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FMC CORPORATION

(FMC)
  Report
Delayed Nyse  -  04:03:13 2023-02-07 pm EST
126.13 USD    0.00%
05:03pFmc : Q4 Earnings Snapshot
AQ
04:42pEarnings Flash (FMC) FMC CORPORATION Reports Q4 EPS $2.37, vs. Street Est of $2.34
MT
04:42pEarnings Flash (FMC) FMC CORPORATION Reports Q4 EPS $2.37, vs. Street Est of $2.34
MT
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FMC CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

11/02/2022 | 02:11pm EST

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 products, 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 did not allow us to operate and grow
our business in Russia. We recorded exit charges of approximately $76 million
during the second quarter. 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.

Third Quarter 2022 Highlights

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


•Revenue of $1,377.2 million for the three months ended September 30, 2022
increased $183.2 million or approximately 15 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 21 percent, sales in Latin America increased
approximately 35 percent, sales in Europe, Middle East and Africa decreased
approximately 12 percent, and sales in Asia decreased approximately 6 percent as
foreign currency headwinds more than offset pricing gains in the region. The
increase was mostly driven by volume growth primarily in Latin America and North
America and price increases across all regions. Excluding foreign currency
impacts, revenue increased 19 percent during the quarter.

•Our gross margin of $477.5 million decreased versus the prior year quarter by
$34.0 million driven by higher cost of goods sold, primarily resulting from
inflation, and foreign currency headwinds. These were partially offset by higher
volumes in Latin America and North America and higher prices in all regions.
Gross margin percent of approximately 35 percent decreased compared to
approximately 43 percent in the prior year period, driven by higher input costs
and foreign currency headwinds.

•Selling, general and administrative expenses decreased from $183.5 million to
$179.4 million, or approximately 2 percent. The decrease in selling, general,
and administrative expenses is a result of foreign currency gains.
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•Research and development expenses of $78.5 million remained relatively flat compared to the previous year.


•Net income (loss) attributable to FMC stockholders decreased from $159.7
million for the three months ended September 30, 2021 to $121.0 million for the
three months ended September 30, 2022 which represents a decrease of $38.7
million, or approximately 24 percent. The lower results were driven by lower
gross margin and an increase in the provision for income taxes. This was
partially offset by lower restructuring and other charges. Adjusted after-tax
earnings from continuing operations attributable to FMC stockholders of $155.6
million decreased compared to the prior year amount of $183.9 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 $190 million was paid at closing on July 19, 2022. See
Note 5 for additional information.

During the quarter we made certain accounting policy changes for inventory costing and net periodic benefit cost. The effects of these changes in accounting principle have been retrospectively applied to all periods presented and as such certain prior period amounts have been adjusted. See Note 1 for further information.

2022 Outlook Update


With continued strength in market demand and successful pricing actions
offsetting cost increases, we are raising our full-year 2022 revenue guidance to
be in the range of approximately $5.6 billion to $5.8 billion, up approximately
13 percent at the midpoint versus 2021. We are narrowing the full year adjusted
EBITDA(1) range to $1.37 billion to $1.43 billion, representing 7 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 $7.10 to $7.60 per diluted
share(1), representing a year over year increase of 7 percent at the midpoint.
Full-year earnings growth drivers include pricing actions and strong volumes,
partially offset by foreign currency impacts. 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 September 30,       Nine Months Ended September 30,
                                                         2022                2021               2022                2021
(in Millions)                                                  (unaudited)                            (unaudited)
Revenue                                              $  1,377.2          $ 1,194.0          $  4,180.3          $ 3,631.6
Costs and Expenses
Costs of sales and services                               899.7              682.5             2,539.1            2,078.4
Gross margin                                         $    477.5          $   511.5          $  1,641.2          $ 1,553.2
Selling, general and administrative expenses              179.4              183.5               562.7              519.0
Research and development expenses                          78.5               79.5               229.8              219.4
Restructuring and other charges (income)                    9.0               32.8                98.9               52.3

Total costs and expenses                             $  1,166.6          $   978.3          $  3,430.5          $ 2,869.1
Income from continuing operations before
non-operating pension and postretirement charges
(income), interest expense, net and income taxes (1) $    210.6          $  

