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EX-12 - EXHIBIT 12 - FMC CORPfmcex12063015.htm
EX-15 - EXHIBIT 15 - FMC CORPfmcex15063015.htm
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EX-32.2 - EXHIBIT 32.2 - FMC CORPfmcex322063015.htm
EX-31.2 - EXHIBIT 31.2 - FMC CORPfmcex312063015.htm
EX-32.1 - EXHIBIT 32.1 - FMC CORPfmcex321063015.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________
 FORM 10-Q
_______________________________________________________________________
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2015
or
o
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 or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
1735 Market Street
Philadelphia, Pennsylvania
 
19103
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: 215-299-6000
__________________________________________________________________________
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  o
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS SUBMITTED ELECTRONICALLY AND POSTED ON ITS CORPORATE WEBSITE, IF ANY, EVERY INTERACTIVE DATA FILE REQUIRED TO BE SUBMITTED AND POSTED PURSUANT TO RULE 405 OF REGULATION S-T DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO SUBMIT AND POST SUCH FILES)    YES  x    NO  o
INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A LARGE ACCELERATED FILER, AN ACCELERATED FILER, A NON-ACCELERATED FILER OR A SMALLER REPORTING COMPANY. SEE THE DEFINITIONS OF “LARGE ACCELERATED FILER,” “ACCELERATED FILER,” AND “SMALLER REPORTING COMPANY” IN RULE 12B-2 OF THE EXCHANGE ACT. (CHECK ONE):
LARGE ACCELERATED FILER
 
x
  
ACCELERATED FILER
 
o
 
 
 
 
 
 
 
NON-ACCELERATED FILER
 
o
  
SMALLER REPORTING COMPANY
 
o
INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT)    YES  o    NO  x
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER’S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE
Class
 
Outstanding at June 30, 2015
Common Stock, par value $0.10 per share
 
133,615,109



FMC CORPORATION
INDEX
 
 
Page
No.


2


PART I - FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
 
(in Millions, Except Per Share Data)
Three Months Ended June 30
 
Six Months Ended June 30
2015
 
2014
 
2015
 
2014
 
(unaudited)
 
(unaudited)
Revenue
$
887.1

 
$
794.9

 
$
1,546.5

 
$
1,551.8

Costs and Expenses
 
 
 
 
 
 
 
Costs of sales and services
581.3

 
478.8

 
990.0

 
942.7

 
 
 
 
 
 
 
 
Gross margin
305.8

 
316.1

 
556.5

 
609.1

 
 
 
 
 
 
 
 
Selling, general and administrative expenses
156.0

 
119.6

 
453.9

 
234.2

Research and development expenses
39.0

 
32.5

 
65.6

 
58.3

Restructuring and other charges (income)
10.3

 
2.6

 
32.6

 
9.3

Business separation costs

 
13.8

 

 
16.8

Total costs and expenses
786.6

 
647.3

 
1,542.1

 
1,261.3

Income from continuing operations before equity in (earnings) loss of affiliates, interest expense, net and income taxes
100.5

 
147.6

 
4.4

 
290.5

Equity in (earnings) loss of affiliates
(0.1
)
 

 

 
(0.3
)
Interest expense, net
24.7

 
13.2

 
38.7

 
24.8

Income (loss) from continuing operations before income taxes
75.9

 
134.4

 
(34.3
)
 
266.0

Provision (benefit) for income taxes
17.8

 
36.4

 
(31.3
)
 
71.0

Income (loss) from continuing operations
58.1

 
98.0

 
(3.0
)
 
195.0

Discontinued operations, net of income taxes
688.2

 
15.3

 
703.8

 
(11.3
)
Net income (loss)
746.3

 
113.3

 
700.8

 
183.7

Less: Net income attributable to noncontrolling interests
4.0

 
4.2

 
5.3

 
9.0

Net income (loss) attributable to FMC stockholders
$
742.3

 
$
109.1

 
$
695.5

 
$
174.7

Amounts attributable to FMC stockholders:
 
 
 
 
 
 
 
Continuing operations, net of income taxes (benefit)
$
54.1

 
$
95.7

 
$
(8.3
)
 
$
189.5

Discontinued operations, net of income taxes
688.2

 
13.4

 
703.8

 
(14.8
)
Net income (loss) attributable to FMC stockholders
$
742.3

 
$
109.1

 
$
695.5

 
$
174.7

Basic earnings (loss) per common share attributable to FMC stockholders:
 
 
 
 
 
 
 
Continuing operations
$
0.40

 
$
0.72

 
$
(0.06
)
 
$
1.42

Discontinued operations
5.14

 
0.10

 
5.27

 
(0.11
)
Net income (loss) attributable to FMC stockholders
$
5.54

 
$
0.82

 
$
5.21

 
$
1.31

Diluted earnings (loss) per common share attributable to FMC stockholders:
 
 
 
 
 
 
 
Continuing operations
$
0.40

 
$
0.71

 
$
(0.06
)
 
$
1.41

Discontinued operations
5.12

 
0.10

 
5.27

 
(0.11
)
Net income (loss) attributable to FMC stockholders
$
5.52

 
$
0.81

 
$
5.21

 
$
1.30

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


3


FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
(in Millions)
Three Months Ended June 30
 
Six Months Ended June 30
2015
 
2014
 
2015
 
2014
 
(unaudited)
 
(unaudited)
Net income (loss)
$
746.3

 
$
113.3

 
$
700.8

 
$
183.7

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Foreign currency adjustments:
 
 
 
 
 
 
 
Foreign currency translation gain (loss) arising during the period
(2.3
)
 
(3.5
)
 
(42.0
)
 
(3.2
)
Reclassification of foreign currency translation losses

 

 

 
49.6

Total foreign currency translation adjustments (1)
(2.3
)
 
(3.5
)
 
(42.0
)
 
46.4

 
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
Unrealized hedging gains (losses) and other, net of tax of $1.5 and $3.5 for the three and six months ended 2015 and $1.1 and $2.4 for the three and six months ended 2014, respectively
2.9

 
2.0

 
5.2

 
4.5

Reclassification of deferred hedging (gains) losses and other, included in net income, net of tax of ($0.4) and ($1.6) for the three and six months ended 2015 and $0.6 and $1.0 for the three and six months ended 2014, respectively (3)
(0.1
)
 
1.1

 
(1.9
)
 
2.2

Total derivative instruments, net of tax of $1.1 and $1.9 for the three and six months ended 2015 and $1.7 and $3.4 for the three and six months ended 2014, respectively
2.8

 
3.1

 
3.3

 
6.7

 
 
 
 
 
 
 
 
Pension and other postretirement benefits:
 
 
 
 
 
 
 
Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of zero and ($4.7) for the three and six months ended 2015 and zero for three and six months ended 2014, respectively (2)
(1.2
)
 
(0.6
)
 
(7.1
)
 
(0.1
)
Reclassification of net actuarial and other (gain) loss and amortization of prior service costs, included in net income, net of tax of $5.5 and $12.2 for the three and six months ended 2015 and $3.7 and $6.9 for the three and six months 2014, respectively (3)
9.7

