sale	101,150
	Cost of sales	(42,771	)
	Total assets	135,430
	Losses of investments accounted for under the equity method of accounting	(2,993	)
	Current liabilities of other operations held for sale	28,904
	Other expenses (net)	(38,212	)
	Non-current liabilities of other operations held for sale	16,101
	Income tax income (expense)	(482	)
	Total liabilities	45,005
	Net loss	(19,578	)

		Three months ended September 30, 2001		Five months ended September 30, 2001
Results of operations, included in consolidated totals:
	Net sales	14,664		32,263
	Cost of sales	(8,506	)	(18,793	)
	Other expenses	(4,456	)	(11,355	)
	Income tax expense	(187	)	(257	)
	Net income	1,515		1,858

10. Income taxes

		Three months ended September 30, 2001		Five months ended September 30, 2001
Cash inflows (outflows) from:
	Operating activities	2,618		3,079
	Investing activities	238		(515	)
	Financing activities	(7,456	)	(13,932	)

For 2001 and 2002 the combined federal corporation income tax rate was 26.38%. Including German trade tax of approximately 13% (net) the total income tax rate for the German companies is 40.00% for 2001 and 2002.

~~Results~~ For ofthe ~~operations~~three ~~for~~month ~~subsidiaries~~period ~~and~~ended ~~net~~March 31, ~~assets~~2002, ~~included~~the inGroup recorded income tax expense totaling EURO3,246 compared with an expected tax benefit based on the combined ~~divestiture~~income ~~program~~tax ~~for~~rate ~~all~~of ~~periods~~EURO3,085. ~~prior~~The difference is mainly due to ~~the~~nondeductible ~~acquisition~~goodwill ~~transactions~~amortization, ~~are~~nondeductible ~~included~~interest inand ~~the~~other ~~consolidated~~nondeductible ~~totals in~~expenses ~~the~~for ~~Company's~~tax purposes.

For the three month period ended March 31, 2001, the Group recorded income tax expense totaling EURO3,872 compared with an expected tax benefit based on the combined federal corporation income tax rate of EURO316. The difference is principally due to the non-recognition of tax losses in certain jurisdictions, non deductible goodwill amortization and miscellaneous nondeductible expenses for tax purposes.

11. Other long-term receivables, net and other assets

The Company provided cash collateral for long term loan facilities which were not refinanced on certain of its foreign subsidiaries. As the cash collateral is not available to the Company while the facilities remain outstanding, the cash collateral has been classified within non current "other assets". As of March 31, 2002 and December 31, 2001, the cash collateral balances were approximately EURO22.7 million and EURO28.3 million, respectively.

~~consolidated financial statements~~12. ~~Summarized condensed results of operations related to such subsidiaries and net assets are set forth below:~~ Inventories

	Four month period ended April 30, 2001		Three month period ended September 30, 2000		Nine month period ended September 30, 2000
Net sales	84,793		67,501		168,192
Cost of sales	(64,541	)	(32,271	)	(106,922	)
Equity in losses of investments accounted for under the equity method of accounting	(499	)	(3,011	)	4,063
Other expenses	(36,824	)	(46,413	)	(92,538	)
Income tax expense	(440	)	(1,626	)	(2,663	)
Net loss	(17,511	)	(9,798	)	(29,868	)

11. Results from discontinuing operations

In 1999, the Company announced a plan to dispose of the Group's cutting and welding division ("C&W"). C&W manufactures products used for steel and aluminium materials in oxy-fuel and laser technology, and did not represent a core business area for the Group. In connection with this plan, on December 30, 1999, the Group entered into an agreement with MIG, the Group's minority shareholder, to acquire the C&W shares. The transaction was to be facilitated via a non-pro rata special dividend to MIG for the amount of the fair value of C&W, followed by (i) a purchase of the C&W shares by MIG, using the dividend as currency, and (ii) a cash payment from MIG to Hoechst for an amount equal to two-thirds of the special dividend. At December 30, 1999, the E150,341 carrying value of the C&W net assets exceeded its then estimated fair value of E136,000. Accordingly, the Group recorded a E14,341 loss and a related tax benefit of E11,588 in 1999.

In 2000, the Group declared the E136,000 special dividend. As a result of the final determination of the purchase price, the Group was released of its obligation to make a capital contribution to C&W in April 2000. In addition, the price to be paid by MIG to Hoechst was reduced in August 2000. Accordingly, subsequent to settlement, the Group recorded an additional loss of E18,066, net of a related tax benefit of E946 during fiscal 2000, consisting of (i) a E24,695 net gain in the quarter ending June 30, 2000 resulting from the reduction of the contribution payable to C&W and (ii) a E41,815 net loss in the quarter ending September 30, 2000 resulting from the reduction of the receivable from MIG from the sale of the C&W net assets.

The operating results of C&W have been classified as discontinuing operations in the consolidated statements of operations for all periods presented.

12. Income taxes

In 2000, the German government enacted new tax legislation effective for the Group on January 1, 2001, which, among other changes, reduced the Group's statutory corporate tax rate for German companies from 40% on retained earnings and 30% on distributed earnings to a uniform 25%. In

general, retained (undistributed) German corporate income was initially subject to a federal corporation income tax at a rate of 40% for 2000 plus a surcharge of 5.5% on federal corporate taxes payable. Giving effect to this surcharge, the federal corporate tax rate was 42.2% for 2000. For 2001, the combined federal corporation income tax rate was 26.38%.

For the three month period ended September 30, 2001, the Group recorded income tax expense totaling E20,914 compared with an expected tax benefit based on the combined federal corporation income tax rate of E4,623. The difference is mainly due to nondeductible goodwill amortization and other nondeductible expenses for tax purposes.

For the three month period ended September 30, 2000, the Group recorded income tax benefit totaling E18,162 compared with an expected tax benefit based on the combined federal corporation income tax rate of E33,338. The difference is principally due to the non-recognition of tax losses in certain jurisdictions and miscellaneous nondeductible expenses for tax purposes.

For the five month period ended September 30, 2001, the Group recorded income tax expense totaling E21,772, compared with an expected tax benefit based on the combined federal corporation income tax rate of E7,876. This difference is principally due to certain items recorded in association with the acquisition and financing transactions (see notes 3 and 4) which were nondeductible for tax purposes, and to losses for which no tax benefit has been recognized in certain tax jurisdictions.

For the four month period ended April 30, 2001, the Group recorded an income tax expense totaling E4,813, compared with an expected tax benefit of E1,728. For the nine month period ended September 30, 2000, the Group recorded an income tax benefit based on the combined federal corporation income tax rate totaling E57,331, compared with an expected tax benefit based on the combined federal corporation income tax rate of E104,411. The difference in both of these periods is principally due to the non-recognition of tax losses in certain jurisdictions and miscellaneous nondeductible expenses for tax purposes.

13. Other long term receivables, net and other assets

The Company provided cash collateral for long term loan facilities which were not refinanced on certain of its foreign subsidiaries. As the cash collateral is not available to the Company while the facilities remain outstanding, the cash collateral has been classified within non current"other assets". As of September 30, 2001, the cash collateral balances were E47.4 million.

14. Inventories

Inventories consist of the following:

		Predecessor
	March 31, 2002	December 31, 2001
	Successor September 30, 2001	April 30, 2001	December 31, 2000
Raw materials and supplies	23,186	20,657
Raw materials and supplies	18,766	18,231	17,133
Work in progress	24,023	21,996
Work in progress	21,534	27,528	23,613
Finished goods and merchandise	36,510	37,445
Finished goods and merchandise	45,001	64,804	54,057
Total	83,719	80,098
Total	85,301	110,563	94,803

1513. Cash and cash ~~equivalent~~equivalents

The Company defines cash and cash equivalents as cash on hand, demand deposits and short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value in the future. In addition, cash and cash equivalents ~~equivalent~~ include unrestricted cash balances at subsidiaries in foreign jurisdictions where those amounts cannot easily be transferred. ~~This~~These unrestricted cash balances amounted to approximately ~~E66~~ EURO57.54 million, ~~E49.7 million~~ and ~~E44~~ EURO56.85 million, as of ~~September~~March 3031, ~~2001,~~2002 ~~April 30, 2001~~ and December 31, ~~2000~~2001, respectively.

1614. Commitments and contingencies

Financial guarantees

The Group has provided financial guarantees totaling ~~E119~~EURO195.6 million at ~~September~~March 3031, 2002 and EURO206.7 million at December 31, 2001, ~~consisting~~respectively. These guarantees mainly include guarantees for third party debt of ~~commitments~~deconsolidated ~~aggregating~~subsidiaries included in assets E7available for sale from the divestiture program of EURO122.45 million ~~for~~and ~~third~~EURO128.6 million ~~parties~~and other at equity consolidated subsidiaries of EURO28.6 million and ~~E112~~EURO28.24 million ~~for~~at ~~related~~March 31, ~~companies~~2002 and December 31, 2001, respectively.

Other financial obligations

Substantially all of the assets of the Group are pledged as security for the Group's senior facilities at ~~September~~March 3031, 2002 and December 31, 2001.

Other financial obligations not included in the balance sheet relate to long-term commitments for capital expenditures of ~~E26~~EURO32.21 million at ~~September~~March 3031, ~~2001,~~2002 and ~~commitments~~EURO32.0 million at December 31, 2001. Commitments under long-term purchase agreements ofamounted ~~E77~~to EURO68.06 million at December 31, 2001. Commitments for capital to be funded to equity and cost method investees totaled E2EURO22.8 million at ~~September~~ December 3031, 2001. There were no major changes within the first quarter for commitments under long-term purchase agreements and for capital to be funded to equity and cost method investees.

Pursuant to the acquisition transactions and the related China sale and purchase agreement, Messer Griesheim has agreed to purchase ACIC's interests in the six ACIC joint ventures. Subject to certain conditions, the committed purchase price for the ACIC joint ventures is EURO32.0 million plus interest from April 30, 2001 until the completion of the purchase of the ACIC joint ventures. Upon

acquiring the ACIC interests, Messer Griesheim has agreed to assume the debt of the ACIC joint ventures upon the date of completion of the transaction. As of March 31, 2002, such debt amounted to approximately EURO16.5 million. Payment of the purchase price is guaranteed by Messer Griesheim Group, the Company's parent.

Legal contingencies

Messer is involved from time to time in various claims and lawsuits incidental to the ordinary course of the business.

In Messer ~~June 2000~~acquired its interest in Bombay Oxygen Corporation Limited (Bombay Oxygen), ~~MGG~~a ~~was~~publicly ~~informed~~traded ~~that~~company ~~the~~in UIndia, in 1997 for a total of EURO12.S2 million. ~~Attorney's~~It acquired ~~Office~~this ~~for~~interest through the ~~Eastern~~purchase ~~District~~ of ~~Pennsylvania~~shares ~~was~~from ~~conducting~~Bombay anOxygen's ~~investigation~~major ~~relating~~shareholder, toand ~~the~~purchased ~~conduct~~additional shares by way of a ~~former executive,~~public ~~who~~offer. ~~had~~The ~~senior~~shares ~~management~~in ~~responsibility~~Bombay Oxygen held by Messer were transferred in ~~Central~~2000 ~~and~~to ~~South~~a ~~America~~company ~~and~~jointly ~~had~~owned ~~misappropriated~~by ~~corporate~~Messer ~~funds~~and Goyal MG Gases. ~~Although~~The ~~the~~Securities ~~Company~~and ~~has~~Exchange ~~not~~Board ~~been~~of ~~fully~~India ~~apprised~~is investigating whether some of the ~~scope~~purchases of Bombay Oxygen shares by Messer or the ~~direction~~ subsequent transfer of such shares to the jointly owned company involved a change of control under Indian takeover regulations. In addition, Messer is involved in litigation with respect to this investment with a major shareholder of Bombay Oxygen.

