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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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94-0479804
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2929 Walnut Street
Philadelphia, Pennsylvania
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19104
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(Address of principal executive offices)
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(Zip Code)
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LARGE ACCELERATED FILER
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x
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ACCELERATED FILER
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o
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NON-ACCELERATED FILER
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o
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SMALLER REPORTING COMPANY
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o
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EMERGING GROWTH COMPANY
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o
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IF AN EMERGING GROWTH COMPANY, INDICATE BY CHECK MARK IF THE REGISTRANT HAS ELECTED NOT TO USE THE EXTENDED TRANSITION PERIOD FOR COMPLYING WITH ANY NEW OR REVISED FINANCIAL ACCOUNTING STANDARDS PROVIDED PURSUANT TO SECTION 13(A) OF THE EXCHANGE ACT.
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Class
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Outstanding at March 31, 2017
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Common Stock, par value $0.10 per share
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134,001,527
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Page
No.
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(in Millions, Except Per Share Data)
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Three Months Ended March 31
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||||||
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2017
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2016
|
|||||
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(unaudited)
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||||||
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Revenue
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$
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596.0
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$
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606.4
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Costs and Expenses
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||||
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Costs of sales and services
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379.8
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390.4
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Gross margin
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216.2
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216.0
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Selling, general and administrative expenses
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109.7
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110.1
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Research and development expenses
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28.2
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34.2
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Restructuring and other charges (income)
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8.3
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9.5
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Total costs and expenses
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526.0
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544.2
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Income from continuing operations before equity in (earnings) loss of affiliates, interest expense, net and income taxes
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70.0
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62.2
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||
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Equity in (earnings) loss of affiliates
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(0.1
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)
|
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—
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||
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Interest expense, net
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15.7
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15.8
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||
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Income (loss) from continuing operations before income taxes
|
54.4
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46.4
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Provision (benefit) for income taxes
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9.4
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20.4
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Income (loss) from continuing operations
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45.0
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26.0
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Discontinued operations, net of income taxes
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(168.8
|
)
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22.7
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Net income (loss)
|
(123.8
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)
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48.7
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Less: Net income attributable to noncontrolling interests
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0.4
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0.4
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Net income (loss) attributable to FMC stockholders
|
$
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(124.2
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)
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$
|
48.3
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Amounts attributable to FMC stockholders:
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||||
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Continuing operations, net of income taxes
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$
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44.5
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$
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25.6
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Discontinued operations, net of income taxes
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(168.7
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)
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22.7
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Net income (loss) attributable to FMC stockholders
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$
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(124.2
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)
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$
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48.3
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Basic earnings (loss) per common share attributable to FMC stockholders:
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Continuing operations
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$
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0.33
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$
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0.19
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Discontinued operations
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(1.26
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)
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0.17
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Net income (loss) attributable to FMC stockholders
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$
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(0.93
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)
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$
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0.36
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Diluted earnings (loss) per common share attributable to FMC stockholders:
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Continuing operations
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$
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0.33
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$
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0.19
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Discontinued operations
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(1.25
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)
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0.17
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Net income (loss) attributable to FMC stockholders
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$
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(0.92
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)
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$
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0.36
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(in Millions)
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Three Months Ended March 31
|
||||||
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2017
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2016
|
|||||
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(unaudited)
|
||||||
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Net income (loss)
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$
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(123.8
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)
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$
|
48.7
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Other comprehensive income (loss), net of tax:
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||||
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Foreign currency adjustments:
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||||
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Foreign currency translation gain (loss) arising during the period
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43.2
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52.3
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Total foreign currency translation adjustments
(1)
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43.2
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52.3
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Derivative instruments:
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Unrealized hedging gains (losses) and other, net of tax of ($2.1) and ($0.8) for the three months ended March 31, 2017 and 2016, respectively
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1.1
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2.3
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Reclassification of deferred hedging (gains) losses and other, included in net income, net of tax of ($0.2) and $1.2 for the three months ended March 31, 2017 and 2016, respectively
(3)
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(0.5
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2.4
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Total derivative instruments, net of tax of ($2.3) and $0.4 for the three months ended March 31, 2017 and 2016, respectively
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0.6
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4.7
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Pension and other postretirement benefits:
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|
||||
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Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of $2.7 and zero for the three months ended March 31, 2017 and 2016, respectively
(2)
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4.4
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|
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—
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Reclassification of net actuarial and other (gain) loss and amortization of prior service costs, included in net income, net of tax of $2.6 and $3.6 for the three months ended March 31, 2017 and 2016, respectively
(3)
|
4.9
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|
6.3
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|
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Total pension and other postretirement benefits, net of tax of $5.3 and $3.6 for the three months ended March 31, 2017 and 2016, respectively
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9.3
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6.3
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|
||||