 
6.7

 
21.4

 
12.7

Total pension and other postretirement benefits, net of tax of $5.5 and $7.5 for the three and six months ended 2015 and $3.7 and $6.9 for the three and six months ended 2014, respectively
8.5

 
6.1

 
14.3

 
12.6

 
 
 
 
 
 
 
 
Other comprehensive income (loss), net of tax
9.0

 
5.7

 
(24.4
)
 
65.7

Comprehensive income (loss)
$
755.3

 
$
119.0

 
$
676.4

 
$
249.4

Less: Comprehensive income attributable to the noncontrolling interest
3.7

 
3.4

 
5.0

 
8.5

Comprehensive income (loss) attributable to FMC stockholders
$
751.6

 
$
115.6

 
$
671.4

 
$
240.9

____________________ 
(1)
Income taxes are not provided on the equity in undistributed earnings of our foreign subsidiaries or affiliates since it is our intention that such earnings will remain invested in those affiliates permanently. The amount for the six months ended June 30, 2014 includes reclassification to net income due to the divestiture of our FMC Peroxygens business, see Note 12 for more information. In accordance with accounting guidance, this amount was previously factored into the lower of cost or fair value test associated with the 2013 Peroxygens' asset held for sale write-down charges.
(2)
At December 31st of each year, we remeasure our pension and postretirement plan obligations at which time we record any actuarial gains (losses) and prior service (costs) credits to other comprehensive income. The interim adjustments noted above typically reflect the foreign currency translation impacts from the unrealized actuarial gains (losses) and prior service (costs) credits related to our foreign pension and postretirement plans. The amounts for the six months June 30, 2015 includes adjustments, recorded during the three months ended March 31, 2015, to comprehensive income as the results of the disposal of our FMC Alkali Chemicals division, we triggered a curtailment of our U.S. pension plans. See Note 13 for more information.
(3)
For more detail on the components of these reclassifications and the affected line item in the condensed consolidated statements of income (loss) see Note 12.


4


FMC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in Millions, Except Share and Par Value Data)
June 30, 2015
 
December 31, 2014
ASSETS
(unaudited)
Current assets
 
 
 
Cash and cash equivalents
$
477.5

 
$
109.5

Trade receivables, net of allowance - 2015: $40.8; 2014: $37.2
1,865.5

 
1,602.5

Inventories
1,041.1

 
607.6

Prepaid and other current assets
268.9

 
188.8

Deferred income taxes
152.7

 
222.7

Current assets of discontinued operations held for sale

 
203.3

Total current assets
$
3,805.7

 
$
2,934.4

Investments
4.8

 
5.5

Property, plant and equipment, net
1,112.8

 
930.0

Goodwill
728.9

 
352.5

Other intangibles, net
843.4

 
246.9

Other assets
334.0

 
269.6

Deferred income taxes
245.6

 
200.1

Noncurrent assets of discontinued operations held for sale

 
401.5

Total assets
$
7,075.2

 
$
5,340.5

LIABILITIES AND EQUITY
 
 
 
Current liabilities
 
 
 
Short-term debt and current portion of long-term debt
$
268.3

 
$
525.2

Accounts payable, trade and other
578.4

 
378.3

Advance payments from customers
5.4

 
190.2

Accrued and other liabilities
330.4

 
407.2

Accrued customer rebates
367.1

 
236.0

Guarantees of vendor financing
57.0

 
50.2

Accrued pension and other postretirement benefits, current
6.6

 
12.7

Income taxes
367.4

 
22.2

Current liabilities of discontinued operations held for sale

 
88.4

Total current liabilities
$
1,980.6

 
$
1,910.4

Long-term debt, less current portion
2,050.9

 
1,153.4

Accrued pension and other postretirement benefits, long-term
200.8

 
238.7

Environmental liabilities, continuing and discontinued
179.1

 
209.9

Deferred income taxes
234.7

 
51.3

Noncurrent liabilities of discontinued operations held for sale

 
4.7

Other long-term liabilities
220.8

 
208.1

Commitments and contingent liabilities (Note 16)

 

Equity
 
 
 
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2015 or 2014

 

Common stock, $0.10 par value, authorized 260,000,000 shares; 185,983,792 issued shares at 2015 and 2014
18.6

 
18.6

Capital in excess of par value of common stock
411.7

 
401.9

Retained earnings
3,635.7

 
2,984.5

Accumulated other comprehensive income (loss)
(399.9
)
 
(375.8
)
Treasury stock, common, at cost - 2015: 52,368,683 shares, 2014: 52,666,121 shares
(1,496.3
)
 
(1,498.7
)
Total FMC stockholders’ equity
$
2,169.8

 
$
1,530.5

Noncontrolling interests
38.5

 
33.5

Total equity
$
2,208.3

 
$
1,564.0

Total liabilities and equity
$
7,075.2

 
$
5,340.5

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

5


FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(in Millions)
Six Months Ended June 30
2015
 
2014
 
(unaudited)
Cash provided (required) by operating activities of continuing operations:
 
 
 
Net income (loss)
$
700.8

 
$
183.7

Discontinued operations
(703.8
)
 
11.3

Income (loss) from continuing operations
$
(3.0
)
 
$
195.0

Adjustments from income from continuing operations to cash provided (required) by operating activities of continuing operations:
 
 
 
Depreciation and amortization
54.2

 
47.9

Equity in (earnings) loss of affiliates

 
(0.3
)
Restructuring and other charges (income)
32.6

 
9.3

Deferred income taxes
21.2

 
(20.8
)
Pension and other postretirement benefits
22.6

 
17.5

Share-based compensation
8.3

 
8.4

Excess tax benefits from share-based compensation
(2.0
)
 
(4.0
)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
Trade receivables, net
241.4

 
(18.7
)
Guarantees of vendor financing
1.2

 
24.6

Inventories
(40.8
)
 
(44.0
)
Accounts payable
(111.9
)
 
(53.0
)
Advance payments from customers
(184.8
)
 
(174.9
)
Accrued customer rebates
121.5

 
146.9

Income taxes
6.5

 
38.3

Pension and other postretirement benefit contributions
(51.8
)
 
(45.2
)
Environmental spending, continuing, net of recoveries
(13.5
)
 
(5.1
)
Restructuring and other spending
(10.5
)
 
(4.6
)
Change in other operating assets and liabilities, net (1)
(213.7
)
 
(25.1
)
Cash provided (required) by operating activities of continuing operations
$
(122.5
)
 
$
92.2

 
 
 
 
Cash provided (required) by operating activities of discontinued operations:
 
 
 
Environmental spending, discontinued, net of recoveries
(4.0
)
 
(9.9
)
Other discontinued reserves
(8.6
)
 
(22.3
)
Operating activities of discontinued operations, net of recoveries
(37.5
)
 
54.6

Cash provided (required) by operating activities of discontinued operations
$
(50.1
)
 