215.7 $ 749.8 $ 762.5


Non-operating pension and postretirement charges
(income)                                                   (1.7)               1.5                 6.5                3.9
Income from continuing operations before interest
expense, net and income taxes                        $    212.3          $   214.2          $    743.3          $   758.6
Interest expense, net                                      41.8               33.1               107.0               98.1
Income (loss) from continuing operations before
income taxes                                         $    170.5          $   181.1          $    636.3          $   660.5
Provision (benefit) for income taxes                       36.0                9.2               133.0               75.8
Income (loss) from continuing operations             $    134.5          $   171.9          $    503.3          $   584.7
Discontinued operations, net of income taxes              (16.2)              (9.7)              (42.2)             (32.4)
Net income (loss) (GAAP)                             $    118.3          $   162.2          $    461.1          $   552.3
Adjustments to arrive at Adjusted EBITDA (Non-GAAP):
Corporate special charges (income):
Restructuring and other charges (income) (3)         $      9.0          $    32.8          $     98.9          $    52.3
Non-operating pension and postretirement charges
(income) (4)                                               (1.7)               1.5                 6.5                3.9
Total transaction-related charges (5)                         -                  -                   -                0.4
Discontinued operations, net of income taxes               16.2                9.7                42.2               32.4
Interest expense, net                                      41.8               33.1               107.0               98.1
Depreciation and amortization                              41.4               43.4               126.6              128.5
Provision (benefit) for income taxes                       36.0                9.2               133.0               75.8
Adjusted EBITDA (Non-GAAP) (2)                       $    261.0          $   291.9          $    975.3          $   943.7


____________________

(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 September         Nine Months Ended September
                                                                   30,                                 30,
                                                          2022              2021              2022              2021
(in Millions)                                                  (unaudited)                         (unaudited)

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

                                                $   121.0          $ 

159.7 $ 462.6 $ 548.9


Corporate special charges (income), pre-tax (1)             7.3             34.3              105.4             56.6
Income tax expense (benefit) on Corporate special
charges (income) (2)                                       (1.0)            (3.3)              (2.8)            (8.1)
Corporate special charges (income), net of income
taxes                                                 $     6.3          $  31.0          $   102.6          $  48.5
Discontinued operations attributable to FMC
Stockholders, net of income taxes                          16.2              9.7               42.2             32.4
Non-GAAP tax adjustments (3)                               12.1            (16.5)              32.0            (12.7)
Adjusted after-tax earnings from continuing
operations attributable to FMC stockholders
(Non-GAAP)                                            $   155.6          $ 183.9          $   639.4          $ 617.1


____________________

(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            Nine Months Ended
                                                           September 30, 2022 vs.       September 30, 2022 vs.
                                                                    2021                         2021
Total Revenue Change (GAAP)                                                 15  %                        15  %
Less: Foreign Currency Impact                                               (4) %                        (4) %
Organic Revenue Change (Non-GAAP)                                           19  %                        19  %


Results of Operations

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

Revenue

Three Months Ended September 30, 2022 vs. 2021


Revenue of $1,377.2 million increased $183.2 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 percent
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.

Nine Months Ended September 30, 2022 vs. 2021


Revenue of $4,180.3 million increased $548.7 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.

                                              Total Revenue by Region
                                            Three Months Ended September 30,       Nine Months Ended September 30,
(in Millions)                                   2022                2021               2022                2021
North America                               $    241.2          $   199.8          $    995.6          $   791.3
Latin America                                    697.1              516.9             1,394.5            1,019.7
Europe, Middle East & Africa (EMEA)              150.7              171.4               829.7              843.7
Asia                                             288.2              305.9               960.5              976.9
Total Revenue                               $  1,377.2          $ 1,194.0          $  4,180.3          $ 3,631.6


Three Months Ended September 30, 2022 vs. 2021


North America: Revenue increased approximately 21 percent versus the prior year
period. The increase was driven by strong pricing actions. Fungicides grew
rapidly in the quarter, especially on corn. Sales in the Midwest helped offset
the impact of drought conditions in the West.

Latin America: Revenue increased approximately 35 percent versus the prior year period, driven by growth in Brazil and Argentina. Sales were strong for herbicides and insecticides on soy and corn.


EMEA: Revenue decreased approximately 12 percent, or increased approximately 1
percent excluding foreign currency. The change in revenue from prior year was
largely impacted by foreign currency headwinds. This was partially offset by
pricing actions and growth in Germany and Central European countries. Diamides
grew in fruits and vegetables and oil seed rape. Additionally, herbicides grew
on cereals.

Asia: Revenue decreased approximately 6 percent versus the prior year period, or
increased approximately 2 percent excluding foreign currency. Foreign currency
headwinds and weather conditions, including floods in Pakistan, more than offset
price increases and strong demand for new products.