Messer has received a notice from Goyal MG Gases alleging that Messer has breached a confidentiality clause contained in a shareholders' agreement among Messer, Goyal MG Gases and certain other shareholders. The notice requests payment of Rupees 5.0 billion ( EURO120 million) for damages allegedly suffered on account of lost business due to certain press announcements by Messer which allegedly prejudicially affected the business of Goyal MG Gases. Management is in the process of investigating this matter and is of the view that the allegations have no merit.

During 2001, Goyal MG Gases defaulted on a bank loan. As a result, the Group, as guarantor, was required to repay the $4.7 million ( EURO5.1 million) loan in full. The Group is currently seeking reimbursement from Goyal MG Gases for this amount.

In 1999, the Company's Brazilian subsidiary, Messer Griesheim do Brazil Ltda., entered into a letter of agreement to pursue research into a new technique for the production of ethanol with an individual, who in April 2001, following a termination of the agreement, filed a suit against Messer Griesheim do Brazil Ltda. and certain other affiliates. The claim, mainly for damages for lost opportunities and potential earnings as a result of the subsidiary's alleged breach of the agreement, is for an amount of Reals 593 million (approximately EURO300 million). In connection with the disposal of this Brazilian subsidiary, management agreed to indemnify the buyer for any loss relating to this claim.

Based on the advice of its Brazilian counsel, management is of the view that the allegations have no merit. Following the disposal of the Brazilian subsidiary during October 2001, the Company has retained responsibility for this litigation.

In August 2001 a former employee filed a lawsuit against the Group's Brazilian subsidiary for an amount of EURO6.5 million. Based on the advice of its Brazilian counsel, management is of the view

that the allegations have no merit. Following the disposal of the Brazilian subsidiary during October 2001, the Company has retained responsibility for this litigation.

In August 1999, Messer Griesheim GmbH discovered that one of it's executives, who then had senior management responsibility in Central and South America, had misappropriated corporate funds, which he represented to others within Messer Griesheim had been paid to third parties in connection with our business. This executive is no longer an employee. In June 2000, Messer Griesheim was informed that the U.S. Attorney's Office for the Eastern District of Pennsylvania was conducting an investigation relating to the conduct of this former executive. In April 2001, this former executive was arrested on a criminal complaint charging him with three counts of fraud against Messer Griesheim Industries, our principal subsidiary in the United States. Thereafter, the employee pled guilty to an Information filed in January 2002, in which he was charged with wire fraud in connection with a scheme to defraud Messer Griesheim Industries of $550,000. Although the Company is not fully apprised of the scope of the government's continuing investigation and there can be no assurance with respect to such matters, the investigation also encompasses questions concerning the activities of Messer Griesheim and/or its affiliates and employees in relation to Cuba, a country which was and is subject to economic sanctions under the United States law. These activities occurred prior to the change in the Company's ownership that resulted from the acquisition transactions. The Company is cooperating fully with the investigation. The Company can give no assurance as to the ultimate scope or outcome of the investigation. Under the business combination agreement entered into in connection with the acquisitions described above, Hoechst has agreed to indemnify the Company with respect to any losses arising out of such investigation of any related proceedings, although this indemnity is generally limited to two-thirds of the loss incurred.

Messer Griesheim has been informed that the Commission of the European Union is conducting an investigation relating to alleged price and similar collusion by the Group's subsidiary in the Netherlands within the market for industrial gases. Based on the advice of its Dutch counsel, management believes that there will be no material outcome.

Messer Griesheim has received a notice from NLP, a South American agent/service provider for Merger & Acquisitions, alleging that Messer Griesheim has yet not paid a fee of EURO740 for the procurement of potential investors for two subsidiaries of Messer Griesheim. Management believes that the allegations have no merit.

In 2001, the Group's subsidiary PT Aneka (Indonesia) entered into an agreement for the purchase of machinery and equipment. In November 2001, the agreement partner filed suit against the subsidiary due to the termination of the contract. The claim, mainly for damages for lost opportunities and potential earnings, is for an amount of US$1.5 million.

While there can be no assurance as to the ultimate outcome of these matters due to the uncertainties involved in matters of litigations, management believes that the outcome of all pending legal proceedings, either individually or in the aggregate, will not have a material effect on the Company's consolidated financial position, results of operations, or cash flows.

government's investigation, it appears that the investigation may also encompass questions concerning the activities of MGG and/or its affiliates in relation to Cuba and other countries subject to economic sanctions under United States law15. Derivative ~~The~~financial Company is fully cooperating with the investigation. Management can give no assurances, however, as to the ultimate scope or outcome of the investigation. Under the business combination agreement relating to the acquisition transactions (see note 3), Hoechst has agreed to indemnify the Company with respect to any losses arising out of such investigation or any related proceedings, although this indemnity is generally limited to two-thirds of the loss incurred. Management does not currently believe there are any liabilities for which provision should be made in connection with this matter. instruments

~~Messer acquired~~ IAS ~~its~~39 ~~interest~~"Financial inInstruments: ~~Bombay~~Recognition ~~Oxygen~~and ~~Corporation~~Measurement" ~~Limited~~sets ~~(Bombay~~standards ~~Oxygen),~~for ~~a publicly traded company in India~~recognition, inmeasurement ~~1997~~and reporting ~~for a total~~ of ~~E12.2 million.~~information ~~It acquired~~relating ~~this~~to ~~interest~~financial ~~through~~instruments ~~the purchase~~ of ~~shares~~an ~~from~~enterprise ~~Bombay~~as ~~Oxygen's~~an ~~major~~asset ~~shareholder~~or liability, ~~and~~including ~~purchased~~the ~~additional~~reporting ~~shares by way~~ of ahedging ~~public offer~~instruments. ~~The~~Under ~~shares~~this inStandard, ~~Bombay~~all ~~Oxygen~~financial ~~held~~assets ~~by Messer were transferred in 2000 to a company jointly owned by Messer~~ and ~~Goyal MG Gases. The Securities and Exchange Board of India is~~ ~~investigating~~liabilities ~~whether~~are ~~some~~recognized ofon the ~~purchases~~balance ofsheet, ~~Bombay~~including ~~Oxygen~~all ~~shares~~derivatives. byThey ~~Messer~~are orinitially ~~the~~measured ~~subsequent~~at ~~transfer~~cost. ofSubsequent ~~such shares~~ to ~~the~~initial ~~jointly~~recognition, ~~owned~~all ~~company~~financial ~~involved~~assets aare ~~change~~remeasured ofat ~~control~~fair ~~under Indian takeover regulations. In addition~~value, ~~Messer is involved in litigation~~ with ~~respect~~the toexception ~~this investment with a major shareholder~~ of ~~Bombay~~certain ~~Oxygen.~~assets ~~Messer~~and ~~has~~liabilities ~~received~~listed ~~a notice from Goyal MG Gases alleging that Messer has breached a confidentiality clause contained~~ in athe ~~shareholders' agreement among Messer, Goyal MG Gases and certain other shareholders~~standard. ~~The~~Adoption ~~notice requests payment~~ of ~~Rupees 5.0 billion~~this ~~(E120 million)~~standard ~~for damages allegedly suffered~~ on ~~account~~January 1, of2001 ~~lost~~resulted ~~business~~in ~~due~~a toEURO335 ~~certain~~cumulative ~~press~~effect ~~announcements by Messer which prejudicially affected the business~~ of ~~Goyal~~change ~~MG Gases. Management is~~ in accounting ~~the~~principles, ~~process~~net of ~~investigating~~deferred ~~this~~taxes ~~matter~~totaling EURO223, and is ofreflected ~~the~~in ~~view that the allegations have no merit~~equity.

In September 2001, Goyal MG Gases defaulted on a bank loan. As a result, the Group, as guarantor, was required to repay the $4.7 million (E5.1 million) loan in full. The Group is currently seeking reimbursement from Goyal MG Gases for this amount.

In 1999, the Company's Brazilian subsidiary, Messer Griesheim do Brazil Ltda., entered into a letter agreement to pursue research into a new technique for the production of ethanol with an individual, who in April 2001, following a termination of the agreement, filed suit against the subsidiary, Messer Griesheim and certain other affiliates. The claim, mainly for damages for lost opportunities and potential earnings as a result of the subsidiary's alleged breach of the agreement, is for an amount of Reals 593 million (approximately E300 million). Following discussions with the subsidiary and Brazilian counsel, management is of the view that the allegations have no merit. Following the disposal of the Brazilian subsidiary (see note 18), the Company has retained responsibility for this litigation.

In August 2001 a former employee filed a lawsuit against the Group's Brazilian subsidiary for an amount of E6.5 million. Following discussions with the subsidiary and Brazilian counsel, management is of the view that the allegations have no merit. Following the disposal of the Brazilian subsidiary, the Company has retained responsibility for this litigation.

17. Derivative financial instruments

IAS 39 "Financial Instruments: Recognition and Measurement" sets standards for recognition, measurement and reporting of information relating to financial instruments of an enterprise as an asset or liability, including the reporting of hedging instruments. Under this Standard, all financial assets and liabilities are recognized on the balance sheet, including all derivatives. They are initially measured at cost. Subsequent to initial recognition, all financial assets are remeasured at fair value, with the exception of certain assets and liabilities listed in the standard. Adoption of this standard on January 1, 2001 resulted in a E335 cumulative effect of change in accounting principles, net of deferred taxes totaling E223, and is reflected in equity.

IAS 39 and FASB 133 "Accounting for Derivative Instruments and Hedging Activities" require companies to recognize all derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e. gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.

The Group has entered into interest rate swap agreements that effectively convert a portion of its floating-rate indebtedness to a fixed rate basis for approximately the next ~~three~~ two and a half years, thus reducing the impact of interest rate changes on future interest expense. ~~Approximately, 46% (E803~~EURO816.51 million) of the Group's outstanding indebtedness was designated as as hedged due to interest rate swap agreements as of ~~September~~March 3031, ~~2001~~2002.

Interest expense for the three month ~~and five month periods ended September 30, 2001 and the four month~~ period ended ~~April~~March 3031, ~~2001,~~2002 did not include any net gains (losses) resulting from hedging activities. There was no ineffectiveness in the cash flow hedges as the critical terms of the interest rate swap (e.g. basis, repricing dates etc), matched the critical terms of the hedged loans. Unless otherwise noted, all components of the interest rate swap gains or losses are included in the assessment of hedge effectiveness.

Changes in the fair value of interest rate swaps designated as hedging instruments of the variability of cash flow associated with floating-rate loans are reported in equity. As the hedge is deemed completely effective and held to the full term, the swap market value changes are recorded as adjustments to the swap asset or liability and equity. There are no subsequent reclassification of derivative gains and losses into interest income or expense.

43 During the next twelve months, Messer Group expects no reclassification of derivative gains (losses) from equity into interest expense. The Messer Group expects the critical terms of the interest rate swaps to be identical to the critical terms of the floating-rate loans during the next twelve months.

