FMC Annual Report 2015 | Quarterlytics

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TODAY’S FMC FMC Corporation 2015 Annual Report A MESSAGE TO OUR SHAREHOLDERS SIX YEARS AGO we began a journey to unlock the growth potential of FMC through several strategic imperatives. We streamlined our portfolio of businesses, improved our operating efficiency, expanded into regions with strong growth potential, drove innovation and invested in organic and external opportunities that were integral to our success. 2015 was the pinnacle of our transformation and a launch point for today’s FMC, a company focused on operating in attractive, growing market segments defined by global trends in agriculture, nutrition, pharmaceuticals, and specialty lithium applications. Now we must execute to profitably grow and deliver the value and performance our stakeholders expect. A letter from Pierre R. Brondeau President, Chief Executive Officer and Chairman of the Board FMC Corporation COMPLETING OUR TRANSFORMATION It has been a busy six years. Since 2010, we have divested or shut down five businesses, acquired or entered into alliances or collaborations with more than 15 companies, and invested $750 million in R&D. Over this time period, the objectives of our actions have been clear—to transform FMC into a specialty company with technology-driven businesses operating in markets where we lead and can grow over the long term. We completed two of our company’s largest transactions in the second quarter of 2015. FMC was an early mover in the agricultural industry consolidation with our acquisition of Cheminova in April. The acquisition of this global crop protection company, with revenue of $1.2 billion, “2O15 WAS THE PINNACLE OF OUR TRANSFORMATION...” strengthened our technology pipeline, better balanced our geographic presence, broadened our market access and expanded our Agricultural Solutions core portfolio with complementary herbicides, insecticides and fungicides. We are pleased with the pace and success of its integration, which is ahead of schedule and exceeding our targets. We now expect cost reductions of $140 million to $160 million on an annual run rate basis, about 65 percent above our initial synergy target. PIERRE R. BRONDEAU Also in April, we sold FMC Alkali Chemicals for $1.6 billion to Tronox Limited. Alkali Chemicals is a high-performing business, but one that did not fit the portfolio strategy of today’s FMC. Proceeds from the sale were used to finance the Cheminova acquisition. POSITIONED FOR GROWTH FMC Agricultural Solutions The acquisition of Cheminova has expanded our global footprint and strengthened our market access in key agricultural regions of the world. Our business model is in a category by itself. Nobody in the agricultural industry operates as we do: Asset Light We continue to employ a successful asset-light operating strategy, even with the acquisition of Cheminova. The vast majority of our active ingredients are manufactured by toll producers that strictly follow FMC’s process technology and environment, health and safety standards. This approach gives us maximum operating flexibility at the lowest cost. Technology Our unique innovation model reduces very early stage R&D risk. Through a broad network of partners, we acquire early stage active ingredients that are developed by FMC into differentiated products. This approach shortens the development time, delivering higher returns on our R&D investment. We also are a leading formulation company, a core competency that allows us to create products for local market needs. Today’s FMC Agricultural Solutions has nine synthetic active ingredients with potential risk-adjusted sales of $1.5 billion, and a biological crop protection platform developed through our alliance with Chr. Hansen. Market Access We operate FMC Agricultural Solutions on a global scale, but our strategy is executed at the regional level, each with unique market needs. We serve these markets in a manner that customers and growers value most. In some countries, such as the U.S., all sales are through a distributor and retailer network. In Brazil, FMC’s historic strength in the central and northern parts of the country is complemented by Cheminova’s access to co-ops in the south. In Asia, which operates as a collection of local markets, Cheminova has strengthened our market access in major countries, such as India and Australia. And in Europe, the second largest agricultural market globally, we have improved our direct market access, especially in Germany, U.K., France, Italy, Spain and Eastern Europe. FMC Health and Nutrition FMC is a leading global supplier of products and technologies to the pharmaceutical, food and nutraceutical industries. Our core competencies are the production of premium ingredients from natural raw materials and their formulation FMC’s new European Innovation Center will open in 2016 in Hørsholm, Denmark (16 miles north of Copenhagen). It joins FMC’s network of existing Innovation Centers in the U.S., Brazil and China. into innovative health and nutrition solutions for our customers. After broadening our portfolio with product lines like Omega-3 and natural colors during the last few years, we focused on fully integrating and growing these businesses in 2015 and optimizing our manufacturing capability through Manufacturing Excellence and process technology improvements. We enter 2016 with a strong Health and Nutrition business serving some of the largest and most demanding pharmaceutical and food companies. Our incumbent position at major customers around the world is a significant competitive advantage. Pharmaceutical customers insist on premium quality and product consistency, a hallmark of our quality, service, and reliability (QSR) programs. Our food scientists help many leading nutrition companies meet evolving consumer trends for safe, healthy, nutritious food. We have great expectations for the Health and Nutrition business in 2016. CONTINUING PROGRESS ON SUSTAINABILITY 26 Waste profile + water risk assessments 12 Social responsibility audits at manufacturing sites 5 Environmental data quality audits 4 Energy audits to improve efficiency 4 Award-winning Sustainability Reports • Reported to the Global Reporting Initiative, an internationally recognized reporting standard • Became a signatory to the United Nations Global Compact • Dedicated over 60 percent of R&D investment to sustainably advantaged products • Joined Field to Market, a sustainable agriculture consortium • Expanded materiality assessment to include external stakeholders • Integrated Cheminova’s key sustainability programs into FMC’s framework 2015 Annual Report 1 FMC Lithium We focused on two priorities in 2015, an important year for this business. Downstream Markets FMC Lithium continued to focus its commercial strategy on growing downstream, differentiated specialty products. These include lithium hydroxide used in electric vehicles and consumer electronics; butyllithium for synthetic rubber, pharmaceuticals and agricultural markets; and high purity lithium used in performance alloys. We bring deep expertise in high-value lithium markets and a unique ability to serve and collaborate with our customers. Manufacturing Excellence We strengthened our manufacturing capability globally with more reliable plant operations. In late 2015, a new natural gas pipeline serving our production facility in Argentina was brought online, improving reliability, cost, sustainability and safety. This plant had its best year with high yields and predictable output. We have high expectations for FMC Lithium. With the potential for improving business conditions in Argentina, a strong manufacturing network and a commercial strategy focused on technology-advantaged downstream product lines, we believe this business has very strong earnings growth potential in 2016. 2015 FINANCIAL PERFORMANCE HIGHLIGHTS For the year ending December 31, 2015, FMC Corporation posted the following results*: *See Non-GAAP Reconciliations on page 8. $3.3 Annual Sales (billions) $519 Adjusted Operating Profit (millions) $2.47 11.0% Adjusted Earnings Per Share Return on Invested Capital FMC Agricultural Solutions • Full-year segment revenue: $2.253 billion. • Full-year segment earnings: $364 million. FMC Health and Nutrition • Full-year segment revenue: $786 million. • Full-year segment earnings: $195 million. FMC Lithium • Full-year segment revenue: $238 million. • Full-year segment earnings: $23 million. TODAY’S FMC Despite a challenging environment in the agricultural markets, I am proud of FMC’s significant progress. We successfully closed on one of the most important and largest acquisitions in our company’s history, and we are on pace to exceed our integration targets. We took decisive steps to address serious macroeconomic challenges in our Agricultural Solutions business, which had impacted the entire crop protection industry. We introduced new safety standards and processes at legacy Cheminova sites that substantially reduced injuries at those facilities. And most importantly, 2015 marked the successful achievement of our transformation into a specialty company focused on agriculture, health, nutrition and lithium technologies. Pierre R. Brondeau President, Chief Executive Officer and Chairman of the Board FMC Corporation SAFETY REMAINS A CORE VALUE FMC’s 2015 injury rate remained flat compared to 2014 in spite of the major changes brought about by acquiring Cheminova. Organizational changes typically distract employees, which can lead to more injuries. FMC credits the following actions with substantially reducing injuries at legacy Cheminova sites: · Increasing leadership focus and attention on safety · Conducting post-injury learning reviews · Rolling out FMC’s award-winning TH!NK. SAFE.™ awareness campaign · Establishing new requirements for personal protective equipment such as hardhats, eye protection, safety shoes and gloves, as well as banning open-blade knives · Initiating new Life Critical Standards 2011 2012 2014 2015 2013 .74 .63 .51 .51 .41 TOTAL RECORDABLE INCIDENT RATE 2 FMC Corporation OUR LEADERSHIP TEAM FMC’s executive leadership includes (left to right): Paul Graves, executive vice president and chief financial officer; Pierre R. Brondeau, president, chief executive officer and chairman of the board; Kenneth A. Gedaka, vice president, communications and public affairs; Andrea E. Utecht, executive vice president, general counsel and secretary; Kyle Matthews, vice president, human resources; Eric W. Norris, president, FMC Health and Nutrition; Karen M. Totland, vice president, global procurement, global facilities & corporate sustainability; Barry J. Crawford, vice president, operations; and Mark A. Douglas, president, FMC Agricultural Solutions. 2015 Annual Report 3 2015 Annual Report 3 2O1 5 SUMMARY+ HIGHLIGHTS FMC Corporation enters 2016 well positioned for future growth, recording the following results for the year ending December 31, 2015. REVENUE BY SEGMENT OPERATING PROFIT BY SEGMENT (in millions) (in millions) $238 FMC LITHIUM $23 FMC LITHIUM FMC HEALTH AND NUTRITION $786 $2,253 FMC AGRICULTURAL SOLUTIONS FMC HEALTH AND NUTRITION $195 $364 FMC AGRICULTURAL SOLUTIONS 2013 2014 2015 TOTAL SHAREHOLDER RETURN RETURN ON INVESTED CAPITAL -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 0 5 10 15 20 -23.6% -30.2% 4 FMC Corporation 13.5% 1.4% 10.6% -4.1% 29.9% C M F I N O T A R O P R O C 32.0% 31.4% 0 0 5 P & S I S L A C M E H C 0 0 5 P & S 16% 14% 11% ADJUSTED EARNINGS PER SHARE* 0 1 2 3 4 $3.25 $3.18 $2.47 *Diluted adjusted after-tax earnings from continuing operations per share, attributable to FMC stockholders (Non-GAAP), see page 8. FMC AGRICULTURAL SOLUTIONS In April, FMC closed its acquisition of Cheminova, one of the largest in company history. The transaction immediately solidified FMC as a leading global provider of crop protection solutions adding a robust portfolio of 60 active ingredients, 2,300 product registrations, and several technologies under development. FMC now has a rich pipeline of 16 new synthetic and biological active ingredients to be commercialized over the next seven years. Cheminova strengthens and balances FMC’s market access across Europe, Latin America and Asia; expands our product offerings in soybeans, sugarcane and cotton; and provides faster access into additional crops, such as cereals. The acquisition adds important manufacturing and formulating capabilities to our highly cost-effective, asset-light global manufacturing network. We made significant progress on our integration and expect to substantially exceed our original estimate of $90 million in cost synergies on an annual run rate basis. Portfolio rationalization is well underway and we expect to capture significant commercial revenue synergies as we increase our focus on proprietary technology platforms and differentiated products. Although the Cheminova acquisition greatly increased our size, we have retained the customer focus and agility of both organizations. FMC was not immune to the challenges that impacted the agricultural industry in 2015. Low commodity prices, high product inventory levels, lower insect pressure and negative foreign exchange, especially the rapid devaluation of the Brazilian real, contributed to a global crop protection chemical market that was down approximately 10 percent. In Brazil, our largest market, we took decisive steps to blunt the effects of the industry downturn and to also position us to deliver higher growth and returns in 2016 and beyond. We rationalized our business in Brazil, eliminating annual sales of nearly $250 million of low-margin, third- party products, including the sale of our generic subsidiary Consagro. Although drought and low pest pressure negatively impacted some Asian and European markets, we increased sales in Mexico, Colombia and our Global Specialty Solutions business. We continue to invest in innovation, including our emerging Plant Health platform as we develop new biological, seed treatment and micronutrients products. We launched four biological products in 2015, including Ethos™ XB, a combination biological fungicide and synthetic insecticide. We also introduced a new patent-pending technology, 3RIVE 3D™, an ultra-low volume, in-furrow foam delivery system that uses less than one-tenth the liquid carrier volume, saving the grower water, fuel and time. BROADER GLOBAL FOOTPRINT H = HERBICIDE I = INSECTICIDE F = FUNGICIDE O = OTHER FMC CHEMINOVA Units are revenue by product type (in millions). 800 700 600 500 400 300 200 100 H I F O H I F O H I F O H I F O LATIN AMERICA EMEA ASIA-PACIFIC NORTH AMERICA 2015 Annual Report 5 FMC HEALTH AND NUTRITION Today’s Health and Nutrition business is more nimble, efficient and better positioned to lead customers to even greater success. In 2015, the business delivered its 11th consecutive year of record earnings, demonstrating stability despite the evolving industries it serves. We also executed several important measures to strengthen our foundation for the future. As a technology-focused business, we reinvigorated how our science delivers results. Our new Process Technology Center of Excellence, in partnership with R&D, has driven significant alginate yield improvement through more robust processing techniques that we can use across our portfolio. This focused approach provides greater control over the variations of naturally derived materials, enabling more consistent products and increased capacity. In microcrystalline cellulose (MCC), we further reinforced our global leadership position by leveraging channel relationships in India, allowing us to take advantage of a fast-growing generic pharmaceuticals market and expand our presence in a crucial region. We also advanced several MCC-based product innovations scheduled to launch in 2016. anticipate trends and create insight-driven innovation in nutritional and nutraceutical markets. For example, we are concept-testing foods to understand the sensory attributes that appeal to different consumers. These insights are used to design tailored ingredient solutions that customers need to bring winning concepts to life. When new products require unique ingredients beyond our current offerings, we engage outside partners to source and develop new technologies and applications. In addition to helping customers deliver products with consumer appeal, FMC is also addressing growing consumer interest about food ingredients. Our FoodScienceMatters.com platform helps educate consumers about food labels and the quality and safety of food ingredients. Our Operations team continued to deploy lean manufacturing programs across our global manufacturing network, achieving cost efficiencies through footprint rationalization. We are building on this foundation to further help customers grow. FMC Health and Nutrition is enhancing consumer and market intelligence capabilities to better Every day our customers play a role in feeding the world and promoting better health. We take our part in those missions seriously—creating safe, naturally derived, quality ingredients that safeguard their brands. Now, with a stronger core than ever before, we can reach beyond our historical role to help navigate customers to greater success. EXPANDING OUR INNOVATION CAPACITY WORLDWIDE FMC Health and Nutrition meets the unique needs of its customers around the world through a network of regional applications laboratories and extensive consumer and regulatory insights. LEGACY SALES/R+D SITE NEW OR ACQUIRED SALES/R+D SITE 6 FMC Corporation FMC LITHIUM 2015 was an important year for the Lithium business. Although high Argentine inflation and currency effects impacted earnings, FMC Lithium made great progress strengthening its position and optimizing operations to be the leading supplier and innovator of high-value lithium products. Today, our business is more cost effective and capital efficient through a focus on three strategic areas: LITHIUM HYDROXIDE HIGH PURITY METAL FMC is the number-one supplier into Electric Vehicle (EV) applications using lithium hydroxide. Throughput was increased from our existing assets by about 10 percent in 2015, and we are positioned to realize a similar increase in 2016. In addition, FMC-patented lithium products have the potential to be used in combination with our lithium hydroxide to increase lithium ion battery performance by 10 percent or more. As the only Western producer of high purity metal products, FMC is uniquely positioned to capitalize on increased applications of new lithium alloys, including lightweight lithium aluminum alloys for the aerospace industry. Lithium metal products are also used to enhance the performance of energy storage applications, such as electric vehicles and tablets, cell phones and mobile devices. BUTYLLITHIUM FMC remains the number-one global supplier of butyllithium products. We have the largest global network of manufacturing facilities, and are well positioned to support customer demand growth. Butyllithium is used in several markets and products, including polymers, synthetic rubber-based materials, pharmaceuticals and agriculture. Our technical service to support the safe use of our products is unmatched in the industry. During 2015, FMC increased production of these high- value products while significantly improving our costs and sustainability profile. We continued to experience solid growth with existing and new customers while focusing on application development projects that will bring added value to our customers. FMC Lithium is poised to grow in key downstream specialty market segments, and is well positioned with deep technology know-how and expansion projects in growing areas such as energy storage. FOCUS ON HIGH-VALUE SPECIALTY LITHIUM INDUSTRIAL SPECIALTY 71% 29% OVERALL MARKET VOLUME APPROX. 160 KMT 43% 57% OVERALL MARKET REVENUE APPROX. $1.5 BILLION 21% 79% FMC REVENUE $238 MILLION LITHIUM BRINE INDUSTRIAL • Carbonate • Chloride SPECIALTY • Hydroxide • Butyllithium • High Purity Metal 2015 Annual Report 7 NON-GAAP RECONCILIATIONS For those not already presented in the Form 10-K, the following charts reconcile Non-GAAP terms used in this report to the closest GAAP term. All tables are unaudited and presented in millions, except for per share amounts. Income from continuing operations attributable to FMC stockholders, net of tax (GAAP): Interest expense, net, net of income tax Corporate special charges (income) Tax effect of corporate special charges (income) Tax adjustments ROIC numerator (Non-GAAP) 2-point average denominator Debt Total FMC stockholder equity ROIC denominator (2 pt. avg) (GAAP) ROIC (using Non-GAAP numerator) Return on invested capital (ROIC), adjusted after-tax earnings per share and adjusted earnings from continuing operations before interest and income taxes (i.e., adjusted operating profit) are not measures of financial performance under U.S. generally accepted accounting principles (GAAP) and should not be considered in isolation from, or as substitutes for, income from continuing operations, net income, or earnings per share determined in accordance with GAAP, nor as substitutes for measures of profitability, performance or liquidity reported in accordance with GAAP. 2013 2014 2015 $ 365.1 $ 298.2 $ (187.4) 27.1 98.6 (36.4) 14.6 37.8 226.5 (84.1) 62.4 569.6 (144.9) (13.8) 95.3 $ 469.0 $ 464.6 $ 395.0 Dec-12 Dec-13 Dec-14 Dec-15 $ 956.7 $ 1,841.3 $ 1,664.1 $ 2,148.9 1,480.3 1,519.8 1,530.5 1,865.7 $ 2,437.0 $ 3,361.1 $ 2,899.1 $ $ 3,194.6 $ 4,014.6 3,277.9 $ 3,604.6 16.2% 14.2% 11.0% Reconciliation of diluted earnings per common share attributable to FMC stockholders, from continuing operations (GAAP) to diluted adjusted after-tax earnings from continuing operations per share, attributable to FMC stockholders (Non-GAAP) Diluted earnings per common share from continuing operations (GAAP) Diluted corporate special charges (income) per share Diluted adjusted after-tax earnings from continuing operations per share, attributable to FMC stockholders (Non-GAAP) 2013 2014 2015 2.68 $ 2.22 $ (1.40) 0.57 0.96 3.87 3.25 $ 3.18 $ 2.47 $ $ Reconciliation of net income (loss) attributable to FMC stockholders (GAAP) to adjusted earnings from continuing operations attributable to FMC stockholders, before interest, income taxes and noncontrolling interests (i.e., adjusted operating profit) (Non-GAAP) 2013 2014 2015 Net income (loss) attributable to FMC stockholders (GAAP) $ 293.9 $ 307.5 $ 489.0 Discontinued operations, net of income taxes Corporate special charges (income) Interest expense, net Provision for income taxes Net income attributable to noncontrolling interests Adjusted earnings from continuing operations attributable to FMC stockholders, before interest, income taxes and noncontrolling interests (Non-GAAP) 8 FMC Corporation 63.6 98.6 36.3 131.6 14.1 (14.5) (676.4) 226.5 569.6 51.2 56.2 14.6 80.1 47.4 9.5 $ 638.1 $ 641.5 $ 519.2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fi scal year ended December 31, 2015 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 1-2376 FMC CORPORATION (Exact name of registrant as specifi ed in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 1735 Market Street Philadelphia, Pennsylvania (Address of principal executive offi ces) 94-0479804 (I.R.S. Employer Identifi cation No.) 19103 (Zip Code) 215-299-6000 (Registrant’s telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: Title of each class Common Stock, $0.10 par value Name of each exchange on which registered New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE Indicate by check mark YES NO • if the registrant is a well-known seasoned issuer, as defi ned in rule 405 of the Securities Act. • if the registrant is not required to fi le reports pursuant to Section 13 and Section 15(d) of the Act. • whether the Registrant (1) has fi led all reports required to be fi led by Section 13 or 15(d) of the Securities Exchange act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to fi le such reports), and (2) has been subject to such fi ling requirements for the past 90 days. • whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data fi le required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such fi les) • if disclosure of delinquent fi lers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in defi nitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-k • whether the Registrant is a large accelerated fi ler, an accelerated fi ler, a non-accelerated fi ler or a smaller reporting company. See defi nitions of “large accelerated fi ler,” “accelerated fi ler,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated fi ler Accelerated fi ler Non-accelerated fi ler Smaller reporting company • whether the registrant is a shell company (as defi ned in Rule 12b-2 of the Exchange Act) Th e aggregate market value of voting stock held by non-affi liates of the registrant as of June 30, 2015, the last day of the registrant’s second fi scal quarter was $6,983,610,763. Th e market value of voting stock held by non-affi liates excludes the value of those shares held by executive offi cers and directors of the registrant. Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date CLASS Common Stock, par value $0.10 per share DECEMBER 31, 2015 133,655,777 DOCUMENTS INCORPORATED BY REFERENCE DOCUMENT Portions of Proxy Statement for 2016 Annual Meeting of Stockholders FORM 10-K REFERENCE Part III Table of Contents PART I 1 Business ...........................................................................................................................................................................................................................................................................................................................................1 ITEM 1 ITEM 1A Risk Factors ..............................................................................................................................................................................................................................................................................................................................9 ITEM 1B Unresolved Staff Comments ..................................................................................................................................................................................................................................................................12 Properties ................................................................................................................................................................................................................................................................................................................................12 ITEM 2 Legal Proceedings ......................................................................................................................................................................................................................................................................................................12 ITEM 3 Mine Safety Disclosures .................................................................................................................................................................................................................................................................................13 ITEM 4 Executive Offi cers of the Registrant ..........................................................................................................................................................................................................................................13 ITEM 4A PART II 14 ITEM 5 Market for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities .........................................................................................................................................................................................................................14 Selected Financial Data ...................................................................................................................................................................................................................................................................................16 ITEM 6 ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations ...................................................17 ITEM 7A Quantitative and Qualitative Disclosures About Market Risk ....................................................................................................................................................34 Financial Statements and Supplementary Data .....................................................................................................................................................................................................35 ITEM 8 ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .................................................87 ITEM 9A Controls and Procedures ..............................................................................................................................................................................................................................................................................87 ITEM 9B Other Information ..................................................................................................................................................................................................................................................................................................88 PART III 89 ITEM 10 Directors, Executive Offi cers and Corporate Governance ................................................................................................................................................................89 Executive Compensation .............................................................................................................................................................................................................................................................................89 ITEM 11 Security Ownership of Certain Benefi cial Owners and Management and Related Stockholder Matters ..............89 ITEM 12 Certain Relationships and Related Transactions, and Director Independence ................................................................................................90 ITEM 13 Principal Accountant Fees and Services ..............................................................................................................................................................................................................................90 ITEM 14 PART IV 91 ITEM 15 Exhibits and Financial Statement Schedules ..............................................................................................................................................................................................................91 SIGNATURES ............................................................................................................................................................ 94 INDEX OF EXHIBITS .............................................................................................................................................. 95 PART I FMC Corporation (FMC) was incorporated in 1928 under Delaware law and has its principal executive offi ces at 1735 Market Street, Philadelphia, Pennsylvania 19103. Th roughout this Annual Report on Form 10-K, except where otherwise stated or indicated by the context, “FMC”, “We,” “Us,” or “Our” means FMC Corporation and its consolidated subsidiaries and their predecessors. Copies of the annual, quarterly and current reports we fi le with the Securities and Exchange Commission (“SEC”), and any amendments to those reports, are available on our website at www.FMC.com as soon as practicable after we furnish such materials to the SEC. ITEM 1 Business General We are a diversifi ed chemical company serving agricultural, consumer and industrial markets globally with innovative solutions, applications and market-leading products. We operate in three distinct business segments: FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium. Our FMC Agricultural Solutions segment develops, markets and sells all three major classes of crop protection chemicals – insecticides, herbicides and fungicides. Th ese products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as in non-agricultural markets for pest control. Th e FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients, and functional health ingredients. Nutritional ingredients are used to enhance texture, color, structure and physical stability. Health excipients are used for binding, encapsulation and disintegrant applications. Functional health ingredients are used as active ingredients in nutraceutical and pharmaceutical markets. Our FMC Lithium segment manufactures lithium for use in a wide range of lithium products, which are used primarily in energy storage, specialty polymers and chemical synthesis application. Discontinued Operations - FMC Alkali Chemicals On April 1, 2015, we completed the sale of our FMC Alkali Chemicals division (“ACD”) for $1,649.8 million to a wholly owned subsidiary of Tronox Limited (“Tronox”). Th e sale resulted in approximately $1,198.5 million in after-tax cash proceeds. Th e sale resulted in a pre-tax gain of $1,080.2 million ($702.1 million net of tax) for the year ended December 31, 2015. Th e results of ACD have been reclassifi ed to refl ect the business as a discontinued operation for all periods presented throughout this document. Cheminova A/S On April 21, 2015, pursuant to the terms and conditions set forth in the Purchase Agreement, we completed the acquisition of 100 percent of the outstanding equity of Cheminova A/S, a Denmark Aktieselskab (“Cheminova”) from Auriga Industries A/S, a Denmark Aktieselskab for an aggregate purchase price of $1.2 billion, excluding assumed net debt and hedged-related costs of approximately $0.6 billion (the “Acquisition”). Cheminova is being integrated into our FMC Agricultural Solutions segment. Since the closing date, Cheminova has been included within our reported results of operations for FMC Agricultural Solutions for the twelve months ended December 31, 2015. FMC Strategy 2015 marked the completion of FMC’s multi-year portfolio transformation. Today, FMC is a company operating in attractive market segments that are supported by growth trends in agriculture, pharmaceuticals, nutrition, and energy storage. Each of FMC’s businesses has the right elements in place to deliver continued growth in earnings and returns. In Agricultural Solutions, the acquisition of Cheminova has expanded market access across Europe, Latin America and key Asia-Pacifi c markets such as India and Australia, and has brought greater balance to the revenue mix of FMC Agricultural Solutions across each of the major growing regions. Th e integration strengthens our leadership position in crop protection chemistry and expands our position in a FMC CORPORATION - Form 10-K 1 PART I ITEM 1 Business variety of crop segments. Our complementary technologies will lead to improved formulation capabilities and a broader innovation pipeline. We continue to invest in R&D and remain committed to developing and commercializing new and diff erentiated products to address grower demands. We will also benefi t from deeper regulatory expertise and access to local markets. FMC with the acquisition of Cheminova, has the scale to operate with greater resources and global reach to address changing market conditions. In Health and Nutrition, we have a portfolio of naturally-derived, functional ingredients that serve health, nutraceutical and nutrition end markets. We provide innovative solutions to our customers by leveraging our application know-how in the nutrition, nutraceutical and pharmaceutical markets as well as diff erentiating the manufacture and delivery of our market leading products through best in class Quality, Service, Reliability (QSR). With QSR at the forefront, we have recently undertaken an eff ort to improve our cost competition by optimizing our organizational and manufacturing footprints. We are implementing Manufacturing Excellence programs to drive operating improvements across our portfolio. As a technology-focused company, we continue to pursue process technology improvements and develop innovative application solutions to drive the highest value for customers. In Lithium, FMC remains one of the leading global producers of specialty lithium products. We will continue to invest in these higher growth, higher value segments of the market, including lithium hydroxide for energy storage and butyllithium for use in chemical synthesis and high purity lithium metal for aerospace applications. We maintain our commitment to enterprise sustainability, including responsible stewardship. As we grow, we will do so in a responsible way. Safety and business ethics will remain of utmost importance. Meeting and exceeding our customers’ expectations will continue to be a primary focus. Financial Information About Our Business Segments (Financial Information (in Millions)) See Note 19 “Segment Information” to our consolidated fi nancial statements included in this Form 10-K. Also see below for selected fi nancial information related to our segments. Th e following table shows the principal products produced by our three business segments, their raw materials and uses: Segment FMC Agricultural Solutions Insecticides Product Herbicides Fungicides Raw Materials Synthetic chemical intermediates Synthetic chemical intermediates Synthetic and biological chemical intermediates Uses Protection of crops, including soybean, corn, fruits and vegetables, cotton, sugarcane, rice, and cereals, from insects and for non-agricultural applications including pest control for home, garden and other specialty markets Protection of crops, including cotton, sugarcane, rice, corn, soybeans, cereals, fruits and vegetables from weed growth and for non-agricultural applications including turf and roadsides Protection of crops, including fruits and vegetables from fungal disease FMC Health and Nutrition Microcrystalline Cellulose Specialty pulp Carrageenan Refi ned seaweed Alginates Natural Colorants Omega-3 EPA/DHA Lithium Refi ned seaweed Plant sources, select insect species Fish oils Various lithium products FMC Lithium Drug dry tablet binder and disintegrant, food ingredient Food ingredient for thickening and stabilizing, pharmaceutical and nutraceutical encapsulates Food ingredient, pharmaceutical excipient, healthcare and industrial uses Food, pharmaceutical and cosmetics Nutraceutical and pharmaceutical uses Batteries, polymers, pharmaceuticals, greases and lubricants, glass and ceramics and other industrial uses 2 FMC CORPORATION - Form 10-K With a worldwide manufacturing and distribution infrastructure, we are better able to respond rapidly to global customer needs, off set downward economic trends in one region with positive trends in another and match local revenues to local costs to reduce the impact of currency volatility. Th e charts below detail our sales and long-lived assets by major geographic region. REVENUE BY REGION  2015 REVENUE: $3,276.5 MILLION LONGLIVED ASSETS BY REGION  2015 LONGLIVED ASSETS: $3,067.1 MILLION PART I ITEM 1 Business 19% Europe, Middle East & Africa 28% North America 30% Latin America 23% Asia Paciﬁc 56% Europe, Middle East & Africa 10% Latin America 13% Asia Paciﬁc 21% North America FMC Agricultural Solutions AGRICULTURAL SOLUTIONS: REVENUE AND OPERATING MARGIN 2013-2015 AGRICULTURAL SOLUTIONS: CAPITAL EXPENDITURES AND DEPRECIATION AND AMORTIZATION 2013-2015 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 2,146 2,174 2,253 25% 23% 16% 2013 Revenue 2014 2015 Operating Margin 60% 50% 40% 30% 20% 10% 0% $70 $60 $50 $40 $30 $20 $10 $0 61 50 34 31 25 29 2013 2014 2015 Capital Expenditures Depreciation and Amortization Overview Our FMC Agricultural Solutions segment, which represents approximately 69 percent of our 2015 consolidated revenues, operates in the agrochemicals industry. Th is segment develops, manufactures and sells a portfolio of crop protection, professional pest control and lawn and garden products. FMC CORPORATION - Form 10-K 3 PART I ITEM 1 Business Products and Markets AGRICULTURAL SOLUTIONS: 2015 SALES MIX AGRICULTURAL SOLUTIONS: 2015 REVENUE BY REGION 10% Fungicides 5% Other 45% 40% Herbicides Latin America 40% Insecticides 26% North America 15% Europe, Middle East & Africa 19% Asia Paciﬁc FMC Agricultural Solutions’ portfolio is comprised of three major pesticide categories: insecticides, herbicides and fungicides. Th e majority our product line consists of insecticides and herbicides, and we have a small but fast-growing portfolio of fungicides mainly used in high value crop segments. Our insecticides are used to control a wide spectrum of pests, while our herbicide portfolio primarily targets a large variety of diffi cult-to-control weeds. We are also investing substantially in a plant health program that includes biological crop protection products, seed treatments and micronutrients. In the Latin American region, which includes the large agricultural market of Brazil, we sell directly to large growers through our own sales and marketing organization, and we access the market through independent Industry Overview Th e three principal categories of agricultural and non-crop chemicals are: herbicides, insecticides and fungicides, representing approximately 40 percent, 30 percent and 25 percent of global industry revenue, respectively. Th e agrochemicals industry is relatively consolidated. Leading crop protection companies, Syngenta AG, Bayer AG, Monsanto Company, BASF AG, Th e Dow Chemical Company and E. I. du Pont de Nemours and Company (DuPont), currently represent approximately 65 percent Growth distributors. In North America, we access the market through several major national and regional distributors and have our own sales and marketing organization in Canada. With the Cheminova acquisition, we now access a majority of the European markets through our own sales and marketing organizations. We access key Asian markets either through local independent distributors or our own sales and marketing organizations. Th rough these and other alliances, along with our own targeted marketing eff orts, access to novel technologies and our innovation initiatives, we expect to maintain and enhance our access in key agricultural and non-crop markets and develop new products that will help us continue to compete eff ectively. of the industry’s global sales. Th e next tier of agrochemical producers include FMC, ADAMA Agricultural Solutions, Ltd., Sumitomo Chemical Company Ltd., Nufarm Ltd., Platform Specialty Products Corporation, and United Phosphorous Ltd. FMC employs various diff erentiated strategies and competes with unique technologies focusing on certain crops, markets and geographies, while also being supported by a low-cost manufacturing model. Th e acquisition of Cheminova positions FMC among leading agrochemical producers in the world. Our complementary technologies will lead to improved formulation capabilities and a broader innovation pipeline, resulting in new and diff erentiated products. We will take advantage of enhanced market access positions and an expanded portfolio to deliver near-term growth. We will continue to grow by obtaining new and approved uses for existing product lines and acquiring, accessing, developing, marketing, distributing and/or selling complementary chemistries and related technologies in order to strengthen our product portfolio and our capabilities to eff ectively service our target markets and customers. Our growth eff orts focus on developing environmentally compatible and sustainable solutions that can eff ectively increase farmers’ yields and provide cost-eff ective alternatives to chemistries which may be prone to resistance. We are committed to providing unique, diff erentiated products to our customers by acquiring and further developing technologies as well as investing in innovation to extend product life cycles. Our external growth eff orts include product acquisitions, in-licensing of chemistries and technologies and alliances that bolster our market access, complement our existing product portfolio or provide entry into adjacent spaces. We have entered into a range of development and distribution agreements with other companies that provide access to new technologies and products which we can subsequently commercialize. 4 FMC CORPORATION - Form 10-K FMC Health and Nutrition PART I ITEM 1 Business HEALTH AND NUTRITION: REVENUE AND OPERATING MARGIN 20132015 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 762 828 22% 23% 785 25% 2013 Revenue 2014 2015 Operating Margin 40% 30% 20% 10% 0% Overview Our FMC Health and Nutrition segment, which represents 24 percent of our 2015 consolidated revenues, is focused on high-performance food ingredients, pharmaceutical excipients and Omega-3 oils. Th e majority of FMC Health and Nutrition sales are to customers in non-cyclical end markets. We believe our future growth in this segment will continue to be based on the value-added performance of these products and our research and development capabilities, as well as on the alliances and close working relationships we have developed with key global customers. Products and Markets HEALTH AND NUTRITION: 2015 REVENUE BY REGION 9% Latin America 25% Asia Paciﬁc HEALTH AND NUTRITION: CAPITAL EXPENDITURES AND DEPRECIATION AND AMORTIZATION 20132015 $120 $100 $80 $60 $40 $20 $0 34% North America 32% Europe, Middle East & Africa 97 87 45 51 39 35 2013 2014 2015 Capital Expenditures Depreciation and Amortization Our product off erings into nutrition markets principally provide texture, structure and physical stability (“TSPS”) solutions to thicken and stabilize certain food products. Our formulation ingredients serve the health excipient industry functioning as binders, disintegrants, suspending agents, and control-release compounds for the production of both solid and liquid pharmaceutical products. Th e majority of our functional ingredient product off erings are high purity Omega-3 products as well as certain alginate products which are considered to be active pharmaceutical ingredients. FMC Health and Nutrition is a supplier of microcrystalline cellulose (“MCC”), carrageenan, alginates, natural colorants, and omega-3, all naturally derived ingredients that have high value-added applications in the production of processed and convenience foods, oral dose form pharmaceuticals and nutraceuticals. MCC, processed from specialty grades of renewable hardwood and softwood pulp, provides binding and disintegrant properties for dry tablets and capsules and has unique functionality that improves the texture and stability of many nutrition products. Carrageenan and alginates, both processed from natural seaweeds, are used in a wide variety of food, pharmaceutical and oral care applications. Natural colorants are utilized in specialty products used in the food, beverage, personal care, nutrition and health excipient markets. Omega-3 is sourced from fi sh oils and use in other pharmaceutical and nutraceutical applications. FMC CORPORATION - Form 10-K 5 PART I ITEM 1 Business Industry Overview Nutritional Ingredients Th e industry is dispersed geographically, with sales in Europe, North America and Asia. Th e nutritional ingredients market is comprised of a large number of suppliers due to the broad spectrum of chemistries employed. Segment leadership, global position and investment in technology are key factors to sustaining profi tability. Th e top suppliers of TSPS ingredients include FMC, DuPont, J.M. Huber Corporation, Kerry Group plc and Cargill Incorporated. Health Excipients and Functional Health Ingredients Competitors tend to be grouped by chemistry. Our principal MCC competitors include J. Rettenmaier & Sôhne GmbH, Ming Tai Chemical FMC Lithium Co., Ltd., Asahi Kasei Corporation and Blanver Farmoquimica Ltda. While pricing pressure from low-cost producers is a common competitive dynamic, companies look to off set that pressure by providing the most reliable and broadest range of products and services. Our customers are pharmaceutical fi rms who depend upon reliable therapeutic performance of their drug products. In Omega-3, our competitors include DSM, BASF, Croda and other smaller producers. Competition has intensifi ed in this market over the past several years as many smaller producers attempt to enter in what is considered by many as an attractive growth market. Diff erentiation among higher end producers such as FMC is achieved through know-how to produce high concentration oils at high levels of purity. LITHIUM: REVENUE AND OPERATING MARGIN 20132015 LITHIUM: CAPITAL EXPENDITURES AND DEPRECIATION AND AMORTIZATION 20132015 257 11% 238 10% $300 $250 $200 $150 $100 $50 $0 223 5% 2013 Revenue 2014 2015 Operating Margin 20% 15% 10% 5% 0% $50 $40 $30 $20 $10 $0 45 21 15 14 17 12 2013 2014 2015 Capital Expenditures Depreciation and Amortization Overview Our FMC Lithium segment, represents seven percent of our 2015 consolidated revenues. While lithium is sold into a variety of end markets, we have focused our strategy on specialty products that require a high level of manufacturing and technical know-how to meet customer requirements. Th e electrochemical properties of lithium make it an ideal material for portable energy storage in high performance applications, including smart phones, tablets, laptop computers, military devices and other next-generation energy storage technologies. Lithium is a critical element in advanced batteries for use in hybrid electric, plug-in hybrids and all-electric vehicles. Organolithium products are highly valued in the polymer market as initiators in the production of synthetic rubbers and elastomers. Organolithiums are also sold to fi ne chemical and pharmaceutical customers who use lithium’s unique chemical properties to synthesize high value-added products. Industry Overview Our FMC Lithium serves a diverse group of markets. Our product off erings are primarily inorganic and generally have few cost-eff ective substitutes. A major growth driver for lithium in the future will be the rate of adoption of electric and hybrid electric batteries in automobiles. Most markets for lithium chemicals are global with signifi cant growth occurring both in Asia and North America, primarily driven by the development and manufacture of lithium ion batteries. Th ere are three key producers of lithium compounds: FMC, Albemarle Corporation (previously Rockwood Holdings, Inc.) and Sociedad Química y Minera de Chile S.A. Spodumene ore is also converted to lithium compounds by a large number of Chinese producers. We expect a few new producers to add capacity within the next 24 months. FMC and Albemarle Corporation are the primary producers of lithium specialty products. 