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Other comprehensive income (loss), net of tax
|
53.1
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|
63.3
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|
||
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Comprehensive income (loss)
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$
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(70.7
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)
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$
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112.0
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Less: Comprehensive income (loss) attributable to the noncontrolling interest
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0.6
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0.5
|
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||
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Comprehensive income (loss) attributable to FMC stockholders
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$
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(71.3
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)
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$
|
111.5
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(1)
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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 indefinitely, however, see Note 15 regarding the impact from the expected sale of our discontinued FMC Health and Nutrition segment on certain of these foreign subsidiaries.
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(2)
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At December 31 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. The interim adjustments noted above typically reflect the foreign currency translation impacts from the unrealized actuarial gains (losses) and prior service (costs) credits related to our foreign pension and postretirement plans. During the
three
months ended
March 31, 2017
due to the announced plans to divest of FMC Health and Nutrition business, we triggered a curtailment of our U.S. pension plans. As a result, we revalued our pension plans which resulted in adjustments to comprehensive income. See Note 14 for more information.
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(3)
|
For more detail on the components of these reclassifications and the affected line item in the condensed consolidated statements of income (loss) see Note 13.
|
|
(in Millions, Except Share and Par Value Data)
|
March 31, 2017
|
|
December 31, 2016
|
||||
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ASSETS
|
(unaudited)
|
||||||
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Current assets
|
|
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|
||||
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Cash and cash equivalents
|
$
|
96.1
|
|
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$
|
64.2
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Trade receivables, net of allowance of $24.8 in 2017 and $17.6 in 2016
|
1,630.6
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|
1,692.5
|
|
||
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Inventories
|
526.4
|
|
|
478.9
|
|
||
|
Prepaid and other current assets
|
248.0
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|
|
232.1
|
|
||
|
Current assets of discontinued operations held for sale
|
1,053.1
|
|
|
381.5
|
|
||
|
Total current assets
|
$
|
3,554.2
|
|
|
$
|
2,849.2
|
|
|
Investments
|
1.0
|
|
|
1.0
|
|
||
|
Property, plant and equipment, net
|
535.1
|
|
|
538.1
|
|
||
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Goodwill
|
500.8
|
|
|
498.7
|
|
||
|
Other intangibles, net
|
734.6
|
|
|
719.9
|
|
||
|
Other assets including long-term receivables, net
|
475.2
|
|
|
461.1
|
|
||
|
Deferred income taxes
|
235.4
|
|
|
242.1
|
|
||
|
Noncurrent assets of discontinued operations held for sale
|
—
|
|
|
829.2
|
|
||
|
Total assets
|
$
|
6,036.3
|
|
|
$
|
6,139.3
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
Current liabilities
|
|
|
|
||||
|
Short-term debt and current portion of long-term debt
|
$
|
217.3
|
|
|
$
|
94.2
|
|
|
Accounts payable, trade and other
|
390.9
|
|
|
317.4
|
|
||
|
Advance payments from customers
|
30.1
|
|
|
239.8
|
|
||
|
Accrued and other liabilities
|
258.0
|
|
|
303.3
|
|
||
|
Accrued payroll
|
39.9
|
|
|
55.2
|
|
||
|
Accrued customer rebates
|
321.5
|
|
|
246.7
|
|
||
|
Guarantees of vendor financing
|
85.8
|
|
|
104.5
|
|
||
|
Accrued pension and other postretirement benefits, current
|
7.1
|
|
|
7.1
|
|
||
|
Income taxes
|
19.1
|
|
|
11.0
|
|
||
|
Current liabilities of discontinued operations held for sale
|
119.1
|
|
|
59.0
|
|
||
|
Total current liabilities
|
$
|
1,488.8
|
|
|
$
|
1,438.2
|
|
|
Long-term debt, less current portion
|
1,790.4
|
|
|
1,798.8
|
|
||
|
Accrued pension and other postretirement benefits, long-term
|
122.4
|
|
|
137.3
|
|
||
|
Environmental liabilities, continuing and discontinued
|
293.9
|
|
|
306.4
|
|
||
|
Deferred income taxes
|
137.0
|
|
|
130.4
|
|
||
|
Other long-term liabilities
|
312.4
|
|
|
287.1
|
|
||
|
Long-term liabilities of discontinued operations held for sale
|
—
|
|
|
48.1
|
|
||
|
Commitments and contingent liabilities (Note 17)
|
|
|
|
|
|||
|
Equity
|
|
|
|
||||
|
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2017 or 2016
|
—
|
|
|
—
|
|
||
|
Common stock, $0.10 par value, authorized 260,000,000 shares; 185,983,792 issued shares at 2017 and 2016
|
18.6
|
|
|
18.6
|
|
||
|
Capital in excess of par value of common stock
|
428.9
|
|
|
418.6
|
|
||
|
Retained earnings
|
3,359.1
|
|
|
3,505.5
|
|
||
|
Accumulated other comprehensive income (loss)
|
(425.5
|
)
|
|
(478.4
|
)
|
||
|
Treasury stock, common, at cost - 2017: 51,982,265 shares, 2016: 52,293,686 shares
|
(1,503.8
|
)
|
|
(1,506.6
|
)
|
||
|
Total FMC stockholders’ equity
|
$
|
1,877.3
|
|
|
$
|
1,957.7
|
|
|
Noncontrolling interests
|
14.1
|
|
|
35.3
|
|
||
|
Total equity
|
$
|
1,891.4
|
|
|
$
|
1,993.0
|
|
|
Total liabilities and equity
|
$
|
6,036.3
|
|
|
$
|
6,139.3
|
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
|
(unaudited)
|
||||||
|
Cash provided (required) by operating activities of continuing operations:
|
|
|
|
||||
|
Net income (loss)
|
$
|
(123.8
|
)
|
|
$
|
48.7
|
|
|
Discontinued operations
|
168.8
|
|
|
(22.7
|
)
|
||
|
Income (loss) from continuing operations
|
$
|
45.0
|
|
|
$
|
26.0
|
|
|
Adjustments from income from continuing operations to cash provided (required) by operating activities of continuing operations:
|
|
|
|
||||
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Depreciation and amortization
|
23.6
|
|
|
24.9
|
|
||
|
Equity in (earnings) loss of affiliates
|
(0.1
|
)
|
|
—
|
|
||
|
Restructuring and other charges (income)
|
8.3
|
|
|
9.5
|
|
||
|
Deferred income taxes
|
4.8
|
|
|
(2.5
|
)
|
||
|
Pension and other postretirement benefits
|
(2.3
|
)
|
|
3.8
|
|
||
|
Share-based compensation
|
6.3
|
|
|
6.2
|
|
||
|
Excess tax benefits from share-based compensation
|
—
|
|
|
(0.3
|
)
|
||
|
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
|
|
|
||||
|
Trade receivables, net
|
78.8
|
|
|
103.1
|
|
||
|
Guarantees of vendor financing
|
(2.6
|
)
|
|
29.7
|
|
||
|
Inventories
|
(37.9
|
)
|
|
(62.5
|
)
|
||
|
Accounts payable, trade and other
|
68.0
|
|
|
103.9
|
|
||
|
Advance payments from customers
|
(209.9
|
)
|
|
(199.2
|
)
|
||
|
Accrued customer rebates
|
72.3
|
|
|
79.8
|
|
||
|
Income taxes
|
1.1
|
|
|
15.2
|
|
||
|
Pension and other postretirement benefit contributions
|
(0.9
|
)
|
|
(1.1
|
)
|
||
|
Environmental spending, continuing, net of recoveries
|
(9.6
|
)
|
|
(2.7
|
)
|
||
|
Restructuring and other spending
|
(2.1
|
)
|
|
(6.0
|
)
|
||
|
Change in other operating assets and liabilities, net
(1)
|
(112.8
|
)
|
|
(65.5
|
)
|
||
|
Cash provided (required) by operating activities of continuing operations
|
$
|
(70.0
|
)
|
|
$
|
62.3
|
|
|
Cash provided (required) by operating activities of discontinued operations:
|
|
|
|
||||
|
Environmental spending, discontinued, net of recoveries
|
(5.1
|
)
|
|
(3.6
|
)
|
||
|
Other discontinued reserves
|
(9.5
|
)
|
|
(5.4
|
)
|
||
|
Operating activities of discontinued operations
|
49.7
|
|
|
46.7
|
|
||
|
Cash provided (required) by operating activities of discontinued operations
|
$
|
35.1
|
|
|
$
|
37.7
|
|
|
(1)
|
Changes in all periods primarily represent timing of payments associated with all other operating assets and liabilities.
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
|
(unaudited)
|
||||||
|
Cash provided (required) by investing activities of continuing operations:
|
|
|
|
||||
|
Capital expenditures
|
$
|
(8.7
|
)
|
|
$
|
(34.9
|
)
|
|
Proceeds from disposal of property, plant and equipment
|
0.8
|
|
|
—
|
|
||
|
Other investing activities
|
(17.0
|
)
|
|
(2.8
|
)
|
||
|
Cash provided (required) by investing activities of continuing operations
|
$
|
(24.9
|
)
|
|
$
|
(37.7
|
)
|
|
Cash provided (required) by investing activities of discontinued operations:
|
|
|
|
||||
|
Other discontinued investing activities
|
(6.2
|
)
|
|
(6.5
|
)
|
||
|
Cash provided (required) by investing activities of discontinued operations
|
$
|
(6.2
|
)
|
|
$
|
(6.5
|
)
|
|
Cash provided (required) by financing activities of continuing operations:
|
|
|
|
||||
|
Increase (decrease) in short-term debt
|
120.1
|
|
|
2.4
|
|
||
|
Repayments of long-term debt
|
(0.7
|
)
|
|
(50.3
|
)
|
||
|
Financing fees
|
(8.5
|
)
|
|
(0.7
|
)
|
||
|
Issuances of common stock, net
|
9.6
|
|
|
0.6
|
|
||
|
Excess tax benefits from share-based compensation
|
—
|
|
|
0.3
|
|
||
|
Transactions with noncontrolling interests
|
(0.5
|
)
|
|
—
|
|
||
|
Dividends paid
(2)
|
(22.1
|
)
|
|
(22.1
|
)
|
||
|
Other repurchases of common stock
|
(1.4
|
)
|
|
(1.2
|
)
|
||
|
Cash provided (required) by financing activities of continuing operations
|
$
|
96.5
|
|
|
$
|
(71.0
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
1.4
|
|
|
0.9
|
|
||
|
Increase (decrease) in cash and cash equivalents
|
31.9
|
|
|
(14.3
|
)
|
||
|
Cash and cash equivalents, beginning of period
|
64.2
|
|
|
78.6
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
96.1
|
|
|
$
|
64.3
|
|
|
(2)
|
See Note 13 regarding quarterly cash dividend.
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Acquisition-related charges -
DuPont
|
|
|
|
||||
|
Legal and professional fees
(1)
|
$
|
9.2
|
|
|
$
|
—
|
|
|
Acquisition-related charges -
Cheminova
(2)
|
|
|
|
|
|
||
|
Legal and professional fees
(1)
|
—
|
|
|
7.4
|
|
||
|
Total acquisition-related charges
(3)
|
$
|
9.2
|
|
|
$
|
7.4
|
|
|
|
|
|
|
||||
|
Restructuring charges and asset disposals
|
|
|
|
||||
|
Cheminova restructuring
|
—
|
|
|
3.0
|
|
||
|
Total Cheminova restructuring charges
(3) (4)
|
$
|
—
|
|
|
$
|
3.0
|
|
|
(1)
|
Represents transaction costs, costs for transitional employees, other acquired employees related costs and integration-related legal and professional third-party fees. These charges are recorded as a component of “Selling, general and administrative expense" on the condensed consolidated statements of income (loss).
|
|
(2)
|
For more information on the acquisition-related charges for Cheminova, refer to Note 3 to the consolidated financial statements included with our 2016 Form 10-K.
|
|
(3)
|
Acquisition-related charges and restructuring charges to integrate Cheminova with Agricultural Solutions were completed at the end of 2016.
|
|
(4)
|
See Note 8 for more information. These charges are recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss).
|
|
(in Millions)
|
FMC Agricultural
Solutions
|
|
FMC Lithium
|
|
Total
|
||||||
|
Balance, December 31, 2016
|
$
|
498.7
|
|
|
$
|
—
|
|
|
$
|
498.7
|
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
Foreign currency adjustments
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|||
|
Balance, March 31, 2017
|
$
|
500.8
|
|
|
$
|
—
|
|
|
$
|
500.8
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
(in Millions)
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
Intangible assets subject to amortization (finite-lived)
|
|||||||||||||||||||||||
|
Customer relationships
|
$
|
366.5
|
|
|
$
|
(49.1
|
)
|
|
$
|
317.4
|
|
|
$
|
356.9
|
|
|
$
|
(43.7
|
)
|
|
$
|
313.2
|
|
|
Patents
|
2.2
|
|
|
(0.5
|
)
|
|
1.7
|
|
|
2.2
|
|
|
(0.4
|
)
|
|
1.8
|
|
||||||
|
Brands
(1)
|
14.1
|
|
|
(5.0
|
)
|
|
9.1
|
|
|
13.6
|
|
|
(4.7
|
)
|
|
8.9
|
|
||||||
|
Purchased and licensed technologies
|
55.7
|
|
|
(25.9
|
)
|
|
29.8
|
|
|
60.3
|
|
|
(30.1
|
)
|
|
30.2
|
|
||||||
|
Other intangibles
|
2.8
|
|
|
(2.0
|
)
|
|
0.8
|
|
|
2.9
|
|
|
(1.9
|
)
|
|
1.0
|
|
||||||
|
|
$
|
441.3
|
|
|
$
|
(82.5
|
)
|
|
$
|
358.8
|
|
|
$
|
435.9
|
|
|
$
|
(80.8
|
)
|
|
$
|
355.1
|
|
|
Intangible assets not subject to amortization (indefinite-lived)
|
|||||||||||||||||||||||
|
Brands
(1) (2)
|
$
|
374.4
|
|
|
|
|
$
|
374.4
|
|
|
$
|
363.4
|
|
|
|
|
$
|
363.4
|
|
||||
|
In-process research & development
|
1.4
|
|
|
|
|
1.4
|
|
|
1.4
|
|
|
|
|
1.4
|
|
||||||||
|
|
$
|
375.8
|
|
|
|
|
$
|
375.8
|
|
|
$
|
364.8
|
|
|
|
|
$
|
364.8
|
|
||||
|
Total intangible assets
|
$
|
817.1
|
|
|
$
|
(82.5
|
)
|
|
$
|
734.6
|
|
|
$
|
800.7
|
|
|
$
|
(80.8
|
)
|
|
$
|
719.9
|
|
|
(2)
|
The majority of the Brands intangible asset in the table above relates to our proprietary brand portfolio.