$
22.4

                                        
(1)
The June 30, 2015 change is impacted by a $99.6 million reduction in the Cheminova acquisition hedge liability and the non-cash Cheminova inventory fair value amortization of $19.3 million. Total cash payments during the six months ended June 30, 2015 associated with the Cheminova acquisition hedges were $264.8 million, which includes $165.2 million that were accrued and paid within the period.
The accompanying notes are an integral part of these condensed consolidated financial statements.
(continued)

6


FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
(in Millions)
Six Months Ended June 30
2015
 
2014
 
(unaudited)
Cash provided (required) by investing activities of continuing operations:
 
 
 
Capital expenditures
$
(65.2
)
 
$
(101.4
)
Proceeds from disposal of property, plant and equipment
1.6

 
0.2

Acquisitions, net of cash acquired
(1,205.1
)
 

Other investing activities
(19.3
)
 
(4.4
)
Cash provided (required) by investing activities of continuing operations
$
(1,288.0
)
 
$
(105.6
)
 
 
 
 
Cash provided (required) by investing activities of discontinued operations:
 
 
 
Proceeds from divestitures
1,653.2

 
199.1

       Other discontinued investing activities
(15.6
)
 
(18.3
)
Cash provided (required) by investing activities of discontinued operations
$
1,637.6

 
$
180.8

 
 
 
 
Cash provided (required) by financing activities of continuing operations:
 
 
 
Increase (decrease) in short-term debt
(394.6
)
 
(138.0
)
Repayments of long-term debt
(1,023.7
)
 
(17.3
)
Proceeds from borrowings of long-term debt
1,650.0

 

Distributions to non controlling interests

 
(11.5
)
Issuances of common stock, net
5.6

 
6.7

Excess tax benefits from share-based compensation
2.0

 
4.0

Dividends paid (2)
(42.2
)
 
(38.0
)
Other repurchases of common stock
(3.2
)
 
(4.1
)
Cash provided (required) by financing activities of continuing operations
$
193.9

 
$
(198.2
)
Effect of exchange rate changes on cash and cash equivalents
(2.9
)
 
(0.4
)
Increase (decrease) in cash and cash equivalents
368.0

 
(8.8
)
Cash and cash equivalents, beginning of period
109.5

 
123.2

Cash and cash equivalents, end of period
$
477.5

 
$
114.4

                                               
(2)
See Note 12 regarding quarterly cash dividend.
Supplemental disclosure of cash flow information: Cash paid for interest, net of capitalized interest was $37.9 million and $19.6 million, and income taxes paid, net of refunds were $19.0 million and $57.3 million for the six months ended June 30, 2015 and 2014, respectively. Non-cash additions to property, plant and equipment were $4.6 million and $19.8 million for the six months ended June 30, 2015 and 2014.


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

7


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 (“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, 2015 and 2014, cash flows for the six months ended June 30, 2015 and 2014 and our financial positions as of June 30, 2015 and December 31, 2014. 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, 2015 and 2014 are not necessarily indicative of the results of operations for the full year. The condensed consolidated balance sheets as of June 30, 2015 and December 31, 2014, and the related condensed consolidated statements of income (loss), condensed consolidated statements of comprehensive income (loss) and condensed consolidated statements of cash flows for the six months ended June 30, 2015 and 2014, 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, 2014 (the “2014 10-K”).

FMC Alkali Chemicals Division:
In February 2015, our FMC Alkali Chemicals division ("ACD") was classified as a discontinued operation. For more information on the discontinued operations see Note 9. As a result, our FMC Minerals segment, which previously included our FMC Alkali Chemicals and FMC Lithium divisions, was renamed FMC Lithium. We have recast all the data within this filing to reflect the changes in our reportable segments to conform to the current year presentation and to present ACD as a discontinued operation retrospectively for all periods presented.

Note 2: Recently Issued and Adopted Accounting Pronouncements and Regulatory Items
New accounting guidance and regulatory items
In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This new standard changes the criteria for which to measure inventory. Prior to the issuance of this new standard, inventory was measured at the lower of cost or market value. This required three separate data points in order to measure inventory. The three data points were cost, market with a ceiling of net realizable value and market with a floor of net realizable value less a normal profit margin. This amendment eliminates the two data points defining "market" and replaces them with one, net realizable value. This amendment does not impact inventory measured using last-in, first-out. We are required to adopt this standard in the first quarter of 2017, early adoption is permitted. We are evaluating the effect that ASU 2015-11 will have on our consolidated financial statements. We have not yet completed the assessment to determine the effect of the standard on our ongoing financial reporting.
In April 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this new standard require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this standard. We are required to adopt this standard in the first quarter of 2016. Early adoption is permitted. The amendments should be applied on a retrospective basis. ASU 2015-03 will impact our consolidated balance sheet.
In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis. This new standard changes the consolidation evaluation for entities that are required to evaluate whether they should consolidate certain legal entities. We are required to adopt this standard in the first quarter of 2016. Early adoption is permitted. The standard permits the use of a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption, or a reporting entity may also apply the amendments retrospectively. We are evaluating the effect that ASU 2015-02 will have on our consolidated financial statements. We have not yet completed the assessment to determine the effect of the standard on our ongoing financial reporting.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. We intend to adopt this standard for interim and annual periods beginning after December 15, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial

8


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

statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Recently adopted accounting guidance
In April 2014, the FASB issued its updated guidance on the financial reporting of discontinued operations. This new standard changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Additionally, expanded disclosures about discontinued operations will be required to provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This guidance impacts disclosures within an entity's financial statements and notes to the financial statements. We have adopted this guidance prospectively this quarter.

Note 3: Acquisitions
Cheminova A/S
On April 21, 2015, pursuant to the terms and conditions set forth in the Purchase Agreement, we completed the acquisition of 100 percent of the outstanding equity of Cheminova A/S, a Denmark Aktieselskab ("Cheminova") from Auriga Industries A/S, a Denmark Aktieselskab for an aggregate purchase price of $1.2 billion, excluding assumed net debt and hedged-related costs totaling $0.6 billion (the “Acquisition”). The Acquisition was funded with the October 10, 2014 term loan which was secured for the purposes of the Acquisition, see Note 8 for more information.
Cheminova is being integrated into our FMC Agricultural Solutions segment and has been included within our results of operations for the three and six months ended June 30, 2015. Revenue and Income from continuing operations before income taxes attributable to Cheminova, since the date of acquisition, for the three and six months ended June 30, 2015 were approximately $217.0 million and $27.0 million, respectively.

