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FMC CORPORATION

(FMC)
  Report
Delayed Nyse  -  04:03 2022-09-28 pm EDT
108.38 USD   +3.22%
09/21FMC Corporation announces dates for third quarter 2022 earnings release and webcast conference call
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08/10Transcript : FMC Corporation Presents at Jefferies Global Industrials Conference 2022, Aug-10-2022 02:30 PM
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08/04Mizuho Adjusts FMC's Price Target to $144 from $149, Keeps Buy Rating
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FMC CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/03/2022 | 02:25pm EDT
Item 2 of this report contains certain forward-looking statements that are based
on our current views and assumptions regarding future events, future business
conditions and the outlook for our company based on currently available
information.

Whenever possible, we have identified these forward-looking statements by such
words or phrases as "will likely result," "is confident that," "expect,"
"expects," "should," "could," "may," "will continue to," "believe," "believes,"
"anticipates," "predicts," "forecasts," "estimates," "projects," "potential,"
"intends" or similar expressions identifying "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, including
the negative of those words or phrases. Such forward-looking statements are
based on our current views and assumptions regarding future events, future
business conditions and the outlook for the company based on currently available
information. The forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different from any results, levels of activity, performance or achievements
expressed or implied by any forward-looking statement. With respect to
forward-looking statements made in connection with our acquisition of BioPhero
ApS, such factors include that (1) BioPhero is still in its early stages of
development or growth and it may be affected by risks inherent in operating a
business of its nature., and (2) that the products and technologies of BioPhero
have not yet been implemented at large commercial scale, and thus our statements
regarding the future, including potential revenue opportunities, are subject to
uncertainties related to development, registration, production and
commercialization of pheromones through use of the BioPhero production
technology. In addition to the continued uncertainty generated by the ongoing
COVID pandemic on our financial condition, results of operations, cash flows and
performance, additional factors include, among other things, the risk factors
included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2021 (the "2021 Form 10-K"), the section captioned "Forward-Looking
Information" in Part II of the 2021 Form 10-K and to similar risk factors and
cautionary statements in all other reports and forms filed with the Securities
and Exchange Commission ("SEC"). Moreover, investors are cautioned to interpret
many of these factors as being heightened as a result of the ongoing and
numerous adverse impacts of COVID. We wish to caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date
made.

We specifically decline to undertake any obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

APPLICATION OF CRITICAL ACCOUNTING POLICIES


Our consolidated financial statements are prepared in conformity with U.S.
generally accepted accounting principles. The preparation of our financial
statements requires management 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 to our consolidated financial
statements included in our 2021 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 our Board of
Directors. Critical accounting policies are central to our presentation of
results of operations and financial condition 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.

The following is a list of those accounting policies that we have deemed most
critical to the presentation and understanding of our results of operations and
financial condition. See the "Critical Accounting Policies" section in our 2021
Form 10-K for a detailed description of these policies and their potential
effects on our results of operations and financial condition.
•Revenue recognition and trade receivables
•Environmental obligations and related recoveries
•Impairment and valuation of long-lived assets and indefinite-lived assets
•Pensions and other postretirement benefits
•Income taxes

RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS AND REGULATORY ITEMS


See Note 2 to the condensed consolidated financial statements included in this
Form 10-Q for a discussion of recently adopted accounting guidance and other new
accounting guidance.


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, crop enhancement, and professional pest and turf management. We operate in a single distinct business segment. We develop, market and sell all three major classes

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of crop protection chemicals (insecticides, herbicides and fungicides) as well
as biologicals, crop nutrition, and seed treatment, which we group as plant
health. 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; Isoflex™ active herbicide ingredient; Talstar® and Hero®
branded insecticides; and flutriafol-based fungicides and biologicals such as
Quartzo® and Presence® bionematicides as well as crop enhancers such as Accudo®.
The FMC portfolio also includes Arc™ farm intelligence.


Russia's Invasion of Ukraine


In mid-April, we announced the decision to discontinue our operations and
business in Russia. Our values as a company do not allow us to operate and grow
our business in Russia. We recorded exit charges of approximately $76 million.
See Note 9 for more information. We are closely monitoring any potential impacts
on our raw material and supply chain costs arising out of Russia's invasion of
Ukraine.