Freestanding ~~During~~derivative instruments maintained by the ~~year~~Messer ~~ended~~Group ~~September~~as of March 3031, 2002, ~~Messer~~included ~~Group~~foreign ~~expects~~exchange noforwards ~~reclassification~~and ofinterest ~~derivative~~rate ~~gains~~caps ~~(losses)~~intended ~~from~~to ~~equity~~hedge ~~into~~ interest expense. ~~The~~on ~~Messer~~floating ~~Group~~rate ~~expects~~loans. ~~the critical~~The ~~terms~~foreign ofexchange forwards and the interest rate ~~swaps~~caps todo benot ~~identical~~qualify toas ~~the~~hedges ~~critical~~and, ~~terms~~consequently, ofhave ~~the~~been ~~floating~~marked-~~rate~~to-market ~~loans~~through ~~during~~earnings for ~~the~~changes ~~next~~in ~~twelve~~their ~~months~~fair value beginning January 1, 2001.

Freestanding derivative instruments maintained by the Messer Group as of September 30, 2001 included foreign exchange forwards and interest rate caps intended to hedge interest expense on floating rate loans. The foreign exchange forwards and the interest rate caps do not qualify as hedges and, consequently, have been marked-to-market through earnings for changes in their fair value beginning January 1, 2001. 42

1816. Related parties

Hoechst

~~Until~~ Prior to the acquisition transactions at April 30, 2001, Hoechst was the majority stockholder of ~~MGG~~Messer Griesheim. ~~MGG~~Messer Griesheim has entered into certain transactions relating to sale and service contracts with companies within the Hoechst group which are not material. The transactions are settled at ~~contractually~~terms ~~agreed~~substantially ~~market~~equivalent ~~prices~~to similar transactions negotiated on an arm's length basis.

Related party transactions with respect to the Group`s Singapore operations have been described in note 5. Hoechst has indemnified the Group for bank guarantees provided to ~~Bombay~~ Bombay Oxygen by E9EURO9.4 million, which has been reflected as an advance towards capital contribution at April 30, 2001 and as equity at ~~September~~March 3031, ~~2001~~2002.

Allianz

As a result of the acquisition transactions, Allianz Capital Partners owns 33.~~665~~17% of Messer Griesheim Group GmbH & Co. KGaA at March 31, 2002.

Allianz Capital Partners is a 20% shareholder in Mahler Italfilo Holding GmbH. OnDuring April 1, 2001, Mahler Italfilo Holding GmbH acquired the shares of Mahler AGS GmbH and ~~Italfilo~~ Italfilo Engineering S.r.l. from ~~MGG~~Messer Griesheim prior the consummation of the acquisition transactions.

Allianz Capital Partners provides certain financial advisory services to the Company and MGG, for which it has been paid in aggregate approximately E3.0 million in advisory fees by MGG.

Goldman Sachs

~~Six~~ As a results of the acquisition transactions, six private equity funds managed by affiliates of The Goldman Sachs Group, Inc. hold 33.~~665~~17% of Messer Griesheim Group GmbH & Co. KGaA. Goldman Sachs International also is an affiliate of The Goldman Sachs Group, Inc. Goldman Sachs and its affiliates, in the ordinary course of business, engage in commercial banking, investment banking and financial advisory transactions with Messer Griesheim Group GmbH & Co. KGaA and the Group.

Goldman Sachs Group, Inc., Goldman Sachs International and their affiliates have provided merger and acquisition advisory services in connection with the acquisition ~~transactions~~ transactions of the Group, and ~~has~~have received no related advisory fees for these services.

44 Goldman Sachs International was a lender under the mezzanine facility of Messer Griesheim. Goldman Sachs International also is a lender under the senior facilities program of Messer Griesheim, the proceeds of which were used to repay the mezzanine facility. Goldman Sachs International previously received an aggregate of EURO20.0 million in financing/syndication fees in connection with these transactions.

Goldman Sachs International ~~was~~and aits ~~lender~~affiliates ~~under~~were the ~~mezzanine~~underwriters ~~facility~~ of ~~MGG.~~the ~~Goldman~~original ~~Sachs~~Senior ~~International~~Notes ~~also~~and ~~is a lender under~~ the ~~senior~~lead ~~facilities~~arrangers ~~program~~ of ~~MGG,~~ the ~~proceeds~~senior ~~of which~~and ~~were used to repay the~~ mezzanine ~~facility.~~facilities ~~Goldman~~of ~~Sachs~~Messer ~~International received E3~~Griesheim.~~0 million~~ ~~and E11.5 million in financing / syndication fees in~~In connection with these ~~transactions~~activities, ~~during~~nothing was paid for the three~~-month~~ ~~and five-~~month periods ended ~~September~~March 3031, 2001 and March 31, ~~respectively~~2002.

Goldman Sachs International and its affiliates were the underwriters of the original Senior Notes and the lead arrangers of the senior and mezzanine facilities of MGG. In connection with these activities, they have received underwriting discount, investment banking, syndication, financial advisory and other fees aggregating approximately E14.4 million from the Group and MGG. 43

The Group enters into derivative contracts to hedge their exposure to changes in interest. Affiliates of the Goldman Sachs Group act as a counter-party to certain interest rate swaps contracts which have a notional amount of ~~E612~~EURO626.61 million at ~~September~~March 3031, ~~2001~~2002.

Goldman Sachs International and its affiliates are involved with providing investment banking services in connection with the Group's divestiture program, and are entitled to receive fees based upon a percentage of debt relief to the Group achieved by completed divestitures on which it has advised the Company. Fees paid or payable to Goldman Sachs International in connection with this arrangement, based on completed divestitures under the program, aggregated E0EURO1,650 and E0EURO0 for the three~~-month~~ ~~and five-~~month periods ended March 31, 2002 and ~~September~~March 3031, 2001, respectively.

An affiliate of Goldman Sachs Group, Inc. is a 20% shareholder in Mahler Italfilo Holding GmbH. On April 1, 2001, Mahler Italfilo Holding GmbH acquired the shares of ~~Mahler~~ Mahler AGS GmbH and Italfilo Engineering S.r.l. from the ~~MGG~~Messer Griesheim prior to the consummation of the acquisition transactions.

Messer Industrie GmbH ("MIG")

Prior to the acquisition transaction at April 30, 2001 MIG was the minority shareholder of Messer Griesheim GmbH. As a result of the acquisition transaction, MIG holds 32.6718% of Messer Griesheim Group GmbH & Co. KGaA. MIG iswas through it's 100% affiliate Bandinelli GmbH a 22% shareholder inof MWW Zweiundachtzigste Vermögensverwaltungs GmbH (renamed Mahler Italfilo Holding GmbH), which acquired two subsidiaries of the Group (Mahler AGS GmbH and Italfilo Engineering S.r.l) in April 2001. It is also an 11% shareholder in Messer Singapore Holding GmbH, the transactions of which are explained in note 5. Related party transactions with respect to the sale of operating companies in Cuba has been discussed in note 6. See also "Loans to related parties" below.

Loans to related parties

As of ~~September~~March 3031, ~~2001,~~2002 ~~April 30, 2001~~ and December 31, ~~2000~~2001, loans to related parties primarily relate to a non-interest bearing note due from an equity method investment in Malaysia of approximately ~~E23,008,~~EURO5.1 million ~~E35,000~~ and ~~E35,000,~~EURO5.1 million respectively.

Inter-group loans

Various consolidated subsidiaries have entered into credit agreements making loans to MGG, with a total E38.9 million outstanding as of September 30, 2001. The interest rates of these loans vary

between 3.75% and 7.15%. None of the facilities extended by the subsidiaries to MGG have stated maturity dates.

Shareholders' Agreement

Messer Industrie, ACP and the GS Funds have entered into a shareholders' agreement. The shareholders' agreement provides, among other things, for the corporate governance of the Group ~~(i.e.,~~and Messer Griesheim Group GmbH, & ~~the~~Co. ~~Company~~KGaA, ~~and MGG),~~ including the right to appoint board members and other voting rights. The shareholders' agreement provides that all important decisions regarding ~~MGG~~Messer Griesheim's management, in particular decisions on divestitures and capital expenditures, are to be taken by Messer Griesheim Group GmbH & Co. KGaA and in certain cases requires 75% of shareholder approval. With respect to a sale of ~~MGG~~Messer Griesheim, a 75% approval will be required until September 30, 2004, thereafter only a majority approval is required. The shareholders' agreement also contains share transfer restrictions, including rights of first offer, rights to participate in sales by other shareholders and provisions regarding change of control. Until ~~October 2004, no shareholder may transfer its shares in MGG without the approval of the other shareholders.~~

Due to certain antitrust considerations relating to ACP's equity interest in a competitor of MGG, ACP and the GS Funds entered into a separate agreement. The agreement generally allocates the rights of ACP relating to the corporate governance and management of the Group to the GS Funds, until such time the antitrust related considerations are no longer relevant. Accordingly, until then, the members of the shareholders' committee appointed by the GS Funds will represent all votes of the ACP and the GS Funds, which will constitute 67.33% of all votes in the shareholders' committee. The agreement also limits ACP and the GS Fund's ability to sell their shares in Messer Griesheim Group independently of each other. 44

19 October 2004, no shareholder may transfer its shares in Messer Griesheim without the approval of the other shareholders. ~~Subsequent~~ ~~events~~

~~Divestiture~~ Due to ~~program~~ certain antitrust considerations relating to ACP's equity interest in a competitor of Messer Griesheim, ACP and the GS Funds entered into a separate agreement. The agreement generally allocates the rights of ACP relating to the corporate governance and management of the Group to the GS Funds, until such time the antitrust related considerations are no longer relevant. Accordingly, until then, the members of the shareholders' committee appointed by the GS Funds will represent all votes of the ACP and the GS Funds, which will constitute 66.34% of all votes in the shareholders' committee. The agreement also limits ACP and the GS Fund's ability to sell their shares in Messer Griesheim Group GmbH & Co. KGaA independently of each other.

Pursuant to the divestiture program described in note 10, the Company completed the disposals of its INO business in Austria and its non-cryogenic plant production operations which were located in Germany, the United States, Italy and China subsequent to September 30, 200117. Stock Inpurchase ~~addition, the Company has also entered into agreements to divest of its interests in certain of its subsidiaries active in the production~~ and ~~distribution~~option of industrial gases in Argentina, Brazil, Egypt, Korea, Mexico, South Africa, Trinidad & Tobago, and the CO2-activities in North America, partly subject to third party consents, regulatory approvals as well as other conditions precedent to closing. plan

During November 2001, the shareholders of Messer Griesheim Group GmbH & Co. KGaA approved a stock compensation plan for the benefit of key managers of the Group. The plan allows these employees to purchase shares of Messer Griesheim Group GmbH & Co. KGaA (original option). The shareholders of Messer Griesheim Group GmbH & Co. KGaA have agreed among each other that the maximum number of shares to be acquired by the managers under the stock purchase and option plan shall be limited to 6.5% of the then-outstanding stock of Messer Griesheim Group GmbH & Co. KGaA. The options to acquire shares have been priced at EURO74.25, the market value at the date of the change in control under the acquisition transactions (April 30, 2001). Upon exercise of the original options and for each share purchased, the participants receive conditionally exercisable, non transferable options to acquire three new shares in Messer Griesheim Group GmbH & Co. KGaA at the same price of EURO74.25. The conditionally exercisable options become exercisable no earlier than two years after the date of grant, and upon the attainment of certain operating performance and investment yield targets, but in any case not before an exit event.

All shares offered under this plan are subject to certain put and call provisions upon the occurrence of certain events. In November 2001, 176,563 original options were granted. Subsequent to December 31, 2001, 156 participants had purchased a total of 148,861 shares and were granted 446,583 conditionally exercisable options. None of these options were exercised, forfeited or expired as of and for the three months period ended March 31, 2002. The Company's stock purchase and option plan is accounted for as provided by APB Opinion No. 25. No compensation cost has been recognized in connection with the granting of original options for the three month period ended March 31, 2002 as the purchase price the participants were required to pay was equivalent to the fair value of the shares of the Company with like features on the date of grant. With respect to the contingently exercisable options compensation cost will be measured and recognized immediately after the occurrence of the exit event.

