FMC : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

February 28, 2020 at 02:22 pm EST

Overview


We are an agricultural sciences company, providing innovative solutions to
growers around the world with a robust product portfolio fueled by a
market-driven discovery and development pipeline in crop protection, plant
health, and professional pest and turf management. We operate in a single
distinct business segment and develop, market and sell all three major classes
of crop protection chemicals: insecticides, herbicides and fungicides. These
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. This powerful combination of advanced
technologies includes leading insect control products based on Rynaxypyr® and
Cyazypyr® active ingredients; Authority®, Boral®, Centium®, Command® and Gamit®
branded herbicides; Talstar® and Hero® branded insecticides; and
flutriafol-based fungicides. The FMC portfolio also includes biologicals such as
Quartzo® and Presence® bionematicides.

2019 Highlights
The following are the more significant developments in our businesses during the
year ended December 31, 2019:
•Revenue of $4,609.8 million in 2019 increased $324.5 million or approximately 8
percent versus last year. A more detailed review of revenues is included under
the section entitled   "Results of Operations"  . On a regional basis, sales in
North America increased 3 percent, sales in Latin America increased by 19
percent, primarily from growth driven by higher volumes in Brazil and Argentina,
sales in Europe, Middle East and Africa increased by 4 percent and sales in Asia
increased 3 percent.
•Our gross margin, excluding transaction-related charges, of $2,083.6 million
increased $134.2 million or approximately 7 percent versus last year. The
increase in gross margin was primarily driven by higher volumes. Gross margin,
excluding transaction-related charges, as a percent of revenue remained flat at
approximately 45 percent in the current year versus 2018.
•Selling, general and administrative expenses increased slightly from $790.0
million to $792.9 million. Selling, general and administrative expenses,
excluding transaction-related charges, of $715.1 million increased $12.0 million
or approximately 2 percent. Transaction-related charges are presented in our
Adjusted Earnings Non-GAAP financial measurement below under the section titled
  "Results of Operations"  .
•Research and development expenses of $298.1 million increased $10.4 million or
4 percent. The increase was primarily due to continued investments in our global
discovery and product development. We maintain our commitment to invest
resources to discover new active ingredients and formulations that support
resistance management and sustainable agriculture.
•Net income (loss) attributable to FMC stockholders of $477.4 million decreased
$24.7 million or approximately 5 percent from $502.1 million in the prior year
period. Adjusted after-tax earnings from continuing operations attributable to
FMC stockholders of $803.7 million increased $91.1 million or approximately 13
percent primarily due to adjusted EBITDA growth. See the disclosure of our
Adjusted Earnings Non-GAAP financial measurement under the section titled

"Results of Operations" .

Other 2019 Highlights
On March 1, 2019, we completed the previously announced distribution of 123
million shares of common stock of Livent as a pro rata dividend on shares of FMC
common stock outstanding at the close of business on the record date of
February 25, 2019. Following the distribution, we have zero shares of Livent and
zero exposure to lithium markets. We have recast all the data within this filing
to present FMC Lithium as a discontinued operation retrospectively for all
periods presented.

2020 Outlook

Our 2020 expectation for the overall global crop protection market growth is
that it will be up low-single digits in U.S. dollars. We expect all regions to
be up low-single digits, primarily driven by higher volumes, in part due to new
product launches in 2020, and to a lesser extent higher pricing, slightly offset
by negative foreign exchange impacts.

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We expect 2020 revenue will be in the range of approximately $4.8 billion to
$4.95 billion, up approximately 6 percent at the midpoint versus 2019. We also
expect adjusted EBITDA(1) of $1.3 billion to $1.34 billion, which represents 8
percent growth at the midpoint versus 2019 results. 2020 adjusted earnings are
expected to be in the range of $6.45 to $6.70 per diluted share(1), up 8 percent
at the midpoint versus 2019, excluding any impact from potential share
repurchases in 2020. For cash flow outlook, refer to the liquidity and capital
resources section below.

(1)Although we provide forecasts for adjusted earnings per share and adjusted
EBITDA (Non-GAAP financial measures), we are not able to forecast the most
directly comparable measures calculated and presented in accordance with U.S.
GAAP. Certain elements of the composition of the U.S. GAAP amounts are not
predictable, making it impractical for us to forecast. Such elements include,
but are not limited to, restructuring, acquisition charges, and discontinued
operations. As a result, no U.S. GAAP outlook is provided.

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Results of Operations - 2019, 2018 and 2017
Overview
The following charts provide a reconciliation of Adjusted EBITDA and Adjusted
Earnings, both of which are Non-GAAP financial measures, from the most directly
comparable GAAP measure. Adjusted EBITDA is provided to assist the readers of
our financial statements with useful information regarding our operating
results. Our operating results are presented based on how we assess operating
performance and internally report financial information. For management
purposes, we report operating performance based on earnings before interest,
income taxes, depreciation and amortization, discontinued operations, and
corporate special charges. Our Adjusted Earnings measure excludes corporate
special charges, net of income taxes, discontinued operations attributable to
FMC stockholders, net of income taxes, and certain Non-GAAP tax adjustments.
These are excluded by us in the measure we use to evaluate business performance
and determine certain performance-based compensation. These items are discussed
in detail within the "Other Results of Operations" section that follows. In
addition to providing useful information about our operating results to
investors, we also believe that excluding the effect of corporate special
charges, net of income taxes, and certain Non-GAAP tax adjustments from
operating results and discontinued operations allows management and investors to
compare more easily the financial performance of our underlying business from
period to period. These measures should not be considered as substitutes for net
income (loss) or other measures of performance or liquidity reported in
accordance with U.S. GAAP.

Year Ended December 31,
(in Millions) 2019 2018 2017
Revenue $ 4,609.8 $ 4,285.3 $ 2,531.2
Costs and Expenses
Costs of sales and services 2,526.2 2,405.5 1,579.4
Gross Margin $ 2,083.6 $ 1,879.8 $ 951.8
Selling, general and administrative expenses 792.9 790.0 581.7
Research and development expenses 298.1 287.7 138.4
Restructuring and other charges (income) 171.0 61.2 73.2

Total costs and expenses $ 3,788.2 $ 3,544.4 $ 2,372.7

Income from continuing operations before equity in (earnings) loss of affiliates, non-operating pension and postretirement charges (income), interest income, interest expense, and provision for income taxes (1)

$   821.6            $   740.9            $   158.5
Equity in (earnings) loss of affiliates                                -                 (0.1)                (0.1)
Non-operating pension and postretirement charges (income)            8.1                 (0.5)               (16.3)
Interest income                                                     (1.9)                (1.4)                (0.9)
Interest expense                                                   160.4                134.5                 80.0

Income from continuing operations before income taxes $ 655.0

         $   608.4            $    95.8
Provision for income taxes                                         111.5                 70.8                228.9
Income (loss) from continuing operations                       $   543.5            $   537.6            $  (133.1)
Discontinued operations, net of income taxes                       (63.3)               (26.1)               671.5
Net income (loss) (GAAP)                                       $   480.2            $   511.5            $   538.4
Adjustments to arrive at Adjusted EBITDA:
Corporate special charges (income):
Restructuring and other charges (income) (3)                   $   171.0            $    61.2            $    73.2

Non-operating pension and postretirement charges (income) (4) 8.1

              (0.5)               (16.3)
Transaction-related charges (5)                                     77.8                156.5                150.4
Discontinued operations, net of income taxes                        63.3                 26.1               (671.5)
Interest expense, net                                              158.5                133.1                 79.1
Depreciation and amortization                                      150.1                150.2                 97.8
Provision (benefit) for income taxes                               111.5                 70.8                228.9
Adjusted EBITDA (Non-GAAP) (2)                                 $ 1,220.5            $ 1,108.9            $   480.0


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____________________
(1)Referred to as operating profit.
(2)Adjusted EBITDA is defined as operating profit excluding corporate special
charges (income) and depreciation and amortization expense.
(3)See Note 9 to the consolidated financial statements included within this Form
10-K for details of restructuring and other charges (income).
(4)Our non-operating pension and postretirement charges (income) are defined as
those costs (benefits) related to interest, expected return on plan assets,
amortized actuarial gains and losses and the impacts of any plan curtailments or
settlements. These are excluded from our operating results and 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 continue to include the service cost and
amortization of prior service cost in our operating results noted above. These
elements reflect the current year operating costs to our businesses for the
employment benefits provided to active employees.
(5)Charges relate to the expensing of the inventory fair value step-up resulting
from the application of purchase accounting, transaction costs, costs for
transitional employees, other acquired employee related costs, integration
related legal and professional third-party fees. Amounts represent the
following:

                                                       Year Ended December 31,
(in Millions)                                     2019          2018          2017
DuPont Crop Protection Business Acquisition
Legal and professional fees (1)                 $ 77.8       $  86.9       $ 130.2
Inventory fair value amortization (2)                -          69.6          20.2

              Total transaction-related charges $ 77.8       $ 156.5       $ 150.4

____________________


(1)Represents transaction costs, costs for transitional employees, other
acquired employees related costs, and transactional-related costs such as legal
and professional third-party fees. These charges are recorded as a component of
"Selling, general and administrative expense" on the consolidated statements of
income (loss).
(2)These charges are included in "Costs of sales and services" on the
consolidated statements of income (loss).