|
|
(in Millions)
|
Finite-lived
|
|
Indefinite-lived
|
||||
|
FMC Agricultural Solutions
|
$
|
357.8
|
|
|
$
|
375.8
|
|
|
FMC Lithium
|
1.0
|
|
|
—
|
|
||
|
Total
|
$
|
358.8
|
|
|
$
|
375.8
|
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Amortization expense
|
$
|
5.1
|
|
|
$
|
5.9
|
|
|
(in Millions)
|
|
||
|
Balance, December 31, 2015
|
$
|
13.9
|
|
|
Additions - charged to expense
|
9.8
|
|
|
|
Transfer (to) from allowance for credit losses (see below)
|
(7.8
|
)
|
|
|
Net recoveries and write-offs
|
1.7
|
|
|
|
Balance, December 31, 2016
|
17.6
|
|
|
|
Additions - charged to expense
|
1.8
|
|
|
|
Transfer (to) from allowance for credit losses (see below)
|
3.1
|
|
|
|
Net recoveries and write-offs
|
2.3
|
|
|
|
Balance, March 31, 2017
|
$
|
24.8
|
|
|
(
in Millions
)
|
|
||
|
Balance, December 31, 2015
|
$
|
29.2
|
|
|
Additions - charged to expense
|
12.1
|
|
|
|
Transfer (to) from allowance for doubtful accounts (see above)
|
7.8
|
|
|
|
Net Recoveries and write-offs
|
—
|
|
|
|
Balance, December 31, 2016
|
$
|
49.1
|
|
|
Additions - charged to expense
|
1.8
|
|
|
|
Transfer (to) from allowance for doubtful accounts (see above)
|
(3.1
|
)
|
|
|
Net Recoveries and write-offs
|
0.1
|
|
|
|
Balance, March 31, 2017
|
$
|
47.9
|
|
|
(in Millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
Finished goods
|
$
|
223.5
|
|
|
$
|
220.1
|
|
|
Work in process
|
249.4
|
|
|
219.3
|
|
||
|
Raw materials, supplies and other
|
180.7
|
|
|
166.7
|
|
||
|
First-in, first-out inventory
|
$
|
653.6
|
|
|
$
|
606.1
|
|
|
Less: Excess of first-in, first-out cost over last-in, first-out cost
|
(127.2
|
)
|
|
(127.2
|
)
|
||
|
Net inventories
|
$
|
526.4
|
|
|
$
|
478.9
|
|
|
(in Millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
Property, plant and equipment
|
$
|
934.7
|
|
|
$
|
921.6
|
|
|
Accumulated depreciation
|
(399.6
|
)
|
|
(383.5
|
)
|
||
|
Property, plant and equipment, net
|
$
|
535.1
|
|
|
$
|
538.1
|
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Restructuring charges and asset disposals
|
$
|
—
|
|
|
$
|
3.0
|
|
|
Other charges (income), net
|
8.3
|
|
|
6.5
|
|
||
|
Total restructuring and other charges
|
$
|
8.3
|
|
|
$
|
9.5
|
|
|
|
Restructuring Charges
|
||||||||||
|
(in Millions)
|
Severance and Employee Benefits
(1)
|
|
Asset Disposal Charges
(2)
|
|
Total
|
||||||
|
Cheminova restructuring
|
$
|
1.8
|
|
|
$
|
1.2
|
|
|
$
|
3.0
|
|
|
Three months ended March 31, 2016
|
$
|
1.8
|
|
|
$
|
1.2
|
|
|
$
|
3.0
|
|
|
(1)
|
Represents severance and employee benefit charges. Income represents adjustments to previously recorded severance and employee benefits.
|
|
(2)
|
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.
|
|
(in Millions)
|
Balance at
12/31/16
(3)
|
|
Change in
reserves
(4)
|
|
Cash
payments
|
|
Other
|
|
Balance at
3/31/17
(3)
|
||||||||||
|
Cheminova restructuring
|
$
|
11.1
|
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
|
$
|
0.2
|
|
|
$
|
9.3
|
|
|
Other workforce related and facility shutdowns
(1)
|
1.4
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
1.3
|
|
|||||
|
Restructuring activities related to discontinued operations
(2)
|
3.4
|
|
|
1.9
|
|
|
(4.9
|
)
|
|
—
|
|
|
0.4
|
|
|||||
|
Total
|
$
|
15.9
|
|
|
$
|
1.9
|
|
|
$
|
(7.0
|
)
|
|
$
|
0.2
|
|
|
$
|
11.0
|
|
|
(1)
|
Primarily severance costs related to workforce reductions and facility shutdowns.
|
|
(2)
|
Cash spending associated with restructuring activities of discontinued operations is reported within "Other discontinued reserves" on the condensed consolidated statements of cash flows.
|
|
(3)
|
Included in "Accrued and other liabilities" on the condensed consolidated balance sheets.
|
|
(4)
|
Primarily severance, exited lease, contract termination and other miscellaneous exit costs. Any accelerated depreciation and impairment charges noted above that impacted our property, plant and equipment balances or other long term assets and are not included in the above tables.
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Environmental charges, net
|
$
|
2.3
|
|
|
$
|
6.6
|
|
|
Argentina devaluation
|
—
|
|
|
4.2
|
|
||
|
Other items, net
|
6.0
|
|
|
(4.3
|
)
|
||
|
Other charges (income), net
|
$
|
8.3
|
|
|
$
|
6.5
|
|
|
(in Millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
Short-term foreign debt
(1)
|
$
|
91.1
|
|
|
$
|
85.5
|
|
|
Commercial paper
(2)
|
123.8
|
|
|
6.3
|
|
||
|
Total short-term debt
|
$
|
214.9
|
|
|
$
|
91.8
|
|
|
Current portion of long-term debt
|
2.4
|
|
|
2.4
|
|
||
|
Short-term debt and current portion of long-term debt
|
$
|
217.3
|
|
|
$
|
94.2
|
|
|
(1)
|
At
March 31, 2017
, the average interest rate on the borrowings was
8.6%
. 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.
|
|
(in Millions)
|
March 31, 2017
|
|
|
|
|
||||||
|
Interest Rate Percentage
|
|
Maturity
Date
|
|
March 31, 2017
|
|
December 31, 2016
|
|||||
|
Pollution control and industrial revenue bonds (less unamortized discounts of $0.2 and $0.2, respectively)
|
1.1 - 6.5%
|
|
2021 - 2032
|
|
$
|
51.6
|
|
|
$
|
51.6
|
|
|
Senior notes (less unamortized discount of $1.3 and $1.4, respectively)
|
3.95 - 5.2%
|
|
2019 - 2024
|
|
998.7
|
|
|
998.6
|
|
||
|
Term Loan Facility
|
2.2%
|
|
2020
|
|
750.0
|
|
|
750.0
|
|
||
|
Credit Facility
(1)
|
3.4%
|
|
2019
|
|
—
|
|
|
—
|
|
||
|
Foreign debt
|
0 - 4.0%
|
|
2018 - 2024
|
|
10.0
|
|
|
10.7
|
|
||
|
Debt issuance cost
|
|
|
|
|
(17.5
|
)
|
|
(9.7
|
)
|
||
|
Total long-term debt
|
|
|
|
|
$
|
1,792.8
|
|
|
$
|
1,801.2
|
|
|
Less: debt maturing within one year
|
|
|
|
|
2.4
|
|
|
2.4
|
|
||
|
Total long-term debt, less current portion
|
|
|
|
|
$
|
1,790.4
|
|
|
$
|
1,798.8
|
|
|
(1)
|
Letters of credit outstanding under our Credit Facility totaled
$128.8 million
and available funds under this facility were
$1,247.3 million
at
March 31, 2017
.
