UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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 FORM 10-K

_______________________________________________________________________

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2020

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File Number 1-2376

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FMC CORPORATION

(Exact name of registrant as specified in its charter)

__________________________________________________________________________ 

Delaware			94-0479804
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
2929 Walnut Street	Philadelphia	Pennsylvania	19104
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: 215-299-6000

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Securities registered pursuant to Section 12(b) of the Act: 

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.10 per share	FMC	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
			☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ☐    No  ☒

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2020, the last day of the registrant’s second fiscal quarter was $12,829,126,457. The market value of voting stock held by non-affiliates excludes the value of those shares held by executive officers and directors of the registrant.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of December 31, 2020, there were 129,353,583 of the registrant's common shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

DOCUMENT	FORM 10-K REFERENCE
Portions of Proxy Statement for 2021 Annual Meeting of Stockholders	Part III

FMC Corporation

2020 Form 10-K

Table of Contents

	Page
PART I
Item 1. Business	4
Item 1A. Risk Factors	12
Item 1B. Unresolved Staff Comments	17
Item 2. Properties	17
Item 3. Legal Proceedings	17
Item 4. Mine Safety Disclosures	18
Item 4A. Information about our Executive Officers	18
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities	19
Item 6. Selected Financial Data	21
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	46
Item 8. Financial Statements and Supplementary Data	47
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	111
Item 9A. Controls and Procedures	111
Item 9B. Other Information	111
PART III
Item 10. Directors, Executive Officers and Corporate Governance	112
Item 11. Executive Compensation	112
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	112
Item 13. Certain Relationships and Related Transactions, and Director Independence	112
Item 14. Principal Accountant Fees and Services	112
PART IV
Item 15. Exhibits and Financial Statement Schedules	113
Item 16. Form 10-K Summary	116
Signatures	117

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PART I

FMC Corporation was incorporated in 1928 under Delaware law and has its principal executive offices at 2929 Walnut Street, Philadelphia, Pennsylvania 19104. Throughout this annual report on Form 10-K, except where otherwise stated or indicated by the context, "FMC", the "Company", "We," "Us," or "Our" means FMC Corporation and its consolidated subsidiaries and their predecessors. Copies of the annual, quarterly and current reports we file with the Securities and Exchange Commission ("SEC"), and any amendments to those reports, are available on our website at www.fmc.com as soon as practicable after we furnish such materials to the SEC.

ITEM 1.    BUSINESS

General

We are a pure-play agricultural sciences company, providing innovative solutions to growers around the world with a robust product portfolio fueled by a market-driven discovery and development pipeline in crop protection, plant health, precision agriculture, and professional pest and turf management. 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(1); and flutriafol-based fungicides. The FMC portfolio also includes Arc™ farm intelligence and biologicals such as Quartzo® and Presence® bionematicides. Our 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 and turf management.

FMC Strategy

We have streamlined our portfolio over the past ten years to become a tier-one leader and the fifth largest global innovation provider in the global agricultural chemicals market. Our strong competitive position is driven by our technology and innovation, as well as our geographic balance and crop diversity, which helped FMC to take market share in 2018, 2019, and 2020.

We have industry-leading insecticides and herbicides (the majority of which are patented technologies), exceptional discovery research capabilities and a global manufacturing network. We expect to spend approximately 6.5 percent of sales on research and development annually. Our R&D pipeline includes 11 molecules and biological strains in our development pipeline (approximately 1-7 years away from commercialization) and more than 25 additional molecules and biological strains in our discovery pipeline (approximately 8-10 years from commercialization). We expect the first four product launches, including the first two significant active ingredients, out of this pipeline will occur in 2021. We own and operate a total of 25 manufacturing plants, and we have the scale to operate with strong resources and global reach to address changing market conditions. Our supply chain organization effectively managed to continue supplying our customers and growing our business, despite multiple shutdowns and other disruptions in the Chinese chemical sector in 2018 and 2019. In the fourth quarter of 2020, we experienced logistics and supply chain constraints in the U.S., mostly due to the COVID-19 pandemic. We do not expect this to be completely resolved by the first quarter of 2021 but we are focused on ensuring we can mitigate supply chain risks and continue to expand our market growth opportunities. We posted solid overall results in 2020, despite numerous challenges related to the 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 fully staffed. We will continue to assess the need related to cost-saving measures as appropriate.

Our revenues grew approximately 1 percent, or 7 percent organically(2) excluding the impacts of foreign currency, year over year in 2020, driven by double-digit growth for our diamides, Rynaxypyr® and Cyazypyr® active ingredients. Though we saw growth in additional active ingredients, the aggregate of the rest of our portfolio (excluding diamides) amounted to a mid-single digit decline, inclusive of a 2 percent decline in product registrations and rationalizations, which mostly offset the diamide growth discussed above. Rynaxypyr® and Cyazypyr® actives now represent over $1.8 billion in combined sales, representing approximately 55 percent growth since we acquired these molecules in November 2017. Products launched in 2020 and 2019 also contributed to revenue growth. We successfully launched our new bixafen fungicide under the Lucento® fungicide brand in North America in 2019, and we are on track to accomplish the $30 million to $50 million revenue target for this new active ingredient. We also launched several new formulated products in 2020, which is key to lifecycle management of our products. Approximately $50 million of our 2020 revenue growth came from 2020 product launches.

FMC performed slightly better than the overall crop protection market in 2020, which we estimate was flat versus 2019. Growth for FMC and the market was offset by significant headwinds from foreign currency. As mentioned above, our growth rate was 1 percent, and excluding the impact of foreign currency, our organic(1) growth rate was 7 percent. FMC’s innovation, starting with our current portfolio of advanced products and continuing through our R&D discovery, development and new formulations, contributed to our performance. Our technology portfolio includes specific innovations in plant health, application technology and delivery systems, as well as advanced agronomic insights through Arc™ farm intelligence, our precision agriculture tool that leverages artificial intelligence and machine learning.

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____________________ 

(1)    Hero® insecticide is a restricted use pesticide in the U.S.

(2)    Organic revenue growth is a non-GAAP term which excludes the impact of foreign currency changes. Refer to the "Results of Operations" section of our Management's Discussion and Analysis in Item 7 for our organic revenue non-GAAP reconciliation.

Acquisitions and Divestitures

In May 2020, FMC entered into a binding offer with Isagro S.p.A ("Isagro") to acquire the remaining rights for Fluindapyr active ingredient assets from Isagro. In July 2020, we entered into an asset sale and purchase agreement with Isagro. On October 2, 2020, we closed on the transaction with a purchase price of approximately $65 million. Fluindapyr has been jointly developed by FMC and Isagro under a 2012 research and development collaboration agreement. The transaction provides FMC with full global rights to the Fluindapyr active ingredient, including key U.S., European, Asian, and Latin American fungicide markets. The transaction transfers to FMC all intellectual property, know-how, registrations, product formulations and other global assets of the proprietary broad-spectrum fungicide molecule. The acquired assets have been classified as in-process research and development. See Note 9 in the consolidated financial statements included within this Form 10-K for accounting considerations. The transaction will expand our fungicide portfolio by giving us full global rights to the Fluindapyr active ingredient and is an important strategic addition to our product line.

In 2019, we completed the separation of our FMC Lithium segment, which was renamed Livent Corporation, or "Livent", following its initial public offering ("IPO") that closed on October 15, 2018. After completion of the IPO, FMC owned 123 million shares of Livent's common stock, representing approximately 84 percent of the total outstanding shares of Livent's common stock. On March 1, 2019, we completed the distribution of 123 million shares of common stock of Livent as a pro rata dividend on shares of FMC. Following the distribution, FMC has zero shares of Livent and zero exposure to lithium markets. The financial information within this filing has been recast to present the former FMC Lithium as a discontinued operation retrospectively for all relevant periods presented.

Financial Information About Our Business

(Financial Information in Millions)

The following table shows the principal products produced by our business, its raw materials and uses:

Product	Raw Materials	Uses
Insecticides	Synthetic and biological chemical intermediates	Protection of crops, including soybean, corn, fruits and vegetables, cotton, sugarcane, rice, and cereals, from insects and for non-agricultural applications including pest control for home, garden and other specialty markets
Herbicides	Synthetic and biological chemical intermediates	Protection of crops, including cotton, sugarcane, rice, corn, soybeans, cereals, fruits and vegetables from weed growth and for non-agricultural applications including turf and roadsides
Fungicides	Synthetic and biological chemical intermediates	Protection of crops, including cereals, fruits and vegetables from fungal disease

With a worldwide manufacturing and distribution infrastructure, we are better able to respond rapidly to global customer needs, offset downward economic trends in one region with positive trends in another and match local revenues to local costs to reduce the impact of currency volatility. The charts below detail our sales by major geographic region and major product category.

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The following table provides our long-lived assets by major geographical region:

(in Millions)	December 31,
	2020		2019
Long-lived assets
North America	$	1,230.2	$	1,190.7
Latin America	792.7		837.0
Europe, Middle East, and Africa	1,513.9		1,448.0
Asia	2,044.4		2,064.8
Total	$	5,581.2	$	5,540.5

Products and Markets

Our portfolio is comprised of three major pesticide categories: insecticides, herbicides and fungicides. The majority of our product lines consist of insecticides and herbicides, and we have a small but fast-growing portfolio of fungicides mainly used in high value crop segments. Our insecticides are used to control a wide spectrum of pests, while our herbicide portfolio primarily targets a large variety of difficult-to-control weeds. We are also investing substantially in a plant health program that includes biological crop protection products, seed treatments and micro-nutrients. Biological technologies developed by FMC’s R&D team in Denmark offer excellent sustainability profiles and serve as strong complements to our synthetic products. Our biologicals feature attributes that exceed the competition, such as high stability, long shelf life, low use rates and compatibility with other chemistries.

In the Latin American region, which includes the large agricultural market of Brazil, we sell directly to large growers through our own sales and marketing organization, and we access the market through independent distributors and co-ops. In North America, we access the market through several major national and regional distributors and have our own sales and marketing organization in Canada. We access the Europe, Middle East & Africa markets through our own sales and marketing organizations. We access key Asian markets through large distributors, in addition to either local independent distributors or our own sales and marketing organizations. Through these and other alliances, along with our own targeted marketing efforts, access to novel technologies and our innovation initiatives, we expect to maintain and enhance our access in key agricultural and non-crop markets and develop new products that will help us continue to compete effectively.

Industry Overview

The three principal categories of agricultural and non-crop chemicals are: herbicides, insecticides and fungicides, representing approximately 40 percent, 30 percent and 28 percent of global industry revenue, respectively.

The agrochemicals industry is more consolidated following several recent mergers of the leading crop protection companies, which now include FMC, ChemChina (owner of Syngenta Group, which includes the former Syngenta and Adama), Bayer AG

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(acquired Monsanto in 2018), BASF AG and Corteva Agriscience (the agricultural division of former DowDuPont, spun out in June 2019). These five innovation companies currently represent approximately 75 percent of the crop protection industry’s global sales. The next group of agrochemical producers include UPL Ltd. (UPL also acquired Arysta in February 2019), Sumitomo Chemical Company Ltd., and Nufarm Ltd. FMC employs various differentiated strategies and competes with unique technologies focusing on certain crops, markets and geographies, while also being supported by a low-cost manufacturing model.

Growth

We are among the leading agrochemical producers in the world. Some of our key insecticides are predominantly based on patent-protected active ingredients and continue to grow well above market patterns. Our complementary technologies combine improved formulation capabilities and a broader innovation pipeline, resulting in new and differentiated products. We will take advantage of enhanced market access positions and an expanded portfolio to deliver near-term growth.

We will continue to grow by obtaining new and approved uses for existing product lines and acquiring, accessing, developing, marketing, distributing and/or selling complementary chemistries and related technologies in order to strengthen our product portfolio and our capabilities to effectively service our target markets and customers.

Our growth efforts focus on developing environmentally compatible and sustainable solutions that can effectively increase farmers’ yields and provide cost-effective alternatives to chemistries which may be prone to resistance. We are committed to providing unique, differentiated products to our customers by acquiring and further developing technologies as well as investing in innovation to extend product life cycles. Our external growth efforts include product acquisitions, in-licensing of chemistries and technologies and alliances that bolster our market access, complement our existing product portfolio or provide entry into adjacent spaces. We have entered into a range of development and distribution agreements with other companies that provide access to new technologies and products which we can subsequently commercialize.

In 2020, we announced the launch of our Arc™ farm intelligence platform, an exclusive precision agriculture platform that enables growers and advisors to more accurately predict pest pressure before it becomes a problem. Nearly 4 million acres across six countries were covered by our platform during its pilot rollout. It is expanding significantly and supports product recommendations for multiple FMC active ingredients, led by our diamides. We have other precision agriculture initiatives and new product launches such as Isoflex™ herbicide. We also launched FMC Ventures, our new venture capital arm targeting strategic investments in start-ups and early-stage companies that are developing and applying emerging technologies in the agricultural industry. The group will be making small, seed type investments.

Diamide Growth Strategy

Our product portfolio features two key diamide-class molecules – Rynaxypyr® (chlorantraniliprole) and Cyazypyr® (cyantraniliprole) actives – with combined annual revenues of approximately $1.8 billion in 2020. These two molecules are industry-leading in terms of performance, combining highly effective low dose rates with fast-acting, systemic, long residual control. These attributes quickly established Rynaxypyr® active as the world’s leading insect control technology and we expect it to continue on a strong growth trajectory notwithstanding the expiration of composition of matter patents covering Rynaxypyr® active in certain countries starting in late 2022. Our Cyazypyr® active, a second-generation diamide, is growing quickly as we obtain more product registrations. We expect it to continue to grow strongly notwithstanding the expiration of its active ingredient composition of matter patents starting in the mid-2020s. This expectation is based on not only our broad patent estate and the timing of key patent milestones, but also on other critical elements that will allow FMC to continue to profitably grow the diamide franchise well beyond the expiration of key patents. These other critical elements include registration and data protection, commercial strategies, brand recognition, as well as manufacturing and supply chain complexity and FMC efficiencies.

Patents and Trade Secrets. The FMC diamide insect control patent estate is made up of many different patent families which cover: Composition of matter – both active ingredients and certain intermediates; Manufacturing processes – both active ingredients and certain intermediates; Formulations; Uses; and Applications. For Rynaxypyr® and Cyazypyr® actives related patents, as of December 31, 2020, we had 33 families with granted patents filed in up to 76 countries, with a total of 897 active granted patents as well as numerous pending patent applications. See "Patents, Trademarks and Licenses" within this Item 1 for more details. FMC’s process patents cover the manufacturing processes for both active ingredients – chlorantraniliprole and cyantraniliprole – as well as key intermediates that are used to make the final products. Chlorantraniliprole is a complex molecule to produce, requiring 16 separate steps; FMC owns granted patents covering many of these 16 process steps and several of the intermediate chemicals, and we protect other aspects of the manufacturing processes by trade secret. Cyantraniliprole is similarly complex and covered by a comparable range of intellectual property. Many of these intermediate process patents run well past the expiration of the composition of matter patents, and in some cases stretch until the end of this decade. Third parties that intend to manufacture and sell generic chlorantraniliprole or cyantraniliprole and rely on FMC’s extensive product safety data will be required to demonstrate that their product has the same regulatory safety profile as FMC Rynaxypyr® and Cyazypyr® actives. To meet regulatory requirements for such difficult-to-manufacture molecules, we believe

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that third parties will have to produce these active ingredients using the same processes that are patented by FMC and if so, would be infringing before patent expiration and subject to our challenge for infringement. FMC also owns formulation patents which cover the use of chlorantraniliprole or cyantraniliprole in specific formulations found in commercially important end-use products.

Regulatory Data Protection. In addition to the patent estate, various pesticide laws and regulations around the world offer added protection to the initial active ingredient registrant in the form of data protection and registration timelines that can extend after the composition or process patents have expired. These rules can effectively provide a product innovator and initial active ingredient registrant such as FMC with a further period of exclusive use of the key reference data even after the applicable AI composition of matter patents have expired. Further, in certain countries, even after the period of exclusive use has expired, a generic entrant seeking to rely on the initial registrant’s reference data may have to pay significant compensation to the initial registrant. For FMC’s diamide products, such rights apply in key markets including United States, Brazil and the European Union.

Growing the Branded FMC Diamide Franchise. FMC is executing its strategy to supply end-use pesticide products that include Rynaxypyr® and Cyazypyr® actives to a broad range of companies prior to patent expiration, and in return establishing long-term commitments from the companies to purchase the diamide active ingredients from FMC. These arrangements may also include limited patent, data and/or trademark licenses. Such partner relationships allow us to grow our business by having others develop and sell diamide-based products to meet farmers' needs not within our current portfolio, offering those farmers a better alternative to competing insecticides with product safety or efficacy profiles which are less attractive than Rynaxypyr® or Cyazypyr® actives. These agreements can require the third party to use the well-known and trusted Rynaxypyr® or Cyazypyr® brand names on the end-use products formulated with active ingredient supplied by FMC. As of December 31, 2020, we had global agreements with four major multinational companies and approximately 50 separate local-country agreements covering 14 countries. We are continuing to explore opportunities with additional companies beyond those with whom we are already engaged.

