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
LONGLIVED ASSETS BY REGION 2015
LONGLIVED 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 20132015
$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 20132015
$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 20132015
LITHIUM:
CAPITAL EXPENDITURES AND DEPRECIATION
AND AMORTIZATION 20132015
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
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