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Revenue
|
$
|
176.7
|
|
|
$
|
192.4
|
|
|
Costs of sales and services
|
111.4
|
|
|
127.0
|
|
||
|
Income (loss) from discontinued operations before income taxes
(1)
|
35.5
|
|
|
39.3
|
|
||
|
Provision for income taxes
(2)
|
26.7
|
|
|
10.5
|
|
||
|
Total discontinued operations of FMC Health and Nutrition, net of income taxes, before divestiture related costs and adjustments
|
$
|
8.8
|
|
|
$
|
28.8
|
|
|
Divestiture related costs of discontinued operations of FMC Health and Nutrition, net of income taxes
|
(6.2
|
)
|
|
—
|
|
||
|
Adjustment to FMC Health and Nutrition Omega-3 net assets held for sale, net of income taxes
(3)
|
(164.7
|
)
|
|
—
|
|
||
|
Discontinued operations of FMC Health and Nutrition, net of income taxes
|
(162.1
|
)
|
|
28.8
|
|
||
|
Less: Discontinued operations of FMC Health and Nutrition attributable to noncontrolling interests
|
(0.1
|
)
|
|
—
|
|
||
|
Discontinued operations of FMC Health and Nutrition, net of income taxes, attributable to FMC Stockholders
|
$
|
(162.0
|
)
|
|
$
|
28.8
|
|
|
(1)
|
For the
three
months ended
March 31, 2017
and
2016
, amounts include
$5.0 million
and
$5.0 million
of allocated interest expense,
$1.8 million
and
$2.9 million
of restructuring and other charges (income), and
$3.9 million
and
$0.0 million
of a pension curtailment charge, respectively. See Note 14 for more information of the pension curtailment charge. Interest was allocated in accordance with relevant discontinued operations accounting guidance.
|
|
(2)
|
Includes the accrual for income taxes of
$17.8 million
associated with unremitted earnings of foreign H&N subsidiaries held for sale. Refer to Note 15 for more information.
|
|
(3)
|
Represents the impairment charge of approximately
$185 million
(
$165 million
, net of tax) associated with the disposal activities of the Omega-3 business to write down the carrying value to its fair value.
|
|
(in Millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
Assets
|
|
|
|
||||
|
Current assets of discontinued operations held for sale (primarily trade receivables and inventories)
|
$
|
403.9
|
|
|
$
|
381.5
|
|
|
Property, plant & equipment
(1)
|
467.1
|
|
|
464.0
|
|
||
|
Goodwill
(1)
|
286.7
|
|
|
278.8
|
|
||
|
Other intangibles, net
(1)
|
74.1
|
|
|
73.5
|
|
||
|
Other non-current assets
(1)
|
6.0
|
|
|
12.9
|
|
||
|
Total assets of discontinued operations held for sale
(2)
|
$
|
1,237.8
|
|
|
$
|
1,210.7
|
|
|
Liabilities
|
|
|
|
||||
|
Current liabilities of discontinued operations held for sale
|
(108.6
|
)
|
|
(59.0
|
)
|
||
|
Noncurrent liabilities of discontinued operations held for sale
(1)
|
(10.5
|
)
|
|
(48.1
|
)
|
||
|
Total liabilities of discontinued operations held for sale
(2)
|
$
|
(119.1
|
)
|
|
$
|
(107.1
|
)
|
|
Total net assets before adjustment to Omega-3 assets held for sale
|
$
|
1,118.7
|
|
|
$
|
1,103.6
|
|
|
Adjustment to Omega-3 assets held for sale
|
(184.7
|
)
|
|
—
|
|
||
|
Total net assets
|
$
|
934.0
|
|
|
$
|
1,103.6
|
|
|
(1)
|
Presented as "Noncurrent assets / Long-term liabilities of discontinued operations held for sale" on the condensed consolidated balance sheet as of December 31, 2016.
|
|
(2)
|
Presented as "Current assets / liabilities of discontinued operations held for sale" on the condensed consolidated balance sheet as of March 31, 2017.
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Adjustment for workers’ compensation, product liability, other postretirement benefits and other, net of income tax benefit (expense) of $1.3 and $0.9 for the three months ended March 31, 2017 and 2016, respectively
(1)
|
$
|
(0.4
|
)
|
|
$
|
(0.4
|
)
|
|
Provision for environmental liabilities, net of recoveries, net of income tax benefit of $1.0 and $1.2 for the three months ended March 31, 2017 and 2016, respectively
(2)
|
(2.8
|
)
|
|
(3.0
|
)
|
||
|
Provision for legal reserves and expenses, net of recoveries, net of income tax benefit (expense) of $1.9 and $1.6 for the three months ended March 31, 2017 and 2016, respectively
|
(3.5
|
)
|
|
(2.7
|
)
|
||
|
Discontinued operations of FMC Health and Nutrition, net of income tax benefit (expense) of ($5.1) and $10.5 for the three months ended March 31, 2017 and 2016, respectively
|
(162.1
|
)
|
|
28.8
|
|
||
|
Discontinued operations, net of income taxes
|
$
|
(168.8
|
)
|
|
$
|
22.7
|
|
|
(1)
|
See a roll forward of our restructuring reserves in Note 8.
|
|
(2)
|
See a roll forward of our environmental reserves, as well as, discussion on significant environmental issues that occurred during the
2017
in Note 11.
|
|
(in Millions)
|
Gross
|
|
Recoveries
(3)
|
|
Net
|
||||||
|
Total environmental reserves at December 31, 2016
|
$
|
378.1
|
|
|
$
|
(11.4
|
)
|
|
$
|
366.7
|
|
|
Provision/(benefit)
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|||
|
(Spending)/recoveries
|
(15.7
|
)
|
|
—
|
|
|
(15.7
|
)
|
|||
|
Foreign currency translation adjustments
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|||
|
Net change
|
(8.3
|
)
|
|
—
|
|
|
(8.3
|
)
|
|||
|
Total environmental reserves at March 31, 2017
|
$
|
369.8
|
|
|
$
|
(11.4
|
)
|
|
$
|
358.4
|
|
|
|
|
|
|
|
|
||||||
|
Environmental reserves, current
(1)
|
65.3
|
|
|
(0.8
|
)
|
|
64.5
|
|
|||
|
Environmental reserves, long-term
(2)
|
304.5
|
|
|
(10.6
|
)
|
|
293.9
|
|
|||
|
Total environmental reserves at March 31, 2017
|
$
|
369.8
|
|
|
$
|
(11.4
|
)
|
|
$
|
358.4
|
|
|
(1)
|
These amounts are included within "Accrued and other liabilities" on the condensed consolidated balance sheets.
|
|
(2)
|
These amounts are included in "Environmental liabilities, continuing and discontinued" on the condensed consolidated balance sheets.
|
|
(3)
|
These recorded recoveries represent probable realization of claims against U.S. government agencies and are recorded as an offset to our environmental reserves in the condensed consolidated balance sheets.
|
|
(in Millions)
|
12/31/2016
|
|
Increase in Recoveries
|
|
Cash Received
|
|
3/31/2017
|
||||||
|
Environmental recoveries
|
$
|
27.2
|
|
|
—
|
|
|
(1.0
|
)
|
|
$
|
26.2
|
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Environmental provisions, net - recorded to liabilities
(1)
|
$
|
6.1
|
|
|
$
|
12.6
|
|
|
Environmental provisions, net - recorded to assets
(2)
|
—
|
|
|
(1.8
|
)
|
||
|
Environmental provision, net
|
$
|
6.1
|
|
|
$
|
10.8
|
|
|
|
|
|
|
||||
|
Continuing operations
(3)
|
2.3
|
|
|
6.6
|
|
||
|
Discontinued operations
(4)
|
3.8
|
|
|
4.2
|
|
||
|
Environmental provision, net
|
$
|
6.1
|
|
|
$
|
10.8
|
|
|
(1)
|
See above roll forward of our total environmental reserves as presented on the condensed consolidated balance sheets.
|
|
(2)
|
See above roll forward of our total environmental recoveries as presented on the condensed consolidated balance sheets.
|
|
(3)
|
Recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss). See Note 8. 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.
|
|
(4)
|
Recorded as a component of “Discontinued operations, net of income taxes" on the condensed consolidated statements of income (loss). See Note 10.
|
|
(in Millions, Except Share and Per Share Data)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Earnings (loss) attributable to FMC stockholders:
|
|
|
|
||||
|
Continuing operations, net of income taxes
|
$
|
44.5
|
|
|
$
|
25.6
|
|
|
Discontinued operations, net of income taxes
|
(168.7
|
)
|
|
22.7
|
|
||
|
Net income (loss) attributable to FMC stockholders
|
$
|
(124.2
|
)
|
|
$
|
48.3
|
|
|
Less: Distributed and undistributed earnings allocable to restricted award holders
|
(0.2
|
)
|
|
(0.1
|
)
|
||
|
Net income (loss) allocable to common stockholders
|
$
|
(124.4
|
)
|
|
$
|
48.2
|
|
|
|
|
|
|
||||
|
Basic earnings (loss) per common share attributable to FMC stockholders:
|
|
|
|
||||
|
Continuing operations
|
$
|
0.33
|
|
|
$
|
0.19
|
|
|
Discontinued operations
|
(1.26
|
)
|
|
0.17
|
|
||
|
Net income (loss) attributable to FMC stockholders
|
$
|
(0.93
|
)
|
|
$
|
0.36
|
|
|
|
|
|
|
||||
|
Diluted earnings (loss) per common share attributable to FMC stockholders:
|
|
|
|
||||
|
Continuing operations
|
$
|
0.33
|
|
|
$
|
0.19
|
|
|
Discontinued operations
|
(1.25
|
)
|
|
0.17
|
|
||
|
Net income (loss) attributable to FMC stockholders
|
$
|
(0.92
|
)
|
|
$
|
0.36
|
|
|
|
|
|
|
||||
|
Shares (in thousands):
|
|
|
|
||||
|
Weighted average number of shares of common stock outstanding - Basic
|
133,966
|
|
|
133,802
|
|
||
|
Weighted average additional shares assuming conversion of potential common shares
|
1,116
|
|
|
502
|
|
||
|
Shares – diluted basis
|
135,082
|
|
|
134,304
|
|
||
|
(in Millions, Except Per Share Data)
|
FMC
Stockholders’
Equity
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
||||||
|
Balance at December 31, 2016
|
$
|
1,957.7
|
|
|
$
|
35.3
|
|
|
$
|
1,993.0
|
|
|
Net income (loss)
|
(124.2
|
)
|
|
0.4
|
|
|
(123.8
|
)
|
|||
|
Stock compensation plans
|
15.8
|
|
|
—
|
|
|
15.8
|
|
|||
|
Shares for benefit plan trust
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
|
Net pension and other benefit actuarial gains (losses) and prior service costs, net of income tax
(1)
|
9.3
|
|
|
—
|
|
|
9.3
|
|
|||
|
Net hedging gains (losses) and other, net of income tax
(1)
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
|
Foreign currency translation adjustments
(1)
|
43.0
|
|
|
0.2
|
|
|
43.2
|
|
|||
|
Dividends ($0.165 per share)
|
(22.1
|
)
|
|
—
|
|
|
(22.1
|
)
|
|||
|
Repurchases of common stock
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|||
|
Transactions with noncontrolling interests
(2)
|
(0.9
|
)
|
|
(21.8
|
)
|
|
(22.7
|
)
|
|||
|
Balance at March 31, 2017
|
$
|
1,877.3
|
|
|
$
|
14.1
|
|
|
$
|
1,891.4
|
|
|
(1)
|
See condensed consolidated statements of comprehensive income (loss).