COVID-19 Pandemic

As an agricultural sciences company, we are considered an "essential" industry
in the countries in which we operate; we have avoided significant plant closures
and all our manufacturing facilities and distribution warehouses remain
operational and properly staffed. Our research laboratories and greenhouses also
have continued to operate throughout the pandemic. We are closely monitoring raw
material and supply chain costs including impacts by the continued COVID
disruptions. Additionally, we are aware of the potential for disruptions or lack
of availability, at any price, of critical materials. The extent to which COVID
will continue to impact us will depend on future developments, many of which
remain uncertain and cannot be predicted with confidence, including the duration
of the pandemic, further actions to be taken to contain the pandemic or mitigate
its impact, and the extent of the direct and indirect economic effects of the
pandemic and containment measures, among others.

We have implemented procedures to support the health and safety of our employees
and we are following all U.S. Centers for Disease Control and Prevention, as
well as state and regional health department guidelines. The well-being of our
employees is FMC's top priority. We have resumed in-office operations where
permitted by local authorities and extended flexible work arrangements in some
locations. In addition, we have thousands of employees who continue operating
our manufacturing sites and distribution warehouses. In all our facilities, we
are using a variety of best practices to address COVID risks, following the
protocols and procedures recommended by leading health authorities. We are
continuing to monitor the situation in all regions and adjust our health and
safety protocols accordingly.

We will continue to monitor the economic environment related to the pandemic on an ongoing basis and assess the impacts on our business.

Second Quarter 2022 Highlights

The following items are the more significant developments or financial highlights in our business during the three months ended June 30, 2022:


•Revenue of $1,452.3 million for the three months ended June 30, 2022 increased
$210.3 million or approximately 17 percent versus the same period last year. A
more detailed review of revenue is discussed under the section titled   "Results
of Operations"  . On a regional basis, sales in North America increased by
approximately 26 percent, sales in Latin America increased approximately 44
percent, sales in Europe, Middle East and Africa increased approximately 3
percent, and sales in Asia decreased approximately 1 percent as foreign currency
headwinds more than offset pricing gains in the region. The increase was mostly
driven by volume growth primarily in North America and Latin America and price
increases across all regions. Excluding foreign currency impacts, revenue
increased 21 percent during the quarter.

•Our gross margin of $591.0 million increased versus the prior year quarter by
$59.2 million driven by higher volumes in North America and Latin America and
higher prices in all regions, partially offset by higher cost of goods sold,
primarily resulting from inflation, and foreign currency headwinds. Gross margin
percent of approximately 41 percent decreased compared to approximately 43
percent in the prior year period, driven by higher costs.

•Selling, general and administrative expenses increased from $161.0 million to
$194.8 million, or approximately 21 percent. The increase in selling, general,
and administrative expenses is a result of higher revenues, investments in
growth, and inflation.
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•Research and development expenses of $79.5 million increased $13.6 million or
21 percent. In the current year period the increase in spending on research and
development projects relates to timing of project expenses and is consistent
with our growth as a company.

•Net income (loss) attributable to FMC stockholders decreased from $202.9
million to $134.2 million which represents a decrease of $68.7 million, or
approximately 34 percent. The lower results were driven by higher restructuring
and other charges, selling, general and administrative expense and the provision
for income taxes. This was partially offset by our gross margin growth. Adjusted
after-tax earnings from continuing operations attributable to FMC stockholders
of $245.1 million increased compared to the prior year amount of $235.2 million.
See the disclosure of our Adjusted Earnings Non-GAAP financial measurement
below, under the section titled   "Results of Operations"  .

Other Highlights


On June 29, 2022 we announced a definitive agreement to acquire BioPhero ApS
("BioPhero"), a Denmark-based pheromone research and production company. The
acquisition adds state-of-the-art biologically produced pheromone insect control
technology to our product portfolio and R&D pipeline, underscoring our role as a
leader in delivering innovative and sustainable crop protection solutions. We
expect pheromones and pheromone-based products to contribute approximately $1
billion in revenue at above company-average EBITDA margin by 2030.

The purchase price of approximately $200 million was paid at closing on July 19, 2022. See Note 5 for additional information.

2022 Outlook Update


In 2022, we now expect the global crop protection market will be up mid-to-high
single digits, on a U.S. dollar basis versus our earlier expectation of
low-to-mid single digit growth. Latin America is now expected to be up double
digits, primarily driven by pricing of non-selective herbicides. We still expect
North America to be up mid-single digits while Asia is now expected to grow
low-single digit. EMEA is still expected to be down low-single digits, including
the impact of foreign currency. Excluding foreign currency impact, EMEA is
expected to grow low-single digits.