6 FMC CORPORATION - Form 10-K PART I ITEM 1 Business oils that are all sourced on a global basis and purchased from selected global producers/suppliers. We extract ores used in FMC Lithium’s manufacturing processes from lithium brines in Argentina. Source and Availability of Raw Materials Raw materials used by FMC Agricultural Solutions, primarily processed chemicals, are obtained from a variety of suppliers worldwide. Raw materials used by FMC Health and Nutrition include various types of seaweed, specialty pulps, natural colorant raw materials and fi sh Patents We own a number of U.S. and foreign patents, trademarks and licenses that are cumulatively important to our business. We do not believe that the loss of any individual or combination of related patents, trademarks or licenses would have a material adverse eff ect on the overall business of FMC. Th e duration of our patents depends on their respective jurisdictions. Seasonality Th e seasonal nature of the crop protection market and the geographic spread of the FMC Agricultural Solutions business can result in signifi cant variations in quarterly earnings among geographic locations. FMC Agricultural Solutions’ products sold in the northern hemisphere (North America, Europe and parts of Asia) serve seasonal agricultural markets from March through September, generally resulting in earnings in the fi rst, second and third quarters. Markets in the southern hemisphere (Latin America and parts of the Asia Pacifi c region, including Australia) are served from July through February, generally resulting in earnings in the third, fourth and fi rst quarters. Th e remainder of our business is generally not subject to signifi cant seasonal fl uctuations. Competition We encounter substantial competition in each of our three business segments. We market our products through our own sales organization and through alliance partners, independent distributors and sales representatives. Th e number of our principal competitors varies from segment to segment. In general, we compete by providing advanced technology, high product quality, reliability, quality customer and technical service, and by operating in a cost-effi cient manner. Our FMC Agricultural Solutions segment competes primarily in the global chemical crop protection market for insecticides, herbicides and fungicides. Industry products include crop protection chemicals and, for certain major competitors, genetically engineered (crop biotechnology) products. Competition from generic agrochemical producers is signifi cant as a number of key product patents held industry-wide have expired in the last decade. In general, we compete as an innovator by focusing on product development, including novel formulations, proprietary mixes, and advanced delivery systems and by acquiring or licensing (mostly) proprietary chemistries or technologies that complement our product and geographic focus. We also diff erentiate ourselves by our global cost-competitiveness through our manufacturing strategies, establishing eff ective product stewardship programs and developing strategic alliances that strengthen market access in key countries and regions. Our FMC Health and Nutrition segment has signifi cant positions in markets that include alginate, carrageenan, and microcrystalline cellulose. We compete with both direct suppliers of cellulose and seaweed extract as well as suppliers of other hydrocolloids, which may provide similar functionality in specifi c applications. In microcrystalline cellulose, competitors are typically smaller than FMC, while in seaweed extracts (carrageenan and alginates) and Omega-3 fi sh oils, we compete with other broad-based chemical companies. FMC Lithium segment sells lithium-based products worldwide. We and our two most signifi cant competitors in lithium extract the element from naturally occurring lithium-rich brines located in the Andes Mountains of Argentina and Chile, which are believed to be the world’s most signifi cant and lowest cost sources of lithium. FMC CORPORATION - Form 10-K 7 PART I ITEM 1 Business Research and Development Expense We perform research and development in all of our segments with the majority of our eff orts focused in the FMC Agricultural Solutions segment. Th e development eff orts in the FMC Agricultural Solutions segment focus on developing environmentally sound solutions and new product formulations that cost-eff ectively increase farmers’ yields and provide alternatives to existing and new chemistries. Our research and development expenses in the last three years are set forth below: (in Millions) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium TOTAL Year Ended December 31, 2015 132.4 $ 7.8 3.5 143.7 $ 2014 111.8 $ 10.0 4.5 126.3 $ 2013 100.5 10.5 4.6 115.6 $ $ Environmental Laws and Regulations A discussion of environmental related factors can be found in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 10 “Environmental Obligations” in the notes to our consolidated fi nancial statements included in this Form 10-K. Employees We employ approximately 6,000 people with about 1,200 people in our domestic operations and 4,800 people in our foreign operations. Approximately 10 percent of our U.S.-based and 35 percent of our foreign-based employees, respectively, are represented by collective bargaining agreements. We have successfully concluded most of our recent contract negotiations without any material work stoppages. In those rare instances where a work stoppage has occurred, there has been no material eff ect on consolidated sales and earnings. We cannot predict, however, the outcome of future contract negotiations. In 2016, eight foreign collective-bargaining agreements and one U.S. collective- bargaining agreements will expire. Th ese contracts aff ect about 15 percent of our foreign-based employees and fi ve percent of our U.S employees. Securities and Exchange Commission Filings Securities and Exchange Commission (SEC) fi lings are available free of charge on our website, www.fmc.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are posted as soon as practicable after we furnish such materials to the SEC. In accordance with New York Stock Exchange (NYSE) rules, on May 18, 2015, we fi led a certifi cation signed by our Chief Executive Offi cer (CEO) that, as of the date of the certifi cation, he was unaware of any violation by FMC of the NYSE’s corporate governance listing standards. We also fi le with each Form 10-Q and our Form 10-K certifi cations by the CEO and Chief Financial Offi cer under sections 302 and 906 of the Sarbanes-Oxley Act of 2002. 8 FMC CORPORATION - Form 10-K PART I ITEM 1A Risk Factors ITEM 1A Risk Factors Below lists our risk factors updated for these events. Among the factors that could have an impact on our ability to achieve operating results and meet our other goals are: Industry Risks Pricing and volumes in our markets are sensitive to a number of industry specifi c and global issues and events including: • Capacity utilization - Our businesses are sensitive to industry capacity utilization. As a result, pricing tends to fl uctuate when capacity utilization changes occur within our industry. • Competition - All of our segments face competition, which could aff ect our ability to maintain or raise prices, successfully enter certain markets or retain our market position. Competition for our FMC Agricultural Solutions business, includes not only generic suppliers of the same pesticidal active ingredients, but also alternative proprietary pesticide chemistries, and crop protection technologies that are bred into or applied onto seeds. Increased generic presence in agricultural chemical markets has been driven by the number of signifi cant product patents and product data protections that have expired in the last decade, and this trend is expected to continue. • Changes in our customer base - Our customer base has the potential to change, especially when long-term supply contracts are renegotiated. Our FMC Lithium and FMC Health and Nutrition businesses are most sensitive to this risk. • Climatic conditions - Our FMC Agricultural Solutions markets are aff ected by climatic conditions, which could adversely impact crop pricing and pest infestations. Adverse weather conditions can impact our ability to extract lithium effi ciently from our lithium reserves in Argentina. Natural disasters can impact production at our facilities in various parts of the world. Th e nature of these events makes them diffi cult to predict. • Changing regulatory environment - Changes in the regulatory environment, particularly in the United States, Brazil, China, Argentina and the European Union, could adversely impact our ability to continue producing and/or selling certain products in our domestic and foreign markets or could increase the cost of doing so. Our FMC Agricultural Solutions business is most sensitive to this general regulatory risk given the need to obtain and maintain pesticide registrations in every country in which we sell our products. Compliance with changing laws and regulations may involve signifi cant costs or capital expenditures or require changes in business practice that could result in reduced profi tability. In the European Union, the regulatory risk specifi cally includes chemicals regulation known as REACH (Registration, Evaluation, and Authorization of Chemicals), which aff ects each of our business segments to varying degrees. Th e fundamental principle behind the REACH regulation is that manufacturers must verify through a special registration system that their chemicals can be marketed safely. • Geographic concentration - Although we have operations in most regions, the majority of our FMC Agricultural Solutions sales outside the United States have principally been to customers in Latin America, including Brazil, Argentina and Mexico. With the acquisition of Cheminova, we are expanding our international sales, particularly in Europe and key Asian countries such as India. Accordingly, developments in those parts of the world will generally have a more signifi cant eff ect on our operations. Our operations outside the United States are subject to special risks and restrictions, including: fl uctuations in currency values; exchange control regulations; changes in local political or economic conditions; governmental pricing directives; import and trade restrictions; import or export licensing requirements and trade policy; restrictions on the ability to repatriate funds; and other potentially detrimental domestic and foreign governmental practices or policies aff ecting U.S. companies doing business abroad. • Food and pharmaceutical regulation - Some of our manufacturing processes and facilities, as well as some of our customers, are subject to regulation by the U.S. Food and Drug Administration (FDA) or similar foreign agencies. Regulatory requirements of the FDA are complex, and any failure to comply with them including as a result of contamination due to acts of sabotage could subject us and/or our customers to fi nes, injunctions, civil penalties, lawsuits, recall or seizure of products, total or partial suspension of production, denial of government approvals, withdrawal of marketing approvals and criminal prosecution. Any of these actions could adversely impact our net sales, undermine goodwill established with our customers, damage commercial prospects for our products and materially adversely aff ect our results of operations. • Climate change regulation - Changes in the regulation of greenhouse gases, depending on their nature and scope, could subject our manufacturing operations to signifi cant additional costs or limits on operations. • Fluctuations in commodity prices - Our operating results could be signifi cantly aff ected by the cost of commodities such as raw materials and energy, including natural gas. We may not be able to raise prices or improve productivity suffi ciently to off set future increases in commodity pricing. Accordingly, increases in commodity prices may negatively aff ect our fi nancial results. Where practical, we use hedging strategies to address material commodity price risks, where hedge strategies are available on reasonable terms. We also use raw material supply agreements that contain terms designed to mitigate the risk of short-term changes in commodity prices. However, we are unable to avoid the risk of medium- and long-term increases. Additionally, fl uctuations in commodity prices could negatively impact our customers’ ability to sell their products at previously forecasted prices resulting in reduced customer liquidity. Inadequate customer liquidity could aff ect our customers’ abilities to pay for our products and, therefore, aff ect existing and future sales or our ability to collect on customer receivables. • Supply arrangements - Certain raw materials are critical to our production process. While we have made supply arrangements to meet planned operating requirements, an inability to obtain the critical raw materials or operate under contract manufacturing arrangements would adversely impact our ability to produce certain products. We FMC CORPORATION - Form 10-K 9 PART I ITEM 1A Risk Factors increasingly source critical intermediates and fi nished products from a number of suppliers. An inability to obtain these products or execute under contract sourcing arrangements would adversely impact our ability to sell products. In FMC Lithium, geological conditions can aff ect production of raw materials. • Economic and political change - Our business has been and could continue be adversely aff ected by economic and political changes in the markets where we compete including: infl ation rates, recessions, trade restrictions, foreign ownership restrictions and economic embargoes imposed by the United States or any of the foreign countries in which we do business; changes in laws, taxation, and regulations and the interpretation and application of these laws, taxes, and regulations; restrictions imposed by foreign governments through exchange controls or taxation policy; nationalization or expropriation of property, undeveloped property rights, and legal systems or political instability; other governmental actions; and other external factors over which we have no control. Economic and political conditions within foreign jurisdictions or strained relations between countries can cause fl uctuations in demand, price volatility, supply disruptions, or loss of property. In Argentina, continued infl ation and tightening of foreign exchange controls along with deteriorating economic and fi nancial conditions could adversely aff ect our business. In Brazil, which makes up a larger portion of our Agricultural Solutions business in Latin America since our acquisition of Cheminova in the second quarter of 2015, continued high infl ation and economic recession could continue to adversely aff ect our business. Operational Risks • Market access risk - Our results may be aff ected by changes in distribution channels, which could impact our ability to access the market. • Business disruptions - Although more recently, FMC Agricultural Solutions has engaged in pesticide active ingredient contract manufacturing rather than owned and operated FMC own manufacturing facilities, Cheminova owns and operates large-scale manufacturing facilities in Denmark and India. Th is will present us with additional operating risks, in that our operating results will be dependent in part on the continued operation of the various acquired production facilities and the ability to manufacture products on schedule. Interruptions at these facilities may materially reduce the productivity and profi tability of a particular manufacturing facility, or our business as a whole, during and after the period of such operational diffi culties. Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations and those of our contract manufacturers are subject to hazards inherent in chemical manufacturing and the related storage and transportation of raw materials, products and wastes. Th ese potential hazards include explosions, fi res, severe weather and natural disasters, mechanical failure, unscheduled downtimes, supplier disruptions, labor shortages or other labor diffi culties, information technology systems outages, disruption in our supply chain or manufacturing and distribution operations, transportation interruptions, chemical spills, discharges or releases of toxic or hazardous substances or gases, shipment of incorrect or off -specifi cation product to customers, storage tank leaks, other environmental risks, or other sudden disruption in business operations beyond our control as a result of events such as acts of sabotage, terrorism or war, civil or political unrest, natural disasters, pandemic situations and large scale power outages. Some of these hazards may cause severe damage to or destruction of property and equipment or personal injury and loss of life and may result in suspension of operations or the shutdown of aff ected facilities. • Information technology security risks - As with all enterprise information systems, our information technology systems could be penetrated by outside parties intent on extracting information, corrupting information, or disrupting business processes. Our systems have in the past been, and likely will in the future be, subject to unauthorized access attempts. Unauthorized access could disrupt our business operations and could result in failures or interruptions in our computer systems and in the loss of assets and could have a material adverse eff ect on our business, fi nancial condition or results 10 FMC CORPORATION - Form 10-K of operations. In addition, breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confi dential information about the company, our employees, our vendors, or our customers, could result in litigation and potential liability for us, damage our reputation, or otherwise harm our business, fi nancial condition, or results of operations. • Capital-intensive business - With the acquisition of Cheminova, our business is more capital intensive than it has been historically. We rely on cash generated from operations and external fi nancing to fund our growth and ongoing capital needs. Limitations on access to external fi nancing could adversely aff ect our operating results. Moreover, interest payments, dividends and the expansion of our business or other business opportunities may require signifi cant amounts of capital. We believe that our cash from operations and available borrowings under our revolving credit facility will be suffi cient to meet these needs in the foreseeable future. However, if we need external fi nancing, our access to credit markets and pricing of our capital will be dependent upon maintaining suffi cient credit ratings from credit rating agencies and the state of the capital markets generally. Th ere can be no assurances that we would be able to obtain equity or debt fi nancing on terms we deem acceptable, and it is possible that the cost of any fi nancings could increase signifi cantly, thereby increasing our expenses and decreasing our net income. If we are unable to generate suffi cient cash fl ow or raise adequate external fi nancing, including as a result of signifi cant disruptions in the global credit markets, we could be forced to restrict our operations and growth opportunities, which could adversely aff ect our operating results. • We may use our existing revolving credit facility to meet our cash needs, to the extent available. In the event of a default this credit facility or any of our senior notes, we could be required to immediately repay all outstanding borrowings and make cash deposits as collateral for all obligations the facility supports, which we may not be able to do. Any default under any of our credit arrangements could cause a default under many of our other credit agreements and debt instruments. Without waivers from lenders party to those agreements, any such default could have a material adverse eff ect on our ability to continue to operate. • Litigation and environmental risks - Current reserves relating to our ongoing litigation and environmental liabilities may ultimately prove to be inadequate. PART I ITEM 1A Risk Factors • Hazardous materials - We manufacture and transport certain materials that are inherently hazardous due to their toxic or volatile nature. While we take precautions to handle and transport these materials in a safe manner, if they are mishandled or released into the environment, they could cause property damage or result in personal injury claims against us. • Environmental Compliance - We are subject to extensive federal, state, local, and foreign environmental and safety laws. regulations, directives, rules and ordinances concerning, among other things, emissions in the air, discharges to land and water, and the generation, handling, treatment, disposal and remediation of hazardous waste and other materials. We may face liability arising out of the normal course of business, including alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our current or former facilities or chemicals that we manufacture, handle or own. We take our environmental responsibilities very seriously, but there is a risk of environmental impact inherent in our manufacturing operations and transportation of chemicals. Any substantial liability for environmental damage could have a material adverse eff ect on our fi nancial condition, results of operations and cash fl ows. • Inability to attract and retain key employees - Th e inability to recruit and retain key personnel or the unexpected loss of key personnel may adversely aff ect our operations. In addition, our future success depends in part on our ability to identify and develop talent to succeed senior management and other key members of the organization. Technology Risks • Our ability to compete successfully depends in part upon our ability to maintain a superior technological capability and to continue to identify, develop and commercialize new and innovative, high value-added products for existing and future customers. • Failure to continue to make process improvements to reduce costs could impede our competitive position. • Some of our competitors may secure patents on production methods or uses of products that may limit our ability to compete cost-eff ectively. Portfolio Management Risks • We continuously review our portfolio which includes the evaluation of potential business acquisitions that may strategically fi t our business and strategic growth initiatives. If we are unable to successfully integrate and develop our acquired businesses, we could fail to achieve anticipated synergies which would include expected cost savings and revenue growth. Failure to achieve these anticipated synergies, could materially and adversely aff ect our fi nancial results. In addition to strategic acquisitions we evaluate the diversity of our portfolio in light of our objectives and alignment with our growth strategy. In implementing this strategy we may not be successful in separating underperforming or non-strategic assets. Th e gains or losses on the divestiture of, or lost operating income from, such assets (e.g., divesting) may aff ect the company’s earnings. Moreover, we may Financial Risks incur asset impairment charges related to acquisitions or divestitures that reduce earnings. • In particular, an inability to successfully integrate and develop Cheminova as planned could result in our inability to achieve the synergies we have projected and could thereby cause our future results of operations to be materially and adversely worse than expected. We expect to generate synergies as a result of i) improving Cheminova operating cost-effi ciencies, ii) changing the mix of Cheminova’s sales from generic, lower margin products to more diff erentiated and higher margin products, and iii) rationalizing of the distribution channels used by FMC and Cheminova in overlapping European markets. However, there can be no assurances that we will be successful in achieving these planned synergies. • Deterioration in the global economy and worldwide credit and foreign exchange markets could adversely aff ect our business. A worsening of global or regional economic conditions or fi nancial markets could adversely aff ect our customers ability to meet the terms of sale or our suppliers ability to perform all their commitments to us. A slowdown in economic growth in our international markets, particularly Latin American regions, or a deterioration of credit or foreign exchange markets could adversely aff ect customers, suppliers and our overall business there. Customers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency, or sell their commodities at prevailing international prices, and we may be unable to collect receivables from such customers. Th e ongoing economic recession in Brazil has adversely impacted and could continue to adversely impact our business there. • We are an international company and face foreign exchange rate risks in the normal course of our business. We are particularly sensitive to the Brazilian real, the euro, the Argentine peso and the Chinese yuan. To a lesser extent, we are sensitive to the Mexican peso, the British pound sterling and several Asian currencies. Our acquisition of Cheminova has signifi cantly expanded our operations and sales in foreign countries and correspondingly increased our exposure to foreign exchange risks. During 2015, adverse changes in the Brazilian real exchange rate adversely impacted our fi nancial results and continued weakness in the real could continue to adversely impact our fi nancial results. • Our future eff ective tax rates may be materially impacted by numerous items including: a future change in the composition of earnings from foreign and domestic tax jurisdictions, as earnings in foreign jurisdictions are typically taxed at more favorable rates than the United States federal statutory rate; accounting for uncertain tax positions; business combinations; expiration of statute of limitations or settlement of tax audits; changes in valuation allowance; changes in tax law; and the potential decision to repatriate certain future foreign earnings on which United States taxes have not been previously accrued. FMC CORPORATION - Form 10-K 11 PART I ITEM 1B Unresolved Staﬀ Comments • We have signifi cant investments in long-lived assets and continually review the carrying value of these assets for recoverability in light of changing market conditions and alternative product sourcing opportunities. • Obligations related to our pension and postretirement plans refl ect certain assumptions. To the extent our plans’ actual experience diff ers from these assumptions, our costs and funding obligations could increase or decrease signifi cantly. ITEM 1B Unresolved Staﬀ Comments None. ITEM 2 Properties FMC leases executive offi ces in Philadelphia, Pennsylvania and operates 32 manufacturing facilities and mines in 19 countries. Our major research and development facilities are in Ewing, New Jersey and Shanghai, China. We have long-term mineral rights to the Salar del Hombre Muerto lithium reserves in Argentina. Our FMC Lithium division requires the lithium brine that is mined from these reserves, without which other sources of raw materials would have to be obtained. We believe our facilities are in good operating conditions. Th e number and location of our owned or leased production properties for continuing operations are: FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium TOTAL United States 2 2 1 5 Latin America & Canada 1 1 2 4 Western Europe 4 7 1 12 Asia-Pacifi c 5 3 3 11 Total 12 13 7 32 ITEM 3 Legal Proceedings Like hundreds of other industrial companies, we have been named as one of many defendants in asbestos-related personal injury litigation. Most of these cases allege personal injury or death resulting from exposure to asbestos in premises of FMC or to asbestos-containing components installed in machinery or equipment manufactured or sold by discontinued operations. Th e machinery and equipment businesses we owned or operated did not fabricate the asbestos- containing component parts at issue in the litigation, and to this day, neither the U.S. Occupational Safety and Health Administration nor the Environmental Protection Agency has banned the use of these components. Further, the asbestos-containing parts for this machinery and equipment were accessible only at the time of infrequent repair and maintenance. A few jurisdictions have permitted claims to proceed against equipment manufacturers relating to insulation installed by other companies on such machinery and equipment. We believe that, overall, the claims against FMC are without merit. As of December 31, 2015, there were approximately 8,000 premises and product asbestos claims pending against FMC in several jurisdictions. Since the 1980s, approximately 111,000 asbestos claims against FMC have been discharged, the overwhelming majority of which have been 12 FMC CORPORATION - Form 10-K dismissed without any payment to the claimant. Since the 1980s, settlements with claimants have totaled approximately $73.1 million. We intend to continue managing these asbestos-related cases in accordance with our historical experience. We have established a reserve for this litigation within our discontinued operations and believe that any exposure of a loss in excess of the established reserve cannot be reasonably estimated. Our experience has been that the overall trends in asbestos litigation have changed over time. Over the last several years, we have seen changes in the jurisdictions where claims against FMC are being fi led and changes in the mix of products named in the various claims. Because these claim trends have yet to form a predictable pattern, we are presently unable to reasonably estimate our asbestos liability with respect to claims that may be fi led in the future. See Note 1 “Principal Accounting Policies and Related Financial Information—Environmental Obligations,” Note 10 “Environmental Obligations” and Note 18 “Guarantees, Commitments and Contingencies” in the notes to our consolidated fi nancial statements included in this Form 10-K, the content of which are incorporated by reference to this Item 3. ITEM 4A Executive Oﬃ cers of the Registrant PART I In September 2015, EPA Region 3 fi led an administrative complaint against the Company, claiming that certain advertising and labeling regarding one of our pesticide products did not comply with the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”) and has calculated a proposed penalty in excess of $100,000. We disagree with EPA on whether a violation occurred and, if a violation did occur, the appropriate penalty calculation, and will defend ourselves vigorously. We do not expect that any penalty associated with fi nal judgment or other resolution would be material. ITEM 4 Mine Safety Disclosures Not Applicable. ITEM 4A Executive Oﬃ cers of the Registrant Information concerning directors, appearing under the caption “III. Board of Directors” in our Proxy Statement to be fi led with the SEC in connection with the Annual Meeting of Stockholders scheduled to be held on April 26, 2016 (the “Proxy Statement”), information concerning the Audit Committee, appearing under the caption “IV. Information About the Board of Directors and Corporate Governance- Committees and Independence of Directors-Audit Committee” in the Proxy Statement, information concerning the Code of Ethics, appearing under the caption “IV. Information About the Board of Directors and Corporate Governance—Corporate Governance-Code of Ethics and Business Conduct Policy” in the Proxy Statement, and information about compliance with Section 16(a) of the Securities Exchange Act of 1934 appearing under the caption “VII. Other Matters—Section 16(a) Benefi cial Ownership Reporting Compliance” in the Proxy Statement, is incorporated herein by reference in response to this Item 4A. Th e executive offi cers of FMC Corporation, the offi ces they currently hold, their business experience since at least January 1, 2010 and their ages as of December 31, 2015, are as follows: Name Pierre R. Brondeau Paul W. Graves Andrea E. Utecht Eric W. Norris Mark A. Douglas Th omas C. Deas, Jr. Age on 12/31/2015 58 44 67 49 53 65 Offi ce, year of election and other information President, Chief Executive Offi cer and Chairman of the Board (10-present); President and Chief Executive Offi cer of Dow Advanced Materials, a specialty materials company (08-09); President and Chief Operating Offi cer of Rohm and Haas Company, a predecessor of Dow Advanced Materials (07-08); Board Member, T.E. Connectivity Electronics (07– Present), Marathon Oil Company (10-present) Executive Vice President and Chief Financial Offi cer (12-present); Managing Director, Goldman Sachs Group (06-12) Executive Vice President, General Counsel and Secretary (01-present) President, FMC Health and Nutrition (15-present); Vice President, Global Business Director, FMC Lithium (12-14); Global Commercial Director, FMC Lithium (09-12) President, FMC Agricultural Solutions (12-present); President, Industrial Chemicals Group (11-12); Vice President, Global Operations and International Development (10-11); Vice President, President Asia, Dow Advanced Materials (09-10); Board Member, Quaker Chemical (13-present) Vice President and Treasurer (01-present) All offi cers are elected to hold offi ce for one year or until their successors are elected and qualifi ed. No family relationships exist among any of the above-listed offi cers, and there are no arrangements or understandings between any of the above-listed offi cers and any other person pursuant to which they serve as an offi cer. Th e above-listed offi cers have not been involved in any legal proceedings during the past ten years of a nature for which the SEC requires disclosure that are material to an evaluation of the ability or integrity of any such offi cer. FMC CORPORATION - Form 10-K 13 PART II ITEM 5 Market for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities FMC common stock of $0.10 par value is traded on the New York Stock Exchange (Symbol: FMC). Th ere were 3,006 registered common stockholders as of December 31, 2015. Presented below are the 2015 and 2014 quarterly summaries of the high and low prices of the FMC common stock. Common stock prices: High Low $ $ 2015 2014 First Quarter Second Quarter Th ird Quarter Fourth Quarter 43.37 33.29 52.74 $ 32.58 $ 61.11 $ 51.18 $ 64.72 $ 55.41 $ First Quarter Second Quarter Th ird Quarter Fourth Quarter 59.67 51.04 79.14 $ 69.50 $ 71.53 $ 56.98 $ 83.94 $ 67.31 $ $ $ Our Board of Directors has declared regular quarterly dividends since 2006; however, any future payment of dividends will depend on our fi nancial condition, results of operations, conditions in the fi nancial markets and such other factors as are deemed relevant by our Board of Directors. Total cash dividends of $86.4 million, $78.1 million and $73.6 million were paid in 2015, 2014 and 2013, respectively. FMC’s annual meeting of stockholders will be held at 2:00 p.m. on Tuesday, April 26, 2016, at Th e Top of the Tower, 1717 Arch Street, 50th Floor, Philadelphia, Pennsylvania. Notice of the meeting, together with proxy materials, will be mailed approximately 30 days prior to the meeting to stockholders of record as of March 1, 2016. Transfer Agent and Registrar of Stock: Wells Fargo Bank, N.A. Shareowner Services 1110 Centre Pointe Curve, Suite 101 Mendota Heights, MN 55120-4100 Phone: 1-800-401-1957 (651-450-4064 local and outside the U.S.) www.wellsfargo.com/shareownerservices or P.O. Box 64874 St. Paul, MN 55164-0856 14 FMC CORPORATION - Form 10-K PART II ITEM 5 Market for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities Stockholder Return Performance Presentation Th e graph that follows shall not be deemed to be incorporated by reference into any fi ling made by FMC under the Securities Act of 1933 or the Securities Exchange Act of 1934. Th e following Stockholder Performance Graph compares the fi ve-year cumulative total return on FMC’s Common Stock for the period from January 1, 2010 to December 31, 2015 with the S&P 500 Index and the S&P 500 Chemicals Index. Th e comparison assumes $100 was invested on December 31, 2010, in FMC’s Common Stock and in both of the indices, and the reinvestment of all dividends. FMC Corporation S&P 500 Index S&P 500 Chemicals Index $ $ $ 2010 100.00 $ 100.00 $ 100.00 $ 2011 108.45 $ 102.09 $ 98.78 $ 2012 148.54 $ 118.30 $ 121.89 $ 2013 192.91 $ 156.21 $ 160.20 $ 2014 147.33 $ 177.32 $ 177.26 $ 2015 102.79 179.76 169.94 STOCK PERFORMANCE CHART $300 $250 $200 $150 $100 $50 $0 2010 2011 2012 2013 2014 2015 FMC Corporation S&P 500 Index S&P 500 Chemicals Index Th e following table summarizes information with respect to the purchase of our common stock during the three months ended December 31, 2015: ISSUER PURCHASES OF EQUITY SECURITIES Publicly Announced Program(1) Period Maximum Dollar Value of Shares that May Yet be Purchased 250,000,000 250,000,000 250,000,000 TOTAL 250,000,000 (1) This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open Total Number of Shares Purchased(2) $ 14,538 339 $ — $ $ Total Dollar Amount Purchased — — — — Average Price Paid Per Share 34.56 37.80 — 34.63 October 1-31, 2015 November 1-30, 2015 December 1-31, 2015 Total Number of Shares Purchased — $ — — — $ 14,877 $ $ market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. (2) Represents reacquired shares for employees exercises in connection with the vesting and forfeiture of awards under our equity compensation plans. FMC CORPORATION - Form 10-K 15 PART II ITEM 6 Selected Financial Data ITEM 6 Selected Financial Data Selected Consolidated Financial Data Th e selected consolidated fi nancial and other data presented below for, and as of the end of, each of the years in the fi ve-year period ended December 31, 2015, are derived from our consolidated fi nancial statements. Th e selected consolidated fi nancial data should be read in conjunction with our consolidated fi nancial statements for the year ended December 31, 2015. Year Ended December 31, 2012 2014 2015 2013 2011 $ $ $ $ $ $ $ $ 9.5 19.5 14.6 14.1 447.7 538.7 414.8 487.7 307.5 293.9 489.0 (50.2) 2,343.6 2,677.6 3,130.7 3,258.7 3,276.5 419.1 311.1 71.1 382.2 453.5 345.8 89.9 435.7 363.8 307.6 14.5 322.1 503.2 371.6 (63.6) 308.0 (130.5) (177.9) 676.4 498.5 (in Millions, except per share data and ratios) Income Statement Data: Revenue Income (loss) from continuing operations before equity in (earnings) loss of affi liates, interest income and expense and income taxes Income (loss) from continuing operations before income taxes Income (loss) from continuing operations Discontinued operations, net of income taxes(1) NET INCOME Less: Net income attributable to noncontrolling interest NET INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS Amounts attributable to FMC stockholders: Continuing operations, net of income taxes Discontinued operations, net of income taxes NET INCOME Basic earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations NET INCOME Diluted earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations NET INCOME Balance Sheet Data: Total assets Long-term debt Other Data: Ratio of earnings (loss) to fi xed charges(2) Cash dividends declared per share (1) Discontinued operations, net of income taxes includes our discontinued FMC Peroxygens and Alkali businesses and other historical discontinued gains and losses related to adjustments to our estimates of our retained liabilities for environmental exposures, general liability, workers’ compensation, postretirement benefit obligations, legal defense, property maintenance and other costs, losses for the settlement of litigation and gains related to property sales. Amounts in 2015 include the divestiture gain associated with the Alkali sale while 2014 and 2013 included charges associated with the sale of the Peroxygens business. (187.4) 676.4 489.0 365.1 (71.2) 293.9 (1.40) 5.06 3.66 2.69 (0.53) 2.16 2.68 (0.52) 2.16 (1.40) 5.06 3.66 341.3 74.9 416.2 308.9 57.0 365.9 298.2 9.3 307.5 5,326.0 1,140.9 5,224.6 1,178.2 6,325.9 2,037.8 4,366.2 906.8 3,734.4 789.5 2.46 0.54 3.00 2.47 0.54 3.01 2.16 0.41 2.57 2.16 0.39 2.55 2.22 0.07 2.29 2.23 0.07 2.30 10.7x 0.300 10.8x 0.405 6.3x 0.600 11.2x 0.540 416.2 365.9 (0.4)x 0.660 16.3 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ (2) In calculating this ratio, earnings consist of income (loss) from continuing operations before income taxes plus interest expense, net of amortization expense related to debt discounts, fees and expenses, amortization of capitalized interest, interest included in rental expenses (assumed to be one-third of rent) and Equity in (earnings) loss of affiliates. Fixed charges consist of interest expense, amortization of debt discounts, fees and expenses, interest capitalized as part of fixed assets and interest included in rental expenses. 16 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Information Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: We and our representatives may from time to time make written or oral statements that are “forward-looking” and provide other than historical information, including statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations within, in our other fi lings with the SEC, or in reports to our stockholders. In some cases, we have identifi ed forward-looking statements by such words or phrases as “will likely result,” “is confi dent that,” “expect,” “expects,” “should,” “could,” “may,” “will continue to,” “believe,” “believes,” “anticipates,” “predicts,” “forecasts,” “estimates,” “projects,” “potential,” “intends” or similar expressions identifying “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words and phrases. Such forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. Th ese statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially diff erent from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. Th ese factors include, among other things, the risk factors listed in Item 1A of this Form 10-K. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We are a diversifi ed chemical company serving agricultural, consumer and industrial markets globally with innovative solutions, applications and market-leading products. We operate in three distinct business segments: FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium. Our FMC Agricultural Solutions segment develops, markets and sells all three major classes of crop protection chemicals – insecticides, herbicides and fungicides. Th ese products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as in non-agricultural markets for pest control. Th e FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients, and functional health ingredients. Nutritional ingredients are used to enhance texture, color, structure and physical stability. Health excipients are used for binding, encapsulation and disintegrant applications. Functional health ingredients are used as active ingredients in nutraceutical and pharmaceutical markets. Our FMC Lithium segment manufactures lithium for use in a wide range of lithium products, which are used primarily in energy storage, specialty polymers and chemical synthesis application. 2015 Highlights Th e following are the more signifi cant developments in our businesses during the year ended December 31, 2015: • Revenue of $3,276.5 million in 2015 increased $17.8 million or one percent versus last year. Th e increase in revenue was attributable to FMC Agricultural Solutions as a result of additional revenue from the acquisition of Cheminova. Th is was off set by signifi cant unfavorable currency impacts, primarily in our Agricultural Solutions segment within Brazil. A more detailed review of revenues by segment is included under the section entitled “Results of Operations”. On a regional basis, sales in Latin America decreased by18 percent, sales in North America were relatively fl at, sales in Asia were up 13 percent and sales in Europe, Middle East and Africa (EMEA) increased by 29 percent. • Our gross margin, excluding acquisition-related charges, of $1,133.2 million decreased approximately $82 million or approximately seven percent versus last year. Gross margin as a percent of revenue is approximately 34.5 percent versus 37.3 percent in 2014. Th e reduction in gross margin was due to lower volumes in Brazil within FMC Agricultural Solutions and unfavorable currency impact and product mix. Th e gross margin percentage decline was impacted by the same factors. • Selling, general and administrative expenses increased 25 percent from $589.8 million to $737.9 million primarily related to acquisition related charges. Selling, general and administrative expenses, excluding non- operating pension and postretirement charges and acquisition-related charges, of $470.1 million increased $22.6 million or approximately fi ve percent. Th e increased was driven primarily by the addition of the Cheminova acquisition. Non-operating pension and postretirement charges and acquisition-related charges are presented in our Adjusted Earnings Non-GAAP fi nancial measurement below under the section titled “Results of Operations”. • Research and Development expenses of $143.7 million increased $17.4 million or 13.8 percent. • Adjusted earnings after-tax from continuing operations attributable to FMC stockholders of $332.6 million decreased approximately $94 million or 22 percent due to lower results in the FMC Agricultural Solutions primarily within Brazil. See the disclosure of our Adjusted Earnings Non-GAAP fi nancial measurement below under the section titled “Results of Operations”. FMC CORPORATION - Form 10-K 17 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations • During 2015, we incurred signifi cant restructuring and other charges. Th e increase was primarily the result of charges associated with the integration of Cheminova as well as charges within Health and Nutrition associated with the mothballing of Seal Sands facility in the UK. Charges associated with the integration of Cheminova also included the loss on sale of $64.5 million associated with the sale of our generic crop protection business in Brazil. Other 2015 Highlights During 2015, we closed on two signifi cant transactions - the divestiture of our Alkali Chemicals division and the acquisition of Cheminova. Th is marked the completion of our transformation to a technology-driven specialty company with leading market positions across agriculture, nutrition, pharmaceutical and specialty lithium applications. In Agricultural Solutions, the acquisition of Cheminova strengthened our technology pipeline, brought greater regional balance, broadened our market access and expanded our portfolio. Th e acquisition and 2016 Outlook We expect to deliver earnings growth in all businesses in 2016, and will continue to position FMC fi rmly on the path of growth by leveraging the company’s unique business model that has defi ned our success. We remain a technology-driven company with low-cost asset light operations, a unique business research and development model that balances short-and mid-term development with long-term innovation, and global scale with strong regional expertise to support local customers. integration of Cheminova combined with the actions we have taken to restructure our Agricultural Solutions operations in Brazil have positioned FMC to better address current market conditions. In Health and Nutrition, we focused on driving higher margins by capturing high-value commercial opportunities across our existing portfolio and by the implementation of Manufacturing Excellence programs and process technology improvements. And in Lithium, we continued to execute on our strategy of growing our diff erentiated, downstream specialty business to take advantage of favorable end market demand. Finally, 2015 was also a year marked by signifi cant foreign exchange volatility which impacted our results negatively as well as diffi cult conditions across the global agriculture market. To address this, we took decisive actions throughout the year to address these challenges which included accelerating the integration of Cheminova, restructuring our Agricultural Solutions business in Brazil, exercising discipline on pricing and aggressively controlling costs across the Company. Please see segment discussions under the section entitled “Results of Operations” for 2016 outlook for each segment. On a consolidated basis we expect our 2016 adjusted earnings per share to be between $2.50 and $2.80. 18 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations—2015, 2014 and 2013 Overview Th e following presents a reconciliation of our segment operating profi t to the net income attributable to FMC stockholders as seen through the eyes of our management. For management purposes, we report the operating performance of each of our business segments based on earnings before interest and income taxes excluding corporate expenses, other income (expense), net and corporate special income/(charges). SEGMENT RESULTS RECONCILIATION (in Millions) Revenue FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium TOTAL Income (loss) from continuing operations before income taxes FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium Segment operating profi t Corporate and other Operating profi t before the items listed below Interest expense, net Corporate special (charges) income: Restructuring and other (charges) income(1) Non-operating pension and postretirement charges(2) Business separation costs(3) Acquisition-related charges(4) Year Ended December 31, 2015 2014 2013 $ $ $ $ $ $ $ $ 2,252.9 785.5 238.1 3,276.5 363.9 194.7 23.0 581.6 (62.4) 519.2 (80.1) $ $ $ $ 2,173.8 828.2 256.7 3,258.7 497.8 187.9 27.2 712.9 (71.4) 641.5 (51.2) (244.0) (35.3) — (290.3) (47.4) 676.4 (9.5) 489.0 (56.4) (10.5) (23.6) (136.0) (56.2) 14.5 (14.6) 307.5 2,145.7 762.0 223.0 3,130.7 539.0 169.5 12.0 720.5 (82.4) 638.1 (36.3) (50.5) (38.1) — (10.0) (131.6) (63.6) (14.1) 293.9 Provision for income taxes Discontinued operations, net of income taxes Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS (1) See Note 7 to the consolidated financial statements included within this Form 10-K for details of restructuring and other (charges) income by segment: $ $ $ Years Ended December 31 (in Millions) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium Corporate 2013 (32.6) (1.0) (9.0) (7.9) (50.5) (2) Our non-operating pension and postretirement costs are defined as those costs related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These costs are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance and we consider these costs to be outside our operational performance. We exclude these non-operating pension and postretirement costs from our segments as we believe that removing them provides a better understanding of the underlying profitability of our businesses, provides increased transparency and clarity in the performance of our retirement plans and enhances period-over-period comparability. We continue to include the service cost and amortization of prior service cost in our operating segments noted above. We believe these elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees. 2015 (123.7) $ (93.8) (2.7) (23.8) (244.0) $ 2014 4.5 (14.1) — (46.8) (56.4) $ RESTRUCTURING AND OTHER (CHARGES) INCOME $ $ $ (3) Charges are associated with the previously planned separation of our FMC Corporation into two independent public companies. On September 8, 2014, we announced that we would no longer proceed with the planned separation. At that time we announced the acquisition of Cheminova. See Note 3 within these consolidated financial statements included within this Form 10-K for more information. These charges are included within “Business separation costs” on our consolidated income statement. These costs were primarily related to professional fees associated with separation activities within the finance and legal functions through September 8, 2014. FMC CORPORATION - Form 10-K 19 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations (4) Charges related to the expensing of the inventory fair value step-up resulting from the application of acquisition purchase accounting, legal and professional fees and gains or losses on hedging purchase price associated with the planned or completed acquisitions. See Note 3 for details. Amounts represent the following: (in Millions) Acquisition related charges - Cheminova Legal and professional fees(a) Inventory fair value step-up amortization(b) Unrealized loss/(gain) on hedging purchase price(a) Acquisition related charges - Epax Legal and professional fees(a) Inventory fair value step-up amortization(b) Twelve Months Ended December 31, 2015 2014 $ $ 60.4 57.8 172.1 — — 290.3 32.2 — 99.6 — 4.2 136.0 $ $ 2013 — — — 4.8 5.2 10.0 ACQUISITION-RELATED CHARGES (a) On the consolidated statements of income, these charges are included in “Selling, general and administrative expenses.” (b) On the consolidated statements of income, these charges are included in “Costs of sales and services.” $ $ ADJUSTED EARNINGS RECONCILIATION Th e following chart, which is provided to assist the readers of our fi nancial statements, depicts certain after-tax charges (gains). Th ese items are excluded from the measures we use to evaluate business performance and determine certain performance-based compensation. Th ese after-tax items are discussed in detail within the “Other results of operations” section that follows. Additionally, the chart below discloses our Non-GAAP fi nancial measure “Adjusted after-tax earnings from continuing operations attributable to FMC stockholders” reconciled from the GAAP fi nancial measure “Net income (loss) attributable to FMC stockholders.” We believe that this measure provides useful information about our operating results to investors. We also believe that excluding the eff ect of restructuring and other income and charges, non-operating pension and postretirement charges, certain Non-GAAP tax adjustments from operating results and discontinued operations allows management and investors to compare more easily the fi nancial performance of our underlying businesses from period to period. Th is measure should not be considered as a substitute for net income (loss) or other measures of performance or liquidity reported in accordance with GAAP. Years Ended December 31, (in Millions) Net income attributable to FMC stockholders (GAAP) Corporate special charges (income), pre-tax Income tax expense (benefi t) on Corporate special charges (income) $ 2015 489.0 569.6 (144.9) 424.7 (676.4) 95.3 $ $ 2014 307.5 226.5 (84.1) 142.4 (9.3) (13.8) 2013 293.9 98.6 (36.4) 62.2 71.2 14.6 Corporate special charges (income), net of income taxes Discontinued operations attributable to FMC Stockholders, net of income taxes Non-GAAP tax adjustments(1) ADJUSTED AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO FMC STOCKHOLDERS (NON-GAAP) (1) We exclude the GAAP tax provision, including discrete items, from the Non-GAAP measure of income, and instead include a Non-GAAP tax provision based upon the annual Non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax items including, but are not limited to: income tax expenses or benefits that are not related to ongoing business operations in the current year; unusual or infrequently occurring items; tax adjustments associated with fluctuations in foreign currency remeasurement of certain foreign operations; certain changes in estimates of tax matters related to prior fiscal years; certain changes in the realizability of deferred tax assets; and changes in tax law. Management believes excluding these discrete tax items assists investors and securities analysts in understanding the tax provision and the effective tax rate related to ongoing operations thereby providing investors with useful supplemental information about FMC’s operational performance. 