|
|
(2)
|
During the first quarter 2017, we terminated our interest in a variable interest entity. See Note 8 for more information.
|
|
(in Millions)
|
Foreign currency adjustments
|
|
Derivative Instruments
(1)
|
|
Pension and other postretirement benefits
(2)
|
|
Total
|
||||||||
|
Accumulated other comprehensive income (loss),
net of tax at December 31, 2016
|
$
|
(194.0
|
)
|
|
$
|
7.1
|
|
|
$
|
(291.5
|
)
|
|
$
|
(478.4
|
)
|
|
2017 Activity
|
|
|
|
|
|
|
|
||||||||
|
Other comprehensive income (loss) before reclassifications
(3)
|
43.0
|
|
|
1.1
|
|
|
4.4
|
|
|
$
|
48.5
|
|
|||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
(0.5
|
)
|
|
4.9
|
|
|
$
|
4.4
|
|
|||
|
Accumulated other comprehensive income (loss), net of tax at March 31, 2017
|
$
|
(151.0
|
)
|
|
$
|
7.7
|
|
|
$
|
(282.2
|
)
|
|
$
|
(425.5
|
)
|
|
(in Millions)
|
Foreign currency adjustments
|
|
Derivative Instruments
(1)
|
|
Pension and other postretirement benefits
(2)
|
|
Total
|
||||||||
|
Accumulated other comprehensive income (loss),
net of tax at December 31, 2015
|
$
|
(147.3
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(303.8
|
)
|
|
$
|
(457.3
|
)
|
|
2016 Activity
|
|
|
|
|
|
|
|
||||||||
|
Other comprehensive income (loss) before reclassifications
(3)
|
52.2
|
|
|
2.3
|
|
|
—
|
|
|
$
|
54.5
|
|
|||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
2.4
|
|
|
6.3
|
|
|
$
|
8.7
|
|
|||
|
Accumulated other comprehensive income (loss), net of tax at March 31, 2016
|
$
|
(95.1
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(297.5
|
)
|
|
$
|
(394.1
|
)
|
|
Details about Accumulated Other Comprehensive Income Components
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
(1)
|
|
Affected Line Item in the Condensed Consolidated Statements of Income (Loss)
|
||||||
|
|
|
Three Months Ended March 31
|
|
|
||||||
|
(in Millions)
|
|
2017
|
|
2016
|
|
|
||||
|
Foreign currency translation adjustments:
|
|
|
|
|
|
|
||||
|
Derivative instruments:
|
|
|
|
|
|
|
||||
|
Foreign currency contracts
|
|
$
|
(2.5
|
)
|
|
$
|
(0.9
|
)
|
|
Costs of sales and services
|
|
Energy contracts
|
|
0.9
|
|
|
(0.6
|
)
|
|
Costs of sales and services
|
||
|
Foreign currency contracts
|
|
2.3
|
|
|
(2.1
|
)
|
|
Selling, general and administrative expenses
|
||
|
Total before tax
|
|
0.7
|
|
|
(3.6
|
)
|
|
|
||
|
|
|
(0.2
|
)
|
|
1.2
|
|
|
Provision for income taxes
|
||
|
Amount included in net income
|
|
$
|
0.5
|
|
|
$
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
|
Pension and other postretirement benefits
(2)
:
|
|
|
|
|
|
|
||||
|
Amortization of prior service costs
|
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
Selling, general and administrative expenses
|
|
Amortization of unrecognized net actuarial and other gains (losses)
|
|
(3.4
|
)
|
|
(9.7
|
)
|
|
Selling, general and administrative expenses
|
||
|
Recognized loss due to curtailment
|
|
(3.9
|
)
|
|
—
|
|
|
Selling, general and administrative expenses
(3)
|
||
|
Total before tax
|
|
$
|
(7.5
|
)
|
|
$
|
(9.9
|
)
|
|
|
|
|
|
2.6
|
|
|
3.6
|
|
|
Provision for income taxes
|
||
|
Amount included in net income
|
|
(4.9
|
)
|
|
(6.3
|
)
|
|
|
||
|
Total reclassifications for the period
|
|
$
|
(4.4
|
)
|
|
$
|
(8.7
|
)
|
|
Amount included in net income
|
|
(1)
|
Amounts in parentheses indicate charges to the condensed consolidated statements of income (loss).
|
|
(2)
|
Pension and other postretirement benefits amounts include the impact from both continuing and discontinued operations. For detail on the continuing operations components of pension and other postretirement benefits, see Note 14.
|
|
(3)
|
The loss due to curtailment for the
three
months ended
March 31, 2017
related to the expected disposal of our FMC Health and Nutrition and was recorded to "Discontinued operations, net of income taxes" on the condensed consolidated statements of income (loss).
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||||||||||
|
Pensions
|
|
Other Benefits
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
Service cost
|
$
|
2.1
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest cost
|
11.4
|
|
|
12.4
|
|
|
0.2
|
|
|
0.2
|
|
||||
|
Expected return on plan assets
|
(19.9
|
)
|
|
(21.4
|
)
|
|
—
|
|
|
—
|
|
||||
|
Amortization of prior service cost (credit)
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
|
Recognized net actuarial and other (gain) loss
|
4.0
|
|
|
10.3
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||
|
Net periodic benefit cost
|
$
|
(2.2
|
)
|
|
$
|
3.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
|
Three Months Ended March 31
|
||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||
|
(in Millions)
|
Before Tax
|
Tax
|
Effective Tax Rate %
|
|
Before Tax
|
Tax
|
Effective Tax Rate %
|
||||||||||
|
Continuing operations
|
$
|
54.4
|
|
$
|
9.4
|
|
17.3
|
%
|
|
$
|
46.4
|
|
$
|
20.4
|
|
44.0
|
%
|
|
Discrete items:
|
|
|
|
|
|
|
|
||||||||||
|
Acquisition-related charges
(1)
|
9.2
|
|
2.6
|
|
|
|
—
|
|
—
|
|
|
||||||
|
Currency remeasurement
(2)
|
5.1
|
|
2.6
|
|
|
|
2.1
|
|
—
|
|
|
||||||
|
Other discrete items
(3)
|
38.1
|
|
2.1
|
|
|
|
46.9
|
|
0.2
|
|
|
||||||
|
Tax only discrete items
(4)
|
—
|
|
(4.0
|
)
|
|
|
—
|
|
(2.5
|
)
|
|
||||||
|
Total discrete items
|
$
|
52.4
|
|
$
|
3.3
|
|
|
|
$
|
49.0
|
|
$
|
(2.3
|
)
|
|
||
|
Continuing operations, before discrete items
|
$
|
106.8
|
|
$
|
12.7
|
|
|
|
$
|
95.4
|
|
$
|
18.1
|
|
|
||
|
Estimated Annualized Effective Tax Rate (EAETR)
(5)
|
|
|
11.9
|
%
|
|
|
|
19.0
|
%
|
||||||||
|
(1)
|
See Note 3 for more information on acquisition-related charges.
|
|
(2)
|
Represents transaction gains or losses for currency remeasurement offset by associated hedge gains or losses, which are accounted for discretely in accordance with GAAP. Certain transaction gains or losses for currency remeasurement are not taxable, while offsetting hedge gains or losses are taxable.
|
|
(3)
|
GAAP generally requires subsidiaries for which a full a valuation allowance has been provided to be excluded from the EAETR. For the three months ended March 31, 2017 and March 31, 2016, the other discrete items component of the EAETR reconciliation primarily relates to the discrete accounting for these pretax losses.
|
|
(4)
|
For the three months ended March 31, 2017, tax only discrete items is comprised primarily of the tax effect of changes in valuation allowances of historical deferred tax assets. For the three months ended March 31, 2016, this component was comprised primarily of currency remeasurement associated with foreign statutory operations.
|
|
(5)
|
The primary drivers for the decrease in the
first
quarter effective tax rate for
2017
compared to
2016
are shown in the table above. The remaining change was due to reduced domestic earnings in our FMC Agricultural Solutions business and the impact of the full integration of Cheminova into our global supply chain.
|
|
Financial Instrument
|
|
Valuation Method
|
|
Foreign exchange forward contracts
|
|
Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on current market prices for applicable currencies.
|
|
|
|
|
|
Commodity forward and option contracts
|
|
Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices for applicable commodities.
|
|
|
|
|
|
Debt
|
|
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.