                        ADJUSTED EARNINGS RECONCILIATION

                                                                       Year Ended December 31,
(in Millions)                                                            2019               2018               2017

Net income (loss) attributable to FMC stockholders (GAAP) $ 477.4

     $ 502.1            $ 535.8
Corporate special charges (income), pre-tax (1)                256.9              217.2              207.3

Income tax expense (benefit) on Corporate special charges (income) (2)

                                                   (49.2)             (52.8)             (58.0)

Corporate special charges (income), net of income taxes $ 207.7

     $ 164.4            $ 149.3

Adjustment for noncontrolling interest, net of tax on Corporate special charges (income)

                                 -               (0.5)                 -

Discontinued operations attributable to FMC Stockholders, net of income taxes

                                             63.3               29.3             (671.5)
Non-GAAP tax adjustments (3)                                    55.3               17.3              258.9

Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP)

$  803.7            $ 712.6            $ 272.5

____________________


(1) Represents restructuring and other charges (income), non-operating pension
and postretirement charges (income) and transaction-related charges.
(2) 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.
(3) 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 not limited to: income tax expenses or
benefits that are not related to current year ongoing business operations; 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 which includes the impact of the Act enacted on
December 22, 2017. 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.

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Results of Operations
In the discussion below, all comparisons are between the periods unless
otherwise noted.

Revenue


2019 vs. 2018
Revenue of $4,609.8 increased $324.5 million, or approximately 8 percent versus
the prior year period. The increase was driven by higher volumes, primarily in
Latin America, and pricing which contributed approximately 8 percent and 3
percent, respectively, slightly offset by unfavorable foreign currency
fluctuations of approximately 3 percent.
2018 vs. 2017
Revenue of $4,285.3 million increased $1,754.1 million, or approximately 69
percent versus the prior year period. The increase was primarily due to the
revenue from the DuPont Crop Protection Acquisition, which was completed on
November 1, 2017, and contributed approximately $1,742 million to the increase.
Refer to the Pro Forma Financial Results with the DuPont Crop Protection
Business section below for further discussion.

Pro Forma Financial Results with the DuPont Crop Protection Business
We believe that reviewing our operating results by combining actual and pro
forma results is more useful in identifying trends in, or reaching conclusions
regarding, the overall operating performance of our business. Our pro forma
information includes adjustments as if the DuPont Crop Protection Business
Acquisition had occurred on January 1, 2017. Our pro forma data is also adjusted
for the effects of acquisition accounting but does not include adjustments for
costs related to integration activities, cost savings or synergies that might be
achieved by the combined businesses. Pro forma amounts presented are not
necessarily indicative of what our results would have been had we operated the
DuPont Crop Protection Business since January 1, 2017, nor our future results.
                                     Pro Forma Financial Results
                                                                Year Ended December 31,
(in Millions)                                        2019                2018                2017
Revenue
Revenue, as reported (1)                         $  4,609.8          $  4,285.3          $  2,531.2
Revenue, DuPont Crop Protection Business, pro
forma (2)                                                 -                   -             1,325.4
             Pro Forma Combined, Revenue (3) (4) $  4,609.8          $  4,285.3          $  3,856.6

___________________


(1)As reported amounts are the results of operations of our business, including
the results of the DuPont Crop Protection Business Acquisition from November 1,
2017 onward.
(2)DuPont Crop Protection Business pro forma amounts include the historical
results of the DuPont Crop Protection Business, prior to November 1, 2017. These
amounts also include adjustments as if the DuPont Crop Protection Business
Acquisition had occurred on January 1, 2017, 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.
(3)The pro forma combined amounts are not necessarily indicative of what the
results would have been had we acquired the DuPont Crop Protection Business on
January 1, 2017 or indicative of future results.
(4)For the years ended December 31, 2019 and 2018, pro forma results and actual
results are the same.

                    Pro Forma Combined Revenue by Region (1) (2)
                                                  Year Ended December 31,
(in Millions)                               2019            2018            2017
North America                           $ 1,121.1       $ 1,090.8       $   941.3
Latin America                             1,441.7         1,210.1         1,021.1
Europe, Middle East and Africa (EMEA)     1,001.8           966.0           920.8
Asia                                      1,045.2         1,018.4           973.4
Total                                   $ 4,609.8       $ 4,285.3       $ 3,856.6


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(1)For the years ended December 31, 2019 and 2018, pro forma results and actual
results are the same.
(2)Pro forma combined revenue by region for the year ended December 31, 2017
includes the results of the DuPont Crop Protection Business of $1,325.4 million,
assuming the acquisition occurred on January 1, 2017. These amounts include
adjustments as if the DuPont Crop Protection Business Acquisition had occurred
on January 1, 2017. The pro forma combined revenue by region amounts are not
necessarily indicative of what the results would have been had we acquired the
DuPont Crop Protection Business on January 1, 2017 or indicative of future
results.

2019 vs. 2018
North America: Revenue increased approximately 3 percent in the year ended
December 31, 2019, primarily driven by volume growth and strength of Rynaxypyr®
and Cyazypyr® insect control on specialty crops, the launch of Lucento®
fungicide, and strong herbicide sales in Canada.
Latin America: Revenue increased approximately 19 percent, or approximately 23
percent excluding foreign currency headwinds, for the year ended December 31,
2019 compared to the prior year period due primarily to strong demand in Brazil
for insecticides on cotton, herbicides on sugarcane, and insecticides in soybean
applications. Strong growth in Argentina, due to improved market access and
strength of herbicides in soybean applications also contributed to the
significant growth in the region.
EMEA: Revenue increased approximately 4 percent versus the prior year period, or
approximately 10 percent excluding foreign currency headwinds, primarily due to
the successful launch of Battle® Delta herbicides and Cyazypyr® insect control
registrations across the region. Favorable weather, demand for our diamide
products, and higher pricing throughout the region also contributed to the
increase. These increases were partially offset by unfavorable foreign currency
impacts.
Asia: Revenue increased approximately 3 percent versus the prior year period, or
approximately 8 percent excluding foreign currency headwinds, primarily driven
by continued strong growth in India and new products across the region.
Partially offsetting the increases were adverse weather conditions in Australia
and challenged rice markets in China.
In late March 2019, there was an explosion within an industrial park in China
which impacted one plant operated by one of our contract manufacturing tollers.
The local government has temporarily shut down the entire park to investigate
the cause of the explosion. We received material from the clean out of the
equipment during the fourth quarter of 2019 and we are working closely with the
supplier to determine the exact re-start date of the operation. Our global
manufacturing network provides significant supply chain flexibility. Due to the
strength of our partnerships and our alternate sourcing options, we believe we
can continue to secure supply of the active ingredients normally manufactured at
this location as needed.

Pro Forma Combined Results - 2018 vs. 2017
Pro forma combined revenue of $4,285.3 million increased by approximately 11
percent versus the prior year period.
North America: Increase in the year ended December 31, 2018 was due to very
strong demand for the acquired insecticides, growth in U.S. soy acreage in 2018,
and strong demand across niche crops. These were partially offset by unfavorable
impacts from the delayed start to the Spring season.
Latin America: Increase in the year ended December 31, 2018 was due to strong
growth for the acquired insecticides in soybean and other crops, strong acreage
growth in cotton and higher prices in Brazil as well as higher wheat acreage in
Argentina. Partially offsetting these increases were unfavorable foreign
currency impacts and severe drought in Argentina.
EMEA: Increase in the year ended December 31, 2018 was primarily due to strong
growth of the acquired insecticides and herbicides, the move to direct market
access in France, as well as sales synergies of legacy FMC products. These were
partially offset by a forced divestiture (anti-trust remedy), unfavorable
weather conditions that led to a shorter growing season and lower demand in
Northern and Central Europe.
Asia: Increase in the year ended December 31, 2018 was due to strong performance
in rice and soy insecticides in India and growth in rice herbicides in China
which was partially offset by a forced divestiture in India (anti-trust remedy),
the rationalization of the legacy portfolio in India and extreme drought
conditions in Australia.

Gross margin
2019 vs. 2018
Gross margin of $2,083.6 million increased $203.8 million, or approximately 11
percent versus the prior year period. Gross margin, excluding
transaction-related charges, also increased versus the prior year period by
$134.2 million. The increase was primarily due to higher revenues driven by
increased volume and pricing, partially offset by higher costs, primarily raw
material costs.
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Gross margin percent of approximately 45 percent slightly increased from
approximately 44 percent in the prior year period. The increase from higher
pricing was nearly offset by higher costs, primarily raw material costs. Gross
margin percent, excluding transaction-related charges, of approximately 45
percent remained relatively flat compared to the prior year period.
2018 vs. 2017
Gross margin of $1,879.8 million increased $928.0 million, or approximately 97
percent versus the prior year period. Gross margin, excluding
transaction-related charges, increased versus the prior year period by $977.4
million. Gross margin percent of approximately 44 percent increased from
approximately 38 percent in the prior year period. Gross margin percent,
excluding transaction-related charges, of approximately 45 percent increased
compared to approximately 38 percent in the prior year period. The increase was
primarily driven by higher margin products as well as a full year of earnings
from the acquired DuPont Crop Protection Business.