After a strong first half of the year, and reflecting the increased market
growth expectations, we are raising the full-year 2022 revenue guidance to be in
the range of approximately $5.50 billion to $5.70 billion, up approximately 11
percent at the midpoint versus 2021. We are narrowing the full year adjusted
EBITDA(1) range to $1.36 billion to $1.44 billion, representing 6 percent growth
at the midpoint versus 2021 results. 2022 adjusted earnings per share is
narrowed and it is now expected to be in the range of $7.00 to $7.70 per diluted
share(1), representing a year over year increase of 6 percent at the midpoint.
Full-year earnings growth drivers include pricing actions and strong volumes,
offset by foreign currency impacts, primarily in EMEA and Asia. Adjusted
earnings estimates do not include the benefit of any future share repurchases.
For cash flow outlook, refer to the   "L    iquidity 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

Overview


The following charts provide a reconciliation of Adjusted EBITDA, Adjusted
Earnings, and Organic Revenue Growth, all of which are Non-GAAP financial
measures, from the most directly comparable GAAP measure. Adjusted EBITDA and
Organic Revenue are 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. Organic Revenue Growth excludes the impacts of foreign currency
changes, which we believe is a meaningful metric to evaluate our revenue
changes. 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.
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                                                         Three Months Ended June 30,                 Six Months Ended June 30,
                                                           2022                  2021                 2022                  2021
(in Millions)                                                    (unaudited)                                (unaudited)
Revenue                                              $      1,452.3        

$ 1,242.0 $ 2,803.1 $ 2,437.6 Costs and Expenses Costs of sales and services

                                   861.3              710.2                 1,639.4            1,393.4
Gross margin                                         $        591.0         

$ 531.8 $ 1,163.7 $ 1,044.2 Selling, general and administrative expenses

                  194.8              161.0                   383.3              335.5
Research and development expenses                              79.5               65.9                   151.3              139.9
Restructuring and other charges (income)                       80.8               16.3                    89.9               19.5

Total costs and expenses                             $      1,216.4          $   953.4          $      2,263.9          $ 1,888.3
Income from continuing operations before
non-operating pension and postretirement charges
(income), interest expense, net and income taxes (1) $        235.9         

$ 288.6 $ 539.2 $ 549.3


Non-operating pension and postretirement charges
(income)                                                        3.9                4.8                     8.2                9.6
Income from continuing operations before interest
expense, net and income taxes                        $        232.0         

$ 283.8 $ 531.0 $ 539.7 Interest expense, net

                                          35.3               32.6                    65.2               65.0
Income (loss) from continuing operations before
income taxes                                         $        196.7         

$ 251.2 $ 465.8 $ 474.7 Provision (benefit) for income taxes

                           54.7               33.4                    97.0               65.6
Income (loss) from continuing operations             $        142.0         

$ 217.8 $ 368.8 $ 409.1 Discontinued operations, net of income taxes

                  (10.8)             (14.6)                  (26.0)             (22.7)
Net income (loss) (GAAP)                             $        131.2         

$ 203.2 $ 342.8 $ 386.4 Adjustments to arrive at Adjusted EBITDA (Non-GAAP): Corporate special charges (income): Restructuring and other charges (income) (3) $ 80.8

$ 16.3 $ 89.9 $ 19.5 Non-operating pension and postretirement charges (income) (4)

                                                    3.9                4.8                     8.2                9.6
Total transaction-related charges (5)                             -                  -                       -                0.4
Discontinued operations, net of income taxes                   10.8               14.6                    26.0               22.7
Interest expense, net                                          35.3               32.6                    65.2               65.0
Depreciation and amortization                                  42.8               42.5                    85.2               85.1
Provision (benefit) for income taxes                           54.7               33.4                    97.0               65.6
Adjusted EBITDA (Non-GAAP) (2)                       $        359.5          $   347.4          $        714.3          $   654.3


____________________

(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 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 business for the
employment benefits provided to active employees.

(5)Represents transaction costs, costs for transitional employees, other acquired employees related costs, and transactional-related costs such as legal and professional third-party fees.

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                                              ADJUSTED EARNINGS RECONCILIATION
                                                    Three Months Ended June 30,               Six Months Ended June 30,
                                                      2022                 2021                 2022                2021
(in Millions)                                               (unaudited)                              (unaudited)
Net income (loss) attributable to FMC
stockholders (GAAP)                             $        134.2          $  

202.9 $ 341.6 $ 385.5


Corporate special charges (income), pre-tax (1)           84.7              21.1                   98.1              29.5
Income tax expense (benefit) on Corporate
special charges (income) (2)                              (0.9)             (4.7)                  (1.8)             (6.3)
Corporate special charges (income), net of
income taxes                                    $         83.8          $   16.4          $        96.3          $   23.2
Discontinued operations attributable to FMC
Stockholders, net of income taxes                         10.8              14.6                   26.0              22.7
Non-GAAP tax adjustments (3)                              16.3               1.3                   19.9               3.8
Adjusted after-tax earnings from continuing
operations attributable to FMC stockholders
(Non-GAAP)                                      $        245.1          $  235.2          $       483.8          $  435.2


____________________

(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 (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. 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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                     ORGANIC REVENUE GROWTH RECONCILIATION
                                                           Three Months Ended          Six Months Ended
                                                            June 30, 2022 vs.         June 30, 2022 vs.
                                                                  2021                      2021
Total Revenue Change (GAAP)                                              17  %                     15  %
Less: Foreign Currency Impact                                            (4) %                     (4) %
Organic Revenue Change (Non-GAAP)                                        21  %                     19  %


Results of Operations

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

Revenue

Three Months Ended June 30, 2022 vs. 2021


Revenue of $1,452.3 million increased $210.3 million, or approximately 17
percent, versus the prior year period. The increase was primarily driven by
volume and price increases, which benefited revenue by approximately 14 percent
and 7 percent, respectively. Foreign currency had an unfavorable impact of
approximately 4 percent on revenue. Excluding foreign currency impacts, revenue
increased approximately 21 percent during the quarter.

Six Months Ended June 30, 2022 vs. 2021


Revenue of $2,803.1 million increased $365.5 million, or approximately 15
percent, versus the prior year period. The increase was primarily driven by
volume and price increases, which benefited revenue by approximately 12 and 7
percent, respectively. Foreign currency had an unfavorable impact of
approximately 4 percent on revenue. Excluding foreign currency impacts, revenue
increased approximately 19 percent during the quarter.

                                                  Total Revenue by Region
                                                Three Months Ended June 30,                 Six Months Ended June 30,
(in Millions)                                     2022                  2021                 2022                  2021
North America                               $        364.6          $   290.5          $        754.4          $   591.5
Latin America                                        431.5              299.6                   697.4              502.8
Europe, Middle East & Africa (EMEA)                  280.8              272.9                   679.0              672.3
Asia                                                 375.4              379.0                   672.3              671.0
Total Revenue                               $      1,452.3          $ 1,242.0          $      2,803.1          $ 2,437.6


Three Months Ended June 30, 2022 vs. 2021


North America: Revenue increased approximately 26 percent versus the prior year
period. The increase was driven by demand for herbicides and insecticides,
particularly for application in fruits and vegetables, corn, and soy. Growth in
Canada was driven by the successful launch of Coragen® MaX insecticide.

Latin America: Revenue increased approximately 44 percent versus the prior year
period, or approximately 42 percent excluding foreign currency, driven by growth
in Brazil, Mexico and Argentina. Sales were strong for insecticides on soy,
corn, and cotton.

EMEA: Revenue increased approximately 3 percent, or approximately 15 percent
excluding foreign currency, driven by volume and price increases. Growth in the
region was driven by diamides, selective herbicides, and Plant Health. The
change in revenue from prior year was largely impacted by foreign currency
headwinds.

Asia: Revenue decreased approximately 1 percent versus the prior year period, or
increased approximately 4 percent excluding foreign currency. Price increases
were largely impacted by foreign currency headwinds.

Six Months Ended June 30, 2022 vs. 2021


North America: Revenue increased approximately 28 percent versus the prior year
period. The increase was driven by broad-based growth across a variety of crops
such as tree fruits, nuts, vines, corn, and soy. In the US, sales of biologicals
almost doubled, led by products for corn and soybean. In Canada our results were
driven by low channel inventory of insecticides,
                                       40
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strength in selective herbicides, and the successful launch of Coragen® MaX insecticide.


Latin America: Revenue increased approximately 39 percent versus the prior year
period, or approximately 35 percent excluding foreign currency, driven by volume
and price increases, particularly in Brazil, Argentina, and Mexico. Growth was
led by insecticides and herbicides across a variety of crops.

EMEA: Revenue increased approximately 1 percent, or approximately 13 percent
excluding foreign currency. Results were driven by strong pricing actions across
the region, demand for selective herbicides on cereals and other crops, and
demand for our diamides on corn and top fruit. The change in revenue from prior
year was largely impacted by foreign currency headwinds.

Asia: Revenue remained flat versus the prior year period, or increased approximately 5 percent excluding foreign currency, driven by price actions and strong performance in Australia and the ASEAN countries. This was offset by foreign currency headwinds and a reduction in rice acres in India.


For 2022, full-year revenue is expected to be in the range of approximately $5.5
billion to $5.7 billion, which represents approximately 11 percent growth at the
midpoint versus 2021.

Gross margin

Three Months Ended June 30, 2022 vs. 2021


Gross margin of $591.0 million increased $59.2 million, or approximately 11
percent versus the prior year period. The increase was primarily due to higher
revenues driven by increased volumes in North America and Latin America and
pricing gains, which more than offset cost inflation and foreign currency
headwinds. Gross margin percent of approximately 41 percent decreased compared
to approximately 43 percent in the prior year period, driven primarily by higher
costs.

Six Months Ended June 30, 2022 vs. 2021


Gross margin of $1,163.7 million increased $119.5 million, or approximately 11
percent versus the prior year period. The increase was primarily due to higher
revenues driven by increased volumes in North America and Latin America and
higher prices in all regions, partially offset by higher cost inflation and
foreign currency headwinds. Gross margin percent of approximately 42 percent
decreased compared to approximately 43 percent in the prior year period, driven
primarily by higher costs.

Selling, general and administrative expenses

Three Months Ended June 30, 2022 vs. 2021

Selling, general and administrative expenses of $194.8 million increased $33.8 million, or 21 percent, versus the prior year period. Spending increased globally as a result of revenue growth, investments in growth programs, and inflation.

Six Months Ended June 30, 2022 vs. 2021


Selling, general and administrative expenses of $383.3 million increased $47.8
million, or 14 percent, versus the prior year period. Spending increased
globally as a result of our revenue growth, investments in growth programs, and
inflation.

Research and development expenses

Three Months Ended June 30, 2022 vs. 2021

Research and development expenses of $79.5 million increased $13.6 million or 21 percent. In the current year period we increased spending on research and development projects due to the timing of project expenses.

Six Months Ended June 30, 2022 vs. 2021


Research and development expenses of $151.3 million increased $11.4 million or 8
percent versus the prior year period. As noted above, the increase in research
and development expenditures is related to increased spending in proportion to
our overall growth.

Depreciation and amortization

Three Months Ended June 30, 2022 vs. 2021

Depreciation and amortization of $42.8 million remained flat as compared to the prior year period of $42.5 million.

Six Months Ended June 30, 2022 vs. 2021

Depreciation and amortization of $85.2 million remained flat as compared to the prior year period of $85.1 million.

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Interest expense, net

Three Months Ended June 30, 2022 vs. 2021


Interest expense, net of $35.3 million increased compared to the prior year
period of $32.6 million. The increase was primarily driven by higher short-term
interest rates and higher debt balances, partially offset by benefits of the
refinancing activity completed in the fourth quarter of 2021.

Six Months Ended June 30, 2022 vs. 2021

Interest expense, net of $65.2 million remained flat compared to the prior year period of $65.0 million.

Corporate special charges (income)

Restructuring and other charges (income)

                                                        Three Months Ended June 30,            Six Months Ended June 30,
(in Millions)                                              2022              2021                2022                 2021
Restructuring charges                                  $     3.4          $  10.5          $         14.6          $  16.8
Other charges (income), net                                 77.4              5.8                    75.3              2.7

Total restructuring and other charges (income) $ 80.8 $

16.3 $ 89.9 $ 19.5

Three Months Ended June 30, 2022 vs. 2021

Restructuring charges in 2022 of $3.4 million relate to employee separation costs and other exit costs associated with various restructuring initiatives across the globe. During the three month period ended June 30, 2022, these primarily relate to our regional realignment activities.


Restructuring charges in 2021 of $10.5 million consist of $7.2 million of
charges related to regional realignment activities, including severance and
employee relocation costs, and $1.7 million associated with the integration of
the DuPont Crop Protection Business which was completed during the second
quarter of 2020 except for certain in-flight initiatives, including severance,
accelerated depreciation on certain fixed assets, and other costs (benefits).
Additionally, there were other miscellaneous restructuring charges of $1.6
million

Other charges (income), net in 2022 of $77.4 million is primarily the result of
our decision to cease operations and business in Russia during the second
quarter of 2022. As a result, we recorded a charge of $76.1 million during the
three months ended June 30, 2022 which consisted primarily of noncash asset
write off charges. Refer to Note 9 for additional information.

In 2021, we had charges of $5.8 million which primarily consists of charges related to environmental sites.

Six Months Ended June 30, 2022 vs. 2021


Restructuring charges in 2022 of $14.6 million consist of $8.9 million in fixed
asset and other charges resulting from the closure of a manufacturing site
during the period. Restructuring charges also include an additional $5.7 million
in charges from various restructuring initiatives across the globe.

Restructuring charges in 2021 of $16.8 million consist of $7.9 million of
charges associated with regional realignment activities, including severance and
employee relocation costs, and $5.0 million related to the integration of the
DuPont Crop Protection Business which was completed during the second quarter of
2020 except for certain in-flight initiatives. Additionally, there were other
miscellaneous restructuring charges of $3.9 million.

Other charges (income), net in 2022 of $75.3 million is primarily the result of
our decision to cease operations and business in Russia during the second
quarter of 2022. As a result, we recorded a charge of approximately
$76.1 million during the six months ended June 30, 2022 which consisted
primarily of noncash asset write off charges. Other charges (income), net in
2021 of 2.7 million primarily consists of in-process research and development
charges.

Non-operating pension and postretirement charges (income)


Charges for the three months ended June 30, 2022 were $3.9 million compared to
charges of $4.8 million for the three months ended June 30, 2021. Charges for
the six months ended June 30, 2022 were $8.2 million compared to charges of $9.6
million for the six months ended June 30, 2021. The decrease in non-operating
pension and postretirement charges (income) is attributable to higher expected
return on plan assets and lower amortization of net actuarial losses. These
decreases were partially offset by higher interest costs due to an increase in
rates. As previously disclosed, we continued to use the smoothed market related
value of assets (MRVA) as opposed to the actual fair value of plan assets in the
determination of pension expense. This continued approach will create some
volatility in our non-operating periodic pension cost since our qualified
pension plan is 100 percent fixed income securities.
                                       42
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Provision for income taxes

Three Months Ended June 30, 2022 vs. 2021


Provision for income taxes for the three months ended June 30, 2022 was $54.7
million resulting in an effective tax rate of 27.8 percent. Provision for income
taxes for the three months ended June 30, 2021 was $33.4 million resulting in an
effective tax rate of 13.3 percent. The increase in the effective tax rate for
the three months ended June 30, 2022 compared to the three months ended June 30,
2021 was driven by the factors shown in the table below as well as the impact of
certain provisions of the Tax Cuts and Jobs Act of 2017 that became effective in
2022 and geographic earnings mix.

                                                                         Three Months Ended June 30,
                                                         2022                                                   2021
                                       Income      Tax Provision    Effective Tax             Income      Tax Provision    Effective Tax
(in Millions)                        (Expense)       (Benefit)          Rate                (Expense)       (Benefit)          Rate
GAAP - Continuing operations       $     196.7    $       54.7              27.8  %       $     251.2    $       33.4              13.3  %
Corporate special charges (income)
(1)                                       84.7             0.9                                   21.1             4.7
Tax adjustments (2)                                      (16.3)                                                  (1.3)
Non-GAAP - Continuing operations   $     281.4    $       39.3              14.0  %       $     272.3    $       36.8              13.5  %


_______________

(1)  Primarily our decision to cease operations and business in Russia during
the three months ended June 30, 2022. As a result, we recorded a pre-tax charge
of $76.1 million during the three months ended June 30, 2022 with minimal tax
benefit.
(2)  Refer to Note 3 of the Adjusted Earnings Reconciliation table within this
section of this Form 10-Q for an explanation of tax adjustments.

Six Months Ended June 30, 2022 vs. 2021


Provision for income taxes for the six months ended June 30, 2022 was $97.0
million resulting in an effective tax rate of 20.8 percent. Provision for income
taxes for the six months ended June 30, 2021 was $65.6 million resulting in an
effective tax rate of 13.8 percent. The increase in the effective tax rate for
the six months ended June 30, 2022 compared to the six months ended June 30,
2021 was driven by the factors shown in the table below as well as the impact of
certain provisions of the Tax Cuts and Jobs Act of 2017 that became effective in
2022 and geographic earnings mix.
                                                                           Six Months Ended June 30,
                                                          2022                                                   2021
                                        Income      Tax Provision    Effective Tax             Income      Tax Provision    Effective Tax
(in Millions)                         (Expense)       (Benefit)          Rate                (Expense)       (Benefit)          Rate
GAAP - Continuing operations              465.8            97.0              20.8  %             474.7            65.6              13.8  %
Corporate special charges (income)
(1)                                        98.1             1.8                                   29.5             6.3
Tax adjustments (2)                                       (19.9)                                                  (3.8)
Non-GAAP - Continuing operations    $     563.9    $       78.9              14.0  %       $     504.2    $       68.1              13.5  %


_______________

(1)  Primarily our decision to cease operations and business in Russia during
the six months ended June 30, 2022. As a result, we recorded a pre-tax charge of
$76.1 million during the six months ended June 30, 2022 with minimal tax
benefit.
(2)  Refer to Note 3 of the Adjusted Earnings Reconciliation table within this
section of this Form 10-Q for an explanation of tax adjustments.


Discontinued operations, net of income taxes

Our discontinued operations include provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities.

Three Months Ended June 30, 2022 vs. 2021


Discontinued operations, net of income taxes represented a loss of $10.8 million
for the three months ended June 30, 2022 compared to a loss of $14.6 million for
the three months ended June 30, 2021. The loss during both the three months
ended June 30, 2022 and 2021 was primarily due to adjustments related to the
retained liabilities from our previously discontinued operations.
                                       43
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Six Months Ended June 30, 2022 vs. 2021


Discontinued operations, net of income taxes represented a loss of $26 million
for the six months ended June 30, 2022 compared to a loss of $22.7 million for
the six months ended June 30, 2021. The loss during both the six months ended
June 30, 2022 and 2021 was primarily due to adjustments related to the retained
liabilities from our previously discontinued operations.


Net income (loss)

Three Months Ended June 30, 2022 vs. 2021


Net income (loss) decreased to $131.2 million from income of $203.2 million in
the prior year period. Restructuring and other charges increased approximately
$65 million as compared to the prior period, primarily due to the charge
associated with the exit of our Russia operations. Additionally, selling,
general and administrative costs and provision for income taxes increased
approximately $34 million and $21 million, respectively. This was partially
offset by an increase in gross margin of approximately $59 million from higher
volume.

Six Months Ended June 30, 2022 vs. 2021


Net income (loss) decreased to $342.8 million from income of $386.4 million in
the prior year period. This decrease in net income was primarily due to an
increase in restructuring and other charges of approximately $70 million,
largely attributable to our exit from Russia operations as mentioned above, as
well as an increase in selling, general and administrative costs and provision
for income taxes of approximately $48 million and $31 million, respectively, as
compared to the prior period. This was partially offset by an increase in gross
margin of approximately $120 million from higher volume.

The only difference between Net income (loss) and Net income (loss) attributable to FMC stockholders is noncontrolling interest, which period over period is immaterial.



Adjusted EBITDA (Non-GAAP)

The Adjusted EBITDA amounts discussed below for three and six months ended June
30, 2022 and 2021 are reconciled to Net Income (loss) within this Form 10-Q.
Refer to our Overview under the section titled   "Results of Operations"
above.

Three Months Ended June 30, 2022 vs. 2021


Adjusted EBITDA of $359.5 million increased $12.1 million, or approximately 3
percent versus the prior year period. The increase was mainly driven by higher
pricing in all regions and volume growth which accounted for approximately 24
percent and 29 percent increases, respectively. These pricing actions were taken
to offset the sustained cost inflation we are experiencing across our supply
chain. Higher costs and foreign currencies fluctuations had an unfavorable
impact of approximately 43 percent and 7 percent, respectively, on adjusted
EBITDA.

Six Months Ended June 30, 2022 vs. 2021


Adjusted EBITDA of $714.3 million increased $60.0 million, or approximately 9
percent versus the prior year period. The increase was mainly driven by higher
pricing in all regions and volume growth which accounted for approximately 27
percent and 20 percent increases, respectively. These pricing actions were taken
to offset the sustained cost inflation we are experiencing across our supply
chain. Higher costs, including raw material, energy, logistics, packaging, and
labor costs, and foreign currencies fluctuations had an unfavorable impact of
approximately 32 percent and 6 percent, respectively, on adjusted EBITDA.

For 2022, full-year Adjusted EBITDA is expected to be in the range of $1.36
billion to $1.44 billion, which represents approximately 6 percent growth at the
midpoint versus 2021. Although we provide a forecast for Adjusted EBITDA, 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. See
Note 1 to our 2022 Outlook Update within this section of the Form 10-Q.
                                       44
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LIQUIDITY AND CAPITAL RESOURCES


As a global agricultural sciences company, we require cash primarily for
seasonal working capital needs, capital expenditures, and return of capital to
shareholders. We plan to meet these liquidity needs through available cash, cash
generated from operations, commercial paper issuances and borrowings under our
committed revolving credit facility as well as other liquidity facilities, and
in certain instances access to debt capital markets. We believe our strong
financial standing and credit ratings will ensure adequate access to the debt
capital markets on favorable conditions.

Cash


Cash and cash equivalents at June 30, 2022 and December 31, 2021, were $591.5
million and $516.8 million, respectively. Of the cash and cash equivalents
balance at June 30, 2022, $562.0 million was held by our foreign subsidiaries.
During the third quarter of 2021, we established plans to repatriate cash from
certain foreign subsidiaries with minimal tax on a go forward basis. Other cash
held by foreign subsidiaries is generally used to finance subsidiaries'
operating activities and future foreign investments.

Outstanding debt


At June 30, 2022, we had total debt of $3,886.8 million as compared to $3,172.5
million at December 31, 2021. Total debt included $2,731.7 million and $2,731.7
million of long-term debt (excluding current portions of $89.2 million and $84.5
million) at June 30, 2022 and December 31, 2021, respectively. Short-term debt
and current portion of long-term debt, which consists of short-term foreign
borrowings, commercial paper borrowings, and the current portion of long-term
debt, increased from $440.8 million at December 31, 2021 to $1,155.1 million at
June 30, 2022. See Note 10 in the condensed consolidated financial statements
included in this Form 10-Q for further details. As of June 30, 2022, we were in
compliance with all of our debt covenants. We remain committed to solid
investment grade credit metrics, and expect full-year average leverage to be in
line with this commitment in 2022.

Access to credit and future liquidity and funding needs


At June 30, 2022, our remaining borrowing capacity under our credit facility was
$875.6 million. See Note 10 in the condensed consolidated financial statements
included in this Form 10-Q for discussion of the amendments to the Revolving
Credit Facility and Term Loan Agreements undertaken in the quarter. Our
commercial paper program allows us to borrow at rates generally more favorable
than those available under our credit facility. At June 30, 2022, we had $964.4
million commercial paper borrowings under the commercial paper program. At June
30, 2022, the average effective interest rate on the borrowings was 2.15
percent. Our commercial paper balances fluctuate from year to year depending on
working capital needs.

Working Capital Initiatives

The Company works with suppliers to optimize payment terms and conditions on
accounts payable to improve working capital and cash flows. The Company offers
to a select group of suppliers a voluntary Supply Chain Finance ("SCF") program
with a global financial institution. The suppliers, at their sole discretion,
may sell their receivables to the financial institution based on terms
negotiated between them. Our obligations to our suppliers are not impacted by
our suppliers' decisions to sell under these arrangements. Agreements under
these supplier financing programs are recorded within Accounts payable in our
Consolidated Balance Sheets and the associated payments are included in
operating activities within our Consolidated Statements of Cash Flows. We do not
believe that changes in the availability of the supply chain finance program
would have a significant impact on our liquidity.

From time to time, the Company may sell receivables on a non-recourse basis to
third-party financial institutions. These sales are normally driven by specific
market conditions, including, but not limited to, foreign exchange environments,
customer credit management, as well as other factors where the receivables may
lay.

We account for these transactions as sales which result in a reduction in
accounts receivables because the agreements transfer effective control and risk
related to the receivables to the buyers. The net cash proceeds received are
presented within cash provided by operating activities within our Consolidated
Statements of Cash Flows. The cost of factoring these accounts receivables is
recorded as an expense within the Consolidated Statements of Income and has been
inconsequential during each reporting period.


                                       45

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