332.6 426.8 441.9 $ $ $ In the discussion below, please refer to our chart titled “Segment Results Reconciliation” within the Results of Operations section. All comparisons are between the periods unless otherwise noted. Segment Results For management purposes, segment operating profi t is defi ned as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales and services, selling, general and administrative expenses (“SG&A”) and research and development expenses (“R&D”). We have excluded the following items from segment operating profi t: corporate staff expense, interest income and expense associated with corporate debt facilities and investments, income taxes, gains (or losses) on divestitures of businesses, restructuring and other charges (income), non-operating pension and postretirement charges, investment gains and losses, loss on extinguishment of debt, asset impairments, Last-in, First-out (“LIFO”) inventory adjustments, acquisition/divestiture related charges, business separation costs and other income and expense items. Information about how each of these items relates to our businesses at the segment level and results by segment are discussed below and in Note 19 to our consolidated fi nancial statements included in this Form 10-K. 20 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations FMC Agricultural Solutions (in Millions) Revenue Operating Profi t 2015 vs. 2014 Revenue of $2,252.9 million increased approximately four percent versus the prior year period due to revenue from the Cheminova acquisition on April 20, 2015. Operating profi t of $363.9 million decreased approximately 27 percent compared to the year-ago period. Th is decline was primarily driven by market conditions and currency movements in Brazil. Refer to the FMC Agricultural Solutions Pro Forma Financial Results with Cheminova section below for further discussion. For 2016, full-year segment revenue is expected to be approximately $2.3 billion to $2.5 billion and full-year segment earnings are expected to be in the range of $380 million to $420 million. In Europe, we expect our key markets to be broadly fl at compared to last year, although we expect to see higher growth across Eastern Europe. In North America, we expect the challenging market conditions will continue in 2016 given elevated channel inventory levels and projected lower farm incomes. As a result, we expect the market in North America to be down in 2016. Across Asia, we expect the market to be mixed, depending on the country. However, overall, we expect the region to be up slightly in 2016 assuming more normal pest pressures and weather conditions. Finally, turning to Latin America, market conditions in Argentina, Mexico and Columbia are expected to remain favorable, with growth in weed resistant acres and increasing acreage of niche crops. We expect the market in Brazil to be down again in 2016. Channel inventory levels are expected to remain elevated in 2016. However, we expect to see an improvement in market fundamentals for sugarcane and cotton. 2014 vs. 2013 Revenue of $2,173.8 million increased approximately one percent versus the prior year period due to higher sales in North America, Asia and EMEA off set by a decline in sales in Latin America. Sales in Latin America of $1,120.7 million decreased fi ve percent due to weak demand conditions in Brazil, particularly in sugarcane and cotton segments, as drought and lower planted area reduced herbicide and insecticide demand. Th is was partially off set by growth in other Latin FMC Agricultural Solutions Pro Forma Financial Results Year Ended December 31, $ 2015 2,252.9 363.9 $ 2014 2,173.8 497.8 $ 2013 2,145.7 539.0 American countries such as Argentina and Mexico as FMC gained market share. Sales in North America of $560.2 million increased 11 percent primarily driven by strong demand for pre-emergent herbicides into soybeans and growth from new product introductions into various crop segments. Revenue in Asia of $343.6 million increased nine percent refl ecting sales growth in Australia, Pakistan, Korea and China. Sales in Europe, Middle East and Africa (EMEA) increased seven percent to $149.3 million primarily due to higher herbicide volumes. FMC Agricultural Solutions’ operating profi t of $497.8 million decreased approximately eight percent compared to the year-ago period, refl ecting relatively fl at sales, unfavorable currency impacts, increases to SG&A as well as additional planned R&D investments and changes in product mix. SG&A costs were approximately $2 million higher and R&D costs were approximately $12 million higher than the prior year period with spending on marketing, sales and technology investments. FMC Agricultural Solutions Pro Forma Financial Results with Cheminova In the second quarter of 2015 we began to present pro forma combined results for the FMC Agricultural Solutions segment for 2015 and 2014. We believe that reviewing our operating results by combining actual and pro forma results for the FMC Agricultural Solutions segment for 2015 and 2014 is more useful in identifying trends in, or reaching conclusions regarding, the overall operating performance of this segment. Our pro forma segment information will include adjustments as if the Cheminova transaction had occurred on January 1, 2014. Our pro forma data will also be adjusted for the eff ects of acquisition accounting but will not include adjustments for costs related to integration activities, cost savings or synergies that might be achieved by the combined businesses. Pro forma amounts to be presented will not necessarily be indicative of what our results would have been had we operated Cheminova since January 1, 2014, nor our future results. We believe that reviewing our operating results by combining actual and pro forma results for the FMC Agricultural Solutions segment for these interim periods is more useful in identifying trends in, or reaching conclusions regarding, the overall operating performance of the segment. Twelve Month Ended December 31, 2014 2015 (in Millions) Revenue Revenue, FMC Agricultural Solutions, as reported(1) Revenue, Cheminova, pro forma(2) PRO FORMA COMBINED, REVENUE(3) Operating Profi t Operating Profi t, FMC Agricultural Solutions, as reported(1) Operating Profi t, Cheminova, pro forma(2) PRO FORMA COMBINED, OPERATING PROFIT(3) (1) As reported amounts are the results of operations of FMC Agricultural Solutions, including the results of the Cheminova acquisition from April 21, 2015 onward. (2) Cheminova pro forma amounts include the historical results of Cheminova, prior to April 21, 2015. These amounts also include adjustments as if the Cheminova transaction had occurred on January 1, 2014, including the effects of acquisition accounting. The pro forma amounts do not include adjustments for expenses related to integration activities, cost savings or synergies that may have been or may be achieved by the combined segment. 2,252.9 $ 362.0 2,614.9 $ 363.9 $ 19.9 383.8 $ 2,173.8 1,225.7 3,399.5 497.8 38.2 536.0 $ $ $ $ (3) The pro forma combined amounts are not necessarily indicative of what the results would have been had we acquired Cheminova on January 1, 2014 or indicative of future results. FMC CORPORATION - Form 10-K 21 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations FMC Agricultural Solutions Pro Forma Combined Revenue by Region(1) Twelve Month Ended December 31, 2014 (in Millions) 639.6 Europe, Middle East and Africa (EMEA) 658.3 North America 1,488.3 Latin America 613.3 Asia TOTAL 3,399.5 (1) The pro forma combined revenue by region amounts are not necessarily indicative of what the results would have been had we acquired Cheminova on January 1, 2015 557.5 $ 595.2 965.3 496.9 2,614.9 $ $ $ 2014 or indicative of future results. Pro Forma Combined Results - 2015 vs. 2014 Pro Forma combined revenue of $2,614.9 million decreased approximately 23 percent versus the prior year period. Favorable pricing impacted revenue by five percent in 2015 compared to the same period in 2014; however, the price increases only partially offset the unfavorable impact of foreign currency movements and lower volumes. Unfavorable currency negatively impacted revenue by 11 percent while volumes impacted revenue by 16 percent. Most of this decline was experienced in Latin America, primarily Brazil. Lower volume was also a result of the deliberate action to reduce third party resales also in Brazil. These reduced third party sales were partially the result of the sale of our Consagro business. Pro forma combined operating profit of $383.8 million decreased approximately 28 percent compared to the year-ago period. The significant movement in foreign currency rates compared to last year, particularly the real, was the main driver of the decline in operating profit as price increases in local currencies were not enough to offset the impact of foreign currency. During 2015, the Brazilian real depreciated significantly versus the U.S. dollar. As a result, foreign currency contributed 55% to the decline in year over year pro forma combined operating profit while to a lesser extent lower volumes contributed to a 16 percent impact. Higher pricing and mix partially offset these declines by 23 percent while lower costs primarily selling, general and administrative combined with lower research and development costs improved profits year over year by 19 percent. These lower costs were driven by cost savings driven by synergies associated with the Cheminova acquisition as well as reduced spending primarily in Brazil to address with near- term market conditions. During the year, we announced several targeted measures to reduce operating costs and reorganize our operations in Brazil to align the business with near-term market conditions. These measures included: • Enhancing our focus on proprietary technology platforms and diff erentiated products, and rationalizing our product off erings to FMC Health and Nutrition (in Millions) Revenue Operating Profi t eliminate low-margin sales. Th is portfolio rationalization program, including the sale of our generic subsidiary, Consagro, reduced 2015 proforma combined operating profi t by $48 million compared to 2014. Th is will enable us to further reduce the region’s operating costs and enhance our potential to deliver higher future earnings and return on capital. At the completion of this reorganization, FMC’s workforce in Brazil will be approximately half its size compared to 2014. All of these actions were substantially completed by December 31, 2015. • Th e Cheminova integration continues to be accelerated and additional programs to achieve further cost savings are being implemented. Certain Regulatory Issues In late December 2015, the Brazilian National Health Surveillance Agency (ANVISA) issued a Technical Note recommending banning of carbofuran as a registered pesticide in Brazil. We disagree with ANVISA’s assessment of carbofuran and its regulatory recommendation. Under the Brazilian regulatory process, FMC and other interested persons may submit, in response to the Technical Note, comments and data for consideration by ANVISA as well as the Brazilian Ministries of Agriculture and Environment. Any final decision regarding the continued registration of carbofuran will require concurrence of all three government agencies before the regulatory action is effective. We are preparing, and will submit, information in support of carbofuran for consideration by the government agencies. The agencies will issue their decision after consideration of all submitted information. We do not expect any material sales impact due to this regulatory review in Brazil during 2016. We intend to defend vigorously all our products in the U.S., EU and other countries as our pesticide products are reviewed in the ordinary course of regulatory programs during 2016 as part of the ongoing cycle of re-registration of our pesticide products around the world. $ Year Ended December 31, 2015 785.5 $ 194.7 2014 828.2 $ 187.9 2013 762.0 169.5 2015 vs. 2014 Revenue was $785.5 million, a decrease of approximately fi ve percent versus the prior-year period. Unfavorable foreign currency impacts, primarily a weaker euro, decreased revenue by approximately fi ve percent with volume, price and mix fl at in the aggregate compared to prior year. Volume was slightly positive as lower volume in carrageenan and alginates were off set by growth in the MCC family of products in both pharmaceuticals and food end markets. Pricing for 2015 as compared to 2014 was slightly positive and mix was slightly negative. 22 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Segment operating profi t of $194.7 million increased approximately four percent versus the year ago period driven by the higher volumes discussed in the preceding paragraph, the operating profi t impact of improved price and mix and lower manufacturing costs as well as lower selling, general and administrative costs, partially off set by unfavorable currency. Volumes and price mix improved operating profi t by three percent and two percent, respectively while lower manufacturing costs and lower selling, general and administrative costs improved profi ts by two percent and three percent, respectively. Th e reduction in these costs was driven by various manufacturing initiatives to improve profi tability as well as the benefi ts of restructuring activities and cost control initiatives. Finally, unfavorable currency negatively impacted results by six percent year over year. Segment revenue for the full year of 2016 is anticipated to be approximately $775 million to $825 million, while full-year segment earnings are expected to be between $198 million and $208 million. Earnings growth in 2016 is expected to be driven primarily by the benefi ts of operational improvements, along with continued growth in demand for excipients and nutritional products across emerging markets. 2014 vs. 2013 Revenue was $828.2 million, an increase of approximately nine percent versus the prior-year period. Revenue from higher volumes in health markets, including acquisitions completed in 2013, and higher volumes in overall nutrition markets increased sales by approximately six percent and two percent, respectively. Favorable pricing and mix, primarily in nutrition-related products increased sales by one percent. Segment operating profi t of $187.9 million increased by 11 percent versus the prior-year period driven by higher demand for pharmaceutical excipients and texture and stability products in North America. Th ese were slightly off set by increased raw material costs, particularly seaweed, and reduced demand for nutrition products into the Chinese beverage market. FMC Lithium (in Millions) Revenue Operating Profi t $ Year Ended December 31, 2015 238.1 $ 23.0 2014 256.7 $ 27.2 2013 223.0 12.0 2015 vs. 2014 Revenue of $238.1 million decreased by approximately seven percent versus the prior-year period driven by lower volumes of upstream products and weaker foreign currencies. Th ese impacted revenues by seven percent and three percent, respectively. Th is was partially off set by favorable pricing which impacted revenue by three percent. Segment operating profi t of $23.0 million decreased approximately 15 percent versus the year ago period. Pricing impacted operating profi t favorably by approximately $7 million while volume had about an equal negative impact on operating profi t. Foreign currency, primarily the Argentine peso and the euro, impacted operating profi t by approximately $9 million. Th is was partially off set by manufacturing cost savings and other miscellaneous items. Demand for lithium remains strong and pricing trends continue to be favorable. Full year segment revenue is expected to be approximately $240 to 260 million while segment operating profi t is expected to be between $33 and $43 million for the full year of 2016, an increase of 65 percent over 2015 at the mid-point of the range. 2014 vs. 2013 Lithium revenues of $256.7 million increased 15 percent compared to the prior year. Higher production volume that allowed for additional sales, particularly for energy storage applications, contributed a 19 percent increase in revenue Th is was partially off set by lower pricing which negatively impacted revenues by four percent. Corporate and other Corporate expenses are included as a component of the line item “Selling, general and administrative expenses” except for last in, fi rst- out (LIFO) related charges that are included as a component of “Cost of sales and other services” on our consolidated statements of income. 2015 vs. 2014 Corporate and other expenses of $62.4 million decreased by $9.0 million from $71.4 million in the same period in 2014. Th e decrease is driven primarily by reduced LIFO inventory expense of approximately $7 million. Th e reduced LIFO expense was driven by lower infl ation rates applied to the inventory subject to LIFO calculations. Excluding the LIFO reductions, corporate staff expenses and incentive payments were fl at year over year. 2014 vs. 2013 Corporate and other expenses of $71.4 million decreased by $11.0 million from $82.4 million in the same period in 2013. Th e decrease period over period is primarily due to a decrease of $5.1 million in employees’ incentive accruals and a decrease of $4.6 million in pension service charges. Reduced pension service charges are primarily driven by the higher discount rate used to calculate the 2014 expense. Interest expense, net Segment operating profi t of $27.2 million increased approximately 103 percent versus the prior year. Operating profi t was driven by higher volumes. Th e increase was partially off set by unfavorable currency and operating costs associated with our Argentine operations. 2015 vs. 2014 Interest expense, net of $80.1 million increased by approximately 56 percent compared to $51.2 million in 2014. Th e increase was primarily due to our borrowings under our senior unsecured Term FMC CORPORATION - Form 10-K 23 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Loan facility. Th e proceeds of these borrowings were used to fi nance the acquisition of Cheminova as well as to pay costs, fees and expenses incurred in connection with the acquisition and the term loan facility. See Note 12 to our consolidated fi nancial statements included in this Form 10-K for more information. 2014 vs. 2013 Interest expense, net for 2014 of $51.2 million increased approximately 41 percent as compared to 2013 of $36.3 million. Th e increase is primarily driven by the issuance of $400 million in Senior Notes in November 2013. Th e $400 million debt issuance, with an interest rate of 4.10 percent, was use to fund the acquisition of Epax and working capital requirements of our businesses. Corporate special (charges) income Restructuring and other (charges) income Our restructuring and other (charges) income are comprised of restructuring, assets disposals and other charges (income) as described below: (in Millions) Restructuring Charges and Asset Disposals Other Charges (Income), Net TOTAL RESTRUCTURING AND OTHER CHARGES 2015 Restructuring and asset disposal charges in 2015 totaled $244.0 million. Included in this were signifi cant charges totaling $118.3 million associated with the Cheminova restructuring that was implemented as part of the integration of Cheminova into our existing FMC Agricultural Solutions segment. Th e Cheminova charges included those associated with the sale of Consagro, which amounted to $64.5 million. Restructuring and asset disposal charges also include charges associated with various activities in Health and Nutrition of $93.6 million. Th e majority of these charges, are from the loss on sale of our Pectin business of $12 million as well as asset write downs associated with the mothballing of our Seal Sands plant equaling $70.5 million. Th e Seal Sands plant, in the UK, was mothballed in 2015 due to a lack of demand for the Omega-3 pharmaceuticals products that were manufactured at that facility. Other charges (income) net in 2015 consisted of environmental charges of $21.7 million, the impacts of the Argentina currency devaluation in December of 2015 of $10.7 million, and $20.5 million of expenses associated with acquired in-process research and development activity. Partially off setting these amounts was a gain of $26.6 million related to the sale of our remaining ownership interest in a Belgian-based pesticide distribution company, Belchim Crop Protection N.V. (“Belchim”). See Note 7 within the consolidated fi nancial statements included in this Form 10-K for more information. 2014 Restructuring and asset disposal charges in 2014 of $17.2 million were primarily associated with our Health and Nutrition restructuring as well as other miscellaneous exit costs. Other charges (income) net in 2014 of $39.2 million were primarily related to corporate environmental charges of $43.7 million and charges of $22.1 million associated with our FMC Agricultural Solutions segment which entered into collaboration and license agreements with various third-party companies for the purpose of obtaining certain technology and intellectual property rights relating to new compounds still under development. Off setting these charges is income from the sale of a portion of our ownership interest in a pesticide distribution company which resulted in a gain on the sale of approximately $26.6 million. Year Ended December 31, $ $ 2015 217.7 $ 26.3 244.0 $ 2014 17.2 $ 39.2 56.4 $ 2013 12.2 38.3 50.5 2013 Restructuring and asset disposal charges in 2013 of $12.2 million were primarily associated with the announced Lithium restructuring. Other charges (income) net in 2013 of $38.3 million primarily related to charges associated with collaboration and license agreements entered into by our FMC Agricultural Solutions segment for the purpose of obtaining certain technology and intellectual property rights relating to new compounds still under development. Th e rights and technology obtained is referred to as in-process research and development and in accordance with GAAP, the amounts paid were expensed as incurred since they were acquired outside of a business combination. Non-operating pension and postretirement (charges) income Non-operating pension and postretirement (charges) income are included in “Selling, general and administrative expenses” on our consolidated statements of income (loss). 2015 vs. 2014 Th e charge for 2015 was $35.3 million compared to $10.5 million for 2014. Th e increase in charges was primarily the result of $24.1 million of higher amortization of net actuarial losses. See Note 13 to the consolidated fi nancial statements included in this Form 10-K for more information. 2014 vs. 2013 Th e charge for 2014 was $10.5 million compared to $38.1 million for 2013. Th e decrease in charges was primarily attributable to lower amortization of net actuarial losses of $21.1 million compared to 2013. Business Separation costs On September 8, 2014, we announced that we would no longer proceed with the planned separation as a result of the planned acquisition of Cheminova and divestiture of FMC Alkali Chemicals division. As a result there were no business separation charges in 2015. Business separation cost for the twelve months ended December 31, 2014 represent charges associated with the planned separation activities through December 31, 2015. 24 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Acquisition-related charges A detailed description of the acquisition related charges is included in Note 19 to the consolidated fi nancial statements included within this Form 10-K and in the Segment Results Reconciliation above within the “Results of Operations” section of the Management’s Discussion and Analysis. Provision for income taxes A signifi cant amount of our earnings is generated by our foreign subsidiaries (e.g. Denmark, Ireland and Hong Kong), which tax earnings at lower rates than the United States federal statutory rate. Our future eff ective tax rates may be materially impacted by numerous items including: a future change in the composition of earnings from foreign and domestic tax jurisdictions, as earnings in foreign jurisdictions are typically taxed at more favorable rates than the United States federal statutory rate; accounting for uncertain tax positions; business combinations; closure of statute of limitations or settlement of tax audits; changes in valuation allowance; changes in tax law; and the potential decision to repatriate certain future foreign earnings on which United States taxes have not been previously accrued. 2015 Tax Provision (Benefi t) Income (Expense) Twelve Months Ended December 31 2014 Eff ective Tax Rate Income (Expense) Tax Provision (Benefi t) Eff ective Tax Rate Income (Expense) 2013 Tax Provision (Benefi t) (in Millions) GAAP - Continuing operations Corporate special charges Tax adjustments(1) $ (130.5) 569.6 $ (36.3)% $ 363.8 226.5 15.4% $ 503.2 98.6 47.4 144.9 (95.3) 97.0 $ 56.2 84.1 13.8 $ 154.1 25.5% (1) Tax adjustments in 2015 were primarily associated with valuation allowance adjustments taken in our Brazil subsidiaries. Tax adjustments in 2014 were primarily associated with revisions to our tax liabilities associated with prior year tax matters. Tax adjustments in 2013 were primarily associated with adjustments to U.S. state deferred tax balances established prior to 2013 driven by a change in enacted tax rates and other state related items. 26.1% $ 601.8 $ 439.1 22.1% $ 590.3 $ Eff ective Tax Rate 26.2% $ 131.6 36.4 (14.6) $ 153.4 Th e primary drivers for the fl uctuations in the eff ective tax rate from 2013 to 2015 are provided in the table above. Excluding the items in the table above, the change in the eff ective tax rates from 2013 to 2015 was primarily due to a shift in earnings mix as it relates to domestic versus foreign income. Foreign profi ts are generally taxed at lower rates compared to domestic income. See Note 11 to the Consolidated Financial Statements for additional details related to the provisions for income taxes on continuing operations, as well as items that signifi cantly impact our eff ective tax rate. Discontinued operations, net of income taxes Our discontinued operations represent our discontinued FMC Alkali Chemicals and FMC Peroxygens divisions’ results as well as adjustments to retained liabilities from other previously discontinued operations. Th e primary liabilities retained include environmental liabilities, other postretirement benefi t liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities. 2015 vs. 2014 Discontinued operations, net of income taxes represented a gain of $676.4 million in 2015 compared to a gain of $14.5 million in 2014. Th e change was driven by the divestiture of our discontinued FMC Alkali Chemicals division which resulted in an after tax gain of $702.1 million in 2015. 2014 vs. 2013 Discontinued operations, net of income taxes represented a gain of $14.5 million for December 31, 2014, compared to a loss of $63.6 million for 2013. Th e change is primarily the result of a charges of $156.7 million ($122.1 million after-tax) in 2013 associated with our discontinued FMC Peroxygens segment. A large portion of the 2013 charge was associated with a write-down of the Peroxygen assets held for sale to fair value. See Note 9 within our consolidated fi nancial statements included in this Form 10-K for more information. Net income attributable to FMC stockholders 2015 vs. 2014 Net income attributable to FMC stockholders increased to $489.0 million from $307.5 million. Th e increase was primarily due to the gain from the sale of our discontinued FMC Alkali Chemicals division off set by reduced Agricultural Solutions results as well as higher interest expense from higher debt levels needed to fund the Cheminova acquisition. Also signifi cantly impacting results was a higher tax rate in 2015 primarily due to the increases in certain foreign valuation allowances against deferred tax assets. 2014 vs. 2013 Net income attributable to FMC stockholders increased to $307.5 million in 2014, from $293.9 million in 2014. Th e increase was driven by improvements in FMC Health and Nutrition and FMC Lithium segment operating profi ts, lower eff ective tax rate, lower non-operating pension and postretirement charges and reduced charges associated with discontinued operations. Mostly off setting these improvements were costs associated with our previously planned business separation, the acquisition of Cheminova, the divestiture of our FMC Alkali Chemicals division, lower FMC Agricultural Solutions segment earnings and higher interest expense. FMC CORPORATION - Form 10-K 25 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Cash and cash equivalents at December 31, 2015 and 2014, were $78.6 million and $109.5 million, respectively. Of the cash and cash equivalents balance at December 31, 2015, $71.6 million were held by our foreign subsidiaries. Our intent is to reinvest permanently the earnings of our foreign subsidiaries and therefore we have not recorded taxes that would be payable if we repatriated these earnings. At December 31, 2015, we had total debt of $2,148.9 million as compared to $1,664.1 million at December 31, 2014. Total debt included $2,036.3 million and $1,138.9 million of long-term debt (excluding current portions of $1.5 million and $2.0 million) at December 31, 2015 and 2014, respectively. As of December 31, 2015, we are in compliance with all of our debt covenants. During 2016, the maximum leverage ratio will step down in accordance with the provisions of the Credit Facility and the Term Loan Facility. Additionally, we will take a variety of steps, if necessary, to ensure compliance with the maximum leverage ratio at the applicable measurement dates. See Note 12 in the consolidated fi nancial statements included in this Form 10-K for further details. and the term loan facility. At December 31, 2015, $900.0 million remained outstanding under the Term Loan facility, as a portion of the net proceeds from the sale of our FMC Alkali Chemicals division (see Note 9 in the consolidated fi nancial statements included in this Form 10-K for further details) was used to pay down the initial borrowings. Th e scheduled maturity of the Term Loan Facility is on April 21, 2020. Th e borrowings under the Term Loan Agreement will bear interest at a fl oating rate, which will be a base rate or a Eurocurrency rate equal to the London interbank off ered rate for the relevant interest period, plus in each case an applicable margin, as determined in accordance with the provisions of the Term Loan Agreement. See Note 12 in the consolidated fi nancial statements included in this Form 10-k for further details. Our short-term debt, consists of foreign borrowings and our commercial paper program. Foreign borrowings increased from $36.6 million at December 31, 2014 to $87.2 million at December 31, 2015 while outstanding commercial paper decreased from $486.6 million to $23.9 million at December 31, 2014 and 2015, respectively. Th e increase in long-term debt was due to borrowings of $1.65 billion under our senior unsecured Term Loan Facility. Th e proceeds of the borrowing were used to fi nance the acquisition of Cheminova as well as to pay costs, fees and expenses incurred in connection with the acquisition Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. At December 31, 2015, the average eff ective interest rate on these borrowings was 0.70 percent. 26 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Statement of Cash Flows Cash provided (required) by operating activities was $(277.1) million, $284.9 million and $258.3 million for 2015, 2014 and 2013, respectively. Th e table below presents the components of net cash provided by operating activities. (in Millions) Income (loss) from continuing operations before equity in (earnings) loss of affi liates, interest income and expense and income taxes Corporate special charges and depreciation and amortization(1) Operating income before depreciation and amortization (Non-GAAP) Change in trade receivables(2) Change in inventories(3) Change in accounts payable(4) Change in accrued rebates(5) Change in advance payments from customers(6) Change in all other operating assets and liabilities(7) Cash basis operating income (Non-GAAP) Restructuring and other spending(8) Environmental spending, continuing, net of recoveries(9) Pension and other postretirement benefi t contributions(10) Net interest payments(11) Tax payments, net of refunds(12) Excess tax benefi ts from share-based compensation(13) Payments associated with the Cheminova purchase price hedges(14) Acquisition legal and professional fees(15) $ $ $ Twelve months ended December 31, 2015 2014 2013 $ (50.2) $ 685.1 634.9 140.9 78.3 (292.5) 11.0 60.6 (22.9) 610.3 (34.9) (32.2) (78.7) (74.7) (340.3) (1.4) (264.8) (60.4) (277.1) $ $ $ $ $ 414.8 320.2 735.0 (274.7) 36.2 (16.2) 34.3 11.3 61.2 587.1 (9.5) (17.5) (68.3) (61.0) (109.0) (4.7) — (32.2) 284.9 538.7 187.4 726.1 (382.2) 2.4 44.8 63.4 35.9 54.5 544.9 (9.9) (7.8) (68.0) (40.5) (153.3) (7.1) — — 258.3 Cash provided (required) by operating activities of continuing operations (1) Represents the sum of corporate special charges and depreciation and amortization. (2) The change in cash flows related to trade receivables in 2015 was primarily driven by reduced revenue growth in FMC Agricultural Solutions mostly related to Brazil as well as, to a lesser extent, timing of collections. Collection timing is more pronounced in our FMC Agricultural Solutions business where sales, particularly in Brazil, have terms significantly longer than the rest of our businesses. Additionally, timing of collection is impacted as amounts for both periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks. In 2014 and 2013, the change is driven by revenue increases in all three of our segments as well as due to timing of payments. $ $ (3) The change in 2015 inventory levels is a result of inventory levels being adjusted to take into consideration the change in market conditions mostly in Agricultural Solutions. Inventory levels dropped in 2014 as compared to 2013 primarily due to inventory management programs and lower 2014 FMC Agricultural Solutions sales. (4) The change in accounts payable in 2015 is primarily due to timing of payments including inventory reductions activities across the company, particularly as we integrate Cheminova as well as proactively adjusting inventory levels in light of current market conditions. The change in 2014 is consistent with the slightly drop in inventory levels at the end of 2014. (5) These rebates are associated with our FMC Agricultural Solutions segment in North America and Brazil and generally settle in the fourth quarter of each year. The changes year over year are primarily associated with the mix in sales eligible for rebates and incentives in 2015 compared to 2014 and timing of rebate payments. (6) The advance payments from customers represent advances from our FMC Agricultural Solutions segment customers. (7) Changes in all periods presented primarily represent timing of payments associated with all other operating assets and liabilities, including guarantees issued to vendors under our vendor finance program. (8) See Note 7 in our consolidated financial statements included in this Form 10-K for further details. (9) Included in our results for each of the years presented are environmental charges for environmental remediation at our operating sites of $21.7 million, $43.7 million and $6.2 million, respectively. The amounts in 2015 will be spent in future years. The amounts represent environmental remediation spending at our operating sites which were recorded against pre-existing reserves, net of recoveries. (10) Amounts include voluntary contributions to our U.S. defined benefit plan of $65 million, $50 million and $40 million, respectively. In 2015 the amount also includes a lump-sum payout of approximately $5.3 million from our nonqualified pension plan. (11) Interest payments from 2014 to 2015 remained fairly constant. Interest payments in 2014 increased over the preceding year primarily due to interest payments under the $400 million of Senior Notes at an interest rate of 4.10% that was issued in November 2013. There were no interest payments under these borrowings in 2013. (12) The significant increase in tax payments from 2014 to 2015 is the tax paid on the gain associated with the sale of the discontinued FMC Alkali Chemicals division. The reduction in tax payments from 2013 to 2014 is due to a domestic prepaid tax balance at December 31, 2013 that was applied in first quarter of 2014, thereby reducing tax payments in 2014. (13) Amounts are presented as a financing activity in the statement of cash flows, from share-based compensation. (14) Represents payments for legal and professional fees associated with the Cheminova acquisition. See also Note 3 to the financial statements including in the Form 10-K for more information. FMC CORPORATION - Form 10-K 27 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Cash provided (required) by operating activities of discontinued operations was $(80.6) million, $88.8 million and $70.4 million for 2015, 2014 and 2013, respectively. Th e increase of cash required by operating activities of discontinued operations in 2015 is due primarily to divestiture costs associated with the sale of our discontinued FMC Alkali Chemicals business on April 1, 2015. Additionally 2014 and 2013 include a full year of positive cash fl ows associated with FMC Alkali while 2015 only includes one quarter’s worth due to sale date timing. Th e increase in cash provided by operating activities of discontinued operations in 2014 is due to reduced net spending associated with discontinued environmental remediation sites. Th is reduced spending was slightly off set by increased spending associated with our other discontinued reserve which primarily includes retained legal obligations. Cash required by investing activities was $1,285.5 million, $190.2 million and $565.3 million for 2015, 2014 and 2013, respectively. Th e increase in spending during the twelve months ended December 31, 2015, as compared to the same period in 2014 was due to the Cheminova acquisition on April 21, 2015 for an aggregate purchase price of $1.2 billion, excluding assumed net debt and hedged-related costs totaling $0.6 billion. Th e decrease in spending in 2014, as compared to 2013 was primarily due to the Epax acquisition that was completed in the third quarter of 2013. Cash provided (required) by investing activities of discontinued operations was $1,634.3 million, $154.9 million and $(87.9) million for 2015, 2014 and 2013, respectively. Cash provided by investing activities of discontinued operations in 2015 is directly associated with the sale of our discontinued FMC Alkali Chemicals business. Th ese proceeds totaled $1.64 billion. Cash provided by investing activities of discontinued operations in 2014 is directly associated with the sale of our discontinued FMC Peroxygens business which was completed on February 28, 2014. Th e proceeds from this sale was approximately $200 million. Also included in these investing activities was capital expenditures of these same discontinued operations for historical periods up to the point of sale. Th e decrease in these capital expenditures in 2015 was due to only one quarter’s worth of Alkali capital expenditures in 2015 compared to a full year’s in 2014. Th e 2013 period included a full year of capital expenditures for both Alkali and FMC Peroxygens. Cash provided (required) by ﬁ nancing activities was $(16.7) million, $(349.9) million and $371.2 million in 2015, 2014 and 2013, respectively. 2015 vs. 2014 Th e change period over period in fi nancing activities is primarily due to the $1.65 billion we borrowed under our previously announced senior unsecured Term Loan facility. Th e proceeds of the borrowing were used to fi nance the acquisition of Cheminova as well as to pay costs, fees and expenses incurred in connection with the acquisition and the term loan facility. Off setting this borrowing in 2015 was repayments of long-term debt totaling $1.1 billion primarily due to repayments associated with acquired Cheminova long term debt. Additionally short term debt decreased $547 million in 2015 as compared to $140 million in 2014. Additionally in 2014 we paid $98.7 million to noncontrolling interests (primarily to acquire the remaining ownership of our discontinued FMC Alkali Chemicals division) as compared to zero such payments in 2015. 2014 vs. 2013 Th e change period over period in fi nancing activities is primarily due to signifi cantly lower short-term borrowings in 2014 compared to borrowings in 2013. In 2013, increased borrowings were approximately $889 million compared to repayments in 2014 of $171 million. Additionally during the year ended 2013 we paid approximately $367 million in share repurchases and $90 million to noncontrolling interests (primarily to acquire additional ownership of our discontinued FMC Alkali Chemicals division) compared to approximately $103 million in combined payments in 2014. 2016 Outlook In 2016, we expect a continued improvement in cash generation. In aggregate, we expect cash basis operating income to increase driven by higher earnings and continued working capital improvements. We also expect lower restructuring and acquisition related integration spending compared to 2015. In 2015, the majority of our tax payments were associated with the taxes associated with the Alkali sale. Excluding these tax payments, we expect higher cash taxes in 2016 as compared to 2015. Other potential liquidity needs Our cash needs for 2016, outside of the Cheminova related integration expenses, include operating cash requirements, capital expenditures, scheduled mandatory payments of long-term debt, dividend payments, contributions to our pension plans, environmental and asset retirement obligation spending and restructuring. We plan to meet our liquidity needs through available cash, cash generated from operations, commercial paper issuances and borrowings under our committed revolving credit facility. At December 31, 2015 our remaining borrowing capacity under our credit facility was $1,422.4 million (which refl ects borrowings under our commercial paper program). Projected 2016 capital expenditures and expenditures related to contract manufacturers are expected to approximate 2015 levels. Projected 2016 spending includes approximately $53 million of net environmental remediation spending. Th is spending does not include expected spending on capital projects relating to environmental control facilities or expected spending for environmental compliance costs, which we will include as a component of costs of sales and services in our consolidated statements of income since these amounts are not covered by established reserves. Capital spending to expand, maintain or replace equipment at our production facilities may trigger requirements for upgrading our environmental controls, which may increase our spending for environmental controls over the foregoing projections. Our U.S. Pension Plan assets decreased from $1,255.1 million at December 31, 2014 to $1,204.6 million at December 31, 2015 due primarily to additional contributions were more than off set by a decline in stock market performance. Our U.S. Pension Plan assets comprise approximately 95 percent of our total plan assets with the diff erence 28 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations representing plan assets related to foreign pension plans. See Note 13 to the consolidated fi nancial statements included within this Form 10-K for details on how we develop our long-term rate of return assumptions. We made contributions of $65 million and $50 million in 2015 and 2014, respectively, and intend to contribute $35 million in 2016. Our contributions in 2014, 2015 and our intended contribution in 2016 are all in excess of the minimum requirements. Our contributions in excess of the minimum requirement are done with the objective of reducing future funding volatility. We do not believe that the additional contribution in 2016 will have a material impact on our current and future liquidity needs. However, volatility of interest rates and equity returns may require greater contributions in the future. During the year ended December 31, 2015, no shares were repurchased under the publicly announced repurchase program. At December 31, 2015, $250 million remained unused under our Board-authorized repurchase program. Th is repurchase program does not include a specifi c timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connections with vesting, exercise and forfeiture of awards under our equity compensation plans. Dividends On January 21, 2016, we paid dividends aggregating $22.1 million to our shareholders of record as of December 31, 2015. Th is amount is included in “Accrued and other liabilities” on the consolidated balance sheet as of December 31, 2015. For the years ended December 31, 2015, 2014 and 2013, we paid $86.4 million, $78.1 million and $73.6 million in dividends, respectively. Commitments We provide guarantees to fi nancial institutions on behalf of certain FMC Agricultural Solutions customers, principally Brazilian customers, for their seasonal borrowing. Th e total of these guarantees was $114.2 million at December 31, 2015. Th ese guarantees arise during the ordinary course of business from relationships with customers and nonconsolidated affi liates. Non-performance by the guaranteed party triggers the obligation requiring us to make payments to the benefi ciary of the guarantee. Based on our experience these types of guarantees have not had a material eff ect on our consolidated fi nancial position or on our liquidity. Our expectation is that future payment or performance related to the non-performance of others is considered unlikely. Short-term debt consisted of foreign credit lines and commercial paper at December 31, 2015 and 2014. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries. We continually evaluate our options for divesting real estate holdings and property, plant and equipment that are no longer integral to our operating businesses. In connection with our property and asset sales and divestitures, we have agreed to indemnify the buyer for certain liabilities, including environmental contamination and taxes that occurred prior to the date of sale. Our indemnifi cation obligations with respect to these liabilities may be indefi nite as to duration and may or may not be subject to a deductible, minimum claim amount or cap. As such, it is not possible for us to predict the likelihood that a claim will be made or to make a reasonable estimate of the maximum potential loss or range of loss. If triggered, we may be able to recover certain of the indemnity payments from third parties. We have not recorded any specifi c liabilities for these guarantees. Our total signifi cant committed contracts that we believe will aff ect cash over the next four years and beyond are as follows: Expected Cash Payments by Year $ 2018 2017 Contractual Commitments (in Millions) Debt maturities(1) Contractual interest(2) Lease obligations(3) Certain long-term liabilities(4) Derivative contracts Purchase obligations (5) TOTAL(6) (1) Excluding discounts. (2) Contractual interest is the interest we are contracted to pay on our long-term debt obligations. We had $1.7 million of long-term debt subject to variable interest rates at December 31, 2015. The rate assumed for the variable interest component of the contractual interest obligation was the rate in effect at December 31, 2015. Variable rates are determined by the market and will fluctuate over time. 2016 112.6 $ 64.8 13.4 4.7 13.5 20.0 229.0 $ Total 2,162.8 465.1 205.4 55.5 13.5 33.4 2,935.7 2019 706.6 $ 58.4 16.5 5.0 1,340.2 $ 212.6 139.0 36.3 1.8 $ 64.7 18.5 4.7 — 1,728.1 $ — 786.5 $ 2020 & beyond 4.4 93.4 $ 9.0 98.7 $ 64.6 18.0 4.8 1.6 $ $ (3) Before sub-lease rental income. (4) Obligations associated with our Ewing, NJ and Shanghai, China research and technology centers. (5) Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and specify all significant terms, including fixed or minimum quantities to be purchased, price provisions and timing of the transaction. We have entered into a number of purchase obligations for the sourcing of materials and energy where take-or-pay arrangements apply. Since the majority of the minimum obligations under these contracts are take-or-pay commitments over the life of the contract and not a year by year take-or-pay, the obligations in the table related to these types of contacts are presented in the earliest period in which the minimum obligation could be payable under these types of contracts. (6) As of December 31, 2015, the liability for uncertain tax positions was $97.1 million. This liability is excluded from the table above. Additionally, accrued pension and other postretirement benefits and our environmental liabilities as recorded on our consolidated balance sheets are excluded from the table above. Due to the high degree of uncertainty regarding the timing of potential future cash flows associated with these liabilities, we are unable to make a reasonably reliable estimate of the amount and periods in which these liabilities might be paid. FMC CORPORATION - Form 10-K 29 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Contingencies See Note 18 to our consolidated fi nancial statements included in this Form 10-K. Climate Change As a global corporate citizen, we are concerned about the consequences of climate change and will take prudent and cost eff ective actions that reduce greenhouse gas emissions to the atmosphere. FMC is committed to doing its part to address climate change. We have set 2025 goals that we will reduce both energy intensity and Green House Gas (GHG) intensity for our operations by 15% from the 2013 baseline year. In 2015 we divested our Alkali Chemical business which previously accounted for the majority of FMC’s global GHG emissions. Th e Alkali business is not included in the baseline or reduction targets for the 2025 goals. But even as we take action to control the release of GHGs, additional warming is anticipated with eff ects on agricultural production, water availability, rising sea levels, increasingly severe weather events and a lack of biodiversity. We continually assess our manufacturing sites worldwide for these risks and for opportunities to increase energy effi ciency. We are assessing sea level rise and storm surge at three of our plants that are within 4 meters of sea level to understand timing of potential impacts and response actions that may need to be taken. In our product portfolio, we are improving existing products and developing new platforms and technologies that help reduce impacts of climate change. Beyond our products, FMC recognizes that energy consumption throughout our supply chain can impact climate change and product costs. Th erefore, we will actively work with our entire value chain -suppliers, contractors, and customers - to improve their energy effi ciencies and to reduce their GHG emissions. We continue to follow legislative and regulatory developments regarding climate change because the regulation of greenhouse gases, depending on their nature and scope, could subject some of our manufacturing operations to additional costs or limits on operations. In December 2015, 195 Countries at the United Nations Climate Change Conference in Paris reached an agreement to reduce GHGs. It still remains to be seen how and when each of these countries will implement this agreement. Th e United States Environmental Protection Agency’s Clean Power Plan (Plan) is the US’s centerpiece for meeting its Paris commitment. Implementation of the Plan recently has been stayed by the United States Supreme Court pending appeals. Th e Plan gives states fl exibility to craft their own programs, so the impact to FMC of the Plan, if implemented, is not estimable at this time. At this point our U.S. facilities are not subject to any state or regional greenhouse gas regulation that limits GHG emissions. Some of our foreign operations are subject to national or local energy management or climate change regulation, such as our plant in Denmark that is subject to the EU Emissions Trading Scheme. At present, that plant’s emissions are below its designated cap. Future GHG regulatory requirements may result in increased costs of energy, additional capital costs for emissions control or new equipment, and/or costs associated with cap and trade or carbon taxes. Th e costs of complying with possible future climate change requirements are diffi cult to estimate at this time. Recently Adopted and Issued Accounting Pronouncements and Regulatory Items See Note 2 “Recently Issued and Adopted Accounting Pronouncements and Regulatory Items” to our consolidated fi nancial statements included in this Form 10-K. Oﬀ -Balance Sheet Arrangements See Note 18 to our consolidated fi nancial statements included in this Form 10-K and Part I, Item 3 - Legal Proceedings for further information regarding any off -balance sheet arrangements. Fair Value Measurements See Note 17 to our consolidated fi nancial statements included in this Form 10-K for additional discussion surrounding our fair value measurements. Critical Accounting Policies Our consolidated fi nancial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP). Th e preparation of these fi nancial statements requires us to make estimates and judgments that aff ect the reported amounts of assets, liabilities, revenues and expenses. We have described our accounting policies in Note 1 “Principal Accounting Policies and related Financial Information” to our consolidated fi nancial statements included in this Form 10-K. We have reviewed these accounting policies, identifying those that we believe to be critical to the preparation and understanding of our consolidated fi nancial statements. We have reviewed these critical accounting policies with the Audit Committee of the Board of Directors. Critical accounting policies are central to our presentation of results of operations and fi nancial condition in accordance with U.S. GAAP and require management to make estimates and judgments on certain matters. We base our estimates and judgments on historical experience, current conditions and other reasonable factors. Revenue recognition and trade receivables We recognize revenue when the earnings process is complete, which is generally upon transfer of title. Th is transfer typically occurs either upon shipment to the customer or upon receipt by the customer. In all cases, we apply the following criteria in recognizing revenue: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fi xed or determinable and collection is reasonably assured. Rebates due to customers are accrued as a reduction of revenue in the same period that the related sales are recorded based on the contract terms. We periodically enter into prepayment arrangements with customers, primarily in our FMC Agricultural Solutions segment, and receive advance payments for product to be delivered in future periods. Th ese advance payments are recorded as deferred revenue and classifi ed as 30 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations “Advance payments from customers” on the consolidated balance sheet. Revenue associated with advance payments is recognized as shipments are made and title, ownership and risk of loss pass to the customer. We record amounts billed for shipping and handling fees as revenue. Costs incurred for shipping and handling are recorded as costs of sales and services. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specifi c transactional taxes imposed on revenue-producing transactions are presented on a net basis and excluded from sales in the consolidated income statements. We record a liability until remitted to the respective taxing authority. Trade receivables consist of amounts owed from customer sales and are recorded when revenue is recognized. Th e allowance for trade receivables represents our best estimate of the probable losses associated with potential customer defaults. In developing our allowance for trade receivables, we use a two stage process which includes calculating a general formula to develop an allowance to appropriately address the uncertainty surrounding collection risk of our entire portfolio and specifi c allowances for customers where the risk of collection has been reasonably identifi ed either due to liquidity constraints or disputes over contractual terms and conditions. Our method of calculating the general formula consists of estimating the recoverability of trade receivables based on historical experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. Our analysis of trade receivable collection risk is performed quarterly, and the allowance is adjusted accordingly. We also hold fi nancing receivables that represent long-term customer receivable balances related to past-due accounts which are not expected to be collected within the current year. Our policy for the review of the allowance for these receivables is consistent with the discussion in the preceding paragraph above on trade receivables. Th erefore on an ongoing basis, we continue to evaluate the credit quality of our fi nancing receivables utilizing aging of receivables, collection experience and write-off s, as well as existing economic conditions, to determine if an additional allowance is necessary. Environmental obligations and related recoveries We provide for environmental-related obligations when they are probable and amounts can be reasonably estimated. Where the available information is suffi cient to estimate the amount of liability, that estimate has been used. Where the information is only suffi cient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Estimated obligations to remediate sites that involve oversight by the United States Environmental Protection Agency (“EPA”), or similar government agencies, are generally accrued no later than when a Record of Decision (“ROD”), or equivalent, is issued, or upon completion of a Remedial Investigation/Feasibility Study (“RI/FS”), or equivalent, that is submitted by us to the appropriate government agency or agencies. Estimates are reviewed quarterly by our environmental remediation management, as well as by fi nancial and legal management and, if necessary, adjusted as additional information becomes available. Th e estimates can change substantially as additional information becomes available regarding the nature or extent of site contamination, required remediation methods, and other actions by or against governmental agencies or private parties. Our environmental liabilities for continuing and discontinued operations are principally for costs associated with the remediation and/or study of sites at which we are alleged to have released hazardous substances into the environment. Such costs principally include, among other items, RI/FS, site remediation, costs of operation and maintenance of the remediation plan, management costs, fees to outside law fi rms and consultants for work related to the environmental eff ort, and future monitoring costs. Estimated site liabilities are determined based upon existing remediation laws and technologies, specifi c site consultants’ engineering studies or by extrapolating experience with environmental issues at comparable sites. Included in our environmental liabilities are costs for the operation, maintenance and monitoring of site remediation plans (OM&M). Such reserves are based on our best estimates for these OM&M plans. Over time we may incur OM&M costs in excess of these reserves. However, we are unable to reasonably estimate an amount in excess of our recorded reserves because we cannot reasonably estimate the period for which such OM&M plans will need to be in place or the future annual cost of such remediation, as conditions at these environmental sites change over time. Such additional OM&M costs could be signifi cant in total but would be incurred over an extended period of years. Included in the environmental reserve balance, other assets balance and disclosure of reasonably possible loss contingencies are amounts from third party insurance policies, which we believe are probable of recovery. Provisions for environmental costs are refl ected in income, net of probable and estimable recoveries from named Potentially Responsible Parties (“PRPs”) or other third parties. Such provisions incorporate infl ation and are not discounted to their present values. In calculating and evaluating the adequacy of our environmental reserves, we have taken into account the joint and several liability imposed by Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and the analogous state laws on all PRPs and have considered the identity and fi nancial condition of the other PRPs at each site to the extent possible. We have also considered the identity and fi nancial condition of other third parties from whom recovery is anticipated, as well as the status of our claims against such parties. Although we are unable to forecast the ultimate contributions of PRPs and other third parties with absolute certainty, the degree of uncertainty with respect to each party is taken into account when determining the environmental reserve by adjusting the reserve to refl ect the facts and circumstances on a site-by-site basis. Our liability includes our best estimate of the costs expected to be paid before the consideration of any potential recoveries from third parties. We believe that any recorded recoveries related to PRPs are realizable in all material respects. Recoveries are recorded as either an off set in “Environmental liabilities, continuing and discontinued” or as “Other assets” in our consolidated balance sheets in accordance with U.S. accounting literature. See Note 10 to our consolidated fi nancial statements included in this Form 10-K for changes in estimates associated with our environmental obligations. Impairments and valuation of long-lived assets Our long-lived assets primarily include property, plant and equipment, goodwill and intangible assets. Th e assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition. Th e excess of the purchase price over the estimated fair value FMC CORPORATION - Form 10-K 31 PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations of the net assets acquired, including identifi ed intangibles, is recorded as goodwill. Th e determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations. Th e principal assumptions utilized in our valuation methodologies include revenue growth rates, operating margin estimates and discount rates. Although the estimates were deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain. We test for impairment whenever events or circumstances indicate that the net book value of our property, plant and equipment may not be recoverable from the estimated undiscounted expected future cash fl ows expected to result from their use and eventual disposition. In cases where the estimated undiscounted expected future cash fl ows are less than net book value, an impairment loss is recognized equal to the amount by which the net book value exceeds the estimated fair value of assets, which is based on discounted cash fl ows at the lowest level determinable. Th e estimated cash fl ows refl ect our assumptions about selling prices, volumes, costs and market conditions over a reasonable period of time. We perform an annual impairment test of goodwill and indefi nite-lived intangible assets in the third quarter of each year, or more frequently whenever an event or change in circumstances occurs that would require reassessment of the recoverability of those assets. In performing our evaluation we assess qualitative factors such as overall fi nancial performance of our reporting units, anticipated changes in industry and market structure, competitive environments, planned capacity and cost factors such as raw material prices. Based on our assessment for 2015, we determined that no impairment charge to our continuing operations was required. See Note 7 to our consolidated fi nancial statements included in this Form 10-K for charges associated with long-lived asset disposal costs and the activity associated with the restructuring reserves. Pension and other postretirement beneﬁ ts We provide qualifi ed and nonqualifi ed defi ned benefi t and defi ned contribution pension plans, as well as postretirement health care and life insurance benefi t plans to our employees and retirees. Th e costs (benefi ts) and obligations related to these benefi ts refl ect key assumptions related to general economic conditions, including interest (discount) rates, healthcare cost trend rates, expected rates of return on plan assets and the rates of compensation increase for employees. Th e costs (benefi ts) and obligations for these benefi t programs are also aff ected by other assumptions, such as average retirement age, mortality, employee turnover, and plan participation. To the extent our plans’ actual experience, as infl uenced by changing economic and fi nancial market conditions or by changes to our own plans’ demographics, diff ers from these assumptions, the costs and obligations for providing these benefi ts, as well as the plans’ funding requirements, could increase or decrease. When actual results diff er from our assumptions, the diff erence is typically recognized over future periods. In addition, the unrealized gains and losses related to our pension and postretirement benefi t obligations may also aff ect periodic benefi t costs (benefi ts) in future periods. In 2015, the Society of Actuaries released an updated mortality table projection scale for measurement of retirement program obligations. We adopted this updates in measuring the December 31, 2015 U.S. defi ned benefi t and post retirement obligations. Adoption of this new projection scale has decreased the benefi t obligations at December 31, 2015 by approximately $24 million. Th e eff ect of this adoption will be amortized into net periodic benefi t cost beginning in 2016. We use several assumptions and statistical methods to determine the asset values used to calculate both the expected rate of return on assets component of pension cost and to calculate our plans’ funding requirements. Th e expected rate of return on plan assets is based on a market-related value of assets that recognizes investment gains and losses over a fi ve-year period. We use an actuarial value of assets to determine our plans’ funding requirements. Th e actuarial value of assets must be within a certain range, high or low, of the actual market value of assets, and is adjusted accordingly. We select the discount rate used to calculate pension and other postretirement obligations based on a review of available yields on high-quality corporate bonds as of the measurement date. In selecting a discount rate as of December 31, 2015, we placed particular emphasis on a discount rate yield-curve provided by our actuary. Th is yield- curve, when populated with projected cash fl ows that represent the expected timing and amount of our plans’ benefi t payments, produced an eff ective discount rate of 4.50 percent for our U.S. qualifi ed plan, 3.72 percent for our U.S. nonqualifi ed, and 3.97 percent for our U.S. other postretirement benefi t plans. Th e discount rates used at our December 31, 2015 and 2014 measurement dates for the U.S. qualifi ed plan were 4.50 percent and 4.15 percent, respectively. Th e eff ect of the change in the discount rate from 4.15 percent to 4.50 percent at December 31, 2015 resulted in a $56.8 million decrease to our U.S. qualifi ed pension benefi t obligations. Th e eff ect of the change in the discount rate from 4.95 percent at December 31, 2013 to 4.15 percent at December 31, 2014 resulted in a $11.1 million increase to the 2015 U.S. qualifi ed pension expense. Th e change in discount rate from 4.15 percent at December 31, 2014 to 4.50 percent at December 31, 2015 was attributable to an increase in yields on high quality corporate bonds with cash fl ows matching the timing and amount of our expected future benefi t payments between the 2014 and 2015 measurement dates. Using the December 31, 2014 yield curve, our U.S. qualifi ed plan cash fl ows produced a single weighted- average discount rate of approximately 4.15 percent. Matching our U.S. qualifi ed plan cash fl ows to a similarly constructed curve refl ecting high-yielding bonds available as of December 31, 2015, resulted in a single weighted-average discount rate of approximately 4.50 percent. Historically, we estimated the service cost and interest cost components of expense using a single weighted-average discount rate derived from the yield curve used to measure the benefi t obligation at the beginning of the period. On December 31, 2015, we changed the method we used to estimate the service cost and interest cost components of our net periodic benefi t cost for our US defi ned benefi t pension plans. We have elected to use a full yield curve approach in the estimation of these components of benefi t cost by applying the specifi c spot rates along the yield curve used in the determination of the benefi t obligation to the relevant projected cash fl ows. We have made this change to 32 FMC CORPORATION - Form 10-K PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations improve the correlation between projected benefi t cash fl ows and the corresponding yield curve spot rates and to provide a more precise measurement of service cost and interest cost. Th e change does not aff ect the measurement of our total benefi t obligations. We have accounted for this change as a change in estimate prospectively starting in 2016. In developing the assumption for the long-term rate of return on assets for our U.S. Plan, we take into consideration the technical analysis performed by our outside actuaries, including historical market returns, information on the assumption for long-term real returns by asset class, infl ation assumptions, and expectations for standard deviation related to these best estimates. We also consider the historical performance of our own plan’s trust, which has earned a compound annual rate of return of approximately 8.7 percent over the last 20 years (which is in excess of comparable market indices for the same period) as well as other factors which are discussed in Note 13 to our consolidated fi nancial statements in this Form 10-K. Our long-term rate of return for the fi scal year ended December 31, 2015, was 7.25 percent and for years ending December 31, 2014 and 2013 was 7.75 percent. For the sensitivity of our pension costs to incremental changes in assumptions see our discussion below. Sensitivity analysis related to key pension and postretirement beneﬁ t assumptions A one-half percent increase in the assumed discount rate would have decreased pension and other postretirement benefi t obligations by $76.8 million and $89.6 million at December 31, 2015 and 2014, respectively, and decreased pension and other postretirement benefi t costs by $6.4 million, $6.9 million and $5.8 million for 2015, 2014 and 2013, respectively. A one-half percent decrease in the assumed discount rate would have increased pension and other postretirement benefi t obligations by $85.3 million and, $99.4 million at December 31, 2015 and 2014, respectively, and increased pension and other postretirement benefi t cost by $6.5 million, $7.5 million and $6.2 million for 2015, 2014 and 2013, respectively. A one-half percent increase in the assumed expected long-term rate of return on plan assets would have decreased pension costs by $5.8 million, $5.2 million and $4.8 million for 2015, 2014 and 2013, respectively. A one-half percent decrease in the assumed long-term rate of return on plan assets would have increased pension costs by $5.8 million, $5.2 million and $4.8 million for 2015, 2014 and 2013, respectively. Further details on our pension and other postretirement benefi t obligations and net periodic benefi t costs (benefi ts) are found in Note 13 to our consolidated fi nancial statements in this Form 10-K. Income taxes We have recorded a valuation allowance to reduce deferred tax assets in certain foreign jurisdictions to the amount that we believe is more likely than not to be realized. In assessing the need for this allowance, we have considered a number of factors including future taxable income, the jurisdictions in which such income is earned and our ongoing tax planning strategies. In the event that we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. Similarly, should we conclude that we would be able to realize certain deferred tax assets in the future in excess of the net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. Additionally, we fi le income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Th e income tax returns for FMC entities taxable in the U.S. and signifi cant foreign jurisdictions are open for examination and adjustment. We assess our income tax positions and record a liability for all years open to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefi t will be sustained, we have recorded the largest amount of tax benefi t with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. We adjust these liabilities, if necessary, upon the completion of tax audits or changes in tax law. See Note 11 to our consolidated fi nancial statements included in this Form 10-K for additional discussion surrounding income taxes. FMC CORPORATION - Form 10-K 33 PART II ITEM 7A Quantitative and Qualitative Disclosures About Market Risk ITEM 7A Quantitative and Qualitative Disclosures About Market Risk Our earnings, cash fl ows and fi nancial position are exposed to market risks relating to fl uctuations in commodity prices, interest rates and foreign currency exchange rates. Our policy is to minimize exposure to our cash fl ow over time caused by changes in commodity, interest and currency exchange rates. To accomplish this, we have implemented a controlled program of risk management consisting of appropriate derivative contracts entered into with major fi nancial institutions. Th e analysis below presents the sensitivity of the market value of our fi nancial instruments to selected changes in market rates and prices. Th e range of changes chosen refl ects our view of changes that are reasonably possible over a one-year period. Market value estimates are based on the present value of projected future cash fl ows considering the market rates and prices chosen. At December 31, 2015, our net fi nancial instrument position was a net liability of $13.4 million compared to a net liability of $92.5 million at December 31, 2014. Th e change in the net fi nancial instrument position was primarily due to lower unrealized losses in our commodity and foreign exchange portfolios. Since our risk management programs are generally highly eff ective, the potential loss in value for each risk management portfolio described below would be largely off set by changes in the value of the underlying exposure. Commodity Price Risk Energy costs are diversifi ed among coal, electricity and natural gas. We attempt to mitigate our exposure to increasing energy costs by hedging the cost of future deliveries of natural gas and by entering into fi xed-price contracts for the purchase of coal and fuel oil. To analyze the eff ect of changing energy prices, we have performed a sensitivity analysis in which we assume an instantaneous 10 percent change in energy market prices from their levels at December 31, 2015 and 2014, with all other variables (including interest rates) held constant. (in Millions) Net asset/(liability) position at December 31, 2015 Net asset/(liability) position at December 31, 2014 Hedged energy exposure vs. Energy market pricing Net Asset /(Liability) Position on Consolidated Balance Sheets (2.0) (7.3) $ $ Net Asset /(Liability) Position with 10% Increase (1.1) (5.3) $ $ Net Asset /(Liability) Position with 10% Decrease (2.9) $ (9.4) $ Our FMC Agricultural Solutions segment enters into contracts with certain customers in Brazil to exchange our products for future physical delivery of soybeans. To mitigate the price risk associated with these barter contracts, we enter into off setting derivatives to hedge our exposure. As of December 31, 2015 and 2014 our net fi nancial instrument position was immaterial. Foreign Currency Exchange Rate Risk Th e primary currencies for which we have exchange rate exposure are the U.S. dollar versus the euro, the Chinese yuan, the Brazilian real and the Argentine peso. Foreign currency debt and foreign exchange forward contracts are used in countries where we do business, thereby reducing our net asset exposure. Foreign exchange forward contracts are also used to hedge fi rm and highly anticipated foreign currency cash fl ows. To analyze the eff ects of changing foreign currency rates, we have performed a sensitivity analysis in which we assume an instantaneous 10 percent change in the foreign currency exchange rates from their levels at December 31, 2015 and 2014, with all other variables (including interest rates) held constant. Hedged Currency vs. Functional Currency Net Asset /(Liability) Position with 10% Weakening (in Millions) (47.2) Net asset/(liability) position at December 31, 2015 Net asset/(liability) position at December 31, 2014(1) (261.0) (1) Includes the unrealized loss on hedging the purchase price of Cheminova as of December 31, 2014. See “Cheminova Acquisition Hedge Costs” in Note 3 to the Net Asset /(Liability) Position on Consolidated Balance Sheets (11.4) (85.2) Net Asset /(Liability) Position with 10% Strengthening 24.4 91.3 $ $ $ $ $ $ consolidated financial statements included in this Form 10-K. 34 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data Interest Rate Risk One of the strategies that we can use to manage interest rate exposure is to enter into interest rate swap agreements. In these agreements, we agree to exchange, at specifi ed intervals, the diff erence between fi xed and variable interest amounts calculated on an agreed-upon notional principal amount. As of December 31, 2015 and 2014, we had no interest rate swap agreements. Our debt portfolio at December 31, 2015 is composed of 56 percent fi xed-rate debt and 44 percent variable-rate debt. Th e variable-rate component of our debt portfolio principally consists of borrowings under our Term Loan Facility, commercial paper program, Credit Facility, variable-rate industrial and pollution control revenue bonds, and amounts outstanding under foreign subsidiary credit lines. Changes in interest rates aff ect diff erent portions of our variable-rate debt portfolio in diff erent ways. Based on the variable-rate debt in our debt portfolio at December 31, 2015, a one percentage point increase in interest rates would have increased gross interest expense by $9.6 million and a one percentage point decrease in interest rates would have decreased gross interest expense by $3.3 million for the year ended December 31, 2015. ITEM 8 Financial Statements and Supplementary Data Item 8 Financial Statements and Supplemental Data Consolidated Statements of Income for the years ended December 31, 2015, 2014 and 2013 Consolidated Statements of Comprehensive income for the years ended December 31, 2015, 2014 and 2013 Consolidated Balance Sheets as of December 31, 2015 and 2014 Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 Consolidated Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013 Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Management’s Annual Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Schedule II- Valuation and Qualifying Accounts and Reserves for Years Ended December 31, 2015, 2014 and 2013 Page 35 36 37 38 39 41 42 84 85 86 87 FMC CORPORATION - Form 10-K 35 PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Consolidated Statements of Income (in Millions, Except Per Share Data) Revenue Costs and Expenses Costs of sales and services Gross Margin Selling, general and administrative expenses Research and development expenses Restructuring and other charges (income) Business separation costs Total costs and expenses Income (loss) from continuing operations before equity in (earnings) loss of affi liates, interest income and expense and income taxes Equity in (earnings) loss of affi liates Interest income Interest expense Income (loss) from continuing operations before income taxes Provision for income taxes Income (loss) from continuing operations Discontinued operations, net of income taxes Net income Less: Net income attributable to noncontrolling interests Net income attributable to FMC stockholders Amounts attributable to FMC stockholders: Continuing operations, net of income taxes Discontinued operations, net of income taxes NET INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS Basic earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations NET INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS Diluted earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations NET INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS The accompanying notes are an integral part of these consolidated financial statements. $ $ $ $ $ $ $ $ Year Ended December 31, 2015 3,276.5 $ 2014 3,258.7 $ 2,201.1 1,075.4 737.9 143.7 244.0 — 3,326.7 (50.2) 0.2 (1.3) 81.4 (130.5) 47.4 (177.9) 676.4 498.5 9.5 489.0 $ (187.4) $ 676.4 489.0 $ (1.40) $ 5.06 3.66 $ (1.40) $ 5.06 3.66 $ 2,047.8 1,210.9 589.8 126.3 56.4 23.6 2,843.9 414.8 (0.2) (0.2) 51.4 363.8 56.2 307.6 14.5 322.1 14.6 307.5 298.2 9.3 307.5 2.23 0.07 2.30 2.22 0.07 2.29 $ $ $ $ $ $ $ 2013 3,130.7 1,929.8 1,200.9 496.1 115.6 50.5 — 2,592.0 538.7 (0.8) (0.2) 36.5 503.2 131.6 371.6 (63.6) 308.0 14.1 293.9 365.1 (71.2) 293.9 2.69 (0.53) 2.16 2.68 (0.52) 2.16 36 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Consolidated Statements of Comprehensive Income (in Millions) Net Income Other comprehensive income (loss), net of tax: Foreign currency adjustments: Foreign currency translation gain (loss) arising during the period Reclassifi cation of foreign currency translations losses Total foreign currency translation adjustments(1) Derivative instruments: Unrealized hedging gains (losses) and other, net of tax of $0.4, ($.8) and ($2.1) Reclassifi cation of deferred hedging (gains) losses and other, included in net income, net of tax of ($2.7) ($0.6) and $0.1 Total derivative instruments, net of tax of ($2.3), ($1.4) and ($2.0) Pension and other postretirement benefi ts: Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of ($16.1), $70.9 and $103.9(2) Reclassifi cation of net actuarial and other (gain) loss, amortization of prior service costs and settlement charges, included in net income, net of tax of $23.2, $12.9 and $21.8(3) Total pension and other postretirement benefi ts, net of tax of $7.1, $83.8 and $125.7 Other comprehensive income (loss), net of tax Comprehensive income Less: Comprehensive income attributable to the noncontrolling interest $ $ Year Ended December 31, 2015 498.5 $ 2014 322.1 $ (97.3) — (97.3) 0.7 (3.0) (2.3) (76.5) 49.6 (26.9) 3.1 (0.9) 2.2 2013 308.0 0.1 — 0.1 (4.9) 0.3 (4.6) (26.4) (173.3) 174.0 44.1 17.7 (81.9) 416.6 9.1 407.5 $ $ 22.3 (151.0) (175.7) 146.4 12.8 133.6 35.9 209.9 205.4 513.4 12.5 500.9 COMPREHENSIVE INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS (1) Income taxes are not provided on the equity in undistributed earnings of our foreign subsidiaries or affiliates since it is our intention that such earnings will remain invested in those affiliates permanently. The amount for the twelve months ended December 31, 2014 includes the reclassification to net income due to the divestiture of our FMC Peroxygens business. See Note 9 within these consolidated financial statements for more information. $ $ $ (2) At December 31st of each year, we remeasure our pension and postretirement plan obligations at which time we record any actuarial gains (losses) and prior service (costs) credits to other comprehensive income. (3) For more detail on the components of these reclassifications and the affected line item in the Consolidated Statements of Income see Note 15 within these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. FMC CORPORATION - Form 10-K 37 PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Consolidated Balance Sheets (in Millions, Except Share and Par Value Data) ASSETS Current assets Cash and cash equivalents Trade receivables, net of allowance of $13.9 in 2015 and $37.2 in 2014(1) Inventories Prepaid and other current assets Deferred income taxes Current assets of discontinued operations held for sale Total current assets Investments Property, plant and equipment, net Goodwill Other intangibles, net Other assets including long-term receivables, net Deferred income taxes Noncurrent assets of discontinued operations held for sale TOTAL ASSETS LIABILITIES AND EQUITY Current liabilities Short-term debt and current portion of long-term debt Accounts payable, trade and other Advance payments from customers Accrued and other liabilities Accrued customer rebates Guarantees of vendor fi nancing Accrued pension and other postretirement benefi ts, current Income taxes Current liabilities of discontinued operations held for sale Total current liabilities Long-term debt, less current portion Accrued pension and other postretirement benefi ts, long-term Environmental liabilities, continuing and discontinued Deferred income taxes Noncurrent liabilities of discontinued operations held for sale Other long-term liabilities Commitments and contingent liabilities (Note 18) Equity Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2015 or 2014 Common stock, $0.10 par value, authorized 260,000,000 shares in 2015 and 2014; 185,983,792 issued shares in 2015 and 2014 Capital in excess of par value of common stock Retained earnings Accumulated other comprehensive income (loss) Treasury stock, common, at cost: 52,328,015 shares in 2015 and 52,666,121 shares in 2014 Total FMC stockholders’ equity Noncontrolling interests Total equity TOTAL LIABILITIES AND EQUITY (1) A portion of the allowance was reclassified to long-term at December 31, 2015. See Note 8 for detail. The accompanying notes are an integral part of these consolidated financial statements. 38 FMC CORPORATION - Form 10-K December 31, 2015 2014 $ 78.6 1,851.4 800.2 241.7 — — 2,971.9 2.5 1,016.4 776.1 837.0 435.1 286.9 — 109.5 1,602.5 607.6 188.8 222.7 203.3 2,934.4 5.5 930.0 352.5 246.9 255.1 200.1 401.5 6,325.9 $ 5,326.0 $ $ 112.6 403.6 249.9 337.6 256.1 67.2 6.4 19.9 — 1,453.3 2,036.3 194.2 281.8 173.2 — 278.8 525.2 378.3 190.2 407.2 236.0 50.2 12.7 22.2 88.4 1,910.4 1,138.9 238.7 209.9 51.3 4.7 208.1 — — 18.6 417.7 3,385.0 (457.3) (1,498.3) 1,865.7 42.6 1,908.3 6,325.9 $ $ 18.6 401.9 2,984.5 (375.8) (1,498.7) 1,530.5 33.5 1,564.0 5,326.0 $ $ $ $ $ $ PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Consolidated Statements of Cash Flows (in Millions) Cash provided (required) by operating activities of continuing operations: Net income Discontinued operations Income (loss) from continuing operations Adjustments from income from continuing operations to cash provided (required) by operating activities of continuing operations: $ $ Depreciation and amortization Equity in (earnings) loss of affi liates Restructuring and other charges (income) Deferred income taxes Pension and other postretirement benefi ts Share-based compensation Excess tax benefi ts from share-based compensation Changes in operating assets and liabilities, net of eff ect of acquisitions and divestitures: Trade receivables, net Guarantees of vendor fi nancing Inventories Accounts payable Advance payments from customers Accrued customer rebates Income taxes Pension and other postretirement benefi t contributions Environmental spending, continuing, net of recoveries Restructuring and other spending Change in other operating assets and liabilities, net(1) Cash provided (required) by operating activities of continuing operations Cash provided (required) by operating activities of discontinued operations: Environmental spending, discontinued, net of recoveries Other activities of discontinued operations held for sale Payments of other discontinued reserves, net of recoveries Year Ended December 31, $ $ 2015 498.5 (676.4) (177.9) 115.7 0.2 244.0 19.9 49.2 15.4 (1.4) 140.9 11.4 78.3 (292.5) 60.6 11.0 (285.9) (78.7) (32.2) (34.9) (120.2) (277.1) $ $ 2014 322.1 (14.5) 307.6 93.5 (0.2) 56.4 (57.8) 29.6 14.8 (4.7) (274.7) 22.3 36.2 (16.2) 11.3 34.3 12.7 (68.3) (17.5) (9.5) 115.1 284.9 2013 308.0 63.6 371.6 88.0 (0.7) 50.5 15.3 62.3 14.2 (7.1) (382.2) (3.6) 2.4 44.8 35.9 63.4 (16.1) (68.0) (7.8) (9.9) 5.3 258.3 (17.9) (37.9) (24.8) (80.6) (9.8) 132.8 (34.2) 88.8 (31.0) 120.1 (18.7) 70.4 Cash provided (required) by operating activities of discontinued operations (1) The 2015 change is impacted by a $99.6 million reduction in the Cheminova acquisition hedge liability and the non-cash Cheminova inventory fair value amortization of $57.8 million. Total cash payments during the year ended December 31, 2015 associated with the Cheminova acquisition hedges were $264.8 million, which includes $165.2 million that were accrued and paid within the period. The accompanying notes are an integral part of these consolidated financial statements. FMC CORPORATION - Form 10-K 39 PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Consolidated Statements of Cash Flows (Continued) (in Millions) Cash provided (required) by investing activities of continuing operations: Capital expenditures Proceeds from disposal of property, plant and equipment Acquisitions, net of cash acquired Proceeds from sale of investments Other investing activities Cash provided (required) by investing activities of continuing operations Cash provided (required) by investing activities of discontinued operations: Proceeds from divestiture Other discontinued investing activities Cash provided (required) by investing activities of discontinued operations Cash provided (required) by fi nancing activities of continuing operations: Net borrowings (repayments) under committed credit facility Increase (decrease) in short-term debt Proceeds from borrowing of long-term debt Financing fees Repayments of long-term debt Acquisitions of noncontrolling interests Distributions to noncontrolling interests Dividends paid(2) Issuances of common stock, net Excess tax benefi ts from share-based compensation Contingent consideration paid Repurchases of common stock under publicly announced program Other repurchases of common stock Cash provided (required) by fi nancing activities Eff ect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period CASH AND CASH EQUIVALENTS, END OF PERIOD (2) See Note 15 regarding quarterly cash dividend. Year Ended December 31, 2015 2014 (108.5) $ 1.9 (1,205.1) 66.4 (40.2) (1,285.5) (182.2) $ 0.2 — 27.5 (35.7) (190.2) 1,649.8 (15.5) 1,634.3 — (547.3) 1,650.0 — (1,036.6) — — (86.4) 5.9 1.4 — — (3.7) (16.7) (5.3) (30.9) 109.5 78.6 $ 199.1 (44.2) 154.9 — (139.6) 3.0 (10.5) (34.6) (95.7) (3.0) (78.1) 8.6 4.7 — — (4.7) (349.9) (2.2) (13.7) 123.2 109.5 $ $ $ 2013 (165.0) 2.1 (339.6) — (62.8) (565.3) — (87.9) (87.9) (130.0) 613.3 410.5 (4.0) (4.9) (80.0) (9.9) (73.6) 10.7 7.1 (1.0) (359.9) (7.1) 371.2 (0.6) 46.1 77.1 123.2 Cash paid for interest, net of capitalized interest was $74.7 million, $61.0 million and $40.5 million, and income taxes paid, net of refunds was $340.3 million, $109.0 million and $153.3 million in December 31, 2015, 2014 and 2013, respectively. Accrued additions to property, plant and equipment at December 31, 2015, 2014 and 2013 were $23.3 million, $27.5 million and $45.4 million respectively. Th e accompanying notes are an integral part of these consolidated fi nancial statements. 40 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Consolidated Statements of Changes in Equity FMC Stockholders’ (in Millions, Except Per Share Data) Balance December 31, 2012 Net income Stock compensation plans Excess tax benefi ts from share-based compensation Shares for benefi t plan trust Net pension and other benefi t actuarial gains/(losses) and prior service costs, net of income tax Net hedging gains (losses) and other, net of income tax Foreign currency translation adjustments Dividends ($0.54 per share) Repurchases of common stock Noncontrolling interests associated with an acquisition(1) Distributions to noncontrolling interests Balance December 31, 2013 Net income Stock compensation plans Excess tax benefi ts from share-based compensation Shares for benefi t plan trust Net pension and other benefi t actuarial gains/(losses) and prior service costs, net of income tax Net hedging gains (losses) and other, net of income tax Foreign currency translation adjustments Dividends ($0.60 per share) Repurchases of common stock Noncontrolling interests associated with an acquisition(1) Distributions to noncontrolling interests Common Stock, $0.10 Par Value 18.6 $ Capital In Excess of Par $ 481.9 14.5 7.1 Retained Earnings $ 2,536.5 293.9 (73.1) (55.2) Accumulated Other Comprehensive Income (Loss) $ Treasury Stock (408.9) $ (1,147.8) $ Non- controlling Interest 74.5 14.1 11.6 0.7 (367.0) 209.9 (4.6) 1.7 $ 18.6 $ 448.3 $ 2,757.3 307.5 $ (201.9) $ (1,502.5) $ (151.0) 2.2 (25.1) (80.3) 7.6 0.9 (4.7) 16.0 4.7 (67.1) $ 18.6 $ 401.9 14.4 1.4 Balance December 31, 2014 Net income Stock compensation plans Excess tax benefi ts from share-based compensation Shares for benefi t plan trust Net pension and other benefi t actuarial gains/(losses) and prior service costs, net of income tax Net hedging gains (losses) and other, net of income tax Foreign currency translation adjustments Dividends ($0.66 per share) Repurchases of common stock BALANCE DECEMBER 31, 2015 (1) See Note 15 for more detail. The accompanying notes are an integral part of these consolidated financial statements. $ 417.7 18.6 $ $ 2,984.5 489.0 $ (375.8) $ (1,498.7) $ 6.3 (2.2) 17.7 (2.3) (96.9) (88.5) $ 3,385.0 (3.7) (457.3) $ (1,498.3) $ $ 42.6 Total Equity $ 1,554.8 308.0 26.1 7.1 0.7 209.9 (4.6) 0.1 (73.1) (367.0) (80.0) (9.9) $ 1,572.1 322.1 23.6 4.7 0.9 (151.0) 2.2 (26.9) (80.3) (4.7) (95.7) (3.0) $ 1,564.0 498.5 20.7 1.4 (2.2) 17.7 (2.3) (97.3) (88.5) (3.7) $ 1,908.3 (1.6) (24.8) (9.9) 52.3 14.6 (1.8) (28.6) (3.0) 33.5 9.5 (0.4) FMC CORPORATION - Form 10-K 41 PART II ITEM 8 Financial Statements and Supplementary Data FMC Corporation Notes to Consolidated Financial Statements Note 1 Principal Accounting Policies and Related Financial Information ............................................................................... 43 Note 2 Recently Issued and Adopted Accounting Pronouncements and Regulatory Items ...................................................... 47 Note 3 Acquisitions ................................................................................................................................................................ 48 Note 4 Goodwill and Intangible Assets .................................................................................................................................. 52 Note 5 Inventories.................................................................................................................................................................. 53 Property, Plant and Equipment .................................................................................................................................. 53 Note 6 Note 7 Restructuring and Other Charges (Income) ................................................................................................................ 53 Note 8 Receivables ................................................................................................................................................................. 56 Note 9 Discontinued Operations ........................................................................................................................................... 56 Note 10 Environmental Obligations ........................................................................................................................................ 58 Note 11 Income Taxes .............................................................................................................................................................. 61 Note 12 Debt ........................................................................................................................................................................... 63 Note 13 Pension and Other Postretirement Beneﬁ ts ................................................................................................................ 64 Note 14 Share-based Compensation ......................................................................................................................................... 68 Note 15 Equity......................................................................................................................................................................... 71 Note 16 Earnings Per Share ...................................................................................................................................................... 73 Note 17 Financial Instruments, Risk Management and Fair Value Measurements .................................................................... 73 Note 18 Guarantees, Commitments and Contingencies ........................................................................................................... 78 Note 19 Segment Information ................................................................................................................................................. 80 Note 20 Supplemental Information .......................................................................................................................................... 82 Note 21 Quarterly Financial Information (Unaudited) ............................................................................................................. 83 42 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data NOTE 1 Principal Accounting Policies and Related Financial Information Nature of operations Cash equivalents We are a diversifi ed chemical company serving agricultural, consumer and industrial markets globally with innovative solutions, applications and market-leading products. We operate in three distinct business segments: FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium. Our FMC Agricultural Solutions segment develops, markets and sells all three major classes of crop protection chemicals – insecticides, herbicides, and fungicides. Th ese products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as pest control in non-agricultural markets. Th e FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients, and functional health ingredients. Nutritional ingredients are used to enhance texture, color, structure and physical stability. Health excipients are used for binding, encapsulation and disintegrant applications. Functional health ingredients are used as active ingredients in nutraceutical and pharmaceutical markets. Our FMC Lithium segment manufactures lithium for use in a wide range of lithium products, which are used primarily in energy storage, specialty polymer and chemical synthesis application. Basis of consolidation and basis of presentation Th e accompanying consolidated fi nancial statements of FMC Corporation and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America. Our consolidated fi nancial statements include the accounts of FMC and all entities that we directly or indirectly control. All signifi cant intercompany accounts and transactions are eliminated in consolidation. Discontinued operations and reclassiﬁ cations In February 2015, our FMC Alkali Chemicals division (“ACD”) was classifi ed as a discontinued operation. For more information on discontinued operations see Note 9. As a result, our FMC Minerals segment, which previously included our FMC Alkali Chemicals and FMC Lithium divisions, was renamed FMC Lithium. We have recast all the data within this fi ling to refl ect the changes in our reportable segments to conform to the current year presentation and to present ACD as a discontinued operation retrospectively for all periods presented. In addition, certain other prior year amounts have been reclassifi ed to conform with the current year’s presentation. Estimates and assumptions In preparing the fi nancial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) we are required to make estimates and assumptions that aff ect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the fi nancial statements and the reported amounts of revenue and expenses during the reporting period. Actual results are likely to diff er from those estimates, but we do not believe such diff erences will materially aff ect our fi nancial position, results of operations or cash fl ows. We consider investments in all liquid debt instruments with original maturities of 3 months or less to be cash equivalents. Trade receivables, net of allowance Trade receivables consist of amounts owed to us from customer sales and are recorded when revenue is recognized. Th e allowance for trade receivables represents our best estimate of the probable losses associated with potential customer defaults. In developing our allowance for trade receivables, we use a two stage process which includes calculating a general formula to develop an allowance to appropriately address the uncertainty surrounding collection risk of our entire portfolio and specifi c allowances for customers where the risk of collection has been reasonably identifi ed either due to liquidity constraints or disputes over contractual terms and conditions. Our method of calculating the general formula consists of estimating the recoverability of trade receivables based on historical experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. Our analysis of trade receivable collection risk is performed quarterly, and the allowance is adjusted accordingly. Th e allowance for trade receivable is $13.9 million and $37.2 million as of December 31, 2015 and 2014, respectively. Th e allowance for long-term fi nancing receivables is $29.2 million at December 31, 2015. Th e provision to the allowance for receivables charged against operations was $5.9 million, $8.7 million and $5.