Preliminary Purchase Price Allocation
The acquisition of Cheminova has been accounted for under the GAAP business combinations accounting guidance, and as such we have applied acquisition accounting. Acquisition accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair values at the Acquisition date using primarily Level 2 and Level 3 inputs (see Note 15 for an explanation of Level 2 and 3 inputs). These Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates. Additionally, estimated fair values are based, in part, upon outside preliminary appraisals for certain assets, including specifically-identified intangible assets.
The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based upon preliminary information and is subject to change within the measurement period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair value of inventories, property, plant and equipment, intangible assets, legal reserves, contingent liabilities, including uncertain tax positions, deferred tax assets and liabilities as well as other assets and liabilities. During the measurement period, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date we will revise the preliminary purchase price allocation. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date. The impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings.
The following table summarizes the consideration paid for Cheminova and the amounts of the assets acquired and liabilities assumed as of the acquisition date, which have been allocated on a preliminary basis.

9


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

Preliminary Purchase Price Allocation
(in Millions)
 
Trade receivables
$
513.4

Inventories (1)
421.1

Other current assets
53.6

Property, plant & equipment
192.9

Intangible assets (2)
 
Customer relationships
258.7

Brands
363.7

In-process research & development
17.2

Goodwill (3)
393.2

Other assets
58.1

Total fair value of assets acquired
2,271.9

 
 
Short-term debt
140.5

Other current liabilities
476.9

Long-term debt (4)
273.1

Deferred tax liabilities
162.3

Other liabilities
14.0

Total fair value of liabilities assumed
1,066.8

 
 
Total cash paid, less cash acquired
$
1,205.1

____________________ 
(1)
Fair value of finished good inventories acquired included a step-up in the value of approximately $58.1 million, of which $19.3 million was expensed in the three and six months ended June 30, 2015 and included in "Cost of sales and services" on the condensed consolidated income statement.
(2)
The weighted average useful life of the acquired finite-lived intangibles, which primarily represents the customer relationships is approximately 20 years.
(3)
Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. None of the acquired goodwill will be deductible for income tax purposes.
(4)
Long-term debt assumed primarily consisted of mortgage debt and borrowings under existing Cheminova credit facilities. As of June 30, 2015 the principal borrowings under this assumed debt has been settled utilizing the borrowing under the October 10, 2014 term loan.

Unaudited Pro Forma Financial Information
The following unaudited pro forma results of operations assume that the Acquisition occurred at the beginning of the periods presented. The pro forma amounts include certain adjustments, including interest expense on the borrowings utilized to complete the acquisition, depreciation and amortization expense and income taxes. The pro forma amounts for the three and six months ended June 30, 2015 were adjusted to exclude approximately $40.3 million and $231.0 million, respectively, of acquisition-related charges, as further described below. The pro forma results do not include adjustments related to cost savings or other synergies that are anticipated as a result of the Acquisition. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisition had occurred as of January 1, 2014, nor are they indicative of future results of operations.

 
Three Months Ended June 30
 
Six Months Ended June 30
(in Millions)
2015
 
2014
 
2015
 
2014
Pro forma Revenue
$
945.0

 
$
1,150.0

 
$
1,908.0

 
$
2,245.0

Pro forma Diluted earnings per share
$
5.68

 
$
0.98

 
$
6.17

 
$
1.57



10


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

Acquisition-related charges
Pursuant to GAAP, costs incurred to complete the Acquisition as well as costs incurred to integrate Cheminova into our operations are expensed as incurred. The following table summarizes the costs incurred associated with these combined activities.
 
Three Months Ended
 
Six Months Ended
 
June 30
 
June 30
(in Millions)
2015
 
2014
 
2015
 
2014
Acquisition-related charges
 
 
 
 
 
 
 
Legal and professional fees (1)
$
29.0

 
$

 
$
39.6

 
$

Inventory fair value amortization (2)
19.3

 

 
19.3

 

(Gain)/loss on hedging purchase price (3)
(8.0
)
 

 
172.1

 

Total Acquisition-related charges
$
40.3

 
$

 
$
231.0

 
$

Restructuring charges and asset disposals
 
 
 
 
 
 
 
Cheminova restructuring
4.8

 

 
4.8

 

Total Cheminova restructuring charges (4)
$
4.8

 
$

 
$
4.8

 
$

____________________ 
(1)
Represents transaction costs, costs for transitional employees, other acquired employee related costs and integration related legal and professional third-party fees. On the condensed consolidated statements of income (loss), these charges are included in “Selling, general and administrative expense.”
(2)
On the condensed consolidated statements of income (loss), these charges are included in “Costs of sales and services.”
(3)
See "Cheminova Acquisition Hedge Costs" below for more information on these charges. On the condensed consolidated statements of income (loss), these charges are included in “Selling, general and administrative expense.”
(4)
See Note 7 for more information. These charges are recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss).

Cheminova Acquisition Hedge Costs
Pursuant to the terms and conditions set forth in the Purchase Agreement, we agreed to acquire all of the outstanding equity of Cheminova from Auriga for an aggregate purchase price of 8.5 billion Danish krone ("DKK"). At the time we entered into the Purchase Agreement, the U.S. dollar ("USD" or “$”) to DKK exchange rate was USD $1.00 to DKK 5.77, resulting in a USD purchase price of $1.47 billion, excluding assumed debt of approximately $0.3 billion. In order to minimize our exposure to adverse changes in the USD to DKK exchange rate from September 8, 2014 to April 21, 2015 (the acquisition close date), we entered into a series of foreign currency forward contracts ("FX forward contracts"). The FX forward contracts provided us the ability to fix the USD to DKK exchange rate for most of the DKK 8.5 billion purchase price, thereby limiting our exposure to foreign currency rate fluctuations. Over the period from September 2014 to April 21, 2015 the USD strengthened against the DKK by approximately 21 percent to an exchange rate of USD $1.00 to DKK 6.96. The strengthening of the USD against the DKK results in a lower USD purchase price for Cheminova. Partially offsetting this was a mark-to-market net loss on the FX forward contracts of $172.1 million for six months ended June 30, 2015.

Note 4: Goodwill and Intangible Assets
The changes in the carrying amount of goodwill by business segment are presented in the table below:
(in Millions)
FMC Agricultural
Solutions
 
FMC Health and Nutrition
 
FMC Lithium
 
Total
Balance, December 31, 2014
$
31.0

 
$
321.5

 
$

 
$
352.5

Acquisitions
393.2

 

 

 
393.2

Foreign currency adjustments

 
(16.8
)
 

 
(16.8
)
Balance, June 30, 2015
$
424.2

 
$
304.7

 
$

 
$
728.9

There were no events or circumstances indicating that goodwill might be impaired as of June 30, 2015.