As an alternative to accounting for stock based compensation under APB No. 25, SFAS No. 123, "Accounting for Stock Based Compensation", establishes a fair value method of accounting for stock purchase and option plan or similar equity instruments. Had compensation cost for these plans been determined in accordance with SFAS No. 123, the Company's net earnings would not have been affected. Therefore, a pro forma table is not presented.

18. Subsequent events

Stock purchase and option plan

~~During~~ Subsequent ~~November~~to March ~~2001~~31, ~~the~~2002, ~~Company's~~a ~~shareholders~~substantially ~~approved~~similar a stock ~~compensation~~purchase and option plan has been approved for certain members of the ~~benefit~~shareholders' committee of ~~key~~the ~~managers~~general partner of Messer Griesheim Group GmbH & Co. KGaA (the Messer Griesheim Group), Messer Griesheim Beteiligungsverwaltungs GmbH. The ~~plan~~participating ~~allows~~members ~~these employees~~were offered to ~~purchase~~acquire the shares ofin Messer Griesheim Group ~~GmbH~~for ~~upon~~a ~~its~~purchase ~~conversion~~price ~~into~~of aEURO74.25, ~~GmbH &~~which ~~Co.~~was ~~KGaA.~~the ~~The~~market ~~maximum~~value ~~number~~at the date of ~~shares~~the ~~issuable~~change in control under the ~~stock~~acquisition ~~purchase~~transactions (April 30, ~~and~~2001). ~~option~~In ~~plan~~addition isto ~~limited up~~the toshares ~~7.5%~~acquired by them from the shareholders of Messer Griesheim Group, Messer Griesheim Group will issue to the ~~then-outstanding~~participants ~~stock~~conditionally exercisable, non transferable convertible bonds for a purchase price of EURO1 each, convertible into one share of Messer Griesheim Group ~~GmbH &~~for Coan additional payment of EURO73.25 ~~KGaA~~for each share. The ~~options~~conversion torights ~~acquire~~become exercisable upon the attainment of certain operating performance and investment yield targets and the number of years the participants have served as members of the shareholders' committee, but in any case not before an exit event. All shares ~~will~~offered beunder ~~priced~~this atplan Eare subject to certain put and call provisions upon the occurrence of certain events.

Divestiture program

Pursuant to the divestiture program described in note 9 the Company completed the sale of its activities in Egypt and Trinidad & Tobago to Air Liquide S.A. The impact of these transactions on the consolidated statements of operations are not significant. However, the closure of these transactions has enabled the Company to complete the repayment of the Senior Term Disposal facility with its syndicate of banks.

19. Reconciliation to U.S. GAAP

The Group's consolidated financial statements have been prepared in accordance with IAS, which differ in certain significant respects from accounting principles generally accepted in the

~~74.25,~~United ~~the~~States ~~market value at the date~~ of ~~the~~America ~~change in control under the acquisition transactions~~ (~~April 30, 2001)~~"U. ~~Upon exercise of the options and purchase of the shares, the participants will receive additional options to acquire three shares for each share purchased at the same price as the original options~~S. ~~The shares to be transferred upon exercise of the original options will be provided by certain principal shareholders of Messer Griesheim Group GmbH & Co~~GAAP"). ~~KGaA, with the additional shares to be issued by Messer Griesheim Group GmbH & Co. KGaA.~~ The ~~original options~~differences ~~granted~~that ~~under~~have ~~the~~a ~~plan~~significant ~~are~~impact ~~immediately~~on ~~exercisable.~~net ~~The~~loss ~~additional options become excercisable no earlier than two years after the date of grant,~~ and ~~upon~~stockholders' ~~the~~equity ~~attainment~~ of ~~certain operating performance and investment yield targets. All shares offered under this plan are subject to certain put and call provisions upon~~ the ~~occurrence of certain events. In November 2001 the conversion of Messer~~ Group ~~GmbH~~are ~~into~~set aout ~~GmbH &~~below: ~~Co. KGaA was entered into the trade register, and 176,563 original options were granted.~~

~~20.~~ Reconciliation of net loss to U.S. GAAP for the three month periods ended March 31, 2002 and 2001, respectively:

The Group's consolidated financial statements have been prepared in accordance with IAS, which differs in certain significant respects from accounting principles generally accepted in the United States of America (U.S. GAAP). The effects of the application of U.S. GAAP results in certain differences to net loss and stockholders' equity of the Group as reported in accordance with IAS. These differences are set out in the tables below:

			Successor		Predecessor
		Note	Three months ended March 31, 2002		Three months ended March 31, 2001
Net loss as reported in the consolidated statements of operations under IAS			(13,394	)	(6,693	)
U.S. GAAP adjustments:
	Amortization expense	a	7,401		—
	Assets to be sold	b	692		—
	Property, plant and equipment	f	—		(62	)
	Provisions for pensions and similar obligations	g	(32	)	132
	Tax effect of U.S. GAAP adjustments	h	13		(28	)

Net loss under U.S. GAAP			(5,320	)	(6,651	)

Reconciliation of ~~net~~stockholders' ~~loss~~equity to U.S. GAAP ~~for~~as ~~the~~of ~~three~~March 31, ~~month~~2002, ~~periods~~and ~~ended September~~December 3031, 2001, ~~and 2000~~respectively:

		Note	~~Successor~~March ~~July 1~~31, ~~2001 to September 30, 2001~~2002		~~Predecessor~~December ~~July 1~~31, ~~2000 to September 30, 2000~~2001
Net loss as reported in the consolidated statements of operations under IAS			(41,306	)	(63,207	)
Stockholders' equity as reported in the consolidated balance sheets under IAS			903,146		903,389
U.S. GAAP adjustments:
	Assets to be sold	a	9,426		—
	Amortization expense	a,b,c,d,e	4,537		(2,864	)
	Goodwill amortization	a,b,c	(724	)	—
	Assets to be sold	a	6,164		5,472
	Property, plant and equipment	d	—		5,315
	Transaction costs	d	33,200		33,200
	Provisions for pensions and similar obligations	e	(742	)	136
	Property, plant and equipment	f	—		—
	Financial instruments	f	—		(1,548	)
	Provisions for pensions and similar obligations	g	(579	)	(547	)
	Tax effect of U.S. GAAP adjustments	gh	~~(3,474~~928	)	~~442~~915
Net loss under U.S. GAAP			(36,820	)	(58,862	)
Stockholders' equity under U.S. GAAP			947,396		939,565

a.: Goodwill and Other Intangible Assets

~~Reconciliation of~~ The ~~net~~Group ~~loss~~was required to ~~U.S.~~adopt ~~GAAP~~SFAS 142 ~~for~~"Goodwill ~~the~~and ~~five~~Other ~~month~~Intangible ~~period~~Assets" ~~ended~~in ~~September~~its entirety on January 301, ~~2001~~2002. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, ~~the~~but ~~four~~instead ~~month~~tested ~~period~~for ~~ended~~impairment ~~April~~annually (or more frequently if impairment indicators arise) in accordance with the provisions of SFAS 30142. Under IAS, ~~2001~~goodwill and intangible assets continue to be amortized on a systematic basis over their estimated useful lives. This difference in accounting treatment results in a decrease in amortization expense of EURO7,401 during the ~~nine~~three month period ended ~~September~~ March 3031, ~~2000:~~2002 under U.S. GAAP. See "New U.S. accounting pronouncements" below for further discussion of the impact of the implementation of this new standard.

b.: Divestiture of subsidiaries

			Successor		Predecessor
		Note	May 1, 2001 to September 30, 2001		January 1, 2001 to April 30, 2001		January 1, 2000 to September 30, 2000
Net loss as reported in the consolidated statements of operations under IAS			(56,208	)	(13,498	)	(195,742	)
U.S. GAAP adjustments:
	Assets to be sold	a	8,192		—		—
	Goodwill amortization	a,b,c	(1,196	)	—		—
	Property, plant and equipment	d	—		(74	)	4,245
	Provisions for pensions and similar obligations	e	(702	)	176		407
	Financial instruments	f	—		—		(1,867	)
	Tax effect of U.S. GAAP adjustments	g	(2,996	)	(41	)	777
Net loss under U.S. GAAP			(52,910	)	(13,437	)	(192,180	)

EITF Issue No. 87-11 "Allocation of Purchase Price to Assets to Be Sold" addresses issues relating to the allocation of the purchase price in a purchase business combination when the acquiring enterprise intends to sell certain operations of the acquired enterprise within one year of the date of the business combination. This EITF provides that the (i) estimated cash flows from the date of acquisition until the date of sale, (ii) estimated interest on incremental debt incurred during the holding period to finance the purchase of these subsidiaries and (iii) expected sales price less costs to sell should usually not affect earnings or losses reported in the acquiring enterprise's consolidated statement of operations for acquired operations that are expected to be sold within one year of the date of the business combination. Instead, these amounts should be considered in the purchase price allocation associated with the business combination. IAS does not allow a similar treatment in regards to the (i) estimated cash flows from the date of acquisition until the date of sale, or (ii) estimated interest on incremental debt incurred during the holding period to finance the purchase of these operations. These differences in accounting treatment result in a EURO692 decrease to net loss during the three month period ended March 31, 2002. Additionally, these differences resulted in an adjustment to increase acquisition goodwill by EURO17,045. The impact to the statement of operations of the goodwill difference, utilizing an estimated useful life of 20 years for the amortization of basis difference, was EURO568 for the eight month period ended December 31, 2001, which is reflected as a difference in the reconciliation of stockholders' equity to U.S. GAAP as of both March 31, 2002 and December 31, 2001. In accordance with SFAS 142, goodwill and intangible assets with indefinite useful lives are no longer amortized, but instead tested for impairment annually (or more frequently if impairment indicators arise) in accordance with the provisions of SFAS 142. See "New U.S. accounting pronouncements" below for further discussion of the impact of the implementation of this new standard.

c.: Restructuring costs

~~Reconciliation~~ In accordance with IAS 37, a provision for restructuring charges is recognized when a detailed formal plan for the restructuring has been developed and the ofcompany ~~stockholders'~~has ~~equity~~raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected. U.S. GAAP applies assimilar ofcriteria ~~September 30,~~to ~~2001~~determine when a provision for restructuring charges should be established. However, ~~April 30~~under U.S. GAAP, ~~2001~~a rebuttable presumption exists that an exit plan should be completed and ~~December 31,~~all ~~2000:~~exit costs and involuntary employee termination costs should be incurred within one year from the commitment

			Successor		Predecessor
		Note	September 30, 2001		April 30, 2001		December 31, 2000
Stockholders' equity as reported in the consolidated balance sheets under IAS			876,535		428,883		438,524
U.S. GAAP adjustments:
	Assets to be sold	a	8,192		—		—
	Goodwill amortization	a,b,c	(1,196	)	—		—
	Transaction costs	c	33,200		—		—
	Property, plant and equipment	d	—		21,451		21,525
	Provisions for pensions and similar obligations	e	(702	)	(2,506	)	(2,682	)
	Financial instruments	f	—		—		558
	Tax effect of U.S. GAAP adjustments	g	(2,996	)	(265	)	(224	)
Stockholders' equity under U.S. GAAP			913,033		447,563		457,701

a. Divestiture of subsidiaries

EITF Issue No. 87-11 "Allocation of Purchase Price to Assets to Be Sold" addresses issues relating to the allocation of the purchase price in a purchase business combination when the acquiring enterprise intends to sell certain operations of the acquired enterprise within one year of the date of the business combination. This EITF provides that the (i) estimated cash flows from the date of