Complexity of manufacturing. Today FMC manufactures all the required intermediates in the multi-step processes, as well as the final Rynaxypyr® and Cyazypyr® actives, at our own active ingredient manufacturing plants or through key contract manufacturers who produce under long-term exclusive technology-license agreements. For a third party to replicate this complex supply chain and manufacturing network would be a major undertaking with very large capital requirements. In addition, given our manufacturing know-how, scale of our operations, and continual investment in manufacturing process improvement, we believe FMC’s manufacturing costs will be substantially lower than any other party seeking to produce these diamide products.

Collectively, these four factors -- deep patent estate, proprietary regulatory data, strong commercial approach leveraging our brand recognition, and capabilities of managing large scale manufacturing complexity – provide us the basis for our expectation that FMC will be the company of choice to supply chlorantraniliprole and cyantraniliprole products to third-party partners, and ultimately to farmers, well into the future.

Source and Availability of Raw Materials

We utilize numerous vendors to supply raw materials and intermediate chemicals to support operations. These materials are sourced on a global basis to strategically balance FMC’s vendor portfolio.

Patents, Trademarks and Licenses

As an agricultural sciences company, FMC believes in innovation and in protecting that innovation through intellectual property rights. We own and license a significant number of U.S. and foreign patents, trademarks, trade secrets and other intellectual property that are cumulatively important to our business. In addition, we seek to license our proprietary technologies through partnering arrangements that effectively allow us to capitalize from our intellectual property. The FMC intellectual property estate provides us with a significant competitive advantage which we seek to expand and renew on a continual basis. We manage our technology investment to discover and develop new active ingredients and biological products, as well as to continue to improve manufacturing processes and existing active ingredients through new formulations, mixtures or other concepts. FMC’s technology innovation processes capture those innovations and protect them through the most appropriate form of intellectual property rights. We also in-license certain active ingredients and other technologies under patents held by third parties, and have granted licenses to certain of our patents to third parties.

Our patents cover many aspects of our business, including our chemical and biological active ingredients, intermediate chemicals, manufacturing processes to produce such active ingredients or intermediates, formulations, and product uses, as well as many aspects of our research and development activities that support the FMC new product pipeline. Patents are granted by individual jurisdictions and the duration of our patents depends on their respective jurisdictions and payment of annuities.

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As of December 31, 2020, the Company owned a total of approximately 220 active granted U.S. patents and 2,600 active granted foreign patents (includes Supplemental Patent Certificates); we also have approximately 1,600 patent applications pending globally.

In our current product portfolio, our diamide insect control products based on Rynaxypyr® (Chlorantraniliprole) and Cyazypyr® (Cyantraniliprole) active ingredients have a substantial patent estate which will remain in force well into the future. More details regarding our diamide granted patent estate are set forth in the tables below:

Numbers of active Granted Patents by type*: Chlorantraniliprole and Cyantraniliprole, as of December 31, 2020
	United States	Foreign
Active Ingredients	21	252
Intermediates and Methods of Manufacturing	23	254
Formulations/Mixtures/Applications	9	338
Total	53	844

*Patent families were only placed under one type but may cover several types.

Remaining Life of Granted Patents: Chlorantraniliprole and Cyantraniliprole, as of December 31, 2020
	United States	Foreign
Through December 31, 2025	36	550
2026 - 2030	15	266
2031 - 2036	2	28
Total	53	844

We also own many trademarks that are well recognized by customers or product end-users. Unlike patents, ownership rights in trademarks can be continued indefinitely so long as the trademarks are properly used and renewal fees are paid.

We actively monitor and manage our patents and trademarks to maintain our rights in these assets and we strategically take aggressive action when we believe our intellectual property rights are being infringed. While we believe that the invalidity or loss of any particular patent, trademark or license would be a remote possibility, our patent and trademark estate related to our diamide insect control products based on Rynaxypyr® and Cyazypyr® active ingredients in the aggregate are of material importance to our operations.

Seasonality

The seasonal nature of the crop protection market and the geographic spread of our business can result in significant variations in quarterly earnings among geographic locations. Our products sold in the northern hemisphere (North America, Europe and parts of Asia) serve seasonal agricultural markets from March through September, generally resulting in significant earnings in the first and second quarters, and to a lesser extent in the fourth quarter. Markets in the southern hemisphere (Latin America and parts of the Asia Pacific region, including Australia) are served from July through February, generally resulting in earnings in the third, fourth and first quarters.

Competition

We encounter substantial competition in our business. We market our products through our own sales organization and through alliance partners, independent distributors and sales representatives. The number of our principal competitors varies from market to market. In general, we compete by providing advanced technology, high product quality, reliability, quality customer and technical service, and by operating in a cost-efficient manner.

Our business competes primarily in the global chemical crop protection market for insecticides, herbicides and fungicides. Industry products include crop protection chemicals and, for certain major competitors, genetically engineered (crop biotechnology) products. Competition from generic agrochemical producers is significant as a number of key product patents have expired in the last two decades. In general, we compete as an innovator by focusing on product development, including novel formulations, proprietary mixes, and advanced delivery systems and by acquiring or licensing (mostly) proprietary chemistries or technologies that complement our product and geographic focus. We also differentiate ourselves by our global cost-competitiveness through our manufacturing strategies, establishing effective product stewardship programs and developing strategic alliances that strengthen market access in key countries and regions.

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Research and Development Expense

The R&D efforts in our business focus on discovering and developing environmentally sound solutions — both new active ingredients and new product formulations — that meet the needs of farmers to maximize yields and control pests by providing new products that utilize both existing and new active ingredient chemistries. On June 24, 2019, we announced our investment of more than $50 million at our FMC Stine Research Center in Newark, Delaware, to upgrade infrastructure and complete construction on a new state-of-the-art, greenhouse and laboratory facility. Due to the pandemic, work on the greenhouse project did not progress as anticipated during 2020. We anticipate that the project will be completed by 2023.

Environmental Laws and Regulations

A discussion of environmental related factors can be found in Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in Note 12 "Environmental Obligations" in the notes to our consolidated financial statements included in this Form 10-K.

Human Capital

Employees

We employ approximately 6,400 people with about 1,500 people in our domestic operations and 4,900 people in our foreign operations.

Approximately 3 percent of our U.S.-based and 33 percent of our foreign-based employees, respectively, are represented by collective bargaining agreements. We have successfully concluded most of our recent contract negotiations without any material work stoppages. In those rare instances where a work stoppage has occurred, there has been no material effect on consolidated sales and earnings. We cannot predict, however, the outcome of future contract negotiations. In 2021, six foreign collective-bargaining agreements will be expiring. These contracts affect approximately 15 percent of our foreign-based employees. There are no U.S. collective-bargaining agreements expiring in 2021.

Talent Engagement and Retention

At FMC, it is important that we focus our programs and initiatives on sustaining strong leaders who are committed to engaging and developing their employees, so they can lead competitively, innovate change, improve business performance, and successfully maintain a competitive advantage. FMC’s leadership development program components include in-class and self-paced learning, development planning and stretch assignments, project-based action learning and rotational learning, mentoring and coaching, and leadership and functional assessments. Our programs are designed to provide engaging, collaborative, and creative learning environments. Employees leverage their experiences in these programs to develop their leadership abilities to their highest levels, enabling them to deliver innovative solutions, strong results and continued growth. Three of our signature leadership programs are science of leadership, the art of leadership, and keys to leadership. We hold quarterly Town Hall meetings and engage with our employees continuously through regular email updates, social media, webcasts, and other channels. We ask our employees to complete surveys and participate in focus groups, we distribute certain reports to keep our employees informed, we require our employees to complete specific trainings and we are piloting a voluntary e-learning program with other development and learning opportunities. We also reach out to new talent through social media.

FMC continually strives to meet the needs of our employees, shareholders, and customers through competitive rewards, policies, and practices that support the company as an employer of choice in every market where we compete for talent. FMC compensates employees through total reward programs that are aligned with performance and competencies. Performance-based direct pay programs include competitive base pay, annual bonus opportunities, sales incentive plans, and long-term incentives. These compensation elements along with benefits, work-life flexibility, recognition awards, talent and career development, enable FMC to offer a comprehensive total reward package designed for employees throughout their career. We also enhanced our offerings during the COVID-19 pandemic to better support our employees and their families by:

•Paying our essential workers a special recognition award

•Fully covering the costs of COVID-19 testing and vaccines

•Expanding our Dependent Care offerings

•Providing more flexibility in taking out 401K loans

•Enhancing Employee Assistance Program presentations and offerings to assist employees with mental well being

•Expanding flexible work opportunities

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Culture and Inclusion

We strive to be an inclusive workplace where our employees reflect the community, are valued, find purpose in their work, and grow and contribute to their fullest potential. We are broadening investments in social areas, including Diversity and Inclusion and racial and gender equity. We launched two task forces, one on Social Justice and Racial Equity, and the other focused on Gender Equity. Our goal for 2027 is to have Black/African American representation in our U.S. workforce to be 14 percent and female representation to be 50 percent of our global workforce across all regions and job levels. The company has developed new global policies and practices to attract and hire talented individuals from underrepresented minorities. For every new hire we now require diverse candidate slates and multiple dimensions of diversity represented by each interview panel. We are expanding our applicant pools and pipelines by adding a new Human Resource role for diversity talent sourcing and partnering with an external recruiting agency specializing in diverse hiring. Diverse views, backgrounds and experiences are key to our success. We launched three additional Employee Resource Groups ("ERGs") in 2019. FMC has six total ERGs with more than twenty employee resource group chapters. We scored 100 percent on the Human Rights Campaign Foundation’s 2021 Corporate Equality Index, a U.S. benchmarking survey measuring corporate policies and practices related to lesbian, gay, bisexual, transgender and queer ("LGBTQ") workplace equality. This is our second consecutive year receiving a score of 100 percent. Over the past several years, we have had significant policy changes related to parental leave and domestic partner and transgender inclusion benefits in the U.S. Due to our diversity and inclusion strategy, women in senior management positions increased from 32 percent in 2019 to 34 percent in 2020.

Safety

Safety is a core value of FMC. At FMC, people come first. We strive for an injury-free workplace, where every employee returns home the same way they arrived. We encourage a culture of open reporting, so we can learn from our mistakes and work towards continuous improvement in behaviors and processes. As a result of our firm commitment to safety, our 2020 TRIR of 0.08 is among the lowest in the industry globally and in the upper decile of peer companies in North America, placing our company among the safest organizations in the chemical industry. This milestone underscores our employees’ commitment to work every day with safety at the forefront of their thoughts and actions. We empower our employees to always put safety first. 2020 presented us with the unique challenge of the COVID-19 pandemic. FMC responded by enacting robust Business Continuity Plans ("BCPs") to ensure continued safe operation at all of our manufacturing sites. These BCPs have been so effective, FMC has not experienced an on-site transmission of the virus to date. In 2021, we continue our journey, focusing on improving management systems and tools. In addition, we continue to engage our global workforce through focused campaigns which address issues and trends identified through analysis of our environment, health and safety data – for example – our current TH!NK. SAFE. campaign addressing "Line of Fire" injuries.

Sustainability

We are committed to delivering products that maintain a safe and secure food supply and to do so in a way that protects the environment for future generations. To reflect this commitment, we reset our sustainability goals in October 2019 to challenge ourselves and ensure that we are helping to create a better world. Our new goals include achieving (i) 100 percent research and development spend on developing sustainable products by 2025, (ii) <0.1 Total Recordable Incident Rate ("TRIR") by 2025, (iii) a 25 percent reduction in Energy Intensity by 2030, (iv) a 25 percent reduction in Green House Gas ("GHG") emissions intensity by 2030, (v) a 20 percent reduction in Water-Use Intensity in High-Risk Locations by 2030, (vi) a sustained Waste Disposed Intensity through 2030 (from our 2018 base year level), and (vii) a 100 on the Community Engagement Index by 2025. In 2020, FMC made progress towards meeting its commitments on the updated goals.

FMC developed and utilizes its award-winning Sustainability Assessment Tool to determine the sustainability of new active ingredients and formulated products in the research and development pipeline and to evaluate products currently on the market. This assessment, along with other stewardship processes and tools, ensures the introduction and continued use of environmentally sustainable agricultural solutions.

At FMC we promote stewardship at each stage of the product life cycle, and stewardship priorities are built into the core of research and development, portfolio and marketing strategies for a truly proactive approach. We continue to strive for open and transparent communications about our product stewardship successes and challenges. FMC is continuing to phase out Highly Hazardous Pesticides ("HHPs") from our product portfolio. In 2020, HHPs accounted for less than 0.4 percent of our total sales.

SEC Filings

SEC filings are available free of charge on our website, www.fmc.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are posted as soon as practicable after we furnish such materials to the SEC.

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REGULATION FD DISCLOSURES

The Company’s investor relations website, located at https://investors.fmc.com, should be considered as a recognized channel of distribution, and the Company may periodically post important information to the web site for investors, including information that the Company may wish to disclose publicly for purposes of complying with the federal securities laws and our disclosure obligations under the SEC's Regulation FD. We encourage investors and others interested in the Company to monitor our investor relations website for material disclosures. Our website address is included in this Form 10-K as a textual reference only and the information on the website is not incorporated by reference into this Form 10-K.

ITEM 1A.    RISK FACTORS

Among the factors that could have an impact on our ability to achieve operating results and meet our other goals are:

Industry Risks:

Pricing and volumes in our markets are sensitive to a number of industry specific and global issues and events including:

•Competition and new agricultural technologies - Our business faces competition, which could affect our ability to maintain or raise prices, successfully enter certain markets or retain our market position. Competition for our business includes not only generic suppliers of the same pesticidal active ingredients but also alternative proprietary pesticide chemistries and crop protection technologies that are bred into or applied onto seeds. Increased generic presence in agricultural chemical markets has been driven by the number of significant product patents and product data protections that have expired in the last decade, and this trend is expected to continue. Also, there are changing competitive dynamics in the agrochemical industry as some of our competitors have consolidated, resulting in them having greater scale and diversity, as well as market reach. These competitive differences may not be overcome and may erode our business. Agriculture in many countries is changing and new technologies (e.g., precision pest prediction or application, data management) continue to emerge. At this time, the scope and potential impact of these technologies are largely unknown but could have the potential to disrupt our business.

•Climatic conditions - Our markets are affected by climatic conditions, which could adversely impact crop pricing and pest infestations. For example, drought may reduce the need for fungicides, which could result in fewer sales and greater unsold inventories in the market, whereas excessive rain could lead to increased plant disease or weed growth requiring growers to purchase and use more pesticides. Drought and/or increased temperatures may change insect pest pressures, requiring growers to use more, less, or different insecticides. Natural disasters can impact production at our facilities in various parts of the world. The nature of these events makes them difficult to predict.

•Geographic cyclicality - While our business is well balanced geographically, in any given calendar quarter a certain geography(ies) will predominate in light of seasonal variations in the demand for our products given the nature of the crop protection market and the geographic regions in which we operate. Unexpected market conditions in any such predominating geography(ies), such as adverse weather, pest pressures, or other risks described herein, may impact our business if occurring during a calendar quarter in which such geography(ies) is predominating.

•Changing regulatory environment and public perception - Changes in the regulatory environment, particularly in the U.S., Brazil, China, India, Argentina and the European Union, could adversely impact our ability to continue producing and/or selling certain products in our domestic and foreign markets or could increase the cost of doing so. Additionally, changes to the regulatory environment may be influenced by non-government public pressure as a result of negative perception regarding the use of our crop protection products. We are sensitive to this regulatory risk given the need to obtain and maintain pesticide registrations in every country in which we sell our products. Many countries require re-registration of pesticides to meet new and more challenging requirements; while we defend our products vigorously, these re-registration processes may result in significant additional data costs, reduced number of permitted product uses, or potential product cancellation. Compliance with changing laws and regulations may involve significant costs or capital expenditures or require changes in business practice that could result in reduced profitability. In the European Union, the regulatory risk specifically includes the chemicals regulation known as REACH (Registration, Evaluation, and Authorization of Chemicals), which requires manufacturers to verify through a special registration system that their chemicals can be marketed safely.

•Geographic presence outside of U.S. - We have a strong presence in Latin America, Europe and Asia, as well as in the U.S. Growth of our geographic footprint particularly in Europe and key Asian countries such as India means that developments outside the U.S. will generally have a more significant effect on our operations than in the past. Our operations outside the U.S. are subject to special risks and restrictions, including: fluctuations in currency values; exchange control regulations; changes in local political or economic conditions; governmental pricing directives; import and trade restrictions or tariffs; import or export licensing requirements and trade policy; restrictions on the ability to repatriate funds; and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad.

