x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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) |
LARGE ACCELERATED FILER | x | ACCELERATED FILER | o | |||
NON-ACCELERATED FILER | o | SMALLER REPORTING COMPANY | o |
Class | Outstanding at March 31, 2014 | |
Common Stock, par value $0.10 per share | 133,162,521 |
Page No. | |
(in Millions, Except Per Share Data) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
(unaudited) | |||||||
Revenue | $ | 941.8 | $ | 910.7 | |||
Costs and Expenses | |||||||
Costs of sales and services | 613.3 | 557.1 | |||||
Gross margin | 328.5 | 353.6 | |||||
Selling, general and administrative expenses | 119.4 | 121.9 | |||||
Research and development expenses | 26.1 | 28.0 | |||||
Restructuring and other charges (income) | 6.7 | 9.3 | |||||
Business separation costs | 3.0 | — | |||||
Total costs and expenses | 768.5 | 716.3 | |||||
Income from continuing operations before equity in (earnings) loss of affiliates, interest expense, net and income taxes | 173.3 | 194.4 | |||||
Equity in (earnings) loss of affiliates | — | 0.3 | |||||
Interest expense, net | 13.5 | 10.5 | |||||
Income from continuing operations before income taxes | 159.8 | 183.6 | |||||
Provision for income taxes | 39.3 | 45.4 | |||||
Income from continuing operations | 120.5 | 138.2 | |||||
Discontinued operations, net of income taxes | (50.1 | ) | (3.2 | ) | |||
Net income | 70.4 | 135.0 | |||||
Less: Net income attributable to noncontrolling interests | 4.8 | 4.1 | |||||
Net income attributable to FMC stockholders | $ | 65.6 | $ | 130.9 | |||
Amounts attributable to FMC stockholders: | |||||||
Continuing operations, net of income taxes | $ | 115.7 | $ | 134.1 | |||
Discontinued operations, net of income taxes | (50.1 | ) | (3.2 | ) | |||
Net income attributable to FMC stockholders | $ | 65.6 | $ | 130.9 | |||
Basic earnings (loss) per common share attributable to FMC stockholders: | |||||||
Continuing operations | $ | 0.87 | $ | 0.97 | |||
Discontinued operations | (0.38 | ) | (0.02 | ) | |||
Net income attributable to FMC stockholders | $ | 0.49 | $ | 0.95 | |||
Diluted earnings (loss) per common share attributable to FMC stockholders: | |||||||
Continuing operations | $ | 0.86 | $ | 0.96 | |||
Discontinued operations | (0.37 | ) | (0.02 | ) | |||
Net income attributable to FMC stockholders | $ | 0.49 | $ | 0.94 |
(in Millions) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
(unaudited) | |||||||
Net income | $ | 70.4 | $ | 135.0 | |||
Other comprehensive income (loss), net of tax: | |||||||
Foreign currency translation adjustments (1) | 49.9 | (14.6 | ) | ||||
Derivative instruments: | |||||||
Unrealized hedging gains (losses) and other, net of tax of $1.3 and $3.6 for the three months ended March 31, 2014 and 2013, respectively | 2.5 | 6.2 | |||||
Reclassification of deferred hedging (gains) losses and other, included in net income, net of tax of $0.4 and $(0.4) for the three months ended March 31, 2014 and 2013, respectively (3) | 1.1 | (0.7 | ) | ||||
Total derivative instruments, net of tax of $1.7 and $3.2 for the three months ended March 31, 2014 and 2013, respectively | 3.6 | 5.5 | |||||
Pension and other postretirement benefits: | |||||||
Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of zero and $0.1 for the three months ended March 31, 2014 and 2013, respectively (2) | 0.5 | 0.6 | |||||
Reclassification of net actuarial and other (gain) loss and amortization of prior service costs, included in net income, net of tax of $3.2 and $6.4 for the three months ended March 31, 2014 and 2013, respectively (3) | 6.0 | 10.8 | |||||
Total pension and other postretirement benefits, net of tax of $3.2 and $6.5 for the three months ended March 31, 2014 and 2013, respectively | 6.5 | 11.4 | |||||