Nine Months Ended September 30, 2022 vs. 2021


North America: Revenue increased approximately 26 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, growth was driven by
sales of
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herbicides, insecticides, and biologicals. In Canada our results were driven by
low channel inventory of insecticides, strength in selective herbicides, and the
successful launch of Coragen® MaX insecticide.

Latin America: Revenue increased approximately 37 percent versus the prior year
period, or approximately 35 percent excluding foreign currency, driven by volume
and price increases, particularly in Brazil and Argentina. Growth was led by
insecticides and herbicides across a variety of crops.

EMEA: Revenue decreased approximately 2 percent, or increased approximately 10
percent excluding foreign currency. The change in revenue from prior year was
largely impacted by foreign currency headwinds. 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 fruits and vegetables.

Asia: Revenue decreased approximately 2 percent, or increased approximately 4
percent excluding foreign currency. The change in revenue from prior year was
impacted by foreign currency headwinds, a reduction in rice acres in India, and
weather conditions. These impacts were partially offset by price actions and
strong performance in Australia.

For 2022, full-year revenue is expected to be in the range of approximately $5.6
billion to $5.8 billion, which represents approximately 13 percent growth at the
midpoint versus 2021.

Gross margin

Three Months Ended September 30, 2022 vs. 2021


Gross margin of $477.5 million decreased $34.0 million, or approximately 7
percent versus the prior year period. The decrease was primarily due to cost
inflation and foreign currency headwinds, which were partially offset by higher
revenues driven by increased volumes in Latin America and North America and
pricing gains. Gross margin percent of approximately 35 percent decreased
compared to approximately 43 percent in the prior year period, driven primarily
by higher input costs and foreign currency headwinds.

Nine Months Ended September 30, 2022 vs. 2021


Gross margin of $1,641.2 million increased $88.0 million, or approximately 6
percent versus the prior year period. The increase was primarily due to higher
revenues driven by increased volumes in Latin America and North America and
higher prices in all regions, partially offset by higher cost inflation and
foreign currency headwinds. Gross margin percent of approximately 39 percent
decreased compared to approximately 43 percent in the prior year period, driven
primarily by higher input costs.

Selling, general and administrative expenses

Three Months Ended September 30, 2022 vs. 2021

Selling, general and administrative expenses of $179.4 million decreased $4.1 million, or 2 percent, versus the prior year period as a result of foreign currency gains.

Nine Months Ended September 30, 2022 vs. 2021


Selling, general and administrative expenses of $562.7 million increased $43.7
million, or 8 percent, versus the prior year period. Spending increased globally
as a result of our revenue growth, investments in growth programs, labor cost
increases, and inflation.

Research and development expenses

Three Months Ended September 30, 2022 vs. 2021

Research and development expenses of $78.5 million remained relatively flat compared to the previous year.

Nine Months Ended September 30, 2022 vs. 2021


Research and development expenses of $229.8 million increased $10.4 million or 5
percent versus the prior year period. The increase in research and development
expenditures is related to continued investment in our new active ingredient
pipeline as well as inflation and labor cost increases.

Depreciation and amortization

Three Months Ended September 30, 2022 vs. 2021

Depreciation and amortization of $41.4 million decreased $2.0 million or 5 percent as compared to the prior year period of $43.4 million.

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Nine Months Ended September 30, 2022 vs. 2021

Depreciation and amortization of $126.6 million decreased $1.9 million or 1 percent as compared to the prior year period of $128.5 million.

Interest expense, net

Three Months Ended September 30, 2022 vs. 2021


Interest expense, net of $41.8 million increased $8.7 million compared to the
prior year period of $33.1 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.

Nine Months Ended September 30, 2022 vs. 2021


Interest expense, net of $107.0 million increased $8.9 million compared to the
prior year period of $98.1 million. The increase was primarily driven by higher
short term interest rates and higher debt balances, partially offset by the
benefits of the refinancing activity completed in the fourth quarter of 2021.

Corporate special charges (income)

Restructuring and other charges (income)

                                                        Three Months Ended September         Nine Months Ended September
                                                                     30,                                 30,
(in Millions)                                               2022              2021              2022              2021
Restructuring charges                                   $     2.0          $   2.1          $    16.6          $  18.9
Other charges (income), net                                   7.0             30.7               82.3             33.4

Total restructuring and other charges (income) $ 9.0 $ 32.8 $ 98.9 $ 52.3

Three Months Ended September 30, 2022 vs. 2021


Restructuring charges in 2022 of $2.0 million relate to employee separation
costs and other exit costs associated with various restructuring initiatives
across the globe. During the three month period ended September 30, 2022, these
primarily relate to our regional realignment activities.