~~acquisition~~date. ~~until~~No ~~the~~similar ~~date~~provisions ofexist ~~sale,~~under ~~(ii) estimated~~IAS. ~~interest~~Based on ~~incremental~~the ~~debt~~difference ~~incurred~~in ~~during~~provisions, ~~the~~an ~~holding~~adjustment ~~period~~ to ~~finance~~decrease ~~the~~acquisition ~~purchase~~goodwill oftotaling ~~these~~EURO7,147 ~~subsidiaries~~was ~~and~~recorded ~~(iii) expected~~under ~~sales~~U.S. GAAP. ~~price~~This ~~less~~adjustment ~~costs~~is toprimarily ~~sell~~related ~~should~~to ~~not~~involuntary ~~affect~~employee ~~earnings~~termination orcosts ~~losses~~recorded ~~reported~~ in ~~the~~association ~~acquiring~~with ~~enterprise's~~the ~~consolidated~~acquisition ~~statement~~transactions ofnot ~~operations for acquired operations that are~~ expected to be ~~sold~~incurred within one year offrom the commitment date ~~of the business combination~~. ~~Instead,~~The ~~these~~impact ~~amounts~~to ~~should be considered in~~ the ~~purchase~~statement ~~price~~of ~~allocation~~operations ~~associated~~of ~~with~~this ~~the~~difference, ~~business~~utilizing ~~combination.~~an ~~IAS does not allow similar treatment in regards to the (i)~~ estimated ~~cash~~useful ~~flows~~life ~~from the date~~ of ~~acquisition~~20 years ~~until~~for the ~~date~~amortization of ~~sale~~basis difference, orwas ~~(ii) estimated~~a ~~interest~~decrease onto ~~incremental~~goodwill amortization ~~debt~~of ~~incurred~~EURO238 ~~during~~for the ~~holding period~~eight tomonth ~~finance~~period ~~the~~ended ~~purchase~~December 31, of2001, ~~these~~which ~~operations.~~is ~~These~~reflected ~~differences~~as ina ~~accounting~~difference ~~treatment result~~ in athe ~~E9,426~~reconciliation ~~and~~of ~~E8,192~~stockholders' ~~decrease~~equity to ~~net~~U.S. ~~loss~~GAAP ~~during~~as ~~the three~~of ~~month~~both ~~and~~March 31, ~~five~~2002 ~~month~~and ~~periods ended September~~December 3031, 2001~~, respectively~~. ~~Additionally,~~In ~~these~~accordance ~~differences~~with ~~result~~SFAS 142, ingoodwill anand ~~adjustment~~intangible toassets ~~increase~~with ~~acquistion~~indefinite ~~goodwill~~useful bylives ~~E17,045.~~are ~~The impact~~no tolonger ~~the~~amortized, ~~statement~~but ofinstead ~~operations~~tested offor impairment ~~the~~annually ~~goodwill~~(or ~~difference,~~more ~~utilizing~~frequently anif ~~estimated~~impairment ~~useful~~indicators ~~life~~arise) ofin ~~15 years~~accordance ~~for~~with the ~~amortization~~provisions of ~~basis~~SFAS 142. ~~difference,~~See is"New ~~E290~~U.S. ~~and~~accounting ~~E473~~pronouncements" below for ~~the~~further ~~three~~discussion ~~month~~of ~~and~~the ~~five~~impact ~~month~~of ~~periods~~the ~~ended~~implementation ~~September 30,~~of ~~2001,~~this ~~respectively~~new standard.

d.: Transaction costs

b Transaction costs totaling EURO33,200 were incurred by Messer Griesheim Group GmbH & Co. ~~Restructuring~~KGaA in connection with the acquisition transactions described in note 3. Under IAS, these transaction costs would not be treated as part of the purchase consideration. However, under U.S. GAAP, these costs are required to be considered as part of the purchase price allocation in the application of "push-down" accounting to the acquisition transactions. This difference in accounting treatment results in an increase to acquisition goodwill and equity of EURO33,200 as of the acquisition date and an increase to goodwill amortization of EURO1,107 during the eight month period ended December 31, 2001 under U.S. GAAP, which is reflected as a difference in the reconciliation of stockholders' equity to U.S. GAAP as of both March 31, 2002 and December 31, 2001. In accordance with SFAS 142, goodwill and intangible assets with indefinite useful lives are no longer amortized, but instead tested for impairment annually (or more frequently if impairment indicators arise) in accordance with the provisions of SFAS 142. See "New U.S. accounting pronouncements" below for further discussion of the impact of the implementation of this new standard.

e.: Assembled workforce

In APB ~~accordance~~Opinion ~~with~~No. 17 ~~IAS~~"Intangible ~~37,~~Assets" a("APB ~~provision~~17") ~~for~~requires ~~restructuring~~that ~~charges~~the iscost ~~recognized~~of ~~when~~identifiable aintangible ~~detailed~~assets be ~~formal~~separated ~~plan~~from ~~for~~goodwill ~~the~~and ~~restructuring~~assigned ~~has~~part ~~been~~of ~~developed and~~ the ~~company~~ ~~has~~total ~~raised~~cost aof ~~valid~~assets ~~expectation~~acquired in ~~those~~a ~~affected~~business ~~that~~combination. itIn ~~will~~accordance ~~carry~~with ~~out~~APB 17, the ~~restructuring~~Group byrecorded ~~starting~~an tointangible ~~implement~~asset ~~that~~under ~~plan~~U.S. orGAAP ~~announcing~~totaling EURO15,657 ~~its~~associated ~~main~~with ~~features~~the toGroup's ~~those~~assembled ~~affected.~~workforce ~~U.S.~~as ~~GAAP applies~~of ~~similar~~the ~~criteria~~date toof ~~determine~~the ~~when~~acquisition atransactions ~~provision~~described ~~for~~in ~~restructuring~~note 3. ~~charges~~This ~~should~~asset bewas ~~established.~~amortized ~~However,~~over ~~under~~an Uestimated useful life of 6 years through December 31, 2001.S. ~~GAAP~~Additionally, aSFAS 109 ~~rebuttable~~"Accounting ~~presumption~~for ~~exists~~Income ~~that~~Taxes" anrequires ~~exit~~that ~~plan~~deferred ~~should~~taxes be ~~completed~~ ~~and~~recognized ~~all~~for ~~exit~~differences ~~costs~~between ~~and~~the ~~involuntary~~financial ~~employee~~statement ~~termination~~carrying ~~costs~~amount ~~should~~and bethe ~~incurred~~tax ~~within~~basis ~~one~~of ~~year~~all ~~from~~identifiable ~~the~~intangible ~~commitment~~assets, ~~date~~excluding goodwill. NoAccordingly, ~~similar~~the ~~provisions~~Group ~~exist~~established ~~under~~a ~~IAS.~~deferred tax ~~Based~~liability onof EURO6,263 associated with the ~~difference~~Group's inassembled ~~provisions, an~~workforce ~~adjustment~~as toof ~~decrease~~the ~~acquistion~~date ~~goodwill~~of ~~totaling~~the E7acquisition transactions,~~147~~ ~~has~~which ~~been~~resulted ~~recorded~~in a corresponding increase in acquisition goodwill under U.S. GAAP. ~~This~~IAS ~~adjustment~~38 isstates ~~primarily~~that ~~related~~an toenterprise ~~involuntary~~typically ~~employee~~has ~~termination~~insufficient ~~costs recorded~~control inover ~~association~~the ~~with~~expected ~~the~~future ~~acquistion~~economic ~~transaction~~benefits ~~not~~arising ~~expected~~from toa beteam ~~incurred~~of ~~within~~skilled ~~one~~staff ~~year~~and from ~~the~~training ~~commitment~~to consider ~~date.~~that ~~The~~these ~~impact~~items tomeet the ~~statement~~definition of ~~operations~~an ofintangible ~~this~~asset. ~~difference~~Accordingly, ~~utilizing~~the ~~an estimated~~cost ~~useful~~of ~~life~~acquiring ofthe ~~15 years~~Group's ~~for~~assembled ~~the~~workforce ~~amortization~~forms part of ~~basis~~the ~~difference,~~acquisition isgoodwill ~~E119~~under IAS and ~~E199~~is ~~for~~being amortized ~~the~~over ~~three~~an ~~month~~estimated ~~and~~useful ~~five~~life ~~month~~of ~~periods ended September~~20 ~~30, 2001, respectively~~years. Under

c. Transaction costs

Transaction costs totaling E33,200 were incurred by Messer Griesheim Group GmbH in connection with the acquisition transaction described in note 3. Under IAS, these transaction costs would not be treated as part of the purchase consideration. However, under U.S. GAAP, these costs are required to be considered as part of the purchase price allocation in the application of"push-down" accounting to the acquisition transactions. This difference in accounting treatment results in an increase to acquisition goodwill and equity of E33,200 and an increase to goodwill amortization of E553 and E922 during the three month and five month periods ended September 30, 2001, respectively, under U.S. GAAP.

d U.S. GAAP, ~~Property~~these differences in accounting treatment resulted in an increase in intangible assets of EURO15,657 ~~plant~~and a decrease in goodwill of EURO9,394 as of the acquisition date, as well as an increase in amortization expense of EURO1,427 for the eight month period ended December 31, 2001, which is reflected as a difference in the reconciliation of stockholders' equity to U.S. GAAP as of both March 31, 2002 and ~~equipment~~ December 31, 2001.

~~Under~~ The Group ~~IAS~~was ~~36,~~required ~~impairments~~to ofadopt ~~long-lived~~SFAS 141 ~~assets~~"Business ~~are~~Combinations" ~~determined~~effective ~~based~~July 1, on2001, aand ~~comparison~~SFAS 142 ofin anits ~~asset's~~entirety on ~~recoverable~~January 1, ~~amount~~2002. toSFAS 141 ~~its~~states ~~carrying~~explicitly ~~value.~~that ~~The recoverable~~an ~~amount~~assembled workforce is ~~defined~~not asan ~~the~~identifiable ~~higher~~intangible ~~of the~~ asset's ~~net~~apart ~~selling~~from ~~price~~goodwill ~~and~~if ~~value~~acquired in ~~use.~~a ~~Value~~purchase inbusiness ~~use~~combination. Additionally, isat ~~based~~the ondate ~~the~~of ~~discounted~~adoption ~~cash~~of ~~flows~~SFAS 142, ~~expected~~amortization tohas ~~arise~~ceased ~~from~~for ~~the~~goodwill ~~continuing~~and ~~use~~intangible ofassets andetermined ~~asset and~~to ~~from~~have ~~its~~indefinite ~~disposal~~lives. atAny ~~the~~intangible ~~end~~assets ofacquired ~~its~~in ~~useful~~a ~~life.~~business combination ~~Under~~completed ~~U.S.~~before ~~GAAP~~July 1, if2001 ~~there~~that isdo anot ~~triggering~~meet ~~event,~~the ancriteria ~~asset~~for toseparate berecognition ~~held~~in ~~and~~Statement ~~used~~141 ismust ~~analyzed~~be ~~for~~subsumed ~~impairment~~into ~~based~~goodwill on(e.g., aassembled ~~comparison~~workforce). ofAccordingly, effective ~~carrying~~January 1, ~~value~~2002, to the ~~undiscounted~~Group ~~cash~~was ~~flows~~required ~~expected~~ to ~~arise~~reallocate ~~from~~as additional goodwill the ~~continuing~~umamortized ~~use~~assembled ofworkforce anbalance ~~asset.~~of ~~During~~EURO14,404 ~~the~~(net ~~three~~of ~~month~~related ~~period~~deferred ~~ended~~tax impact) ~~September 30,~~recorded ~~2000,~~by the Group ~~recorded~~under anprior ~~impairment~~U.S. inGAAP ~~accordance~~standards ~~with IAS~~in ofeffect ~~approximately~~prior ~~E5,376 related~~ to athe ~~plant~~adoption inof ~~Argentina,~~SFAS 141 ~~which~~and isSFAS 142. ~~not~~See ~~impaired~~"New ~~under~~ U.S. ~~GAAP~~accounting pronouncements" below for further discussion of the impact of the implementation of this new standard.

f.: Property, plant and equipment

In accordance with IAS 23, foreign currency gains and losses on borrowing costs directly attributable to construction can be capitalized. Such costs are not capitalizable under U.S. GAAP. An additional ~~E35,~~EURO35 ~~E47, and E105~~ of depreciation expense would have been recognized under U.S. GAAP during the three month period ended ~~September 30,~~ ~~2000, the four month period ended April~~March 3031, 2001 ~~and the nine month periods ended September 30, 2000, respectively,~~ as a result of not capitalizing such foreign currency losses in prior years.