|
|
|
March 31, 2017
|
||||||||||||||||||
|
|
Gross Amount of Derivatives
|
|
|
|
|
|
|
||||||||||||
|
(in Millions)
|
Designated as Cash Flow Hedges
|
|
Not Designated as Hedging Instruments
|
|
Total Gross Amounts
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
(3)
|
|
Net Amounts
|
||||||||||
|
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign exchange contracts
|
$
|
8.3
|
|
|
$
|
3.3
|
|
|
$
|
11.6
|
|
|
$
|
(4.1
|
)
|
|
$
|
7.5
|
|
|
Energy contracts
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||
|
Total derivative assets
(1)
|
8.6
|
|
|
3.3
|
|
|
11.9
|
|
|
(4.1
|
)
|
|
7.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign exchange contracts
|
$
|
(5.4
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
4.1
|
|
|
$
|
(2.3
|
)
|
|
Energy contracts
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
|
Total derivative liabilities
(2)
|
(5.6
|
)
|
|
(1.0
|
)
|
|
(6.6
|
)
|
|
4.1
|
|
|
(2.5
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net derivative assets (liabilities)
|
$
|
3.0
|
|
|
$
|
2.3
|
|
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Gross Amount of Derivatives
|
|
|
||||||||||||||||
|
(in Millions)
|
Designated as Cash Flow Hedges
|
|
Not Designated as Hedging Instruments
|
|
Total Gross Amounts
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
(3)
|
|
Net Amounts
|
||||||||||
|
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign exchange contracts
|
$
|
9.8
|
|
|
$
|
0.8
|
|
|
$
|
10.6
|
|
|
$
|
(6.2
|
)
|
|
$
|
4.4
|
|
|
Energy contracts
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||||
|
Total derivative assets
(1)
|
11.8
|
|
|
0.8
|
|
|
12.6
|
|
|
(6.2
|
)
|
|
6.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign exchange contracts
|
$
|
(5.5
|
)
|
|
$
|
(9.6
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
6.2
|
|
|
$
|
(8.9
|
)
|
|
Energy contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Total derivative liabilities
(2)
|
(5.5
|
)
|
|
(9.6
|
)
|
|
(15.1
|
)
|
|
6.2
|
|
|
(8.9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net derivative assets (liabilities)
|
$
|
6.3
|
|
|
$
|
(8.8
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
—
|
|
|
$
|
(2.5
|
)
|
|
(1)
|
Net balance is included in “Prepaid and other current assets” in the condensed consolidated balance sheets.
|
|
(2)
|
Net balance is included in “Accrued and other liabilities” in the condensed consolidated balance sheets.
|
|
(3)
|
Represents net derivatives positions subject to master netting arrangements.
|
|
|
Three Months Ended March 31
|
||||||||||||||||||||||
|
|
Contracts
|
|
|||||||||||||||||||||
|
|
Foreign Exchange
|
|
Energy
|
|
Total
|
||||||||||||||||||
|
(in Millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
|
Unrealized hedging gains (losses) and other, net of tax
|
$
|
1.9
|
|
|
$
|
2.9
|
|
|
$
|
(0.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
1.1
|
|
|
$
|
2.3
|
|
|
Reclassification of deferred hedging (gains) losses, net of tax
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Effective portion
(1)
|
0.1
|
|
|
2.0
|
|
|
(0.6
|
)
|
|
0.4
|
|
|
(0.5
|
)
|
|
2.4
|
|
||||||
|
Total derivative instrument impact on
comprehensive income, net of tax
|
$
|
2.0
|
|
|
$
|
4.9
|
|
|
$
|
(1.4
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
0.6
|
|
|
$
|
4.7
|
|
|
(1)
|
See Note 13 for classification of amounts within the condensed consolidated statements of income (loss).
|
|
|
Location of Gain or (Loss)
Recognized in Income on Derivatives
|
Amount of Pre-tax Gain or (Loss)
Recognized in Income on Derivatives
(1)
|
||||||
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
|
2017
|
|
2016
|
||||
|
Foreign exchange contracts
|
Cost of sales and services
|
$
|
(6.0
|
)
|
|
$
|
15.6
|
|
|
Total
|
|
$
|
(6.0
|
)
|
|
$
|
15.6
|
|
|
(1)
|
Amounts in the columns represent the gain or loss on the derivative instrument offset by the gain or loss on the hedged item.
|
|
(in Millions)
|
March 31, 2017
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
||||||||
|
Derivatives – Commodities:
(1)
|
|
|
|
|
|
|
|
||||||||
|
Energy contracts
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
Derivatives – Foreign exchange
(1)
|
7.5
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
||||
|
Other
(2)
|
27.8
|
|
|
27.8
|
|
|
—
|
|
|
—
|
|
||||
|
Total assets
|
$
|
35.6
|
|
|
$
|
27.8
|
|
|
$
|
7.8
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
Derivatives – Commodities:
(1)
|
|
|
|
|
|
|
|
||||||||
|
Energy contracts
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
Derivatives – Foreign exchange
(1)
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
||||
|
Other
(3)
|
34.8
|
|
|
34.1
|
|
|
0.7
|
|
|
—
|
|
||||
|
Total liabilities
|
$
|
37.3
|
|
|
$
|
34.1
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
(1)
|
See the Fair Value of Derivative Instruments table within this Note for classifications on the condensed consolidated balance sheet.
|
|
(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 condensed 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 due are included in “Other long-term liabilities” in the condensed consolidated balance sheets. Level 2 liabilities represent liability-based awards associated with non-employees.
|
|
(in Millions)
|
December 31, 2016
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
||||||||
|
Derivatives – Commodities:
(1)
|
|
|
|
|
|
|
|
||||||||
|
Energy contracts
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
Derivatives – Foreign exchange
(1)
|
4.4
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
||||
|
Other
(2)
|
$
|
25.3
|
|
|
$
|
25.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total assets
|
$
|
31.7
|
|
|
$
|
25.3
|
|
|
$
|
6.4
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
Derivatives – Commodities:
(1)
|
|
|
|
|
|
|
|
||||||||
|
Energy contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Derivatives – Foreign exchange
(1)
|
8.9
|
|
|
—
|
|
|
8.9
|
|
|
—
|
|
||||
|
Other
(3)
|
31.1
|
|
|
30.5
|
|
|
0.6
|
|
|
—
|
|
||||
|
Total liabilities
|
$
|
40.0
|
|
|
$
|
30.5
|
|
|
$
|
9.5
|
|
|
$
|
—
|
|
|
(1)
|
See the Fair Value of Derivative Instruments table within this Note for classification on the condensed consolidated balance sheet.
|
|
(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 condensed consolidated balance sheets.
|
|
(3)
|
Consist 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 condensed consolidated balance sheets.
|
|
(in Millions)
|
March 31, 2017
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total Gains
(Losses)
(Year Ended
March 31,
2017)
|
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net assets of discontinued operations held for sale
(1)
|
$
|
24.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.0
|
|
|
$
|
(184.7
|
)
|
|
Total assets
|
$
|
24.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.0
|
|
|
$
|
(184.7
|
)
|
|
(1)
|
As further discussed in Note 10, the fair value of the FMC Health and Nutrition business being exchanged to DuPont are significantly greater than its carrying value. However, we determined the fair value of our separate Omega-3 assets held for sale, which are not included in the expected DuPont transaction, to be significantly less than carrying value. These assets used to be part of the broader FMC Health and Nutrition reporting unit. The charge was recorded to “Discontinued operations, net of income taxes” on the condensed consolidated statements of income (loss) for the three months ended March 31, 2017. Our evaluation of fair value, less costs to sell included a combination of preliminary bids received from a prospective buyer as well as discounted cash flow models to estimate fair value.
|
|
(in Millions)
|
December 31, 2016
|
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total Gains
(Losses) (Year Ended December 31, 2016) |
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impairment of intangibles
(1)
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
|
$
|
(1.0
|
)
|
|
Total assets
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
|
$
|
(1.0
|
)
|
|
(1)
|
We recorded an impairment charge, related to our FMC Agricultural Solutions segment, to write down the carrying value of the generic brand portfolio of approximately
$1.0 million
to its fair value.
|
|
(in Millions)
|
|
||
|
Guarantees:
|
|
||
|
Guarantees of vendor financing - short-term
(1)
|
$
|
85.8
|
|
|
Guarantees of vendor financing - long-term
(1)
|
18.0
|
|
|
|
Other debt guarantees
(2)
|
2.2
|
|
|
|
Total
|
$
|
106.0
|
|
|
(1)
|
Represents guarantees to financial institutions on behalf of certain FMC Agricultural Solutions customers for their seasonal borrowing. This short term amount is recorded on the condensed consolidated balance sheets as “Guarantees of vendor financing.” The long term amount is recorded on the condensed consolidated balance sheet within "Other long term liabilities."
|
|
(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.