11


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


Our intangible assets, other than goodwill, consist of the following:
 
June 30, 2015
 
December 31, 2014
(in Millions)
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
Intangible assets subject to amortization (finite-lived)
Customer relationships
$
397.4

 
$
(29.2
)
 
$
368.2

 
$
152.8

 
$
(22.5
)
 
$
130.3

Patents
2.2

 
(0.2
)
 
2.0

 
1.7

 
(0.1
)
 
1.6

Brands (1)
13.6

 
(1.3
)
 
12.3

 
1.2

 
(0.6
)
 
0.6

Purchased and licensed technologies
72.0

 
(27.4
)
 
44.6

 
74.3

 
(24.5
)
 
49.8

Other intangibles
3.6

 
(2.2
)
 
1.4

 
3.6

 
(2.4
)
 
1.2

 
$
488.8

 
$
(60.3
)
 
$
428.5

 
$
233.6

 
$
(50.1
)
 
$
183.5

Intangible assets not subject to amortization (indefinite life)
Brands (1)
$
398.4

 
 
 
$
398.4

 
$
63.4

 
 
 
$
63.4

In-process research & development
16.5

 
 
 
16.5

 

 
 
 

 
$
414.9

 
 
 
$
414.9

 
$
63.4

 
 
 
$
63.4

Total intangible assets
$
903.7

 
$
(60.3
)
 
$
843.4

 
$
297.0

 
$
(50.1
)
 
$
246.9

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

At June 30, 2015, the finite-lived and indefinite life intangibles were allocated among our business segments as follows:
(in Millions)
Finite-lived
 
Indefinite Life
FMC Agricultural Solutions
$
351.8

 
$
388.9

FMC Health and Nutrition
75.6

 
26.0

FMC Lithium
1.1

 

Total
$
428.5

 
$
414.9

 
Three Months Ended June 30
 
Six Months Ended June 30
(in Millions)
2015
 
2014
 
2015
 
2014
Amortization expense
$
5.5

 
$
2.9

 
$
8.1

 
$
5.7

The estimated pre-tax amortization expense for fiscal year 2015 is $24 million and is estimated to be $28 million for each fiscal year from 2016 to 2019. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency.

Note 5: Inventories
Inventories consisted of the following:
 (in Millions)
June 30, 2015
 
December 31, 2014
Finished goods
$
491.9

 
$
281.1

Work in process
323.4

 
248.8

Raw materials, supplies and other
392.2

 
242.1

First-in, first-out inventory
$
1,207.5

 
$
772.0

Less: Excess of first-in, first-out cost over last-in, first-out cost
(166.4
)
 
(164.4
)
Net inventories
$
1,041.1

 
$
607.6


12


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


Note 6: Property, Plant and Equipment
Property, plant and equipment consisted of the following:
(in Millions)
June 30, 2015
 
December 31, 2014
Property, plant and equipment
$
1,828.0

 
$
1,618.7

Accumulated depreciation
(715.2
)
 
(688.7
)
Property, plant and equipment, net
$
1,112.8

 
$
930.0


Note 7: 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)
2015
 
2014
 
2015
 
2014
Restructuring charges and asset disposals
$
6.8

 
$
1.3

 
$
12.2

 
$
6.6

Other charges (income), net
3.5

 
1.3

 
20.4

 
2.7

Total restructuring and other charges
$
10.3

 
$
2.6

 
$
32.6

 
$
9.3


Restructuring charges and asset disposals
Details on the 2015 restructuring charges and asset disposals activities is provided below. For detail on restructuring activities which commenced prior to 2015, see Note 7 to our consolidated financial statements included with our 2014 Form 10-K.
2015 Restructuring Activities
Cheminova Restructuring
On April 21, 2015 we completed the acquisition of Cheminova, see Note 3 for more details. As part of the integration of Cheminova into our existing FMC Agricultural Solutions segment we implemented a restructuring plan. The restructuring plan includes workforce reductions, relocation of current operating locations, lease termination fees and fixed asset accelerated depreciation as well as fixed asset disposal charges at several of our FMC Agricultural Solutions' facilities.

13


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

 
Restructuring Charges
 
 
 
 
(in Millions)
Severance and Employee Benefits (1)
 
Other Charges (Income) (2)
 
Asset Disposal Charges (3)
 
Total
Cheminova Restructuring
$
4.4

 
$
0.3

 
$
0.1

 
$
4.8

Health and Nutrition Restructuring
0.8

 

 
1.0

 
1.8

Other Items

 
0.2

 

 
0.2

Three months ended June 30, 2015
$
5.2

 
$
0.5

 
$
1.1

 
$
6.8

 
 
 
 
 
 
 
 
Health and Nutrition Restructuring
$
0.9

 
$

 
$

 
$
0.9

Other Items

 
0.4

 

 
0.4

Three months ended June 30, 2014
$
0.9

 
$
0.4

 
$

 
$
1.3

 
 
 
 
 
 
 
 
Cheminova Restructuring
$
4.4

 
$
0.3

 
$
0.1

 
$
4.8

Health and Nutrition Restructuring
1.6

 
0.1

 
2.2

 
3.9

Other Items
3.6

 
(0.1
)
 

 
3.5

Six months ended June 30, 2015
$
9.6

 
$
0.3

 
$
2.3

 
$
12.2

 
 
 
 
 
 
 
 
Health and Nutrition Restructuring
$
5.8

 
$

 
$

 
$
5.8

Other Items

 
0.8

 

 
0.8

Six months ended June 30, 2014
$
5.8

 
$
0.8

 
$

 
$
6.6

____________________ 
(1)
Represents severance and employee benefit charges. Income represents adjustments to previously recorded severance and employee benefits.
(2)
Primarily represents costs associated with lease payments, contract terminations, and other miscellaneous exit costs. Other Income primarily represents favorable developments on previously recorded exit costs as recoveries associated with restructuring.
(3)
Primarily represents accelerated depreciation and impairment charges 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.
Roll forward of restructuring reserves
The following table shows a roll forward of restructuring reserves, continuing and discontinued, that will result in cash spending. These amounts exclude asset retirement obligations.
(in Millions)
Balance at
12/31/14 (4)
 
Change in
reserves (2)
 
Cash
payments
 
Other (3)
 
Balance at
6/30/15 (4)
Cheminova Restructuring
$

 
$
4.7

 
$
(1.9
)
 
$

 
$
2.8

Health and Nutrition Restructuring
4.6

 
1.7

 
(4.6
)
 
0.1

 
1.8

Other Workforce Related and Facility Shutdowns (1)
3.0

 
3.5

 
(4.1
)
 
0.5

 
2.9

Restructuring activities related to discontinued operations (5)
2.7

 
(2.2
)
 
(0.1
)
 

 
0.4

Total
$
10.3

 
$
7.7

 
$
(10.7
)
 
$
0.6

 
$
7.9

____________________ 
(1)
Primarily severance costs related to workforce reductions and facility shutdowns noted in the “Other Items” sections above.
(2)
Primarily severance, exited lease, contract termination and other miscellaneous exit costs. Any accelerated depreciation and impairment charges noted above impacted our property, plant and equipment balances and are not included in the above tables.
(3)
Primarily foreign currency translation adjustments.
(4)
Included in “Accrued and other liabilities” on the condensed consolidated balance sheets.
(5)
Cash spending associated with restructuring activities of discontinued operations is reported within Payments of other discontinued reserves, net of recoveries on the condensed consolidated statements of cash flows.