Additionally, under IAS, impairments must be reversed in certain situations, while under U.S. GAAP impairments on assets to be held for use may not be reversed. During the three ~~month~~ ~~period ended September 30, 2000, the four~~ month period ended ~~April~~March 3031, 2001 ~~and the nine month period ended September 30~~, ~~2000,~~ the Group reversed impairment charges under IAS of ~~E26,~~ ~~E27~~EURO27 ~~and E1,026, respectively,~~ which are not reversed under U.S. GAAP.

g.: Provisions for pensions and similar obligations

e The Group's net obligation in respect of defined benefit pension plans and similar obligations is calculated using the projected unit credit method under IAS 19, which is the same valuation method required under U.S. ~~Provisions~~GAAP. ~~for~~In ~~pensions~~reconciling its defined benefit pension plans and similar obligations from IAS to U.S. GAAP, the Company has applied SFAS 87 "Employer's Accounting for Pensions" effective January 1, 1999, as it was not feasible to apply it as of January 1, 1987, the date specified in the standard. The principal actuarial assumptions used by the Company's actuaries in determining pension provisions and related costs under SFAS 87 are the same as those utilized in applying IAS 19. In applying the late adoption rules under SFAS 87, pension provisions and related costs differ from those calculated under IAS 19, as the amortization components for the transitional liabilities differ in certain respects. Further, under U.S. GAAP, when the accumulated benefit obligation exceeds the fair value of the plan assets, the excess is immediately recognized as an additional minimum liability. The cost of this is capitalized as an intangible asset up to the amount of any unrecognized net transition obligation, plus the unrecognized prior service costs, and the remainder is charged through other comprehensive

The Group's net obligation in respect of defined benefit pension plans and similar obligations is calculated using the projected unit credit method under IAS 19, which is the same valuation method required under U.S. GAAP. In reconciling its defined benefit pension plans and similar obligations from IAS to U.S. GAAP, the Company has applied SFAS 87, "Employer's Accounting for Pensions" effective January 1, 1999, as it was not feasible to apply it as of January 1, 1987, the date specified in the standard. The principal actuarial assumptions used by the Company's actuaries in determining pension provisions and related costs under SFAS 87 are the same as those utilized in applying IAS 19. In applying the late adoption rules under SFAS 87, pension provisions and related costs differ from those calculated under IAS 19, as the amortization components for the transitional liabilities differ in certain respects. Further, under U.S. GAAP, when the accumulated benefit obligation exceeds the fair value of the plan assets, the excess is immediately recognized as an additional minimum liability. The cost of this is capitalized as an intangible asset up to the amount of any unrecognized net transition obligation, plus the unrecognized prior service costs, and the remainder is charged through other comprehensive income. IAS 19 has no similar requirements equivalent to U.S. GAAP in such circumstances. These differences result in an increase (decrease) in net periodic pension cost and other comprehensive loss totaling E(64) and E517 for the three months period ended September 30, 2000, an increase (decrease) in net periodic pension cost and other comprehensive loss totaling E(95) and E709, respectively, for the four month period ended April 30, 2001, an increase (decrease) in net periodic

~~pension~~income. ~~cost~~IAS ~~and~~19 ~~other~~has ~~comprehensive~~no ~~loss~~similar ~~totaling~~requirements ~~E(193) and~~equivalent ~~E1,551,~~to ~~respectively,~~U.S. ~~for~~GAAP ~~the~~in ~~nine~~such ~~month~~circumstances. ~~period~~These ~~ended~~differences ~~September 30,~~result ~~2000~~in ~~and~~ an ~~increase~~ decrease in net periodic pension ~~obligations~~cost ofand ~~E9,888~~other comprehensive income totaling EURO71 and E8EURO532,~~576~~ asrespectively, offor ~~April 30,~~the ~~2001~~three ~~and~~month ~~December~~period ended March 31, ~~2000, respectively~~2001. Subsequent to April 30, 2001, all previously existing unrecognized net actuarial gains or losses, prior service costs and transition obligations or assets related to the Group's pension plans have been eliminated as a result of the allocation of the purchase price in the acquisition transactions (see note 3).

Under IAS, the Group has established accruals for an estimated number of employees that are expected to elect participation in a voluntary early retirement program. Under U.S. GAAP, ~~such~~ such accruals are only established when the employee has entered into a binding contractual agreement. In addition, the Group accrues certain amounts related to the early retirement program as a termination benefit that is recognized when the plan is adopted under IAS. Under U.S. GAAP, such amounts are accrued over the employees' remaining service period. These differences result in an increase (decrease) in expense of ~~E742~~EURO32 and EEURO(7261) ~~during~~for the three month periods ended ~~September~~March 3031, ~~2001~~2002 and ~~2000, respectively, and a increase (decrease) in expense of E702, E(81) and E(214) for the five month period ended September 30,~~ 2001, ~~the four month period ended April 30, 2001 and the nine month period ended September 30, 2000,~~ respectively.

h.: Tax effect of U.S. GAAP adjustments

f. Financial instruments

In accordance with IAS effective prior to January 1, 2001, the Group recognized losses from changes in fair values of currency and interest rate derivatives, however, the Group did not recognize income from gains related to such instruments. In comparison, U.S. GAAP during such period required the recognition of both gains and losses from changes in fair value unless certain hedging criteria were met. This adjustment reflects the recognition of losses of E1,548 and E1,867 in the three month and nine month periods ended September 30, 2000, respectively, related to currency and interest rate derivatives.

g. Tax effect of U.S. GAAP adjustments

This reconciliation item includes all tax effects due to the aforementioned reconciling items.

Additional U.S. GAAP information

~~Acquistion~~Acquisition ~~transaction~~transactions

As a result of the acquisition ~~transaction~~transactions (see note 3), ~~MGG~~Messer Griesheim has become a wholly-owned subsidiary of Messer Griesheim Holding AG, which in turn was 100% acquired by Messer Griesheim Group GmbH & Co. KGaA in a purchase transaction. The series of transactions requires "push-down" of the Messer Griesheim Group GmbH & Co. KGaA's basis under U.S. GAAP in accordance with EITF Topic D-97 "Push-Down Accounting", and SAB No. 54 ""Pushdown" Basis of Accounting in ~~Financial~~ Financial Statements of Subsidiaries Acquired by Purchase". The "pushdown" of basis under U.S. GAAP differs from the allocation of cost to the net assets acquired under IAS. The U.S. GAAP reconciliation of ~~net~~stockholders' ~~income~~equity ~~for~~as ~~the~~of ~~three month and five month periods ending September~~March 3031, ~~2001~~2002 and ~~stockholders' equity as of September~~December 3031, 2001 also reflects differences arising from the new bases of accounting under U.S. GAAP and IAS.

51 The consolidated financial statements reflect the deferred notes payable to Hoechst (see note 3) by the Group's parent, Messer Griesheim Group GmbH & Co. KGaA, as part of equity under IAS and U.S. GAAP as the Company does not meet any of the criteria enumerated in SAB No. 73, which would require the recognition of such obligation as a liability in the Group consolidated financial statements. Therefore, the interest payable by Messer Griesheim Group GmbH & Co. KGaA relating to these deferred notes is not recorded under IAS or U.S. GAAP.

The unaudited interim condensed consolidated financial statements reflect the deferred notes payable to Hoechst (see note 3) by the Group's parent, Messer Griesheim Group GmbH as part of equity under IAS and U.S. GAAP as the Company does not meet any of the criteria enumerated in Question 3 of SAB No. 54, which would require the recognition of such obligation as a liability in the Group consolidated financial statements. Therefore, the interest payable by Messer Griesheim Group GmbH relating to these deferred notes is not recorded under IAS or U.S. GAAP.

Statement of operations

Certain items in the ~~interim condensed~~ consolidated statements of operations would be classified differently under U.S. GAAP. These items include the reversal of certain provisions and allowances for doubtful accounts that would generally be recorded in the same line items as the provisions were originally recorded under U.S. GAAP, rather than as other income.

U.S. GAAP requires the operating results of those subsidiaries which are to be divested after one year from the measurement date to continue to be reflected as part of the statement of operations. Under IAS, the Company has exercised the option of disclosing discontinuing operations in the notes to the financial statements (see note 10). As a result, there is no difference between IAS and U.S. GAAP in sales, net income and total assets as reflected in the unaudited interim condensed consolidated financial statements with respect to these subsidiaries. 51

U.S. GAAP requires the operating results of those subsidiaries which are expected to be divested more than one year from the measurement date to continue to be reflected in the consolidated statement of operations. Under IAS, the Company has exercised the option of disclosing discontinuing operations in the notes to the financial statements. As a result, there is no difference between IAS and U.S. GAAP in sales, net income and total assets as reflected in the consolidated financial statements with respect to these subsidiaries.

Balance sheet

Certain items in the ~~interim condensed~~ consolidated balance sheets would be classified differently under U.S. ~~GAAP. As discussed in note~~ ~~18 to MGG's 2000 consolidated financial statements~~GAAP, ~~the~~including ~~Group participated in a factoring program with a financial conduit. In connection with~~ the ~~acquisition~~net ~~and~~assets ~~financing~~of ~~transactions,~~entities ~~this~~included ~~program was discontinued. Due to the Group's continued residual risks and rewards~~ in the ~~transferred accounts receivable, the Group continued to consolidate the receivables transferred under this program in~~ ~~accordance~~divestiture with International Accounting Standards SIC Interpretation 12. In reconciling to U.S. GAAP, the Company applied SFAS 125 "Accounting for Transfers and Services of Financial Assets and Extinguishments of Liabilities" to account for its factoring program prior to March 31, 2001 and SFAS 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" thereafter. Under U.S. GAAP, the Group was not required to consolidate a qualifying special purpose entity to a factoring program if control over the receivables had been transferred. Accordingly, transfers of receivables under the Group's factoring program qualified as sales under U.S. GAAP. The impact of the different treatment under U.S. GAAP resulted in a decrease in both accounts receivable and corporate debt totaling E51,129 as of December 31, 2000. Additionally, the net assets of entities expected to be disposed of within a period of one year from the date of the ~~acquistion~~acquisition ~~transaction~~ transactions which would be classified as "~~held~~available for sale" under U.S. GAAP.

In accordance with IAS the elements of corporate debt are classified as current or non-current based upon their contractual maturity date. Under US GAAP, the elements of corporate debt are classified based upon their maturity date at the end of each reporting period. As a consequence of the Company extinguishing its senior term disposal facility during the second quarter 2002, an amount of EURO14,574 would have been classified as part of current liabilities under U.S. GAAP at March 31, 2002. In accordance with IAS, all deferred tax assets and liabilities are classified as non-current. Under U.S. GAAP, deferred tax assets and liabilities would be classified as current or non-current depending on when the related benefit or expense is expected to be realized. As of March 31, 2002 and December 31, 2001, EURO5,745 and EURO6,227, respectively, would be classified as current deferred tax assets and EURO7,587 and EURO4,041, respectively, would be classified as current deferred tax liabilities. Additionally, under U.S. GAAP, tax loss carryforwards and other credits that are available to reduce future taxes are recognized as deferred tax assets. Such amounts are reduced by a valuation allowance to the extent that it is deemed more likely than not that the tax benefit related to the utilization of such tax loss carryforwards or credits will not be realized. Under IAS, a deferred tax asset should be recognized for the carryforward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. Deferred tax assets amounted to EURO132,322 and EURO133,781, net of valuation allowances of EURO3,508 and EURO3,471, related to tax loss carryforwards as of March 31, 2002 and December 31, 2001, respectively.

not that the tax benefit related to the utilization of such tax loss carryforwards or credits will not be realized. Under IAS, a deferred tax asset should be recognized for the carryforward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized.

The Group includes in its classification of "cash and cash equivalents" funds with depositories used as collateral for certain indebtedness. Under U.S. GAAP, only funds with depositories which can be withdrawn at any time without prior notice or penalty qualify as cash. The impact of this definitional difference under U.S. GAAP resulted in an increase in "other receivables and other assets" and a related decrease in "cash and cash equivalents" in the amounts of E131.2 million, E0.0 million and E0.0 at September 30, 2001, April 30, 2001 and December 31, 2000, respectively.

Cash flow statement

The cash flow statement is prepared in accordance with IAS 7.

Reporting of comprehensive income

SFAS No. 130 "Reporting Comprehensive Income" requires the reporting of comprehensive (loss) income, which includes all changes in stockholders' equity except those resulting from investments by or distributions to shareholders.

~~Statement of comprehensive income for the three month periods ended September 30, 2001 and 2000:~~ 52

		Successor July 1, 2001 to September 30, 2001		Predecessor July 1, 2000 to September 30, 2000
Net loss in accordance with U.S. GAAP		(36,820	)	(58,862	)
Other comprehensive income (loss), net of tax:
	Foreign currency translation adjustments	(44,244	)	52,357
	Change in fair value of derivative financial instruments	(11,892	)	—
	Additional minimum pension liability	—		(517	)
Comprehensive (loss) income, net of tax		(92,956	)	(7,022	)

Statement of comprehensive (loss) income for the three month periods ended March 31, 2002 and 2001, respectively:

		Successor Three months ended March 31, 2002		Predecessor Three months ended March 31, 2001
Net loss in accordance with U.S. GAAP		(5,320	)	(6,651	)
Other comprehensive (loss) income, net of tax:
	Foreign currency translation adjustments	8,334		403
	Change in fair value of derivative financial instruments	4,817		—
	Additional minimum pension liability	—		(532	)

Comprehensive (loss) income, net of tax		7,831		(6,780	)

Statement of comprehensive income for the five month period ended September 30, 2001, the four month period ended April 30, 2001, and the nine month period ended September 30, 2000:

		Successor		Predecessor
		May 1, 2001 to September 30, 2001		January 1, 2001 to April 30, 2001		January 1, 2000 to September 30, 2000
Net loss in accordance with U.S. GAAP		(52,910	)	(13,437	)	(192,180	)
Other comprehensive income (loss), net of tax:
	Foreign currency translation adjustments	(23,257	)	3,522		72,236
	Change in fair value of derivative financial instruments	(11,180	)	—		—
	Additional minimum pension liability	—		(709	)	(1,551	)
Comprehensive (loss) income, net of tax		(87,347	)	(10,624	)	(121,495	)

Hyperinflation

In accordance with IAS, the financial statements of certain subsidiaries of the Messer Group have been restated in accordance with IAS 29. This treatment is different from that which would have been calculated under U.S. GAAP. No difference is included within the reconciliation of U.S. GAAP as foreign private issuers applying IAS 29 are granted relief from such requirement.

New U.S. accounting pronouncements

In June 1998, the FASB issued SFAS 133 "Accounting for Derivative Instruments and Hedging Activities.". SFAS 133 was subsequently amended by SFAS 137 "Deferral of the Effective Date of FASB 133", which allowed entities which had not adopted SFAS 133 to defer its effective date to all fiscal quarters of all fiscal years beginning after June 15, 2000, and SFAS 138 "Accounting for Certain Derivative Instruments and ~~Hedge~~Certain Hedging Activities—an amendment of FASB Statement No. 133" which addresses a limited number of issues causing implementation difficulties for entities that apply SFAS 133.

SFAS 133, as amended, establishes accounting and reporting standards for derivative instruments, including derivative instruments embedded in other contracts, and hedging activities. Similar to IAS 39, SFAS 133, as amended, requires the Group to recognize all derivatives in the consolidated balance sheet at fair value. The financial statement recognition of the change in fair value of a derivative depends on a number of factors, including the intended use of the derivative and the extent to which it is effective as part of a hedge transaction. SFAS 133, as amended, was adopted by the Group effective January 1, 2001.

Although IAS 39 and SFAS 133, as amended, are similar in many respects, the transition adjustments resulting from the adoption of IAS 39 must be reported in shareholders' equity, whereas the transition adjustments resulting from adoption of SFAS 133, as amended, must be reported in earnings or other comprehensive income, as appropriate. Adoption of SFAS 133 did not have a material impact on the Group's consolidated financial statements.

In September 2000, the FASB issued SFAS 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities—a replacement of FASB No. 125". This statement

revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain financial statement disclosures. SFAS 140 is effective for transactions occurring after March 31, 2001, except for certain disclosure requirements which were effective December 31, 2000. Adoption of this replacement standard did not have a material effect on the Group's consolidated financial statements.

Effective July 1, 2001, the Group adopted Statement 141 "Business Combinations" and certain provisions of SFAS 142 "Goodwill and Other Intangible Assets". The Group adopted SFAS 142 in its entirety on January 1, 2002. SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, as well as all purchase method business combinations completed after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported separately from goodwill, and also indicates that any purchase price allocable to an assembled workforce may not be accounted for separately. Additionally, SFAS 141 required, upon adoption of SFAS 142 in its entirety, that the Group evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in SFAS 141 for recognition apart from goodwill. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead will be tested for impairment annually (or more frequently if impairment indicators arise) in accordance with the provisions of SFAS 142. Intangible assets with definite useful lives will be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets".

Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 continued to be amortized through December 31, 2001. As of December 31, 2001, the amount of unamortized goodwill under U.S. GAAP was EURO598,756. Unamortized assembled workforce totaled EURO13,917 as of December 31, 2001, which was required to be reallocated to goodwill upon adoption of SFAS 141 and SFAS 142. Related deferred tax liabilities of EURO5,567 were also required to be eliminated through a corresponding reduction in the U.S. GAAP carrying amount of goodwill. The amount of unamortized goodwill under U.S. GAAP as of March 31, 2002 was EURO612,673.

As discussed above, upon adoption of SFAS 142, the Group was required to evaluate its existing intangible assets and goodwill that were acquired in a prior purchase combination, and to make any reclassifications in order to conform with the new criteria in SFAS 141 for recognition apart from goodwill. As a consequence, the Group was required to reallocate as additional goodwill the unamortized assembled workforce upon adoption of SFAS 142. This evaluation did not result in any other significant reclassifications. Upon adoption of SFAS 142, the Group was also required to reassess the useful lives and residual values of all intangible assets acquired, and make any necessary amortization period adjustments by the end of the first interim period after adoption. This reassessment did not result in any significant amortization period adjustments. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Group is required to test the intangible asset for impairment in accordance with the provisions of SFAS 142 within the first interim period. Any impairment loss should be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in the first interim period. No impairment loss was recognized in the first quarter ended March 31, 2002 as a result of these

Inimpairment ~~September 2000~~tests, ~~the~~as ~~FASB issued SFAS 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a replacement of FASB No. 125". This statement revises~~ the ~~standards~~Group for accounting for securitizations and other transfers of financial assets and collateral and requires certain financial statement disclosures. SFAS 140 is effective for transactions occurring after March 31, 2001. Adoption of this replacement standard did not ~~have~~identify aany ~~material~~intangible ~~effect~~asset ~~on the~~as ~~Group's~~having ~~consolidated~~an ~~financial~~indefinite ~~statements~~useful life.

~~In July~~ SFAS ~~2001,~~142 requires the ~~FASB~~Group ~~issued~~to ~~SFAS 141~~perform ~~"Business~~an ~~Combinations",~~assessment ~~and~~of ~~SFAS 142~~whether ~~"Goodwill~~there is an indication that goodwill and ~~Other~~/or ~~Intangible~~equity ~~Assets".~~method ~~These~~goodwill ~~pronouncements~~is ~~significantly~~impaired ~~change~~as of the ~~accounting~~date ~~for~~of ~~business~~adoption. ~~combinations~~To accomplish this, ~~goodwill~~the Group must identify its reporting units and ~~intangible~~determine the carrying value of each reporting unit by assigning the assets. ~~SFAS 141~~and ~~requires~~liabilities, ~~that~~including the existing goodwill and ~~purchase~~intangible ~~method~~assets, to those reporting units as of ~~accounting~~January 1, be2002. ~~used~~The ~~for~~Group ~~all~~will ~~business~~then ~~combinations~~have ~~initiated~~up ~~after~~to June 30, ~~2001~~2002 asto ~~well~~determine asthe ~~all~~fair ~~purchase~~value ~~method~~of ~~business~~each ~~combinations~~reporting ~~completed~~unit ~~after~~and ~~June 30,~~compare ~~2001.~~it to the ~~SFAS 141~~carrying ~~also~~amount ~~specifies~~of ~~criteria~~the ~~intangible~~reporting ~~assets~~unit. ~~acquired~~To inthe aextent ~~purchase~~the ~~method~~carrying ~~business~~amount ~~combination~~of ~~must~~a ~~meet~~reporting tounit beexceeds ~~recognized~~the ~~and~~fair ~~reported~~value ~~apart~~of ~~from~~the ~~goodwill.~~reporting ~~SFAS 142~~unit, ~~will~~an ~~require~~ indication exists that the reporting unit goodwill may be impaired and ~~intangible~~the ~~assets~~Group ~~with~~must ~~indefinite~~perform ~~useful~~the ~~lives~~second nostep ~~longer~~of bethe ~~amortized~~transitional impairment test. In the second step, ~~but~~the ~~instead~~Group ~~tested~~then, ~~for~~must ~~impairment~~compare ~~annually~~the ~~(or~~implied ~~more~~fair ~~frequently~~value ifof ~~impairment~~the ~~indicators~~reporting ~~arise)~~unit ingoodwill ~~accordance~~ with the carrying ~~provisions~~amount of ~~SFAS 142.~~the ~~SFAS 142~~reporting ~~will~~unit ~~also~~goodwill, ~~require~~both ~~that~~of ~~intangible~~which ~~assets with~~would ~~definite~~be ~~useful~~measured ~~lives~~as beof ~~amortized~~the ~~over~~date ~~their~~of ~~respective~~adoption. ~~estimated~~The ~~useful~~implied ~~lives~~fair tovalue ~~their~~of ~~estimated~~goodwill ~~residual~~is ~~values,~~determined ~~and~~by ~~reviewed~~allocating ~~for~~the ~~impairment~~fair invalue ~~accordance~~of ~~with SFAS 121~~the ~~"Accounting~~reporting ~~for~~unit ~~the~~to ~~Impairment~~all of ~~Long-Lived~~the ~~Assets~~assets (recognized and ~~for~~unrecognized) ~~Long-Lived~~and ~~Assets~~liabilities toof Bethe ~~Disposed~~reporting ~~Of".~~unit ~~The~~in ~~Group~~a ismanner ~~required~~similar to ~~adopt all~~a ~~provisions~~purchase ofprice allocation, in accordance with SFAS 141. ~~and~~The residual ~~certain~~fair ~~provisions~~value ofafter ~~SFAS 142~~this ~~immediately,~~allocation ~~and~~is ~~SFAS 142~~the inimplied ~~its~~fair ~~entirety~~value onof ~~January 1,~~the ~~2002~~reporting unit goodwill. ~~The~~This ~~Group~~second ~~has~~step ~~not~~is ~~yet~~required to be completed ~~its~~as ~~analysis~~soon as possible, but no later than the end of the calendar ~~new~~year ~~pronouncements,~~2002. ~~however,~~Any ~~management~~transitional ~~expects~~impairment ~~that~~loss ~~adoption~~will ofbe ~~these~~recognized ~~new~~as ~~pronouncements~~the ~~may~~cumulative ~~have~~effect of a ~~material~~change ~~effect~~in onaccounting principle in the Group's ~~financial~~statement ~~statements~~of ~~due~~earnings. toThe ~~the~~Group ~~significant~~has ~~intangible~~not ~~assets,~~yet ~~including~~completed the first step of this transitional goodwill ~~(which~~impairment test, and it is ~~subject~~not practicable to ~~final~~reasonably ~~purchase~~estimate ~~price~~the ~~allocation)~~impact ~~recorded~~of inadopting ~~connection~~SFAS 141and ~~with~~SFAS 142 on the ~~acquisition~~Group's financial ~~transactions~~information ~~described~~under inU.S. ~~note 3,~~GAAP ~~and~~at the ~~reallocation~~date of ~~such~~this ~~amounts between~~report, ~~goodwill~~including ~~and~~whether ~~other~~it ~~intangible~~will ~~assets~~be ~~which~~required ~~may~~to ~~result~~recognize ~~from~~any ~~the~~transitional ~~application~~impairment losses as a cumulative effect of ~~SFAS 141~~a ~~and~~change ~~SFAS 142~~in accounting principle.

In The ~~August 2001,~~year ~~the~~2002 ~~FASB issued SFAS 143 "Accounting for Asset Retirement Obligations"~~U.S. ~~This~~GAAP ~~Statement~~results ~~addresses financial accounting and reporting for obligations associated with the retirement~~ of ~~tangible long-lived assets and~~ the ~~associated~~Group ~~asset~~will ~~retirement~~also ~~costs.~~reflect ~~SFAS 143 requires an enterprise to record~~ the ~~fair~~Group's ~~value~~share of ~~an asset retirement obligation as a liability in~~ the ~~period~~impact inof ~~which~~adoption ~~it incurs a legal obligation associated with the retirement~~ of ~~a tangible long-lived asset.~~ SFAS ~~143~~141 ~~also~~and ~~requires~~142 ~~the~~by ~~enterprise~~its toequity ~~increase~~method ~~the~~investees. ~~carrying~~As ~~amount~~ of the ~~related~~date ~~long-lived~~of this ~~asset (i.e.~~report, ~~the~~certain ~~associated~~equity ~~asset~~method ~~retirement~~investees ~~costs)~~had ~~and to~~not ~~depreciate~~completed ~~that cost over~~ the ~~remaining~~various ~~useful~~activities ~~life~~relating ~~of the asset. The liability is changed at the end of each period~~ to ~~reflect~~ the ~~passage~~adoption of ~~time~~SFAS 141 ~~(i.e., accretion expense)~~ and ~~changes in the estimated future cash flows underlying the initial fair value measurement. Enterprises are required to adopt~~ SFAS ~~143 for fiscal years beginning after June 15~~142, ~~2002.~~and ~~The~~it ~~Group~~is ~~has~~ not ~~yet~~ ~~completed~~practicable ~~its~~to ~~analysis~~reasonably of estimate the ~~new~~impact ~~pronouncement~~that ~~and has not yet determined if~~ the adoption of ~~the~~SFAS 141 ~~new~~and ~~pronouncement~~SFAS 142 ~~will~~by ~~have~~these aequity ~~material~~investees ~~effect~~may have on ~~its~~the ~~financial~~Group's ~~statements~~U.S. GAAP results.

In Reported ~~August 2001~~income net, ~~the~~exclusive ~~FASB approved for issuance SFAS 144 "Accounting for the Impairment or Disposal~~ of ~~Long-Lived Assets".~~amortization ~~This~~expense ~~Statement~~associated ~~addresses~~with ~~financial~~goodwill ~~accounting~~ and ~~reporting~~assets ~~for~~with ~~the~~an ~~impairment~~indefinite oruseful ~~disposal~~life ofrecognized ~~long-lived~~in ~~assets.~~the ~~This~~three ~~Statement~~month ~~supersedes~~periods ~~SFAS~~ended March ~~121~~31, ~~and~~2002 ~~the accounting~~ and ~~reporting~~2001, ~~provisions~~respectively, ofis ~~APB~~calculated ~~Opinion~~as ~~No. 30~~follows: ~~"Reporting the Results of Operations—Reporting the~~

		Successor Three months ended March 31, 2002		Predecessor Three months ended March 31, 2001
Net (loss) income in accordance with U.S. GAAP		(5,320	)	(6,651	)
Add back:
	Goodwill amortization	—		2,213

Adjusted net (loss) income in accordance with U.S. GAAP		(5,320	)	(4,438	)

In August 2001, ~~Effects~~the ofFASB ~~Disposal~~issued ofSFAS 143 a"Accounting ~~Segment~~for ofAsset aRetirement ~~Business,~~Obligations". ~~and~~This ~~Extraordinary,~~Statement ~~Unusual~~addresses ~~and~~financial accounting ~~Infrequently Occurring Events~~ and ~~Transactions",~~reporting for ~~the~~obligations ~~disposal~~associated ofwith athe ~~segment~~retirement of atangible ~~business~~long-lived ~~(as previously~~assets ~~defined~~and inthe ~~that~~associated ~~Opinion).~~asset ~~This~~retirement ~~Statement also amends ARB No~~costs. SFAS 51143 ~~"Consolidated~~requires ~~Financial~~an ~~Statements"~~enterprise to record ~~eliminate~~ the ~~exception~~fair ~~to consolidation~~value ~~for~~of aan ~~subsidiary~~asset ~~for~~retirement ~~which~~obligation ~~control~~as isa ~~likely~~liability toin bethe ~~temporary.~~period ~~The~~in ~~provisions~~which ofit ~~this~~incurs ~~Statement~~a ~~are~~legal ~~effective~~obligation ~~for~~associated ~~financial~~with ~~statements~~the ~~issued~~retirement ~~for~~of ~~fiscal~~a ~~years~~tangible ~~beginning~~long-lived ~~after~~asset. ~~December~~SFAS ~~15,~~143 ~~2001,~~also ~~with~~requires ~~earlier~~the ~~adoption~~enterprise ~~encouraged.~~to ~~The~~increase ~~Group~~the ~~has~~carrying ~~not~~amount ~~yet~~of ~~completed~~the ~~its~~related ~~analysis~~long-lived ofasset by the ~~new~~associated ~~pronouncement~~asset retirement costs and ~~has~~to ~~not~~depreciate ~~yet~~that ~~determined~~cost ~~whether~~over the remaining ~~adoption~~useful life of the ~~new pronouncement~~asset. ~~will~~The ~~have~~liability ais ~~material~~changed ~~effect~~at onthe end of each period to reflect the ~~financial~~passage ~~statements.~~of ~~However~~time (i.e., ~~the~~accretion ~~Group~~expense) ~~has~~and ~~noted~~changes ~~that~~in the ~~provisions~~estimated offuture ~~SFAS 144~~cash ~~would~~flows underlying ~~supersede~~the ~~certain~~initial ~~provisions~~fair ofvalue ~~EITF~~measurement. ~~87-11 as~~Enterprises ~~they~~are ~~relate~~required to ~~allocation~~adopt ofSFAS 143 ~~purchase~~for ~~price~~fiscal inyears abeginning ~~business~~after ~~combination~~June 15, ~~where~~2002. ~~the~~The ~~acquirer~~Group ~~intends~~has tostarted ~~sell~~its aanalysis ~~portion~~ of the ~~operations~~new pronouncement ofbut ~~the~~has ~~acquired~~not ~~enterprise~~yet ~~(see~~determined ~~Note 18a).~~if ~~Therefore, early~~the adoption of ~~SFAS 144~~the ~~would~~new ~~have~~pronouncement ~~resulted~~will inhave ~~fewer~~a ~~differences~~material ~~between~~effect ~~IAS~~on ~~and~~its USfinancial ~~GAAP~~statements.

In August 2001, the FASB approved for issuance SFAS 144. This Statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This Statement supersedes SFAS 121 and the accounting and reporting provisions of APB Opinion No. 30 "Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions", for the disposal of a segment of a business (as previously defined in that Opinion). This Statement also amends ARB No. 51 "Consolidated Financial Statements" to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. The Group adopted the provisions of this Statement on January 1, 2002. The adoption of the new pronouncement did not have a material effect on the unaudited interim condensed consolidated financial statements. However, the Group has noted that certain provisions of SFAS 144 will potentially impact its accounting and reporting for the remaining subsidiaries to be sold under its divestiture program. The Group has also noted that the provisions of SFAS 144 would supersede certain provisions of EITF 87-11 as they relate to allocation of purchase price in a business combination where the acquirer intends to sell a portion of the operations of the acquired enterprise and, as a result, had SFAS 144 been applied in accounting for the acquisition transactions, certain of the differences between U.S. GAAP and IAS relating to operations and entities included in the divestiture program would not have occurred.

The FASB issued SFAS 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections", on April 30, 2002. SFAS 145 rescinds SFAS 4, which required all gains and losses from extinguishment of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. Upon adoption of SFAS 145, the Group will be required to apply the criteria in APB Opinion No. 30, in determining the classification of gains and losses resulting from the extinguishment of debt. Additionally, SFAS 145 amends SFAS 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. While early adoption of the provisions related to the rescission of statement No. 4 is encouraged, the Group has decided to adopt SFAS 145 effective January 1, 2003. Upon adoption, the Group will have to reclassify prior period items that do not meet the extraordinary item classification criteria in Opinion No. 30. Adoption of this standard is not expected to have a material effect on the Group's consolidated financial statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		MESSER GRIESHEIM HOLDING AG
		By:		/s/ KLAUS-JÜRGEN SCHMIEDER Klaus-Jürgen Schmieder Chief Executive Officer

		By:		/s/ HARALD PINGER Harald Pinger Chief Financial Officer
		Date: May 30, 2002

MESSER GRIESHEIM HOLDING AG

/s/ KLAUS-JÜRGEN SCHMIEDER

Klaus-Jürgen Schmieder

Chief Executive Officer

17 December, 2001

Filing Compare · MESSER GRIESHEIM HOLDING GMBH