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•Climate change and government regulation of greenhouse gases - The effects of climate change such as rising sea levels, drought, flooding and general volatility in seasonal temperatures could adversely affect our operations globally. Extreme weather events attributable to climate change may result in, among other things, physical damage to our property and equipment, and interruptions to our supply chain. Climate change may also impact markets in which we sell our products, where, for example, a prolonged drought may result in decreased demand for our products. The more gradual effects of persistent temperature change in geographies with significant agricultural lands may result in changes in lands suitable for agriculture or changes in the mix of crops suitable for cultivation and the pests that may be present in such geographies. For example, prolonged increase in average temperature may make northern lands suitable for growing crops not grown historically in such climes, leading farmers to shift from crops such as wheat to soybean and may result in new or different weed, plant disease or insect pressures on such crops – such changes would impact the mix of pesticide products farmers would purchase, which may be adverse for us, depending on the local market and our product mix. Additionally, changes in the governmental regulation of greenhouse gases, depending on their nature and scope, could subject our manufacturing operations to significant additional costs or limits on operations.

•Fluctuations in commodity prices - Our operating results could be significantly affected by the cost of commodities - both chemical raw material commodities and harvested crop commodities. We may not be able to raise prices or improve productivity sufficiently to offset future increases in chemical raw material commodity pricing. Accordingly, increases in such commodity prices may negatively affect our financial results. We use hedging strategies to address material commodity price risks, where hedge strategies are available on reasonable terms. However, we are unable to avoid the risk of medium- and long-term increases. Additionally, fluctuations in harvested crop commodity prices could negatively impact our customers' ability to sell their products at previously forecasted prices resulting in reduced customer liquidity. Inadequate customer liquidity could affect our customers’ abilities to pay for our products and, therefore, affect existing and future sales or our ability to collect on customer receivables.

•Supply arrangements - Certain raw materials are critical to our production processes and our purchasing strategy and supply chain design are complex. While we have made supply arrangements to meet planned operating requirements, an inability to obtain the critical raw materials or operate under contract manufacturing arrangements would adversely impact our ability to produce certain products and could lead to operational disruption and increase uncertainties around business performance. We source critical intermediates and finished products from a number of suppliers, largely outside of the U.S. and principally in China. An inability to obtain these products or execute under contract sourcing arrangements would adversely impact our ability to sell products.

Operational Risks:

•COVID-19 and global pandemic cycles - The rapid spread of the novel coronavirus (COVID-19) outbreak has caused significant disruptions in the U.S. and global economies, and economists expect the impact will continue to be significant. 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 fully staffed. While we have maintained business continuity and sustained our operations with safety as a priority, the full extent of the disruptions on either our business and operations or the global economy are on-going. In addition, the duration of the pandemic and its adverse effects are unknown and rapidly evolving. External and internal factors and events related to COVID-19 could result in employee isolation and burnout, leading to operational disruption and unexpected, regrettable attrition, which may impact the sustainability of our "high touch" agile culture. We have seen some logistics challenges and shortages of packaging materials and containers, as many industries have increased e-commerce and delivery of goods, creating extra demand on packaging materials, as well as related higher costs and pockets of demand reduction. We may continue to experience disruption caused by COVID-19 in our supply chain, logistics, and pockets of demand, as well as on farm worker labor required for planting, harvesting and packing crops (especially fruits, vegetables and other specialty crops) in the food chain going forward. This outbreak may impact access to our production sites or our ability to adequately and safely staff these sites, the ability of raw material suppliers to produce and deliver goods to us, our ability to ship our products to production, warehousing or customer sites, the ability of our sales organization to make sales or for customers (or indirect customers such as farmers) to purchase our products, or the ability to collect on customer receivables. Our supply chain and business operations could be disrupted from the temporary closure of third-party supplier and manufacturer facilities, interruptions in product supply or restrictions on the export or shipment of our products. Any disruption of our suppliers and contract manufacturers could impact our sales and operating results. The outbreak, and governmental responses to the outbreak, have caused disruption in certain food distribution systems and labor markets for planting and harvesting, which in turn have created operational and financial pressures on some farmers who are the ultimate users of the vast majority of our products. If those pressures continue and grow more widespread or severe, and if farmers materially change their planting decisions or choose not to protect their crops with our products, such pressures on farmers could impact our sales and operating results. Global health concerns, such as coronavirus, could also result in social, economic, and labor instability in the countries in which we or our customers and suppliers

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operate. These uncertainties could have a material adverse effect on our business and our results of operation and financial condition. A widespread health crisis could adversely affect the global economy, resulting in an economic downturn that could impact demand for our products. Although our production operations that support agriculture have generally been viewed as "essential" and exempted from governmental lockdown orders, the future impact of the outbreak is highly uncertain and cannot be predicted and there is no assurance that the outbreak will not have a material adverse impact on the future results of the Company. The extent of the impact will depend on future developments, including the availability of vaccines and other actions taken to contain the coronavirus.

•Business disruptions - We produce products through a combination of owned facilities and contract manufacturers. We own and operate large-scale active ingredient manufacturing facilities in the U.S. (Mobile), Puerto Rico (Manati), China (Jinshan), Denmark (Ronland), and India (Panoli). Our operating results are dependent in part on the continued operation of these production facilities. Interruptions at these facilities may materially reduce the productivity of a particular manufacturing facility, or the profitability of our business as a whole. Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations and those of our contract manufacturers are subject to hazards inherent in chemical manufacturing and the related storage and transportation of raw materials, products and wastes. These potential hazards include explosions, fires, severe weather and natural disasters, mechanical failure, unscheduled downtimes, supplier disruptions, labor shortages or other labor difficulties, information technology systems outages, disruption in our supply chain or manufacturing and distribution operations, transportation interruptions, chemical spills, discharges or releases of toxic or hazardous substances or gases, shipment of contaminated or off-specification product to customers, storage tank leaks, other environmental risks, or other sudden disruption in business operations beyond our control as a result of events such as acts of sabotage, terrorism or war, civil or political unrest, natural disasters, large scale power outages and public health epidemics/pandemics. Some of these hazards may cause severe damage to or destruction of property and equipment or personal injury and loss of life and may result in suspension of operations or the shutdown of affected facilities.

•Litigation and environmental risks - Current reserves relating to our ongoing litigation and environmental liabilities may ultimately prove to be inadequate.

•Hazardous materials - We manufacture and transport certain materials that are inherently hazardous due to their toxic or volatile nature. While we take precautions to handle and transport these materials in a safe manner, if they are mishandled or released into the environment, they could cause property damage or result in personal injury claims against us.

•Environmental compliance - We are subject to extensive federal, state, local, and foreign environmental and safety laws, regulations, directives, rules and ordinances concerning, among other things, emissions in the air, discharges to land and water, and the generation, handling, treatment, disposal and remediation of hazardous waste and other materials. We may face liability arising out of the normal course of business, including alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our current or former facilities or chemicals that we manufacture, handle or own. We take our environmental responsibilities very seriously, but there is a risk of environmental impact inherent in our manufacturing operations and transportation of chemicals. Any substantial liability for environmental damage could have a material adverse effect on our financial condition, results of operations and cash flows.

Technology Risks:

•Technological and new product discovery/development - Our ability to compete successfully depends in part upon our ability to maintain a superior technological capability and to continue to identify, develop and commercialize new and innovative, high value-added products for existing and future customers. Our investment in the discovery and development of new pesticidal active ingredients relies on discovery of new chemical molecules or biological strains. Such discovery processes depend on our scientists being able to find new molecules and strains, which are novel and outside of patents held by others, and such molecules/strains being efficacious against target pests, and our ability to develop those molecules and strains into new products without creating an undue risk to human health and the environment, and then meeting applicable regulatory criteria. The timeline from active ingredient discovery through full development and product launch averages 8-10 years depending on local regulatory requirements; the complexity and duration of developing new products create risks that product concepts may fail during development or, when launched, may not meet then-current market needs or competitive conditions.

Portfolio Management and Integration Risks:

•Portfolio management risks - We continuously review our portfolio which includes the evaluation of potential business acquisitions that may strategically fit our business and strategic growth initiatives. If we are unable to successfully integrate and develop our acquired businesses, we could fail to achieve anticipated synergies which would include expected cost savings and revenue growth. Failure to achieve these anticipated synergies could materially and adversely affect our financial results. In addition to strategic acquisitions we evaluate the diversity of our portfolio in light of our objectives and alignment with our growth strategy. In implementing this strategy we may not be successful in separating underperforming or non-strategic assets. The gains or losses on the divestiture of, or lost operating

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income from, such assets (e.g., divesting) may affect the Company’s earnings. Moreover, we may incur asset impairment charges related to acquisitions or divestitures that reduce earnings. Significant effort will likely be required to ensure that the right mix of resources are trained, engaged and focused on achieving business objectives while adhering to our core values of safety, ethics and compliance.

•Innovation and intellectual property - Our innovation efforts are protected by patents, trade secrets and other intellectual property rights that cover many of our current products, manufacturing processes, and product uses, as well as many aspects of our research and development activities supporting our new product pipeline. Trademarks protect valuable brands associated with our products. Patents and trademarks are granted by individual jurisdictions and the duration of our patents depends on their respective jurisdictions and payment of annuities. Our future performance will depend on our ability to address active ingredient composition of matter patent expirations through effective enforcement of our patents that continue to cover key chemical intermediates and process patents, as well as portfolio life cycle management, particularly for our high value diamide insecticides (see "Diamide Growth Strategy" and "Patents, Trademarks and Licenses" in Item 1 for more details). If our innovation efforts fail to continue to make process improvements to reduce costs, such conditions could impede our competitive position. Some of our competitors may secure patents on production methods or uses of products that may limit our ability to compete cost-effectively.

•Enforcement of intellectual property rights - The composition of matter patents on our Rynaxypyr® active ingredient is nearing its expiration in several key countries. We have a broad estate of additional patents regarding the production of Rynaxypyr® active ingredient, as well as trademark and data exclusivity protection in certain countries that extend well beyond the active ingredient composition of matter patents. (See "Diamide Growth Strategy" and "Patents, Trademarks and Licenses" in Item 1). We intend to strategically and vigorously enforce our patents and other forms of intellectual property and have done so already against several third parties. Other third parties may seek to enter markets with infringing products or may find alternative production methods that avoid infringement or we may not be successful in litigating to enforce our patents due to the risks inherent in any litigation. Patents involve complex factual and legal issues and, thus, the scope, validity or enforceability of any patent claims we have or may obtain cannot be clearly predicted. Patents may be challenged in the courts, as well as in various administrative proceedings before U.S. or foreign patent offices, and may be deemed unenforceable, invalidated or circumvented. We are currently and may in the future be a party to various lawsuits or administrative proceedings involving our patents. Such challenges can result in some or all of the claims of the asserted patent being invalidated or deemed unenforceable. In such circumstances, an adverse patent enforcement decision which could lead to the entry of competing chlorantraniliprole products in relevant markets may materially and adversely impact our financial results.

•Major enterprise initiatives - In the fourth quarter of 2020 we completed the go-live on a single global instance of SAP S/4 HANA. There are execution and change management activities that may affect our ability to operationalize and monetize the investment made in the system. The post implementation period may place significant demands on certain of our internal functional groups, particularly finance and information technology, as we continue to adapt to the new system. Failure to successfully execute and realize the expected synergies from a single global instance could materially and adversely affect our expected performance.

•Potential tax implications of FMC Lithium separation - We have received an opinion from outside counsel to the effect that the spin-off of FMC Lithium as a distribution to our stockholders, completed in March 2019, qualified as a non-taxable transaction for U.S. federal income tax purposes. The opinion is based on certain assumptions and representations as to factual matters from both FMC and FMC Lithium, as well as certain covenants by those parties. The opinion cannot be relied upon if any of the assumptions, representations or covenants is incorrect, incomplete or inaccurate or is violated in any material respect. The opinion of counsel is not binding upon the IRS or the courts and there is no assurance that the IRS or a court will not take a contrary position. It is possible that the IRS or a state or local taxing authority could take the position that aforementioned transaction results in the recognition of significant taxable gain by FMC, in which case FMC may be subject to material tax liabilities.

Financial Risks:

•Foreign exchange rate risks - We are an international company operating in many countries around the world, and thus face foreign exchange rate risks in the normal course of our business. We are particularly sensitive to the Brazilian real, the euro, the Indian rupee, the Chinese yuan, the Mexican peso, the Argentine peso and the U.S. dollar. While we engage in hedging and other strategies to mitigate those risks, unexpected severe changes in foreign exchange may create risks that could materially and adversely affect our expected performance.

•Uncertain tax rates - Our future effective tax rates may be materially impacted by numerous items including: a future change in the composition of earnings from foreign and domestic tax jurisdictions, as earnings in foreign jurisdictions are typically taxed at different statutory rates than the U.S. federal statutory rate; accounting for uncertain tax positions; business combinations; expiration of statute of limitations or settlement of tax audits; changes in valuation allowance; changes in tax law; currency gains and losses; and the potential decision to repatriate certain future foreign earnings on which U.S. or foreign withholding taxes have not been previously accrued.

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•Uncertain recoverability of investments in long-lived assets - We have significant investments in long-lived assets and continually review the carrying value of these assets for recoverability in light of changing market conditions and alternative product sourcing opportunities. We may recognize future impairments of long-lived assets which could adversely affect our results of operations.

•Pension and postretirement plans - Our U.S. Plan reached fully funded status during 2018. The primary investment strategy is a liability hedging approach with an objective of maintaining the funded status of the plan such that the funded status volatility is minimized and the likelihood that we will be required to make significant contributions to the plan is limited. The portfolio is comprised of 100 percent fixed income securities and cash. Nevertheless, obligations related to our pension and postretirement plans reflect certain assumptions. To the extent actual experience differs from these assumptions, our costs and funding obligations could increase or decrease significantly.

General Risk Factors:

•Market access risk - Our results may be affected by changes in distribution channels, which could impact our ability to access the market.

•Compliance with laws and regulations - The global regulatory environment is becoming increasingly complex and requires more resources to effectively manage, which may increase the potential for misunderstanding or misapplication of regulatory standards.

•Talent engagement and culture - The inability to recruit and retain key personnel, the unexpected loss of key personnel, or other external and internal factors and events could culminate in employee attrition and may adversely affect our operations. In addition, our future success depends in part on our ability to identify and develop talent to succeed senior management and other key members of the organization.

•Economic and political change - Our business has been and could continue to be adversely affected by economic and political changes in the markets where we compete including: inflation rates, recessions, trade restrictions, tariff increases or potential new tariffs, foreign ownership restrictions and economic embargoes imposed by the U.S. or any of the foreign countries in which we do business; changes in laws, taxation, and regulations and the interpretation and application of these laws, taxes, and regulations; restrictions imposed by the U.S. government or foreign governments through exchange controls or taxation policy; nationalization or expropriation of property, undeveloped property rights, and legal systems or political instability; other governmental actions; and other external factors over which we have no control. Economic and political conditions within the U.S. and foreign jurisdictions or strained relations between countries could result in fluctuations in demand, price volatility, loss of property, state sponsored cyberattacks, supply disruptions, or other disruptions. In Argentina, continued inflation and foreign exchange controls could adversely affect our business. Realignment of change in regional economic arrangements could have an operational impact on our businesses. In China, unpredictable enforcement of environmental regulations could result in unanticipated shutdowns in broad geographic areas, impacting our contract manufacturers and raw material suppliers.

•Information technology security and data privacy risks - As with all enterprise information systems, our information technology systems could be penetrated by outside parties’ intent on extracting information, corrupting information, deploying ransomware, or disrupting business processes. Remote and other work arrangements may leave the Company more vulnerable to a cyberattack. Our systems have in the past been, and likely will in the future be, subject to unauthorized access attempts. Unauthorized access could disrupt our business operations and could result in failures or interruptions in our computer systems, lockout from systems due to ransomware, or in the loss of assets and could have a material adverse effect on our business, financial condition or results of operations. In addition, breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confidential information about the Company, our employees, our vendors, or our customers, could result in litigation, violations of various data privacy regulations in some jurisdictions, and also potentially result in a liability. While we have taken measures to assess the requirements of, and to comply with the European Union's General Data Protection Regulation and data privacy regulations in other countries, these measures may be challenged by authorities that regulate data-related compliance. We could incur significant expense in facilitating and responding to investigations and if the measures we have taken prove to be inadequate, we could face fines or penalties. This could damage our reputation, or otherwise harm our business, financial condition, or results of operations.

•Access to debt and capital markets - We rely on cash generated from operations and external financing to fund our growth and working capital needs. Limitations on access to external financing could adversely affect our operating results. Moreover, interest payments, dividends and the expansion of our business or other business opportunities may require significant amounts of capital. We believe that our cash from operations and available borrowings under our revolving credit facility will be sufficient to meet these needs in the foreseeable future. However, if we need external financing, our access to credit markets and pricing of our capital will be dependent upon maintaining sufficient credit ratings from credit rating agencies and the state of the capital markets generally. There can be no assurances that we would be able to obtain equity or debt financing on terms we deem acceptable, and it is possible that the cost of any financings could increase significantly, thereby increasing our expenses and decreasing our net income. If we are

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unable to generate sufficient cash flow or raise adequate external financing, including as a result of significant disruptions in the global credit markets, we could be forced to restrict our operations and growth opportunities, which could adversely affect our operating results.

•Credit default risks - We may use our existing revolving credit facility to meet our cash needs, to the extent available. In the event of a default in this credit facility or any of our senior notes, we could be required to immediately repay all outstanding borrowings and make cash deposits as collateral for all obligations the facility supports, which we may not be able to do. Any default under any of our credit arrangements could cause a default under many of our other credit agreements and debt instruments. Without waivers from lenders party to those agreements, any such default could have a material adverse effect on our ability to continue to operate.

•Exposure to global economic conditions - Deterioration in the global economy and worldwide credit and foreign exchange markets could adversely affect our business. A worsening of global or regional economic conditions or financial markets could adversely affect both our own and our customers' ability to meet the terms of sale or our suppliers' ability to perform all their commitments to us. A slowdown in economic growth in our international markets, or a deterioration of credit or foreign exchange markets could adversely affect customers, suppliers and our overall business there. Customers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency, or sell their commodities at prevailing international prices, and we may be unable to collect receivables from such customers.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

FMC leases executive offices in Philadelphia, Pennsylvania and operates 25 manufacturing facilities in 18 countries. Our major research and development facilities are in Newark, Delaware; Shanghai, China and Copenhagen, Denmark.

We believe our facilities are in good operating conditions. The number and location of our owned or leased production properties for continuing operations are as follows:

	North America	Latin America	Europe, Middle East and Africa	Asia	Total
Total	5	2	6	12	25

ITEM 3.    LEGAL PROCEEDINGS

Like hundreds of other industrial companies, we have been named as one of many defendants in asbestos-related personal injury litigation. Most of these cases allege personal injury or death resulting from exposure to asbestos in premises of FMC or to asbestos-containing components installed in machinery or equipment manufactured or sold by discontinued operations. The machinery and equipment businesses we owned or operated did not fabricate the asbestos-containing component parts at issue in the litigation, and to this day, neither the U.S. Occupational Safety and Health Administration nor the Environmental Protection Agency has banned the use of these components. Further, the asbestos-containing parts for this machinery and equipment were accessible only at the time of infrequent repair and maintenance. A few jurisdictions have permitted claims to proceed against equipment manufacturers relating to insulation installed by other companies on such machinery and equipment. We believe that, overall, the claims against FMC are without merit.

As of December 31, 2020, there were approximately 9,100 premises and product asbestos claims pending against FMC in several jurisdictions. Since the 1980s, approximately 117,000 asbestos claims against FMC have been discharged, the overwhelming majority of which have been dismissed without any payment to the claimant. Since the 1980s, settlements with claimants have totaled approximately $130 million.

We intend to continue managing these asbestos-related cases in accordance with our historical experience. We have established a reserve for this litigation within our discontinued operations and believe that any exposure of a loss in excess of the established reserve cannot be reasonably estimated. Our experience has been that the overall trends in asbestos litigation have changed over time. Over the last several years, we have seen changes in the jurisdictions where claims against FMC are being filed and changes in the mix of products named in the various claims. Because these claim trends have yet to form a predictable pattern, we are presently unable to reasonably estimate our asbestos liability with respect to claims that may be filed in the future.

Please see Note 1 "Principal Accounting Policies and Related Financial Information" - Environmental obligations, Note 12 "Environmental Obligations" and Note 20 "Guarantees, Commitments and Contingencies" in the notes to our consolidated financial statements included in this Form 10-K, the content of which are incorporated by reference to this Item 3.

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ITEM 4.    MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 4A.    INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The executive officers of FMC Corporation, the offices they currently hold, their business experience during the previous five years and their ages as of December 31, 2020, are as follows. Each executive officer has been employed by the Company for more than five years.

Name	Age	Office and year of election
Mark A. Douglas	58	President, Chief Executive Officer, and Director (20-present), President and Chief Operating Officer (18-19), President, FMC Agricultural Solutions (12-18); President, Industrial Chemicals Group (11-12); Vice President, Global Operations and International Development (10-11); Vice President, President Asia, Dow Advanced Materials (09-10); Board Member, Quaker Houghton (13-present); Board Member CropLife International (17-present); Board Member Pennsylvania Academy of the Fine Arts (16-present)
Pierre R. Brondeau	63	Executive Chairman of the Board (20-Present); Chief Executive Officer and Chairman of the Board (18-20); President, Chief Executive Officer and Chairman of the Board (10-18); President and Chief Executive Officer of Dow Advanced Materials, a specialty materials company (08-09); President and Chief Operating Officer of Rohm and Haas Company, a predecessor of Dow Advanced Materials (07-08); Board Member, T.E. Connectivity Electronics (07-present); Board Member, American Chemistry Council (17-present); Board Trustee, Franklin Institute (17-present), Board Member, Livent Corporation (18-present)
Andrew D. Sandifer	51	Executive Vice President and Chief Financial Officer (18-present); Vice President and Treasurer (16-18); Vice President, Corporate Transformation (14-16); Board Member, Philabundance (14-present); Board Trustee, Germantown Academy (17-present)
Michael F. Reilly	57	Executive Vice President, General Counsel, Chief Compliance Officer and Secretary (19-present); Vice President, Associate General Counsel and Chief Compliance Officer (16-19); Associate General Counsel (13-16); Board Member, First State Montessori Academy, Inc. (18-present)

All officers are elected to hold office for one year or until their successors are elected and qualified. No family relationships exist among any of the above-listed officers, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer. The above-listed officers have not been involved in any legal proceedings during the past ten years of a nature for which the SEC requires disclosure that are material to an evaluation of the ability or integrity of any such officer.

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PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

FMC common stock of $0.10 par value is traded on the New York Stock Exchange (Symbol: FMC). There were 2,370 registered common stockholders as of December 31, 2020.

FMC’s annual meeting of stockholders will be held at 2:00 p.m. on Tuesday, April 27, 2021 via live webcast at www.virtualshareholdermeeting.com/FMC2021. Notice of the meeting, together with proxy materials, will be mailed approximately five weeks prior to the meeting to stockholders of record as of March 3, 2021.

Transfer Agent and Registrar of Stock:

EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101	or	P.O. Box 64874
Mendota Heights, MN 55120-4100		St. Paul, MN 55164-0854
Phone: 1-800-468-9716
(651-450-4064 local and outside the U.S.)
https://equiniti.com/us/

Stockholder Return Performance Presentation

The graph that follows shall not be deemed to be incorporated by reference into any filing made by FMC under the Securities Act of 1933 or the Securities Exchange Act of 1934.

The following Stockholder Performance Graph compares the five-year cumulative total return on FMC’s Common Stock with the S&P 500 Index and the S&P 500 Chemicals Index. The comparison assumes $100 was invested on December 31, 2015, in FMC’s Common Stock and in both of the indices, and the reinvestment of all dividends.

	2015		2016		2017		2018		2019		2020
FMC Corporation	$	100.00	$	146.23	$	246.44	$	194.27	$	266.40	$	311.42
S&P 500 Index	100.00		111.76		135.99		130.25		170.91		201.81
S&P 500 Chemicals Index	100.00		109.98		139.16		123.23		150.07		176.46

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The following table summarizes information with respect to the purchase of our common stock during the three months ended December 31, 2020:

ISSUER PURCHASES OF EQUITY SECURITIES

				Publicly Announced Program
Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased	Total Dollar Amount Purchased		Maximum Dollar Value of Shares that May Yet be Purchased
October	187,511	$	107.18	186,581	$	19,999,977	$	580,000,643
November	224,837	113.36		210,000	23,818,775		556,181,868
December	53,983	118.91		51,957	6,181,212		550,000,656
Total	466,331	$	111.52	448,538	$	49,999,964

___________________

(1)    Includes shares purchased in open market transactions by the independent trustee of the FMC Corporation Non-Qualified Savings and Investment Plan ("NQSP").

In 2020, 0.4 million shares were repurchased under the publicly announced repurchase program. At December 31, 2020, approximately $550 million remained unused under our Board-authorized repurchase program. This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connection with the vesting, exercise and forfeiture of awards under our equity compensation plans. In addition, the independent trustee of our non-qualified deferred compensation plan reacquires shares from time to time through open-market purchases relating to investments by employees in our common stock, one of the investment options available under the Plan.

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ITEM 6.    SELECTED FINANCIAL DATA

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial and other data presented below for, and as of the end of, each of the years in the five-year period ended December 31, 2020, are derived from our consolidated financial statements. The selected consolidated financial data should be read in conjunction with our consolidated financial statements for the year ended December 31, 2020.

	Year Ended December 31,
(in Millions, except per share data)	2020		2019		2018		2017		2016
Income Statement Data:
Revenue	$	4,642.1	$	4,609.8	$	4,285.3	$	2,531.2	$	2,274.8
Income from continuing operations before equity in (earnings) loss of affiliates, non-operating pension and postretirement charges (income), interest expense, net and income taxes	902.2		821.6		740.9		158.5		197.8
Income (loss) from continuing operations before income taxes	729.8		655.0		608.4		95.8		111.6
Income (loss) from continuing operations	$	578.9	$	543.5	$	537.6	$	(133.1)	$	73.4
Discontinued operations, net of income taxes (1)	(28.3)		(63.3)		(26.1)		671.5		138.3
Net income (loss)	$	550.6	$	480.2	$	511.5	$	538.4	$	211.7
Less: Net income (loss) attributable to noncontrolling interest	(0.9)		2.8		9.4		2.6		2.6
Net income (loss) attributable to FMC stockholders	$	551.5	$	477.4	$	502.1	$	535.8	$	209.1
Amounts attributable to FMC stockholders:
Continuing operations, net of income taxes	$	579.8	$	540.7	$	531.4	$	(135.7)	$	71.1
Discontinued operations, net of income taxes	(28.3)		(63.3)		(29.3)		671.5		138.0
Net income (loss)	$	551.5	$	477.4	$	502.1	$	535.8	$	209.1
Basic earnings (loss) per common share attributable to FMC stockholders:
Continuing operations	$	4.46	$	4.12	$	3.94	$	(1.01)	$	0.53
Discontinued operations	(0.22)		(0.48)		(0.22)		5.00		1.03
Net income (loss)	$	4.24	$	3.64	$	3.72	$	3.99	$	1.56
Diluted earnings (loss) per common share attributable to FMC stockholders:
Continuing operations	$	4.44	$	4.10	$	3.91	$	(1.01)	$	0.53
Discontinued operations	(0.22)		(0.48)		(0.22)		5.00		1.03
Net income (loss)	$	4.22	$	3.62	$	3.69	$	3.99	$	1.56
Balance Sheet Data:
Total assets	$	10,186.4	$	9,872.7	$	9,974.3	$	9,206.3	$	6,139.3
Long-term debt	3,023.1		3,113.9		2,531.0		3,094.2		1,801.2
Other Data:
Cash dividends declared per share	$	1.80	$	1.64	$	0.90	$	0.66	$	0.66

____________________

(1)    Discontinued operations, net of income taxes includes, in periods up to their respective dispositions, our discontinued FMC Lithium and FMC Health and Nutrition segments. It also includes other historical discontinued gains and losses related to adjustments to our estimates of our retained liabilities for environmental exposures, general liability, workers’ compensation, postretirement benefit obligations, legal defense, property maintenance and other costs, losses for the settlement of litigation and gains related to property sales. Amount in 2017 includes the divestiture gain associated with FMC Health and Nutrition.

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FORWARD-LOOKING INFORMATION

Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: FMC and its representatives may from time to time make written or oral statements that are "forward-looking" and provide other than historical information, including statements contained herein, in FMC’s other filings with the SEC, and in reports or letters to FMC stockholders.

In some cases, FMC has identified 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 and phrases. Such forward-looking statements are based on management’s current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. These 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. Currently, one of the most significant factors is the potential adverse effect of the current COVID-19 pandemic on our financial condition, results of operations, cash flows and performance, which is substantially influenced by the potential adverse effect of the pandemic on our customers and suppliers and the global economy and financial markets. The extent to which COVID-19 impacts us will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional factors include, among other things, the risk factors and other cautionary statements filed with the SEC included within this Form 10-K as well as other SEC filings and public communications. 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-19. FMC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are qualified in their entirety by the above cautionary statement. FMC undertakes no obligation, and specifically disclaims any duty, to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law.

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

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

COVID-19 Pandemic

In March 2020, the World Health Organization characterized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the outbreak has caused significant disruptions in the U.S. and global economies.

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 fully staffed. However, we did have a third party U.S. toller that was disrupted in the fourth quarter because of COVID-related staffing issues, which signifies one of the ongoing business risks that the pandemic creates. We do not yet know the full extent of the disruptions on either our business and operations or the global economy nor the duration of the pandemic and its adverse effects.

We have implemented new 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. Although most FMC office-based employees around the world have been working remotely during this period, we have implemented procedures to safely return to the workplace in regions where the pandemic is controlled and local health officials have deemed this to be safe in compliance with any government regulations. 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-19 risks, following the protocols and procedures recommended by leading health authorities. We are monitoring the situation in regions where the pandemic continues to escalate and in such regions will remain in a remote working environment until it is safe to return to the workplace. During 2020 we have made significant investments in our employees as a result of the COVID-19 pandemic, including through enhanced dependent care pay policies, recognition bonuses, increased flexibility of work schedules and hours of work to accommodate remote working arrangements, and investment in IT infrastructure to promote remote work. Through these efforts we have successfully avoided any COVID-19 related furloughs or workforce reductions to date.

In addition to addressing the needs of the Company and our employees, FMC has been a leader in supporting the needs of the communities in which FMC has operations and those generally in need as a result of the pandemic. Since the advent of the pandemic, we have donated in excess of 233,000 personal protective equipment supplies, including N95 masks, surgical masks, protective cover suits, goggles and similar items. We have also donated more than 1,800 containers and canisters used to transport alcohol-based disinfecting solution. Additional efforts include financial contributions to hunger-relief organizations; assisting with disinfecting schools and other public spaces in villages; and supporting various community initiatives.

In our supply chain, sourcing of raw materials and intermediates was not a significant issue, although we continued to see some logistics challenges and related higher costs. We are conscious of the potential downside risks in future periods and expect to continue to experience disruption caused by COVID-19 in our supply chain and logistics. We have also seen some pockets of reduced demand as a result of COVID-19, primarily related to disruptions of farm worker labor required for planting, harvesting and packing crops (especially fruits, vegetables and other specialty crops) which may continue going forward. As discussed in our 2020 quarterly reports, we implemented price increases and cost-saving measures across the company to offset impacts of the COVID-19 pandemic and related foreign currency headwinds. We amended our debt covenants with our banks on April 22, 2020 (see Note 11 for more details) to provide significant additional headroom above any of the COVID-19 related scenarios assessed by the company. We will continue to monitor the economic environment related to the pandemic on an ongoing basis and assess the impacts on our business.

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2020 Highlights

The following are the more significant developments in our businesses during the year ended December 31, 2020:

•Revenue of $4,642.1 million in 2020 increased $32.3 million or approximately 1 percent versus last year. A more detailed review of revenues is included under the section entitled "Results of Operations". On a regional basis, sales in North America decreased 8 percent, driven primarily by timing of shipments and supply chain disruptions, including COVID related factors, sales in Latin America increased by 1 percent, sales in Europe, Middle East and Africa increased by 4 percent and sales in Asia increased 6 percent, primarily by volume growth.

•Our gross margin of $2,052.0 million decreased $31.6 million or approximately 2 percent versus last year. The decrease in gross margin was primarily driven by unfavorable foreign currency impacts primarily in Latin America. Gross margin as a percent of revenue of 44 percent decreased slightly from 45 percent in the prior year period, primarily due to unfavorable foreign currency headwinds.

•Selling, general and administrative expenses decreased from $792.9 million to $729.7 million. Selling, general and administrative expenses, excluding transaction-related charges, of $676.4 million decreased $38.7 million or approximately 5 percent. These decreases were a result of cost-saving measures implemented in response to the pandemic. Transaction-related charges are presented in our Adjusted Earnings Non-GAAP financial measurement below under the section titled "Results of Operations".

•Research and development expenses of $287.9 million decreased $10.2 million or 3 percent. The decrease was primarily due to cost-saving measures taken in response to the COVID-19 pandemic. We did not cancel any research and development projects, but we phased some differently to allow lower costs this year in response to the pandemic without fundamentally impacting long-term timelines. We maintain our commitment to invest resources to discover new active ingredients and formulations that support resistance management and sustainable agriculture.