14


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

Other charges (income), net
 
Three Months Ended June 30
 
Six Months Ended June 30
(in Millions)
2015
 
2014
 
2015
 
2014
Environmental charges, net
$
3.5

 
$
1.3

 
$
5.4

 
$
2.7

Other items, net

 

 
15.0

 

Other charges (income), net
$
3.5

 
$
1.3

 
$
20.4

 
$
2.7

Environmental charges, net
Environmental charges represent the net charges associated with environmental remediation at continuing operating sites. See Note 10 for additional details.
Other items, Net
Our FMC Agricultural Solutions segment enters into collaboration and license agreements with various third-party companies for the purpose of obtaining certain technology and intellectual property rights relating to new compounds still under development. In most transactions the rights and technology obtained is referred to as in-process research and development and in accordance with GAAP, the amounts paid are expensed as incurred since they were acquired outside of a business combination. During the six months ended June 30, 2015, we entered into one such transaction, consisting of the acquisition of all global rights to a pre-development novel, proprietary broadleaf herbicide.

Note 8: Debt
Debt maturing within one year:
(in Millions)
June 30, 2015
 
December 31, 2014
Short-term foreign debt (1)
$
161.4

 
$
36.6

Commercial paper (2)
105.2

 
486.6

Total short-term debt
$
266.6

 
$
523.2

Current portion of long-term debt
1.7

 
2.0

Short-term debt and current portion of long-term debt
$
268.3

 
$
525.2

____________________
(1)
At June 30, 2015, the average interest rate on the borrowings was 12.0%. We often provide parent-company guarantees to lending institutions that extend credit to our foreign subsidiaries.
(2)
At June 30, 2015, the average interest rate on the borrowings was 0.51%.

15


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

Long-term debt:
(in Millions)
June 30, 2015
 
 
 
 
Interest Rate
Percentage
 
Maturity
Date
 
June 30, 2015
 
December 31, 2014
Pollution control and industrial revenue bonds (less unamortized discounts of $0.2 and $0.2, respectively)
0.2-6.5%
 
2021-2035
 
$
141.5

 
$
141.5

Senior notes (less unamortized discount of $1.8 and $1.9, respectively)
3.95-5.2%
 
2019-2024
 
998.2

 
998.1

Term Loan Facility
1.4%
 
2020
 
900.0

 

Credit Facility (1)
2.6%
 
2019
 

 

Foreign debt
3.5%
 
2015-2024
 
12.9

 
15.8

Total long-term debt

 

 
$
2,052.6

 
$
1,155.4

Less: debt maturing within one year

 

 
1.7

 
2.0

Total long-term debt, less current portion

 

 
$
2,050.9

 
$
1,153.4

____________________
(1)
Letters of credit outstanding under our Credit Facility totaled $79.4 million and available funds under this facility were $1,315.4 million at June 30, 2015, which reflects borrowings under our commercial paper program.

Covenants
Among other restrictions, our Credit Facility and Term Loan Facility contain financial covenants applicable to FMC and its consolidated subsidiaries related to leverage (measured as the ratio of debt to adjusted earnings) and interest coverage (measured as the ratio of adjusted earnings to interest expense). Our actual leverage for the four consecutive quarters ended June 30, 2015, was 4.1 which is below the maximum leverage of 4.5 at June 30, 2015. During 2015 the maximum leverage ratio will step down in accordance with the provisions of the Credit Facility and the Term Loan Facility. Our actual interest coverage for the four consecutive quarters ended June 30, 2015, was 9.1 which is above the minimum interest coverage of 3.5. We were in compliance with all covenants at June 30, 2015.

Term Loan Facility
On April 21, 2015, we borrowed $1.65 billion under our previously announced senior unsecured Term Loan Facility. The proceeds of the borrowing were used to finance the acquisition of Cheminova as well as to pay costs, fees and expenses incurred in connection with the acquisition and the term loan facility. At June 30, 2015, $900.0 million remained outstanding under the Term Loan facility, as a portion of the net proceeds from the sale of our FMC Alkali division (see Note 9) was used to pay down the initial borrowings.
The scheduled maturity of the Term Loan Facility is on April 21, 2020. The borrowings under the Term Loan Agreement will bear interest at a floating rate, which will be a base rate or a Eurocurrency rate equal to the London interbank offered rate for the relevant interest period, plus in each case an applicable margin, as determined in accordance with the provisions of the Term Loan Agreement. The base rate will be the highest of: the rate of interest announced publicly by Citibank, N.A. in New York, New York from time to time as its “base rate”; the federal funds effective rate plus1/2 of one percent; and the Eurocurrency rate for a one-month period plus one percent.
The Term Loan Agreement contains a cross-default provision whereby a default under our other indebtedness in excess of $50.0 million, after grace periods and absent a waiver from the lenders, would be an event of default under the Term Loan Agreement and could result in a demand for payment of all amounts outstanding under this facility.

Note 9: Discontinued Operations
FMC Alkali:
On April 1, 2015, we completed the previously disclosed sale of our FMC Alkali Chemicals division ("ACD") for $1,653.2 million to a wholly owned subsidiary of Tronox Limited ("Tronox"). The sale resulted in approximately $1,202.1 million in after-tax cash proceeds. The sale resulted in a pre-tax gain of $1,073.4 million ($697.8 million net of tax) for the three months ended June 30, 2015.

16


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

In connection with the sale we entered into a customary transitional services agreement with Tronox to provide for the orderly separation of the business and transition of various functions and processes. These services will be provided by us to Tronox for up to 12 months after closing. These services include information technology services, human resource and facility services among other services, while Tronox assumes the operations of ACD.
Additionally, FMC is providing certain financial guarantees to third parties on behalf of ACD (Tronox guarantees). These Tronox guarantees include payment guarantees to the lessors of various transportation equipment leases, subleases of certain transportation equipment leases and a self-bonding guarantee for several environmental reclamation obligations assumed by Tronox, which were previously treated as an asset retirement obligation by FMC. In accordance with the Definitive Agreement, Tronox is provided 90 days to secure FMC's release from such guarantees after which FMC is entitled to receive compensation from Tronox based on the outstanding amount of guarantees until such release is obtained. As of July 27, 2015 we have been released from any obligations under a significant portion of these guarantees, see Note 16 for our total outstanding guarantees which include these Tronox guarantees.
The results of our discontinued FMC ACD operations are summarized below:
(in Millions)
Three Months Ended June 30
 
Six Months Ended June 30
2015
 
2014
 
2015
 
2014
Revenue
$

 
$
192.9

 
$
194.0

 
$
377.8

Costs of sales and services

 
151.4

 
149.2

 
300.9

 
 
 
 
 
 
 
 
Income (loss) from discontinued operations before income taxes (1)
1,069.8

 
33.0

 
1,088.7

 
61.2

Provision for income taxes
372.0

 
5.1

 
372.4

 
9.8

Total discontinued operations of FMC ACD, net of income taxes
$
697.8

 
$
27.9

 
$
716.3

 
$
51.4

Less: discontinued operations of FMC ACD attributable to noncontrolling interests
$

 
$
1.9

 
$

 
$
3.5

Discontinued operations of FMC ACD, net of income taxes, attributable to FMC Stockholders
$
697.8

 
$
26.0

 
$
716.3

 
$
47.9

____________________
(1)
For the three months ended June 30, 2015 and 2014, respectively, amounts include approximately zero and $2.2 million attributable to noncontrolling interests, zero and $2.1 million of allocated interest expense, $3.7 million and zero of divestiture related charges. For the six months ended June 30, 2015 and 2014, respectively, amounts include approximately zero and $4.1 million attributable to noncontrolling interests, $2.2 million and $4.0 million of allocated interest expense, $15.0 million and zero of divestiture related charges and $5.3 million and zero of a pension curtailment charge. Interest was allocated in accordance with relevant discontinued operations accounting guidance.