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. Investments Investments in companies in which our ownership interest is 50 percent or less and in which we exercise signifi cant infl uence over operating and fi nancial policies are accounted for using the equity method. Under the equity method, original investments are recorded at cost and adjusted by our share of undistributed earnings and losses of these investments. Majority owned investments in which our control is restricted are also accounted for using the equity method. All other investments are carried at their fair values or at cost, as appropriate. We are party to several joint venture investments throughout the world, which individually and in the aggregate are not signifi cant to our fi nancial results. Inventories Inventories are stated at the lower of cost or market value. Inventory costs include those costs directly attributable to products before sale, including all manufacturing overhead but excluding distribution costs. All domestic inventories, excluding materials and supplies, are determined on a last-in, fi rst-out (“LIFO”) basis and our remaining inventories are recorded on a fi rst-in, fi rst-out (“FIFO”) basis. See Note 5. FMC CORPORATION - Form 10-K 43 PART II ITEM 8 Financial Statements and Supplementary Data Property, plant and equipment Restructuring and other charges We record property, plant and equipment, including capitalized interest, at cost. Depreciation is provided principally on the straight-line basis over the estimated useful lives of the assets (land improvements— 20 years, buildings—20 to 40 years, and machinery and equipment—three to 18 years). Gains and losses are refl ected in income upon sale or retirement of assets. Expenditures that extend the useful lives of property, plant and equipment or increase productivity are capitalized. Ordinary repairs and maintenance are expensed as incurred through operating expense. Capitalized interest We capitalized interest costs of $7.8 million in 2015, $8.0 million in 2014 and $4.6 million in 2013. Th ese costs were associated with the construction of certain long-lived assets and have been capitalized as part of the cost of those assets. We amortize capitalized interest over the assets’ estimated useful lives. Impairments of long-lived assets We review the recovery of the net book value of long-lived assets whenever events and circumstances indicate that the net book value of an asset may not be recoverable from the estimated undiscounted future cash fl ows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash fl ows are less than the net book value, we recognize an impairment loss equal to an amount by which the net book value exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. Asset retirement obligations We record asset retirement obligations at fair value at the time the liability is incurred if we can reasonably estimate the settlement date. Th e associated asset retirement obligations (“AROs”) are capitalized as part of the carrying amount of related long-lived assets. In future periods, the liability is accreted to its present value and the capitalized cost is depreciated over the useful life of the related asset. We also adjust the liability for changes resulting from the passage of time and/or revisions to the timing or the amount of the original estimate. Upon retirement of the long-lived asset, we either settle the obligation for its recorded amount or incur a gain or loss. We have mining operations in our lithium business and we have legal reclamation obligations relate to these facilities upon closure of the mines. Also, we have obligations at the majority of our manufacturing facilities in the event of permanent plant shutdown. Certain of these obligations are recorded in our environmental reserves described in Note 10. For certain AROs not already accrued, we have calculated the fair value of these AROs and concluded that the present value of these obligations was immaterial at December 31, 2015 and 2014. We have also determined that the liability for certain AROs cannot currently be calculated as the settlement dates are not reasonably estimable. We will recognize the liability for these AROs, when suffi cient information exists to estimate a range of potential settlement dates. Th e carrying amounts for the AROs for the years ended December 31, 2015 and 2014 are $1.7 million and $1.7 million, respectively. Th ese amounts are included in “Other long-term liabilities” on the consolidated balance sheet. We continually perform strategic reviews and assess the return on our businesses. Th is sometimes results in a plan to restructure the operations of a business. We record an accrual for severance and other exit costs under the provisions of the relevant accounting guidance. Additionally, as part of these restructuring plans, write-downs of long-lived assets may occur. Two types of assets are impacted: assets to be disposed of by sale and assets to be abandoned. Assets to be disposed of by sale are measured at the lower of carrying amount or estimated net proceeds from the sale. Assets to be abandoned with no remaining future service potential are written down to amounts expected to be recovered. Th e useful life of assets to be abandoned that have a remaining future service potential are adjusted and depreciation is recorded over the adjusted useful life. Capitalized software We capitalize the costs of internal use software in accordance with accounting literature which generally requires the capitalization of certain costs incurred to develop or obtain internal use software. We assess the recoverability of capitalized software costs on an ongoing basis and record write-downs to fair value as necessary. We amortize capitalized software costs over expected useful lives ranging from three to 10 years. See Note 20 for the net unamortized computer software balances. Goodwill and intangible assets Goodwill and other indefi nite life intangible assets (“intangibles”) are not subject to amortization. Instead, they are subject to at least an annual assessment for impairment by applying a fair value-based test. We test goodwill and indefi nite life intangibles for impairment annually using the criteria prescribed by U.S. GAAP accounting guidance for goodwill and other intangible assets. Based upon our annual impairment assessment, conducted in 2015, we did not record any goodwill impairments and we believe that the fair value of our reporting units with goodwill substantially exceeds their carrying value. In 2015, we recorded indefi nite life intangible impairments of $19.6 million. Th ese amounts were associated with our Seal Sands facility in Health and Nutrition as well as events within Agricultural Solutions related to Cheminova integration and restructuring activities. Th ese items are discussed further in Note 7. We did not record goodwill or indefi nite life intangible impairments to continuing operations in 2014 and 2013. Finite-lived intangible assets consist primarily of patents, access rights, customer relationships, brands, registration rights, industry licenses, developed formulations and other intangibles and are being amortized over periods of fi ve to 25 years. See Note 4 for additional information on goodwill and intangible assets and Note 7 for additional information on the indefi nite life intangible impairments. Revenue recognition We recognize revenue when the earnings process is complete, which is generally upon transfer of title. Th is transfer typically occurs either upon shipment to the customer or upon receipt by the customer. In all cases, we apply the following criteria in recognizing revenue: persuasive evidence of an arrangement exists, delivery has occurred, the selling price 44 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data is fi xed or determinable and collection is reasonably assured. Rebates due to customers are accrued as a reduction of revenue in the same period that the related sales are recorded based on the contract terms. instruments. We enter into foreign exchange contracts, including forward and purchased option contracts, to reduce the eff ects of fl uctuating foreign currency exchange rates. We periodically enter into prepayment arrangements with customers, primarily in our FMC Agricultural Solutions segment, and receive advance payments for product to be delivered in future periods. Th ese advance payments are recorded as deferred revenue and classifi ed as “Advance payments from customers” on the consolidated balance sheet. Revenue associated with advance payments is recognized as shipments are made and title, ownership and risk of loss pass to the customer. We record amounts billed for shipping and handling fees as revenue. Costs incurred for shipping and handling are recorded as costs of sales and services. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specifi c transactional taxes imposed on revenue-producing transactions are presented on a net basis and excluded from sales in the consolidated income statements. We record a liability until remitted to the respective taxing authority. Research and Development Research and development costs are expensed as incurred. In-process research and development acquired as part of asset acquisitions, which include license and development agreements, are expensed as incurred and included as a component of “Restructuring and other charges (income).” Income and other taxes We provide current income taxes on income reported for fi nancial statement purposes adjusted for transactions that do not enter into the computation of income taxes payable and recognize deferred tax liabilities and assets for the expected future tax consequences of temporary diff erences between the carrying amounts and the tax basis of assets and liabilities. We do not provide income taxes on the equity in undistributed earnings of consolidated foreign subsidiaries as it is our intention that such earnings will remain invested in those companies. Foreign currency We translate the assets and liabilities of our foreign operations at exchange rates in eff ect at the balance sheet date. For foreign operations for which the functional currency is not the U.S. dollar we record translation gains and losses as a component of accumulated other comprehensive income in equity. Th e foreign operations’ income statements are translated at the monthly exchange rates for the period. We record remeasurement gains and losses on monetary assets and liabilities, such as accounts receivables and payables, which are not in the functional currency of the operation. Th ese remeasurement gains and losses are recorded in the income statement as they occur. We generally enter into foreign currency contracts to mitigate the fi nancial risk associated with these transactions. See “Derivative fi nancial instruments” below and Note 17. Derivative ﬁ nancial instruments We mitigate certain fi nancial exposures, including currency risk, interest rate risk and commodity price exposures, through a controlled program of risk management that includes the use of derivative fi nancial We recognize all derivatives on the balance sheet at fair value. On the date the derivative instrument is entered into, we generally designate the derivative as either a hedge of the variability of cash fl ows to be received or paid related to a forecasted transaction (cash fl ow hedge) or a hedge of the fair value of a recognized asset or liability or of an unrecognized fi rm commitment (fair value hedge). We record in accumulated other comprehensive income or loss changes in the fair value of derivatives that are designated as, and meet all the required criteria for, a cash fl ow hedge. We then reclassify these amounts into earnings as the underlying hedged item aff ects earnings. We record immediately in earnings changes in the fair value of derivatives that are not designated as cash fl ow hedges. We formally document all relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. Th is process includes relating derivatives that are designated as fair value or cash fl ow hedges to specifi c assets and liabilities on the balance sheet or to specifi c fi rm commitments or forecasted transactions. We also formally assess, both at the inception of the hedge and throughout its term, whether each derivative is highly eff ective in off setting changes in fair value or cash fl ows of the hedged item. If we determine that a derivative is not highly eff ective as a hedge, or if a derivative ceases to be a highly eff ective hedge, we discontinue hedge accounting with respect to that derivative prospectively. Treasury stock We record shares of common stock repurchased at cost as treasury stock, resulting in a reduction of stockholders’ equity in the Consolidated Balance Sheets. When the treasury shares are contributed under our employee benefi t plans or issued for option exercises, we use a fi rst-in, fi rst-out (“FIFO”) method for determining cost. Th e diff erence between the cost of the shares and the market price at the time of contribution to an employee benefi t plan is added to or deducted from the related capital in excess of par value of common stock. Segment information We determined our reportable segments based on our strategic business units, the commonalities among the products and services within each segment and the manner in which we review and evaluate operating performance. We have identifi ed FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium as our reportable segments. Segment disclosures are included in Note 19. Segment operating profi t is defi ned as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales and services, selling, general and administrative expenses and research and development expenses). We have excluded the following items from segment operating profi t: corporate staff expense, interest income and expense associated with corporate debt facilities and investments, income taxes, gains (or losses) on divestitures of businesses, restructuring and other charges (income), investment gains and losses, loss on extinguishment of debt, asset impairments, LIFO inventory adjustments, acquisition related costs, non-operating pension and postretirement charges, and other FMC CORPORATION - Form 10-K 45 PART II ITEM 8 Financial Statements and Supplementary Data income and expense items. Information about how restructuring and other charges (income) relate to our businesses at the segment level is discussed in Note 7. Segment assets and liabilities are those assets and liabilities that are recorded and reported by segment operations. Segment operating capital employed represents segment assets less segment liabilities. Segment assets exclude corporate and other assets, which are principally cash equivalents, the LIFO reserve on inventory, deferred income taxes, eliminations of intercompany receivables and property and equipment not attributable to a specifi c segment, such as capitalized interest. Segment liabilities exclude substantially all debt, income taxes, pension and other postretirement benefi t liabilities, environmental reserves and related recoveries, restructuring reserves, fair value of currency contracts, intercompany eliminations, and reserves for discontinued operations. Geographic segment revenue is based on the location of our customers. Geographic segment long-lived assets include investments, net property, plant and equipment, and other non-current assets. Geographic segment data is included in Note 19. Stock compensation plans We recognize compensation expense in the fi nancial statements for all share options and other equity-based arrangements. Share-based compensation cost is measured at the date of grant, based on the fair value of the award, and is recognized over the employee’s requisite service period. See Note 14 for further discussion on our share-based compensation. Environmental obligations We provide for environmental-related obligations when they are probable and amounts can be reasonably estimated. Where the available information is suffi cient to estimate the amount of liability, that estimate has been used. Where the information is only suffi cient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Estimated obligations to remediate sites that involve oversight by the United States Environmental Protection Agency (“EPA”), or similar government agencies, are generally accrued no later than when a Record of Decision (“ROD”), or equivalent, is issued, or upon completion of a Remedial Investigation/Feasibility Study (“RI/FS”), or equivalent, that is submitted by us and the appropriate government agency or agencies. Estimates are reviewed quarterly and, if necessary, adjusted as additional information becomes available. Th e estimates can change substantially as additional information becomes available regarding the nature or extent of site contamination, required remediation methods, and other actions by or against governmental agencies or private parties. Our environmental liabilities for continuing and discontinued operations are principally for costs associated with the remediation and/or study of sites at which we are alleged to have released hazardous substances into the environment. Such costs principally include, among other items, RI/FS, site remediation, costs of operation and maintenance of the remediation plan, management costs, fees to outside law fi rms and consultants for work related to the environmental eff ort, and future monitoring costs. Estimated site liabilities are determined based upon existing remediation laws and technologies, specifi c site consultants’ engineering studies or by extrapolating experience with environmental issues at comparable sites. 46 FMC CORPORATION - Form 10-K Included in our environmental liabilities are costs for the operation, maintenance and monitoring of site remediation plans (“OM&M”). Such reserves are based on our best estimates for these OM&M plans. Over time we may incur OM&M costs in excess of these reserves. However, we are unable to reasonably estimate an amount in excess of our recorded reserves because we cannot reasonably estimate the period for which such OM&M plans will need to be in place or the future annual cost of such remediation, as conditions at these environmental sites change over time. Such additional OM&M costs could be signifi cant in total but would be incurred over an extended period of years. Included in the environmental reserve balance, other assets balance and disclosure of reasonably possible loss contingencies are amounts from third party insurance policies which we believe are probable of recovery. Provisions for environmental costs are refl ected in income, net of probable and estimable recoveries from named Potentially Responsible Parties (“PRPs”) or other third parties. Such provisions incorporate infl ation and are not discounted to their present values. In calculating and evaluating the adequacy of our environmental reserves, we have taken into account the joint and several liability imposed by Comprehensive Environmental Remediation, Compensation and Liability Act (“CERCLA”) and the analogous state laws on all PRPs and have considered the identity and fi nancial condition of the other PRPs at each site to the extent possible. We have also considered the identity and fi nancial condition of other third parties from whom recovery is anticipated, as well as the status of our claims against such parties. Although we are unable to forecast the ultimate contributions of PRPs and other third parties with absolute certainty, the degree of uncertainty with respect to each party is taken into account when determining the environmental reserve on a site-by-site basis. Our liability includes our best estimate of the costs expected to be paid before the consideration of any potential recoveries from third parties. We believe that any recorded recoveries related to PRPs are realizable in all material respects. Recoveries are recorded as either an off set in “Environmental liabilities, continuing and discontinued” or as “Other assets” in our consolidated balance sheets in accordance with U.S. accounting literature. Pension and other postretirement beneﬁ ts We provide qualifi ed and nonqualifi ed defi ned benefi t and defi ned contribution pension plans, as well as postretirement health care and life insurance benefi t plans to our employees and retirees. Th e costs (or benefi ts) and obligations related to these benefi ts refl ect key assumptions related to general economic conditions, including interest (discount) rates, healthcare cost trend rates, expected rates of return on plan assets and the rates of compensation increase for employees. Th e costs (or benefi ts) and obligations for these benefi t programs are also aff ected by other assumptions, such as average retirement age, mortality, employee turnover, and plan participation. To the extent our plans’ actual experience, as infl uenced by changing economic and fi nancial market conditions or by changes to our own plans’ demographics, diff ers from these assumptions, the costs and obligations for providing these benefi ts, as well as the plans’ funding requirements, could increase or decrease. When actual results diff er from our assumptions, the diff erence is typically recognized over future periods. In addition, the unrealized gains and losses related to our pension and postretirement benefi t obligations may also aff ect periodic benefi t costs (or benefi ts) in future periods. See Note 13 for additional information relating to pension and other postretirement benefi ts. NOTE 2 Recently Issued and Adopted Accounting Pronouncements and Regulatory Items PART II ITEM 8 Financial Statements and Supplementary Data New Accounting guidance and regulatory items On February 25, 2016, the Financial Accounting Standards Board (FASB) issued its new lease accounting guidance in Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specifi ed asset for the lease term. Th e new standard is eff ective for fi scal year beginning after December 15, 2018, including interim periods within those fi scal years (i.e. a January 1, 2019 eff ective date). We are evaluating the eff ect the guidance will have on our consolidated fi nancial statements. In January 2016, the FASB issued Accounting Standards Update (ASU) 2016-01, “Financial Instruments--Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance in U.S. GAAP on the classifi cation and measurement of fi nancial instruments. Changes to the current guidance primarily aff ect the accounting for equity investments, fi nancial liabilities under the fair value option, and the presentation and disclosure requirements for fi nancial instruments. Th e new standard is eff ective for fi scal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-eff ect adjustment to the balance sheet at the beginning of the fi rst reporting period in which the guidance is eff ective. Early adoption is not permitted except for the provision to record fair value changes for fi nancial liabilities under the fair value option resulting from instrument-specifi c credit risk in other comprehensive income. We are evaluating the eff ect the guidance will have on our consolidated fi nancial statements. Recently adopted accounting guidance In November 2015 the FASB issued ASU 2015-17, Income Taxes (Topic 740) Related to the Balance Sheet Classifi cation of Deferred Taxes which will require entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classifi ed balance sheet. Th e ASU simplifi es the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classifi ed balance sheet. We have adopted this ASU as of December 31, 2015 and prior periods have not been adjusted to refl ect this adoption. In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. Th is new standard eliminates the requirement to restate prior period fi nancial statements for measurement period adjustments associated with business combinations. Th is new guidance does not change what constitutes a measurement period adjustment. We have adopted this guidance prospectively beginning in the third quarter of 2015. For more information on the measurement period adjustments recorded during 2015, see Note 3. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Th e amendments in this new standard require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Th e recognition and measurement guidance for debt issuance costs are not aff ected by the amendments in this standard. As permitted under the guidance, we have adopted this In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. Th is new standard changes the criteria by which to measure inventory. Prior to the issuance of this new standard, inventory was measured at the lower of cost or market value. Th is required three separate data points in order to measure inventory. Th e three data points were cost, market with a ceiling of net realizable value and market with a fl oor of net realizable value less a normal profi t margin. Th is amendment eliminates the two data points defi ning “market” and replaces them with one, net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Th is amendment does not impact inventory measured using last-in, fi rst-out. We are required to adopt this standard in the fi rst quarter of 2017 and early adoption is permitted. We believe the adoption will not have a material impact on our consolidated fi nancial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Th is guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes eff ective. We intend to adopt this standard for interim and annual periods beginning after December 15, 2017. Th e standard permits the use of either the retrospective or cumulative eff ect transition method. We are evaluating the eff ect that ASU 2014-09 will have on our consolidated fi nancial statements and related disclosures. We have not yet selected a transition method nor have we determined the eff ect of the standard on our ongoing fi nancial reporting. Standard at December 31, 2015 and have reclassifi ed all prior periods to be consistent with the requirements as outlined in the ASU. Th e impact of the prior period reclassifi cation was a $14.5 million reduction of Other assets on our consolidated balance sheet and a corresponding reduction in long-term debt as of December 31, 2014. In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis. Th is new standard changes the consolidation evaluation for entities that are required to evaluate whether they should consolidate certain legal entities. We are required to adopt this standard in the fi rst quarter of 2016 but under the rules have elected to adopt as part of year end 2015. We have evaluated the eff ect that ASU 2015-02 had on our consolidated fi nancial statements and have determined that there was no impact upon adoption. In April 2014, the FASB issued its updated guidance on the fi nancial reporting of discontinued operations. Th is new standard changed the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the this guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Additionally, expanded disclosures about discontinued operations would be required to provide fi nancial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. Th is guidance impacts disclosures within an entity’s fi nancial statements and notes to the fi nancial statements. We have adopted this guidance prospectively beginning in 2015. FMC CORPORATION - Form 10-K 47 PART II ITEM 8 Financial Statements and Supplementary Data NOTE 3 Acquisitions 2015 Acquisitions: Cheminova A/S On April 21, 2015, pursuant to the terms and conditions set forth in the Purchase Agreement, we completed the acquisition of 100% of the outstanding equity of Cheminova A/S, a Denmark Aktieselskab (“Cheminova”) from Auriga Industries A/S, a Denmark Aktieselskab for an aggregate purchase price of $1.2 billion, excluding assumed net debt and hedged-related costs totaling $0.6 billion (the “Acquisition”). Th e Acquisition was funded with the October 10, 2014 term loan which was secured for the purposes of the Acquisition. See Note 11 for more information. Cheminova is being integrated into our FMC Agricultural Solutions segment and has been included within our results of operations since the date of acquisition. Th e acquisition of Cheminova broadens our supply capabilities and strengthen our geographic footprint, particularly in Europe. Preliminary Purchase Price Allocation Th e acquisition of Cheminova has been accounted for under the U.S. GAAP business combinations accounting guidance, and as such we have applied acquisition accounting. Acquisition accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. Th e aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair values at the Acquisition date using primarily Level 2 and Level 3 inputs (see Note 17 for an explanation of Level 2 and 3 inputs). Th ese Level 2 and Level 3 valuation inputs include an estimate of future cash fl ows and discount rates. Additionally, estimated fair values are based, in part, upon outside preliminary appraisals for certain assets, including specifi cally-identifi ed intangible assets. Th e allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based upon preliminary information. Th e allocation is subject to change within the measurement period (up to one year from the acquisition date) as additional information concerning fi nal asset and liability valuations is obtained. Any changes to the initial allocation are referred to as measurement-period adjustments. Measurement-period adjustment since our initial preliminary estimates reported in our second quarter 2015 Form 10-Q were primarily related to decreases in the estimated fair values of certain current assets, property, plant and equipment and income taxes payable. Th ese decreases were off set by increases in current and long-term asset and liabilities, intangible assets and deferred income taxes. Th e cumulative eff ect of all measurement-period adjustments resulted in an increase to recognized goodwill of approximately $55 million. Th e primary areas of the preliminary purchase price allocation that are not yet fi nalized relate to the fair value of trade receivables, inventories, property, plant and equipment, intangible assets, legal reserves, contingent liabilities, including uncertain tax positions, deferred tax assets and liabilities as well as other assets and liabilities. During the measurement period, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date we will revise the preliminary purchase price allocation. Th e eff ect of measurement period adjustments to the estimated fair values will be calculated as if the adjustments had been completed on the acquisition date. Th e impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings. 48 FMC CORPORATION - Form 10-K Th e following table summarizes the consideration paid for Cheminova and the amounts of the assets acquired and liabilities assumed as of the acquisition date, which have been allocated on a preliminary basis. PART II ITEM 8 Financial Statements and Supplementary Data Preliminary Purchase Price Allocation (in Millions) Trade receivables Inventories(1) Other current assets Property, plant & equipment Intangible assets(2) $ 493.3 374.8 53.6 186.4 Customer relationships Brands In-process research & development 294.1 362.8 1.4 Goodwill(3) 448.5 85.2 Other assets 2,300.1 Total fair value of assets acquired 140.5 Short-term debt 430.3 Other current liabilities 47.2 Environmental reserves Long-term debt(4) 273.1 165.1 Deferred tax liabilities 38.8 Other liabilities 1,095.0 Total fair value of liabilities assumed 1,205.1 TOTAL CASH PAID, LESS CASH ACQUIRED (1) The Fair value of finished goods inventory acquired included a step-up in the value of approximately $57.8 million, of which all was expensed in 2015 and $ $ $ included in “Cost of sales and services” on the consolidated income statement. (2) The weighted average useful life of the acquired finite-lived intangibles, which primarily represents customer relationships, is approximately 20 years. (3) Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. None of the acquired goodwill will be deductible for income tax purposes. (4) Long-term debt assumed primarily consisted of mortgage debt and borrowings under existing Cheminova credit facilities. As of December 31, 2015 the principal borrowings under this assumed debt has been settled using the borrowing under the October 10, 2014 term loan. Unaudited Pro Forma Financial Information Th e following unaudited pro forma results of operations assume that the Acquisition occurred at the beginning of the periods presented. Th e pro forma amounts include certain adjustments, including interest expense on the borrowings used to complete the acquisition, depreciation and amortization expense and income taxes. Th e pro forma amounts for the twelve month period below exclude acquisition-related charges. Th e pro forma results do not include adjustments related to cost savings or other synergies that are anticipated as a result of the Acquisition. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisition had occurred as of January 1, 2014, nor are they indicative of future results of operations. (in Millions) Pro forma Revenue Pro forma Diluted earnings per share Year ended December 31, 2015 3,638.5 4.99 $ $ 2014 4,484.4 3.01 $ $ FMC CORPORATION - Form 10-K 49 PART II ITEM 8 Financial Statements and Supplementary Data Acquisition-related charges Pursuant to U.S. GAAP, costs incurred to complete the Acquisition as well as costs incurred to integrate Cheminova into our operations are expensed as incurred. Th e following table summarizes the costs incurred associated with these combined activities. Year ended December 31 (in Millions) Acquisition-related charges Legal and professional fees(1) Inventory fair value amortization(2) (Gain)/loss on hedging purchase price(3) TOTAL ACQUISITION-RELATED CHARGES Restructuring charges and asset disposals Cheminova restructuring TOTAL CHEMINOVA RESTRUCTURING CHARGES(4) (1) Represents transaction costs, costs for transitional employees, other acquired employee related costs and integration related legal and professional third-party fees. 32.2 — 99.6 131.8 60.4 57.8 172.1 290.3 118.3 118.3 — — $ $ $ $ $ $ 2015 2014 On the consolidated statements of income (loss), these charges are included in “Selling, general and administrative expense.” (2) On the consolidated statements of income (loss), these charges are included in “Costs of sales and services.” (3) See “Cheminova Acquisition Hedge Costs” below for more information on these charges. On the consolidated statements of income (loss), these charges are included in “Selling, general and administrative expense.” (4) See Note 7 for more information. These charges are recorded as a component of “Restructuring and other charges (income)” on the consolidated statements of income (loss). Cheminova Acquisition Hedge Costs Pursuant to the terms and conditions set forth in the Purchase Agreement, we agreed to acquire all of the outstanding equity of Cheminova from Auriga for an aggregate purchase price of $8.5 billion Danish krone (“DKK”). At the time we entered into the Purchase Agreement, the U.S. dollar (“USD” or “$”) to DKK exchange rate was USD $1.00 to DKK $5.77, resulting in a USD purchase price of $1.47 billion, excluding assumed debt of approximately $0.3 billion. In order to minimize our exposure to adverse changes in the USD to DKK exchange rate from September 8, 2014 to April 21, 2015 (the acquisition close date), we entered into a series of foreign currency forward contracts (“FX forward contracts”). Th e FX forward contracts provided us the ability to fi x the USD to DKK exchange rate for most of the DKK $8.5 billion purchase price, thereby limiting our exposure to foreign currency rate fl uctuations. Over the period from September 2014 to April 21, 2015 the USD strengthened against the DKK by approximately 21 percent to an exchange rate of USD $1.00 to DKK $6.96. Th e strengthening of the USD against the DKK results in a lower USD purchase price for Cheminova. Partially off setting this was a mark-to-market net loss settlement on the FX forward contracts of $172.1 million in 2015 and $99.6 million in 2014. 2014 Acquisitions: Noncontrolling interest purchase: In October 2014 we purchased the remaining 6.25% ownership interest from the last remaining non-controlling interest holder in a legal entity within our discontinued FMC Alkali Chemicals division. See Note 15 for more information. 2013 Acquisitions Epax: In July 2013, we acquired 100 percent of the stock of Epax Nutra Holding III AS and Epax UK Holding III AS (together, “Epax”) for $339.6 million. Epax is a global supplier of fi sh-based omega-3 EPA/DHA fatty acid concentrates. Epax was integrated into our FMC Health and Nutrition segment from the acquisition date. Th e results of operations related to Epax have been included in our results since the acquisition date. Th is acquisition was considered a business under the U.S. GAAP business combinations accounting guidance, and therefore we applied acquisition accounting. Acquisition accounting requires, among other things, that assets and liabilities assumed be recognized at their fair values as of the acquisition date. Th e net assets of the Epax acquisition were recorded at the estimated fair values using primarily Level 2 and Level 3 inputs (see Note 17 for an explanation of Level 2 and 3 inputs). In valuing acquired assets and liabilities, valuation inputs include an estimate of future cash fl ows and discount rates based on the internal rate of return and the weighted average rate of return. 50 FMC CORPORATION - Form 10-K Purchase Price Allocation PART II ITEM 8 Financial Statements and Supplementary Data (in Millions) 15.6 Trade receivables Inventories(1) 53.7 5.0 Other current assets 136.8 Property, plant & equipment Intangible assets(2) 71.7 Goodwill(3) 99.4 0.6 Other assets 382.8 Total fair value of assets acquired 12.3 Current liabilities 30.5 Deferred tax liabilities 0.4 Other liabilities 43.2 Total fair value of liabilities assumed 339.6 TOTAL CASH PAID, LESS CASH ACQUIRED (1) Fair value of finished good inventories acquired included a step-up in the value of approximately $9.4 million, of which $5.2 million was expensed in 2013 $ $ $ $ with the remaining, $4.2 million, expensed in 2014. Amounts are expensed to “Cost of sales and services.” (2) The major classes of intangible assets acquired primarily represent customer relationships and brands. The weighted average useful life of the acquired finite-lived intangibles is approximately 17 years. See Note 4 for more information. (3) Goodwill largely consisted of expected revenue synergies resulting from the business combinations. None of the acquired goodwill will be deductible for income tax purposes. Noncontrolling interest purchase: In 2013, we completed the purchase of additional ownership interest in a legal entity our within our discontinued FMC Alkali Chemicals division. See Note 15 for more information. FMC CORPORATION - Form 10-K 51 PART II ITEM 8 Financial Statements and Supplementary Data NOTE 4 Goodwill and Intangible Assets Th e changes in the carrying amount of goodwill by business segment for the years ended December 31, 2015 and 2014, are presented in the table below: (in Millions) Balance, December 31, 2013 Foreign currency adjustments Balance, December 31, 2014 Acquisitions Foreign currency adjustments BALANCE, DECEMBER 31, 2015 FMC Agricultural Solutions 31.0 $ $ $ — 31.0 448.5 — 479.5 $ $ $ FMC Health and Nutrition 358.4 $ (36.9) 321.5 $ — (24.9) 296.6 $ FMC Lithium — $ — — $ — — — $ Total 389.4 (36.9) 352.5 448.5 (24.9) 776.1 Our fi scal year 2015 annual goodwill impairment test was performed during the third quarter ended September 30, 2015. We determined no goodwill impairment existed. Th ere were no events or circumstances indicating that goodwill might be impaired as of December 31, 2015. Our intangible assets, other than goodwill, consist of the following: (in Millions) Intangible assets subject to amortization (fi nite-lived) Weighted avg. useful life at December 31, 2015 Customer relationships Patents Brands(1) Purchased and licensed technologies Other intangibles 19 years $ 3 years 11 years 11 years 29 years Intangible assets not subject to amortization (indefi nite life) Brands(1) In-process research & development TOTAL INTANGIBLE ASSETS (1) Represents trademarks, trade names and know-how. $ $ $ $ December 31, 2015 Accumulated Amortization Gross 435.5 $ 2.2 14.2 71.0 3.5 526.4 $ 384.7 1.4 386.1 912.5 $ (40.8) $ (0.3) (2.7) (29.5) (2.2) (75.5) $ $ $ (75.5) $ December 31, 2014 Accumulated Amortization Gross Net 394.7 1.9 11.5 41.5 1.3 450.9 $ $ 152.8 $ 1.7 1.2 74.3 3.6 233.6 $ $ 384.7 1.4 386.1 $ 837.0 $ 63.4 — 63.4 297.0 $ Net 130.3 1.6 0.6 49.8 1.2 183.5 63.4 — 63.4 246.9 (22.5) $ (0.1) (0.6) (24.5) (2.4) (50.1) $ $ $ (50.1) $ At December 31, 2015, the fi nite-lived and indefi nite life intangibles were allocated among our business segments as follows: (in Millions) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium TOTAL (in Millions) Amortization Expense Finite-lived 379.8 $ 70.0 1.1 450.9 $ Indefi nite life 371.0 15.1 — 386.1 $ $ Year Ended December 31, $ 2015 22.7 $ 2014 11.0 $ 2013 9.7 Th e estimated pre-tax amortization expense for each of the fi ve years ending December 31, 2016 to 2020 is $29.5 million, $28.9 million, $28.9 million, $28.7 million and $28.4 million, respectively. 52 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data NOTE 5 Inventories Inventories consisted of the following: (in Millions) Finished goods Work in process Raw materials, supplies and other FIFO inventory $ Less: Excess of FIFO cost over LIFO cost NET INVENTORIES Approximately 29% and 38% of our inventories in 2015 and 2014, respectively were recorded on the LIFO basis. $ $ December 31, 2015 350.0 275.4 335.6 961.0 (160.8) 800.2 $ 2014 281.1 242.6 248.3 772.0 (164.4) 607.6 NOTE 6 Property, Plant and Equipment Property, plant and equipment consisted of the following: (in Millions) Land and land improvements Buildings Machinery and equipment Construction in progress Total cost Accumulated depreciation PROPERTY, PLANT AND EQUIPMENT, NET December 31, 2015 101.9 320.4 1,171.9 190.4 1,784.6 (768.2) 1,016.4 $ $ December 31, 2014 61.4 269.7 1,064.8 222.8 1,618.7 (688.7) 930.0 $ $ Depreciation expense was $74.1 million, $67.0 million, and $56.6 million in 2015, 2014 and 2013, respectively. NOTE 7 Restructuring and Other Charges (Income) Th e following table shows total restructuring and other charges included in the respective line items of the Consolidated Statements of Income: (in Millions) Restructuring Charges and Asset Disposals Other Charges (Income), Net TOTAL RESTRUCTURING AND OTHER CHARGES Restructuring Charges and Asset Disposals Year Ended December 31, $ $ 2015 217.7 $ 26.3 244.0 $ 2014 17.2 $ 39.2 56.4 $ 2013 12.2 38.3 50.5 Restructuring Charges (in Millions) Cheminova Restructuring Health and Nutrition Restructuring Other Items YEAR ENDED DECEMBER 31, 2015 Health and Nutrition Restructuring Other Items Year ended December 31, 2014 Lithium Restructuring Other Items Year ended December 31, 2013 (1) Represents severance and employee benefit charges. (2) Primarily represents costs associated with lease payments, contract terminations, and other miscellaneous exit costs. Other Income primarily represents favorable Severance and Employee Benefi ts(1) 23.5 6.5 6.0 36.0 10.1 0.5 10.6 2.8 1.8 4.6 Asset Disposal Charges(3) 92.1 86.1 — 178.2 $ 3.1 0.2 3.3 $ 1.9 0.4 2.3 $ Other Charges (Income)(2) 2.7 1.0 (0.2) 3.5 0.7 2.6 3.3 4.4 0.9 5.3 Total 118.3 93.6 5.8 217.7 13.9 3.3 17.2 9.1 3.1 12.2 $ $ $ $ $ $ $ $ $ developments on previously recorded exit costs and recoveries associated with restructuring. (3) Primarily represents accelerated depreciation and impairment charges on long-lived assets, which were or are to be abandoned. To the extent incurred, the acceleration effect of re-estimating settlement dates and revised cost estimates associated with asset retirement obligations due to facility shutdowns, are also included within the asset disposal charges. FMC CORPORATION - Form 10-K 53 PART II ITEM 8 Financial Statements and Supplementary Data 2015 Restructuring Activities Cheminova Restructuring On April 21, 2015 we completed the acquisition of Cheminova. See Note 3 for more details. As part of the integration of Cheminova into our existing FMC Agricultural Solutions segment we implemented a restructuring plan. Th e restructuring plan includes workforce reductions, relocation of current operating locations, lease termination fees and fi xed asset accelerated depreciation as well as fi xed asset disposal charges at several of our FMC Agricultural Solutions’ facilities. Included within these actions was the decision to exit our generic crop protection business in Brazil, Consagro Agroquimica Ltda. (Consagro). Consagro Crop Protection Business On September 10, 2015, we entered into a defi nitive agreement to sell our generic crop protection business in Brazil, Consagro, to Atanor do Brazil Ltda., the Brazilian subsidiary of Albaugh, LLC. Th e sale of Consagro is part of our broad strategy to focus our portfolio of valued-added products, especially with the addition of the Cheminova product line in Brazil. Th is sale was completed in the fourth quarter of 2015 and resulted in $31.9 million of cash proceeds. Th e proceeds from the sale are included within “Proceeds from sale of investments” on the consolidated statement of cash fl ows. As a result of the sale, we recorded a loss of $64.5 million representing the carrying value of the assets less the net proceeds and the costs of selling the business. Health and Nutrition Restructuring In 2014 our FMC Health and Nutrition segment implemented a plan to restructure a portion of its operations. Th e objective of the restructuring was to better align our business and costs to macroeconomic and market realities. Th e restructuring decision resulted in workforce reductions at several of our FMC Health and Nutrition facilities. In 2015, these restructuring activities continued with the mothballing of our Seal Sands UK facility as well as the sale of our pectin manufacturing business. Seal Sands Our Seal Sands facility was acquired as part of the EPAX acquisition for the manufacture of specifi c pharmaceutical Omega-3-Active Pharmaceutical Ingredients (API’s) which would compete as a generic alternative to the prescription Lovaza drug. Th is facility started operations in 2014, and during both 2014 and 2015 was used for productions of these generic Lovaza alternatives. However, since the start of the operations, the dynamics of the Lovaza market have changed dramatically as several generic players have penetrated the market sooner than originally expected, and growth overall has slowed as the category has become mature. In the fourth quarter of 2015, given the lack of demand for these Omega-3 products, we took action and mothballed the site. As a result of this decision, we accelerated the depreciation of the remaining carrying value of the site to its salvage value over its remaining expected use period. Since we believe the expected use period is limited, these accelerated depreciation charges were all incurred in the fourth quarter of 2015 and no further accelerated depreciation charges are expected in 2016. Th ese accelerated depreciation charges totaled approximately $45.8 million. Additionally, we wrote off stranded inventory at the site which totaled approximately $14.4 million. As a result of the mothballing decision, this inventory had no other outlets and cannot be able to be reworked elsewhere and therefore became impaired as a result of these events. Finally, the decisions noted above resulted in the need for us to re-test for impairment the EPAX indefi nite-lived intangible asset. As a result of that test, an impairment charge of $10.3 million was recognized associated with this indefi nite lived asset. Pectin As part of our Health and Nutrition Restructuring we changed our strategy for pectin shifting our focus from the manufacture of standard grade pectin to concentrate on higher-value, more specialized solutions for our customers. To accomplish our goals under this new strategy on September 11, 2015, we completed the sale of our pectin manufacturing business, located in Milazzo, Italy, to Cargill, Inc (Cargill). Th e sale resulted in approximately $7.0 million in proceeds and a loss on sale of $11.9 million in December 31, 2015. Th e proceeds from the sale are included within “Proceeds from sale of investment/ business” on the Consolidated Statement of Cash Flows. Th e loss of $11.9 million was comprised of net assets sold of $18.9 million which primarily included property, plant and equipment and trade working capital (i.e., trade receivables and payables as well as inventory). In connection with the sale we entered into a customary transitional services agreement with Cargill to provide for the orderly separation of the business. We provided these services to Cargill for three months after closing. We also entered into an arm’s-length supply agreement with Cargill, which provides us with more effi cient and fl exible sourcing on a broad range of both standard and specialty pectin grades. 54 FMC CORPORATION - Form 10-K Roll forward of Restructuring Reserves Th e following table shows a roll forward of restructuring reserves that will result in cash spending. Th ese amounts exclude asset retirement obligations. PART II ITEM 8 Financial Statements and Supplementary Data Balance at 12/31/13(4) Change in reserves(2) Cash Balance at 12/31/14(4) Change in reserves(2) 26.2 Cash $ — $ — $ — $ — $ payments Other(3) (in Millions) Cheminova Restructuring Health and Nutrition Restructuring Other Workforce Related and Facility Shutdowns (1) Restructuring activities related to discontinued operations (5) TOTAL (1) Primarily severance costs related to workforce reductions and facility shutdowns described in the “Other Items” sections above. (2) Primarily severance, exited lease, contract termination and other miscellaneous exit costs. The accelerated depreciation and impairment charges noted above payments Other(3) 0.6 (18.1) $ (0.1) (34.9) $ (3.3) (12.7) $ 2.7 10.3 $ 2.3 16.2 $ 3.0 6.1 $ (2.2) 37.3 0.4 15.6 0.7 0.7 — 2.9 (10.2) — $ (3.2) (6.2) (6.5) 10.8 3.6 1.3 5.8 3.0 — 2.9 7.5 4.6 3.1 — 3.1 1.0 — $ $ $ $ $ $ Balance at 12/31/15(4) 8.7 impacted our property, plant and equipment or intangible balances and are not included in the above tables. (3) Primarily foreign currency translation adjustments. (4) Included in “Accrued and other liabilities” on the consolidated balance sheets. (5) Cash spending associated with restructuring activities of discontinued operations is reported within “Payments of other discontinued reserves, net of recoveries” on the consolidated statements of cash flows. OTHER CHARGES (INCOME), NET (in Millions) Environmental charges, net Argentina Devaluation Belchim Crop Protection sale Other items, net OTHER CHARGES (INCOME), NET Environmental charges, net Environmental charges represent the net charges associated with environmental remediation at continuing operating sites, see Note 10 for additional details. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations. Argentina Devaluation On December 17, 2015 the Argentina government initiated actions to signifi cantly devalue its currency. Th ese actions created an immediate loss associated with the impacts of the remeasurement of our local balance sheet at the date of the devaluation. Th e loss was attributable to Lithium and Agricultural Solutions operations. Because of the severity of the event and its immediate impact to our operations in the country, the charge associated with the remeasurement was included within restructuring and other charges in our consolidated income statement. Belchim Crop Protection Sale During 2015 we sold our remaining ownership interest in a Belgian- based pesticide distribution company, Belchim Crop Protection N.V. (“Belchim”). Prior to and subsequent to the sale, Belchim was accounted for as a cost method investment. Th e gain on the sale was $26.6 million. Year Ended December 31, 2015 21.7 10.7 (26.6) 20.5 26.3 $ $ 2014 43.7 $ — (26.6) 22.1 39.2 $ 2013 6.2 — — 32.1 38.3 $ $ In 2014 we sold the fi rst portion of our ownership interest in Belchim. Belchim was previously accounted for as a cost method investment. Th e gain on the sale from the fi rst portion was also $26.6 million. Th e cash proceeds from the sale in 2015 and 2014 of $27.5 million and $27.5 million, respectively, are included within “Proceeds from sale of investment/business” on the Consolidated Statement of Cash Flows. Other items, net During 2015, 2014 and 2013 our FMC Agricultural Solutions segment entered into collaboration and license agreements with various third parties for the purposes of obtaining certain technology and intellectual property rights relating to compounds still under development. Th e rights and technology obtained is referred to as in-process research and development and in accordance with GAAP, the amounts paid were expensed as incurred since they were acquired outside of a business combination. We entered in two, such arrangements in 2015, one in 2014 and three in 2013. FMC CORPORATION - Form 10-K 55 PART II ITEM 8 Financial Statements and Supplementary Data NOTE 8 Receivables Th e following table displays a roll forward of the allowance for doubtful trade receivables for fi scal years 2014 and 2015. (in Millions) Balance, December 31, 2013 Additions — charged to expense Other Balance, December 31, 2014 Additions — charged to expense Transfer to long-term allowance (see below) BALANCE DECEMBER 31, 2015 $ $ 30.1 8.7 (1.6) 37.2 5.9 (29.2) 13.9 Th e company has fi nancing receivables that represent long-term customer receivable balances related to past due accounts which are not expected to be collected within the current year. Th e net long-term customer receivables were $90.6 million as of December 31, 2015. Th ese long- term customer receivable balances and the corresponding allowance are included in Other assets on the consolidated balance sheet. For these long-term customer receivables, interest is no longer accrued when the receivable is determined to be delinquent and classifi ed as long-term based on the estimated timing of collection. A portion of these long-term receivables have payment contracts. We have no reason to believe payments will not be made based upon the credit quality of these customers. Additionally, we also hold signifi cant collateral against these customers including rights to property or other assets as a form of credit guarantee. If the customer does not pay or gives indication that they will not pay, these guarantees allow us to start legal action to block the sale of the customer’s harvest. On an ongoing basis, we continue to evaluate the credit quality of our fi nancing receivables using aging of receivables, collection experience and write-off s, as well as evaluating existing economic conditions, to determine if an additional allowance is necessary. Th e following table displays a roll forward of the allowance for credit losses related to long-term customer receivables for fi scal years 2015. (in Millions) Balance, December 31, 2014 Transfer from allowance for doubtful accounts (see above) Net Recoveries and write- off s BALANCE DECEMBER 31, 2015 NOTE 9 Discontinued Operations FMC Alkali $ $ — 29.2 — 29.2 On April 1, 2015, we completed the sale of our FMC Alkali Chemicals division (“ACD”) for $1,649.8 million to a wholly owned subsidiary of Tronox Limited (“Tronox”). Th e sale resulted in approximately $1,198.5 million in after-tax cash proceeds and in a pre-tax gain of $1,080.2 million ($702.1 million net of tax) for the year ended December 31, 2015. In connection with the sale we entered into a customary transitional services agreement with Tronox to provide for the orderly separation of the business and transition of various functions and processes. Th ese services will be provided to Tronox for up to 12 months after closing. Th ese services include information technology services, human resource and facility services among other services, while Tronox assumes the operations of ACD. Th e results of our discontinued FMC ACD operations are summarized below: Year Ended December 31, (in Millions) Revenue Costs of sales and services Income (loss) from discontinued operations before income taxes(1) Provision for income taxes Total discontinued operations of FMC ACD, net of income taxes Less: discontinued operations of FMC ACD attributable to noncontrolling interests DISCONTINUED OPERATIONS OF FMC ACD, NET OF INCOME TAXES, ATTRIBUTABLE TO FMC STOCKHOLDERS (1) For the years ended December 31, 2015, 2014 and 2013, respectively, amounts include approximately zero, $5.9 million and $8.7 million attributable to noncontrolling interests, $2.2 million, $8.3 million and $5.9 million of allocated interest expense, $15.0 million, $9.0 million and zero of divestiture related charges, respectively as well as a $5.3 million pension curtailment charge in 2015. Interest was allocated in accordance with relevant discontinued operations accounting guidance. 2015 194.0 149.2 1,096.1 379.0 717.1 $ — $ 2014 779.0 614.9 121.2 17.3 103.9 $ $ 5.2 2013 744.1 604.6 112.7 17.0 95.7 7.6 717.1 $ 98.7 $ 88.1 $ $ $ $ $ $ 56 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data Th e following table presents the major classes of assets and liabilities of FMC Alkali Chemicals: (in Millions) Assets Current assets of discontinued operations held for sale (primarily trade receivables and inventories) Property, plant & equipment(1) Other non-current assets(1) Total assets of discontinued operations held for sale Liabilities Current liabilities of discontinued operations held for sale Noncurrent liabilities of discontinued operations held for sale(1) Total liabilities of discontinued operations held for sale NET ASSETS December 31, 2014 $ $ $ $ 203.3 378.6 22.9 604.8 (88.4) (4.7) (93.1) 511.7 (1) Presented as “Noncurrent assets\liabilities of discontinued operations held for sale” on the consolidated balance sheet as of December 31, 2014. In addition to our discontinued FMC Alkali Chemicals division, our discontinued operations in our fi nancial statements includes adjustments to retained liabilities from previous discontinued operations. Th e primary liabilities retained include environmental liabilities, other postretirement benefi t liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities. Our discontinued operations comprised the following: Year Ended December 31, 2015 2014 (in Millions) Adjustment for workers’ compensation, product liability, and other postretirement benefi ts and other, net of income tax benefi t (expense) of $1.0, $0.6 and $0.2, respectively(3) Provision for environmental liabilities, net of recoveries, net of income tax benefi t of $16.7, $16.4 and $14.2, respectively(1) Provision for legal reserves and expenses, net of recoveries, net of income tax benefi t of $6.3, $8.4 and $5.5, respectively(2) Discontinued operations of FMC Peroxygens, net of income tax benefi t (expense) of zero, ($23.7) and $25.1, respectively Discontinued operations of FMC Alkali Chemicals, net of income tax benefi t (expense) of ($379), ($17.3) and ($17.0), respectively DISCONTINUED OPERATIONS, NET OF INCOME TAXES (1) See a roll forward of our environmental reserves as well as discussion on significant environmental issues that occurred during the year in Note 10. (2) Includes a gain of $13.9 million in 2013 associated with an insurance recovery related to previously discontinued operations legal matters. No such gain existed 717.1 676.4 95.7 (63.6) 103.9 14.5 (1.1) $ (4.0) $ (111.1) (14.3) (36.7) (34.4) (23.1) (10.8) (28.8) (16.1 (9.0) — $ $ $ $ ) 2013 in 2015 or 2014. (3) See roll forward of our restructuring reserves in Note 7. Reserves for Discontinued Operations at December 31, 2015 and 2014 2014 (in Millions) 6.8 Workers’ compensation and product liability reserve 10.0 Postretirement medical and life insurance benefi ts reserve, net 36.5 Reserves for legal proceedings RESERVE FOR DISCONTINUED OPERATIONS(1) 53.3 (1) Included in “Other long-term liabilities” on the consolidated balance sheets. Also refer to Note 7 for discontinued restructuring reserves and Note 10 for 6.1 $ 9.3 30.7 46.1 $ $ $ December 31, 2015 discontinued environmental reserves. Th e discontinued postretirement medical and life insurance benefi ts liability equals the accumulated postretirement benefi t obligation. Associated with this liability is a net pre-tax actuarial gain and prior service credit of $7.6 million ($4.1 million after-tax) and $6.5 million ($3.5 million after-tax) at December 31, 2015 and 2014, respectively. Th e estimated net pre-tax actuarial gain and prior service credit that will be amortized from accumulated other comprehensive income into discontinued operations during 2016 are $1.4 million and $0.3 million, respectively. Net, spending in 2015, 2014 and 2013 was $0.8 million, $0.8 million and $0.9 million, respectively, for workers’ compensation, product liability and other claims; $1.1 million, $1.1 million and $0.9 million, respectively, for other postretirement benefi ts; and $22.9 million, $23.0 million and $8.8 million, respectively, related to reserves for legal proceedings associated with discontinued operations. FMC CORPORATION - Form 10-K 57 PART II ITEM 8 Financial Statements and Supplementary Data NOTE 10 Environmental Obligations We are subject to various federal, state, local and foreign environmental laws and regulations that govern emissions of air pollutants, discharges of water pollutants, and the manufacture, storage, handling and disposal of hazardous substances, hazardous wastes and other toxic materials and remediation of contaminated sites. We are also subject to liabilities arising under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state laws that impose responsibility on persons who arranged for the disposal of hazardous substances, and on current and previous owners and operators of a facility for the clean-up of hazardous substances released from the facility into the environment. We are also subject to liabilities under the Resource Conservation and Recovery Act (“RCRA”) and analogous state laws that require owners and operators of facilities that have treated, stored or disposed of hazardous waste pursuant to a RCRA permit to follow certain waste management practices and to clean up releases of hazardous substances into the environment associated with past or present practices. In addition, when deemed appropriate, we enter certain sites with potential liability into voluntary remediation compliance programs, which are also subject to guidelines that require owners and operators, current and previous, to clean up releases of hazardous substances into the environment associated with past or present practices. Environmental liabilities consist of obligations relating to waste handling and the remediation and/or study of sites at which we are alleged to have released or disposed of hazardous substances. Th ese sites include current operations, previously operated sites, and sites associated with discontinued operations. We have provided reserves for potential environmental obligations that we consider probable and for which a reasonable estimate of the obligation can be made. Accordingly, total reserves of $348.2 million and $296.2 million, respectively, before recoveries, existed at December 31, 2015 and 2014. Th e estimated reasonably possible environmental loss contingencies, net of expected recoveries, exceed amounts accrued by approximately $230 million at December 31, 2015. Th is reasonably possible estimate is based upon information available as of the date of the fi ling and the actual future losses may be higher given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of potentially responsible parties, technology and information related to individual sites. Additionally, although potential environmental remediation expenditures in excess of the reserves and estimated loss contingencies could be signifi cant, the impact on our future consolidated fi nancial results is not subject to reasonable estimation due to numerous uncertainties concerning the nature and scope of possible contamination at many sites, identifi cation of remediation alternatives under constantly changing requirements, selection of new and diverse clean-up technologies to meet compliance standards, the timing of potential expenditures and the allocation of costs among Potentially Responsible Parties (“PRPs”) as well as other third parties. Th e liabilities arising from potential environmental obligations that have not been reserved for at this time may be material to any one quarter’s or year’s results of operations in the future. However, we believe any liability arising from such potential environmental obligations is not likely to have a material adverse eff ect on our liquidity or fi nancial condition as it may be satisfi ed over many years. Th e table below is a roll forward of our total environmental reserves, continuing and discontinued, from December 31, 2012 to December 31, 2015. (in Millions) Total environmental reserves, net of recoveries at December 31, 2012 2013 Provision Spending, net of recoveries Net Change Total environmental reserves, net of recoveries at December 31, 2013 2014 Provision Spending, net of recoveries Transfer from asset retirement obligations Foreign currency translation adjustments Net Change Total environmental reserves, net of recoveries at December 31, 2014 2015 Provision Spending, net of recoveries Acquisitions (see Note 3) Foreign currency translation adjustments Net Change TOTAL ENVIRONMENTAL RESERVES, NET OF RECOVERIES AT DECEMBER 31, 2015 Operating and Discontinued Sites Total 216.0 $ 48.2 (59.5) (11.3) 204.7 106.2 (42.4) 16.9 (1.1) 79.6 284.3 66.9 (57.0) 47.2 (0.5) 56.6 340.9 $ $ $ To ensure we are held responsible only for our equitable share of site remediation costs, we have initiated, and will continue to initiate, legal proceedings for contributions from other PRPs. At December 31, 2015 and 2014, we have recorded recoveries representing probable realization of claims against U.S. government agencies, insurance carriers and other third parties. Recoveries are recorded as either an off set to the “Environmental liabilities, continuing and discontinued” or as “Other assets” on the consolidated balance sheets. 58 FMC CORPORATION - Form 10-K Th e table below is a roll forward of our total recorded recoveries from December 31, 2013 to December 31, 2015: PART II ITEM 8 Financial Statements and Supplementary Data December 31, 2013 Increase in Recoveries Cash Received December 31, 2014 Increase in Recoveries (in Millions) Environmental liabilities, continuing and discontinued Other assets(1) TOTAL (1) The amounts are included within “Prepaid and other current assets” and “Other assets” on the consolidated balance sheets. See Note 20 for more details. (0.5) $ (0.3) (0.8) $ 11.9 $ 29.9 41.8 $ 21.0 $ 35.5 56.5 $ 10.3 $ 15.0 25.3 $ 4.1 $ 6.9 11.0 $ 1.2 $ 9.4 10.6 $ $ $ Cash Received December 31, 2015 7.3 22.7 30.0 Th e table below provides detail of current and long-term environmental reserves, continuing and discontinued. (in Millions) Environmental reserves, current, net of recoveries(1) Environmental reserves, long-term continuing and discontinued, net of recoveries(2) TOTAL ENVIRONMENTAL RESERVES, NET OF RECOVERIES (1) These amounts are included within “Accrued and other liabilities” on the consolidated balance sheets. (2) These amounts are included in “Environmental liabilities, continuing and discontinued” on the consolidated balance sheets. $ $ December 31, 2015 59.1 $ 281.8 340.9 $ 2014 74.4 209.9 284.3 Our net environmental provisions relate to costs for the continued remediation of both operating sites and for certain discontinued manufacturing operations from previous years. Th e net provisions are comprised as follows: 2013 (in Millions) Continuing operations(1) 6.2 Discontinued operations(2) 37.3 43.5 NET ENVIRONMENTAL PROVISION (1) Recorded as a component of “Restructuring and other charges (income)” on our consolidated statements of income. See Note 7. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations. 2014 43.7 $ 53.1 96.8 $ $ $ Year ended December 31, 2015 21.7 $ 45.5 67.2 $ (2) Recorded as a component of “Discontinued operations, net” on our consolidated statements of income. See Note 9. On our consolidated balance sheets, the net environmental provisions aff ect assets and liabilities as follows: Year ended December 31, (in Millions) Environmental reserves(1) Other assets(2) NET ENVIRONMENTAL PROVISION (1) See above roll forward of our total environmental reserves as presented on our consolidated balance sheets. (2) Represents certain environmental recoveries. See Note 20 for details of “Other assets” as presented on our consolidated balance sheets. 67.2 $ 2015 66.9 $ 0.3 $ $ 2014 106.2 $ (9.4) 96.8 $ 2013 48.2 (4.7) 43.5 Signiﬁ cant Environmental Sites Pocatello From 1949 until 2001, we operated the world’s largest elemental phosphorus plant in Power County, Idaho, just outside the city of Pocatello. Since the plant’s closure, FMC has worked with the EPA, the State of Idaho, and the Shoshone-Bannock Tribes to develop a proposed cleanup plan for the property. In September of 2012, the EPA issued an Interim Record of Decision (“IROD”) that is environmentally protective and that ensures the health and safety of both workers and the general public. Since the plant’s closure, we have successfully decommissioned our Pocatello plant, completed closure of the RCRA ponds and formally requested that the EPA acknowledge completion of work under a June 1999 RCRA Consent Decree. Future remediation costs include completion of the IROD that addresses groundwater contamination and existing waste disposal areas on the Pocatello plant portion of the Eastern Michaud Flats Superfund Site. In June 2013 EPA issued a Unilateral Administrative Order to us under which we will implement the IROD remedy. Our current reserves factor in the estimated costs associated with implementing the IROD. In addition to implementing the IROD, we continue to conduct work pursuant to CERCLA unilateral administrative orders to address air emissions from beneath the cap of several of the closed RCRA ponds. Th e amount of the reserve for this site was $44.9 million and $68.6 million at December 31, 2015 and 2014, respectively. Pocatello Tribal Litigation For a number of years, we engaged in disputes with the Tribes concerning their attempts to regulate our activities on the reservation. On March 6, 2006, a U.S. District Court Judge found that the Tribes were a third- party benefi ciary of a 1998 RCRA Consent Decree and ordered us to apply for any applicable Tribal permits relating to the nearly-complete RCRA Consent Decree work. Th e third-party benefi ciary ruling was FMC CORPORATION - Form 10-K 59 PART II ITEM 8 Financial Statements and Supplementary Data later reversed by the Ninth Circuit Court of Appeals, but the permitting process continued in the tribal legal system. We applied for the tribal permits, but preserved objections to the Tribes’ jurisdiction. and extent of contamination caused by our historical plant operations, (2) take interim corrective measures and (3) evaluate Corrective Action Management Alternatives (“CMA”) for discrete contaminated areas. In addition, in 1998, the Tribes and we entered into an agreement (“1998 Agreement”) that required us to pay the Tribes $1.5 million per year for waste generated from operating our Pocatello plant and stored on site. We paid $1.5 million per year until December 2001 when the plant closed. In our view the agreement was terminated, as the plant was no longer generating waste. Th e Tribes claim that the 1998 Agreement has no end date. On April 25, 2006, the Tribes’ Land Use Policy Commission issued us a Special Use Permit for the “disposal and storage of waste” at the Pocatello plant and imposed a $1.5 million per annum permit fee. Th e permit and fee were affi rmed by the Tribal Business Council on July 21, 2006. We sought review of the permit and fee in Tribal Court, in which the Tribes also brought a claim for breach of the 1998 Agreement. On May 21, 2008, the Tribal Court reversed the permit and fee, fi nding that they were not authorized under tribal law, and dismissed the Tribes’ breach of contract claim. Th e Tribes appealed to the Tribal Court of Appeals. On May 8, 2012, the Tribal Court of Appeals reversed the May 21, 2008 Tribal Court decision and issued a decision fi nding the permit and fee validly authorized and ordering us to pay waste permit fees in the amount of $1.5 million per annum for the years 2002-2007 ($9.0 million in total), the Tribes’ demand as set forth in the lawsuit. It also reinstated the breach of contract claim. Th e Tribes have fi led additional litigation to recover the permit fees for the years since 2007, but that litigation has been stayed pending the outcome of the appeal in the Tribal Court of Appeals. Following a trial on certain jurisdictional issues which occurred during April 2014, the Shoshone-Bannock Tribal Appellate Court issued a Statement of Decision fi nding in favor of the Tribes’ jurisdiction over FMC and awarding costs on appeal to the Tribes. Th e Tribal Appellate Court conducted further post-trial proceedings and on May 6, 2014 issued Finding and Conclusions and a Final Judgment consistent with its earlier Statement of Decision. Th e fi nding by the Shoshone-Bannock Tribal Appellate Court in May 2014 does not impact our reserves for the period ended December 31, 2015. Having now exhausted the Tribal administrative and judicial process, in November 2014 we fi led an action in the United States District Court seeking declaratory and injunctive relief on the grounds that the Tribes lacked jurisdiction. We have estimated a reasonably possible loss for this matter and it has been refl ected in our total reasonably possible loss estimate previously discussed within this note. Middleport Our Middleport, NY facility is currently an Agricultural Solutions formulation and packaging plant that formerly manufactured arsenic- based and other products. As a result of past manufacturing operations and waste disposal practices at this facility, releases of hazardous substances have occurred at the the site that have aff ected soil, sediment, surface water and groundwater at the facility’s property and also in adjacent off -site areas. Th e impact of our discontinued operations was the subject of an Administrative Order on Consent (“AOC”) entered into with the EPA and New York State Department of Environmental Conservation (the “Agencies”) in 1991. Th e AOC requires us to (1) defi ne the nature We have defi ned the nature and extent of the contamination and have constructed an engineered cover, closed the RCRA regulated surface water impoundments and are collecting and treating both surface water run off and ground water, which has satisfi ed the fi rst two requirements of the AOC. In 2013 we received from the New York State Department of Environmental Conservation (“NYSDEC”), the Final Statement of Basis (“FSOB”). Th e FSOB includes the same CMA as the Preliminary Statement of Basis, which we continue to believe is overly conservative and is not consistent with the 1991 AOC, which governs the remedy selection. In order to negotiate with the NYSDEC with respect to the FSOB, we entered into a tolling agreement with the NYSDEC. Th e tolling agreement serves as a “standstill” agreement to the FSOB so that time spent negotiating with the NYSDEC does not go against the statute of limitations under the FSOB. Th e tolling agreement expired on April 30, 2014. We were not able to reach an agreement with the NYSDEC; thus, on May 1, 2014, we submitted a Notice of Dispute to the EPA seeking review of the remedy chosen by the NYSDEC. On May 30, 2014, 30 days after the tolling period expired, we fi led an action in the Supreme Court of New York formally challenging the NYSDEC’s FSOB. In that lawsuit, we are contending that NYSDEC breached the 1991 AOC by not following the procedures set forth in the AOC for remedy selection. On June 3, 2014, we received a letter from EPA (dated May 22, 2014) declining to review the Notice of Dispute. On June 20, 2014, we fi led an action in the United States District Court for the Western District of New York seeking a declaratory judgment that the EPA is obligated under the 1991 AOC to hear the dispute. On August 20, 2015, the Supreme Court of New York dismissed our state action on procedural grounds. We have appealed that dismissal to the New York Supreme Court Appellate Division, Th ird Department. Our existing federal action before the United States District Court for the Western District of New York is still pending. Th e amount of the reserve for this site is $40.1 million and $44.9 million at December 31, 2015 and 2014, respectively. Our reserve continues to include the estimated liability for clean-up to refl ect the costs associated with our recommended CMA. Our estimated reasonably possible environmental loss contingencies exposure refl ects the additional cost of the CMA proposed in the FSOB. Other Potentially Responsible Party (“PRP”) Sites We have been named a PRP at 32 sites on the federal government’s National Priorities List (“NPL”), at which our potential liability has not yet been settled. In addition, we received notice from the EPA or other regulatory agencies that we may be a PRP, or PRP equivalent, at other sites, including 38 sites at which we have determined that it is reasonably possible that we have an environmental liability. In cooperation with appropriate government agencies, we are currently participating in, or have participated in, a Remedial Investigation/ Feasibility Study (“RI/FS”), or equivalent, at most of the identifi ed sites, with the status of each investigation varying from site to site. At certain sites, a RI/FS has only recently begun, providing limited information, if any, relating to cost estimates, timing, or the involvement of other PRPs; whereas, at other sites, the studies are complete, remedial action plans have been chosen, or a ROD has been issued. 60 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data One site where FMC is listed as a PRP is the Portland Harbor Superfund Site (“Portland Harbor”), that includes the river and sediments of a 12 mile section of the lower reach of the Willamette River in Portland, Oregon that runs through an industrialized area. Portland Harbor is listed on the NPL. FMC formerly owned and operated a manufacturing site adjacent to this section of the river and has since sold its interest in this business. When the EPA determines the cleanup remedy from the RI/FS conducted during the last decade at the site, it will issue a ROD. Currently, FMC and 70 other parties including the current owner of the former FMC site are involved in a non-judicial allocation process to determine each party’s respective share of the cleanup costs. Th e EPA is expected to develop a ROD by 2017. It is anticipated that the cleanup activities will begin within one year of the issuance of the ROD. Any potential liability to FMC will represent a portion of the costs of the remedy the EPA is expected to select for Portland Harbor. Th e cost of that remedy is expected to be allocated among more than 70 potentially responsible parties. Because of the large number of responsible parties and the variability in range of remediation alternatives, we are unable to develop a reasonable estimate of our potential exposure for Portland Harbor at this time. Based on information currently available, we have no reason to believe that the ultimate resolution of our potential obligations at Portland Harbor will have a material adverse eff ect on our consolidated fi nancial position, liquidity or results of operations. However, there can be no assurance that the outcome will be favorable. Adverse results in the outcome of the EPA decision could have a material adverse eff ect on our consolidated fi nancial position, results of operations in any one reporting period, or liquidity. NOTE 11 Income Taxes Domestic and foreign components of income (loss) from continuing operations before income taxes are shown below: (in Millions) Domestic Foreign TOTAL Year Ended December 31, $ $ 2015 (186.7) $ 56.2 (130.5) $ 2014 27.4 336.4 363.8 $ $ Th e provision (benefi t) for income taxes attributable to income (loss) from continuing operations consisted of: 2013 174.4 328.8 503.2 2013 44.3 66.2 5.8 116.3 25.4 (18.0) 7.9 15.3 131.6 Year Ended December 31, 2015 2014 (52.6) $ 78.5 1.6 27.5 $ 65.7 43.4 4.9 114.0 $ $ $ $ 23.0 (1.0) (2.1) 19.9 47.4 (37.5) (21.1) 0.8 (57.8) 56.2 (in Millions) Current: Federal(1) Foreign State Total current Deferred: Federal Foreign State Total deferred TOTAL (1) The gain from the sale of our discontinued Alkali business created an overall domestic taxable income position. The loss from continuing operations is reducing $ $ $ $ $ $ current taxes payable in the current year and as such is presented as a reduction to current tax expense. Signifi cant components of our deferred tax assets and liabilities were attributable to: 2014 (in Millions) 111.1 Reserves for discontinued operations, environmental and restructuring 70.4 Accrued pension and other postretirement benefi ts 7.4 Alternative minimum, foreign tax and other credit carryforwards 143.0 Net operating loss carryforwards 34.2 Deferred expenditures capitalized for tax 266.2 Other 632.3 Deferred tax assets Valuation allowance, net(1) (125.3) 507.0 Deferred tax assets, net of valuation allowance Property, plant and equipment, net(2) 138.2 138.2 Deferred tax liabilities NET DEFERRED TAX ASSETS 368.8 (1) The change in the net valuation allowance was principally related to operations within our Agricultural Solutions business in Brazil driven by unfavorable December 31, 2015 132.8 64.3 25.8 161.1 24.2 190.8 599.0 (272.5) 326.5 212.8 212.8 113.7 $ $ $ $ $ $ $ $ $ $ market conditions and currency impacts experienced in the latter half of 2015. (2) The increase in our Intangibles, property, plant and equipment deferred tax liabilities was primarily related to the acquisition of Cheminova. FMC CORPORATION - Form 10-K 61 PART II ITEM 8 Financial Statements and Supplementary Data We evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. U.S. GAAP accounting guidance requires that companies assess whether valuation allowances should be established against their deferred tax assets based on all available evidence, both positive and negative, using a “more likely than not” standard. In assessing the need for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. Th is assessment considers, among other matters, the nature and severity of current and cumulative losses, forecasts of future profi tability, the duration of statutory carryforward periods, and tax planning alternatives. We operate and derive income from multiple lines of business across multiple jurisdictions. As each of the respective lines of business experiences changes in operating results across their geographic footprint, we may encounter losses in jurisdictions that have been historically profi table, and as a result might require additional valuation allowances to be recorded. We are committed to implementing tax planning actions, when deemed appropriate, in jurisdictions that experience losses in order to realize deferred tax assets prior to their expiration. During 2015, our Agricultural Solutions business in Brazil experienced signifi cant current and cumulative losses driven by unfavorable market conditions and currency impacts. Considering the current year losses, available tax planning strategies, and unfavorable projections of operating performance expected for 2016, the Company concluded that suffi cient positive evidence to realize its net deferred tax assets in Brazil was not available as of December 31, 2015 and therefore established valuation allowances in the amount of $106.5 million. At December 31, 2015, we had net operating loss and tax credit carryforwards as follows: U.S. state net operating loss carryforwards of $24.5 million (tax-eff ected) expiring in future years through 2035, foreign net operating loss carryforwards of $136.6 million (tax-eff ected) expiring in various future years, and other tax credit carryforwards of $6.2 million expiring in various future years. Th e eff ective income tax rate applicable to income from continuing operations before income taxes was diff erent from the statutory U.S. federal income tax rate due to the factors listed in the following table: Year Ended December 31, U.S. Federal statutory rate Foreign earnings subject to diff erent tax rates State and local income taxes, less federal income tax benefi t Manufacturer's production deduction and miscellaneous tax credits Tax on intercompany dividends and deemed dividends for tax purposes Changes to unrecognized tax benefi ts Nondeductible expenses Change in valuation allowance Exchange gains and losses(1) Other TOTAL TAX PROVISION (1) Includes adjustments for transaction gains or losses on net monetary assets for which no corresponding tax expense or benefit is realized and the tax provision for 2013 176.1 (69.6) 13.7 (5.0) 3.7 5.2 2.5 — — 5.0 131.6 2014 127.3 (83.9) 4.2 (6.4) 10.7 5.5 6.3 1.0 (7.2) (1.3) 56.2 2015 (45.7) (81.7) (1.0) (9.0) 12.6 9.9 7.8 178.7 (20.2) (4.0) 47.4 statutory taxable losses in foreign jurisdictions for which there is no corresponding amount in income before income taxes. Th e material factors contributing to the reduction in income from continuing operations experienced in 2015 were Cheminova acquisition related charges incurred by our domestic operations, reduced results in our Agricultural Solutions business, primarily in Brazil, as well as signifi cant restructuring charges. Th e statutory tax rates in the jurisdictions where these charges were incurred are similar to the U.S. Federal statutory rate; therefore, the reduction in income from continuing operations did not signifi cantly impact the tax benefi t disclosed above for foreign earnings subject to diff erent tax rates. Earnings from operations located in jurisdictions with lower tax rates than the U.S. Federal statutory rate, such as Ireland and Hong Kong, were generally consistent in 2015 compared to 2014. From 2013 to 2014, earnings from operations in Hong Kong increased, driving the increase in favorable foreign rate diff erential between those years. Th e tax rate for 2015 as compared to prior years was unfavorably impacted by a material increase in valuation allowances in our Agricultural Solutions business, primarily in Brazil. Unremitted earnings of foreign subsidiaries for which we have not provided taxes approximate $1,787.4 million. We have not provided taxes for these earnings given that our intention, as of December 31, 2015, is to indefi nitely reinvest such earnings in the respective existing foreign operations. We have not provided deferred tax liabilities for basis diff erences in investments in subsidiaries because the investments are essentially permanent in duration or we have concluded that no additional tax liability will arise upon disposal. A liability may arise in the future if our intention to indefi nitely reinvest such earnings were to change, however it is not practical to estimate the income tax liability that may be incurred. Uncertain Income Tax Positions U.S. GAAP accounting guidance for uncertainty in income taxes prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classifi cation, interest and penalties, disclosure and transition. We fi le income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Th e income tax returns for FMC entities taxable in the U.S. and signifi cant foreign jurisdictions are open for examination and adjustment. As of December 31, 2015, the U. S. federal and state income tax returns are open for examination and adjustment for the years 2012-2015 and 2004-2015, respectively. Our signifi cant foreign jurisdictions, which total 17, are open for examination and adjustment during varying periods from 2005-2015. 62 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data As of December 31, 2015, we had total unrecognized tax benefi ts of $97.1 million, of which $31.5 million would favorably impact the eff ective tax rate if recognized. As of December 31, 2014, we had total unrecognized tax benefi ts of $45.9 million, of which $11.1 million would favorably impact the eff ective tax rate if recognized. Interest and penalties related to unrecognized tax benefi ts are reported as a component of income tax expense. For the years ended December 31, 2015, 2014 and 2013, we recognized interest and penalties of $2.0 million, $1.0 million, and $2.1 million, respectively, in the consolidated statements of income. As of December 31, 2015 and 2014, we have accrued interest and penalties in the consolidated balance sheets of $5.2 million and $3.2 million, respectively. Due to the potential for resolution of federal, state, or foreign examinations, and the expiration of various jurisdictional statutes of limitation, it is reasonably possible that our liability for gross unrecognized tax benefi ts will decrease within the next 12 months by a range of $2.5 million to $3.7 million. A reconciliation of the beginning and ending amount of unrecognized tax benefi ts is as follows: (in Millions) Balance at beginning of year Increases related to positions taken in the current year Increases for tax positions on acquisitions Increases related to positions taken on items from prior years Decreases related to positions taken on items from prior years Settlements during the current year $ 2015 45.9 21.4 25.1 7.4 (2.7) — 97.1 $ $ 2014 35.5 9.6 — 1.5 — (0.7) 45.9 2013 21.8 15.1 (1.3) — (0.1) — 35.5 BALANCE AT END OF YEAR(1) (1) At December 31, 2015, 2014, and 2013 we recognized an offsetting non-current deferred tax asset of $65.5 million, $34.8 million, and $28.7 million $ $ $ respectively, relating to specific uncertain tax positions presented above. NOTE 12 Debt Debt maturing within one year Debt maturing within one year consists of the following: (in Millions) Short-term foreign debt(1) Commercial paper(2) Total short-term debt $ $ $ December 31, 2015 87.2 23.9 111.1 1.5 112.6 $ $ 2014 36.6 486.6 523.2 2.0 525.2 Current portion of long-term debt SHORT-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT (1) At December 31, 2015, the average effective interest rate on the borrowings was 8.30%. We often provide parent-company guarantees to lending institutions that extend credit to our foreign subsidiaries. Since these guarantees are provided to consolidated subsidiaries the consolidated financial position is not affected by the issuance of these guarantees. $ (2) At December 31, 2015, the average effective interest rate on the borrowings was 0.70%. Long-term debt Long-term debt consists of the following: December 31, 2015 December 31, Interest Rate Percentage Maturity Date (in Millions) Pollution control and industrial revenue bonds (less unamortized discounts of $0.2 and $0.2, respectively) Senior notes (less unamortized discount of $1.7 and $1.9, respectively) Term Loan Facility Credit Facility(1) Foreign debt Debt issuance cost Total long-term debt Less: debt maturing within one year TOTAL LONG-TERM DEBT, LESS CURRENT PORTION (1) Letters of credit outstanding under the Credit Facility totaled $53.7 million and available funds under this facility were $1,422.4 million at December 31, 2015 0.2-6.5% 2021-2035 $ 3.95-5.2% 2019-2024 2020 2019 0-9.3% 2016-2024 141.5 998.1 — — 15.8 (14.5) 1,140.9 2.0 1,138.9 141.5 998.3 900.0 — 9.9 (11.9) 2,037.8 1.5 2,036.3 1.6% 2.9% $ $ $ $ $ 2015 2014 (which reflects borrowings under our commercial paper program). FMC CORPORATION - Form 10-K 63 PART II ITEM 8 Financial Statements and Supplementary Data Maturities of long-term debt Maturities of long-term debt outstanding, excluding discounts, at December 31, 2015, are $1.5 million in 2016, $1.8 million in 2017, $1.6 million in 2018, $706.6 million in 2019, $496.2 million in 2020 and $843.9 million thereafter. Covenants Among other restrictions, the Credit Facility and Term Loan Facility contains fi nancial covenants applicable to FMC and its consolidated subsidiaries related to leverage (measured as the ratio of debt to adjusted earnings) and interest coverage (measured as the ratio of adjusted earnings to interest expense). Our actual leverage for the four consecutive quarters ended December 31, 2015 was 3.8 which is below the maximum leverage of 4.5. During 2016, the maximum leverage ratio will step down in accordance with the provisions of the Credit Facility and the Term Loan Facility. Our actual interest coverage for the four consecutive quarters ended December 31, 2015 was 7.6 which is above the minimum interest coverage of 3.5. We were in compliance with all covenants at December 31, 2015. remained outstanding under the Term Loan facility, as a portion of the net proceeds from the sale of our FMC Alkali division (see Note 9) was used to pay down the initial borrowings. Th e scheduled maturity of the Term Loan Facility is on April 21, 2020. Th e borrowings under the Term Loan Agreement will bear interest at a fl oating rate, which will be a base rate or a Eurocurrency rate equal to the London interbank off ered rate for the relevant interest period, plus in each case an applicable margin, as determined in accordance with the provisions of the Term Loan Agreement. Th e base rate will be the highest of: the rate of interest announced publicly by Citibank, N.A. in New York, New York from time to time as its “base rate”; the federal funds eff ective rate plus 1/2 of one percent; and the Eurocurrency rate for a one-month period plus one percent. Th e Term Loan Agreement also contains a cross-default provision whereby a default under our other indebtedness in excess of $50.0 million, after grace periods and absent a waiver from the lenders, would be an event of default under the Term Loan Agreement and could result in a demand for payment of all amounts outstanding under this facility. Fees incurred to secure the Term Loan Facility have been deferred and will be amortized over the term of the arrangement. Term Loan Facility On April 21, 2015 we borrowed $1.65 billion under our previous announced senior unsecured Term Loan Facility. Th e proceeds of the borrowing were used to fi nance the acquisition of Cheminova and to pay costs, fees and expenses incurred in connection with the acquisition and the Term Loan Facility. At December 31, 2015, $900 million Compensating Balance Agreements We maintain informal credit arrangements in many foreign countries. Foreign lines of credit, which include overdraft facilities, typically do not require the maintenance of compensating balances, as credit extension is not guaranteed but is subject to the availability of funds. NOTE 13 Pension and Other Postretirement Beneﬁ ts Th e funded status of our U.S. qualifi ed and nonqualifi ed defi ned benefi t pension plans, our United Kingdom, Ireland, Belgium, and Norway defi ned benefi t pension plans, plus our U.S. other postretirement healthcare and life insurance benefi t plans for continuing operations, together with the associated balances and net periodic benefi t cost recognized in our consolidated fi nancial statements as of December 31, are shown in the tables below. We are required to recognize in our consolidated balance sheets the overfunded and underfunded status of our defi ned benefi t postretirement plans. Th e overfunded or underfunded status is defi ned as the diff erence between the fair value of plan assets and the projected benefi t obligation. We are also required to recognize as a component of other comprehensive income the actuarial gains and losses and the prior service costs and credits that arise during the period. Th e following table summarizes the weighted-average assumptions used to determine the benefi t obligations at December 31 for the U.S. Plans: (in Millions, except for percentages) Following are the weighted average assumptions used to determine the benefi t obligations at December 31: Discount rate qualifi ed Discount rate nonqualifi ed plan Discount rate other benefi ts Rate of compensation increase Pensions and Other Benefi ts December 31, 2015 2014 4.50% 3.72% 3.97% 3.60% 4.15% 4.15% 4.15% 3.60% 64 FMC CORPORATION - Form 10-K Th e following table summarizes the components of our defi ned benefi t postretirement plans and refl ect a measurement date of December 31: PART II ITEM 8 Financial Statements and Supplementary Data (in Millions) Change in projected benefi t obligation Projected benefi t obligation at January 1 Service cost Interest cost Actuarial loss (gain)(4) Amendments Foreign currency exchange rate changes Plan participants’ contributions Settlements Transfer of liabilities from continuing to discontinued operations Curtailments Benefi ts paid Projected benefi t obligation at December 31 Change in plan assets Fair value of plan assets at January 1 Actual return on plan assets Foreign currency exchange rate changes Company contributions Plan participants’ contributions Settlements Benefi ts paid Pensions Other Benefi ts(1) December 31, 2015 2014 2015 2014 $ 1,569.0 13.0 61.0 (81.7) 1.5 (8.9) — (16.3) — (5.4) (79.7) $ 1,452.5 $ 1,315.2 17.3 62.3 261.3 3.3 (12.0) — (8.5) — — (69.9) $ 1,569.0 $ 1,344.9 (40.5) (8.2) 76.9 — (22.4) (79.7) $ 1,271.0 $ 1,285.4 83.2 (11.1) 65.8 — (8.5) (69.9) $ 1,344.9 $ $ $ 26.4 — 0.9 (2.5) (2.0) — 2.1 — (1.0) — (3.9) 20.0 $ $ — $ — — 1.8 2.1 — (3.9) 23.5 0.1 1.0 1.0 3.4 — 6.1 — — — (8.7) 26.4 — — — 2.6 6.1 — (8.7) — $ $ — $ Fair value of plan assets at December 31 Funded Status U.S. plans with assets U.S. plans without assets Non-U.S. plans with assets All other plans NET FUNDED STATUS OF THE PLAN (LIABILITY) Amount recognized in the consolidated balance sheets: Pension other asset(2) Accrued benefi t liability(3) TOTAL (1) Refer to Note 9 for information on our discontinued postretirement benefit plans. (2) Included in “Other assets” on the consolidated balance sheets. (3) Recorded as “Accrued pension and other postretirement benefits, current and long-term” on the consolidated balance sheets. (4) In 2015, the Society of Actuaries released an updated mortality table projection scale for measurement of retirement program obligations. Adoption of this new (167.6) (40.2) (7.4) (8.9) (224.1) (135.3) (37.5) (4.8) (3.9) (181.5) (20.0) — — (20.0) 0.7 (224.8) (224.1) — (26.4) — — (26.4) — (26.4) (26.4) (181.5) (181.5 ) (20.0) (20.0) — $ — $ — $ $ $ $ $ $ $ $ $ $ $ $ $ projection scale has decreased the U.S. defined benefit obligations by approximately $24 million at December 31, 2015. (in Millions) Th e amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefi t cost are as follows: Prior service (cost) credit Net actuarial (loss) gain $ Accumulated other comprehensive income (loss) – pretax ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) – NET OF TAX $ (1) Refer to Note 9 for information on our discontinued postretirement benefit plans. $ Pensions Other Benefi ts(1) December 31, 2015 2014 2015 2014 (3.6) (495.5) (499.1) (314.0) $ $ $ (7.7) (512.9) (520.6) (329.5) $ $ $ (0.6) 10.4 9.8 6.1 $ $ $ (3.3) 10.4 7.1 4.4 Th e accumulated benefi t obligation for all pension plans was $1,404.9 million and $1,495.0 million at December 31, 2015 and 2014, respectively. (in Millions) Information for pension plans with projected benefi t obligation in excess of plan assets Projected benefi t obligations Accumulated benefi t obligations Fair value of plan assets $ December 31, 2015 1,458.5 $ 1,414.2 1,277.0 2014 1,544.7 1,475.6 1,319.9 FMC CORPORATION - Form 10-K 65 PART II ITEM 8 Financial Statements and Supplementary Data (in Millions) Information for pension plans with accumulated benefi t obligation in excess of plan assets Projected benefi t obligations Accumulated benefi t obligations Fair value of plan assets $ December 31, 2015 1,441.4 $ 1,399.4 1,261.2 2014 1,544.8 1,475.6 1,319.9 Other changes in plan assets and benefi t obligations for continuing operations recognized in other comprehensive loss (income) are as follows: (in Millions) Current year net actuarial loss (gain) Current year prior service cost (credit) Amortization of net actuarial (loss) gain Amortization of prior service (cost) credit Recognition of prior service cost due to curtailment Transfer of actuarial (loss) gain from continuing to discontinued operations Curtailment (loss) Settlement (loss) Foreign currency exchange rate changes on the above line items Total recognized in other comprehensive (income) loss, before taxes TOTAL RECOGNIZED IN OTHER COMPREHENSIVE (INCOME) LOSS, AFTER TAXES (1) Refer to Note 9 for information on our discontinued postretirement benefit plans. Pensions Other Benefi ts(1) Year ended December 31 2015 58.8 1.5 (54.7) (0.8) (4.8) — (5.4) (8.9) (7.2) (21.5) (15.4) $ $ $ 2014 262.1 3.3 (30.5) (1.9) — — — (4.2) (3.6) 225.2 145.1 $ $ $ $ $ $ 2015 (2.5) (2.1) 1.2 (0.1) (0.5) 1.3 — — — (2.7) (1.7) $ $ $ 2014 0.9 3.4 1.6 (0.1) — — — — — 5.8 3.6 Th e estimated net actuarial loss and prior service cost for our pension plans that will be amortized from accumulated other comprehensive income (loss) into our net annual benefi t cost (income) during 2016 are $41.2 million and $0.7 million, respectively. Th e estimated net actuarial gain and prior service cost for our other benefi ts that will be amortized from accumulated other comprehensive income (loss) into net annual benefi t cost (income) during 2016 will be $(1.0) million and $0.1 million. Th e following table summarizes the weighted-average assumptions used for and the components of net annual benefi t cost (income): (in Millions, except for percentages) Discount rate Expected return on plan assets Rate of compensation increase Components of net annual benefi t cost (in millions): Service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of net actuarial and other (gain) loss Recognized (gain) loss due to curtailments(2) Recognized (gain) loss due to settlement $ Year Ended December 31, 2015 4.15% 7.25% 3.60% Pensions 2014 4.95% 7.75% 3.60% 2013 4.15% 7.75% 3.40% Other Benefi ts(1) 2015 4.15% — — 2014 4.95% — — 2013 4.15% — — $ $ $ $ $ 13.0 61.0 (88.9) 0.8 54.6 4.8 8.9 54.2 17.3 62.3 (86.3) 1.9 30.5 — 4.2 29.9 22.0 57.7 (78.0) 2.1 51.9 — 7.4 63.1 — 0.9 — 0.1 (1.2) 0.5 — 0.3 0.1 1.0 — 0.2 (1.6) — — (0.3) 0.1 1.0 — — (1.9) — — (0.8) NET ANNUAL BENEFIT COST (1) Refer to Note 9 for information on our discontinued postretirement benefit plans. (2) The Curtailment loss is associated with the disposal of our FMC Alkali Chemicals division and was recorded to discontinued operations within the consolidated $ $ $ $ $ $ statements of income (loss). Our U.S. qualifi ed defi ned benefi t pension plan (“U.S. Plan”) holds the majority of our pension plan assets. Th e expected long-term rate of return on these plan assets was 7.25 percent for December 31, 2015 and 7.75 percent for the years ended December 31, 2014 and 2013. In developing the assumption for the long-term rate of return on assets for our U.S. Plan, we take into consideration the technical analysis performed by our outside actuaries, including historical market returns, information on the assumption for long-term real returns by asset class, infl ation assumptions and expectations for standard deviation related to these best estimates. We also consider the historical performance of our own plan’s trust, which has earned a compound annual rate of return of approximately 8.7 percent over 66 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data the last 20 years (which is in excess of comparable market indices for the same period) and other factors. Given an actively managed investment portfolio, the expected annual rates of return by asset class for our portfolio, assuming an estimated infl ation rate of approximately 2.0 percent, is between 8.6 percent and 10.5 percent for equities, and between 5.5 percent and 8.3 percent for fi xed-income investments, which generates a total expected portfolio return that is in line with our assumption for the rate of return on assets. Th e target asset allocation for 2015, by asset category, is 80 percent to 90 percent equity securities, 10 percent to 20 percent fi xed income investments and zero to fi ve percent cash and other short-term investments. Our U.S. qualifi ed pension plan’s investment strategy consists of a total return investment management approach using a portfolio mix of equities and fi xed income investments to maximize the long-term return of plan assets for an appropriate level of risk. Th e goal of this strategy is to minimize plan expenses by matching asset growth to the plan’s liabilities over the long run. Furthermore, equity investments are weighted towards value equities and diversifi ed across U.S. and non-U.S. stocks. Derivatives and hedging instruments may be used eff ectively to manage and balance risks associated with the plan’s investments. Investment performance and related risks are measured and monitored on an ongoing basis through annual liability measurements, periodic asset and liability studies, and quarterly investment portfolio reviews. Th e following tables present our fair value hierarchy for our major categories of pension plan assets by asset class. See Note 17 for the defi nition of fair value and the descriptions of Level 1, 2 and 3 in the fair value hierarchy. (in Millions) Cash and short-term investments Equity securities: Common stock Preferred stock Mutual funds and other investments(1) Fixed income investments: Investment contracts Mutual funds Corporate debt instruments Government debt Other investments Real estate/property Other TOTAL ASSETS (in Millions) Cash and short-term investments Equity securities: Common stock Preferred stock Mutual funds and other investments(1) Fixed income investments: Investment contracts Mutual funds Corporate debt instruments Government debt Other investments Quoted Prices in Active Markets for Identical Assets (Level 1) Signifi cant Other Observable Inputs (Level 2) 12/31/2015 $ 62.4 $ 62.4 $ — $ Signifi cant Unobservable Inputs (Level 3) — 742.1 0.3 277.8 174.0 9.8 1.2 2.5 742.1 0.3 187.9 — 9.8 1.2 2.5 — — 89.9 174.0 — — — 0.8 0.1 1,271.0 $ — — 1,006.2 $ — — 263.9 $ — — — — — — — 0.8 0.1 0.9 Quoted Prices in Active Markets for Identical Assets (Level 1) Signifi cant Other Observable Inputs (Level 2) 12/31/2014 54.1 $ 54.1 $ — $ Signifi cant Unobservable Inputs (Level 3) — 799.8 3.0 286.9 185.5 9.9 0.9 3.9 799.8 3.0 198.3 — 9.9 0.9 3.9 — — 88.6 184.8 — — — — — — 0.7 — — — $ $ Real estate/property Other 0.8 0.1 TOTAL ASSETS 1.6 $ (1) As of December 31, 2015 and 2014 we have $89.9 million and $88.6 million, respectively, of investments in certain funds where the net asset value reported by the underlying funds approximates the fair value. These investments are redeemable with the fund at net asset value under the original terms of the partnership agreements and/or subscription agreements and operations of the underlying funds. However, it is possible that these redemption rights may be restricted or eliminated by the funds in the future in accordance with the underlying fund agreements. Due to the nature of the investments held by the funds, changes in market conditions and the economic environment may significantly impact the net asset value of the funds and, consequently, the fair value of the interests in the funds. Furthermore, changes to the liquidity provisions of the funds may significantly impact the fair value of the interest in the funds. 0.8 0.1 1,344.9 $ — — 1,069.9 $ — — 273.4 $ FMC CORPORATION - Form 10-K 67 PART II ITEM 8 Financial Statements and Supplementary Data Th e change in the value of plan assets using signifi cant unobservable inputs (Level 3) for all periods presented was not material. We made the following contributions to our pension and other postretirement benefi t plans: (in Millions) U.S. qualifi ed pension plan U.S. nonqualifi ed pension plan Non-U.S. plans Other postretirement benefi ts, net of participant contributions TOTAL Year Ended December 31, 2015 65.0 $ 7.8 4.1 1.8 78.7 $ 2014 50.0 10.8 4.9 2.6 68.3 $ $ We expect our voluntary cash contributions to our U.S. qualifi ed pension plan to be $35 million in 2016. Th e following table refl ects the estimated future benefi t payments for our pension and other postretirement benefi t plans. Th ese estimates take into consideration expected future service, as appropriate: ESTIMATED NET FUTURE BENEFIT PAYMENTS IN MILLIONS (in Millions) 2016 2017 2018 2019 2020 2021-2025 Assumed health care cost trend rates have an eff ect on the other postretirement benefi t obligations and net periodic other postretirement benefi t costs reported for the health care portion of the other postretirement plan. A one-percentage point change in the assumed health care cost trend rates would be immaterial to our net periodic other postretirement benefi t costs for the year ended December 31, 2015, and our other postretirement benefi t obligation at December 31, 2015. FMC Corporation Savings and Investment Plan Th e FMC Corporation Savings and Investment Plan is a qualifi ed salary-reduction plan under Section 401(k) of the Internal Revenue Code in which substantially all of our U.S. employees may participate NOTE 14 Share-based Compensation Stock Compensation Plans We have a share-based compensation plan, which has been approved by the stockholders, for certain employees, offi cers and directors. Th is plan is described below. FMC Corporation Incentive Compensation and Stock Plan Th e FMC Corporation Incentive Compensation and Stock Plan (the “Plan”) provides for the grant of a variety of cash and equity awards to offi cers, directors, employees and consultants, including stock options, restricted stock, performance units (including restricted stock units), stock appreciation rights, and multi-year management incentive awards payable partly in cash and partly in common stock. Th e Compensation and Organization Committee of the Board of Directors (the “Committee”), subject to the provisions of the Plan, approves fi nancial targets, award grants, and the times and conditions for 68 FMC CORPORATION - Form 10-K Pension Benefi ts $ $ 84.6 $ 86.8 86.4 87.8 88.9 451.1 $ Other Benefi ts 2.0 1.9 1.8 1.8 1.7 7.3 by contributing a portion of their compensation. For eligible employees participating in the Plan, except for those employees covered by certain collective bargaining agreements, the Company makes matching contributions of 80 percent of the portion of those contributions up to fi ve percent of the employee’s compensation. Eligible employees participating in the Plan that do not participate in the U.S. qualifi ed pension plan are entitled to receive an employer contribution of fi ve percent of the employee’s eligible compensation. Charges against income for all contributions were $8.9 million in 2015, $11.4 million in 2014, and $11.8 million in 2013. payment of awards to employees. Th e total number of shares of common stock authorized for issuance under the Plan is 29.0 million of which approximately 5.6 million shares of common stock are available for future grants of share based awards under the Plan as of December 31, 2015. Th e FMC Corporation Non-Employee Directors’ Compensation Policy, administered by the Nominating and Corporate Governance Committee of the Board of Directors, sets forth the compensation to be paid to the directors, including awards (currently restricted stock units only) to be made to directors under the Plan. Stock options granted under the Plan may be incentive or nonqualifi ed stock options. Th e exercise price for stock options may not be less than the fair market value of the stock at the date of grant. Awards granted under the Plan vest or become exercisable or payable at the time designated by the Committee, which has generally been three years from the date of grant. Incentive and nonqualifi ed options granted under the Plan expire not later than 10 years from the grant date. PART II ITEM 8 Financial Statements and Supplementary Data Under the Plan, awards of restricted stock and restricted stock units may be made to selected employees. Th e awards vest over periods designated by the Committee, which has generally been 3 years, with vesting conditional upon continued employment. Compensation cost is recognized over the vesting periods based on the market value of the stock on the date of the award. Restricted stock units granted to directors under the Plan vest immediately if granted as part of, or in lieu of, the annual retainer (but are subject to forfeiture on a pro rata basis if the director does not serve the full year except under certain circumstances); other restricted stock units granted to directors vest at the Annual Meeting of Shareholders in the calendar year following the May 1 annual grant date. At December 31, 2015 and 2014, there were restricted stock units representing an aggregate of 168,634 shares and 140,656 shares of common stock, respectively, credited to the directors’ accounts. Stock Compensation We recognized the following stock compensation expense: Year Ended December 31, (in Millions) Stock Option Expense, net of taxes of $2.4, $2.2 and $2.4(1) Restricted Stock Expense, net of taxes of $3.3, $3.3 and $3.1(2) TOTAL STOCK COMPENSATION EXPENSE, NET OF TAXES OF $5.7, $5.5 AND $5.5(3) (1) We applied an estimated forfeiture rate of four percent per stock option grant in the calculation of the expense. (2) We applied an estimated forfeiture rate of two percent of outstanding grants in the calculation of the expense. (3) This expense is classified as selling, general and administrative expense in our consolidated statements of income. Total stock compensation expense, net of tax, of $0.6 million, $1.4 million, and $1.8 million for the years ended December 31, 2015, 2014 and 2013, respectively, is included in the Discontinued operations, net of income taxes in the Consolidated Statements of Income. 2015 4.1 5.6 9.7 2014 3.8 5.5 9.3 2013 4.2 5.5 9.7 $ $ $ $ $ $ We received $5.9 million, $8.6 million and $10.7 million in cash related to stock option exercises for the years ended December 31, 2015, 2014 and 2013, respectively. Th e shares used for the exercise of stock options occurring during the years ended December 31, 2015, 2014 and 2013 came from treasury shares. For tax purposes, share-based compensation expense is deductible in the year of exercise or vesting based on the intrinsic value of the award on the date of exercise or vesting. For fi nancial reporting purposes, share-based compensation expense is based upon grant-date fair value and amortized over the vesting period. Excess tax benefi ts represent the diff erence between the share-based compensation expense for fi nancial reporting purposes and the deduction taken for tax purposes. Th e excess tax benefi ts for the years ended December 31, 2015, 2014 and 2013 totaled $1.4 million, $4.7 million and $7.1 million, respectively. Stock Options Th e grant-date fair values of the stock options we granted in the years ended December 31, 2015, 2014 and 2013 were estimated using the Black-Scholes option valuation model, the key assumptions for which are listed in the table below. Th e expected volatility assumption is based on the actual historical experience of our common stock. Th e expected life represents the period of time that options granted are expected to be outstanding. Th e risk-free interest rate is based on U.S. Treasury securities with terms equal to the expected timing of stock option exercises as of the grant date. Th e dividend yield assumption refl ects anticipated dividends on our common stock. Black Scholes valuation assumptions for stock option grants: Expected dividend yield Expected volatility Expected life (in years) Risk-free interest rate 2015 0.95% 40.95% 6.5 1.74% 2014 0.74% 41.96% 6.5 2.01% 2013 0.91% 42.10% 6.5 1.29% Th e weighted-average grant-date fair value of options granted during the years ended December 31, 2015, 2014 and 2013 was $24.68, $30.01 and $23.32 per share, respectively. FMC CORPORATION - Form 10-K 69 PART II ITEM 8 Financial Statements and Supplementary Data Th e following summary shows stock option activity for employees under the Plan for the three years ended December 31, 2015: Number of Options Granted But Not Exercised Weighted-Average Remaining Contractual Life (in Years) Weighted-Average Exercise Price Per Share Number of Shares in Th ousands 2,239 339 (462) (58) 2,058 253 (313) (67) 1,931 408 (213) (55) 6.5 years $ 5.9 years $ 5.5 years $ 30.69 59.47 23.20 42.75 36.76 72.66 27.76 51.15 42.46 63.37 27.77 62.38 Aggregate Intrinsic Value (In Millions) 62.3 $ $ $ 18.1 79.6 14.0 32.7 6.6 December 31, 2012 (932 shares exercisable) Granted Exercised Forfeited December 31, 2013 (948 shares exercisable) Granted Exercised Forfeited December 31, 2014 (1,023 shares exercisable and 1,903 shares expected to vest or be exercised) Granted Exercised Forfeited DECEMBER 31, 2015 (1,200 SHARES EXERCISABLE AND 2,073 SHARES EXPECTED TO VEST OR BE EXERCISED) Th e number of stock options indicated in the above table as being exercisable as of December 31, 2015, had an intrinsic value of $8.7 million, a weighted-average remaining contractual term of 3.8 years, and a weighted-average exercise price of $35.13. As of December 31, 2015, we had total remaining unrecognized compensation cost related to unvested stock options of $8.0 million which will be amortized over the weighted-average remaining requisite service period of approximately 1.8 years. 2,071 5.6 YEARS $ 47.52 $ 8.7 Restricted Equity Awards Th e grant-date fair value of restricted stock awards and stock units under the Plan is based on the market price per share of our common stock on the date of grant, and the related compensation cost is amortized to expense on a straight-line basis over the vesting period during which the employees perform related services, which is typically three years except for those eligible for retirement prior to the stated vesting period. Th e following table shows our employee restricted award activity for the three years ended December 31, 2015: Number of Awards in Th ousands Nonvested at December 31, 2012 Granted Vested Forfeited Nonvested at December 31, 2013 Granted Vested Forfeited Nonvested at December 31, 2014 Granted Vested Forfeited NONVESTED AT DECEMBER 31, 2015 Number of Awards 704 150 (326) (5) 523 129 (203) (21) 428 223 (190) (25) 436 $ Weighted-Average Grant Date Fair Value 38.29 58.95 31.76 51.61 49.07 71.92 46.06 57.40 57.86 60.22 49.06 64.27 57.36 $ $ $ As of December 31, 2015, we had total remaining unrecognized compensation cost related to unvested restricted awards of $10.9 million which will be amortized over the weighted-average remaining requisite service period of approximately 2.8 years. 70 FMC CORPORATION - Form 10-K NOTE 15 Equity Th e following is a summary of our capital stock activity over the past three years: December 31, 2012 Stock options and awards Repurchases of common stock, net December 31, 2013 Stock options and awards Repurchases of common stock, net December 31, 2014 Stock options and awards DECEMBER 31, 2015 PART II ITEM 8 Financial Statements and Supplementary Data Common Stock Shares 185,983,792 — — 185,983,792 — — 185,983,792 — 185,983,792 Treasury Stock Shares 48,313,414 (753,389) 5,538,078 53,098,103 (431,982) — 52,666,121 (338,106) 52,328,015 Accumulated other comprehensive income (loss) Summarized below is the roll forward of accumulated other comprehensive income (loss), net of tax. (in Millions) Accumulated other comprehensive income (loss), net of tax at December 31, 2012 2013 Activity Other comprehensive income (loss) before reclassifi cations Amounts reclassifi ed from accumulated other comprehensive income (loss) Accumulated other comprehensive income (loss), net of tax at December 31, 2013 2014 Activity Other comprehensive income (loss) before reclassifi cations Amounts reclassifi ed from accumulated other comprehensive income (loss) Accumulated other comprehensive income (loss), net of tax at December 31, 2014 2015 Activity $ $ $ Other comprehensive income (loss) before reclassifi cations Amounts reclassifi ed from accumulated other comprehensive income (loss) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX AT DECEMBER 31, 2015 (1) See Note 17 for more information. (2) See Note 13 for more information. Foreign currency adjustments Derivative Instruments(1) Pension and other postretirement benefi ts(2) (27.0) $ (1.5) $ (380.4) $ Total (408.9) 1.7 — (25.3) $ (74.7) 49.6 (50.4) $ (96.9) — (4.9) 0.3 (6.1) $ 3.1 (0.9) (3.9) $ 0.7 (3.0) 174.0 35.9 (170.5) $ 170.8 36.2 (201.9) (173.3) 22.3 (321.5) $ (244.9) 71.0 (375.8) (26.4) 44.1 (122.6) 41.1 $ (147.3) $ (6.2) $ (303.8) $ (457.3) FMC CORPORATION - Form 10-K 71 PART II ITEM 8 Financial Statements and Supplementary Data Reclassiﬁ cations of accumulated other comprehensive income (loss) Th e table below provides details about the reclassifi cations from accumulated other comprehensive income (loss) and the aff ected line items in the consolidated statements of income for each of the periods presented. Details about Accumulated Other Comprehensive Income Components (in Millions) Foreign Currency translation adjustments: Divestiture of FMC Peroxygens(3) Derivative instruments: Foreign currency contracts Energy contracts Foreign currency contracts Other contracts Total before tax Amount included in net income Pension and other postretirement benefi ts(2): Amortization of prior service costs Amortization of unrecognized net actuarial and other gains (losses) Recognized loss due to settlement Total before tax $ $ $ $ $ Amounts Reclassifi ed from Accumulated Other Comprehensive Income(1) Year ended December 31, 2015 2014 2013 Aff ected Line Item in the Consolidated Statements of Income — $ (49.6) $ — Discontinued operations, net of income taxes 43.0 (4.8) (32.5) — 5.7 (2.7) 3.0 $ $ 3.0 1.4 (2.9) — 1.5 (0.6) 0.9 $ $ Selling, general and administrative expenses Interest expense, net (0.1) Costs of sales and services (0.6) Costs of sales and services 0.5 (0.2) (0.4) 0.1 (0.3) Provision for income taxes (0.9) $ (2.1) $ (2.0) Selling, general and administrative expenses (52.2) (14.2) (67.3) $ 23.2 (44.1) $ (28.9) (4.2) (35.2) $ 12.9 (22.3) $ (48.3) (7.4) (57.7) 21.8 (35.9) Selling, general and administrative expenses Selling, general and administrative expenses Provision for income taxes Amount included in net income TOTAL RECLASSIFICATIONS FOR THE PERIOD (1) Amounts in parentheses indicate charges to the consolidated statements of income. (2) Pension and other postretirement benefits amounts include the impact from both continuing and discontinued operations. For detail on the continuing operations (36.2) Amount included in net income (41.1) $ (71.0) $ $ $ components of pension and other postretirement benefits, see Note 13. (3) The reclassification of historical cumulative translation adjustments was the result of the divestiture of our FMC Peroxygens business. The loss recognized from this reclassification is considered permanent for tax purposes and therefore no tax has been provided. See Note 9 for more information. In accordance with accounting guidance, this amount was previously factored into the lower of cost or fair value test associated with the 2013 Peroxygens’ asset held for sale write-down charges. Noncontrolling interest purchase In 2013 we purchased an additional 6.25 percent ownership interest in a legal entity within our discontinued FMC Alkali Chemicals division for $80.0 million from one of two remaining noncontrolling interest holders. In 2014 we purchased the remaining 6.25 percent ownership interest from the last remaining non-controlling interest holder of a legal entity within our discontinued FMC Alkali Chemicals division for $95.7 million. See Note 9 for subsequent disposal of this division in 2015. Dividends and Share Repurchases On January 21, 2016, we paid dividends totaling $22.1 million to our shareholders of record as of December 31, 2015. Th is amount is included in “Accrued and other liabilities” on the consolidated balance sheets as of December 31, 2015. For the years ended December 31, 2015, 2014 and 2013, we paid $86.4 million, $78.1 million and $73.6 million in dividends, respectively. We did not repurchase any shares under the publicly announced repurchase program. At December 31, 2015, $250.0 million remained unused under our Board-authorized repurchase program. Th is repurchase program does not include a specifi c timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connection with the vesting, exercise and forfeiture of awards under our equity compensation plans. 72 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data NOTE 16 Earnings Per Share Earnings per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis. Our potentially dilutive securities include potential common shares related to our stock options, restricted stock and restricted stock units. Diluted earnings per share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive eff ect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. For the year ended December 31, 2015, we had a net loss from continuing operations attributable to FMC stockholders. As such, all 1.7 million shares were potential common shares were excluded from Diluted EPS. For the years ended December 31, 2014 and 2013 there were 386 thousand and 374 thousand, respectively, of potential common shares excluded from Diluted EPS. Our non-vested restricted stock awards contain rights to receive non- forfeitable dividends, and thus, are participating securities requiring the two-class method of computing EPS. Th e two-class method determines EPS by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In calculating the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows: Year Ended December 31, (in Millions, Except Share and Per Share Data) Earnings (loss) attributable to FMC stockholders: Continuing operations, net of income taxes Discontinued operations, net of income taxes Net income Less: Distributed and undistributed earnings allocable to restricted award holders NET INCOME ALLOCABLE TO COMMON STOCKHOLDERS Basic earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations NET INCOME Diluted earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations NET INCOME Shares (in thousands): Weighted average number of shares of common stock outstanding – Basic Weighted average additional shares assuming conversion of potential common shares SHARES – DILUTED BASIS $ $ $ $ $ $ $ 2015 (187.4) $ 676.4 489.0 — 489.0 $ $ (1.40) $ 5.06 3.66 $ (1.40) $ 5.06 3.66 $ 2014 298.2 9.3 307.5 (0.9) 306.6 2.23 0.07 2.30 2.22 0.07 2.29 $ $ $ $ $ $ $ 2013 365.1 (71.2) 293.9 (1.6) 292.3 2.69 (0.53) 2.16 2.68 (0.52) 2.16 133,696 — 133,696 133,327 955 134,282 135,209 928 136,137 NOTE 17 Financial Instruments, Risk Management and Fair Value Measurements Our fi nancial instruments include cash and cash equivalents, trade receivables, other current assets, certain receivables classifi ed as other long-term assets, accounts payable, and amounts included in investments and accruals meeting the defi nition of fi nancial instruments. Th e carrying value of these fi nancial instruments approximates their fair value. Our other fi nancial instruments include the following: Financial Instrument Foreign exchange forward contracts Commodity forward and option contracts Debt Valuation Method Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on current market prices for applicable currencies. Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices for applicable commodities. Our estimates and information obtained from independent third parties using market data, such as bid/ask spreads for the last business day of the reporting period. Th e estimated fair value of the fi nancial instruments in the above table have been determined using standard pricing models which take into account the present value of expected future cash fl ows discounted to the balance sheet date. Th ese standard pricing models utilize inputs derived from, or corroborated by, observable market data such as interest rate yield curves and currency and commodity spot and forward rates. In addition, we test a subset of our valuations against valuations received from the transaction’s counterparty to validate the accuracy of our standard pricing models. Accordingly, the estimates presented may not be indicative of the amounts that we would realize in a market exchange at settlement date and do not represent potential gains or losses on these agreements. Th e estimated fair values of foreign exchange FMC CORPORATION - Form 10-K 73 PART II ITEM 8 Financial Statements and Supplementary Data forward contracts and commodity forward and option contracts are included in the tables within this Note. Th e estimated fair value of debt is $2,214.0 million and $1,773.2 million and the carrying amount is $2,148.9 million and $1,664.1 million as of December 31, 2015 and December 31, 2014, respectively. Our Agricultural Solutions segment enters into contracts with certain customers in Brazil whereby we exchange our products for physical delivery of soybeans from the customer. In order to mitigate the price risk associated with these barter contracts, we have entered into off setting derivatives to hedge our exposure. We enter into various fi nancial instruments with off -balance-sheet risk as part of the normal course of business. Th ese off -balance sheet instruments include fi nancial guarantees and contractual commitments to extend fi nancial guarantees under letters of credit, and other assistance to customers (Note 18). Decisions to extend fi nancial guarantees to customers, and the amount of collateral required under these guarantees is based on our evaluation of creditworthiness on a case-by-case basis. Use of Derivative Financial Instruments to Manage Risk We mitigate certain fi nancial exposures, including currency risk, commodity purchase exposures and interest rate risk through a program of risk management that includes the use of derivative fi nancial instruments. We enter into foreign exchange contracts, including forward and purchased option contracts, to reduce the eff ects of fl uctuating foreign currency exchange rates. We formally document all relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. Th is process includes relating derivatives that are designated as fair value or cash fl ow hedges to specifi c assets and liabilities on the balance sheet or to specifi c fi rm commitments or forecasted transactions. We also assess both at the inception of the hedge and on an ongoing basis, whether each derivative is highly eff ective in off setting changes in fair values or cash fl ows of the hedged item. If we determine that a derivative is not highly eff ective as a hedge, or if a derivative ceases to be a highly eff ective hedge, we discontinue hedge accounting with respect to that derivative prospectively. Foreign Currency Exchange Risk Management We conduct business in many foreign countries, exposing earnings, cash fl ows, and our fi nancial position to foreign currency risks. Th e majority of these risks arise as a result of foreign currency transactions. Our policy is to minimize exposure to adverse changes in currency exchange rates. Th is is accomplished through a controlled program of risk management that includes the use of foreign currency debt and forward foreign exchange contracts. We also use forward foreign exchange contracts to hedge fi rm and highly anticipated foreign currency cash fl ows, with an objective of balancing currency risk to provide adequate protection from signifi cant fl uctuations in the currency markets. Th e primary currencies for which we have exchange rate exposure are the U.S. dollar versus the euro, the Chinese yuan, the Brazilian real and the Argentine peso. Commodity Price Risk We are exposed to risks in energy costs due to fl uctuations in energy prices, particularly natural gas. We attempt to mitigate our exposure to increasing energy costs by hedging the cost of future deliveries of natural gas. Interest Rate Risk We use various strategies to manage our interest rate exposure, including entering into interest rate swap agreements to achieve a targeted mix of fi xed and variable-rate debt. In the agreements we exchange, at specifi ed intervals, the diff erence between fi xed and variable-interest amounts calculated on an agreed-upon notional principal amount. As of December 31, 2015 and December 31, 2014, we had no such swap agreements in place. Concentration of Credit Risk Our counterparties to derivative contracts are primarily major fi nancial institutions. We limit the dollar amount of contracts entered into with any one fi nancial institution and monitor counterparties’ credit ratings. We also enter into master netting agreements with each fi nancial institution, where possible, which helps mitigate the credit risk associated with our fi nancial instruments. While we may be exposed to credit losses due to the nonperformance of counterparties, we consider this risk remote. Financial Guarantees and Letter-of-Credit Commitments We enter into various fi nancial instruments with off -balance-sheet risk as part of the normal course of business. Th ese off -balance-sheet instruments include fi nancial guarantees and contractual commitments to extend fi nancial guarantees under letters of credit and other assistance to customers (Notes 1 and 19). Decisions to extend fi nancial guarantees to customers, and the amount of collateral required under these guarantees, is based on our evaluation of creditworthiness on a case-by-case basis. Accounting for Derivative Instruments and Hedging Activities Cash Flow Hedges We recognize all derivatives on the balance sheet at fair value. On the date we enter into the derivative instrument, we generally designate the derivative as a hedge of the variability of cash fl ows to be received or paid related to a forecasted transaction (cash fl ow hedge). We record in AOCI changes in the fair value of derivatives that are designated as and meet all the required criteria for, a cash fl ow hedge. We then reclassify these amounts into earnings as the underlying hedged item aff ects earnings. In contrast we immediately record in earnings changes in the fair value of derivatives that are not designated as cash fl ow hedges. As of December 31, 2015, we had open foreign currency forward contracts in AOCI in a net after-tax loss position of $6.1 million designated as cash fl ow hedges of underlying forecasted sales and purchases. Current open contracts hedge forecasted transactions until December 31, 2016. At December 31, 2015, we had open forward contracts with various expiration dates to buy, sell or exchange foreign currencies with a U.S. dollar equivalent of approximately $505.2 million. 74 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data Derivatives Not Designated As Hedging Instruments We hold certain forward contracts that have not been designated as cash fl ow hedging instruments for accounting purposes. Contracts used to hedge the exposure to foreign currency fl uctuations associated with certain monetary assets and liabilities are not designated as cash fl ow hedging instruments, and changes in the fair value of these items are recorded in earnings. We periodically hold soybean barter contracts which qualify as derivatives and we have entered into off setting commodity contracts to hedge our exposure. Both the change in fair value of the soybean barter contracts and the off setting commodity contracts are recorded in earnings. We had open forward contracts not designated as cash fl ow hedging instruments for accounting purposes with various expiration dates to buy, sell or exchange foreign currencies with a U.S. dollar equivalent of approximately $1.8 billion at December 31, 2015. As of December 31, 2015, we had current open commodity contracts in AOCI in a net after-tax loss position of $1.3 million designated as cash fl ow hedges of underlying forecasted purchases, primarily related to natural gas. Current open commodity contracts hedge forecasted transactions until December 31, 2017. At December 31, 2015, we had 2.2 million mmBTUs (millions of British Th ermal Units) in aggregate notional volume of outstanding natural gas commodity forward contracts to hedge forecasted purchases. Of the $7.4 million of net after-tax losses, representing both open foreign currency exchange contracts and open commodity contracts, approximately $7.4 million of these losses would be realized in earnings during the twelve months ending December 31, 2016, and zero of net losses would be realized subsequent to December 31, 2016, if spot rates in the future are consistent with forward rates as of December 31, 2015. Th e actual eff ect on earnings will be dependent on the actual spot rates when the forecasted transactions occur. We recognize derivative gains and losses in the “Costs of sales and services” line in the consolidated statements of income. Fair Value of Derivative Instruments Th e following tables provide the gross fair value and net balance sheet presentation of our derivative instruments as of December 31, 2015 and 2014. (in Millions) Derivatives Foreign exchange contracts Energy contracts Total derivative assets(1) Foreign exchange contracts Energy contracts Total derivative liabilities(2) NET DERIVATIVE ASSETS/(LIABILITIES) Gross Amount of Derivatives December 31, 2015 Designated as Cash Flow Hedges Not Designated as Hedging Instruments Total Gross Amounts Gross Amounts Off set in the Consolidated Balance Sheet(3) Net Amounts $ $ 6.1 — 6.1 (15.4) (2.0) (17.4) (11.3) $ $ $ 5.2 — 5.2 (7.3) — (7.3) (2.1) $ $ 11.3 — 11.3 (22.7) (2.0) (24.7) (13.4) $ (11.3) $ — (11.3) 11.3 — 11.3 — $ — — — (11.4) (2.0) (13.4) (13.4) Gross Amount of Derivatives December 31, 2014 Designated as Cash Flow Hedges Not Designated as Hedging Instruments Gross Amounts Gross Amounts Off set in the Consolidated Balance Sheet(3) Net Amounts $ $ (in Millions) Derivatives Foreign exchange contracts Energy contracts Other contracts Total derivative assets(1) Foreign exchange contracts Energy contracts Total derivative liabilities(2) NET DERIVATIVE ASSETS/(LIABILITIES) (1) Net balance is included in “Prepaid and other current assets” in the consolidated balance sheets. (2) Net balance is included in “Accrued and other liabilities” in the consolidated balance sheets. (3) Represents net derivatives positions subject to master netting arrangements. 17.1 0.3 — 17.4 (17.4) (7.6) (25.0) (7.6) 15.1 — — 15.1 (100.0) — (100.0) (84.9) $ $ $ $ $ 32.2 0.3 — 32.5 (117.4) (7.6) (125.0) (92.5) $ (3.6) $ (0.3) — (3.9) 3.6 0.3 3.9 — $ 28.6 — — 28.6 (113.8) (7.3) (121.1) (92.5) FMC CORPORATION - Form 10-K 75 PART II ITEM 8 Financial Statements and Supplementary Data Th e following tables summarize the gains or losses related to our cash fl ow hedges and derivatives not designated as hedging instruments. Derivatives in Cash Flow Hedging Relationships (in Millions) Accumulated other comprehensive income (loss), net of tax at December 31, 2012 2013 Activity Unrealized hedging gains (losses) and other, net of tax Reclassifi cation of deferred hedging (gains) losses, net of tax Eff ective Portion(1) Accumulated other comprehensive income (loss), net of tax at December 31, 2013 2014 Activity Unrealized hedging gains (losses) and other, net of tax Reclassifi cation of deferred hedging (gains) losses, net of tax Eff ective Portion(1) Accumulated other comprehensive income (loss), net of tax at December 31, 2014 2015 Activity Unrealized hedging gains (losses) and other, net of tax Reclassifi cation of deferred hedging (gains) losses, net of tax Eff ective Portion(1) $ $ Contracts(2) Foreign exchange 0.7 $ Energy Other $ (1.0) $ (1.2) $ Total (1.5) (8.0) 0.7 2.4 (0.2) (8.2) (7.5) $ 0.4 1.1 0.1 $ 0.1 2.5 1.3 $ 6.9 (3.8) — 6.9 (0.6) $ (0.9) (4.7) (4.6) $ 0.4 (5.9) (5.5) 0.4 2.9 3.3 $ — — — 1.3 (0.1) — (0.1) (4.9) 0.3 (4.6) (6.1) 3.1 (0.9) 2.2 (3.9) 0.7 (3.0) (2.3) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX AT DECEMBER 31, 2015 (6.1) $ (1) Amounts are included in “Cost of sales and services” and “Interest expense” on the consolidated statements of income. (2) For the years ended December 31, 2015, 2014 and 2013, there was no material ineffectiveness with regard to cash flow hedges. $ (1.3) $ 1.2 $ (6.2) Derivatives Not Designated as Hedging Instruments (in Millions) Foreign Exchange contracts Location of Gain or (Loss) Recognized in Income on Derivatives Cost of Sales and Services Selling, general & administrative(2) $ Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives(1) Year Ended December 31, $ 2015 (47.9) (172.1) (220.0) $ 2014 (2.9) $ (99.6) (102.5) $ 2013 11.2 — 11.2 TOTAL (1) Amounts in the columns represent the gain or loss on the derivative instrument offset by the gain or loss on the hedged item. (2) Charges represent loss on the Cheminova acquisition hedge. See Note 3 within these consolidated financial statements more information. $ Fair-Value Measurements Fair-Value Hierarchy Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are defi ned as buyers or sellers in the principle or most advantageous market for the asset or liability that are independent of the reporting entity, knowledgeable and able and willing to transact for the asset or liability. We have categorized our assets and liabilities that are recorded at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair-value hierarchy. Th e fair-value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets and liabilities fall within diff erent levels of the hierarchy, the categorization is based on the lowest level input that is signifi cant to the fair-value measurement of the instrument. 76 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data Recurring Fair Value Measurements Th e following tables present our fair-value hierarchy for those assets and liabilities measured at fair-value on a recurring basis in our consolidated balance sheets. (in Millions) ASSETS Derivatives – Commodities:(1) Energy contracts Derivatives – Foreign exchange(1) Other(2) TOTAL ASSETS LIABILITIES Derivatives – Commodities:(1) Energy contracts Derivatives – Foreign exchange(1) Other(3) December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Signifi cant Other Observable Inputs (Level 2) Signifi cant Unobservable Inputs (Level 3) $ $ $ — $ — 25.4 25.4 $ 2.0 $ 11.4 29.1 42.5 $ — $ — 25.4 25.4 $ — $ — 29.1 29.1 $ — $ — — — $ 2.0 $ 11.4 — 13.4 $ — — — — — — — — TOTAL LIABILITIES (1) See the Fair Value of Derivative Instruments table within this Note for classifications on our consolidated balance sheets. (2) Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheet. Both the asset and $ liability are recorded at fair value. Asset amounts included in “Other assets” in the consolidated balance sheets. (3) Consists of a deferred compensation arrangement recognized on our balance sheet. Both the asset and liability are recorded at fair value. Liability amounts included in “Other long-term liabilities” in the consolidated balance sheets. (in Millions) ASSETS Derivatives – Commodities:(1) Energy contracts Derivatives – Foreign exchange(1) Other(2) TOTAL ASSETS LIABILITIES Derivatives – Commodities:(1) December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Signifi cant Other Observable Inputs (Level 2) Signifi cant Unobservable Inputs (Level 3) $ $ — $ 28.6 30.9 59.5 $ — $ — 30.9 30.9 $ — $ 28.6 — 28.6 $ — — — — Energy contracts Derivatives – Foreign exchange(1) Other(3) — $ — 33.1 TOTAL LIABILITIES 33.1 $ (1) See the Fair Value of Derivative Instruments table within this Note for classifications on our consolidated balance sheets. (2) Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheet. Both the asset and 113.8 33.7 154.8 $ 113.8 0.6 121.7 $ — — — — 7.3 $ 7.3 $ $ $ liability are recorded at fair value. Asset amounts included in “Other assets” in the consolidated balance sheets. (3) Consists of a deferred compensation arrangement recognized on our balance sheet. Both the asset and liability are recorded at fair value. Liability amounts included in “Other long-term liabilities” in the consolidated balance sheets. Nonrecurring Fair Value Measurements Th e following tables present our fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis in our consolidated balance sheets during the year ended December 31, 2015 and 2014. See Note 3 for the assets and liabilities measured on a non-recurring basis at fair value associated with our acquisitions. (in Millions) ASSETS Year ended December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Signifi cant Other Observable Inputs (Level 2) Signifi cant Unobservable Inputs (Level 3) Total Gains (Losses) (Year Ended December 31, 2015) Long-lived assets associated with Health and Nutrition activities(1) (70.5) TOTAL ASSETS (70.5) (1) We recorded charges, within our FMC Health and Nutrition segment, to write down the value of certain long-lived assets of approximately $70.5 million to salvage value in the case of fixed assets and fair value in the case of indefinite lived intangible assets. See Note 7 within these consolidated financial statements for more information. 35.4 $ 35.4 $ — $ — $ — $ — $ 35.4 35.4 $ $ $ $ FMC CORPORATION - Form 10-K 77 PART II ITEM 8 Financial Statements and Supplementary Data (in Millions) ASSETS Year ended December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Signifi cant Other Observable Inputs (Level 2) Signifi cant Unobservable Inputs (Level 3) Total Gains (Losses) (Year Ended December 31, 2014) Long-lived assets associated with exit activities(1) (3.1) (3.1) TOTAL ASSETS (1) We recorded charges, within our FMC Health and Nutrition segment, to write down to zero the value of certain long-lived assets to related to our FMC Health — — $ — — $ — — $ — — $ $ and Nutrition restructuring as they have no future use. See Note 7 within these consolidated financial statements for more information. NOTE 18 Guarantees, Commitments and Contingencies Guarantees We continue to monitor the conditions that are subject to guarantees and indemnifi cations to identify whether a liability must be recognized in our fi nancial statements. Th e following table provides the estimated undiscounted amount of potential future payments for each major group of guarantees at December 31, 2015. Th ese guarantees arise during the ordinary course of business from relationships with customers and nonconsolidated affi liates. Non-performance by the guaranteed party triggers the obligation requiring us to make payments to the benefi ciary of the guarantee. Based on our experience these types of guarantees have not had a material eff ect on our consolidated fi nancial position or on our liquidity. Our expectation is that future payment or performance related to the non-performance of others is considered unlikely. (in Millions) Guarantees: Guarantees of vendor fi nancing - short term(1) Guarantees of vendor fi nancing- long term(1) Other debt guarantees(2) 67.2 25.7 21.3 TOTAL 114.2 (1) Represents guarantees to financial institutions on behalf of certain FMC Agricultural Solutions customers for their seasonal borrowing. This amount is recorded $ $ on the consolidated balance sheets as “Guarantees of vendor financing.” (2) These guarantees represent support provided to third-party banks for credit extended to various FMC Agricultural Solutions customers and nonconsolidated affiliates. The liability for the guarantees is recorded at an amount that approximates fair-value (i.e. representing the stand-ready obligation) based on our historical collection experience and a current assessment of credit exposure. We believe the fair-value of these guarantees is immaterial. The majority of these guarantees have an expiration date of less than one year. Excluded from the chart above, in connection with our property and asset sales and divestitures, we have agreed to indemnify the buyers for certain liabilities, including environmental contamination and taxes that occurred prior to the date of sale or provided guarantees to third parties relating to certain contracts assumed by the buyer. Our indemnifi cation or guarantee obligations with respect to these liabilities may be indefi nite as to duration and may or may not be subject to a deductible, minimum claim amount or cap. As such, it is not possible for us to predict the likelihood that a claim will be made or to make a reasonable estimate of the maximum potential loss or range of loss. If triggered, we may be able to recover some of the indemnity payments from third parties. We have not recorded any specifi c liabilities for these guarantees. (in Millions) Operating leases rent expense (in Millions) 2016 2017 2018 2019 2020 Th ereafter 78 FMC CORPORATION - Form 10-K Commitments Leases We lease offi ce space, plants and facilities, and various types of manufacturing, data processing and transportation equipment. Leases of real estate generally provide for our payment of property taxes, insurance and repairs. Our capital leases primarily relate to our two research and technology centers in the U.S. and China. Our capital lease asset balances (net of accumulated amortization of $2.0 million and $1.4 million), which are classifi ed as buildings within our property, plant and equipment on our consolidated balance sheets, were $28.1 million and $28.7 million as of December 31, 2015 and 2014, respectively. Amortization of capital lease assets is included within depreciation expense. See Note 20 within these consolidated fi nancial statements for obligations associated with our capital leases. Year ended December 31, 2015 18.4 $ 2014 23.2 $ $ 2013 24.2 Future Minimum Lease Payments Operating Leases $ $ $ $ $ $ 13.4 $ 18.5 $ 18.0 $ 16.5 $ 15.2 $ 123.8 $ Capital Leases 4.7 4.7 4.8 4.9 5.0 31.4 Purchase Obligations Our minimum commitments under our take-or-pay purchase obligations associated with the sourcing of materials and energy total approximately $33.4 million. Since the majority of our minimum obligations under these contracts are over the life of the contract a year-by-year basis, we are unable to determine the periods in which these obligations could be payable under these contracts. However, we intend to fulfi ll the obligations associated with these contracts through our purchases associated with the normal course of business. Contingencies Competition / antitrust litigation related to the discontinued FMC Peroxygens segment. We are subject to actions brought by private plaintiff s relating to alleged violations of European and Canadian competition and antitrust laws, as further described below. European competition action. Multiple European purchasers of hydrogen peroxide who claim to have been harmed as a result of alleged violations of European competition law by hydrogen peroxide producers assigned their legal claims to a single entity formed by a law fi rm. Th e single entity then fi led a lawsuit in Germany in March 2009 against European producers, including our wholly-owned Spanish subsidiary, Foret. Initial defense briefs were fi led in April 2010, and an initial hearing was held during the fi rst quarter of 2011, at which time case management issues were discussed. At a subsequent hearing in October 2011, the Court indicated that it was considering seeking guidance from the European Court of Justice (“ECJ”) as to whether the German courts have jurisdiction over these claims. After submission of written comments on this issue by the parties, on March 1, 2012, the judge announced that she would refer the jurisdictional issues to the ECJ, which she did on April 29, 2013. On May 21, 2015, the ECJ issued its decision, upholding the jurisdiction of the German court. Th e case is now back before the German judge. We fi led a motion to dismiss the proceedings in September 2015. We do not anticipate a response by the court until the second quarter of 2016. Since the case is in the preliminary stages and is based on a novel procedure - namely the attempt to create a cross-border “class action” which is not a recognized proceeding under EU or German law - we are unable to develop a reasonable estimate of our potential exposure of loss at this time. We intend to vigorously defend this matter. Canadian antitrust actions. In 2005, after public disclosures of the U.S. federal grand jury investigation into the hydrogen peroxide industry (which resulted in no charges brought against us) and the fi ling of various class actions in U.S. federal and state courts, which have all been settled, putative class actions against us and fi ve other major hydrogen peroxide producers were fi led in provincial courts in Ontario, Quebec and British Columbia under the laws of Canada. Th e other fi ve defendants have settled these claims for a total of approximately $20.6 million. On September 28, 2009, the Ontario Superior Court of Justice certifi ed a class of direct and indirect purchasers of hydrogen peroxide from 1994 to 2005. Our motion for leave to appeal the class certifi cation decision was denied in June 2010. Th e case was largely dormant while the Canadian Supreme Court considered, in diff erent PART II ITEM 8 Financial Statements and Supplementary Data litigation, whether indirect purchasers may recover overcharges in antitrust actions. In October 2013 the Court ruled that such recovery is permissible. Th e Court has approved, the plaintiff s’ request have now moved to dismiss certain downstream purchasers (those who purchased products that contain hydrogen peroxided or were made using hydrogen peroxide) from the case and to reduce the class period to November 1, 1998 through December 31, 2003 - thereby eliminating six of the eleven years of the originally certifi ed class period. Since the proceedings are in the preliminary stages with respect to the merits, we are unable to develop a reasonable estimate of our potential exposure of loss at this time. We intend to vigorously defend these matters. Asbestos claims. Like hundreds of other industrial companies, we have been named as one of many defendants in asbestos-related personal injury litigation. Most of these cases allege personal injury or death resulting from exposure to asbestos in premises of FMC or to asbestos-containing components installed in machinery or equipment manufactured or sold by discontinued operations. We intend to continue managing these asbestos-related cases in accordance with our historical experience. We have established a reserve for this litigation within our discontinued operations and believe that any exposure of a loss in excess of the established reserve cannot be reasonably estimated. Our experience has been that the overall trends in asbestos litigation have changed over time. Over the last several years, we have seen changes in the jurisdictions where claims against FMC are being fi led and changes in the mix of products named in the various claims. Because these claim trends have yet to form a predictable pattern, we are presently unable to reasonably estimate our asbestos liability with respect to claims that may be fi led in the future. Other contingent liabilities. In addition to the matters disclosed above, we have certain other contingent liabilities arising from litigation, claims, products we have sold, guarantees or warranties we have made, contracts we have entered into, indemnities we have provided, and other commitments incident to the ordinary course of business. Some of these contingencies are known - for example pending product liability litigation or claims - but are so preliminary that the merits cannot be determined, or if more advanced, are not deemed material based on current knowledge; and some are unknown - for example, claims with respect to which we have no notice or claims which may arise in the future, resulting from products we have sold, guarantees or warranties we have made, or indemnities we have provided. Th erefore, we are unable to develop a reasonable estimate of our potential exposure of loss for these contingencies, either individually or in the aggregate, at this time. Based on information currently available and established reserves, we have no reason to believe that the ultimate resolution of our known contingencies, including the matters described in this Note, will have a material adverse eff ect on our consolidated fi nancial position, liquidity or results of operations. However, there can be no assurance that the outcome of these contingencies will be favorable, and adverse results in certain of these contingencies could have a material adverse eff ect on our consolidated fi nancial position, results of operations in any one reporting period, or liquidity. See Note 10 for the Pocatello tribal litigation and Middleport litigation for legal proceedings associated with our environmental contingencies. FMC CORPORATION - Form 10-K 79 PART II ITEM 8 Financial Statements and Supplementary Data NOTE 19 Segment Information Year Ended December 31, 2013 2014 2015 $ $ $ $ $ 2,252.9 785.5 238.1 3,276.5 2,145.7 762.0 223.0 3,130.7 2,173.8 828.2 256.7 3,258.7 (in Millions) Revenue(1) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium TOTAL Income (loss) from continuing operations before income taxes FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium Segment operating profi t Corporate and other Operating profi t before the items listed below Interest expense, net Restructuring and other (charges) income(2) Non-operating pension and postretirement (charges) income(3) Business separation cost(4) Acquisition related charges(5) (Provision) benefi t for income taxes Discontinued operations, net of income taxes Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO FMC STOCKHOLDERS (1) Our FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium segments each have one product line group, and therefore net sales to external 363.9 194.7 23.0 581.6 (62.4) 519.2 (80.1) (244.0) (35.3) — (290.3) (47.4) 676.4 (9.5) 489.0 497.8 187.9 27.2 712.9 (71.4) 641.5 (51.2) (56.4) (10.5) (23.6) (136.0) (56.2) 14.5 (14.6) 307.5 539.0 169.5 12.0 720.5 (82.4) 638.1 (36.3) (50.5) (38.1) — (10.0) (131.6) (63.6) (14.1) 293.9 $ $ $ $ $ $ $ customers within each of those segments are included in the table above. (2) See Note 7 for details of restructuring and other charges (income). Below provides the detail the charges (income) by segment: Year Ended December 31 $ 2015 (in Millions) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium Corporate RESTRUCTURING AND OTHER (CHARGES) INCOME 2013 (32.6) (1.0) (9.0) (7.9) (50.5) (3) Our non-operating pension and postretirement costs are defined as those costs related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These costs are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance and we consider these costs to be outside our operational performance. We exclude these non-operating pension and postretirement costs from our segments as we believe that removing them provides a better understanding of the underlying profitability of our businesses, provides increased transparency and clarity in the performance of our retirement plans and enhances period-over-period comparability. We continue to include the service cost and amortization of prior service cost in our operating segments noted above. We believe these elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees. These expenses are included as a component of the line item “Selling, general and administrative expenses” on our consolidated statements of income. 2014 4.5 (14.1) — (46.8) (56.4) $ (123.7) $ (93.8) (2.7) (23.8) (244.0) $ $ $ (4) Charges are associated with the previously planned separation of FMC Corporation into two independent public companies. On September 8, 2014, we announced that we would no longer proceed with the planned separation of FMC into two distinct public entities. At that time we announced the acquisition of Cheminova; see Note 3 within these consolidated financial statements for more information. These charges are included within “Business separation costs” on our consolidated income statement. These costs were primarily related to professional fees associated with separation activities within the finance and legal functions through September 8, 2014. (5) Charges related to the expensing of the inventory fair value step-up resulting from the application of purchase accounting, legal and professional fees and gains or losses on hedging purchase price associated with the planned or completed acquisitions and costs incurred associated with the divestiture of our FMC Alkali Chemicals division. Amounts represent the following: 80 FMC CORPORATION - Form 10-K (in Millions) Acquisition related charges - Cheminova Legal and professional fees(1) Unrealized loss/(gain) on hedging purchase price(1) Inventory fair value step-up amortization(2) Acquisition related charges - Epax Legal and professional fees(1) Inventory fair value step-up amortization(2) ACQUISITION/DIVESTITURE RELATED CHARGES (1) On the consolidated statements of income, these charges are included in “Selling, general and administrative expenses”. $ (2) On the consolidated statements of income, these charges are included in “Costs of sales and services”. (in Millions) Operating capital employed(1) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium Elimination Total operating capital employed Segment liabilities included in total operating capital employed Assets of discontinued operations held for sale Corporate items TOTAL ASSETS Segment assets(2) FMC Agricultural Solutions FMC Health and Nutrition FMC Lithium Elimination Total segment assets $ $ $ PART II ITEM 8 Financial Statements and Supplementary Data Twelve Months Ended December 31, 2015 2014 $ 60.4 $ 172.1 57.8 — — 290.3 $ 32.2 $ 99.6 — — 4.2 136.0 $ December 31, 2015 $ $ $ 3,085.2 1,180.9 312.6 — 4,578.7 1,270.6 — 476.6 6,325.9 4,259.5 1,241.1 348.7 — 5,849.3 — 476.6 6,325.9 2013 — — — 4.8 5.2 10.0 2014 1,612.3 1,365.8 297.3 — 3,275.4 919.2 604.8 526.6 5,326.0 2,399.0 1,452.3 343.3 — 4,194.6 604.8 526.6 5,326.0 Assets of discontinued operations held for sale Corporate items TOTAL ASSETS (1) We view operating capital employed, which consists of assets, net of liabilities, reported by our operations and excluding corporate items such as cash equivalents, $ $ debt, pension liabilities, income taxes and LIFO reserves, as our primary measure of segment capital. (2) Segment assets are assets recorded and reported by the segments and are equal to segment operating capital employed plus segment liabilities. See Note 1. Year Ended December 31, Depreciation and Amortization Research and Development Expense 2013 (in Millions) 100.5 FMC Agricultural Solutions 10.5 FMC Health and Nutrition 4.6 FMC Lithium — Corporate TOTAL 115.6 $ (1) Cash spending associated with contract manufacturers in our FMC Agricultural Solutions segment, which are not included in the table above was $14.2 million, Capital Expenditures(1) 2015 29.2 $ 50.6 17.4 11.3 108.5 $ 2015 132.4 $ 7.8 3.5 — 143.7 $ 2015 60.5 $ 38.9 12.2 4.1 115.7 $ 2014 111.8 $ 10.0 4.5 — 126.3 $ 2014 25.4 $ 96.8 45.0 15.0 182.2 $ 2014 31.0 $ 44.9 13.7 3.9 93.5 $ 2013 49.7 86.5 21.3 8.7 166.2 2013 34.1 35.4 14.7 3.8 88.0 $ $ $ $ $ $8.1 million and $24.1 million for the years ended December 31, 2015. 2014 and 2013, respectively. FMC CORPORATION - Form 10-K 81 PART II ITEM 8 Financial Statements and Supplementary Data Geographic Segment Information (in Millions) Revenue from continuing operations (by location of customer): Year Ended December 31, 2015 2014 2013 North America(1) Europe/Middle East/Africa Latin America(1) Asia Pacifi c 818.5 455.0 1,259.1 598.1 TOTAL 3,130.7 (1) In 2015, countries with sales in excess of ten percent of consolidated revenue consisted of the U.S. and Brazil. Sales for the years ended December 2015, 2014 and 2013 for the U.S. totaled $853.0 million, $857.7 million and $782.4 million and for Brazil totaled $662.5 million, $926.5 million and $1,014.7 million, respectively. 908.2 $ 483.7 1,195.6 671.2 3,258.7 $ 911.1 $ 623.9 981.8 759.7 3,276.5 $ $ $ (in Millions) Long-lived assets(1): North America(2) Europe/Middle East/Africa(2) Latin America Asia Pacifi c 580.1 652.0 209.9 348.0 TOTAL 1,790.0 (1) Geographic segment long-lived assets exclude long-term deferred income taxes and assets of discontinued operations held for sale on the consolidated balance sheets. (2) The countries with long-lived assets in excess of ten percent of consolidated long-lived assets at December 31, 2015 are the U.S. which totaled $646.9 million and Denmark which totaled $689.1 million, respectively. The long- lived assets at December 31, 2014 are the U.S which totaled $586.0 million and Norway which totaled $453.5 million, respectively. Norway assets included goodwill $194.3 million at December 31, 2014. 1,720.1 290.9 407.6 3,067.1 $ 648.5 $ $ $ December 31, 2015 2014 NOTE 20 Supplemental Information Th e following tables present details of prepaid and other current assets, other assets, accrued and other liabilities and other long-term liabilities as presented on the consolidated balance sheets: (in Millions) Prepaid and other current assets Prepaid insurance Tax related items including value added tax receivables Environmental obligation recoveries (Note 10) Derivative assets (Note 17) Argentina government receivable(1) Other prepaid and current assets TOTAL December 31, 2015 8.8 $ 105.3 6.1 — 18.7 102.8 241.7 $ 2014 7.0 74.9 8.0 28.6 14.8 55.5 188.8 $ $ December 31, 2015 (in Millions) Other Assets — Financing receivables (Note 8) 62.8 Advance to contract manufacturers 32.1 Capitalized software, net 21.9 Environmental obligation recoveries (Note 10) Argentina government receivable(1) 47.0 — Income taxes deferred charges 30.9 Deferred compensation arrangements 0.7 Pension and other postretirement benefi ts (Note 13) 59.7 Other long-term assets 255.1 TOTAL (1) We have various subsidiaries that conduct business within Argentina, primarily in our FMC Agricultural Solutions and FMC Lithium segments. At December 31, 2015 and 2014, $50.3 million and $42.2 million of outstanding receivables due from the Argentina government, which primarily represent export tax and valued added tax receivables, were denominated in U.S. dollars. As with all outstanding receivable balances we continually review recoverability by analyzing historical experience, current collection trends and regional business and political factors among other factors. 90.6 $ 69.0 36.5 17.1 52.5 65.6 25.4 — 78.4 435.1 $ $ $ 2014 82 FMC CORPORATION - Form 10-K Accrued and other liabilities (in Millions) Restructuring reserves (Note 7) Dividend payable (Note 15) Accrued payroll Environmental reserves, current, net of recoveries (Note 10) Derivative liabilities (Note 17) Other accrued and other liabilities TOTAL Other long-term liabilities (in Millions) Asset retirement obligations, long-term (Note 1) Contingencies related to uncertain tax positions (Note 11) Deferred compensation arrangements Self insurance reserves (primarily workers’ compensation) Lease obligations Reserve for discontinued operations (Note 9) Guarantees of vendor fi nancing (Note 18) Other long-term liabilities TOTAL NOTE 21 Quarterly Financial Information (Unaudited) PART II ITEM 8 Financial Statements and Supplementary Data December 31, 2015 15.6 $ 22.1 49.8 59.1 13.4 177.6 337.6 $ December 31, 2015 1.7 $ 97.1 29.1 11.2 34.3 46.1 25.7 33.6 278.8 $ 2014 10.3 20.1 46.0 74.4 121.1 135.3 407.2 2014 1.7 45.9 33.1 13.8 33.6 53.3 — 26.7 208.1 $ $ $ $ (in Millions, Except Share and Per Share Data) Revenue Gross margin Income (loss) from continuing operations before equity in (earnings) loss of affi liates, net interest income and expense and income taxes Income (loss) from continuing operations(1) Discontinued operations, net of income taxes Net income (loss) Less: Net income attributable to noncontrolling interests NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS Amounts attributable to FMC stockholders: Continuing operations, net of income taxes Discontinued operations, net of income taxes NET INCOME (LOSS) Basic earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations BASIC NET INCOME (LOSS) PER COMMON SHARE(1) Diluted earnings (loss) per common share attributable to FMC stockholders: Continuing operations Discontinued operations DILUTED NET INCOME (LOSS) PER COMMON SHARE(2) Weighted average shares outstanding: 2015 2014 1Q $ 659.4 250.7 $ 2Q 887.1 305.8 $ 3Q 830.7 220.3 $ 4Q 899.3 298.6 1Q $ 756.9 293.0 $ 2Q 794.9 316.1 $ 3Q 819.1 283.5 $ 4Q 887.8 318.3 (96.1) (61.1) 15.6 (45.5) 100.5 58.1 688.2 746.3 1.3 4.0 $ (46.8) $ 742.3 $ (62.4) $ 15.6 54.1 688.2 $ (46.8) $ 742.3 $ (0.47) $ 0.12 0.40 5.14 $ $ $ $ 0.5 5.4 (5.0) 0.4 2.8 (55.1) (180.3) (22.4) (202.7) 142.9 97.0 (26.6) 70.4 147.6 98.0 15.3 113.3 1.4 4.8 4.2 (2.4) $ (204.1) $ 65.6 $ 109.1 $ 2.6 (5.0) (2.4) $ (204.1) $ (181.7) $ (22.4) 93.8 (28.2) 65.6 $ 95.7 13.4 $ 109.1 $ 0.02 (0.04) (1.36) $ (0.17) 0.70 (0.21) $ 0.72 0.10 70.2 53.7 6.4 60.1 3.8 56.3 51.6 4.7 56.3 0.39 0.03 $ $ $ $ 54.1 58.9 19.4 78.3 1.8 76.5 57.1 19.4 76.5 0.43 0.14 $ $ $ $ $ (0.35) $ 5.54 $ (0.02) $ (1.53) $ 0.49 $ 0.82 $ 0.42 $ 0.57 $ (0.47) $ 0.12 0.40 5.12 $ $ 0.02 (0.04) (1.36) $ (0.17) 0.70 (0.21) $ $ 0.71 0.10 $ 0.39 0.03 0.43 0.14 $ (0.35) $ 5.52 $ (0.02) $ (1.53) $ 0.49 $ 0.81 $ 0.42 $ 0.57 Basic Diluted 133.6 133.6 133.7 134.4 133.8 134.4 133.7 133.7 133.1 134.3 133.3 134.4 133.4 134.3 133.5 134.3 (1) In the fourth quarter of 2015, we recorded significant restructuring and charges associated with both our Seal Sands facility and associated with Cheminova. Both of these are described in more detail in Note 7. Additionally, our results for the fourth quarter of 2015, were favorably impacted by $4.8 million after-tax or $0.03 per diluted share related to a cost of sale adjustment for the elimination of inter-company profit in inventory. This adjustment related to third quarter of 2015. (2) The sum of quarterly earnings per common share may differ from the full-year amount. FMC CORPORATION - Form 10-K 83 PART II ITEM 8 Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm Th e Board of Directors and Stockholders FMC Corporation: We have audited the accompanying consolidated balance sheets of FMC Corporation and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash fl ows, and changes in equity for each of the years in the three-year period ended December 31, 2015. In connection with our audits of the consolidated fi nancial statements, we also have audited the related fi nancial statement schedule. Th ese consolidated fi nancial statements and fi nancial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated fi nancial statements and fi nancial statement schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Th ose standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated fi nancial statements referred to above present fairly, in all material respects, the fi nancial position of FMC Corporation and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash fl ows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related fi nancial statement schedule, when considered in relation to the basic consolidated fi nancial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), FMC Corporation’s internal control over fi nancial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 26, 2016 expressed an unqualifi ed opinion on the eff ectiveness of the Company’s internal control over fi nancial reporting. FMC Corporation acquired Cheminova A/S during 2015, and management excluded from its assessment of the eff ectiveness of FMC Corporation’s internal control over fi nancial reporting as of December 31, 2015, Cheminova A/S’s internal control over fi nancial reporting which represented 33% of FMC Corporation’s consolidated total assets (including amounts resulting from the purchase price allocation) and 14% of consolidated revenues as of and for the year ended December 31, 2015. Our audit of internal control over fi nancial reporting of FMC Corporation also excluded an evaluation of the internal control over fi nancial reporting of Cheminova A/S. /s/ KPMG LLP Philadelphia, Pennsylvania February 26, 2016 84 FMC CORPORATION - Form 10-K PART II ITEM 8 Financial Statements and Supplementary Data Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over fi nancial reporting as defi ned in Exchange Act Rule 13a-15(f ). FMC’s internal control over fi nancial reporting is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over fi nancial reporting includes those written policies and procedures that: • pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the transactions and dispositions of the assets of FMC; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of fi nancial statements in accordance with U.S. generally accepted accounting principles; • provide reasonable assurance that receipts and expenditures of FMC are being made only in accordance with authorization of management and directors of FMC; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material eff ect on the consolidated fi nancial statements. Internal control over fi nancial reporting includes the controls themselves, monitoring and internal auditing practices and actions taken to correct defi ciencies as identifi ed. Because of its inherent limitations, internal control over fi nancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of eff ectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We assessed the eff ectiveness of our internal control over fi nancial reporting as of December 31, 2015. We based this assessment on criteria for eff ective internal control over fi nancial reporting described in “Internal Control—Integrated Framework (COSO 2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of our internal control over fi nancial reporting and testing of the operational eff ectiveness of our internal control over fi nancial reporting. We reviewed the results of our assessment with the Audit Committee of our Board of Directors. FMC acquired Cheminova A/S during 2015, and we excluded from our assessment of the eff ectiveness of FMC’s internal control over fi nancial reporting as of December 31, 2015, Cheminova A/S’s internal control over fi nancial reporting which represented 33% of FMC’s consolidated total assets (including amounts resulting from the purchase price allocation) and 14% of consolidated revenues as of and for the year ended December 31, 2015. Based on this assessment, we determined that, as of December 31, 2015, FMC has eff ective internal control over fi nancial reporting. KPMG LLP, our independent registered public accounting fi rm, has issued an attestation report on the eff ectiveness of internal control over fi nancial reporting as of December 31, 2015, which appears on the following page. FMC CORPORATION - Form 10-K 85 PART II ITEM 8 Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm Th e Board of Directors and Stockholders FMC Corporation: We have audited FMC Corporation’s internal control over fi nancial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). FMC Corporation’s management is responsible for maintaining eff ective internal control over fi nancial reporting and for its assessment of the eff ectiveness of internal control over fi nancial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over fi nancial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Th ose standards require that we plan and perform the audit to obtain reasonable assurance about whether eff ective internal control over fi nancial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over fi nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating eff ectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over fi nancial reporting is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over fi nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of fi nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material eff ect on the fi nancial statements. Because of its inherent limitations, internal control over fi nancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of eff ectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, FMC Corporation maintained, in all material respects, eff ective internal control over fi nancial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). FMC Corporation acquired Cheminova A/S during 2015, and management excluded from its assessment of the eff ectiveness of FMC Corporation’s internal control over fi nancial reporting as of December 31, 2015, Cheminova A/S’s internal control over fi nancial reporting which represented 33% of FMC Corporation’s consolidated total assets (including amounts resulting from the purchase price allocation) and 14% of consolidated revenues as of and for the year ended December 31, 2015. Our audit of internal control over fi nancial reporting of FMC Corporation also excluded an evaluation of the internal control over fi nancial reporting of Cheminova A/S. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of FMC Corporation and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash fl ows, and changes in equity for each of the years in the three-year period ended December 31, 2015, and our report dated February 26, 2016 expressed an unqualifi ed opinion on those consolidated fi nancial statements. /s/ KPMG LLP Philadelphia, Pennsylvania February 26, 2016 86 FMC CORPORATION - Form 10-K PART II ITEM 9A Controls and Procedures FMC Corporation Schedule II - Valuation and Qualifying Accounts and Reserves for Years Ended December 31, 2015, 2014 and 2013 (in Millions) December 31, 2015 Reserve for doubtful accounts(2) Deferred tax valuation allowance December 31, 2014 Reserve for doubtful accounts Deferred tax valuation allowance December 31, 2013 Reserve for doubtful accounts Deferred tax valuation allowance (1) Write-offs are net of recoveries. (2) Includes short term and long-term portion Provision /(Benefi t) Charged to Costs and Expenses Charged to Other Comprehensive Income Balance, Beginning of Year $ $ $ $ $ $ 37.2 125.3 30.1 108.2 26.7 84.5 5.9 146.8 8.7 17.3 5.1 23.1 — 0.4 — (0.2) — 0.6 Write-off s(1) Balance, End of Year — $ — $ (1.6) $ — $ (1.7) $ — $ 43.1 272.5 37.2 125.3 30.1 108.2 ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ITEM 9A Controls and Procedures (a) Evaluation of disclosure controls and procedures. Based on management’s evaluation (with the participation of the Company’s Chief Executive Offi cer and Chief Financial Offi cer), the Chief Executive Offi cer and Chief Financial Offi cer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures (as defi ned in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are eff ective to provide reasonable assurance that information required to be disclosed by the Company in reports fi led or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specifi ed in the SEC’s rules and forms and is accumulated and communicated to management, including our principal executive offi cer and principal fi nancial offi cer, as appropriate to allow timely decisions regarding required disclosure. Management’s annual report on internal control over fi nancial reporting. Refer to Management’s Report on Internal Control Over Financial Reporting which is included in Item 8 of Part II of this Annual Report on Form 10-K and is incorporated by reference to this Item 9A. Audit report of the independent registered public accounting fi rm. Refer to Report of Independent Registered Public Accounting Firm which is included in Item 8 of Part II of this Annual Report on Form 10-K and is incorporated by reference to this Item 9A. (b) Change in Internal Controls. Th ere have been no changes in internal control over fi nancial reporting that occurred during the quarter ended December 31, 2015, that materially aff ected or are reasonably likely to materially aff ect our internal control over fi nancial reporting. (c) Th e scope of management’s assessment of the eff ectiveness of its internal control over fi nancial reporting included the Company’s consolidated operations except for the operations of Cheminova A/S, which FMC acquired on April 21, 2015. Cheminova A/S represented 33% of the Company’s total assets (including amounts resulting from the purchase price allocation) and 14% of the consolidated revenue as of and for the year ended December 31, 2015. Cheminova will be included within scope of management’s assessment of its internal control over fi nancial reporting in the Company’s Annual Report on Form 10-K for the year ending December 31, 2016. FMC CORPORATION - Form 10-K 87 PART II ITEM 9B Other Information ITEM 9B Other Information On February 18, 2013, in order to more closely align the Company’s incentive compensation clawback practices and policies with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (which added Section 10D to the Securities Exchange Act of 1934), the Compensation and Organization Committee of the Company’s Board of Directors adopted a Clawback Policy (the “Clawback Policy”), applicable to all cash and equity incentive compensation thereafter granted to executive offi cers of the Company. On February 25, 2016, the Compensation and Organization Committee adopted an amendment to the FMC Corporation Incentive Compensation and Stock Plan, as amended (the “Plan”) to confi rm that all awards of cash and equity incentive compensation made to executive offi cers of the Company pursuant to the Plan are subject to the forfeiture, clawback, disgorgement and other provisions set forth in the Clawback Policy, as the same shall be in eff ect from time to time. 88 FMC CORPORATION - Form 10-K PART III ITEM 12 Security Ownership of Certain Beneﬁ cial Owners and Management and Related Stockholder Matters PART III ITEM 10 Directors, Executive Oﬃ cers and Corporate Governance Information concerning directors, appearing under the caption “III. Board of Directors” in our Proxy Statement to be fi led with the SEC in connection with the Annual Meeting of Stockholders scheduled to be held on April 26, 2016 (the “Proxy Statement”), information concerning executive offi cers, appearing under the caption “Item 4A. Executive Offi cers of the Registrant” in Part I of this Form 10-K, information concerning the Audit Committee, appearing under the caption “IV. Information About the Board of Directors and Corporate Governance - Committees and Independence of Directors - Audit Committee” in the Proxy Statement, information concerning the Code of Ethics, appearing under the caption “IV. Information About the Board of Directors and Corporate Governance - Corporate Governance - Code of Ethics and Business Conduct Policy” in the Proxy Statement, and information about compliance with Section 16(a) of the Securities Exchange Act of 1934 appearing under the caption “VII. Other Matters - Section 16(a) Benefi cial Ownership Reporting Compliance” in the Proxy Statement, is incorporate herein by reference in response to this Item 10. ITEM 1 1 Executive Compensation Th e information contained in the Proxy Statement in the section titled “VI. Executive Compensation” with respect to executive compensation, in the section titled “IV. Information About the Board of Directors and Corporate Governance—Director Compensation” and “—Corporate Governance—Compensation and Organization Committee Interlocks and Insider Participation” is incorporated herein by reference in response to this Item 11. ITEM 1 2 Security Ownership of Certain Beneﬁ cial Owners and Management and Related Stockholder Matters Th e information contained in the section titled “V. Security Ownership of FMC Corporation” in the Proxy Statement, with respect to security ownership of certain benefi cial owners and management, is incorporated herein by reference in response to this Item 12. FMC CORPORATION - Form 10-K 89 PART III ITEM 13 Certain Relationships and Related Transactions, and Director Independence Equity Compensation Plan Information Th e table below sets forth information with respect to compensation plans under which equity securities of FMC are authorized for issuance as of December 31, 2015. All of the equity compensation plans pursuant to which we are currently granting equity awards have been approved by stockholders. (Shares in thousands, except per share data) Number of Securities remaining available for future issuance under equity compensation plans (excluding securities refl ected in column (A)) (C) Plan Category Equity Compensation Plans approved by stockholders 5,562 (1) Taking into account all outstanding awards included in this table, the weighted-average exercise price of such stock options is $47.52 and the weighted-average Number of Securities to be issued upon exercise of outstanding options and restricted stock awards (A)(2) 2,631 $ Weighted-average exercise price of outstanding options awards (B)(1) 47.52 term-to-expiration is 5.6 years (2) Includes 2,071 stock options and 392 restricted stock awards granted to employees and 169 Restricted Stock Units (RSUs) held by directors. ITEM 1 3 Certain Relationships and Related Transactions, and Director Independence Th e information contained in the Proxy Statement concerning our independent directors and related party transactions under the caption “IV. Information About the Board of Directors and Corporate Governance- Committees and Independence of Directors,” and the information contained in the Proxy Statement concerning our related party transactions policy, appearing under the caption “IV. Information About the Board of Directors and Corporate Governance—Corporate Governance—Related Party Transactions Policy,” is incorporated herein by reference in response to this Item 13. ITEM 1 4 Principal Accountant Fees and Services Th e information contained in the Proxy Statement in the section titled “II. Th e Proposals to be Voted On—Ratifi cation of Appointment of Independent Registered Public Accounting Firm” is incorporated herein by reference in response to this Item 14. 90 FMC CORPORATION - Form 10-K PART IV ITEM 15 Exhibits and Financial Statement Schedules PART IV ITEM 15 Exhibits and Financial Statement Schedules (a) Documents fi led with this Report 1. Consolidated fi nancial statements of FMC Corporation and its subsidiaries are incorporated under Item 8 of this Form 10-K. 2. Th e following supplementary fi nancial information is fi led in this Form 10-K: Financial Statements Schedule II – Valuation and qualifying accounts and reserves for the years ended December 31, 2015, 2014 and 2013 Th e schedules not included herein are omitted because they are not applicable or the required information is presented in the fi nancial statements or related notes. 3. Exhibits: See attached Index of Exhibits (b) Exhibits Exhibit No. Exhibit Description (2) *2.1a *2.1b (3) *3.1 *3.2 (4) *4.1 *4.2 *4.3 *4.4 (10) *10.1 *10.1a *10.1b Plan of acquisition, reorganization, arrangement, liquidation or succession Share Purchase Agreement, dated September 8, 2014, by and between FMC Corporation, Auriga Industries A/S and Cheminova A/S (Exhibit 2.1 to the Current Report on Form 8-K/A fi led on September 11, 2014) Stock and Asset Purchase Agreement, dated as of February 3, 2015, by and among FMC Corporation, Tronox US Holdings Inc. and Tronox Limited (Exhibit 2.1 to the Current Report on Form 8-K/A fi led on February 4, 2015) Articles of Incorporation and By-Laws Restated Certifi cate of Incorporation, as amended through May 23, 2013 (Exhibit 3.1 to the Quarterly Report on Form 10-Q fi led on July 30, 2013) Restated By-Laws of FMC Corporation as of February 18, 2014 (Exhibit 3.2 to the Quarterly Report on Form 10-Q fi led on May 7, 2014) Instruments defi ning the rights of security holders, including indentures. FMC Corporation undertakes to furnish to the SEC upon request, a copy of any instrument defi ning the rights of holders of long-term debt of FMC Corporation and its consolidated subsidiaries and for any of its unconsolidated subsidiaries for which fi nancial statements are required to be fi led. Indenture, dated as of November 15, 2009, by and between FMC Corporation and U.S. Bank National Association, as trustee (Exhibit 4.1 to the Current Report on Form 8-K fi led on November 30, 2009). First Supplemental Indenture, dated as of November 30, 2009, by and between FMC Corporation and U.S. Bank National Association, as trustee (including the form of the Note) (Exhibit 4.2 to the Current Report on Form 8-K fi led on November 30, 2009). Second Supplemental Indenture, dated as of November 17, 2011, by and between the Company and U.S. Bank National Association, as trustee (including the form of the Note) (Exhibit 4.2 to the Current Report on Form 8-K fi led on November 17, 2011). Th ird Supplemental Indenture, dated as of November 15, 2013, by and between the Company and U.S. Bank National Association, as trustee (including the form of the Note) (Exhibit 4.1 to the Current Report on Form 8-K fi led on November 12, 2013). Material contracts Credit Agreement, dated as of August 5, 2011, among FMC Corporation and certain Foreign Subsidiaries, the Lenders and Issuing Banks Parties Th ereto, Citibank, N.A., as Administrative Agent, Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers, Bank of America, N.A., as Syndication Agent, DNB NOR Bank ASA, Th e Bank of Tokyo-Mitsubishi UFJ, Ltd., and Sumitomo Mitsui Banking Corp., as Co-Documentation Agents, and DNB NOR Bank ASA, Th e Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corp., BNP Paribas, HSBC Bank USA, National Association, and U.S. Bank, National Association, as Co-Senior Managing Agents (Exhibit 10.1 to the Current Report on Form 8-K fi led on August 8, 2011) Amendment and Consent No. 1, dated as of August 5, 2013, to the Credit Agreement, dated as of August 5, 2011, among FMC Corporation, certain subsidiaries of FMC Corporation party thereto, the lenders and issuing banks party thereto, and Citibank, N.A., as Administrative Agent for such lenders (Exhibit 10.1 to the Quarterly Report on Form 10-Q fi led on October 29, 2013) Amended and Restated Credit Agreement, dated as of October 10, 2014, among FMC Corporation, certain subsidiaries of FMC Corporation party thereto, the lenders and issuing banks party thereto, and Citibank, N.A., as Administrative Agent for such lenders. (Exhibit 10.1 to the Current Report on Form 8-K fi led on October 14, 2014) FMC CORPORATION - Form 10-K 91 PART IV ITEM 15 Exhibits and Financial Statement Schedules Exhibit No. Exhibit Description *10.1c Term Loan Agreement, dated as of October 10, 2014, among FMC Corporation, certain subsidiaries of FMC Corporation party thereto, the lenders party thereto, and Citibank, N.A., as Administrative Agent for such lenders. (Exhibit 10.1 to the Current Report on Form 8-K fi led on October 14, 2014) Asset Purchase Agreement among FMC Corporation, Solutia Inc., Astaris LLC, Israel Chemicals Limited and ICL Performance Products Holding Inc., dated as of September 1, 2005 (Exhibit 10 to the Quarterly Report on Form 10-Q/A fi led on November 8, 2005) FMC Corporation Compensation Plan for Non-Employee Directors As Amended and Restated Eff ective February 20, 2009 (Exhibit 10.4 to the Annual Report on Form 10-K fi led on February 23, 2009) Non-Employee Director Restricted Stock Unit Award Agreement (Exhibit 10.4.a to the Annual Report on Form 10-K fi led on February 23, 2009) Non-Employee Director Restricted Stock Unit Award Agreement (Exhibit 10.4.b to the Annual Report on Form 10-K fi led on February 23, 2009) FMC Corporation Salaried Employees’ Equivalent Retirement Plan, as amended and restated eff ective as of January 1, 2009 (Exhibit 10.5 to the Annual Report on Form 10-K fi led on February 23, 2009) FMC Corporation Salaried Employees’ Equivalent Retirement Plan Grantor Trust, as amended and restated eff ective as July 31, 2001 (Exhibit 10.6.a to the Quarterly Report on Form 10-Q fi led on November 7, 2001) FMC Corporation Non-Qualifi ed Savings and Investment Plan, as adopted by the Company on December 17, 2008 (Exhibit 10.7 to the Annual Report on Form 10-K fi led on February 23, 2009) FMC Corporation Non-Qualifi ed Savings and Investment Plan Trust, as amended and restated eff ective as of September 28, 2001 (Exhibit 10.7.a to the Quarterly Report on Form 10-Q fi led on November 7, 2001) First Amendment to FMC Corporation Non-Qualifi ed Savings and Investment Plan Trust between Fidelity Management Trust Company and FMC Corporation, eff ective as of October 1, 2003 (Exhibit 10.15a to the Annual Report on Form 10-K fi led on March 11, 2004) Second Amendment to FMC Corporation Non-Qualifi ed Savings and Investment Plan Trust, eff ective as of January 1, 2004 (Exhibit 10.12b to the Annual Report on Form 10-K fi led on March 14, 2005) *10.2 †*10.3 †*10.3.a †*10.3.b †*10.4 †*10.5 †*10.6 †*10.7 †* 10.7.a †* 10.7.b †*10.7.c Th ird Amendment to FMC Corporation Non-Qualifi ed Savings and Investment Plan Trust between Fidelity Management Trust Company and †*10.7.d †*10.7.e †*10.8 †*10.8a †*10.8b †*10.8c †10.8d †*10.9 †*10.10 †*10.11 †*10.12 †*10.13 †*10.14 †*10.14a *10.15 *10.15.a *10.15.b FMC Corporation, eff ective as of February 14, 2005 (Exhibit 10.8.c to the Annual Report on Form 10-K fi led on February 23, 2009) Fourth Amendment to FMC Corporation Non-Qualifi ed Savings and Investment Plan Trust between Fidelity Management Trust Company and FMC Corporation, eff ective as of July 1, 2005 (Exhibit 10.8.d to the Annual Report on Form 10-K fi led on February 23, 2009) Fifth Amendment to FMC Corporation Non-Qualifi ed Savings and Investment Plan Trust between Fidelity Management Trust Company and FMC Corporation, eff ective as of April 23, 2008 (Exhibit 10.8.e to the Annual Report on Form 10-K fi led on February 23, 2009) FMC Corporation Incentive Compensation and Stock Plan as amended and restated through February 18, 2013 (Exhibit 10.8 to the Annual Report on Form 10-K fi led on February 18, 2013) Form of Employee Restricted Stock Unit Agreement Pursuant to the FMC Corporation Incentive Compensation and Stock Plan (Exhibit 10.8 to the Annual Report on Form 10-K fi led on February 18, 2013) Form of Nonqualifi ed Stock Option Agreement Pursuant to the FMC Corporation Incentive Compensation and Stock Plan (Exhibit 10.8 to the Annual Report on Form 10-K fi led on February 18, 2013) Form of Key Manager Restricted Stock Agreement Pursuant to the FMC Corporation Incentive Compensation and Stock Plan (Exhibit 10.8 to the Annual Report on Form 10-K fi led on February 18, 2013) Amendment to FMC Corporation Incentive Compensation and Stock Plan FMC Corporation Executive Severance Plan, as amended and restated eff ective as of January 1, 2009 (Exhibit 10.10 to the Annual Report on Form 10-K fi led on February 23, 2009) FMC Corporation Executive Severance Grantor Trust Agreement, dated July 31, 2001 (Exhibit 10.10.a to the Quarterly Report on Form 10-Q fi led on November 7, 2001) Amended and Restated Executive Severance Agreement, dated November 6, 2012, between FMC Corporation and Pierre Brondeau. (Exhibit 10.2 to FMC Corporation’s Current Report on Form 8-K fi led on November 9, 2012) Pursuant to Instruction 2 to Item 601 of Regulation S-K, an Amended and Restated Executive Severance Agreement that is substantially identical in all material respects, except as to the parties thereto, between the Company and Mark A. Douglas was not fi led. Amended and Restated Executive Severance Agreement, dated November 6, 2012, between FMC Corporation and Andrea E. Utecht. (Exhibit 10.12 to FMC Corporation’s Annual Report on Form 10-K fi led on February 18, 2014) Amended and Restated Executive Severance Agreement, entered into as of November 6, 2012, by and between FMC Corporation and Th omas C. Deas, Jr. (Exhibit 10.13 to FMC Corporation’s Annual Report on Form 10-K fi led on February 18, 2014) Amended and Restated Executive Severance Agreement, entered into as of November 6, 2012, by and between FMC Corporation and Edward T. Flynn. (Exhibit 10.14 to the Annual Report on Form 10-K fi led on February 18, 2013) Pursuant to Instruction 2 to Item 601 of Regulation S-K, an Amended and Restated Executive Severance Agreement that is substantially identical in all material respects, except as to the parties thereto, between the Company and Eric Norris was not fi led. Transition Agreement by and between D. Michael Wilson and FMC Corporation, dated April 29, 2013. (Exhibit 10.1 to FMC Corporation’s Current Report on Form 8-K fi led on April 30, 2013) Joint Venture Agreement between FMC Corporation and Solutia Inc., made as of April 29, 1999 (Exhibit 2.I to Solutia’s Current Report on Form 8-K fi led on April 27, 2000) First Amendment to Joint Venture Agreement between FMC Corporation and Solutia Inc., eff ective as of December 29, 1999 (Exhibit 2.II to Solutia’s Current Report on Form 8-K fi led on April 27, 2000) Second Amendment to Joint Venture Agreement between FMC Corporation and Solutia Inc., eff ective as of February 2, 2000 (Exhibit 2.III to Solutia’s Current Report on Form 8-K fi led on April 27, 2000) *10.15.c Th ird Amendment to Joint Venture Agreement between FMC Corporation and Solutia Inc., eff ective as of March 31, 2000 (Exhibit 2.IV to *10.15.d Solutia’s Current Report on Form 8-K fi led on April 27, 2000) Fourth Amendment to Joint Venture Agreement between FMC Corporation and Solutia Inc., dated November 4, 2005 (Exhibit 10 to FMC Corporation’s Current Report on Form 8-K fi led on November 9, 2005) 92 FMC CORPORATION - Form 10-K PART IV ITEM 15 Exhibits and Financial Statement Schedules Exhibit No. Exhibit Description *10.16 Separation and Distribution Agreement by and between FMC Corporation and FMC Technologies, Inc., dated as of May 31, 2001 (Exhibit 2.1 to Form S-1/A for FMC Technologies, Inc. (Registration No. 333-55920) fi led on June 6, 2001) Letter Agreement dated October 23, 2009 between FMC Corporation and Pierre Brondeau (Exhibit 10.18 to FMC Corporation’s Annual Report on Form 10-K fi led on February 22, 2010) Amendment to October 23, 2009 Letter Agreement, dated November 6, 2012, between FMC Corporation and Pierre Brondeau. (Exhibit 10.1 to FMC Corporation’s Current Report on Form 8-K fi led on November 9, 2012) Executive Severance Agreement, dated November 6, 2012, between FMC Corporation and Paul W. Graves. (Exhibit 10.3 to FMC Corporation’s Current Report on Form 8-K fi led on November 9, 2012) Amendment to FMC Corporation Incentive Compensation and Stock Plan Computation of Ratios of Earnings to Fixed Charges FMC Corporation List of Signifi cant Subsidiaries Consent of KPMG LLP Chief Executive Offi cer Certifi cation Chief Financial Offi cer Certifi cation Chief Executive Offi cer Certifi cation of Annual Report Chief Financial Offi cer Certifi cation of Annual Report Interactive Data File †*10.17 †*10.17.a †*10.18 10.8d 12 21 23.1 31.1 31.2 32.1 32.2 101 * Incorporated by reference † Management contract or compensatory plan or arrangement FMC CORPORATION - Form 10-K 93 PART IV ITEM 15 Exhibits and Financial Statement Schedules Signatures Pursuant to the requirements of Section 13 or 15(d) 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. FMC CORPORATION (Registrant) By: Date: /S/ PAUL W. GRAVES Paul W. Graves Executive Vice President and Chief Financial Offi cer February 26, 2016 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. Title Executive Vice President and Chief Financial Offi cer Vice President, Corporate Controller and Chief Accounting Offi cer President, Chief Executive Offi cer and Chairman of the Board Director Director Director Director Director Director Director Director Director Date February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 February 26, 2016 Signature /S/ PAUL W. GRAVES Paul W. Graves /S/ NICHOLAS L. PFEIFFER Nicholas L. Pfeiff er /S/ PIERRE R. BRONDEAU Pierre R. Brondeau /S/ G. PETER D’ALOIA G. Peter D’Aloia /S/ EDUARDO E. CORDEIRO Eduardo E. Cordeiro /S/ C. SCOTT GREER C. Scott Greer /S/ DIRK A. KEMPTHORNE Dirk A. Kempthorne /S/ PAUL J. NORRIS Paul J. Norris /S/ ROBERT C. PALLASH Robert C. Pallash /S/ VINCENT R. VOLPE, JR. Vincent R. Volpe, Jr. /S/ WILLIAM H. POWELL William H. Powell /S/ K’LYNNE JOHNSON K’Lynne Johnson 94 FMC CORPORATION - Form 10-K PART IV ITEM 15 Exhibits and Financial Statement Schedules Index of Exhibits Filed with the Form 10-K of FMC Corporation for the Year Ended December 31, 2015 Exhibit No. 10.8d 12 21 23.1 31.1 31.2 32.1 32.2 101 Exhibit Description Amendment to FMC Corporation Incentive Compensation and Stock Plan Computation of Ratios of Earnings to Fixed Charges FMC Corporation List of Signifi cant Subsidiaries Consent of KPMG LLP Chief Executive Offi cer Certifi cation Chief Financial Offi cer Certifi cation Chief Executive Offi cer Certifi cation of Annual Report Chief Financial Offi cer Certifi cation of Annual Report Interactive Data File FMC CORPORATION - Form 10-K 95 PART IV ITEM 15 Exhibits and Financial Statement Schedules EXHIBIT 12 Statements of Computation of Ratio of Earnings to Fixed Charges Year ended December 31, 2011 2012 2013 2015 2014 $ (in Millions, Except Ratios) Earnings: Income from continuing operations before income taxes Equity in (earnings) loss of affi liates Interest expense and amortization of debt discount, fees and expenses Amortization of capitalized interest Interest included in rental expense TOTAL EARNINGS Fixed charges: 30.2 Interest expense and amortization of debt discount, fees and expenses 4.8 Interest capitalized as part of fi xed assets 7.7 Interest included in rental expense 42.7 TOTAL FIXED CHARGES Ratio of earnings to fi xed charges(1) 10.7 (1) In calculating this ratio, earnings consist of income (loss) from continuing operations before income taxes plus interest expense, net, amortization expense related to debt discounts, fees and expenses, amortization of capitalized interest, interest included in rental expenses (assumed to be one-third of rent) and Equity in (earnings) loss of affiliates. Fixed charges consist of interest expense, amortization of debt discounts, fees and expenses, interest capitalized as part of fixed assets and interest included in rental expenses. (130.5) $ 0.2 81.4 3.1 8.6 (37.2) $ 503.2 $ (0.8) 36.5 2.3 6.3 547.5 363.8 $ (0.2) 51.4 2.8 7.7 425.5 453.5 $ (0.8) 35.1 2.2 5.5 495.5 36.5 $ 6.2 6.3 49.0 11.2 35.1 $ 5.4 5.5 46.0 10.8 419.1 (1.5) 30.2 1.8 7.7 457.3 81.4 7.8 8.6 97.8 (0.4) 51.4 $ 8.0 7.7 67.1 6.3 $ $ $ $ $ $ $ $ $ $ $ EXHIBIT 21 Signifi cant Subsidiaries of the Registrant The following is a list of the Company’s consolidating subsidiaries, as of December 31, 2015, except for certain subsidiaries of the Registrant which do not, in the aggregate, constitute a significant subsidiary as that term is defined in Rule 12b-2 under the Securities Exchange Act of 1934. This list does not include equity affiliate investments and cost investments. Name of Subsidiary FMC Corporation (the Registrant) FMC Agricultural Products International AG FMC Agroquímica de México S.R.L de C.V. FMC BioPolymer AS FMC Norway Holding AS Epax Norway AS Epax Pharma UK Ltd. FMC BioPolymer UK Limited FMC Chemicals Netherlands BV FMC Chemical International, AG FMC Chemicals Limited FMC Chemical sprl FMC Finance BV FMC Foret SA FMC India Private Limited FMC International - Irish Partnership FMC Philippines Inc. FMC of Canada Limited FMC Química do Brasil Ltda FMC Specialty Alkali Corporation FMC (Suzhou) Crop Care Co., Ltd FMC WFC I, Inc. FMC Wyoming Corporation Minera del Altiplano SA PT Bina Guna Kimia Phytone Limited Ruralco Soluciones SA Cheminova India Ltd Cheminova A/S FMC Chemicals (Th ailand) Ltd 96 FMC CORPORATION - Form 10-K State or Country of Incorporation Delaware Switzerland Mexico Norway Norway Norway United Kingdom United Kingdom Netherlands Switzerland United Kingdom Belgium Netherlands Spain India Ireland Philippines Canada Brazil Delaware China Wyoming Delaware Argentina Indonesia United Kingdom Argentina India Denmark Th ailand PART IV ITEM 15 Exhibits and Financial Statement Schedules EXHIBIT 23.1 Consent of Independent Registered Public Accounting Firm Th e Board of Directors FMC Corporation: We consent to the incorporation by reference in the registration statements (Nos. 333-64702, 333-62683, 333-36973, 333-24039, 333-18383, 333-69805, 333-69714, 333-111456, 333-172387 and 333-172388) on Form S-8 of FMC Corporation of our reports dated February 26, 2016, with respect to the consolidated balance sheets of FMC Corporation and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash fl ows, and changes in equity for each of the years in the three-year period ended December 31, 2015, and the related fi nancial statement schedule, and the eff ectiveness of internal control over fi nancial reporting as of December 31, 2015, which reports appear in the December 31, 2015 annual report on Form 10-K of FMC Corporation. FMC Corporation acquired Cheminova A/S during 2015, and management excluded from its assessment of the eff ectiveness of FMC Corporation’s internal control over fi nancial reporting as of December 31, 2015, Cheminova A/S’s internal control over fi nancial reporting which represented 33% of FMC Corporation’s consolidated total assets (including amounts resulting from the purchase price allocation) and 14% of consolidated revenues as of and for the year ended December 31, 2015. Our audit of internal control over fi nancial reporting of FMC Corporation also excluded an evaluation of the internal control over fi nancial reporting of Cheminova A/S. /s/ KPMG LLP Philadelphia, Pennsylvania February 26, 2016 EXHIBIT 31.1 Chief Executive Oﬃ cer Certiﬁ cation I, Pierre R. Brondeau, certify that: 1. I have reviewed this Annual Report on Form 10-K of FMC Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the fi nancial statements, and other fi nancial information included in this report, fairly present in all material respects the fi nancial condition, results of operations and cash fl ows of the registrant as of, and for, the periods presented in this report; 4. Th e registrant’s other certifying offi cer and I are responsible for establishing and maintaining disclosure controls and procedures (as defi ned in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over fi nancial reporting (as defi ned in Exchange Act Rules 13a-15(f ) and 15d-15(f )) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over fi nancial reporting, or caused such internal control over fi nancial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the eff ectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the eff ectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant’s internal control over fi nancial reporting that occurred during the registrant’s most recent fi scal quarter (the registrant’s fourth fi scal quarter in the case of an annual report) that has materially aff ected, or is reasonably likely to materially aff ect, the registrant’s internal control over fi nancial reporting; and 5. Th e registrant’s other certifying offi cer and I have disclosed, based on our most recent evaluation of internal control over fi nancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): a. All signifi cant defi ciencies and material weaknesses in the design or operation of internal control over fi nancial reporting which are reasonable likely to adversely aff ect the registrant’s ability to record, process, summarize and report fi nancial information; and b. Any fraud, whether or not material, that involves management or other employees who have a signifi cant role in the registrant’s internal control over fi nancial reporting. /s/ PIERRE R. BRONDEAU Pierre R. Brondeau President and Chief Executive Offi cer February 26, 2016 FMC CORPORATION - Form 10-K 97 PART IV ITEM 15 Exhibits and Financial Statement Schedules EXHIBIT 31.2 Chief Financial Oﬃ cer Certiﬁ cation I, Paul W. Graves, certify that: 1. I have reviewed this Annual Report on Form 10-K of FMC Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the fi nancial statements, and other fi nancial information included in this report, fairly present in all material respects the fi nancial condition, results of operations and cash fl ows of the registrant as of, and for, the periods presented in this report; 4. Th e registrant’s other certifying offi cer and I are responsible for establishing and maintaining disclosure controls and procedures (as defi ned in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over fi nancial reporting (as defi ned in Exchange Act Rules 13a-15(f ) and 15d-15(f )) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over fi nancial reporting, or caused such internal control over fi nancial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the eff ectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the eff ectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant’s internal control over fi nancial reporting that occurred during the registrant’s most recent fi scal quarter (the registrant’s fourth fi scal quarter in the case of an annual report) that has materially aff ected, or is reasonably likely to materially aff ect, the registrant’s internal control over fi nancial reporting; and 5. Th e registrant’s other certifying offi cer and I have disclosed, based on our most recent evaluation of internal control over fi nancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): a. All signifi cant defi ciencies and material weaknesses in the design or operation of internal control over fi nancial reporting which are reasonable likely to adversely aff ect the registrant’s ability to record, process, summarize and report fi nancial information; and b. Any fraud, whether or not material, that involves management or other employees who have a signifi cant role in the registrant’s internal control over fi nancial reporting. /s/ PAUL W. GRAVES Paul W. Graves Executive Vice President and Chief Financial Offi cer February 26, 2016 EXHIBIT 32.1 CEO Certiﬁ cation of Annual Report I, Pierre R. Brondeau, President and Chief Executive Offi cer of FMC Corporation (“the Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, based on my knowledge that: (1) (2) the Annual Report on Form 10-K of the Company for the year ended December 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and the information contained in the Report fairly presents, in all material respects, the fi nancial condition and results of operations of the Company. /s/ PIERRE R. BRONDEAU Pierre R. Brondeau President and Chief Executive Offi cer February 26, 2016 98 FMC CORPORATION - Form 10-K PART IV ITEM 15 Exhibits and Financial Statement Schedules EXHIBIT 32.2 CFO Certiﬁ cation of Annual Report I, Paul W. Graves, Executive Vice President and Chief Financial Offi cer of FMC Corporation (“the Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, based on my knowledge that: (1) (2) the Annual Report on Form 10-K of the Company for the year ended December 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and the information contained in the Report fairly presents, in all material respects, the fi nancial condition and results of operations of the Company. /s/ PAUL W. GRAVES Paul W. Graves Executive Vice President and Chief Financial Offi cer February 26, 2016 FMC CORPORATION - Form 10-K 99 Th is page is intentionally left blank. Th is page is intentionally left blank. Th is page is intentionally left blank. Marc L. Hullebroeck Vice President and Business Director FMC Agricultural Solutions, North America David A. Kotch Vice President Chief Information Officer Nicholas L. Pfeiffer Vice President, Corporate Controller and Chief Accounting Officer Andrew D. Sandifer Vice President and Treasurer Tom Schneberger Vice President Global Business Director FMC Lithium Charles J. Thomas Vice President, Finance BOARD OF DIRECTORS EXECUTIVE COMMITTEE OFFICERS Pierre R. Brondeau President, Chief Executive Officer and Chairman of the Board Brian P. Angeli Vice President, Corporate Strategy and Development & Investor Relations Paul Graves Executive Vice President and Chief Financial Officer Jaime Gómez-Arnau Vice President, FMC Agricultural Solutions, EMEA Pierre R. Brondeau President, Chief Executive Officer and Chairman of the Board FMC Corporation Eduardo E. Cordeiro Executive Vice President and Chief Financial Officer Cabot Corporation G. Peter D’Aloia Managing Director and Member of the Board of Directors Ascend Performance Materials Holdings, Inc. C. Scott Greer Principal Greer and Associates Andrea E. Utecht Executive Vice President General Counsel and Secretary Mark A. Douglas President FMC Agricultural Solutions Eric W. Norris President FMC Health and Nutrition K’Lynne Johnson Executive Chairman Elevance Renewable Sciences Barry J. Crawford Vice President Operations Dirk A. Kempthorne President and Chief Executive Officer American Council of Life Insurers Kenneth A. Gedaka Vice President Communications and Public Affairs Paul J. Norris Retired Chairman and Chief Executive Officer W. R. Grace & Co. Kyle Matthews Vice President Human Resources Robert C. Pallash Retired President, Global Customer Group and Senior Vice President Visteon Corporation William H. Powell Retired Chairman and Chief Executive Officer National Starch and Chemical Company Vincent R. Volpe, Jr. Retired Chief Executive Officer and President Dresser-Rand Group, Inc. Karen M. Totland Vice President, Global Procurement, Global Facilities & Corporate Sustainability Bethwyn Todd President, FMC Asia Vice President FMC Agricultural Solutions, Asia Shawn Whitman Vice President, Government Affairs Antonio Zem President, FMC Latin America Vice President FMC Agricultural Solutions, Latin America STOCKHOLDER DATA FMC Corporation’s Annual Meeting of Stockholders will be held on Tuesday, April 26, 2016, at 2:00 p.m. ET at the Top of the Tower, 1717 Arch Street, 50th Floor, Philadelphia, PA, 19103. Notice of the meeting, together with proxy materials, will be mailed approximately five weeks prior to the meeting, to stockholders of record as of Tuesday, March 1, 2016. Transfer Agent and Registrar of Stock: Wells Fargo Bank N.A. Shareowner Services 1110 Centre Pointe Curve Mendota Heights, MN 55120 Phone: 1.800.468.9716 (1.651.450.4064 local and outside the United States) www.wellsfargo.com/shareownerservices FMC was incorporated in Delaware in 1928. Stock Exchange Listing: New York Stock Exchange Stock Exchange Symbol: FMC FMC Corporation is an active participant in the American Chemistry Council (ACC) and we support the principles of the ACC’s Responsible Care® Program by working with our employees, suppliers, customers, contractors and commercial partners to promote responsible management of our products and processes through their entire life cycle, and for their intended use, worldwide. FMC undergoes third-party review and certification of our conformance with the Responsible Care Management System requirements at our headquarters offices and all of our sites located in the United States. For additional information on our Responsible Care Program, please go to www.FMC.com. FMC, TH!NK. SAFE., Ethos, and 3RIVE 3D are trademarks of FMC Corporation or an affiliate. FMC Corporation 1735 Market Street Philadelphia, PA 19103 USA www.FMC.com 62614 Portions of this publication are printed on recycled paper using soy-based inks. Copyright© 2016, FMC Corporation. All rights reserved.

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