•Net income (loss) attributable to FMC stockholders of $551.5 million increased $74.1 million or approximately 16 percent from $477.4 million in the prior year period. The higher results were driven by cost-saving measures of a combined $73.4 million in selling, general, and administrative and research and development expenses combined in response to the pandemic. Restructuring and other charges were $38.8 million lower versus prior year and discontinued operations expense decreased $35 million compared to the prior year. These increases to income were slightly offset by higher tax expense and higher provision for income taxes of $39.4 million and higher non-operating pension and postretirement charges of $13.1 million. Adjusted after-tax earnings from continuing operations attributable to FMC stockholders of $809.0 million increased $5.3 million or approximately 1 percent. See the disclosure of our Adjusted Earnings Non-GAAP financial measurement under the section titled "Results of Operations".

Other 2020 Highlights

In November 2020, we successfully completed the implementation of our new SAP system. We now have a single, modern system across the entire company for the first time in our history.

On October 2, 2020, we closed on the previously disclosed transaction with Isagro S.p.A ("Isagro") for a purchase price of approximately $65 million, which resulted in a charge in the fourth quarter of 2020. The Fluindapyr acquisition has been treated as an asset acquisition for accounting purposes as it does not meet the definition of a business. Therefore, any acquired in-process research and development was immediately expensed. See Note 9 in the consolidated financial statements included within this Form 10-K for further details.

In June 2020, we launched FMC Ventures, our new venture capital arm targeting strategic investments in start-ups and early-stage companies that are developing and applying emerging technologies in the agricultural industry. The group will be making small, seed type investments.

In May 2020, we announced the launch of our Arc™ farm intelligence platform, a proprietary precision agriculture platform that enables growers and advisors to more accurately predict pest pressure before it becomes a problem.

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2021 Outlook

Our 2021 expectation for the overall global crop protection market growth is that it will be up low-single digits on a percentage basis in U.S. dollars. Commodity prices for many of the major crops are higher and stock-to-use ratios have improved compared to this time last year. All regions are seeing some benefit from better crop commodity prices, while the impacts from COVID on crop demand appear to be lessening.

We expect 2021 revenue will be in the range of approximately $4.9 billion to $5.1 billion, up approximately 8 percent at the midpoint versus 2020. We also expect adjusted EBITDA(1) of $1.32 billion to $1.42 billion, which represents 10 percent growth at the midpoint versus 2020 results. 2021 adjusted earnings are expected to be in the range of $6.65 to $7.35 per diluted share(1), up 13 percent at the midpoint versus 2020, excluding any impact from potential share repurchases in 2021. For cash flow outlook, refer to the liquidity and capital resources section below.

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

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Results of Operations — 2020, 2019 and 2018

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 is provided to assist the readers of our financial statements with useful information regarding our operating results. Our operating results are presented based on how we assess operating performance and internally report financial information. For management purposes, we report operating performance based on earnings before interest, income taxes, depreciation and amortization, discontinued operations, and corporate special charges. Our Adjusted Earnings measure excludes corporate special charges, net of income taxes, discontinued operations attributable to FMC stockholders, net of income taxes, and certain Non-GAAP tax adjustments. These are excluded by us in the measure we use to evaluate business performance and determine certain performance-based compensation. 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.

(in Millions)	Year Ended December 31,
	2020		2019		2018
Revenue	$	4,642.1	$	4,609.8	$	4,285.3
Costs and Expenses
Costs of sales and services	2,590.1		2,526.2		2,405.5
Gross Margin	$	2,052.0	$	2,083.6	$	1,879.8
Selling, general and administrative expenses	729.7		792.9		790.0
Research and development expenses	287.9		298.1		287.7
Restructuring and other charges (income)	132.2		171.0		61.2
Total costs and expenses	$	3,739.9	$	3,788.2	$	3,544.4
Income from continuing operations before equity in (earnings) loss of affiliates, non-operating pension and postretirement charges (income), interest income, interest expense, and provision for income taxes (1)	$	902.2	$	821.6	$	740.9
Equity in (earnings) loss of affiliates	—		—		(0.1)
Non-operating pension and postretirement charges (income)	21.2		8.1		(0.5)
Interest income	(0.1)		(1.9)		(1.4)
Interest expense	151.3		160.4		134.5
Income from continuing operations before income taxes	$	729.8	$	655.0	$	608.4
Provision for income taxes	150.9		111.5		70.8
Income (loss) from continuing operations	$	578.9	$	543.5	$	537.6
Discontinued operations, net of income taxes	(28.3)		(63.3)		(26.1)
Net income (loss) (GAAP)	$	550.6	$	480.2	$	511.5
Adjustments to arrive at Adjusted EBITDA:
Corporate special charges (income):
Restructuring and other charges (income) (3)	$	132.2	$	171.0	$	61.2
Non-operating pension and postretirement charges (income) (4)	21.2		8.1		(0.5)
Transaction-related charges (5)	53.3		77.8		156.5
Discontinued operations, net of income taxes	28.3		63.3		26.1
Interest expense, net	151.2		158.5		133.1
Depreciation and amortization	162.7		150.1		150.2
Provision (benefit) for income taxes	150.9		111.5		70.8
Adjusted EBITDA (Non-GAAP) (2)	$	1,250.4	$	1,220.5	$	1,108.9

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____________________

(1)Referred to as operating profit.

(2)Adjusted EBITDA is defined as operating profit excluding corporate special charges (income) and depreciation and amortization expense.

(3)See Note 9 to the consolidated financial statements included within this Form 10-K for details of restructuring and other charges (income).

(4)Our non-operating pension and postretirement charges (income) are defined as those costs (benefits) related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These are excluded from our operating results and are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance and we consider these costs to be outside our operational performance. We continue to include the service cost and amortization of prior service cost in our operating results noted above. These elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees.

(5)Charges relate to the expensing of the inventory fair value step-up resulting from the application of purchase accounting, transaction costs, costs for transitional employees, other acquired employee related costs, integration related legal and professional third-party fees. Except for the completion of certain in-flight initiatives, primarily associated with the finalization of our worldwide ERP system, we completed the integration of the DuPont Crop Protection Business as of June 30, 2020. The TSA is now terminated and the last phase of the ERP system transition went live in November 2020 with a stabilization period that will go into the first quarter of 2021. Estimated remaining costs are expected to be less than $5 million for the completion of these defined in-flight initiatives during the remaining time period. Amounts represent the following:

	Year Ended December 31,
(in Millions)	2020		2019		2018
DuPont Crop Protection Business Acquisition (1)
Legal and professional fees (2)	$	53.3	$	77.8	$	86.9
Inventory fair value amortization (3)	—		—		69.6
Total transaction-related charges	$	53.3	$	77.8	$	156.5

____________________ 

(1)As previously disclosed, in November 2017, we acquired certain assets relating to the crop protection business of E. I. du Pont de Nemours and Company, and the related research and development organization (the "DuPont Crop Protection Business").

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

(3)These charges are included in "Costs of sales and services" on the consolidated statements of income (loss).

ADJUSTED EARNINGS RECONCILIATION

(in Millions)	Year Ended December 31,
	2020		2019		2018
Net income (loss) attributable to FMC stockholders (GAAP)	$	551.5	$	477.4	$	502.1
Corporate special charges (income), pre-tax (1)	206.7		256.9		217.2
Income tax expense (benefit) on Corporate special charges (income) (2)	(23.8)		(49.2)		(52.8)
Corporate special charges (income), net of income taxes	$	182.9	$	207.7	$	164.4
Adjustment for noncontrolling interest, net of tax on Corporate special charges (income)	—		—		(0.5)
Discontinued operations attributable to FMC Stockholders, net of income taxes	28.3		63.3		29.3
Non-GAAP tax adjustments (3)	46.3		55.3		17.3
Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP)	$	809.0	$	803.7	$	712.6

____________________

(1)    Represents restructuring and other charges (income), non-operating pension and postretirement charges (income) and transaction-related charges.

(2)    The income tax expense (benefit) on Corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the Corporate special charge or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure.

(3)    We exclude the GAAP tax provision, including discrete items, from the Non-GAAP measure of income, and instead include a Non-GAAP tax provision based upon the annual Non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax

27

items including, but not limited to: income tax expenses or benefits that are not related to current year ongoing business operations; tax adjustments associated with fluctuations in foreign currency remeasurement of certain foreign operations; certain changes in estimates of tax matters related to prior fiscal years; certain changes in the realizability of deferred tax assets; and changes in tax law which includes the impact of the Tax Cuts and Jobs Act ("the Act") enacted on December 22, 2017. Management believes excluding these discrete tax items assists investors and securities analysts in understanding the tax provision and the effective tax rate related to ongoing operations thereby providing investors with useful supplemental information about FMC's operational performance.

ORGANIC REVENUE GROWTH RECONCILIATION

	Twelve Months Ended December 31, 2020 vs. 2019
Total Revenue Change (GAAP)	1	%
Less: Foreign Currency Impact	(6%)
Organic Revenue Change (Non-GAAP)	7	%

Results of Operations

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

Revenue

2020 vs. 2019

Revenue of $4,642.1 increased $32.3 million, or approximately 1 percent versus the prior year period. The increase was driven by higher volumes, primarily in Latin America and Asia, which accounted for an approximate 4 percent increase, as well as favorable pricing which accounted for an approximate 3 percent increase. Foreign currency headwinds had an unfavorable impact of approximately 6 percent on revenue. Excluding foreign currency impacts, revenue increased approximately 7 percent.

2019 vs. 2018

Revenue of $4,609.8 million increased $324.5 million, or approximately 8 percent versus the prior year period. The increase was driven by higher volumes, primarily in Latin America, and pricing which accounted for an approximate 8 percent and 3 percent increase, respectively, slightly offset by unfavorable foreign currency fluctuations of approximately 3 percent.

See below for a discussion of revenue by region.

Total Revenue by Region
	Year Ended December 31,
(in Millions)	2020		2019		2018
North America	$	1,032.5	$	1,121.1	$	1,090.8
Latin America	1,456.5		1,441.7		1,210.1
Europe, Middle East and Africa (EMEA)	1,046.3		1,001.8		966.0
Asia	1,106.8		1,045.2		1,018.4
Total	$	4,642.1	$	4,609.8	$	4,285.3

2020 vs. 2019

North America: Revenue decreased approximately 8 percent in the year ended December 31, 2020. Sales were impacted due to supply chain disruptions, including COVID-related factors associated with logistics and a tolling partner in the fourth quarter. Additionally, we had channel destocking in the first half of the year. We continued market expansion of the Lucento® fungicide, which had a strong second year, and Elevest™ insect control had a good launch year.

Latin America: Revenue increased approximately 1 percent, or approximately 17 percent excluding foreign currency headwinds, for the year ended December 31, 2020 compared to the prior year period due primarily to high-single digit volume growth and solid price increases. Brazil had robust demand for our products for soybeans and sugarcane, while there was reduced acreage for cotton.

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EMEA: Revenue increased approximately 4 percent versus the prior year period, or approximately 6 percent excluding foreign currency headwinds. Demand was driven by diamides on specialty crops, Battle® Delta herbicide on cereals and Spotlight® Plus herbicide on potatoes.

Asia: Revenue increased approximately 6 percent versus the prior year period, or approximately 9 percent excluding foreign currency headwinds, primarily driven by market expansion and share gains in India and the very strong market rebound in Australia. Our diamides were in high demand throughout the region in 2020, as we continue to grow on specialty crops like rice and fruit and vegetables.

2019 vs. 2018

North America: Revenue increased approximately 3 percent in the year ended December 31, 2019, primarily driven by volume growth and strength of Rynaxypyr® and Cyazypyr® actives on specialty crops, the launch of Lucento® fungicide, and strong herbicide sales in Canada.

Latin America: Revenue increased approximately 19 percent, or approximately 23 percent excluding foreign currency headwinds, for the year ended December 31, 2019 compared to the prior year period due primarily to strong demand in Brazil for insecticides on cotton, herbicides on sugarcane, and insecticides in soybean applications. Strong growth in Argentina, due to improved market access and strength of herbicides in soybean applications also contributed to the significant growth in the region.

EMEA: Revenue increased approximately 4 percent versus the prior year period, or approximately 10 percent excluding foreign currency headwinds, primarily due to the successful launch of Battle® Delta herbicides and Cyazypyr® insect control registrations across the region. Favorable weather, demand for our diamide products, and higher pricing throughout the region also contributed to the increase. These increases were partially offset by unfavorable foreign currency impacts.

Asia: Revenue increased approximately 3 percent versus the prior year period, or approximately 8 percent excluding foreign currency headwinds, primarily driven by continued strong growth in India and new products across the region. Partially offsetting the increases were adverse weather conditions in Australia and challenged rice markets in China.

In late March 2019, there was an explosion within an industrial park in China which impacted one plant operated by one of our contract manufacturing tollers. The local government had temporarily shut down the entire park to investigate the cause of the explosion. During 2020, our toller received approval for a phased re-opening that began during the fourth quarter and will continue through 2021. Our global manufacturing network provides significant supply chain flexibility. Due to the strength of our partnerships and our alternate sourcing options, we have been able to secure supply of the active ingredients normally manufactured at this location.

Gross margin

2020 vs. 2019

Gross margin of $2,052.0 million decreased $31.6 million, or approximately 2 percent versus the prior year period. The decrease was primarily due to unfavorable foreign currency impacts.

Gross margin percent of approximately 44 percent slightly decreased from 45 percent in the prior year period, primarily due to unfavorable foreign currency headwinds.

2019 vs. 2018

Gross margin of $2,083.6 million increased $203.8 million, or approximately 11 percent versus the prior year period. Gross margin, excluding transaction-related charges, increased versus the prior year period by $134.2 million. The increase was primarily due to higher revenues driven by increased volume and pricing, partially offset by higher costs, primarily raw material costs.

Gross margin percent of approximately 45 percent slightly increased from approximately 44 percent in the prior year period. The increase from higher pricing was nearly offset by higher costs, primarily raw material costs. Gross margin percent, excluding transaction-related charges, of approximately 45 percent remained relatively flat compared to the prior year period.

Selling, general, and administrative expenses

2020 vs. 2019

Selling, general and administrative expenses of $729.7 million decreased by $63.2 million, or approximately 8.0 percent versus the prior year period. Selling, general and administrative expenses, excluding transaction-related charges, decreased $38.7 million, or approximately 5 percent, versus the prior year period due to cost-saving measures implemented in response to the pandemic.

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2019 vs. 2018

Selling, general and administrative expenses of $792.9 million slightly increased by $2.9 million versus the prior year period. Selling, general and administrative expenses, excluding transaction-related charges, increased $12.0 million, or approximately 2 percent, versus the prior year period.

Research and development expenses

2020 vs. 2019

Research and development expenses of $287.9 million decreased $10.2 million, or approximately 3 percent versus the prior year period due to cost-saving measures taken in response to the COVID-19 pandemic, but we did not cancel any research and development projects. We phased some projects differently to allow lower costs this year in response to the pandemic without fundamentally impacting long-term timelines.

2019 vs. 2018

Research and development expenses of $298.1 million increased $10.4 million, or approximately 4 percent versus the prior year period primarily due to investments in our global discovery and product development.

Adjusted EBITDA (Non-GAAP)

2020 vs. 2019

Adjusted EBITDA of $1,250.4 million increased $29.9 million, or approximately 2 percent versus the prior year period. The increase was due to higher volumes, higher pricing, and strong cost management which accounted for approximately 9 percent, 9 percent, and 6 percent increases respectively. These factors offset foreign currency fluctuations which had an unfavorable impact of approximately 22 percent on Adjusted EBITDA.

2019 vs. 2018

Adjusted EBITDA of $1,220.5 million increased $111.6 million, or approximately 10 percent versus the prior year period. The increase was due to the strong demand which led to higher volumes and higher pricing as discussed above which contributed approximately 18 percent and 12 percent to the increase, respectively. The price increases were primarily seen in Latin America. These factors more than offset the higher costs, primarily driven by higher raw material costs, and unfavorable foreign currency fluctuations which impacted the change in Adjusted EBITDA by approximately 15 percent and 5 percent, respectively.

Other Results of Operations

Depreciation and amortization

2020 vs. 2019

Depreciation and amortization of $162.7 million increased $12.6 million, or approximately 8 percent, as compared to 2019 of $150.1 million. The increase was mostly driven by the impacts of the amortization effects of the completion of various phases of our ERP implementation which increased amortization expense by approximately $10 million.

2019 vs. 2018

Depreciation and amortization of $150.1 million remained relatively flat as compared to 2018 of $150.2 million.

Interest expense, net

2020 vs. 2019

Interest expense, net of $151.2 million decreased by $7.3 million, or approximately 5 percent, compared to $158.5 million in 2019. The decrease was driven by lower term loan balances which decreased interest expense by approximately $17 million, lower LIBOR rates which decreased interest expense by approximately $20 million and partially offset by the impacts of our third quarter 2019 debt offering which increased interest expense by approximately $30 million.

2019 vs. 2018

Interest expense, net of $158.5 increased by $25.4 million, or approximately 19 percent compared to $133.1 million in 2018. The increase was driven by the issuance of the Senior Notes discussed further below, which increased interest expense by approximately $7 million, and higher average foreign debt balances throughout the year, which increased interest expense by approximately $17 million.

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Corporate special charges (income)

Restructuring and other charges (income)

Our restructuring and other charges (income) are comprised of restructuring, assets disposals and other charges (income) as described below:

	Year Ended December 31,
(in Millions)	2020		2019		2018
Restructuring charges	$	42.6	$	62.2	$	124.1
Other charges (income), net	89.6		108.8		(62.9)
Total restructuring and other charges (income) (1)	$	132.2	$	171.0	$	61.2

_______________

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

2020

Restructuring charges in 2020 primarily consisted of $40.2 million of charges 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. These charges included severance, accelerated depreciation on certain fixed assets, and other costs (benefits). There were other miscellaneous restructuring charges $2.4 million.

Other charges (income), net in 2020 includes $65.6 million of charges related to our acquisition of the remaining rights for Fluindapyr active ingredient assets from Isagro. See Note 9 for further information regarding this matter. Additional charges of $24.9 million consists of charges of environmental sites.

2019

Restructuring charges in 2019 primarily consisted of $34.1 million of charges related to our decision to exit sales of all carbofuran formulations globally and $26.4 million of charges associated with the integration of the DuPont Crop Protection Business. These charges included severance, accelerated depreciation on certain fixed assets, and other costs (benefits). There were other miscellaneous restructuring charges $1.7 million.

Other charges (income), net in 2019 primarily consists of charges of environmental sites. During the fourth quarter of 2019, we recorded a charge of $72.8 million a result of an unfavorable court ruling we received in relation to the Pocatello Tribal Litigation at one of our environmental sites. See Note 12 for further information regarding this matter.

2018

Restructuring charges in 2018 were primarily associated with restructuring charges associated with the integration of the DuPont Crop Protection Business. These charges primarily consisted of approximately $59 million of charges related to the change in our market access model in India and approximately $28 million of charges due to our decision to exit the Ewing R&D center. Refer to Note 9 for more information. Other restructuring charges related to the integration of the acquired DuPont Crop Protection Business totaled approximately $22 million.

Other charges (income), net in 2018 primarily consists of income from the gain on sales of $87.2 million from the divestment of a portion of FMC's European herbicide portfolio to Nufarm Limited and certain products of our India portfolio to Crystal Crop Protection Limited. These divestitures satisfied FMC's commitment to the European Commission and the Competition Commission of India, respectively, for regulatory requirements in order to complete the DuPont Crop Protection Acquisition. Additionally, there were environmental related charges of $21.7 million for remediation activities and $2.6 million of other charges.

Non-operating pension and postretirement (charges) income

2020 vs. 2019

The charge for 2020 was $21.2 million compared to $8.1 million in 2019. The increase in non-operating pension and post retirement charges (income) is attributable to the continued approach of using the smoothed market related value of assets (MRVA) as opposed to the actual fair value of plan assets in the determination of 2020 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.

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2019 vs. 2018

The charge for 2019 was $8.1 million compared to income of $0.5 million in 2018. The change was due to lower expected return on plan assets of approximately $10 million resulting from the full shift to a fixed income investment portfolio for the full year of 2019 versus the shift to a primarily fixed income investment portfolio for only a portion of the year in 2018. See Note 15 for more information.

Transaction-related charges

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

Provision for income taxes    

Provision for income taxes for 2020 was expense of $150.9 million resulting in an effective tax rate of 20.7 percent. Provision for income taxes for 2019 was expense of $111.5 million resulting in an effective tax rate of 17.0 percent. Provision for income taxes for 2018 was expense of $70.8 million resulting in an effective tax rate of 11.6 percent. Note 13 to the consolidated financial statements included in this Form 10-K includes more details on the drivers of the GAAP effective rate and year-over-year changes. We believe showing the reconciliation below of our GAAP to Non-GAAP effective tax rate provides investors with useful supplemental information about our tax rate on the core underlying business.

	Year Ended December 31,
	2020						2019						2018
(in Millions)	Income (Expense)		Tax Provision (Benefit)		Effective Tax Rate		Income (Expense)		Tax Provision (Benefit)		Effective Tax Rate		Income (Expense)		Tax Provision (Benefit)		Effective Tax Rate
GAAP - Continuing operations	$	729.8	$	150.9	20.7	%	$	655.0	$	111.5	17.0	%	$	608.4	$	70.8	11.6	%
Corporate special charges (income)	206.7		23.8				256.9		49.2				217.2		52.8
Tax adjustments (1)			(46.3)						(55.3)						(17.3)
Non-GAAP - Continuing operations	$	936.5	$	128.4	13.7	%	$	911.9	$	105.4	11.6	%	$	825.6	$	106.3	12.9	%

_______________

(1)Tax adjustments in 2020, 2019, and 2018 are materially attributable to the effects of certain changes in prior year tax matters and the realizability of deferred tax assets in certain jurisdictions. Tax adjustments in 2018 also include the effects of the Act, primarily related to the one-time transition tax and the decrease in the U.S. federal tax rate. See Note 13 to the consolidated financial statements included within this Form 10-K for additional discussion.

The primary drivers for the fluctuations in the effective tax rate for each period are provided in the table above. Excluding the items in the table above, the changes in the non-GAAP effective tax rate were primarily due to the impact of geographic mix of earnings among our global subsidiaries. See Note 13 to the consolidated financial statements for additional details related to the provisions for income taxes on continuing operations, as well as items that significantly impact our effective tax rate.

Discontinued operations, net of income taxes

Our discontinued operations, in periods up to its disposition, represent our discontinued FMC Lithium and FMC Health and Nutrition business results as well as adjustments to retained liabilities from other previously discontinued operations. The primary liabilities retained include environmental liabilities, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities. See Note 11 to the consolidated financial statements for additional details on our discontinued operations.

2020 vs. 2019

Discontinued operations, net of income taxes represented a loss of $28.3 million in 2020 compared to a loss of $63.3 million in 2019. The loss during both periods was primarily due to adjustments related to the retained liabilities from our previously discontinued operations. Offsetting the loss in both 2019 and 2020 were the gain on sale of two parcels of land in our discontinued site in Newark, California of $21 million and $24 million, net of taxes, respectively. Additionally, during 2019, we included the net loss from our discontinued FMC Lithium segment, primarily due to separation-related costs, up to its separation date on March 1, 2019.

2019 vs. 2018

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Discontinued operations, net of income taxes represented a loss of $63.3 million in 2019 compared to a loss of $26.1 million in 2018. 2019 included the net loss from our discontinued FMC Lithium segment, primarily due to separation-related costs, up to its separation date on March 1, 2019, compared to income for the full year in 2018. Offsetting the loss was the gain on sale from the sale of the first of two parcels of land of our discontinued site in Newark, California in 2019. During 2018, we recorded a charge of approximately $106 million as a result of active negotiations for a settlement agreement primarily to address discontinued operations at our Middleport, New York plant which was the subject of an Administrative Order on Consent entered into with the EPA and NYSDEC in 1991. The charge consisted of incremental estimated costs of remediation for certain offsite operable units associated with historic site operations as we engaged in settlement discussions with NYSDEC to resolve the path forward regarding remediation. Refer to Note 12 for further details.

Net income (loss) attributable to FMC stockholders

2020 vs. 2019

Net income (loss) attributable to FMC stockholders increased to $551.5 million from $477.4 million. The higher results were driven by a slight increase in revenue as well as cost-saving measures in selling, general, and administrative and research and development expenses in response to the pandemic. Restructuring and other charges were $38.8 million lower versus prior year and discontinued operations expense decreased $35 million compared to the prior year. These increases to income were partially offset by higher tax expense and higher provision for income taxes of $39.4 million and higher non-operating pension and postretirement charges of $13.1 million.

2019 vs. 2018

Net income (loss) attributable to FMC stockholders decreased to $477.4 million from $502.1 million. The decrease was primarily due to higher costs and expenses, particularly restructuring and other charges associated with environmental remediation at our decommissioned plant near Pocatello, higher tax provisions, and higher net interest expense. This was partially offset by higher adjusted EBITDA from higher volumes and pricing.

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Liquidity and Capital Resources

Cash and cash equivalents at December 31, 2020 and 2019, were $568.9 million and $339.1 million, respectively. We held more cash on the balance sheet as a result of significantly increased cash from operations year over year and held it in advance of a seasonal working capital build in the first quarter. Of the cash and cash equivalents balance at December 31, 2020, $560.5 million was held by our foreign subsidiaries. The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries’ operating activities and future foreign investments. We have not provided income taxes for other outside basis differences inherent in our investments in subsidiaries because the investments and related unremitted earnings are essentially permanent in duration or we have concluded that no additional tax liability will arise upon disposal or remittance. See Note 13 to the consolidated financial statements included within this Form 10-K for more information.

At December 31, 2020, we had total debt of $3,267.8 million as compared to $3,258.8 million at December 31, 2019. Total debt included $2,929.5 million and $3,031.1 million of long-term debt (excluding current portions of $93.6 million and $82.8 million) at December 31, 2020 and 2019, respectively. Early in the second quarter of 2020 we amended the Revolving Credit Facility and 2017 Term Loan Agreements to increase the maximum leverage ratio, in order to address potential liquidity constraints that might arise due to the COVID-19 pandemic. Although we had not then, and have not since, experienced any liquidity issues as a result of the economic impacts of the pandemic, we determined that it would be prudent to take this step, as the higher leverage ratio provides significant headroom above any of the COVID-19 related scenarios assessed by the company. Additionally, during the second quarter we fully repaid the $500 million revolver draw made late in the first quarter at the height of the pandemic’s impact on short-term financing markets. As of December 31, 2020, we were in compliance with all of our debt covenants. See Note 14 in the consolidated financial statements included in this Form 10-K for further details. We remain committed to solid investment grade credit metrics, and expect full-year average leverage to be in line with this commitment in 2020.

The decrease in long-term debt was primarily due to paydowns on the 2017 Term Loan Facility, which is scheduled to mature on November 1, 2022. The borrowings under the 2017 Term Loan Facility will bear interest at a floating rate, which will be a base rate or a Eurocurrency rate equal to the London interbank offered rate for the relevant interest period, plus in each case an applicable margin, as determined in accordance with the provisions of the 2017 Term Loan Facility. The decrease in long-term debt was offset by the increase in short-term debt.

Our short-term debt consists of foreign borrowings and our commercial paper program. Foreign borrowings decreased from $144.9 million at December 31, 2019 to $98.4 million at December 31, 2020 while outstanding commercial paper increased from zero at December 31, 2019 to $146.3 million at December 31, 2020. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries.

Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. At December 31, 2020, we had $146.3 million borrowings outstanding under the commercial paper program at an average borrowing rate of 0.5 percent. Our commercial paper balances fluctuate from year to year depending on working capital needs and status on receivables collections.

Revolving Credit Facility and 2017 Term Loan Agreement Amendment

On April 22, 2020, we amended both our Revolving Credit Agreement and 2017 Term Loan Agreement which, among other things, increased the maximum leverage ratio financial covenant and added a negative covenant restricting purchases of the Company’s stock if at any time the maximum leverage ratio exceeds 3.5 through the period ending June 30, 2021. See Note 14 for further details.

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Statement of Cash Flows

Cash provided (required) by operating activities was $736.8 million, $555.6 million and $362.7 million for 2020, 2019 and 2018, respectively.

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

(in Millions)	Year ended December 31,
	2020		2019		2018
Income (loss) from continuing operations before equity in (earnings) loss of affiliates, non-operating pension expense and postretirement charges, interest expense, net and income taxes	$	902.2	$	821.6	$	740.9
Restructuring and other charges (income), transaction-related charges and depreciation and amortization	348.2		398.9		367.9
Operating income before depreciation and amortization (Non-GAAP)	$	1,250.4	$	1,220.5	$	1,108.8
Change in trade receivables, net (1)	(71.8)		(123.5)		(281.5)
Change in guarantees of vendor financing	64.8		8.6		15.4
Change in advance payments from customers (2)	(145.5)		34.1		80.2
Change in accrued customer rebates (3)	17.2		(85.8)		104.1
Change in inventories (4)	(59.7)		6.4		(200.7)
Change in accounts payable (5)	61.8		103.0		166.7
Change in all other operating assets and liabilities (6)	(68.2)		(208.5)		(187.5)
Operating cash flows (Non-GAAP)	$	1,049.0	$	954.8	$	805.5
Restructuring and other spending (7)	(17.9)		(18.6)		(25.2)
Environmental spending, continuing, net of recoveries (8)	(1.9)		(18.3)		(20.3)
Pension and other postretirement benefit contributions (9)	(4.6)		(13.4)		(37.5)
Net interest payments (10)	(141.8)		(140.9)		(133.4)
Tax payments, net of refunds (11)	(82.1)		(130.9)		(125.3)
Transaction and integration costs (12)	(63.9)		(77.1)		(101.1)
Cash provided (required) by operating activities of continuing operations	$	736.8	$	555.6	$	362.7

____________________ 

(1)The change in trade receivables in all periods include the impacts of seasonality and the receivable build intrinsic in our business. The change in cash flows related to trade receivables in 2020 was driven by timing of collections as well as higher sales. Collection timing is more pronounced in certain countries such as Brazil where there may be terms significantly longer than the rest of our business. Additionally, timing of collection is impacted as amounts for all periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks. During 2020, we collected approximately $931 million of receivables in Brazil. 

(2)Advance payments are typically received in the fourth quarter of each year, primarily in our North America operations as revenue associated with advance payments is recognized, generally in the first half of each year following the seasonality of that business, as shipments are made and title, ownership and risk of loss pass to the customer. The change in 2020 was primarily related to lower overall payments received and higher application of funds to accounts receivable balances year over year.

(3)These rebates are primarily associated within North America, and to a lesser extent Brazil, and in North America generally settle in the fourth quarter of each year given the end of the respective crop cycle. The changes year over year are associated with the mix in sales eligible for rebates and incentives in 2020 compared to 2019 and 2018 and timing of certain rebate payments.

(4)Changes in inventory in 2020 are a result of significant market impacts during the fourth quarter related to logistics and supply chain constraints in the U.S., reduced demand in the U.S., Brazil and Argentina, and products held by foreign customs. Changes in inventory in 2019 and 2018 are a result of inventory levels being adjusted to take into consideration the change in market conditions.

(5)The change in cash flows related to accounts payable in 2020, 2019 and 2018 is primarily due to timing of payments made to suppliers and vendors. 2019 was partially impacted during portions of 2019 from global supply chain issues, primarily in China, which required us to obtain raw materials on payment terms shorter than normal.

(6)Changes in all periods presented primarily represent timing of payments associated with all other operating assets and liabilities. Additionally, the 2020 and 2019 period includes the effects of the unfavorable contracts amortization of approximately $120 million and $116 million, respectively.

(7)See Note 9 to the consolidated financial statements included in this Form 10-K for further details.

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(8)Included in our results for each of the years presented are environmental charges for environmental remediation of $24.9 million, $108.7 million and $21.7 million, respectively. The amounts in 2020 will be spent in future years. The amounts represent environmental remediation spending which were recorded against pre-existing reserves, net of recoveries. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations. Additionally, during the first quarter of 2020, we entered into a confidential insurance settlement pertaining to coverage at a legacy environmental site, which settlement resulted in a cash payment to FMC in the amount of $20.0 million. Refer to Note 12 for more details.

(9)There were no voluntary contributions to our U.S. qualified defined benefit plan in 2020. Amounts in 2019 and 2018 include voluntary contributions to our U.S. qualified defined benefit plan of $7.0 million and $30.0 million, respectively.

(10)Interest payments were basically flat versus prior year.

(11)Amounts shown in the chart represent net tax payments of our continuing operations. The decrease in net tax payments in 2020 as compared to prior periods is primarily attributable to the deferral of income tax payments in various jurisdictions as a result of the COVID-19 pandemic. Tax payments in 2019 primarily represent the payments of tax attributable to the Nufarm Limited sale, transition tax, and tax payments related to the acquired DuPont Crop Protection Business. Tax payments in 2018 primarily represent the payments of tax attributable to the FMC Health and Nutrition segment disposition, transition tax and full year tax payments related to the acquired DuPont Crop Protection Business.

(12)Represents payments for legal and professional fees associated with the DuPont Crop Protection Business Acquisition in addition to costs related to integrating the DuPont Crop Protection Business. Except for the completion of certain in-flight initiatives, primarily associated with the finalization of our worldwide ERP system, we completed the integration of the DuPont Crop Protection Business as of June 30, 2020. The TSA is now terminated and the last phase of the ERP system transition went live in November 2020 with a stabilization period that will go into the first quarter of 2021. Estimated remaining cash outflows are expected to be approximately $15 million for the completion of these defined in-flight initiatives during the remaining time period. See Note 5 to the consolidated financial statements for more information.

Cash provided (required) by operating activities of discontinued operations was $(89.0) million, $(67.1) million and $5.7 million for 2020, 2019 and 2018, respectively.

Cash required by operating activities of discontinued operations is directly related to environmental, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities.

Amounts in 2019 and 2018 also include the operating activities of our discontinued FMC Lithium segment, which was separated on March 1, 2019

Cash provided (required) by investing activities of continuing operations was $(200.4) million, $(195.9) million and $(37.5) million for 2020, 2019 and 2018, respectively.

Cash required in 2020 primarily due to capital expenditures and spending related to our contract manufacturing arrangements, as well as continued spending associated with the final stages of our new SAP system implementation. 2020 also includes payments of $65.6 million to acquire the remaining rights for Fluindapyr from Isagro S.p.A ("Isagro") in an asset acquisition.

Cash required in 2019 is primarily due to capital expenditures and spending related to our contract manufacturing arrangements, as well as continued spending during that period associated with the implementation of a new SAP system.

Cash required in 2018 is primarily due to higher capital expenditure spending as well as incremental capitalizable corporate level spending associated with the implementation of a new SAP system, partially offset by the sale of product portfolios of approximately $88 million that were required to complete the DuPont Crop Protection Business Acquisition.

Cash provided (required) by investing activities of discontinued operations was $31.1 million, $9.2 million and $(93.4) million for 2020, 2019 and 2018, respectively.

Cash provided by investing activities of discontinued operations in 2020 and 2019 represents the proceeds of approximately $31 million and $26 million from the sale of our two parcels of land of our discontinued site in Newark, California. These sales resulted in a gain recognized within discontinued operations in each period of approximately $24 million and $21 million, net of taxes, respectively. In 2019, this was partially offset by capital expenditures of our discontinued FMC Lithium segment. Cash required by investing activities of discontinued operations in 2018 represents the working capital payment associated with the divestiture of FMC Health and Nutrition as well as the capital expenditures of our discontinued FMC Lithium segment.

Cash provided (required) by financing activities was $(250.3) million, $(87.0) million and $(397.3) million in 2020, 2019 and 2018, respectively.

The change in cash required by financing activities in 2020 is primarily driven by the prior year proceeds from the Senior Notes and higher dividend payments offset by a reduction in the payment of long term debt and a reduction of repurchases of common stock under our publicly announced program.

The change in cash required by financing activities in 2019 is primarily due to the proceeds from the Senior Notes offset by cash outflows including higher repurchases of common stock, repayment of long-term debt, and higher dividend payments in

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2019 as compared to the prior period. 2018 included the net proceeds from the IPO of FMC Lithium which were more than offset by repayments of long-term debt, dividend payments and repurchases of common stock.

Cash provided (required) by financing activities of discontinued operations was zero , $(37.2) million and $34.0 million in 2020, 2019 and 2018, respectively.

Cash required by financing activities of discontinued operations in 2019 represents debt repayments on FMC Lithium's external debt as well as cash payments associated with its separation. Cash provided by financing activities of discontinued operations in 2018 represents the proceeds from borrowing of long-term debt of our discontinued FMC Lithium segment.

Free Cash Flow

We define free cash flow, a Non-GAAP financial measure, as all cash inflows and outflows excluding those related to financing activities (such as debt repayments, dividends, and share repurchases) and acquisition related investing activities. Free cash flow is calculated as all cash from operating activities reduced by spending for capital additions and other investing activities as well as legacy and transformation spending. Therefore, our calculation of free cash flow will almost always result in a lower amount than cash from operating activities from continuing operations, the most directly comparable U.S. GAAP measure. However, the free cash flow measure is consistent with management's assessment of operating cash flow performance and we believe it provides a useful basis for investors and securities analysts about the cash generated by routine business operations, including capital expenditures, in addition to assessing our ability to repay debt, fund acquisitions and return capital to shareholders through share repurchases and dividends.

Our use of free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results under U.S. GAAP. First, free cash flow is not a substitute for cash provided (required) by operating activities of continuing operations, as it is not a measure of cash available for discretionary expenditures since we have non-discretionary obligations, primarily debt service, that are not deducted from the measure. Second, other companies may calculate free cash flow or similarly titled Non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a tool for comparison. Additionally, the utility of free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for a given period. Because of these and other limitations, free cash flow should be considered along with cash provided (required) by operating activities of continuing operations and other comparable financial measures prepared and presented in accordance with U.S. GAAP.

The table below presents a reconciliation of free cash flow from the most directly comparable U.S. GAAP measure.

FREE CASH FLOW RECONCILIATION

(in Millions)	Year ended December 31,
	2020		2019		2018
Cash provided (required) by operating activities of continuing operations (GAAP)	$	736.8	$	555.6	$	362.7
Transaction and integration costs (1)	63.9		77.1		101.1
Adjusted cash from operations (2)	$	800.7	$	632.7	$	463.8
Capital expenditures (3)	(67.2)		(93.9)		(83.0)
Other investing activities (3)(4)	(20.4)		(54.0)		(13.6)
Capital additions and other investing activities	$	(87.6)	$	(147.9)	$	(96.6)
Cash provided (required) by operating activities of discontinued operations (5)	(89.0)		(67.1)		5.7
Cash provided (required) by investing activities of discontinued operations (5)	31.1		9.2		(93.4)
Transaction and integration costs (1)	(63.9)		(77.1)		(101.1)
Investment in Enterprise Resource Planning system (3)	(47.2)		(48.0)		(48.5)
Legacy and transformation (6)	$	(169.0)	$	(183.0)	$	(237.3)
Free cash flow (Non-GAAP)	$	544.1	$	301.8	$	129.9

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(1)    Represents payments for legal and professional fees associated with the DuPont Crop Protection Business Acquisition in addition to costs related to integrating the DuPont Crop Protection Business. See Note 5 to the consolidated financial statements for more information.

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(2)    Adjusted cash from operations is defined as cash provided (required) by operating activities of continuing operations excluding the effects of transaction-related cash flows, which are included within Legacy and transformation.

(3)    Components of cash provided (required) by investing activities of continuing operations. Refer to the below discussion for further details.

(4)    Cash spending associated with contract manufacturers was $17.4 million, $51.7 million and $13.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

(5)    Refer to the above discussion for further details.

(6)    Includes our legacy liabilities such as environmental remediation and other legal matters that are reported in discontinued operations as well as business integration costs associated with the DuPont Crop Protection Business Acquisition and the implementation of our new SAP system.

2021 Cash Flow Outlook

Our cash needs for 2021 include operating cash requirements (which are impacted by contributions to our pension plan, as well as environmental, asset retirement obligation, and restructuring spending), capital expenditures, and legacy and transformation spending, as well as mandatory payments of debt, dividend payments, and share repurchases. We plan to meet our liquidity needs through available cash, cash generated from operations, commercial paper issuances and borrowings under our committed revolving credit facility. At December 31, 2020 our remaining borrowing capacity under our credit facility was $1,139.6 million.

We expect 2021 free cash flow (Non-GAAP) to increase to a range of approximately $530 million to $620 million, driven by growth in adjusted cash from operations and reduced legacy and transformation spending which is forecasted to be partially offset by a significant year over year increase in capital additions. This increase in capital additions primarily relates to resuming or advancing projects that were delayed or deferred in 2020 due to the pandemic.

Although we provide a forecast for free cash flow, a Non-GAAP financial measure, we are not able to forecast the most directly comparable measure calculated and presented in accordance with U.S. GAAP, which is cash provided (required) by operating activities of continuing operations. Certain elements of the composition of the U.S. GAAP amount are not predictable, making it impractical for us to forecast. Such elements include, but are not limited to, restructuring, acquisition charges, and discontinued operations. As a result, no U.S. GAAP outlook is provided.

Cash from operating activities of continuing operations

We expect higher cash from operating activities, excluding the effects of transaction-related cash flows, primarily driven by higher forecasted Adjusted EBITDA as well as continued improvement in working capital, to be in the range of approximately $790 million to $950 million. Transaction-related cash flows are included within Legacy and transformation, which is consistent with how we evaluate our business operations from a cash flow standpoint. See below for further discussion. Cash from operating activities includes cash requirements related to our pension plans, environmental sites, restructuring and asset retirement obligations, taxes and interest on borrowings.

Pension

We do not expect to make any voluntary cash contributions to our U.S. qualified defined benefit pension plan in 2021. The plan is fully funded and our portfolio is comprised of 100 percent fixed income securities and cash. Our investment strategy is a liability hedging approach with an objective of maintaining the funded status of the plan such that the funded status volatility is minimized and the likelihood that we will be required to make significant contributions to the plan is limited.

Environmental

Projected 2021 spending includes approximately $58 million to $68 million of net environmental remediation spending for our sites accounted for within continuing operations. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations. This spending includes approximately $43 million related to our environmental remediation site near Pocatello, Idaho, primarily as a result of a litigation judgment against us in the Pocatello Tribal litigation described in Note 12. Of the total 2021 projected spend at this site, $20.5 million was paid in the first quarter of 2021 and an additional $11.7 million payment for past years' permit fees plus interest associated with these payments will also be made in 2021.

Total projected 2021 environmental spending, inclusive of both sites accounted for within continuing operations and discontinued sites (discussed within Legacy and transformation below), is expected to be in the range of $115 million to $125 million.

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Restructuring and asset retirement obligations

We expect to make payments of approximately $25 to $35 million in 2021, of which approximately $10 million is related to exit and disposal costs as a result of our decision to exit sales of all carbofuran formulations (including Furadan® insecticide/nematicide, as well as Curaterr® insecticide/nematicide and any other brands used with carbofuran products). See Note 9 for more information.

Capital additions and other investing activities

Projected 2021 capital expenditures and expenditures related to contract manufacturers are expected to be in the range of approximately $160 million to $200 million. The spending is mainly driven by continuing progress on projects delayed or deferred in 2020 due to the pandemic, primarily for diamide capacity expansion and new active ingredient capacity. Expenditures related to contract manufacturers are included within "other investing activities".

Legacy and transformation

Projected 2021 legacy and transformation spending are expected to be in the range of approximately $100 million to $130 million. This is primarily driven by environmental remediation spending and legacy liabilities. Except for the completion of certain in-flight initiatives, primarily associated with the finalization of our worldwide ERP system, we completed the integration of the DuPont Crop Protection Business as of June 30, 2020. As noted, the TSA is now terminated and the last phase of the ERP system transition went live in November 2020 with a stabilization period that will go into the first quarter of 2021. Cash outflows for these initiatives are expected to be approximately $15 million in 2021.

Projected 2021 spending includes approximately $53 million to $63 million of net environmental remediation spending for our discontinued sites. These projections include spending as a result of a settlement reached in the second quarter of 2019 at our Middleport, New York site. The settlement will result in spending of approximately $25 million in 2021.

Total projected 2021 environmental spending, inclusive of both sites accounted for within continuing operations (discussed within Cash from operating activities of continuing operations above) and discontinued sites, is expected to be in the range of $115 million to $125 million.

Share repurchases

During the year ended December 31, 2020, 0.4 million shares were repurchased under the publicly announced repurchase program for approximately $50 million. At December 31, 2020, approximately $550 million remained unused under our Board-authorized repurchase program. We intend to purchase between $400 million to $500 million of our common shares in 2021. This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connections with vesting, exercise and forfeiture of awards under our equity compensation plans.

Dividends

On January 21, 2021, we paid dividends aggregating $62.3 million to our shareholders of record as of December 31, 2020. This amount is included in "Accrued and other liabilities" on the consolidated balance sheet as of December 31, 2020. For the years ended December 31, 2020, 2019 and 2018, we paid $228.5 million, $210.3 million and $89.2 million in dividends, respectively. We expect to continue to make quarterly dividend payments. Future cash dividends, as always, will depend on a variety of factors, including earnings, capital requirements, financial condition, general economic conditions and other factors considered relevant by us and is subject to final determination by our Board of Directors.

Commitments

We provide guarantees to financial institutions on behalf of certain customers, principally customers in Brazil, for their seasonal borrowing. The total of these guarantees was $140.6 million at December 31, 2020. These guarantees arise during the ordinary course of business from relationships with customers and nonconsolidated affiliates. Non-performance by the guaranteed party triggers the obligation requiring us to make payments to the beneficiary of the guarantee. Based on our experience these types of guarantees have not had a material effect on our consolidated financial position or on our liquidity. Our expectation is that future payment or performance related to the non-performance of others is considered unlikely.

In connection with certain of our property and asset sales and divestitures, we have agreed to indemnify the buyer for certain liabilities, including environmental contamination and taxes that occurred prior to the date of sale. Our indemnification obligations with respect to these liabilities may be indefinite as to duration and may or may not be subject to a deductible, minimum claim amount or cap. In cases where it is not possible for us to predict the likelihood that a claim will be made or to make a reasonable estimate of the maximum potential loss or range of loss, no specific liability has been recorded. If triggered, we may be able to recover certain of the indemnity payments from third parties. In cases where it is possible, we have recorded a specific liability within our Reserve for Discontinued Operations. Refer to Note 11 for further details.

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Our total significant committed contracts that we believe will affect cash over the next four years and beyond are as follows:

Contractual Commitments	Expected Cash Payments by Year
(in Millions)	2021		2022		2023		2024		2025 & beyond		Total
Debt maturities (1)	$	338.3	$	1,000.1	$	0.2	$	400.1	$	1,550.0	$	3,288.7
Contractual interest (2)	97.0		100.3		78.6		76.0		706.4		1,058.3
Lease obligations (3)	31.7		27.3		21.5		17.6		120.3		218.4
Derivative contracts	24.5		0.8		—		—		—		25.3
Purchase obligations (4)	380.3		142.3		147.5		52.9		102.0		825.0
Total (5)	$	871.8	$	1,270.8	$	247.8	$	546.6	$	2,478.7	$	5,415.7

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(1)     Excluding discounts.

(2)     Contractual interest is the interest we are contracted to pay on our long-term debt obligations. We had $700.0 million of long-term debt subject to variable interest rates at December 31, 2020. The rate assumed for the variable interest component of the contractual interest obligation was the rate in effect at December 31, 2020. Variable rates are determined by the market and will fluctuate over time.

(3)    Obligations associated with operating leases, before sub-lease rental income.

(4)    Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and specify all significant terms, including fixed or minimum quantities to be purchased, price provisions and timing of the transaction. We have entered into a number of purchase obligations for the sourcing of materials and energy where take-or-pay arrangements apply. Since the majority of the minimum obligations under these contracts are take-or-pay commitments over the life of the contract and not a year by year take-or-pay, the obligations in the table related to these types of contacts are presented in the earliest period in which the minimum obligation could be payable under these types of contracts.

(5)    As of December 31, 2020, the liability for uncertain tax positions was $83.1 million. This liability is excluded from the table above. Additionally, accrued pension and other postretirement benefits and our environmental liabilities as recorded on our consolidated balance sheets are excluded from the table above. Due to the high degree of uncertainty regarding the timing of potential future cash flows associated with these liabilities, we are unable to make a reasonably reliable estimate of the amount and periods in which these liabilities might be paid. Also excluded from the table above is the liability attributable to the transition tax on deemed repatriated foreign earnings incurred as a result of the Act of $107.8 million.

Contingencies

See Note 20 to our consolidated financial statements included in this Form 10-K.

Climate Change

As a global corporate citizen, we are concerned about the consequences of climate change and will take prudent and cost effective actions that reduce Green House Gas (GHG) emissions to the atmosphere.

FMC is committed to continuing to do its part to address climate change and its impacts. Our 2030 intensity reduction targets for energy and greenhouse gas emissions are both 25 percent from our 2018 baseline year. FMC has been reporting its GHG emissions and mitigation strategy to CDP (formerly Carbon Disclosure Project) since 2016. FMC detailed the business risks and opportunities we have due to climate change and its impacts in our CDP climate change reports. FMC received a "B" in the CDP Climate Change questionnaire in 2020. In 2021, FMC will begin conducting climate related scenario analyses in line with the Taskforce for Climate-Related Financial Disclosures recommendations to better understand our risks and opportunities with respect to climate change.

Even as we take action to control the release of GHGs, additional warming is anticipated. Long-term, higher average global temperatures could result in induced changes in natural resources, growing seasons, precipitation patterns, weather patterns, species distributions, water availability, sea levels, and biodiversity. These impacts could cause changes in supplies of raw materials used to maintain FMC’s production capacity and could lead to possible increased sourcing costs. Depending on how pervasive the climate impacts are in the different geographic locations experiencing changes in natural resources, FMC’s customers could be impacted. Demand for FMC’s products could increase if our products meet our customers’ needs to adapt to climate change impacts or decrease if our products do not meet their needs. Within our own operations, we continually assess our manufacturing sites worldwide for risks and opportunities to increase our preparedness for climate change. We are continuing to evaluate sea level rise and storm surge at our plants to understand timing of potential impacts and proactive responses that may need to be taken. To lessen FMC’s overall environmental footprint, we have taken actions to increase the energy efficiency in our manufacturing sites. We have also committed to new 2030 goals to reduce our water use intensity in

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high-risk areas by 20 percent and to maintain our 2018 waste disposed intensity which otherwise would increase by 55 percent due to expected growth and shifts in production mix.

In our product portfolio, we see market opportunities for our products to address climate change and its impacts. For example, FMC's agricultural products can help customers increase yield, energy and water efficiency, and decrease greenhouse gas emissions. Our products can also help growers adapt to more unpredictable growing conditions and the effects these types of threats have on crops. FMC has committed to invest 100 percent of our innovation budget to developing sustainable products and solutions for future use.

We are improving existing products and developing new platforms and technologies that help mitigate impacts of climate change. FMC is developing products with a lighter environmental footprint in its biologicals products. These opportunities could lead to new products and services for our existing and potential customers. Beyond our products and operations, FMC recognizes that energy consumption throughout our supply chain can impact climate change and product costs. Therefore, we will actively work with our entire value chain - suppliers, contractors, and customers - to improve their energy efficiencies and to reduce their GHG emissions.

We continue to follow legislative and regulatory developments regarding climate change because the regulation of greenhouse gases, depending on their nature and scope, could subject some of our manufacturing operations to additional costs or limits on operations. In December 2015, 195 countries at the United Nations Climate Change Conference in Paris reached an agreement to reduce GHGs. It remains to be seen how and when each of these countries will implement this agreement.

FMC will actively manage climate risks and incorporate them in our decision making as indicated in our responses to the CDP Climate Change Module. The United States Climate Alliance, a coalition of 24 states (governing 55 percent of the population) and unincorporated self-governing territories in the United States have expressed their commitment to upholding the objectives of the 2015 Paris Agreement on climate change within their borders. Several of our manufacturing and R&D sites fall within this alliance territory. FMC remains deeply committed to reducing our GHG emissions and energy consumption at all our facilities around the world.

Some of our foreign operations are subject to national or local energy management or climate change regulation, such as our plant in Denmark that is subject to the EU Emissions Trading Scheme. At present, that plant’s emissions are below its designated cap.

In December 2019, the European Commission approved the European Green Deal, with the goal of making the EU carbon neutral by 2050. The Green Deal includes investment plans and a roadmap to fight against climate change. FMC is closely following updates and the discussion surrounding the Green Deal. The costs of complying with possible future requirements are difficult to estimate at this time.

Future GHG regulatory requirements may result in increased costs of energy, additional capital costs for emissions control or new equipment, and/or costs associated with cap and trade or carbon taxes. We are currently monitoring regulatory developments. The costs of complying with possible future climate change requirements are difficult to estimate at this time.

Recently Adopted and Issued Accounting Pronouncements and Regulatory Items

See Note 2 "Recently Issued and Adopted Accounting Pronouncements and Regulatory Items" to our consolidated financial statements included in this Form 10-K.

Off-Balance Sheet Arrangements

See Note 20 to our consolidated financial statements included in this Form 10-K and Part I, Item 3 - Legal Proceedings for further information regarding any off-balance sheet arrangements.

Fair Value Measurements

See Note 19 to our consolidated financial statements included in this Form 10-K for additional discussion surrounding our fair value measurements.

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Critical Accounting Policies

Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have described our accounting policies in Note 1 "Principal Accounting Policies and Related Financial Information" to our consolidated financial statements included in this Form 10-K. We have reviewed these accounting policies, identifying those that we believe to be critical to the preparation and understanding of our consolidated financial statements. We have reviewed these critical accounting policies with the Audit Committee of the Board of Directors. Critical accounting policies are central to our presentation of results of operations and financial condition in accordance with U.S. GAAP and require management to make estimates and judgments on certain matters. We base our estimates and judgments on historical experience, current conditions and other reasonable factors.

Revenue recognition and trade receivables

We recognize revenue when (or as) we satisfy our performance obligation which is when the customer obtains control of the good or service. Rebates due to customers are accrued as a reduction of revenue in the same period that the related sales are recorded based on the contract terms. Refer to Note 3 to our consolidated financial statements included in this Form 10-K for more information.

We record amounts billed for shipping and handling fees as revenue. Costs incurred for shipping and handling are recorded as costs of sales and services. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue-producing transactions are presented on a net basis and excluded from sales in the consolidated income statements. We record a liability until remitted to the respective taxing authority.

We periodically enter into prepayment arrangements with customers and receive advance payments for product to be delivered in future periods. These advance payments are recorded as deferred revenue and classified as "Advance payments from customers" on the consolidated balance sheet. Revenue associated with advance payments is recognized as shipments are made and transfer of control to the customer takes place.

Trade receivables consist of amounts owed to us from customer sales and are recorded when revenue is recognized. The allowance for trade receivables represents our best estimate of the probable losses associated with potential customer defaults. In developing our allowance for trade receivables, we use a two stage process which includes calculating a general formula to develop an allowance to appropriately address the uncertainty surrounding collection risk of our entire portfolio and specific allowances for customers where the risk of collection has been reasonably identified either due to liquidity constraints or disputes over contractual terms and conditions.

Our method of calculating the general formula consists of estimating the recoverability of trade receivables based on historical experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. Our analysis of trade receivable collection risk is performed quarterly, and the allowance is adjusted accordingly.

We also hold long-term receivables that represent long-term customer receivable balances related to past-due accounts which are not expected to be collected within the current year. Our policy for the review of the allowance for these receivables is consistent with the discussion in the preceding paragraph above on trade receivables. Therefore on an ongoing basis, we continue to evaluate the credit quality of our long-term receivables utilizing aging of receivables, collection experience and write-offs, as well as existing economic conditions, to determine if an additional allowance is necessary.

Environmental obligations and related recoveries

We provide for environmental-related obligations when they are probable and amounts can be reasonably estimated. Where the available information is sufficient to estimate the amount of liability, that estimate has been used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used.

Estimated obligations to remediate sites that involve oversight by the United States Environmental Protection Agency ("EPA"), or similar government agencies, are generally accrued no later than when a Record of Decision ("ROD"), or equivalent, is issued, or upon completion of a Remedial Investigation/Feasibility Study ("RI/FS"), or equivalent, that is submitted by us to the appropriate government agency or agencies. Estimates are reviewed quarterly by our environmental remediation management, as well as by financial and legal management and, if necessary, adjusted as additional information becomes available. The estimates can change substantially as additional information becomes available regarding the nature or extent of site contamination, required remediation methods, and other actions by or against governmental agencies or private parties.

Our environmental liabilities for continuing and discontinued operations are principally for costs associated with the remediation and/or study of sites at which we are alleged to have released hazardous substances into the environment. Such costs principally include, among other items, RI/FS, site remediation, costs of operation and maintenance of the remediation

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plan, management costs, fees to outside law firms and consultants for work related to the environmental effort, and future monitoring costs. Estimated site liabilities are determined based upon existing remediation laws and technologies, specific site consultants’ engineering studies or by extrapolating experience with environmental issues at comparable sites.

Included in our environmental liabilities are costs for the operation, maintenance and monitoring of site remediation plans (OM&M). Such reserves are based on our best estimates for these OM&M plans. Over time we may incur OM&M costs in excess of these reserves. However, we are unable to reasonably estimate an amount in excess of our recorded reserves because we cannot reasonably estimate the period for which such OM&M plans will need to be in place or the future annual cost of such remediation, as conditions at these environmental sites change over time. Such additional OM&M costs could be significant in total but would be incurred over an extended period of years.

Included in the environmental reserve balance, other assets balance and disclosure of reasonably possible loss contingencies are amounts from third party insurance policies, which we believe are probable of recovery.

Provisions for environmental costs are reflected in income, net of probable and estimable recoveries from named Potentially Responsible Parties ("PRPs") or other third parties. In the fourth quarter of 2019, we increased our reserves for the Pocatello Tribal Matter by $72.8 million, which represents both the historical and discounted present value of future annual use permit fees as well as the associated legal costs. See Note 12 for further information. All other environmental provisions incorporate inflation and are not discounted to their present value.

In calculating and evaluating the adequacy of our environmental reserves, we have taken into account the joint and several liability imposed by Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and the analogous state laws on all PRPs and have considered the identity and financial condition of the other PRPs at each site to the extent possible. We have also considered the identity and financial condition of other third parties from whom recovery is anticipated, as well as the status of our claims against such parties. Although we are unable to forecast the ultimate contributions of PRPs and other third parties with absolute certainty, the degree of uncertainty with respect to each party is taken into account when determining the environmental reserve by adjusting the reserve to reflect the facts and circumstances on a site-by-site basis. Our liability includes our best estimate of the costs expected to be paid before the consideration of any potential recoveries from third parties. We believe that any recorded recoveries related to PRPs are realizable in all material respects. Recoveries are recorded as either an offset in "Environmental liabilities, continuing and discontinued" or as "Other assets" in our consolidated balance sheets in accordance with U.S. accounting literature.

See Note 12 to our consolidated financial statements included in this Form 10-K for changes in estimates associated with our environmental obligations.

Impairments and valuation of long-lived and indefinite-lived assets

Our long-lived assets primarily include property, plant and equipment, goodwill and intangible assets. The assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangibles, is recorded as goodwill. The determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations. The principal assumptions utilized in our valuation methodologies include revenue growth rates, operating margin estimates and discount rates. Although the estimates were deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain.

We test for impairment whenever events or circumstances indicate that the net book value of our property, plant and equipment may not be recoverable from the estimated undiscounted expected future cash flows expected to result from their use and eventual disposition. In cases where the estimated undiscounted expected future cash flows are less than net book value, an impairment loss is recognized equal to the amount by which the net book value exceeds the estimated fair value of assets, which is based on discounted cash flows at the lowest level determinable. The estimated cash flows reflect our assumptions about selling prices, volumes, costs and market conditions over a reasonable period of time.

We perform an annual impairment test of goodwill and indefinite-lived intangible assets in the third quarter of each year, or more frequently whenever an event or change in circumstances occurs that would require reassessment of the recoverability of those assets. In performing our evaluation we assess qualitative factors such as overall financial performance of our reporting units, anticipated changes in industry and market structure, competitive environments, planned capacity and cost factors such as raw material prices. Based on our assessment for 2020, we determined that no goodwill and indefinite-lived intangible assets impairment charge to our continuing operations was required.

See Note 9 to our consolidated financial statements included in this Form 10-K for charges associated with long-lived asset disposal costs and the activity associated with the restructuring reserves.

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Pension and other postretirement benefits

We provide qualified and nonqualified defined benefit and defined contribution pension plans, as well as postretirement health care and life insurance benefit plans to our employees and retirees. The costs (benefits) and obligations related to these benefits reflect key assumptions related to general economic conditions, including interest (discount) rates, healthcare cost trend rates, expected rates of return on plan assets and the rates of compensation increase for employees. The costs (benefits) and obligations for these benefit programs are also affected by other assumptions, such as average retirement age, mortality, employee turnover, and plan participation. To the extent our plans’ actual experience, as influenced by changing economic and financial market conditions or by changes to our own plans’ demographics, differs from these assumptions, the costs and obligations for providing these benefits, as well as the plans’ funding requirements, could increase or decrease. When actual results differ from our assumptions, the difference is typically recognized over future periods. In addition, the unrealized gains and losses related to our pension and postretirement benefit obligations may also affect periodic benefit costs (benefits) in future periods.

We use several assumptions and statistical methods to determine the asset values used to calculate both the expected rate of return on assets component of pension cost and to calculate our plans’ funding requirements. The expected rate of return on plan assets is based on a market-related value of assets that recognizes investment gains and losses over a five-year period. We use an actuarial value of assets to determine our plans’ funding requirements. The actuarial value of assets must be within a certain range, high or low, of the actual market value of assets, and is adjusted accordingly.

We select the discount rate used to calculate pension and other postretirement obligations based on a review of available yields on high-quality corporate bonds as of the measurement date. In selecting a discount rate as of December 31, 2020, we placed particular emphasis on a discount rate yield-curve provided by our actuary. This yield-curve, when populated with projected cash flows that represent the expected timing and amount of our plans' benefit payments, produced an effective discount rate of 2.49 percent for our U.S. qualified plan, 1.62 percent for our U.S. nonqualified, and 1.91 percent for our U.S. other postretirement benefit plans.

The discount rates used to determine projected benefit obligation at our December 31, 2020 and 2019 measurement dates for the U.S. qualified plan were 2.49 percent and 3.22 percent, respectively. The effect of the change in the discount rate from 3.22 percent to 2.49 percent at December 31, 2020 resulted in a $105.9 million increase to our U.S. qualified pension benefit obligations. The effect of the change in the discount rate used to determine net annual benefit cost (income) from 4.36 percent at December 31, 2019 to 3.22 percent at December 31, 2020 resulted in a $0.1 million decrease to the 2020 U.S. qualified pension expense.

The change in discount rate from 3.22 percent at December 31, 2019 to 2.49 percent at December 31, 2020 was attributable to a decrease in yields on high quality corporate bonds with cash flows matching the timing and amount of our expected future benefit payments between the 2019 and 2020 measurement dates. Using the December 31, 2020 and 2019 yield curves, our U.S. qualified plan cash flows produced a single weighted-average discount rate of approximately 2.49 percent and 3.22 percent, respectively.

In developing the assumption for the long-term rate of return on assets for our U.S. Plan, we take into consideration the technical analysis performed by our outside actuaries, including historical market returns, information on the assumption for long-term real returns by asset class, inflation assumptions, and expectations for standard deviation related to these best estimates. Our long-term rate of return for the fiscal year ended December 31, 2020, 2019 and 2018 was 3.00 percent, 4.25 percent and 5.00 percent, respectively.

For the sensitivity of our pension costs to incremental changes in assumptions see our discussion below.

Sensitivity analysis related to key pension and postretirement benefit assumptions.

A one-half percent increase in the assumed discount rate would have decreased pension and other postretirement benefit obligations by $72.6 million and $72.1 million at December 31, 2020 and 2019, respectively, and decreased pension and other postretirement benefit costs by zero, $0.6 million and $0.4 million for 2020, 2019 and 2018, respectively. A one-half percent decrease in the assumed discount rate would have increased pension and other postretirement benefit obligations by $79.3 million and $79.4 million at December 31, 2020 and 2019, respectively, and increased pension and other postretirement benefit cost by $0.1 million, $0.5 million and $0.1 million for 2020, 2019 and 2018, respectively.

A one-half percent increase in the assumed expected long-term rate of return on plan assets would have decreased pension costs by $6.2 million, $6.3 million and $6.4 million for 2020, 2019 and 2018, respectively. A one-half percent decrease in the assumed long-term rate of return on plan assets would have increased pension costs by $6.2 million, $6.3 million and $6.4 million for 2020, 2019 and 2018, respectively.

Further details on our pension and other postretirement benefit obligations and net periodic benefit costs (benefits) are found in Note 15 to our consolidated financial statements in this Form 10-K.

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Income taxes

We have recorded a valuation allowance to reduce deferred tax assets in certain jurisdictions to the amount that we believe is more likely than not to be realized. In assessing the need for this allowance, we have considered a number of factors including future taxable income, the jurisdictions in which such income is earned and our ongoing tax planning strategies. In the event that we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. Similarly, should we conclude that we would be able to realize certain deferred tax assets in the future in excess of the net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.

Additionally, we file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Certain income tax returns for FMC entities taxable in the U.S. and significant foreign jurisdictions are open for examination and adjustment. We assess our income tax positions and record a liability for all years open to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. We adjust these liabilities, if necessary, upon the completion of tax audits or changes in tax law.

On December 22, 2017, the Act was enacted in the United States. The Act reduced the U.S. federal corporate tax rate from 35 percent to 21 percent, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced earnings. At December 31, 2018, the Company had completed its accounting for the impacts of the enactment of the Act.

See Note 13 to our consolidated financial statements included in this Form 10-K for additional discussion surrounding income taxes.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our earnings, cash flows and financial position are exposed to market risks relating to fluctuations in commodity prices, interest rates and foreign currency exchange rates. Our policy is to minimize exposure to our cash flow over time caused by changes in commodity, interest and currency exchange rates. To accomplish this, we have implemented a controlled program of risk management consisting of appropriate derivative contracts entered into with major financial institutions.

The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates and prices. The range of changes chosen reflects our view of changes that are reasonably possible over a one-year period. Market value estimates are based on the present value of projected future cash flows considering the market rates and prices chosen.

At December 31, 2020, our net financial instrument position was a net liability of $25.3 million compared to a net liability of $8.9 million at December 31, 2019. The change in the net financial instrument position was primarily due to exchange rate fluctuations in our foreign exchange portfolio.

Since our risk management programs are generally highly effective, the potential loss in value for each risk management portfolio described below would be largely offset by changes in the value of the underlying exposure.

Foreign Currency Exchange Rate Risk

The primary currencies for which we have exchange rate exposure are the U.S. dollar versus the euro, the Chinese yuan, the Brazilian real, Mexican peso, Indian rupee and the Argentine peso. Foreign currency debt and foreign exchange forward contracts are used