Restructuring charges in 2021 of $2.1 million consist of $1.0 million of charges
related to regional realignment activities, including severance and employee
relocation costs, and $0.8 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 $0.3 million.

Other charges (income), net in 2022 of $7.0 million is primarily the result of $3.4 million of environmental charges.


Other charges, net in 2021 of $30.7 million primarily consists of $23.8 million
charges related to the establishment of reserves for certain historical India
indirect tax matters that were triggered during the period.

Nine Months Ended September 30, 2022 vs. 2021


Restructuring charges in 2022 of $16.6 million consist of $9.5 million in fixed
asset and other charges resulting from the closure of a manufacturing site
during the period. Restructuring charges also include an additional $7.1 million
in charges from various restructuring initiatives across the globe.

Restructuring charges in 2021 of $18.9 million consist of $8.9 million of
charges associated with regional realignment activities, including severance and
employee relocation costs, and $5.8 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 $4.2 million.

Other charges (income), net in 2022 of $82.3 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 nine months ended September 30, 2022 which consisted
primarily of noncash asset write off charges. Other charges (income), net also
includes charges related to environmental sites of $1.0 million and other
miscellaneous charges of $5.2 million.

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Other charges, net in 2021 of $33.4 million primarily consists of $23.8 million
charges related to the establishment of reserves for certain historical India
indirect tax matters that were triggered during the period. Additionally, there
were charges related to environmental sites of $3.3 million.

Non-operating pension and postretirement charges (income)


Income for the three months ended September 30, 2022 was $1.7 million compared
to charges of $1.5 million for the three months ended September 30, 2021.
Charges for the nine months ended September 30, 2022 were $6.5 million compared
to charges of $3.9 million for the nine months ended September 30, 2021. The
increase in non-operating pension and postretirement charges (income) is
attributable to lower expected return on plan assets and higher interest costs
due to an increase in rates. As previously disclosed, we changed our method of
accounting to the fair value approach for our liability-hedging asset class,
which does not involve deferring the impact of excess plan asset gains or losses
in the determination of these two components of net periodic benefit cost. This
class of assets is comprised solely of fixed income securities and therefore,
provides a natural hedge (liability-hedging assets) against the changes in the
recorded amount of net periodic benefit cost. No change is being made to the
accounting principle for the other classes of pension assets; however our U.S.
qualified pension plan reached fully funded status during 2018 and since that
point the portfolio has been invested 100 percent in fixed income securities and
cash.


Provision for income taxes

Three Months Ended September 30, 2022 vs. 2021


Provision for income taxes for the three months ended September 30, 2022 was
$36.0 million resulting in an effective tax rate of 21.1 percent. Provision for
income taxes for the three months ended September 30, 2021 was $9.2 million
resulting in an effective tax rate of 5.1 percent. The increase in the effective
tax rate from GAAP continuing operations for the three months ended September
30, 2022 compared to the three months ended September 30, 2021 was driven by the
factors shown in the table below, the impact of certain provisions of the Tax
Cuts and Jobs Act of 2017 that became effective in 2022, and geographic earnings
mix. Our effective income tax rate from GAAP continuing operations for the three
months ended September 30, 2021 was impacted by a $17.7 million tax reserve
release related to our domestic operations.

                                                                        

Three Months Ended September 30,

                                                           2022                                                     2021
                                                       Tax Provision    Effective Tax             Income      Tax Provision    Effective Tax
(in Millions)                       Income (Expense)     (Benefit)          Rate                (Expense)       (Benefit)          Rate

GAAP - Continuing operations $ 170.5 $ 36.0

     21.1  %       $     181.1    $        9.2               5.1  %
Corporate special charges (income)          7.3                1.0                                   34.3             3.3
Tax adjustments (1)                                          (12.1)                                                  16.5

Non-GAAP - Continuing operations $ 177.8 $ 24.9

     14.0  %       $     215.4    $       29.0              13.5  %


_______________

(1) Refer to Note 3 of the Adjusted Earnings Reconciliation table within this section of this Form 10-Q for an explanation of tax adjustments.

Nine Months Ended September 30, 2022 vs. 2021


Provision for income taxes for the nine months ended September 30, 2022 was
$133.0 million resulting in an effective tax rate of 20.9 percent. Provision for
income taxes for the nine months ended September 30, 2021 was $75.8 million
resulting in an effective tax rate of 11.5 percent. The increase in the
effective tax rate for the nine months ended September 30, 2022 compared to the
nine months ended September 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, our decision to cease operations in
Russia, and geographic earnings mix. Our effective income tax rates from
continuing operations for the nine months ended September 30, 2021 were impacted
by a $17.7 million tax reserve release related to our domestic operations.


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Nine Months Ended September 30,

                                                             2022                                                      2021
                                                          Tax Provision    Effective Tax             Income      Tax Provision    Effective Tax
(in Millions)                         Income (Expense)      (Benefit)          Rate                (Expense)       (Benefit)          Rate
GAAP - Continuing operations        $           636.3    $      133.0              20.9  %       $     660.5    $       75.8              11.5  %
Corporate special charges (income)
(1)                                             105.4             2.8                                   56.6             8.1
Tax adjustments (2)                                             (32.0)                                                  12.7
Non-GAAP - Continuing operations    $           741.7    $      103.8              14.0  %       $     717.1    $       96.6              13.5  %


_______________

(1)  Primarily our decision to cease operations and business in Russia during
the nine months ended September 30, 2022. As a result, we recorded a pre-tax
charge of $76.1 million during the nine months ended September 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 September 30, 2022 vs. 2021


Discontinued operations, net of income taxes represented a loss of $16.2 million
for the three months ended September 30, 2022 compared to a loss of $9.7 million
for the three months ended September 30, 2021. The loss during both the three
months ended September 30, 2022 and 2021 was primarily due to adjustments
related to the retained liabilities from our previously discontinued operations.

Nine Months Ended September 30, 2022 vs. 2021


Discontinued operations, net of income taxes represented a loss of $42.2 million
for the nine months ended September 30, 2022 compared to a loss of $32.4 million
for the nine months ended September 30, 2021. The loss during both the nine
months ended September 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 September 30, 2022 vs. 2021


Net income (loss) decreased to $118.3 million from income of $162.2 million in
the prior year period primarily from a decrease in gross margin of approximately
$34.0 million and an increase of $26.8 million to the provision for income
taxes. This was partially offset by a decrease of $23.8 million to restructuring
and other charges.

Nine Months Ended September 30, 2022 vs. 2021


Net income (loss) decreased to $461.1 million from income of $552.3 million in
the prior year period. This decrease in net income was primarily due to an
increase in restructuring and other charges of approximately $47 million, an
increase in selling, general and administrative costs of approximately $44
million, and an increase in provision for income taxes of $57 million,
respectively, as compared to the prior period. This was partially offset by an
increase in gross margin of approximately $88 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.

                                       55
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Adjusted EBITDA (Non-GAAP)


The Adjusted EBITDA amounts discussed below for three and nine months ended
September 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 September 30, 2022 vs. 2021


Adjusted EBITDA of $261.0 million decreased $30.9 million, or approximately 11
percent versus the prior year period. The decrease was mainly driven by higher
costs and foreign currency fluctuations which had an unfavorable impact of
approximately 58 percent and 9 percent, respectively, on adjusted EBITDA. These
were partially offset by higher pricing in all regions and volume growth which
accounted for approximately 29 percent and 27 percent increases, respectively.
These pricing actions were taken to offset the sustained cost inflation we are
experiencing across our supply chain.

Nine Months Ended September 30, 2022 vs. 2021


Adjusted EBITDA of $975.3 million increased $31.6 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 28
percent and 22 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 40 percent and 7 percent, respectively, on adjusted EBITDA.

For 2022, full-year Adjusted EBITDA is expected to be in the range of $1.37
billion to $1.43 billion, which represents approximately 7 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.
                                       56
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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 September 30, 2022 and December 31, 2021, were $363.8 million and $516.8 million, respectively. Of the cash and cash equivalents balance at September 30, 2022, $330.5 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 September 30, 2022, we had total debt of $3,558.8 million as compared to
$3,172.5 million at December 31, 2021. Total debt included $2,732.5 million and
$2,731.7 million of long-term debt (excluding current portions of $85.9 million
and $84.5 million) at September 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
$826.3 million at September 30, 2022. See Note 10 in the condensed consolidated
financial statements included in this Form 10-Q for further details. As of
September 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 September 30, 2022, our remaining borrowing capacity under our credit
facility was $1,179.7 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 September 30,
2022, we had $660.3 million commercial paper borrowings under the commercial
paper program. At September 30, 2022, the average effective interest rate on the
borrowings was 3.52 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
condensed consolidated balance sheets and the associated payments are included
in operating activities within our condensed 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. See Note 6 for more information on receivables factoring.




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