Selling, general, and administrative expenses
2019 vs. 2018
Selling, general and administrative expenses of $792.9 million slightly
increased by $2.9 million versus the prior year period. Selling, general and
administrative expenses, excluding transaction-related charges, increased $12.0
million, or approximately 2 percent, versus the prior year period.
2018 vs. 2017
Selling, general and administrative expenses of $790.0 million increased $208.3
million, or approximately 36 percent versus the prior year period. Selling,
general and administrative expenses, excluding transaction-related charges,
increased $251.6 million, or approximately 56 percent, versus the prior year
period. The increase was primarily driven by a full year of operations of the
acquired DuPont Crop Protection Business.

Research and development expenses
2019 vs. 2018
Research and development expenses of $298.1 million increased $10.4 million, or
approximately 4 percent versus the prior year period primarily due to continued
investments in our global discovery and product development.
2018 vs. 2017
Research and development expenses of $287.7 million increased $149.3 million, or
approximately 108 percent versus the prior year period. The increase was
primarily due to investments in discovery and product development from the
acquired state of the art facilities from the DuPont Crop Protection Business
Acquisition.

Adjusted EBITDA (Non-GAAP)
Pro Forma Financial Results
Year Ended December 31,
(in Millions) 2019 2018 2017

Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA, as reported (1) $ 1,220.5 $ 1,108.9 $ 480.0
Adjusted EBITDA, DuPont Crop Protection
Business, pro forma (2) - - 486.5

Pro Forma Combined, Adjusted EBITDA (Non-GAAP)

(3) (4) $ 1,220.5 $ 1,108.9 $ 966.5

___________________
(1)As reported amounts are the results of operations of our business, including
the results of the DuPont Crop Protection Business Acquisition from November 1,
2017 onward.
(2)DuPont Crop Protection Business pro forma amounts include the historical
results of the DuPont Crop Protection Business, prior to November 1, 2017. These
amounts also include adjustments as if the DuPont Crop Protection Business
Acquisition had occurred on January 1, 2017, 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.
(3)The pro forma combined amounts are not necessarily indicative of what the
results would have been had we acquired the DuPont Crop Protection Business on
January 1, 2017 or indicative of future results.
(4)For the years ended December 31, 2019 and 2018, pro forma results and actual
results are the same.

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2019 vs. 2018
Adjusted EBITDA of $1,220.5 million increased $111.6 million, or approximately
10 percent versus the prior year period. The increase was due to the strong
demand which led to higher volumes and higher pricing as discussed above which
contributed approximately 18 percent and 12 percent to the increase,
respectively. The price increases were primarily seen in Latin America. These
factors more than offset the higher costs, primarily driven by higher raw
material costs, and unfavorable foreign currency fluctuations which impacted the
change in Adjusted EBITDA by approximately 15 percent and 5 percent,
respectively.
Pro Forma Combined Results - 2018 vs. 2017
2018 pro forma combined Adjusted EBITDA of $1,108.9 million increased
approximately 15 percent compared to 2017. The increase was primarily driven by
revenue growth discussed above as our sales organization leveraged valuable
cross-selling opportunities due to minimal customer overlap with DuPont.
Additionally, we reduced expected operating costs for the acquired DuPont Crop
Protection Business through accelerated functional integration, leveraging our
back office infrastructure and reducing manufacturing costs at the acquired
plants. These were partially offset by higher raw material costs which have had
a negative impact on results year over year. This impacted the chemical industry
broadly as the Chinese government has been shutting down industrial parks as
part of their environmental program. We have been able to mitigate and manage
the impact on our ability to supply our customer due to our diversified supply
chain network.

Other Results of Operations
Depreciation and amortization
2019 vs. 2018
Depreciation and amortization of $150.1 million remained relatively flat as
compared to 2018 of $150.2 million.
2018 vs. 2017
Depreciation and amortization of $150.2 million increased $52.4 million as
compared to 2017 of $97.8 million. The increase was primarily due to the
increase in intangible assets and property, plant and equipment acquired as a
result of the DuPont Crop Protection Business.

Interest expense, net
2019 vs. 2018
Interest expense, net of $158.5 million increased by $25.4 million, or
approximately 19 percent, compared to $133.1 million in 2018. The increase was
driven by the issuance of the Senior Notes discussed further below, which
increased interest expense by approximately $7 million, and higher average
foreign debt balances throughout the year, which increased interest expense by
approximately $17 million.
2018 vs. 2017
Interest expense, net of $133.1 million increased by approximately 68 percent
compared to $79.1 million in 2017. The increase was driven by the addition of
the 2017 Term Loan Facility, used to fund the 2017 acquisition, which increased
interest expense by approximately $30 million, and higher interest rates which
increased interest expense by approximately $6 million. The remaining increase
of approximately $17 million was due to zero interest allocated to discontinued
operations in 2018 as compared to 2017, due to the divestment of the FMC Health
and Nutrition business to DuPont in 2017. Interest was previously allocated in
accordance with relevant discontinued operations accounting guidance.

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:
Year Ended December 31,
(in Millions) 2019 2018 2017
Restructuring charges $ 62.2 $ 124.1 $ 8.5
Other charges (income), net 108.8 (62.9) 64.7

Total restructuring and other charges (income) (1) $ 171.0 $ 61.2

$ 73.2

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(1) See Note 9 to the consolidated financial statements included in this Form 10-K for more information.


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2019
Restructuring charges in 2019 primarily consisted of $34.1 million of charges
related to our decision to exit sales of all carbofuran formulations globally
and $26.4 million of charges associated with the integration of the DuPont Crop
Protection Business. These charges included severance, accelerated depreciation
on certain fixed assets, and other costs (benefits). There were other
miscellaneous restructuring charges $1.7 million. We expect integration-related
activity to end in 2020.
Other charges (income), net in 2019 primarily consists of charges of
environmental sites. During the fourth quarter of 2019, we recorded a charge of
$72.8 million a result of an unfavorable court ruling we received in relation to
the Pocatello Tribal Litigation at one of our environmental sites. See Note 12
for further information regarding this matter.
2018
Restructuring charges in 2018 were primarily associated with restructuring
charges associated with the integration of the DuPont Crop Protection Business.
These charges primarily consisted of approximately $59 million of charges
related to the change in our market access model in India and approximately $28
million of charges due to our decision to exit the Ewing R&D center. Refer to
Note 9 for more information. Other restructuring charges as we continue to
integrate the acquired DuPont Crop Protection Business totaled approximately $22
million.
Other charges (income), net in 2018 primarily consists of income from the gain
on sales of $87.2 million from the divestment of a portion of FMC's European
herbicide portfolio to Nufarm Limited and certain products of our India
portfolio to Crystal Crop Protection Limited. These divestitures satisfied FMC's
commitment to the European Commission and the Competition Commission of India,
respectively, for regulatory requirements in order to complete the DuPont Crop
Protection Acquisition. Additionally, there were environmental related charges
of $21.7 million for remediation activities and $2.6 million of other charges.
2017
Restructuring charges in 2017 includes impairment charges of intangible assets
of $2.2 million and asset write-downs of approximately $5.5 million. Amounts
also include miscellaneous restructuring charges of $0.8 million.
Other charges (income), net in 2017 consisted of a $42.1 million impairment on
certain indefinite-lived intangible assets from the acquired DuPont Crop
Protection Business Acquisition as a result of a triggering event due to the Tax
Cuts and Jobs Act ("the Act"). Other charges (income) also includes $16.2
million for environmental sites. Additionally, we incurred exit costs of $4.8
million resulting from the termination and de-consolidation of our interest in a
variable interest entity that was previously consolidated. We had other
miscellaneous charges, net of approximately $1.6 million.
Non-operating pension and postretirement (charges) income
2019 vs. 2018
The charge for 2019 was $8.1 million compared to income of $0.5 million in 2018.
The change was due to lower expected return on plan assets of approximately $10
million resulting from the full shift to a fixed income investment portfolio for
the full year of 2019 versus the shift to a primarily fixed income investment
portfolio for only a portion of the year in 2018.
2018 vs. 2017
The income for 2018 was $0.5 million compared to $16.3 million in 2017. The
decrease was primarily due to lower expected return on plan assets due to the
partial shift to a primarily fixed income investment portfolio of approximately
$16 million versus 2017. See Note 15 for more information.

Transaction-related charges
A detailed description of the transaction related charges is included in Note 5
to the consolidated financial statements included within this Form 10-K.

Provision for income taxes
A significant amount of our earnings is generated by our foreign subsidiaries
(e.g., Singapore, Hong Kong, and Switzerland), which tax earnings at lower
statutory rates than the United States federal statutory rate. Our future
effective 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 statutory 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 or foreign withholding taxes have
not been previously accrued.
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Provision for income taxes for 2019 was expense of $111.5 million resulting in
an effective tax rate of 17.0 percent. Provision for income taxes for 2018 was
expense of $70.8 million resulting in an effective tax rate of 11.6 percent.
Provision for income taxes for 2017 was expense of $228.9 million resulting in
an effective tax rate of 238.9 percent primarily attributable to the $303.6
million of provisional tax expense associated with the Act. Note 13 to the
consolidated financial statements included in this Form 10-K includes more
details on the drivers of the GAAP effective rate and year-over-year changes. We
believe showing the reconciliation below of our GAAP to Non-GAAP effective tax
rate provides investors with useful supplemental information about our tax rate
on the core underlying business.