17


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

The following table presents the major classes of assets and liabilities of FMC Alkali Chemicals:
(in Millions)
December 31, 2014
Assets
 
Current assets of discontinued operations held for sale (primarily trade receivables and inventories)
$
203.3

Property, plant & equipment (1)
378.6

Other non-current assets (1)
22.9

Total assets of discontinued operations held for sale
$
604.8

Liabilities
 
Current liabilities of discontinued operations held for sale
(88.4
)
Noncurrent liabilities of discontinued operations held for sale (1)
(4.7
)
Total liabilities of discontinued operations held for sale
$
(93.1
)
Net Assets
$
511.7

____________________
(1)     Presented as "Noncurrent assets\liabilities of discontinued operations held for sale" on the condensed consolidated balance sheet as
of December 31, 2014.

In addition to our discontinued FMC Alkali Chemicals division our other discontinued operations include adjustments to retained liabilities. The primary liabilities retained include environmental liabilities, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities.
Our discontinued operations comprised the following:
(in Millions)
Three Months Ended June 30
 
Six Months Ended June 30
2015
 
2014
 
2015
 
2014
Adjustment for workers’ compensation, product liability, other postretirement benefits and other, net of income tax benefit (expense) of zero and ($0.3) for the three and six months ended 2015 and $0.6 for the three and six months ended 2014, respectively
$
2.4

 
$
(1.3
)
 
$
(0.1
)
 
$
(2.8
)
Provision for environmental liabilities, net of recoveries, net of income tax benefit of $2.6 and $4.6 for the three and six months ended 2015 and $4.4 and $7.1 for the three and six months ended 2014, respectively (1)
(7.5
)
 
(7.5
)
 
(8.0
)
 
(12.3
)
Provision for legal reserves and expenses, net of recoveries, net of income tax benefit (expense) of $2.8 and $2.7 for the three and six months ended 2015 and $2.2 and $4.5 for the three and six months ended 2014, respectively
(4.5
)
 
(3.8
)
 
(4.4
)
 
(7.6
)
Discontinued operations of FMC Alkali Chemicals, net of income tax benefit (expense) of ($372.0) and ($372.4) for the three and six months ended 2015 and ($5.1) and ($9.8) for the three and six months ended 2014, respectively
697.8

 
27.9

 
716.3

 
51.4

Discontinued operations of FMC Peroxygens, net of income tax benefit (expense) of zero for the three and six months ended 2015 and zero and ($29.3) for the three and six months ended 2014, respectively (2)

 

 

 
(40.0
)
Discontinued operations, net of income taxes
$
688.2

 
$
15.3

 
$
703.8

 
$
(11.3
)
____________________
(1)
See a roll forward of our environmental reserves as well as discussion on significant environmental issues that occurred during the 2015 in Note 10.
(2)
On February 28, 2014, we completed the sale of our FMC Peroxygens business for $199.1 million in cash to One Equity Partners (OEP), the private investment arm of J.P. Morgan Chase & Co. The sale resulted in a further pre-tax loss of $10.1 million ($33.4 million net of tax). The net of tax loss was driven by the final allocation of the proceeds.

Note 10: Environmental Obligations
We have reserves for potential environmental obligations, which management considers probable and which management can reasonably estimate. The table below is a roll forward of our total environmental reserves, continuing and discontinued:

18


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

 
(in Millions)
Gross
 
Recoveries (3)
 
Net
Total environmental reserves at December 31, 2014
$
296.2

 
$
(11.9
)
 
$
284.3

Provision/(benefit)
18.0

 

 
18.0

(Spending)/recoveries
(25.4
)
 
4.1

 
(21.3
)
Total environmental reserves at June 30, 2015
$
288.8

 
$
(7.8
)
 
$
281.0

 
 
 
 
 
 
Environmental reserves, current (1)
104.9

 
(3.0
)
 
101.9

Environmental reserves, long-term (2)
183.9

 
(4.8
)
 
179.1

Total environmental reserves at June 30, 2015
$
288.8

 
$
(7.8
)
 
$
281.0

____________________
(1)
These amounts are included within "Accrued and other liabilities" on the condensed consolidated balance sheets.
(2)
These amounts are included in “Environmental liabilities, continuing and discontinued” on the condensed consolidated balance sheets.
(3)
These recorded recoveries represent probable realization of claims against U.S. government agencies and are recorded as an offset to our environmental reserves in the condensed consolidated balance sheets.
The estimated reasonably possible environmental loss contingencies, net of expected recoveries, exceed amounts accrued by approximately $210 million at June 30, 2015. This reasonably possible estimate is based upon information available as of the date of the filing but the actual future losses may be higher given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of potentially responsible parties, technology and information related to individual sites. Potential environmental obligations that have not been reserved may be material to any one quarter's or year's results of operations in the future. However, we believe any such liability arising from such potential environmental obligations is not likely to have a material adverse effect on our liquidity or financial condition as it may be satisfied over many years.
The table below provides a roll forward of our environmental recoveries representing probable realization of claims against insurance carriers and other third parties. These recoveries are recorded as "Other assets" in the condensed consolidated balance sheets.
(in Millions)
12/31/2014
 
Increase in Recoveries
 
Cash Received
 
6/30/2015
Environmental recoveries
$
29.9

 

 
(3.6
)
 
$
26.3


Our net environmental provisions relate to costs for the continued cleanup of both continuing and discontinued manufacturing operations from previous years. The net provisions are comprised as follows:
 
Three Months Ended June 30
 
Six Months Ended June 30
(in Millions)
2015
 
2014
 
2015
 
2014
Environmental provisions, net - recorded to liabilities (1)
$
13.6

 
$
13.2

 
$
18.0

 
$
22.1

Environmental provisions, net - recorded to assets (2)

 

 

 

Environmental provision, net
$
13.6

 
$
13.2

 
$
18.0

 
$
22.1

 
 
 
 
 
 
 
 
Continuing operations (3)
3.5

 
1.3

 
5.4

 
2.7

Discontinued operations (4)
10.1

 
11.9

 
12.6

 
19.4

Environmental provision, net
$
13.6

 
$
13.2

 
$
18.0

 
$
22.1

____________________
(1)     See above roll forward of our total environmental reserves as presented on the condensed consolidated balance sheets.
(2)     See above roll forward of our total environmental recoveries as presented on the condensed consolidated balance sheets.
(3)     Recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss). See
Note 7. 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.
(4)     Recorded as a component of “Discontinued operations, net of income taxes" on the condensed consolidated statements of income
(loss). See Note 9.