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Revenue
|
|
|
|
||||
|
FMC Agricultural Solutions
|
$
|
530.4
|
|
|
$
|
546.1
|
|
|
FMC Lithium
|
65.6
|
|
|
60.3
|
|
||
|
Total
|
$
|
596.0
|
|
|
$
|
606.4
|
|
|
Income from continuing operations before income taxes
|
|
|
|
||||
|
FMC Agricultural Solutions
|
$
|
83.0
|
|
|
$
|
82.0
|
|
|
FMC Lithium
|
21.6
|
|
|
14.9
|
|
||
|
Segment operating profit
(1)
|
$
|
104.6
|
|
|
$
|
96.9
|
|
|
Corporate and other
|
(21.6
|
)
|
|
(16.7
|
)
|
||
|
Operating profit before the items listed below
|
$
|
83.0
|
|
|
$
|
80.2
|
|
|
Interest expense, net
|
(15.7
|
)
|
|
(15.8
|
)
|
||
|
Restructuring and other (charges) income
(2)
|
(8.3
|
)
|
|
(9.5
|
)
|
||
|
Non-operating pension and postretirement (charges) income
(3)
|
4.6
|
|
|
(1.1
|
)
|
||
|
Acquisition-related charges
(4)
|
(9.2
|
)
|
|
(7.4
|
)
|
||
|
(Provision) benefit for income taxes
|
(9.4
|
)
|
|
(20.4
|
)
|
||
|
Discontinued operations, net of income taxes
|
(168.8
|
)
|
|
22.7
|
|
||
|
Net income (loss) attributable to noncontrolling interests
|
(0.4
|
)
|
|
(0.4
|
)
|
||
|
Net income (loss) attributable to FMC stockholders
|
$
|
(124.2
|
)
|
|
$
|
48.3
|
|
|
(2)
|
See Note 8 of the condensed consolidated financial statements included within this Form 10-Q for details of restructuring and other (charges) income. Below provides the detail the (charges) income by segment:
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
FMC Agricultural Solutions
|
$
|
(4.5
|
)
|
|
$
|
(6.7
|
)
|
|
FMC Lithium
|
—
|
|
|
(0.6
|
)
|
||
|
Corporate
|
(3.8
|
)
|
|
(2.2
|
)
|
||
|
Restructuring and other (charges) income
|
$
|
(8.3
|
)
|
|
$
|
(9.5
|
)
|
|
(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, 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 the 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 the condensed consolidated statements of income (loss).
|
|
(4)
|
Charges relate to the expensing of the integration related legal and professional third-party fees associated with the planned or completed acquisitions. Amounts represent the following:
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Acquisition-related charges -
DuPont
|
|
|
|
||||
|
Legal and professional fees
(1)
|
$
|
9.2
|
|
|
$
|
—
|
|
|
Acquisition-related charges -
Cheminova
|
|
|
|
|
|
||
|
Legal and professional fees
(1)
|
—
|
|
|
7.4
|
|
||
|
Total acquisition-related charges
|
$
|
9.2
|
|
|
$
|
7.4
|
|
|
(1)
|
On the condensed consolidated statements of income (loss), these charges are included in “Selling, general and administrative expenses.” For more information see Note 3.
|
|
•
|
Revenue recognition and trade receivables
|
|
•
|
Environmental obligations and related recoveries
|
|
•
|
Impairment and valuation of long-lived assets and indefinite-lived assets
|
|
•
|
Pensions and other postretirement benefits
|
|
•
|
Income taxes
|
|
•
|
Revenue of $
596.0 million
for the
three
months ended
March 31, 2017
decreased
$10 million
or
2
percent versus the same period last year. The
decrease
in revenue was attributable to FMC Agricultural Solutions which was partially offset by an increase in revenue from FMC Lithium. A more detailed review of revenues by segment is discussed under the section titled
"Results of Operations"
. On a regional basis, sales in North America
increased
2
percent period over period and sales in Asia
increased
by
13
percent, sales in Latin America
decreased
6
percent, and sales in Europe, Middle East and Africa
decreased
by
12
percent.
|
|
•
|
Our gross margin of $
216.2 million
remained relatively flat versus the prior year's
first
quarter. Gross margin percent of
36
percent also remained flat compared to
36
percent in the prior year.
|
|
•
|
Selling, general and administrative expenses, excluding acquisition-related charges and non-operating pension and postretirement charges,
increased
by approximately $
4 million
or
3
percent to $
105.1 million
.
|
|
•
|
Research and development expenses of $
28.2 million
decreased
$
6 million
or
18
percent. A majority of the
decrease
was due to registration and regulatory timing within FMC Agricultural Solutions.
|
|
•
|
Adjusted after-tax earnings from continuing operations attributable to FMC stockholders of
$58.4 million
increased
compared to the prior year amount of
$48.0 million
primarily due to higher results in FMC Lithium as well as lower research and development expense and a significantly lower effective tax rate. See the disclosure of our Adjusted Earnings Non-GAAP financial measurement below, under the section titled
"Results of Operations"
.
|
|
SEGMENT RESULTS RECONCILIATION
|
|||||||
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Revenue
|
|
|
|
||||
|
FMC Agricultural Solutions
|
$
|
530.4
|
|
|
$
|
546.1
|
|
|
FMC Lithium
|
65.6
|
|
|
60.3
|
|
||
|
Total
|
$
|
596.0
|
|
|
$
|
606.4
|
|
|
Income from continuing operations before income taxes
|
|
|
|
||||
|
FMC Agricultural Solutions
|
$
|
83.0
|
|
|
$
|
82.0
|
|
|
FMC Lithium
|
21.6
|
|
|
14.9
|
|
||
|
Segment operating profit
|
$
|
104.6
|
|
|
$
|
96.9
|
|
|
Corporate and other
|
(21.6
|
)
|
|
(16.7
|
)
|
||
|
Operating profit before the items listed below
|
$
|
83.0
|
|
|
$
|
80.2
|
|
|
Interest expense, net
|
(15.7
|
)
|
|
(15.8
|
)
|
||
|
Corporate special (charges) income:
|
|
|
|
||||
|
Restructuring and other (charges) income
(1)
|
(8.3
|
)
|
|
(9.5
|
)
|
||
|
Non-operating pension and postretirement charges
(2)
|
4.6
|
|
|
(1.1
|
)
|
||
|
Acquisition-related charges
(3)
|
(9.2
|
)
|
|
(7.4
|
)
|
||
|
(Provision) benefit for income taxes
|
(9.4
|
)
|
|
(20.4
|
)
|
||
|
Discontinued operations, net of income taxes
|
(168.8
|
)
|
|
22.7
|
|
||
|
Net income attributable to noncontrolling interests
|
(0.4
|
)
|
|
(0.4
|
)
|
||
|
Net income (loss) attributable to FMC stockholders
|
$
|
(124.2
|
)
|
|
$
|
48.3
|
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
FMC Agricultural Solutions
|
$
|
(4.5
|
)
|
|
$
|
(6.7
|
)
|
|
FMC Lithium
|
—
|
|
|
(0.6
|
)
|
||
|
Corporate
|
(3.8
|
)
|
|
(2.2
|
)
|
||
|
Restructuring and other (charges) income
|
$
|
(8.3
|
)
|
|
$
|
(9.5
|
)
|
|
(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, 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 the 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 the condensed consolidated statements of income (loss).
|
|
(3)
|
Charges relate to the expensing of the integration related legal and professional third-party fees associated with the planned or completed acquisitions. Amounts represent the following:
|
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Acquisition-related charges -
DuPont
|
|
|
|
||||
|
Legal and professional fees
(1)
|
$
|
9.2
|
|
|
$
|
—
|
|
|
Acquisition-related charges -
Cheminova
|
|
|
|
||||
|
Legal and professional fees
(1) (2)
|
—
|
|
|
7.4
|
|
||
|
Total Acquisition-related charges
|
$
|
9.2
|
|
|
$
|
7.4
|
|
|
(1)
|
On the condensed consolidated statements of income (loss), these charges are included in “Selling, general and administrative expenses.” For more information on the loss on purchase price hedge see Note 3 to the condensed consolidated financial statements included within this Form 10-Q.
|
|
(2)
|
Acquisition-related charges associated with Cheminova were completed at the end of 2016.
|
|
ADJUSTED EARNINGS RECONCILIATION
|
|||||||
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Net income (loss) attributable to FMC stockholders (GAAP)
|
$
|
(124.2
|
)
|
|
$
|
48.3
|
|
|
Corporate special charges (income), pre-tax
|
12.9
|
|
|
18.0
|
|
||
|
Income tax expense (benefit) on Corporate special charges (income)
(1)
|
(4.4
|
)
|
|
(5.2
|
)
|
||
|
Corporate special charges (income), net of income taxes
|
$
|
8.5
|
|
|
$
|
12.8
|
|
|
Discontinued operations attributable to FMC Stockholders, net of income taxes
|
168.7
|
|
|
(22.7
|
)
|
||
|
Non-GAAP tax adjustments
(2)
|
5.4
|
|
|
9.6
|
|
||
|
Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP)
|
$
|
58.4
|
|
|
$
|
48.0
|
|
|
(1)
|
The income tax expense (benefit) on Corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the Corporate special charge or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure.
|
|
(2)
|
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 projected annual Non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax items including, but not limited to: income tax expenses or benefits that are not related to ongoing business operations in the current year; 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.
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Revenue
|
$
|
530.4
|
|
|
$
|
546.1
|
|
|
Operating Profit
|
83.0
|
|
|
82.0
|
|
||
|
FMC Agricultural Solutions Combined Revenue by Region
|
|||||||
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Europe, Middle East and Africa (EMEA)
(1)
|
$
|
176.8
|
|
|
$
|
205.3
|
|
|
North America
(2)
|
152.1
|
|
|
150.0
|
|
||
|
Latin America
(3)
|
94.9
|
|
|
101.0
|
|
||
|
Asia
(4)
|
106.6
|
|
|
89.8
|
|
||
|
Total
|
$
|
530.4
|
|
|
$
|
546.1
|
|
|
(1)
|
Decrease in the three months ended
March 31, 2017
was due to a late start to the season in Northwestern Europe resulting from prolonged cold weather as well as unfavorable foreign currency impacts. These decreases were somewhat offset by favorable pricing and new product launches within the region.
|
|
(2)
|
Increase in the three months ended
March 31, 2017
was due to higher volumes of herbicide sales as well as early demand in Canada shifting some sales earlier in the year. These increases were partially offset by lower pricing.
|
|
(3)
|
Decrease in the three months ended
March 31, 2017
was due to the intentional decision to allow channel inventory levels to reduce. Partially offsetting the decreases was strong demand in Argentina and favorable foreign currency impacts in Brazil.
|
|
(4)
|
Increase for the three months ended
March 31, 2017
was due to successful product launches in China which increased revenues by $7 million. Additionally, favorable weather conditions in Australia and Indonesia also contributed to the volume increase.
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Revenue
|
$
|
65.6
|
|
|
$
|
60.3
|
|
|
Operating Profit
|
21.6
|
|
|
14.9
|
|
||
|
|
Three Months Ended March 31
|
||||||
|
(in Millions)
|
2017
|
|
2016
|
||||
|
Restructuring charges and asset disposals
|
$
|
—
|
|
|
$
|
3.0
|
|
|
Other charges (income), net
|
8.3
|
|
|
6.5
|
|
||
|
Total restructuring and other charges
|
$
|
8.3
|
|
|
$
|
9.5
|
|
|
|
Three Months Ended March 31
|
||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||
|
(in Millions)
|
Income (Expense)
|
Tax Provision (Benefit)
|
Effective Tax Rate
|
|
Income (Expense)
|
Tax Provision (Benefit)
|
Effective Tax Rate
|
||||||||||
|
GAAP - Continuing operations
|
$
|
54.4
|
|
$
|
9.4
|
|
17.3
|
%
|
|
$
|
46.4
|
|
$
|
20.4
|
|
44.0
|
%
|
|
Corporate special charges
|
12.9
|
|
4.4
|
|
|
|
18.0
|
|
5.2
|
|
|
||||||
|
Tax adjustments
(1)
|
|
(5.4
|
)
|
|
|
|
(9.6
|
)
|
|
||||||||
|
Non-GAAP - Continuing operations
|
$
|
67.3
|
|
$
|
8.4
|
|
12.5
|
%
|
|
$
|
64.4
|
|
$
|
16.0
|
|
24.8
|
%
|
|
(in Millions)
|
Three Months Ended March 31
|
||||||
|
2017
|
|
2016
|
|||||
|
Income (loss) from continuing operations before equity in (earnings) loss of affiliates, interest income and expense and income taxes
|
$
|
70.0
|
|
|
$
|
62.2
|
|
|
Corporate special charges and depreciation and amortization
(1)
|
36.6
|
|
|
42.9
|
|
||
|
Operating income before depreciation and amortization (Non-GAAP)
|
$
|
106.6
|
|
|
$
|
105.1
|
|
|
Change in trade receivables, net
(2)
|
78.8
|
|
|
103.1
|
|
||
|
Change in inventories
(3)
|
(37.9
|
)
|
|
(62.5
|
)
|
||
|
Change in accounts payable
(4)
|
68.0
|
|
|
103.9
|
|
||
|
Change in accrued customer rebates
(5)
|
72.3
|
|
|
79.8
|
|
||
|
Change in advance payments from customers
(6)
|
(209.9
|
)
|
|
(199.2
|
)
|
||
|
Change in all other operating assets and liabilities
(7)
|
(116.6
|
)
|
|
(25.1
|
)
|
||
|
Cash basis operating income (Non-GAAP)
|
$
|
(38.7
|
)
|
|
$
|
105.1
|
|
|
Restructuring and other spending
(8)
|
(2.1
|
)
|
|
(6.0
|
)
|
||
|
Environmental spending, continuing, net recoveries
(9)
|
(9.6
|
)
|
|
(2.7
|
)
|
||
|
Pension and other postretirement benefit contributions
(10)
|
(0.9
|
)
|
|
(1.1
|
)
|
||
|
Net interest payments
(11)
|
(16.7
|
)
|
|
(18.0
|
)
|
||
|
Tax payments, net of refunds
(11)
|
(2.0
|
)
|
|
(7.3
|
)
|
||
|
Excess tax benefits from share-based compensation
|
—
|
|
|
(0.3
|
)
|
||
|
Acquisition legal and professional fees
(12)
|
—
|
|
|
(7.4
|
)
|
||
|
Cash provided (required) by operating activities of continuing operations
|
$
|
(70.0
|
)
|
|
$
|
62.3
|
|
|
(1)
|
Represents the sum of corporate special charges and depreciation and amortization.
|
|
(2)
|
The change in cash flows related to trade receivables in
2017
was primarily driven by 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. During the
three
months ended
March 31, 2017
, we collected over $143 million of receivables in Brazil. A significant proportion of the collections in Brazil are
|
|
(3)
|
Inventory changes and the seasonal nature of the business within the different hemispheres are adjusted accordingly to take into consideration the change in market conditions primarily in Agricultural Solutions. In the first quarter
2017
, there was a planned inventory build to meet the needs of anticipated increased demand in Latin America and Asia.
|
|
(4)
|
The change in cash flows related to accounts payable is primarily driven by the timing of payments made to suppliers and vendors.
|
|
(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
2017
compared to
2016
and timing of rebate payments.
|
|
(6)
|
Advanced payments are primarily associated with our FMC Agricultural Solutions business within North America and these payments are received in the fourth quarter of each year and recorded as deferred revenue on the balance sheet at December 31. Revenue associated with advance payments is recognized, generally in the first quarter of each year, as shipments are made and title, ownership and risk of loss pass to the customer.
|
|
(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 8 in our consolidated financial statements included in this Form 10-Q for further details.
|
|
(9)
|
Included in the period presented are environmental charges for environmental remediation at our operating sites of
$2.3 million
and
$6.6 million
, respectively. The amounts in
2017
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)
|
There were no voluntary contributions to our U.S. defined benefit plans in the periods presented for either
2017
or
2016
.
|
|
(11)
|
Net interest payments of $5.3 million and $5.7 million and tax payments, net of refunds of $1.4 million and $0.7 million were allocated to discontinued operations for the three months ended March 31, 2017 and 2016, respectively.
|
|
(12)
|
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-Q for more information.
|
|
|
|
|
Hedged energy exposure vs. Energy market pricing
|
||
|
(in Millions)
|
Net Asset / (Liability) Position on Consolidated Balance Sheets
|
|
10% Increase
|
|
10% Decrease
|
|
Net asset (liability) position at March 31, 2017
|
$0.1
|
|
$0.8
|
|
$(0.7)
|
|
|
|
|
|
|
|
|
Net asset (liability) position at December 31, 2016
|
$2.0
|
|
$3.3
|
|
$0.8
|
|
|
|
|
Hedged Currency vs. Functional Currency
|
||
|
(in Millions)
|
Net Asset / (Liability) Position on Consolidated Balance Sheets
|
|
10% Strengthening
|
|
10% Weakening
|
|
Net asset (liability) position at March 31, 2017
|
$5.2
|
|
$35.4
|
|
$(24.3)
|
|
|
|
|
|
|
|
|
Net asset (liability) position at December 31, 2016
|
$(4.5)
|
|
$31.9
|
|
$(39.0)
|
|
|
|
|
|
|
|
Publicly Announced Program
|
||||||||||||
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number of
Shares Purchased
|
|
Total Dollar
Amount
Purchased
|
|
Maximum Dollar Value of
Shares that May Yet be
Purchased
|
||||||||
|
January 1-31, 2017
|
|
3,580
|
|
|
$
|
57.16
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
238,779,078
|
|
|
February 1-28, 2017
|
|
27,839
|
|
|
$
|
57.92
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
238,779,078
|
|
|
March 1-31, 2017
|
|
4,848
|
|
|
$
|
61.48
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
238,779,078
|
|
|
Total Q1 2017
|
|
36,267
|
|
|
$
|
58.32
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
238,779,078
|
|
|
12
|
|
Statements of Computation of Ratios of Earnings to Fixed Charges
|
|
|
|
|
|
15
|
|
Awareness Letter of KPMG LLP
|
|
|
|
|
|
31.1
|
|
Chief Executive Officer Certification
|
|
|
|
|
|
31.2
|
|
Chief Financial Officer Certification
|
|
|
|
|
|
32.1
|
|
CEO Certification of Quarterly Report
|
|
|
|
|
|
32.2
|
|
CFO Certification of Quarterly Report
|
|
|
|
|
|
101
|
|
Interactive Data File
|
|
|
FMC CORPORATION
(Registrant)
|
||
|
|
|
|
|
|
|
By:
|
/s/ PAUL W. GRAVES
|
|
|
|
|
Paul W. Graves
Executive Vice President and
Chief Financial Officer
|
|
|
Exhibit No.
|
|
Exhibit Description
|
|
12
|
|
Statements of Computation of Ratios of Earnings to Fixed Charges
|
|
|
|
|
|
15
|
|
Awareness Letter of KPMG LLP
|
|
|
|
|
|
31.1
|
|
Chief Executive Officer Certification
|
|
|
|
|
|
31.2
|
|
Chief Financial Officer Certification
|
|
|
|
|
|
32.1
|
|
CEO Certification of Quarterly Report
|
|
|
|
|
|
32.2
|
|
CFO Certification of Quarterly Report
|
|
|
|
|
|
101
|
|
Interactive Data File
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Customers
Suppliers
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|