                                                                                                                        Year Ended December 31,
                                                                     2019                                                                                   2018                                                                    2017
                                               Income      Tax Provision                                    Income      Tax Provision                                    Income      Tax Provision
(in Millions)                                (Expense)       (Benefit)      Effective Tax Rate            (Expense)       (Benefit)      Effective Tax Rate            (Expense)       (Benefit)      Effective Tax Rate
GAAP - Continuing operations                $     655.0    $      111.5                    17.0  %       $     608.4    $       70.8                    11.6  %       $      95.8    $      228.9                   238.9  %
Corporate special charges                         256.9            49.2                                        217.2            52.8                                        207.3            58.0
Tax adjustments (1)                                               (55.3)                                                       (17.3)                                                      (258.9)
                                            $     911.9    $      105.4                    11.6  %       $     825.6    $      106.3                    12.9  %       $     303.1    $       28.0                     9.2  %

_______________


(1)Tax adjustments in 2019 are materially attributable to the effects of tax law
changes and the realizability of deferred tax assets in certain jurisdictions.
Tax adjustments in 2018 are materially attributable to the effects of the Act
and primarily relate to the one-time transition tax, the decrease in the U.S.
federal tax rate, and the realizability of certain U.S. state deferred tax
assets. Tax adjustments in 2017 were primarily associated with the provisional
income tax expense recorded as a result of the enactment of the Act in December
2017. See Note 13 to the consolidated financial statements included within this
Form 10-K for additional discussion.

The primary drivers for the fluctuations in the effective tax rate for each
period are provided in the table above. Excluding the items in the table above,
the changes in the effective tax rate were primarily due to the impact of
geographic mix of earnings among our global subsidiaries. See Note 13 to the
consolidated financial statements for additional details related to the
provisions for income taxes on continuing operations, as well as items that
significantly impact our effective tax rate.
Discontinued operations, net of income taxes
Our discontinued operations, in periods up to its disposition, represent our
discontinued FMC Lithium and FMC Health and Nutrition business results as well
as adjustments to retained liabilities from other previously discontinued
operations. The primary liabilities retained include environmental liabilities,
other postretirement benefit liabilities, self-insurance, long-term obligations
related to legal proceedings and historical restructuring activities. See Note
11 to the consolidated financial statements for additional details on our
discontinued operations.
2019 vs. 2018
Discontinued operations, net of income taxes represented a loss of $63.3 million
in 2019 compared to a loss of $26.1 million in 2018. The current year included
the net loss from our discontinued FMC Lithium segment, primarily due to
separation-related costs, up to its separation date on March 1, 2019, compared
to income for the full year in 2018. Offsetting the loss was the gain on sale
from the sale of the first of two parcels of land of our discontinued site in
Newark, California in the current year. During 2018, we recorded a charge of
approximately $106 million as a result of active negotiations for a settlement
agreement primarily to address discontinued operations at our Middleport, New
York plant which was the subject of an Administrative Order on Consent entered
into with the EPA and NYSDEC in 1991. The charge consisted of incremental
estimated costs of remediation for certain offsite operable units associated
with historic site operations as we engaged in settlement discussions with
NYSDEC to resolve the path forward regarding remediation. Refer to Note 12 for
further details.
2018 vs. 2017
Discontinued operations, net of income taxes represented a loss of $26.1 million
in 2018 compared to income of $671.5 million in 2017. The decrease was primarily
driven by the divestiture of FMC Health and Nutrition to DuPont in the fourth
quarter of 2017 which resulted in an after-tax gain of approximately $727
million, which did not recur in 2018. Discontinued operations, net of income
taxes, in 2017 also includes the impairment charge of approximately $148
million, net of tax, to reflect the write down of our Omega-3 business to its
sales price. During 2018, we recorded a charge of approximately $106 million
related to our discontinued environmental site at our Middleport, New York.
Refer to Note 12 for further details.

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Net income (loss) attributable to FMC stockholders
2019 vs. 2018
Net income attributable to FMC stockholders decreased to $477.4 million from
$502.1 million. The decrease was primarily due to higher costs and expenses,
particularly restructuring and other charges associated with environmental
remediation at our decommissioned plant near Pocatello, higher tax provisions,
and higher net interest expense. This was partially offset by higher adjusted
EBITDA from higher volumes and pricing.
2018 vs. 2017
Net income attributable to FMC stockholders decreased to $502.1 million from
$535.8 million. The decrease was primarily due to the gain on sale recorded in
discontinued operations, net of income taxes in 2017 as well as charges related
to the Middleport environmental settlement as discussed above. These were
partially offset by higher income from continuing operations driven by a full
year of results from the DuPont Crop Protection Business, which was completed on
November 1, 2017.
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Liquidity and Capital Resources
Cash and cash equivalents at December 31, 2019 and 2018, were $339.1 million and
$134.4 million, respectively. Of the cash and cash equivalents balance at
December 31, 2019, $181.5 million was held by our foreign subsidiaries. The cash
held by foreign subsidiaries for permanent reinvestment is generally used to
finance the subsidiaries' operating activities and future foreign investments.
We have not provided income taxes for other outside basis differences inherent
in our investments in subsidiaries because the investments and related
unremitted earnings are essentially permanent in duration or we have concluded
that no additional tax liability will arise upon disposal or remittance. See
Note 13 to the consolidated financial statements included within this Form 10-K
for more information.
At December 31, 2019, we had total debt of $3,258.8 million as compared to
$2,692.7 million at December 31, 2018. Total debt included $3,031.1 million and
$2,145.0 million of long-term debt (excluding current portions of $82.8 million
and $386.0 million) at December 31, 2019 and 2018, respectively. As of
December 31, 2019, we were in compliance with all of our debt covenants. See
Note 14 in the consolidated financial statements included in this Form 10-K for
further details. We remain committed to solid investment grade credit metrics,
and expect full-year average leverage to be in line with this commitment in
2020.
The increase in long-term debt was primarily due to the issuance of Senior Notes
discussed further below. Partially offsetting the increase were partial paydowns
on the 2017 Term Loan Facility, which is scheduled to mature on November 1,
2022. The borrowings under the 2017 Term Loan Facility will bear interest at a
floating rate, which will be a base rate or a Eurocurrency rate equal to the
London interbank offered rate for the relevant interest period, plus in each
case an applicable margin, as determined in accordance with the provisions of
the 2017 Term Loan Facility.
Our short-term debt consists of foreign borrowings and our commercial paper
program. Foreign borrowings increased from $106.5 million at December 31, 2018
to $144.9 million at December 31, 2019 while outstanding commercial paper
decreased entirely from $55.2 million at December 31, 2018. We provide
parent-company guarantees to lending institutions providing credit to our
foreign subsidiaries.
Our commercial paper program allows us to borrow at rates generally more
favorable than those available under our credit facility. At December 31, 2019,
we had no borrowings outstanding under the commercial paper program.
Senior Notes
On September 20, 2019, we issued $500 million aggregate principal amount of
3.200% Senior Notes due 2026, $500 million aggregate principal amount 3.450%
Senior Notes due 2029, and $500 million aggregate principal amount 4.500% Senior
Notes due 2049. A portion of the net proceeds from the offering were used for
paydowns of outstanding commercial paper, 2017 Term Loan Facility balances, and
general corporate purposes. We used the remaining net proceeds of approximately
$300 million to redeem all of our Senior notes that matured in the fourth
quarter of 2019.
Fees incurred to secure the senior notes have been deferred and will be
amortized over the terms of the arrangement.
See Note 19 for details on the interest rate swap settlement which will also be
amortized over the terms of the arrangement.
Revolving Credit Facility
On May 17, 2019, we entered into an amended and restated credit agreement (the
"Revolving Credit Agreement"). The unsecured Revolving Credit Agreement provides
for a $1.5 billion revolving credit facility, $400 million of which is available
for the issuance of letters of credit for the account of the Revolving Borrowers
and $50 million of which is available for swing loans to certain of the
Revolving Borrowers, with an option, subject to certain conditions and
limitations, to increase the aggregate amount of the revolving credit
commitments to $2.25 billion (the "Revolving Credit Facility"). The current
termination date of the Revolving Credit Facility is May 17, 2024.
Revolving loans under the Revolving Credit Agreement will bear interest at a
floating rate, which will be a base rate or a Eurocurrency rate equal to the
London interbank offered rate for the relevant interest period, plus, in each
case, an applicable margin, as determined in accordance with the provisions of
the Revolving Credit Agreement. The 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 effective rate plus 1/2 of 1%; and
the Eurocurrency rate for a one-month period plus 1%. The Company is required to
pay a facility fee on the average daily amount (whether used or unused) of each
Revolving Credit Lender's revolving credit commitment from the effective date
for such Revolving Credit Lender until the termination date of such Revolving
Credit Lender at a rate per annum equal to an applicable percentage in effect
from time to time for the facility fee, as determined in accordance with the
provisions of the Revolving Credit Agreement. The initial facility fee is 0.125%
per annum. The applicable margin and the facility fee are subject to adjustment
as provided in the Revolving Credit Agreement.
The Revolving Credit Agreement contains customary financial and other covenants,
including a maximum leverage ratio and minimum interest coverage ratio.
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Fees incurred to secure the Revolving Credit Facility have been deferred and
will be amortized over the term of the arrangement.
Statement of Cash Flows
Cash provided (required) by operating activities was $555.6 million, $362.7
million and $232.0 million for 2019, 2018 and 2017, respectively.