19


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

A more complete description of our environmental contingencies and the nature of our potential obligations are included in Notes 1 and 10 to our consolidated financial statements in our 2014 Form 10-K. See Note 10 to our consolidated financial statements in our 2014 Form 10-K for a description of significant updates to material environmental sites.

Note 11: Earnings Per Share
Earnings per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis.
Our potentially dilutive securities include potential common shares related to our stock options, restricted stock and restricted stock units. Diluted earnings per share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. There were 1.020 million potential common shares excluded from Diluted EPS for the three months ended June 30, 2015. For the six months ended June 30, 2015, we had a net loss from continuing operations attributable to FMC stockholders and as such all 1.880 million potential common shares were excluded from Diluted EPS. For the three and six months ended June 30, 2014, respectively there were 0.251 million and 0.354 million potential common shares excluded from Diluted EPS.
Our non-vested restricted stock awards contain rights to receive non-forfeitable dividends, and thus, are participating securities requiring the two-class method of computing EPS. The two-class method determines EPS by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In calculating the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average number of shares outstanding during the period.

20


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

Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows:
(in Millions, Except Share and Per Share Data)
Three Months Ended June 30
 
Six Months Ended June 30
2015
 
2014
 
2015
 
2014
Earnings (loss) attributable to FMC stockholders:
 
 
 
 
 
 
 
Continuing operations, net of income taxes
$
54.1

 
$
95.7

 
$
(8.3
)
 
$
189.5

Discontinued operations, net of income taxes
688.2

 
13.4

 
703.8

 
(14.8
)
Net income (loss) attributable to FMC stockholders
$
742.3

 
$
109.1

 
$
695.5

 
$
174.7

Less: Distributed and undistributed earnings allocable to restricted award holders
(2.0
)
 
(0.3
)
 

 
(0.5
)
Net income (loss) allocable to common stockholders
$
740.3

 
$
108.8

 
$
695.5

 
$
174.2

 
 
 
 
 
 
 
 
Basic earnings (loss) per common share attributable to FMC stockholders:
 
 
 
 
 
 
 
Continuing operations
$
0.40

 
$
0.72

 
$
(0.06
)
 
$
1.42

Discontinued operations
5.14

 
0.10

 
5.27

 
(0.11
)
Net income (loss) attributable to FMC stockholders
$
5.54

 
$
0.82

 
$
5.21

 
$
1.31

 
 
 
 
 
 
 
 
Diluted earnings (loss) per common share attributable to FMC stockholders:
 
 
 
 
 
 
 
Continuing operations
$
0.40

 
$
0.71

 
$
(0.06
)
 
$
1.41

Discontinued operations
5.12

 
0.10

 
5.27

 
(0.11
)
Net income (loss) attributable to FMC stockholders
$
5.52

 
$
0.81

 
$
5.21

 
$
1.30

 
 
 
 
 
 
 
 
Shares (in thousands):
 
 
 
 
 
 
 
Weighted average number of shares of common stock outstanding - Basic
133,714

 
133,339

 
133,643

 
133,233

Weighted average additional shares assuming conversion of potential common shares
731

 
1,015

 

 
1,044

Shares – diluted basis
134,445

 
134,354

 
133,643

 
134,277


Note 12: Equity
The table provides a roll forward of equity, equity attributable to FMC stockholders, and equity attributable to noncontrolling interests. 
(in Millions, Except Per Share Data)
FMC
Stockholders’
Equity
 
Noncontrolling
Interest
 
Total
Equity
Balance at December 31, 2014
$
1,530.5

 
$
33.5

 
$
1,564.0

Net income (loss)
695.5

 
5.3

 
700.8

Stock compensation plans
13.1

 

 
13.1

Excess tax benefits from share-based compensation
2.0

 

 
2.0

Shares for benefit plan trust
0.2

 

 
0.2

Net pension and other benefit actuarial gains/(losses) and prior service costs, net of income tax (1)
14.3

 

 
14.3

Net hedging gains/(losses) and other, net of income tax (1)
3.3

 

 
3.3

Foreign currency translation adjustments (1)
(41.7
)
 
(0.3
)
 
(42.0
)
Dividends ($0.33 per share)
(44.2
)
 

 
(44.2
)
Repurchases of common stock
(3.2
)
 

 
(3.2
)
Balance at June 30, 2015
$
2,169.8

 
$
38.5

 
$
2,208.3

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

21


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


Accumulated other comprehensive income (loss)
Summarized below is the roll forward of accumulated other comprehensive income (loss), net of tax.
(in Millions)
Foreign currency adjustments
 
Derivative Instruments(1)
 
Pension and other postretirement benefits (2)
 
Total
Accumulated other comprehensive income (loss),
net of tax at December 31, 2014
$
(50.4
)
 
$
(3.9
)
 
$
(321.5
)
 
$
(375.8
)
2015 Activity
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications (3)
(41.7
)
 
5.2

 
(7.1
)
 
$
(43.6
)
Amounts reclassified from accumulated other comprehensive income (loss)

 
(1.9
)
 
21.4

 
$
19.5

 
 
 
 
 
 
 
 
Accumulated other comprehensive income (loss),
net of tax at June 30, 2015
$
(92.1
)
 
$
(0.6
)
 
$
(307.2
)
 
$
(399.9
)
(in Millions)
Foreign currency adjustments
 
Derivative Instruments (1)
 
Pension and other postretirement benefits (2)
 
Total
Accumulated other comprehensive income (loss),
net of tax at December 31, 2013
$
(25.3
)
 
$
(6.1
)
 
$
(170.5
)
 
$
(201.9
)
2014 Activity
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications (3)
(2.7
)
 
4.5

 
(0.1
)
 
$
1.7

Amounts reclassified from accumulated other comprehensive income (loss)
49.6

 
2.2

 
12.7

 
$
64.5

 
 
 
 
 
 
 
 
Accumulated other comprehensive income (loss),
net of tax at June 30, 2014
$
21.6

 
$
0.6

 
$
(157.9
)
 
$
(135.7
)
____________________
(1)     See Note 15 for more information.
(2)    See Note 13 for more information.
(3)    Excludes foreign currency translation adjustments attributable to noncontrolling interests.


22


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


Reclassifications of accumulated other comprehensive income (loss)

The table below provides details about the reclassifications from Accumulated Other Comprehensive Income and the affected line items in the condensed consolidated statements of income (loss) for each of the periods presented.
Details about Accumulated Other Comprehensive Income Components
 
Amounts Reclassified from Accumulated Other Comprehensive Income (1)
 
Affected Line Item in the Condensed Consolidated Statements of Income (Loss)
 
 
Three Months Ended June 30
 
Six Months Ended June 30
 
 
(in Millions)
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments: