UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________

 FORM 10-Q

_______________________________________________________________________

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

For the quarterly period ended June 30, 2023

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

__________________________________________________________________________

FMC CORPORATION

(Exact name of registrant as specified in its charter)

__________________________________________________________________________ 

Delaware			94-0479804
(State or other jurisdiction of incorporation)			(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

__________________________________________________________________________

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

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  ☒    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  ☒    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 is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  ☐    No  ☒

As of June 30, 2023, there were 124,733,535 of the registrant's common shares outstanding.

FMC CORPORATION

INDEX

 

	Page No.
Part I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Condensed Consolidated Statements of Income (Loss) - Three and six months ended June 30, 2023 and 2022 (unaudited)	3
Condensed Consolidated Statements of Comprehensive Income (Loss) - Three and six months ended June 30, 2023 and 2022 (unaudited)	4
Condensed Consolidated Balance Sheets - June 30, 2023 and December 31, 2022 (unaudited)	5
Condensed Consolidated Statements of Cash Flows - Six months ended June 30, 2023 and 2022 (unaudited)	6
Condensed Consolidated Statements of Changes in Equity - Three and six months ended June 30, 2023 and 2022 (unaudited)	8
Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	53
Item 4. Controls and Procedures	53
Part II - OTHER INFORMATION	55
Item 1. Legal Proceedings	55
Item 1A. Risk Factors	55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 5. Other Information	56
Item 6. Exhibits	57
Signatures	58

2

PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
(in Millions, Except Per Share Data)	(unaudited)				(unaudited)
Revenue	$	1,014.5	$	1,452.3	$	2,358.8	$	2,803.1
Costs and Expenses
Costs of sales and services	581.7		861.3		1,344.7		1,639.4
Gross margin	$	432.8	$	591.0	$	1,014.1	$	1,163.7
Selling, general and administrative expenses	205.6		194.8		391.5		383.3
Research and development expenses	87.7		79.5		166.1		151.3
Restructuring and other charges (income)	7.3		80.8		19.8		89.9
Total costs and expenses	$	882.3	$	1,216.4	$	1,922.1	$	2,263.9
Income from continuing operations before non-operating pension and postretirement charges (income), interest expense, net and income taxes	$	132.2	$	235.9	$	436.7	$	539.2
Non-operating pension and postretirement charges (income)	4.6		3.9		9.2		8.2
Interest expense, net	64.5		35.3		115.9		65.2
Income (loss) from continuing operations before income taxes	$	63.1	$	196.7	$	311.6	$	465.8
Provision (benefit) for income taxes	9.2		54.7		50.3		97.0
Income (loss) from continuing operations	$	53.9	$	142.0	$	261.3	$	368.8
Discontinued operations, net of income taxes	(21.5)		(10.8)		(33.0)		(26.0)
Net income (loss)	$	32.4	$	131.2	$	228.3	$	342.8
Less: Net income (loss) attributable to noncontrolling interests	1.9		(3.0)		1.8		1.2
Net income (loss) attributable to FMC stockholders	$	30.5	$	134.2	$	226.5	$	341.6
Amounts attributable to FMC stockholders:
Continuing operations, net of income taxes	$	52.0	$	145.0	$	259.5	$	367.6
Discontinued operations, net of income taxes	(21.5)		(10.8)		(33.0)		(26.0)
Net income (loss) attributable to FMC stockholders	$	30.5	$	134.2	$	226.5	$	341.6
Basic earnings (loss) per common share attributable to FMC stockholders:
Continuing operations	$	0.41	$	1.15	$	2.07	$	2.91
Discontinued operations	(0.17)		(0.09)		(0.26)		(0.21)
Net income (loss) attributable to FMC stockholders	$	0.24	$	1.06	$	1.81	$	2.70
Diluted earnings (loss) per common share attributable to FMC stockholders:
Continuing operations	$	0.41	$	1.15	$	2.06	$	2.90
Discontinued operations	(0.17)		(0.09)		(0.26)		(0.21)
Net income (loss) attributable to FMC stockholders	$	0.24	$	1.06	$	1.80	$	2.69

The accompanying Notes are an integral part of these condensed consolidated financial statements.

3

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
(in Millions)	(unaudited)				(unaudited)
Net income (loss)	$	32.4	$	131.2	$	228.3	$	342.8
Other comprehensive income (loss), net of tax:
Foreign currency adjustments:
Foreign currency translation gain (loss) arising during the period	$	(12.7)	$	(81.5)	$	7.4	$	(120.9)
Reclassification of foreign currency translation (gains) losses	—		4.2		—		4.2
Total foreign currency translation adjustments (1)	$	(12.7)	$	(77.3)	$	7.4	$	(116.7)
Derivative instruments:
Unrealized hedging gains (losses) and other, net of tax expense (benefit) of $(7.7) and $(11.8) for the three and six months ended June 30, 2023 and $(2.1) and $(2.6) for the three and six months ended June 30, 2022, respectively	$	(39.5)	$	40.2	$	(76.8)	$	(44.5)
Reclassification of deferred hedging (gains) losses and other, included in net income, net of tax (expense) benefit of $6.6 and $8.8 for the three and six months ended June 30, 2023 and $3.7 and $5.2 for the three and six months ended June 30, 2022, respectively (2)	15.8		7.8		21.8		8.4
Total derivative instruments, net of tax expense (benefit) of $(1.1) and $(3.0) for the three and six months ended June 30, 2023 and $1.6 and $2.6 for the three and six months ended June 30, 2022, respectively	$	(23.7)	$	48.0	$	(55.0)	$	(36.1)
Pension and other postretirement benefits:
Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax expense (benefit) of zero and zero for the three and six months ended June 30, 2023 and June 30, 2022, respectively	$	(0.1)	$	—	$	—	$	—
Reclassification of net actuarial and other (gain) loss and amortization of prior service costs, included in net income, net of tax (expense) benefit of $0.7 and $1.5 for the three and six months ended June 30, 2023 and 0.8 and 1.8 for the three and six months ended June 30, 2022, respectively (2)	2.9		3.2		5.7		6.8
Total pension and other postretirement benefits, net of tax expense (benefit) of $0.7 and $1.5 for the three and six months ended June 30, 2023 and 0.8 and 1.8 for the three and six months ended June 30, 2022, respectively	$	2.8	$	3.2	$	5.7	$	6.8
Other comprehensive income (loss), net of tax	$	(33.6)	$	(26.1)	$	(41.9)	$	(146.0)
Comprehensive income (loss)	$	(1.2)	$	105.1	$	186.4	$	196.8
Less: Comprehensive income (loss) attributable to the noncontrolling interest	0.6		(4.3)		1.4		(0.1)
Comprehensive income (loss) attributable to FMC stockholders	$	(1.8)	$	109.4	$	185.0	$	196.9

____________________ 

(1)Income taxes are not provided for foreign currency translation because the related investments are essentially permanent in duration.

(2)For more detail on the components of these reclassifications and the affected line item in the condensed consolidated statements of income (loss) see Note 14.

The accompanying Notes are an integral part of these condensed consolidated financial statements.

4

FMC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in Millions, Except Share and Par Value Data)	June 30, 2023		December 31, 2022
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	941.5	$	572.0
Trade receivables, net of allowance of $34.4 in 2023 and $33.9 in 2022	2,782.8		2,871.4
Inventories	2,072.3		1,651.6
Prepaid and other current assets	470.2		343.6
Total current assets	$	6,266.8	$	5,438.6
Investments	17.8		14.5
Property, plant and equipment, net	867.9		849.6
Goodwill	1,592.3		1,589.3
Other intangibles, net	2,488.6		2,508.1
Other assets including long-term receivables, net	499.8		560.5
Deferred income taxes	218.5		210.7
Total assets	$	11,951.7	$	11,171.3
LIABILITIES AND EQUITY
Current liabilities
Short-term debt and current portion of long-term debt	$	1,660.5	$	540.8
Accounts payable, trade and other	1,032.7		1,252.2
Advance payments from customers	3.4		680.5
Accrued and other liabilities	685.0		601.8
Accrued customer rebates	743.1		465.3
Guarantees of vendor financing	106.3		142.0
Accrued pension and other postretirement benefits, current	3.5		2.3
Income taxes	118.2		114.7
Total current liabilities	$	4,352.7	$	3,799.6
Long-term debt, less current portion	3,022.0		2,733.2
Accrued pension and other postretirement benefits, long-term	29.7		31.6
Environmental liabilities, continuing and discontinued	430.6		439.1
Deferred income taxes	324.2		321.5
Other long-term liabilities	415.1		445.4
Commitments and contingent liabilities (Note 19)
Equity
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2023 or 2022	$	—	$	—
Common stock, $0.10 par value, authorized 260,000,000 shares in 2023 and 2022; 185,983,792 shares issued in 2023 and 2022	18.6		18.6
Capital in excess of par value of common stock	922.4		909.2
Retained earnings	5,637.2		5,555.9
Accumulated other comprehensive income (loss)	(501.1)		(459.6)
Treasury stock, common, at cost - 2023: 61,250,257 shares, 2022: 60,872,988 shares	(2,724.1)		(2,646.2)
Total FMC stockholders’ equity	$	3,353.0	$	3,377.9
Noncontrolling interests	24.4		23.0
Total equity	$	3,377.4	$	3,400.9
Total liabilities and equity	$	11,951.7	$	11,171.3

The accompanying Notes are an integral part of these condensed consolidated financial statements.

5

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

	Six Months Ended June 30,
	2023		2022
(in Millions)	(unaudited)
Cash provided (required) by operating activities of continuing operations:
Net income (loss)	$	228.3	$	342.8
Discontinued operations, net of income taxes	33.0		26.0
Income (loss) from continuing operations	$	261.3	$	368.8
Adjustments from income from continuing operations to cash provided (required) by operating activities of continuing operations:
Depreciation and amortization	$	92.8	$	85.2
Restructuring and other charges (income)	19.8		89.9
Deferred income taxes	(1.8)		(0.6)
Pension and other postretirement benefits	10.7		10.6
Share-based compensation	13.6		13.1
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Trade receivables, net	132.2		(432.6)
Guarantees of vendor financing	(35.7)		(1.2)
Advance payments from customers	(677.1)		(628.8)
Accrued customer rebates	274.2		400.0
Inventories	(423.3)		(235.8)
Accounts payable, trade and other	(197.3)		38.8
Income taxes	(72.6)		19.7
Pension and other postretirement benefit contributions	(1.0)		(2.3)
Environmental spending, continuing, net of recoveries	(14.5)		(10.8)
Restructuring and other spending (1)	(6.2)		(16.8)
Transaction and integration costs	—		(0.5)
Change in other operating assets and liabilities, net (2)	(94.9)		(98.6)
Cash provided (required) by operating activities of continuing operations	$	(719.8)	$	(401.9)
Cash provided (required) by operating activities of discontinued operations:
Environmental spending, discontinued, net of recoveries	$	(11.7)	$	(14.7)
Other discontinued spending	(15.2)		(16.9)
Cash provided (required) by operating activities of discontinued operations	$	(26.9)	$	(31.6)

____________________ 

(1)    In addition to cash payments shown in our roll forward of restructuring reserves in Note 9 to our consolidated financial statements included within this Form 10-Q, the restructuring and other spending amount above for the six months ended June 30, 2023 and 2022 includes spending of $1.3 million and $3.2 million, respectively, related to the Furadan® asset retirement obligations. For additional detail on restructuring and other charges activities, see Note 9.

(2)    Changes in all periods primarily represent timing of payments associated with all other operating assets and liabilities.

The accompanying Notes are an integral part of these condensed consolidated financial statements.

(continued)

6

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

 

	Six Months Ended June 30,
	2023		2022
(in Millions)	(unaudited)
Cash provided (required) by investing activities of continuing operations:
Capital expenditures	$	(75.8)	$	(73.7)
Acquisitions, including cost and equity method, net	(3.2)		(0.5)
Proceeds from land disposition(3)	5.8		—
Other investing activities	(5.3)		8.9
Cash provided (required) by investing activities of continuing operations	$	(78.5)	$	(65.3)
Cash provided (required) by financing activities of continuing operations:
Increase (decrease) in short-term debt	$	719.1	$	721.5
Repayments of long-term debt	(800.0)		(0.3)
Proceeds from borrowings of long-term debt	1,498.6		—
Financing fees and interest rate swap settlements	(0.4)		(1.5)
Issuances of common stock, net	3.9		8.3
Dividends paid (4)	(145.4)		(133.7)
Repurchases of common stock under publicly announced program	(75.0)		—
Other repurchases of common stock	(6.2)		(8.6)
Cash provided (required) by financing activities of continuing operations	$	1,194.6	$	585.7
Effect of exchange rate changes on cash and cash equivalents	0.1		(12.2)
Increase (decrease) in cash and cash equivalents	$	369.5	$	74.7
Cash and cash equivalents, beginning of period	$	572.0	$	516.8
Cash and cash equivalents, end of period	$	941.5	$	591.5

____________________ 

(3)    During the six months ended June 30, 2023, we received the final payment of $5.8 million related to a land transfer agreement with the Shanghai Municipal People's Government, which was executed in December 2022.

(4)     See Note 14 regarding the quarterly cash dividend.

Supplemental disclosure of cash flow information: Cash paid for interest, net of capitalized interest was $101.1 million and $61.2 million, and income taxes paid, net of refunds were $105.2 million and $53.2 million for the six months ended June 30, 2023 and 2022, respectively. Non-cash additions to property, plant and equipment and other assets were $20.5 million and $24.5 million for the six months ended June 30, 2023 and 2022, respectively.

The accompanying Notes are an integral part of these condensed consolidated financial statements.

7

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

	FMC Stockholders’ Equity
(in Millions, Except Per Share Data)	Common Stock, $0.10 Par Value		Capital In Excess of Par		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interest		Total Equity
Balance at December 31, 2022	$	18.6	$	909.2	$	5,555.9	$	(459.6)	$	(2,646.2)	$	23.0	$	3,400.9
Net income (loss)	—		—		196.0		—		—		(0.1)		195.9
Stock compensation plans	—		7.2		—		—		2.4		—		9.6
Shares for benefit plan trust	—		—		—		—		(0.1)		—		(0.1)
Net pension and other benefit actuarial gains (losses) and prior service costs, net of income tax (1)	—		—		—		2.9		—		—		2.9
Net hedging gains (losses) and other, net of income tax (1)	—		—		—		(31.3)		—		—		(31.3)
Foreign currency translation adjustments (1)	—		—		—		19.2		—		0.9		20.1
Dividends ($0.58 per share)	—		—		(72.7)		—		—		—		(72.7)
Repurchases of common stock	—		—		—		—		(30.8)		—		(30.8)
Balance at March 31, 2023	$	18.6	$	916.4	$	5,679.2	$	(468.8)	$	(2,674.7)	$	23.8	$	3,494.5
Net income (loss)	—		—		30.5		—		—		1.9		32.4
Stock compensation plans	—		6.0		—		—		2.4		—		8.4
Shares for benefit plan trust	—		—		—		—		(0.7)		—		(0.7)
Net pension and other benefit actuarial gains (losses) and prior service costs, net of income tax (1)	—		—		—		2.8		—		—		2.8
Net hedging gains (losses) and other, net of income tax (1)	—		—		—		(23.7)		—		—		(23.7)
Foreign currency translation adjustments (1)	—		—		—		(11.4)		—		(1.3)		(12.7)
Dividends ($0.58 per share)	—		—		(72.5)		—		—		—		(72.5)
Repurchases of common stock	—		—		—		—		(51.1)		—		(51.1)
Balance at June 30, 2023	$	18.6	$	922.4	$	5,637.2	$	(501.1)	$	(2,724.1)	$	24.4	$	3,377.4

____________________

(1)See condensed consolidated statements of comprehensive income (loss).

8

	FMC Stockholders’ Equity
(in Millions, Except Per Share Data)	Common Stock, $0.10 Par Value		Capital In Excess of Par		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interest		Total Equity
Balance at December 31, 2021	$	18.6	$	880.4	$	5,092.9	$	(325.5)	$	(2,542.1)	$	19.4	$	3,143.7
Net income (loss)	—		—		207.4		—		—		4.2		211.6
Stock compensation plans	—		10.5		—		—		4.0		—		14.5
Shares for benefit plan trust	—		—		—		—		0.1		—		0.1
Net pension and other benefit actuarial gains (losses) and prior service costs, net of income tax (1)	—		—		—		3.6		—		—		3.6
Net hedging gains (losses) and other, net of income tax (1)	—		—		—		(84.1)		—		—		(84.1)
Foreign currency translation adjustments (1)	—		—		—		(39.4)		—		—		(39.4)
Dividends ($0.53 per share)	—		—		(66.9)		—		—		—		(66.9)
Repurchases of common stock	—		—		—		—		(8.6)		—		(8.6)
Distributions to noncontrolling interests	—		—		—		—		—		(0.5)		(0.5)
Balance at March 31, 2022	$	18.6	$	890.9	$	5,233.4	$	(445.4)	$	(2,546.6)	$	23.1	$	3,174.0
Net income (loss)	—		—		134.2		—		—		(3.0)		131.2
Stock compensation plans	—		6.6		—		—		0.3		—		6.9
Net pension and other benefit actuarial gains (losses) and prior service costs, net of income tax (1)	—		—		—		3.2		—		—		3.2
Net hedging gains (losses) and other, net of income tax (1)	—		—		—		48.0		—		—		48.0
Foreign currency translation adjustments (1)	—		—		—		(76.0)		—		(1.3)		(77.3)
Dividends ($0.53 per share)	—		—		(66.9)		—		—		—		(66.9)
Balance at June 30, 2022	$	18.6	$	897.5	$	5,300.7	$	(470.2)	$	(2,546.3)	$	18.8	$	3,219.1

____________________

(1)See condensed consolidated statements of comprehensive income (loss).

The accompanying Notes are an integral part of these condensed consolidated financial statements.

9

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1: Financial Information and Accounting Policies

In our opinion, the condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") applicable to interim period financial statements and reflect all adjustments necessary for a fair statement of results of operations for the three and six months ended June 30, 2023 and 2022, cash flows for the six months ended June 30, 2023 and 2022, changes in equity for the three and six months ended June 30, 2023 and 2022, and our financial positions as of June 30, 2023 and December 31, 2022. All such adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the Notes. The results of operations for the three and six months ended June 30, 2023 and 2022 are not necessarily indicative of the results of operations for the full year. The condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, and the related condensed consolidated statements of income (loss) and condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022, condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, and condensed consolidated statements of changes in equity for the three and six months ended June 30, 2023 and 2022 have been reviewed by our independent registered public accountants. The review is described more fully in their report included herein. Our accounting policies are set forth in detail in Note 1 to the consolidated financial statements included with our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2022 (the "2022 Form 10-K").

Note 2: Recently Issued and Adopted Accounting Pronouncements and Regulatory Items

New accounting guidance and regulatory items

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to provide optional guidance for a limited period of time to ease the potential burden in accounting for contracts and hedging relationships affected by reference rate reform. This applies to contracts that reference LIBOR or another rate that is expected to be discontinued as a result of rate reform and have modified terms that affect or have the potential to affect the amount and timing of contractual cash flows resulting from the discontinuance of reference rate. In December 2022, the FASB finalized ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date for Topic 848 from December 31, 2022 to December 31, 2024. This standard amends the definition of the SOFR Swap Rate under Topic 815 so that it is not limited to the Overnight Indexed Swap rate based on SOFR and includes other rates based on SOFR. These amendments were effective upon issuance and should be applied prospectively. We are evaluating the impacts this standard will have on accounting for contracts and hedging relationships but do not believe it will have a material impact on our consolidated financial statements.

Recently adopted accounting guidance

In September 2022, the FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This ASU enhances the transparency of supplier finance programs and their effect on working capital, liquidity, and cash flows. The new standard is effective for fiscal years beginning after December 15, 2022 (i.e. a January 1, 2023 effective date), including interim periods within those years. The amendments in the ASU should be applied retrospectively to all periods in which a balance sheet is presented, except for the amendment on roll forward information, which should be applied prospectively on an annual basis. In accordance with the new disclosure requirements, which we have adopted beginning January 1, 2023, we have included information regarding our key program terms and the amount outstanding that remains unpaid at period end as further described below.

We work with suppliers to optimize payment terms and conditions on accounts payable to improve working capital and cash flows. We offer to a select group of suppliers a voluntary Supply Chain Finance (“SCF”) program with a global financial institution. The suppliers, at their sole discretion, may sell their receivables to the financial institution based on terms negotiated between them. Our obligations to our suppliers are not impacted by our suppliers’ decisions to sell under these arrangements. Obligations outstanding under this program are recorded within "Accounts payable, trade and other" in our condensed consolidated balance sheets and the associated payments are included in operating activities within our condensed consolidated statements of cash flows.

10

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Our payment terms with our suppliers are consistent, regardless of whether a supplier participates in the program. We deem these terms to be commercially reasonable and consistent with the range of industry standards within their respective regions. Under the terms of the agreement, we do not pledge assets as security or make any other forms of guarantees.

FMC's outstanding obligations confirmed as valid under the SCF was $281.6 million and $307.5 million as of June 30, 2023 and December 31, 2022, respectively.

Note 3: Revenue Recognition

Disaggregation of revenue

We disaggregate revenue from contracts with customers by geographical areas and major product categories. We have three major agricultural product categories: insecticides, herbicides, and fungicides. Plant health, which includes biological products, is also included in the below table, because it is a growing part of our business. The disaggregated revenue tables are shown below for the three and six months ended June 30, 2023 and 2022.

The following table provides information about disaggregated revenue by major geographical region:

	Three Months Ended June 30,				Six Months Ended June 30,
(in Millions)	2023		2022		2023		2022
North America	$	272.5	$	364.6	$	769.8	$	754.4
Latin America	268.7		431.5		502.3		697.4
Europe, Middle East & Africa (EMEA)	207.6		280.8		590.6		679.0
Asia	265.7		375.4		496.1		672.3
Total Revenue	$	1,014.5	$	1,452.3	$	2,358.8	$	2,803.1

The following table provides information about disaggregated revenue by product category:

	Three Months Ended June 30,				Six Months Ended June 30,
(in Millions)	2023		2022		2023		2022
Insecticides	$	658.9	$	897.1	$	1,405.6	$	1,663.8
Herbicides	225.5		380.3		668.3		784.7
Fungicides	72.3		63.3		173.3		172.0
Plant Health	43.4		62.7		95.7		116.1
Other	14.4		48.9		15.9		66.5
Total Revenue	$	1,014.5	$	1,452.3	$	2,358.8	$	2,803.1

We earn revenue from the sale of a wide range of products to a diversified base of customers around the world. We develop, market and sell all three major classes of crop protection chemicals (insecticides, herbicides and fungicides) as well as biologicals, crop nutrition, and seed treatment products, which we group as plant health. These products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as in non-agricultural markets for pest control. The majority of our product lines consist of insecticides and herbicides, with a smaller portfolio of fungicides mainly used in high value crop segments. We are investing in plant health which includes our growing biological products. 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. Products in the other category include various agricultural products such as smaller classes of pesticides, growth promoters, and other miscellaneous revenue sources.

11

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Sale of Goods

Revenue from product sales is recognized when (or as) we satisfy a performance obligation by transferring the promised goods to a customer, that is, when control of the good transfers to the customer. The customer is then invoiced at the agreed-upon price with payment terms generally ranging from 30 to 90 days, with some regions providing terms longer than 90 days. We do not typically give payment terms that exceed 360 days; however, in certain geographical regions such as Latin America, these terms may be given in limited circumstances. Additionally, a timing difference of over one year can exist between when products are delivered to the customer and when payment is received from the customer in these regions; however, the effect of these sales is not material to the financial statements as a whole. Furthermore, we have assessed the circumstances and arrangements in these regions and determined that the contracts with these customers do not contain a significant financing component.

In determining when the control of goods is transferred, we typically assess, among other things, the transfer of risk and title and the shipping terms of the contract. The transfer of title and risk typically occurs either upon shipment to the customer or upon receipt by the customer. As such, we typically recognize revenue when goods are shipped based on the relevant Incoterm for the product order, or in some regions, when delivery to the customer’s requested destination has occurred. When we perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. For FOB shipping point terms, revenue is recognized at the time of shipment since the customer gains control at this point in time.

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.

Sales Incentives and Other Variable Considerations

As a part of our customary business practice, we offer a number of sales incentives to our customers including volume discounts, retailer incentives, and prepayment options. The variable considerations given can differ by products, support levels and other eligibility criteria. For all such contracts that include any variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Although determining the transaction price for these considerations requires significant judgment, we have significant historical experience with incentives provided to customers and estimate the expected consideration considering historical patterns of incentive payouts. These estimates are reassessed each reporting period as required.

In addition to the variable considerations described above, in certain instances, we may require our customers to meet certain volume thresholds within their contract term. We estimate what amount of variable consideration should be included in the transaction price at contract inception and continually reassess this estimation each reporting period to determine situations when the minimum volume thresholds will not be met.

Right of Return

We extend an assurance warranty offering customers a right of refund or exchange in case delivered product does not conform to specifications. Additionally, in certain regions and arrangements, we may offer a right of return for a specified period. Both instances are accounted for as a right of return and transaction price is adjusted for an estimate of expected returns. Replacement products are accounted for under the warranty guidance if the customer exchanges one product for another of the same kind, quality, and price. We have significant experience with historical return patterns and use this experience to include returns in the estimate of transaction price.

12

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Contract Asset and Contract Liability Balances

We satisfy our obligations by transferring goods and services in exchange for consideration from customers. The timing of performance sometimes differs from the timing the associated consideration is received from the customer, thus resulting in the recognition of a contract asset or contract liability. We recognize a contract liability if the customer's payment of consideration is received prior to completion of our related performance obligation.

The following table presents the opening and closing balances of our receivables, net of allowances and contract liabilities from contracts with customers:

(in Millions)	Balance as of December 31, 2022		Balance as of June 30, 2023		Increase (Decrease)
Receivables from contracts with customers, net of allowances (1)	$	2,932.2	$	2,805.2	$	(127.0)
Contract liabilities: Advance Payments from customers	680.5		3.4		(677.1)

____________________ 

(1)     Amount includes $2,782.8 million of trade receivables and $22.4 million of net long-term customer receivables as of June 30, 2023. See Note 6 for more information.

The balance of receivables from contracts with customers listed in the table above include both current trade receivables and long-term receivables, net of allowance for doubtful accounts. The allowance for receivables represents our best estimate of the probable losses associated with potential customer defaults. We determine the allowance based on historical experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. The change in allowance for doubtful accounts for both current trade receivables and long-term receivables is representative of the impairment of receivables as of June 30, 2023. Refer to Note 6 for further information.

The amount of revenue recognized in the six months ended June 30, 2023 that was included in the opening contract liability balance is $677.1 million.

We periodically enter into prepayment arrangements with customers and receive advance payments for product to be delivered in future periods. Prepayment terms are extended to customers/distributors in order to capitalize on surplus cash with growers. Growers receive bulk payments for their produce, which they leverage to buy our products from distributors through prepayment options. This in turn creates opportunity for distributors to make large prepayments to us for securing the future supply of products to be sold to growers. Prepayments are typically received in the fourth quarter of the fiscal year and are for the following marketing year indicating that the time difference between prepayment and performance of corresponding performance obligations does not exceed one year.

We recognize these prepayments as a liability under "Advance payments from customers" on the condensed consolidated balance sheets when they are received. Revenue associated with advance payments is recognized as shipments are made and transfer of control to the customer takes place. Advance payments from customers were $680.5 million as of December 31, 2022 and $3.4 million as of June 30, 2023.

Note 4: Goodwill and Intangible Assets

The changes in the carrying amount of goodwill are presented in the table below:

(in Millions)	Total
Balance, December 31, 2022	$	1,589.3
Foreign currency adjustments	3.0
Balance, June 30, 2023	$	1,592.3

There were no events or circumstances indicating that goodwill might be impaired as of June 30, 2023.

13

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Our intangible assets, other than goodwill, consist of the following:

	June 30, 2023						December 31, 2022
(in Millions)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Intangible assets subject to amortization (finite-lived)
Customer relationships	$	1,133.6	$	(383.2)	$	750.4	$	1,127.9	$	(351.3)	$	776.6
Patents	1.8		(1.5)		0.3		1.7		(1.4)		0.3
Brands (1)	49.2		(11.8)		37.4		16.1		(10.6)		5.5
Purchased and licensed technologies	130.1		(44.6)		85.5		128.4		(42.9)		85.5
Other intangibles	2.3		(1.7)		0.6		1.8		(1.7)		0.1
	$	1,317.0	$	(442.8)	$	874.2	$	1,275.9	$	(407.9)	$	868.0

Intangible assets not subject to amortization (indefinite-lived)
Crop Protection Brands (2)	$	1,259.0			$	1,259.0	$	1,259.0			$	1,259.0
Brands (1)	344.2				344.2		370.1				370.1
In-process research & development	11.2				11.2		11.0				11.0
	$	1,614.4			$	1,614.4	$	1,640.1			$	1,640.1
Total intangible assets	$	2,931.4	$	(442.8)	$	2,488.6	$	2,916.0	$	(407.9)	$	2,508.1

____________________ 

(1)    Represents trademarks, trade names and know-how.

(2)    Represents proprietary brand portfolios, consisting of trademarks, trade names and know-how, of our crop protection brands.

	Three Months Ended June 30,				Six Months Ended June 30,
(in Millions)	2023		2022		2023		2022
Amortization expense	$	16.1	$	15.3	$	32.1	$	30.7

The full year estimated pre-tax amortization expense for the year ended December 31, 2023 and each of the succeeding five years is approximately $64 million, $63 million, $68 million, $69 million, $69 million, and $70 million, respectively.

Note 5: Acquisitions

On June 29, 2022, we announced a definitive agreement to acquire BioPhero ApS ("BioPhero"), a Denmark-based pheromone research and production company. The acquisition added state-of-the-art biologically produced pheromone insect control technology to our product portfolio and R&D pipeline, underscoring our role as a leader in delivering innovative and sustainable crop protection solutions.

The purchase price of approximately $193 million was primarily paid at closing on July 19, 2022. The acquisition, which was accounted for as a business combination, included all of BioPhero’s technology, IP, supply agreements, employees and net assets of the business.

Purchase Price Allocation

The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is considered complete. The allocation was subject to change within the measurement period (up to one year from the acquisition date) if additional information concerning final asset and liability valuations was obtained. There were no adjustments to the initial purchase price allocation during the measurement period.

14

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

The following table summarizes the consideration paid for the BioPhero acquisition and the amounts of the assets acquired and liabilities assumed.

Purchase Price Allocation
(in Millions)
Fair Value of Assets Acquired
Cash	$	10.0
Intangible assets
Developed Technology (1)	66.3
In-process research & development	10.5
Goodwill	130.7
Other Assets	3.4
Total Assets	$	220.9
Fair Value of Liabilities Assumed
Deferred income tax liabilities	$	16.6
Other Liabilities	1.1
Total Liabilities	17.7
Net Assets	$	203.2
Total Purchase Consideration:	Amount
Cash purchase price, net of acquired cash	$	193.2
____________________
(1) Expected life is 15 years and will be amortized based on the pattern of economic benefit

Note 6: Receivables

The following table displays a roll forward of the allowance for doubtful trade receivables.

(in Millions)
Balance, December 31, 2021	$	37.4
Additions - charged to expense	0.7
Transfer from (to) allowance for credit losses (see below)	0.5
Net recoveries, write-offs and other	(4.7)
Balance, December 31, 2022	$	33.9
Additions - charged to expense	1.0
Transfer from (to) allowance for credit losses (see below)	(1.7)
Net recoveries, write-offs and other	1.2
Balance, June 30, 2023	$	34.4

We have non-current receivables that represent long-term customer receivable balances related to past due accounts which are not expected to be collected within the current year. The net long-term customer receivables were $22.4 million as of June 30, 2023. These long-term customer receivable balances and the corresponding allowance are included in "Other assets including long-term receivables, net" on the condensed consolidated balance sheets.

15

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

A portion of these long-term receivables have payment contracts. We have no reason to believe payments will not be made based upon the credit quality of these customers. Additionally, we also hold significant collateral against these customers including rights to property or other assets as a form of credit guarantee. If the customer does not pay or gives indication that they will not pay, these guarantees allow us to start legal action to block the sale of the customer’s harvest. On an ongoing basis, we continue to evaluate the credit quality of our non-current receivables using aging of receivables, collection experience and write-offs, as well as evaluating existing economic conditions, to determine if an additional allowance is necessary.

The following table displays a roll forward of the allowance for credit losses related to long-term customer receivables:

(in Millions)
Balance, December 31, 2021	$	27.7
Additions - charged (credited) to expense	(1.2)
Transfer from (to) allowance for doubtful accounts (see above)	(0.5)
Foreign currency adjustments	8.1
Net recoveries, write-offs and other	10.4
Balance, December 31, 2022	$	44.5
Additions - charged (credited) to expense	(0.3)
Transfer from (to) allowance for doubtful accounts (see above)	1.7
Foreign currency adjustments	0.8
Net recoveries, write-offs and other	(1.3)
Balance, June 30, 2023	$	45.4

Receivables Securitization Facility:

FMC entered into a trade receivables securitization program, primarily impacting our Brazilian operations during the third quarter of 2022. On a revolving basis, FMC may sell certain trade receivables into the facility in exchange for cash. A portion of the total receivables sold are deferred as an asset on our condensed consolidated balance sheets representing FMC’s beneficial interest in the securitization fund.

In all instances, the transferred financial assets are sold on a non-recourse basis and have met the true sale criteria under ASC Topic 860. FMC has surrendered control of the receivables and as a result they will no longer be recognized on the condensed consolidated balance sheets. FMC may be engaged to serve as a special servicer for any delinquent receivables. In that capacity, we are entitled to market rate compensation for those services.

Cash receipts from the sale of trade receivables under the securitization arrangement, received at the time of sale, are classified as cash flows from operating activities. There were $67.5 million in receivables sold under the securitization program during the six months ended June 30, 2023. There were no sales under the program during the six months ended June 30, 2022.

Other Receivable Factoring:

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

We account for these transactions as true sales and as a result they will no longer be recognized on the condensed consolidated balance sheets because the agreements transfer effective control and risk related to the receivables to the buyers. The net cash proceeds received are presented within cash provided by operating activities within our condensed consolidated statements of cash flows. The cost of factoring these accounts receivables is recorded as an expense within the condensed consolidated statements of income (loss) and has been inconsequential during each reporting period. During the six months ended June 30, 2023, there was $155.0 million in non-recourse factoring. There was no non-recourse factoring during the six months ended June 30, 2022.

16

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Note 7: Inventories

Inventories consisted of the following:

(in Millions)	June 30, 2023		December 31, 2022
Finished goods	$	718.9	$	577.5
Work in process	992.7		807.4
Raw materials, supplies and other	360.7		266.7
Net inventories	$	2,072.3	$	1,651.6

Note 8: Property, Plant and Equipment

Property, plant and equipment consisted of the following:

(in Millions)	June 30, 2023		December 31, 2022
Property, plant and equipment	$	1,481.8	$	1,415.5
Accumulated depreciation	(613.9)		(565.9)
Property, plant and equipment, net	$	867.9	$	849.6

Note 9: Restructuring and Other Charges (Income)

Our restructuring and other charges (income) are comprised of restructuring, asset disposals and other charges (income) as noted below.

	Three Months Ended June 30,				Six Months Ended June 30,
(in Millions)	2023		2022		2023		2022
Restructuring charges	$	(0.9)	$	3.4	$	—	$	14.6
Other charges (income), net	8.2		77.4		19.8		75.3
Total restructuring and other charges (income)	$	7.3	$	80.8	$	19.8	$	89.9

17

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Restructuring charges

For detail on restructuring activities which commenced prior to 2023, see Note 9 to our consolidated financial statements included within our 2022 Form 10-K.

(in Millions)	Severance and Employee Benefits		Other Charges (Income) (1)		Asset Disposal Charges (Income) (2)		Total
DuPont Crop restructuring	$	—	$	(5.7)	$	—	$	(5.7)
Other items (3)	4.8		—		—		4.8
Three Months Ended June 30, 2023	$	4.8	$	(5.7)	$	—	$	(0.9)
DuPont Crop restructuring (4)	$	—	$	0.2	$	—	$	0.2
Regional realignment (5)	1.4		1.0		—		2.4
Other items	0.3		0.5		—		0.8
Three Months Ended June 30, 2022	$	1.7	$	1.7	$	—	$	3.4
DuPont Crop restructuring	$	—	$	(8.1)	$	2.8	$	(5.3)
Other items (3)	4.8		0.5		—		5.3
Six Months Ended June 30, 2023	$	4.8	$	(7.6)	$	2.8	$	—
DuPont Crop restructuring (4)	$	—	$	0.5	$	—	$	0.5
Regional realignment (5)	3.4		1.5		—		4.9
Other items	(0.1)		1.1		8.2		9.2
Six Months Ended June 30, 2022	$	3.3	$	3.1	$	8.2	$	14.6

____________________ 

(1)Primarily represents costs associated with miscellaneous restructuring activities, including third-party costs. Other income, if applicable, primarily represents favorable developments on previously recorded exit costs and recoveries associated with restructuring. The three and six months ended June 30, 2023 includes the recognition of a gain of $5.8 million for land disposition related to a transfer agreement with the Shanghai Municipal People's Government, which was executed in December 2022.

(2)Primarily represents asset write-offs (recoveries) and accelerated depreciation on long-lived assets, which were or are to be abandoned. To the extent incurred, the acceleration effect of re-estimating settlement dates and revised cost estimates associated with asset retirement obligations due to facility shutdowns, are also included within the asset disposal charges. The amount for the six months ended June 30, 2022 represents fixed asset charges resulting from the closure of certain manufacturing sites during the period.

(3)During the three and six months ended June 30, 2023, we incurred severance charges associated with a targeted work force reduction initiative, primarily impacting our EMEA operations.

(4)Restructuring charges related to DuPont Crop restructuring during the three and six months ended June 30, 2022 represent the remaining in-flight restructuring charges as we completed the established DuPont Crop Restructuring program associated with integration. These charges are primarily associated with accelerated depreciation on certain fixed assets, severance, and other costs as we exit certain facilities.

(5)Beginning in the second quarter of 2021, we began to consolidate our global operations into centralized regional headquarters within EMEA and APAC. The regional realignment restructuring charges during the three and six months ended June 30, 2022 are primarily related to severance and other exit costs resulting from this consolidation.

18

FMC CORPORATION

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Roll forward of restructuring reserves

The following table shows a roll forward of restructuring reserves, that will result in cash spending. These amounts exclude asset retirement obligations.

(in Millions)	Balance at 12/31/22 (6)		Change in reserves (4)		Cash payments		Other (5)		Balance at 6/30/23 (6)
DuPont Crop restructuring (1)	$	5.0	$	0.1	$	(0.9)			$	4.2
Regional realignment (2)	3.0		—		(1.5)		—		1.5
Other workforce related and facility shutdowns (3)	2.6		5.3		(2.3)		0.1		5.7
Total	$	10.6	$	5.4	$	(4.7)	$	0.1	$	11.4

____________________ 

(1)Primarily consists of residual separation costs associated with DuPont Crop restructuring activities.

(2)Primarily consists of severance and employee relocation costs as well as other costs associated with the relocation of our European headquarters and the consolidation of our Asia Pacific operations into a single regional headquarters in Singapore.

(3)Primarily severance costs and other exit costs related to workforce reductions and facility shutdowns.

(4)