The table below presents the components of net cash provided (required) by operating activities. For comparability, the prior period amounts for "Change in all other operating assets and liabilities" have been recast to reflect the current period presentation.


                                                                            Year ended December 31,
(in Millions)                                                               2019                 2018               2017

Income (loss) from continuing operations before equity in (earnings) loss of affiliates, non-operating pension expense and postretirement charges, interest expense, net and income taxes

$   821.6            $   740.9            $ 158.5

Restructuring and other charges (income), transaction-related charges and depreciation and amortization

                         398.9                367.9              321.4

Operating income before depreciation and amortization (Non-GAAP)

$ 1,220.5            $ 1,108.8            $ 479.9
Change in trade receivables, net (1)                             (123.5)              (281.5)            (191.1)
Change in guarantees of vendor financing                            8.6                 15.4              (54.7)
Change in advance payments from customers (2)                      34.1                 80.2              141.1
Change in accrued customer rebates (3)                            (85.8)               104.1               16.9
Change in inventories (4)                                           6.4               (200.7)            (102.8)
Change in accounts payable (5)                                    103.0                166.7              304.3

Change in all other operating assets and liabilities (6) (208.5)

           (187.5)             (95.4)
Operating cash flows (Non-GAAP)                               $   954.8            $   805.5            $ 498.2
Restructuring and other spending (7)                              (18.6)               (25.2)              (7.3)

Environmental spending, continuing, net of recoveries (8) (18.3)

            (20.3)             (20.2)

Pension and other postretirement benefit contributions (9) (13.4)

(37.5) (55.3)
Net interest payments (10) (140.9) (133.4) (82.2)
Tax payments, net of refunds (11) (130.9) (125.3) (22.3)

Transaction and integration costs (12) (77.1) (101.1) (78.9)
Cash provided (required) by operating activities of
continuing operations $ 555.6 $ 362.7 $ 232.0

____________________
(1)The change in trade receivables in all periods was primarily driven by timing
of collections, largely due to seasonality. Additionally, the change in 2018 was
related to receivable build from the acquired DuPont Crop Protection Business as
we did not acquire any receivables as part of the transaction. Collection timing
is more pronounced in certain countries such as Brazil where there may be terms
significantly longer than the rest of our business. Additionally, timing of
collection is impacted as amounts for all periods include carry-over balances
remaining to be collected in Latin America, where collection periods are
measured in months rather than weeks. During 2019, we collected approximately
$1,070 million of receivables in Brazil.
(2)Advance payments are typically received in the fourth quarter of each year,
primarily in our North America operations as revenue associated with advance
payments is recognized, generally in the first half of each year following the
seasonality of that business, as shipments are made and title, ownership and
risk of loss pass to the customer.
(3)These rebates are primarily associated with North America and to a lesser
extent Brazil and in North America are generally settled in the fourth quarter
of each year given the end of that region's crop cycle. The changes year over
year are primarily associated with the mix in sales eligible for rebates and
incentives and timing of rebate payments. Additionally, the change in 2018 was
related to the build in rebates as we did not acquire the rebates of the DuPont
Crop Protection Business as part of the transaction.
(4)Changes in inventory are a result of inventory levels being adjusted to take
into consideration the change in market conditions. The increase in the change
in 2018 was also driven by recovering inventory levels due to a faster return to
full production from our China toll manufacturing partners.
(5)The change in cash flows related to accounts payable is primarily due to
timing of payments made to suppliers and vendors. Timing in 2019 was partially
impacted during portions of 2019 from global supply chain issues, primarily in
China, which required us to obtain raw materials on payment terms shorter than
normal. The change in accounts payable in both 2018 and 2017 was primarily
impacted by the payable build from the acquired DuPont Crop Protection Business
as we did not acquire any payables as part of the transactions.
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(6)Changes in all periods presented primarily represent timing of payments
associated with all other operating assets and liabilities. Additionally, the
2019 and 2018 period includes the effects of the unfavorable contracts
amortization of approximately $116 million and $103 million, respectively.
(7)See Note 9 to the consolidated financial statements included in this Form
10-K for further details.
(8)Included in our results for each of the years presented are environmental
charges for environmental remediation of $108.7 million, $21.7 million and $16.2
million, respectively. The amounts in 2019 will be spent in future years. The
amounts represent environmental remediation spending which were recorded against
pre-existing reserves, net of recoveries. 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.
(9)Amounts include voluntary contributions to our U.S. qualified defined benefit
plan of $7.0 million, $30.0 million and $44.0 million, respectively. These
amounts are in excess of the minimum requirements. Our contributions in excess
of minimums are done with the objective of avoiding variable rate Pension
Benefit Guaranty Corporation premiums as well as potentially reducing future
funding volatility.
(10)The increase in interest payments in 2019 was primarily due to higher
foreign borrowings and the issuance of the Senior Notes during the year. The
increase in 2018 was primarily due to higher foreign debt balances, the addition
of the 2017 Term Loan Facility, and increases in interest rates.
(11)Tax payments in 2019 primarily represent the payments of tax attributable to
the Nufarm Limited sale, transition tax, and tax payments related to the
acquired DuPont Crop Protection Business. Tax payments in 2018 primarily
represent the payments of tax attributable to the FMC Health and Nutrition
segment disposition, transition tax and full year tax payments related to the
acquired DuPont Crop Protection Business.
(12)Represents payments for legal and professional fees associated with the
DuPont Crop Protection Business Acquisition in addition to costs related to
integrating the DuPont Crop Protection Business. We expect these payments to
cease by the end of 2020. See Note 5 to the consolidated financial statements
for more information.

Cash provided (required) by operating activities of discontinued operations was
$(67.1) million, $5.7 million and $103.5 million for 2019, 2018 and 2017,
respectively.
Cash required by operating activities of discontinued operations is directly
related to environmental, other postretirement benefit liabilities,
self-insurance, long-term obligations related to legal proceedings and
historical restructuring activities.
Amounts in all periods also include the operating activities of our discontinued
FMC Lithium segment, which was separated on March 1, 2019. Amounts in 2017
include the operating activities of our discontinued FMC Health and Nutrition
segment and were partially offset by divestiture costs associated with its sale,
which was completed on November 1, 2017.
Cash provided (required) by investing activities of continuing operations was
$(195.9) million, $(37.5) million and $(1,288.5) million for 2019, 2018 and
2017, respectively.
Cash required in 2019 is primarily due to capital expenditures and spending
related to our contract manufacturing arrangements, as well as continued
spending associated with the implementation of a new SAP system.
Cash required in 2018 is primarily due to higher capital expenditure spending as
well as incremental capitalizable corporate level spending associated with the
implementation of a new SAP system, partially offset by the sale of product
portfolios of approximately $88 million that were required to complete the
DuPont Crop Protection Business Acquisition.
The cash required by investing activities in 2017 was primarily due to the
acquisition of the DuPont Crop Protection Business.
Cash provided (required) by investing activities of discontinued operations was
$9.2 million, $(93.4) million and $(45.3) million for 2019, 2018 and 2017,
respectively.
Cash provided by investing activities of discontinued operations in 2019
represents the proceeds from the sale of the first of two parcels of land of our
discontinued site in Newark, California partially offset by capital expenditures
of our discontinued FMC Lithium segment. Cash required by investing activities
of discontinued operations in 2018 represents the working capital payment
associated with the divestiture of FMC Health and Nutrition as well as the
capital expenditures of our discontinued FMC Lithium segment.
Cash required by investing activities of discontinued operations in 2017
represents the capital expenditures of our discontinued FMC Lithium and FMC
Health and Nutrition segments, partially offset by the cash proceeds from the
sale of the Omega-3 business for $38.0 million.
Cash provided (required) by financing activities was $(87.0) million, $(397.3)
million and $1,213.1 million in 2019, 2018 and 2017, respectively.
The change in cash required by financing activities in 2019 is primarily due to
the proceeds from the Senior Notes offset by cash outflows including higher
repurchases of common stock, repayment of long-term debt, and higher dividend
payments in the current period as compared to the prior period. The prior period
included the net proceeds from the IPO of FMC Lithium which were more than
offset by repayments of long-term debt, dividend payments and repurchases of
common stock.
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The change in cash required by financing activities in 2018 is due to higher
repayments of long-term debt of approximately $200 million as compared to 2017
and $200 million in repurchases of common stock as part of the publicly
announced repurchase program. Additionally, there were significant borrowings of
long-term debt in 2017 to fund the DuPont transaction. The cash required in 2018
was partially offset by the proceeds received from the IPO of FMC Lithium of
$363.6 million.
Cash provided (required) by financing activities was $(37.2) million, $34.0
million and zero in 2019, 2018 and 2017, respectively.
Cash required by financing activities of discontinued operations in 2019
represents debt repayments on FMC Lithium's external debt as well as cash
payments associated with its separation. Cash provided by financing activities
of discontinued operations in 2018 represents the proceeds from borrowing of
long-term debt of our discontinued FMC Lithium segment.

Free Cash Flow
We define free cash flow, a Non-GAAP financial measure, as all cash inflows and
outflows excluding those related to financing activities (such as debt
repayments, dividends, and share repurchases) and acquisition related investing
activities. Free cash flow is calculated as all cash from operating activities
reduced by spending for capital additions and other investing activities as well
as legacy and transformation spending. Therefore, our calculation of free cash
flow will almost always result in a lower amount than cash from operating
activities from continuing operations, the most directly comparable U.S. GAAP
measure. However, the free cash flow measure is consistent with management's
assessment of operating cash flow performance and we believe it provides a
useful basis for investors and securities analysts about the cash generated by
routine business operations, including capital expenditures, in addition to
assessing our ability to repay debt, fund acquisitions and return capital to
shareholders through share repurchases and dividends.
Our use of free cash flow has limitations as an analytical tool and should not
be considered in isolation or as a substitute for an analysis of our results
under U.S. GAAP. First, free cash flow is not a substitute for cash provided
(required) by operating activities of continuing operations, as it is not a
measure of cash available for discretionary expenditures since we have
non-discretionary obligations, primarily debt service, that are not deducted
from the measure. Second, other companies may calculate free cash flow or
similarly titled Non-GAAP financial measures differently or may use other
measures to evaluate their performance, all of which could reduce the usefulness
of free cash flow as a tool for comparison. Additionally, the utility of free
cash flow is further limited as it does not reflect our future contractual
commitments and does not represent the total increase or decrease in our cash
balance for a given period. Because of these and other limitations, free cash
flow should be considered along with cash provided (required) by operating
activities of continuing operations and other comparable financial measures
prepared and presented in accordance with U.S. GAAP.
The table below presents a reconciliation of free cash flow from the most
directly comparable U.S. GAAP measure.

FREE CASH FLOW RECONCILIATION
Year ended December 31,
(in Millions) 2019 2018 2017

Cash provided (required) by operating activities of continuing operations (GAAP)

$   555.6            $   362.7            $   232.0
Transaction and integration costs (1)                     77.1                101.1                 78.9
Adjusted cash from operations (2)                    $   632.7            $   463.8            $   310.9

Capital expenditures (3)                                 (93.9)               (83.0)               (38.3)
Other investing activities (3)(4)                        (54.0)               (13.6)               (24.6)
Capital additions and other investing activities     $  (147.9)           $   (96.6)           $   (62.9)

Cash provided (required) by operating activities of discontinued operations (5)

                              (67.1)                 5.7                103.5

Cash provided (required) by investing activities of discontinued operations (5)

                                9.2                (93.4)               (45.3)
Transaction and integration costs (1)                    (77.1)              (101.1)               (78.9)
Investment in Enterprise Resource Planning system
(3)                                                      (48.0)               (48.5)                   -
Legacy and transformation (6)                        $  (183.0)           $  (237.3)           $   (20.7)

Free cash flow (Non-GAAP)                            $   301.8            $   129.9            $   227.3


___________________
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(1) Represents payments for legal and professional fees associated with the
DuPont Crop Protection Business Acquisition in addition to costs related to
integrating the DuPont Crop Protection Business. See Note 5 to the consolidated
financial statements for more information.
(2) Adjusted cash from operations is defined as cash provided (required) by
operating activities of continuing operations excluding the effects of
transaction-related cash flows, which are included within Legacy and
transformation.
(3) Components of cash provided (required) by investing activities of continuing
operations. Refer to the below discussion for further details.
(4) Cash spending associated with contract manufacturers was $51.7 million,
$13.1 million and $11.7 million for the years ended December 31, 2019, 2018 and
2017, respectively.
(5) Refer to the above discussion for further details.
(6) Includes our legacy liabilities such as environmental remediation and other
legal matters that are reported in discontinued operations as well as business
integration costs associated with the DuPont Crop Protection Business
Acquisition and the implementation of our new SAP system.


2020 Cash Flow Outlook
Our cash needs for 2020 include operating cash requirements (which are impacted
by contributions to our pension plan, as well as environmental, asset retirement
obligation, and restructuring spending), capital expenditures, and legacy and
transformation spending, as well as mandatory payments of debt, dividend
payments, and share repurchases. 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, 2019
our remaining borrowing capacity under our credit facility was $1,283.0 million.
We expect 2020 free cash flow (Non-GAAP) to increase to a range of approximately
$425 million to $525 million, driven by higher cash from operating activities,
partially offset by higher capital expenditures and higher legacy and
transformation costs. We continue to believe we can drive free cash conversion
substantially higher over the next two to three years as we finalize our SAP
system implementation, ending the three-year period of high cash spending on
transformation activity and as we drive further improvement in working capital
performance and continue to increase revenue and Adjusted EBITDA.
Although we provide a forecast for free cash flow, a Non-GAAP financial measure,
we are not able to forecast the most directly comparable measure calculated and
presented in accordance with U.S. GAAP, which is cash provided (required) by
operating activities of continuing operations. Certain elements of the
composition of the U.S. GAAP amount are not predictable, making it impractical
for us to forecast. Such elements include, but are not limited to,
restructuring, acquisition charges, and discontinued operations. As a result, no
U.S. GAAP outlook is provided.
Cash from operating activities of continuing operations
We expect higher cash from operating activities, excluding the effects of
transaction-related cash flows, primarily driven by higher forecasted Adjusted
EBITDA as well as continued improvement in working capital, to be in the range
of approximately $735 million to $935 million. Transaction-related cash flows
are included within Legacy and transformation, which is consistent with how we
evaluate our business operations from a cash flow standpoint. See below for
further discussion. Cash from operating activities includes cash requirements
related to our pension plans, environmental sites, restructuring and asset
retirement obligations, taxes and interest on borrowings.
Pension
We do not expect to make any voluntary cash contributions to our U.S. qualified
defined benefit pension plan in 2020. The plan is fully funded and our portfolio
is comprised of 100 percent fixed income securities and cash. Our investment
strategy is a liability hedging approach with an objective of maintaining the
funded status of the plan such that the funded status volatility is minimized
and the likelihood that we will be required to make significant contributions to
the plan is limited.
Environmental
Projected 2020 spending includes approximately $45 million to $55 million of net
environmental remediation spending for our sites accounted for within continuing
operations. 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. This
spending includes approximately $36 million related to our environmental
remediation site near Pocatello, Idaho, primarily as a result of a litigation
judgment against us in the Pocatello Tribal litigation described in Note 12. In
addition to the expected 2020 payments for Pocatello, the judgment resulted in
the requirement for future payments of $1.5 million annually thereafter. On
February 4, 2020, the Ninth Circuit granted our motion to stay the mandate and
as a result, payment of the judgement, if necessary, will not take place until
final disposition by the Supreme Court.
Total projected 2020 environmental spending, inclusive of both sites accounted
for within continuing operations and discontinued sites (discussed within Legacy
and transformation below), is expected to be in the range of $98 million to $108
million.
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Restructuring and asset retirement obligations
We expect to make payments of approximately $30 million to $34 million in 2020,
of which approximately $12 million is related to exit and disposal costs as a
result of our decision to exit sales of all carbofuran formulations (including
Furadan® insecticide/nematicide, as well as Curaterr® insecticide/nematicide and
any other brands used with carbofuran products). See Note 9 for more
information.
Capital additions and other investing activities
Projected 2020 capital expenditures and expenditures related to contract
manufacturers are expected to be in the range of approximately $135 million to
$185 million. The spending is primarily driven by diamide capacity expansion and
new active ingredient capacity. Expenditures related to contract manufacturers
are included within "other investing activities".
Legacy and transformation
Projected 2020 legacy and transformation spending are expected to be in the
range of approximately $175 million to $225 million. This is primarily driven by
continued spending associated with the three-year implementation of a new SAP
system and related costs we expect to continue to incur associated with the
remaining integration of the DuPont Crop Protection Business due to its
significance and complexity. Total spending related to these initiatives is
expected to be approximately $125 million. Costs for these initiatives are
expected to be immaterial beyond 2020.
Projected 2020 spending includes approximately $48 million to $58 million of net
environmental remediation spending for our discontinued sites. These projections
include spending as a result of a settlement reached in the second quarter of
2019 at our Middleport, New York site. The settlement will result in spending of
approximately $20 million to $30 million per year for 2020 and 2021, due to
front loading of reimbursement in installments of past costs, and a $10 million
maximum per year, on average, until the remediation is complete. See Note 12 for
further information.
Total projected 2020 environmental spending, inclusive of both sites accounted
for within continuing operations (discussed within Cash from operating
activities of continuing operations above) and discontinued sites, is expected
to be in the range of $98 million to $108 million.
Share repurchases
During the year ended December 31, 2019, 4.7 million shares were repurchased
under the publicly announced repurchase program. At December 31, 2019,
approximately $600 million remained unused under our Board-authorized repurchase
program. We intend to purchase between $400 million to $500 million of our
common shares in 2020. 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 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 16, 2020, we paid dividends aggregating $57.0 million to our
shareholders of record as of December 31, 2019. This amount is included in
"Accrued and other liabilities" on the consolidated balance sheet as of
December 31, 2019. For the years ended December 31, 2019, 2018 and 2017, we paid
$210.3 million, $89.2 million and $88.8 million in dividends, respectively.
Commitments
We provide guarantees to financial institutions on behalf of certain customers,
principally customers in Brazil, for their seasonal borrowing. The total of
these guarantees was $77.8 million at December 31, 2019. These guarantees arise
during the ordinary course of business from relationships with customers and
nonconsolidated affiliates. Non-performance by the guaranteed party triggers the
obligation requiring us to make payments to the beneficiary of the guarantee.
Based on our experience these types of guarantees have not had a material effect
on our consolidated financial position or on our liquidity. Our expectation is
that future payment or performance related to the non-performance of others is
considered unlikely.
In connection with certain of 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 indemnification obligations with respect to these liabilities may be
indefinite as to duration and may or may not be subject to a deductible, minimum
claim amount or cap. In cases where 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, no specific liability has been
recorded. If triggered, we may be able to recover certain of the indemnity
payments from third parties. In cases where it is possible, we have recorded a
specific liability within our Reserve for Discontinued Operations. Refer to Note
11 for further details.
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Our total significant committed contracts that we believe will affect cash over
the next four years and beyond are as follows:

Contractual Commitments

Expected Cash Payments by Year

(in Millions) 2020 2021 2022 2023 2024 & beyond Total
Debt maturities (1) $ 227.7 $ 1.6 $ 1,100.9 $ 0.3 $ 1,950.0 $ 3,280.5
Contractual interest (2) 114.9 114.9 114.9 72.8 781.5 1,199.0
Lease obligations (3) 38.3 28.3 24.1 19.0 133.1 242.8
Derivative contracts 8.7 0.2 - - - 8.9
Purchase obligations (4) 389.1 324.5 123.1 127.9 161.3 1,125.9
Total (5) $ 778.7 $ 469.5 $ 1,363.0 $ 220.0 $ 3,025.9 $ 5,857.1

____________________
(1) Excluding discounts.
(2) Contractual interest is the interest we are contracted to pay on our
long-term debt obligations. We had $800.0 million of long-term debt subject to
variable interest rates at December 31, 2019. The rate assumed for the variable
interest component of the contractual interest obligation was the rate in effect
at December 31, 2019. Variable rates are determined by the market and will
fluctuate over time.
(3) Obligations associated with operating leases, before sub-lease rental
income.
(4) 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.
(5) As of December 31, 2019, the liability for uncertain tax positions was $71.4
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. Also excluded from the table above is the liability attributable to the
transition tax on deemed repatriated foreign earnings incurred as a result of
the Act of $139.3 million.
Contingencies
See Note 20 to our consolidated financial 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 effective actions that reduce
Green House Gas (GHG) emissions to the atmosphere.
FMC is committed to continuing to do its part to address climate change and its
impacts. In 2019 we set new environmental goals to reflect the changes to our
business with the acquisition of the DuPont Crop Protection Business and the
separation of the FMC Lithium business. Our new 2030 intensity reduction targets
for energy and greenhouse gas emissions are both 25 percent from our 2018
baseline year. FMC has been reporting its GHG emissions and mitigation strategy
to CDP (formerly Carbon Disclosure Project) since 2016. FMC detailed the
business risks and opportunities we have due to climate change and its impacts
in our CDP climate change reports. In recognition of our commitment to address
climate change, FMC enhanced its CDP Climate Change score from a "C" in 2018 to
a "B" in 2019.
Even as we take action to control the release of GHGs, additional warming is
anticipated. Long-term, higher average global temperatures could result in
induced changes in natural resources, growing seasons, precipitation patterns,
weather patterns, species distributions, water availability, sea levels, and
biodiversity. These impacts could cause changes in supplies of raw materials
used to maintain FMC's production capacity and could lead to possible increased
sourcing costs. Depending on how pervasive the climate impacts are in the
different geographic locations experiencing changes in natural resources, FMC's
customers could be impacted. Demand for FMC's products could increase if our
products meet our customers' needs to adapt to climate change impacts or
decrease if our products do not meet their needs. Within our own operations, we
continually assess our manufacturing sites worldwide for risks and opportunities
to increase our preparedness for climate change. We are continuing to evaluate
sea level rise and storm surge at our plants to understand timing of potential
impacts and proactive responses that may need to be taken. To lessen FMC's
overall environmental footprint, we have taken actions to increase the energy
efficiency in our manufacturing sites. We have also committed to new 2030 goals
to reduce our water use intensity in
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high-risk areas by 20 percent and to maintain our 2018 waste disposed intensity
which otherwise would increase by 55 percent due to expected growth and shifts
in production mix.
In our product portfolio, we see market opportunities for our products to
address climate change and its impacts. For example, FMC's agricultural products
can help customers increase yield, energy and water efficiency, and decrease
greenhouse gas emissions. Our products can also help growers adapt to more
unpredictable growing conditions and the effects these types of threats have on
crops. FMC has committed to invest 100% of our innovation budget to developing
sustainable products and solutions for future use.
We are improving existing products and developing new platforms and technologies
that help mitigate impacts of climate change. FMC is developing products with a
lighter environmental footprint in its biologicals products. These opportunities
could lead to new products and services for our existing and potential
customers. Beyond our products and operations, FMC recognizes that energy
consumption throughout our supply chain can impact climate change and product
costs. Therefore, we will actively work with our entire value chain - suppliers,
contractors, and customers - to improve their energy efficiencies 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
remains to be seen how and when each of these countries will implement this
agreement. The United States was a signatory to the Paris Agreement. Then on
November 4, 2019, the United States announced that it will begin formally
withdrawing the US from the Paris climate accord, the first step in a year-long
process that will lead to a complete withdrawal just after the 2020 presidential
election.
Notwithstanding the United States' withdrawal from the Paris Agreement, FMC will
actively manage climate risks and incorporate them in our decision making as
indicated in our responses to the CDP Climate Change Module. The United States
Climate Alliance, a coalition of 24 states (governing 55 percent of the
population) and unincorporated self-governing territories in the United States
have expressed their commitment to upholding the objectives of the 2015 Paris
Agreement on climate change within their borders. Several of our manufacturing
and R&D sites fall within this alliance territory. FMC remains deeply committed
to reducing our GHG emissions and energy consumption at all our facilities
around the world.
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.
In December 2019, the European Commission approved the European Green Deal, with
the goal of making the EU carbon neutral by 2050. The Deal includes investment
plans and a roadmap to fight against climate change. FMC is closely following
updates and the discussion surrounding the Green Deal. The costs of complying
with possible future requirements are difficult to estimate at this time.
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. We are currently monitoring
regulatory developments. The costs of complying with possible future climate
change requirements are difficult 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 financial statements included in this Form 10-K.
Off-Balance Sheet Arrangements
See Note 20 to our consolidated financial 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 19 to our consolidated financial statements included in this Form 10-K
for additional discussion surrounding our fair value measurements.

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Critical Accounting Policies
Our consolidated financial statements are prepared in conformity with U.S.
generally accepted accounting principles ("U.S. GAAP"). The preparation of these
financial statements requires us to make estimates and judgments that affect 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 financial 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 financial 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 financial
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 (or as) we satisfy our performance obligation which is
when the customer obtains control of the good or service. 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. Refer to Note 3 to our
consolidated financial statements included in this Form 10-K for more
information.
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 specific 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.
We periodically enter into prepayment arrangements with customers and receive
advance payments for product to be delivered in future periods. These advance
payments are recorded as deferred revenue and classified as "Advance payments
from customers" on the consolidated balance sheet. Revenue associated with
advance payments is recognized as shipments are made and transfer of control to
the customer takes place.
Trade receivables consist of amounts owed to us from customer sales and are
recorded when revenue is recognized. The 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 specific allowances for customers where the risk of
collection has been reasonably identified 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 long-term 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. Therefore on an ongoing basis, we continue to evaluate the
credit quality of our long-term receivables utilizing aging of receivables,
collection experience and write-offs, 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
sufficient to estimate the amount of liability, that estimate has been used.
Where the information is only sufficient 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 financial
and legal management and, if necessary, adjusted as additional information
becomes available. The 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
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plan, management costs, fees to outside law firms and consultants for work
related to the environmental effort, and future monitoring costs. Estimated site
liabilities are determined based upon existing remediation laws and
technologies, specific 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 significant 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 reflected in income, net of probable and
estimable recoveries from named Potentially Responsible Parties ("PRPs") or
other third parties. In the fourth quarter of 2019, we increased our reserves
for the Pocatello Tribal Matter by $72.8 million, which represents both the
historical and discounted present value of future annual use permit fees as well
as the associated legal costs. See Note 12 for further information. All other
environmental provisions incorporate inflation and are not discounted to their
present value.
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 financial
condition of the other PRPs at each site to the extent possible. We have also
considered the identity and financial 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 reflect 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 offset
in "Environmental liabilities, continuing and discontinued" or as "Other assets"
in our consolidated balance sheets in accordance with U.S. accounting
literature.
See Note 12 to our consolidated financial statements included in this Form 10-K
for changes in estimates associated with our environmental obligations.

Impairments and valuation of long-lived and indefinite-lived assets
Our long-lived assets primarily include property, plant and equipment, goodwill
and intangible assets. The assets and liabilities of acquired businesses are
measured at their estimated fair values at the dates of acquisition. The excess
of the purchase price over the estimated fair value of the net assets acquired,
including identified intangibles, is recorded as goodwill. The 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. The 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 flows expected to result from their
use and eventual disposition. In cases where the estimated undiscounted expected
future cash flows 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 flows at the lowest level
determinable. The estimated cash flows reflect 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 indefinite-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 financial 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 2019, we determined that no goodwill and
indefinite-lived intangible assets impairment charge to our continuing
operations was required.
See Note 9 to our consolidated financial statements included in this Form 10-K
for charges associated with long-lived asset disposal costs and the activity
associated with the restructuring reserves.

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Pension and other postretirement benefits
We provide qualified and nonqualified defined benefit and defined contribution
pension plans, as well as postretirement health care and life insurance benefit
plans to our employees and retirees. The costs (benefits) and obligations
related to these benefits reflect 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. The costs (benefits) and obligations for these benefit programs
are also affected by other assumptions, such as average retirement age,
mortality, employee turnover, and plan participation. To the extent our plans'
actual experience, as influenced by changing economic and financial market
conditions or by changes to our own plans' demographics, differs from these
assumptions, the costs and obligations for providing these benefits, as well as
the plans' funding requirements, could increase or decrease. When actual results
differ from our assumptions, the difference is typically recognized over future
periods. In addition, the unrealized gains and losses related to our pension and
postretirement benefit obligations may also affect periodic benefit costs
(benefits) in future periods.
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. The expected rate
of return on plan assets is based on a market-related value of assets that
recognizes investment gains and losses over a five-year period. We use an
actuarial value of assets to determine our plans' funding requirements. The
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, 2019, we placed particular emphasis on a discount rate yield-curve
provided by our actuary. This yield-curve, when populated with projected cash
flows that represent the expected timing and amount of our plans' benefit
payments, produced an effective discount rate of 3.22 percent for our U.S.
qualified plan, 2.74 percent for our U.S. nonqualified, and 2.89 percent for our
U.S. other postretirement benefit plans.
The discount rates used to determine projected benefit obligation at our
December 31, 2019 and 2018 measurement dates for the U.S. qualified plan were
3.22 percent and 4.35 percent, respectively. The effect of the change in the
discount rate from 4.35 percent to 3.22 percent at December 31, 2019 resulted in
a $152.8 million increase to our U.S. qualified pension benefit obligations. The
effect of the change in the discount rate used to determine net annual benefit
cost (income) from 3.68 percent at December 31, 2018 to 4.36 percent at
December 31, 2019 resulted in a $0.5 million decrease to the 2019 U.S. qualified
pension expense.
The change in discount rate from 4.35 percent at December 31, 2018 to 3.22
percent at December 31, 2019 was attributable to an increase in yields on high
quality corporate bonds with cash flows matching the timing and amount of our
expected future benefit payments between the 2018 and 2019 measurement dates.
Using the December 31, 2019 and 2018 yield curves, our U.S. qualified plan cash
flows produced a single weighted-average discount rate of approximately 3.22
percent and 4.35 percent, respectively.
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, inflation assumptions, and
expectations for standard deviation related to these best estimates. Our
long-term rate of return for the fiscal year ended December 31, 2019, 2018 and
2017 was 4.25 percent, 5.00 percent and 6.50 percent, respectively.
For the sensitivity of our pension costs to incremental changes in assumptions
see our discussion below.
Sensitivity analysis related to key pension and postretirement benefit
assumptions.
A one-half percent increase in the assumed discount rate would have decreased
pension and other postretirement benefit obligations by $72.1 million and $62.4
million at December 31, 2019 and 2018, respectively, and decreased pension and
other postretirement benefit costs by $0.6 million, $0.4 million and $0.4
million for 2019, 2018 and 2017, respectively. A one-half percent decrease in
the assumed discount rate would have increased pension and other postretirement
benefit obligations by $79.4 million and $68.3 million at December 31, 2019 and
2018, respectively, and increased pension and other postretirement benefit cost
by $0.5 million, $0.1 million and $0.4 million for 2019, 2018 and 2017,
respectively.
A one-half percent increase in the assumed expected long-term rate of return on
plan assets would have decreased pension costs by $6.3 million, $6.4 million and
$6.0 million for 2019, 2018 and 2017, respectively. A one-half percent decrease
in the assumed long-term rate of return on plan assets would have increased
pension costs by $6.3 million, $6.4 million and $6.0 million for 2019, 2018 and
2017, respectively.
Further details on our pension and other postretirement benefit obligations and
net periodic benefit costs (benefits) are found in Note 15 to our consolidated
financial statements in this Form 10-K.

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Income taxes
We have recorded a valuation allowance to reduce deferred tax assets in certain
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 file income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions. Certain income tax returns for FMC
entities taxable in the U.S. and significant 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 benefit will be
sustained, we have recorded the largest amount of tax benefit with a greater
than 50 percent 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.
On December 22, 2017, the Act was enacted in the United States. The Act reduced
the U.S. federal corporate tax rate from 35 percent to 21 percent, required
companies to pay a one-time transition tax on earnings of certain foreign
subsidiaries that were previously tax deferred and created new taxes on certain
foreign sourced earnings. At December 31, 2018, the Company had completed its
accounting for the impacts of the enactment of the Act.
See Note 13 to our consolidated financial statements included in this Form 10-K
for additional discussion surrounding income taxes.
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Market Closed - Nyse Other stock markets 04:00:02 2024-04-17 pm EDT			5-day change	1st Jan Change
56.06 ^USD	+1.14%		-9.90%	-11.09%

Apr. 17	Goldman Sachs Adjusts FMC Price Target to $59 From $55	MT
Apr. 09	KeyBanc Adjusts Price Target on FMC to $79 From $76, Keeps Overweight Rating	MT

Goldman Sachs Adjusts FMC Price Target to $59 From $55	Apr. 17	MT
KeyBanc Adjusts Price Target on FMC to $79 From $76, Keeps Overweight Rating	Apr. 09	MT
FMC Corporation Announces Board Changes	Apr. 03	CI
North American Morning Briefing : Investors -2-	Mar. 21	DJ
UBS Upgrades FMC to Buy From Neutral, Raises Price Target to $84 From $61	Mar. 20	MT
FMC Corporation Announces Executive Changes, Effective April 1, 2024	Mar. 20	CI
Loop Capital Raises Price Target on FMC to $65 From $55, Keeps Hold Rating	Mar. 19	MT
FMC Corporation Receives Shareholder Proposal from John Chevedden	Mar. 15	CI
FMC Partners With Novonesis in Canada for Biosolution Products	Mar. 12	MT
RBC Raises Price Target on FMC to $66 From $59 on Greater Confidence in FMC Meeting Forecasts, Keeps Outperform Rating	Mar. 07	MT
Transcript : FMC Corporation Presents at Bank of America Securities 2024 Global Agriculture and Materials Conference, Feb-29-2024 02:10 PM	Feb. 29
FMC Keeps Quarterly Dividend at $0.58 per Share, Payable April 18 to Shareholders of Record March 28	Feb. 27	MT
FMC Corporation Declares Quarterly Dividend, Payable on April 18, 2024	Feb. 27	CI
Agri chemicals firm FMC expects restructuring charges of up to $215 mln	Feb. 27	RE
North American Morning Briefing : Stocks Seen -2-	Feb. 13	DJ
Loop Capital Downgrades FMC to Hold From Buy, Adjusts Price Target to $55 From $68	Feb. 12	MT
RBC Cuts Price Target on FMC to $59 From $61, Keeps Outperform Rating	Feb. 08	MT
North American Morning Briefing : S&P 500 to Open -2-	Feb. 08	DJ
BNP Paribas Exane Downgrades FMC to Neutral From Outperform, Adjusts Price Target to $56 From $74	Feb. 07	MT
Fed officials fail to convince investors, who are focused on earnings	Feb. 07
ANALYST RECOMMENDATIONS : Caterpillar, Eli Lilly, Intel, Meta, T-Mobile...	Feb. 07
Equities Rise as Traders Weigh Fed Official Comments, Corporate Earnings	Feb. 06	MT
Top Midday Decliners	Feb. 06	MT
US Equity Indexes Mixed, Treasury Yields Slump as Fed Officials Mull Rate Outlook	Feb. 06	MT
US Equity Indexes Mixed, Treasury Yields Drop in Midday Trading	Feb. 06	MT

	1st Jan change	Capi.
FMC CORPORATION	-11.09%	7B
CORTEVA, INC.	+11.71%	37.41B
PHOSAGRO	-.--%	10.92B
PI INDUSTRIES LIMITED	+5.68%	6.79B
ICL GROUP LTD	-2.31%	6.02B
OCI N.V.	-5.22%	5.54B
YUNNAN YUNTIANHUA CO., LTD.	+34.94%	5.33B
THE FERTILISERS AND CHEMICALS TRAVANCORE LIMITED	-19.00%	5.16B
JORDAN PHOSPHATE MINES CO. PLC	+21.42%	4.53B
UPL LIMITED	-18.59%	4.35B

FMC Corporation

Equities

FMC

US3024913036

Agricultural Chemicals

FMC : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

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Sector Other Agricultural Chemicals