Other comprehensive income (loss), net of tax | 60.0 | 2.3 | |||||
Comprehensive income | $ | 130.4 | $ | 137.3 | |||
Less: Comprehensive income attributable to the noncontrolling interest | 5.1 | 4.0 | |||||
Comprehensive income attributable to FMC stockholders | $ | 125.3 | $ | 133.3 |
(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 2014 includes reclassification to net income due to the divestiture of our FMC Peroxygens business, see Note 14 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 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. |
(3) | For more detail on the components of these reclassifications and the affected line item in the Condensed Consolidated Statements of Income see Note 14. |
(in Millions, Except Share and Par Value Data) | March 31, 2014 | December 31, 2013 | |||||
ASSETS | (unaudited) | ||||||
Current assets | |||||||
Cash and cash equivalents | $ | 92.5 | $ | 123.2 | |||
Trade receivables, net of allowance - 2014: $30.8; 2013: $30.2 | 1,568.3 | 1,484.3 | |||||
Inventories | 702.8 | 688.4 | |||||
Prepaid and other current assets | 176.0 | 236.8 | |||||
Deferred income taxes | 212.9 | 214.0 | |||||
Current assets of discontinued operations held for sale | — | 198.3 | |||||
Total current assets | $ | 2,752.5 | $ | 2,945.0 | |||
Investments | 26.8 | 26.8 | |||||
Property, plant and equipment, net | 1,268.7 | 1,248.3 | |||||
Goodwill | 390.7 | 389.4 | |||||
Other intangibles, net | 268.4 | 272.3 | |||||
Other assets | 282.8 | 262.0 | |||||
Deferred income taxes | 100.8 | 91.4 | |||||
Total assets | $ | 5,090.7 | $ | 5,235.2 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Short-term debt and current portion of long-term debt | $ | 658.5 | $ | 697.8 | |||
Accounts payable, trade and other | 380.2 | 475.2 | |||||
Advance payments from customers | 30.4 | 178.9 | |||||
Accrued and other liabilities | 276.4 | 307.0 | |||||
Accrued customer rebates | 290.4 | 203.7 | |||||
Guarantees of vendor financing | 56.7 | 27.9 | |||||
Accrued pension and other postretirement benefits, current | 12.7 | 12.7 | |||||
Income taxes | 21.4 | 35.3 | |||||
Current liabilities of discontinued operations held for sale | — | 48.2 | |||||
Total current liabilities | $ | 1,726.7 | $ | 1,986.7 | |||
Long-term debt, less current portion | 1,154.0 | 1,154.1 | |||||
Accrued pension and other postretirement benefits, long-term | 54.0 | 57.8 | |||||
Environmental liabilities, continuing and discontinued | 167.9 | 175.2 | |||||
Deferred income taxes | 85.2 | 73.1 | |||||
Other long-term liabilities | 215.5 | 216.2 | |||||
Commitments and contingent liabilities (Note 18) | |||||||
Equity | |||||||
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2014 or 2013 | — | — | |||||
Common stock, $0.10 par value, authorized 260,000,000 shares; 185,983,792 issued shares at 2014 and 2013 | 18.6 | 18.6 | |||||
Capital in excess of par value of common stock | 455.8 | 448.3 | |||||
Retained earnings | 2,802.8 | 2,757.3 | |||||
Accumulated other comprehensive income (loss) | (142.2 | ) | (201.9 | ) | |||
Treasury stock, common, at cost - 2014: 52,821,271 shares, 2013: 53,098,103 shares | (1,502.0 | ) | (1,502.5 | ) | |||
Total FMC stockholders’ equity | $ | 1,633.0 | $ | 1,519.8 | |||
Noncontrolling interests | 54.4 | 52.3 | |||||
Total equity | $ | 1,687.4 | $ | 1,572.1 | |||
Total liabilities and equity | $ | 5,090.7 | $ | 5,235.2 |
(in Millions) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
(unaudited) | |||||||
Cash provided (required) by operating activities of continuing operations: | |||||||
Net income | $ | 70.4 | $ | 135.0 | |||
Discontinued operations | 50.1 | 3.2 | |||||
Income from continuing operations | $ | 120.5 | $ | 138.2 | |||
Adjustments from income from continuing operations to cash provided (required) by operating activities of continuing operations: | |||||||
Depreciation and amortization | 33.1 | 28.6 | |||||
Equity in (earnings) loss of affiliates | — | 0.3 | |||||
Restructuring and other charges (income) | 6.7 | 9.3 | |||||
Deferred income taxes | 1.3 | 15.2 | |||||
Pension and other postretirement benefits | 8.5 | 18.6 | |||||
Share-based compensation | 3.8 | 5.2 | |||||
Excess tax benefits from share-based compensation | (3.4 | ) | (4.3 | ) | |||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||||||
Trade receivables, net | (82.2 | ) | (100.6 | ) | |||
Guarantees of vendor financing | 28.9 | (14.2 | ) | ||||
Inventories | (12.0 | ) | (4.6 | ) | |||
Other current assets and other assets | (16.1 | ) | 6.3 | ||||
Accounts payable | (71.0 | ) | (55.5 | ) | |||
Accrued and other current liabilities and other liabilities | 5.8 | (10.3 | ) | ||||
Advance payments from customers | (148.4 | ) | (133.0 | ) | |||
Accrued payroll | (29.0 | ) | (26.6 | ) | |||
Accrued customer rebates | 86.2 | 120.3 | |||||
Income taxes | 9.3 | 2.5 | |||||
Pension and other postretirement benefit contributions | (23.8 | ) | (17.9 | ) | |||
Environmental spending, continuing, net of recoveries | (1.6 | ) | (1.0 | ) | |||
Restructuring and other spending | (1.9 | ) | (2.6 | ) | |||
Cash provided (required) by operating activities of continuing operations | $ | (85.3 | ) | $ | (26.1 | ) | |
Cash provided (required) by operating activities of discontinued operations: | |||||||
Environmental spending, discontinued, net of recoveries | (3.7 | ) | (7.6 | ) | |||
Operating activities of discontinued operations of FMC Peroxygens | (1.2 | ) | (2.5 | ) | |||
Payments of other discontinued reserves, net of recoveries | (6.6 | ) | (8.3 | ) | |||
Cash provided (required) by operating activities of discontinued operations | $ | (11.5 | ) | $ | (18.4 | ) |
(in Millions) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
(unaudited) | |||||||
Cash provided (required) by investing activities of continuing operations: | |||||||
Capital expenditures | $ | (75.3 | ) | $ | (38.9 | ) | |
Proceeds from disposal of property, plant and equipment | — | 1.2 | |||||
Acquisitions, net of cash acquired | — | (0.2 | ) | ||||
Investments in nonconsolidated affiliates | — | (3.2 | ) | ||||
Other investing activities | (1.1 | ) | (5.5 | ) | |||
Cash provided (required) by investing activities of continuing operations | $ | (76.4 | ) | $ | (46.6 | ) | |
Cash provided (required) by investing activities of discontinued operations: | |||||||
Proceeds from FMC Peroxygens divestiture | 199.1 | — | |||||
Other discontinued investing activities | 0.9 | (8.6 | ) | ||||
Cash provided (required) by investing activities of discontinued operations | $ | 200.0 | $ | (8.6 | ) | ||
Cash provided (required) by financing activities of continuing operations: | |||||||
Net borrowings (repayments) under committed credit facility | — | 325.0 | |||||
Increase (decrease) in short-term debt | (39.6 | ) | (13.4 | ) | |||
Repayments of long-term debt | (0.7 | ) | (0.3 | ) | |||
Proceeds from borrowings of long-term debt | — | 0.4 | |||||
Distributions to noncontrolling interests | (3.0 | ) | (6.6 | ) | |||
Acquisition of noncontrolling interests | — | (72.0 | ) | ||||
Issuances of common stock, net | 5.2 | 2.9 | |||||
Excess tax benefits from share-based compensation | 3.4 | 4.3 | |||||
Dividends paid | (18.0 | ) | (18.7 | ) | |||
Repurchases of common stock under publicly announced program | — | (109.9 | ) | ||||
Other repurchases of common stock | (4.0 | ) | (6.4 | ) | |||
Cash provided (required) by financing activities of continuing operations | $ | (56.7 | ) | $ | 105.3 | ||
Effect of exchange rate changes on cash and cash equivalents | (0.8 | ) | (0.1 | ) | |||
Increase (decrease) in cash and cash equivalents | (30.7 | ) | 5.5 | ||||
Cash and cash equivalents, beginning of period | 123.2 | 77.1 | |||||
Cash and cash equivalents, end of period | $ | 92.5 | $ | 82.6 |
(in Millions) | FMC Agricultural Solutions | FMC Health and Nutrition | FMC Minerals | Total | |||||||||||
Balance, December 31, 2013 | $ | 31.0 | $ | 358.4 | $ | — | $ | 389.4 | |||||||
Foreign currency adjustments | — | 1.3 | — | 1.3 | |||||||||||
Balance, March 31, 2014 | $ | 31.0 | $ | 359.7 | $ | — | $ | 390.7 |
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||
(in Millions) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||
Intangible assets subject to amortization (finite-lived) | |||||||||||||||||||||||
Customer relationships | $ | 159.6 | $ | (17.4 | ) | $ | 142.2 | $ | 159.3 | $ | (15.2 | ) | $ | 144.1 | |||||||||
Patents | 0.4 | — | 0.4 | 0.4 | — | 0.4 | |||||||||||||||||
Trademarks and trade names | 1.3 | (0.5 | ) | 0.8 | 1.3 | (0.4 | ) | 0.9 | |||||||||||||||
Purchased and licensed technologies | 75.5 | (20.9 | ) | 54.6 | 75.6 | (19.3 | ) | 56.3 | |||||||||||||||
Other intangibles | 4.3 | (3.0 | ) | 1.3 | 4.3 | (2.8 | ) | 1.5 | |||||||||||||||
$ | 241.1 | $ | (41.8 | ) | $ | 199.3 | $ | 240.9 | $ | (37.7 | ) | $ | 203.2 |
Intangible assets not subject to amortization (indefinite life) | |||||||||||||||||||||||
Trademarks and trade names | $ | 67.0 | $ | 67.0 | $ | 67.0 | $ | 67.0 | |||||||||||||||
In-process research & development | 2.1 | 2.1 | 2.1 | 2.1 | |||||||||||||||||||
$ | 69.1 | $ | 69.1 | $ | 69.1 | $ | 69.1 | ||||||||||||||||
Total intangible assets | $ | 310.2 | $ | (41.8 | ) | $ | 268.4 | $ | 310.0 | $ | (37.7 | ) | $ | 272.3 |
(in Millions) | Finite-lived | Indefinite Life | |||||
FMC Agricultural Solutions | $ | 105.1 | $ | 35.2 | |||
FMC Health and Nutrition | 93.0 | 33.9 | |||||
FMC Minerals | 1.2 | — | |||||
Total | $ | 199.3 | $ | 69.1 |
(in Millions) | March 31, 2014 | December 31, 2013 | |||||
Finished goods | $ | 355.7 | $ | 283.0 | |||
Work in process | 229.1 | 276.7 | |||||
Raw materials, supplies and other | 287.9 | 297.8 | |||||
First-in, first-out inventory | $ | 872.7 | $ | 857.5 | |||
Less: Excess of first-in, first-out cost over last-in, first-out cost | (169.9 | ) | (169.1 | ) | |||
Net inventories | $ | 702.8 | $ | 688.4 |
(in Millions) | March 31, 2014 | December 31, 2013 | |||||
Property, plant and equipment | $ | 2,711.1 | $ | 2,663.2 | |||
Accumulated depreciation | (1,442.4 | ) | (1,414.9 | ) | |||
Property, plant and equipment, net | $ | 1,268.7 | $ | 1,248.3 |
Three Months Ended March 31 | |||||||
(in Millions) | 2014 | 2013 | |||||
Restructuring charges and asset disposals | $ | 5.3 | $ | 7.8 | |||
Other charges (income), net | 1.4 | 1.5 | |||||
Total restructuring and other charges | $ | 6.7 | $ | 9.3 |
Restructuring Charges | |||||||||||||||
(in Millions) | Severance and Employee Benefits (1) | Other Charges (Income) (2) | Asset Disposal Charges (3) | Total | |||||||||||
Health and Nutrition Restructuring | $ | 4.9 | $ | — | $ | — | $ | 4.9 | |||||||
Lithium Restructuring | — | 0.1 | — | 0.1 | |||||||||||
Other Items | — | 0.3 | — | 0.3 | |||||||||||
Three months ended March 31, 2014 | $ | 4.9 | $ | 0.4 | $ | — | $ | 5.3 | |||||||
Lithium Restructuring | 2.6 | 2.2 | 1.0 | 5.8 | |||||||||||
Other Items | 1.8 | 0.2 | — | 2.0 | |||||||||||
Three months ended March 31, 2013 | $ | 4.4 | $ | 2.4 | $ | 1.0 | $ | 7.8 |
(1) | Represents severance and employee benefit charges. Income represents adjustments to previously recorded severance and employee benefits. |
(2) | Primarily represents costs associated with accrued lease payments, contract terminations, and other miscellaneous exit costs. Other Income primarily represents favorable developments on previously recorded exit costs as well as recoveries associated with restructurings. |
(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, see Note 8. |
(in Millions) | Balance at 12/31/13 (4) | Change in reserves (2) | Cash payments | Other (3) | Balance at 3/31/14 (4) | ||||||||||||||
Health and Nutrition Restructuring | $ | — | $ | 4.9 | $ | (1.2 | ) | $ | — | $ | 3.7 | ||||||||
Lithium Restructuring | 0.3 | 0.1 | (0.1 | ) | — | 0.3 | |||||||||||||
Other Workforce Related and Facility Shutdowns (1) | 2.8 | 0.3 | (0.6 | ) | — | 2.5 | |||||||||||||
Restructuring activities related to discontinued operations (5) | 3.0 | 1.4 | (1.6 | ) | — | 2.8 | |||||||||||||
Total | $ | 6.1 | $ | 6.7 | $ | (3.5 | ) | $ | — | $ | 9.3 |
(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. |
Three Months Ended March 31 | |||||||
(in Millions) | 2014 | 2013 | |||||
Environmental charges, net | $ | 1.4 | $ | 1.0 | |||
Other, net | — | 0.5 | |||||
Other charges (income), net | $ | 1.4 | $ | 1.5 |
(in Millions) | March 31, 2014 | December 31, 2013 | |||||
Short-term foreign debt (1) | $ | 17.8 | $ | 7.1 | |||
Commercial paper (2) | 605.9 | 656.0 | |||||
Total short-term debt | $ | 623.7 | $ | 663.1 | |||
Current portion of long-term debt | 34.8 | 34.7 | |||||
Short-term debt and current portion of long-term debt | $ | 658.5 | $ | 697.8 |
(in Millions) | March 31, 2014 | |||||||||||
Interest Rate Percentage | Maturity Date | 3/31/2014 | 12/31/2013 | |||||||||
Pollution control and industrial revenue bonds (less unamortized discounts of $0.2 and $0.2, respectively) | 0.1-6.5% | 2014-2035 | $ | 174.0 | $ | 174.0 | ||||||
Senior notes (less unamortized discount of $2.2 and $2.2, respectively) | 3.95-5.2% | 2019-2024 | 997.8 | 997.8 | ||||||||
Credit Facility (1) | 2.4 | % | 2017 | — | — | |||||||
Foreign debt | 0-9.3% | 2014-2024 | 17.0 | 17.0 | ||||||||
Total long-term debt | $ | 1,188.8 | $ | 1,188.8 | ||||||||
Less: debt maturing within one year | 34.8 | 34.7 | ||||||||||
Total long-term debt, less current portion | $ | 1,154.0 | $ | 1,154.1 |
(1) | Letters of credit outstanding under our Credit Facility totaled $73.1 million and available funds under this facility were $821.0 million at March 31, 2014 (which reflects borrowings under our commercial paper program). |
(in Millions) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
Revenue | $ | 55.5 | $ | 79.5 | |||
(Loss) income from discontinued operations before income taxes (1) | (10.7 | ) | 4.5 | ||||
Provision for income taxes | 29.3 | 2.1 | |||||
Total discontinued operations of FMC Peroxygens, net of income taxes | $ | (40.0 | ) | $ | 2.4 |
(1) | Includes allocated interest expense of $0.8 million and $1.2 million for the three months ended March 31, 2014 and 2013, respectively. Interest was allocated in accordance with relevant discontinued operations accounting guidance. Interest expense allocated in 2014 was prior to the completed sale. Income from discontinued operations before income taxes for 2014 includes the pre-tax loss of $10.1 million discussed in the preceding paragraph. |
(in Millions) | December 31, 2013 | ||
Assets | |||
Current assets of discontinued operations held for sale (primarily trade receivables and inventories) | $ | 94.8 | |
Property, plant & equipment | 61.1 | ||
Goodwill | — | ||
Intangible assets, net | 2.7 | ||
Other non-current assets | 39.7 | ||
Noncurrent assets of discontinued operations held for sale (1) | 103.5 | ||
Total Assets | 198.3 | ||
Liabilities | |||
Current liabilities of discontinued operations held for sale | 43.0 | ||
Noncurrent liabilities of discontinued operations held for sale (1) | 5.2 | ||
Total Liabilities | 48.2 | ||
Net Assets (2) | $ | 150.1 |
(1) | Presented as "Current assets\liabilities of discontinued operations held for sale" on the condensed and consolidated balance sheet as of December 31, 2013. |
(2) | Excludes the net cumulative translation adjustment (CTA) losses of our foreign FMC Peroxygens operations. See Note 14 for the CTA loss recognized upon the divestiture of FMC Peroxygens. |
(in Millions) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
Adjustment for workers’ compensation, product liability, and other postretirement benefits, net of income tax benefit (expense) of zero and ($0.1) for the three months ended March 31, 2014 and 2013, respectively | $ | (0.1 | ) | $ | 0.1 | ||
Provision for environmental liabilities, net of recoveries, net of income tax benefit of $2.7 and $1.3 for the three months ended March 31, 2014 and 2013, respectively (1) | (4.8 | ) | (2.0 | ) | |||
Provision for legal reserves and expenses, net of recoveries, net of income tax benefit of $2.3 and $2.0 for the three months ended March 31, 2014 and 2013, respectively | (3.8 | ) | (3.3 | ) | |||
Provision for restructuring charges, net of income tax benefit (expense) of zero and $0.2 for the three months ended March 31, 2014 and 2013, respectively (2) | (1.4 | ) | (0.4 | ) | |||
Discontinued operations of FMC Peroxygens, net of income tax benefit (expense) of ($29.3) and $2.1 for the three months ended March 31, 2014 and 2013, respectively | (40.0 | ) | 2.4 | ||||
Discontinued operations, net of income taxes | $ | (50.1 | ) | $ | (3.2 | ) |
(1) | See a roll forward of our environmental reserves as well as discussion on significant environmental issues that occurred during the 2014 in Note 11. |
(2) | See roll forward of our restructuring reserves in Note 7. |
(in Millions) | Operating and Discontinued Sites Total | ||
Total environmental reserves, net of recoveries at December 31, 2013 | $ | 204.7 | |
Provision | 8.9 | ||
Spending, net of recoveries | (11.2 | ) | |
Net change | (2.3 | ) | |
Total environmental reserves, net of recoveries at March 31, 2014 | $ | 202.4 | |
Environmental reserves, current, net of recoveries (1) | 34.5 | ||
Environmental reserves, long-term continuing and discontinued, net of recoveries (2) | 167.9 | ||
Total environmental reserves, net of recoveries at March 31, 2014 | $ | 202.4 |
(1) | “Current” includes only those reserves related to continuing operations. 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. |
(in Millions) | 12/31/2013 | Increase in Recoveries | Cash Received | 3/31/2014 | |||||||||||
Environmental liabilities, continuing and discontinued | $ | 21.0 | $ | — | $ | (2.4 | ) | $ | 18.6 | ||||||
Other assets | 35.5 | — | (5.9 | ) | 29.6 | ||||||||||
Total | $ | 56.5 | $ | — | $ | (8.3 | ) | $ | 48.2 |
Three Months Ended March 31 | |||||||
(in Millions) | 2014 | 2013 | |||||
Continuing operations (1) | $ | 1.4 | $ | 1.0 | |||
Discontinued operations (2) | 7.5 | 3.3 | |||||
Net environmental provision | $ | 8.9 | $ | 4.3 |
Three Months Ended March 31 | |||||||
(in Millions) | 2014 | 2013 | |||||
Environmental reserves (1) | $ | 8.9 | $ | 5.3 | |||
Other assets (2) | — | (1.0 | ) | ||||
Net environmental provision | $ | 8.9 | $ | 4.3 |
(in Millions, Except Share and Per Share Data) | Three Months Ended March 31 | ||||||
2014 | 2013 | ||||||
Earnings (loss) attributable to FMC stockholders: | |||||||
Continuing operations, net of income taxes | $ | 115.7 | $ | 134.1 | |||
Discontinued operations, net of income taxes | (50.1 | ) | (3.2 | ) | |||
Net income attributable to FMC stockholders | $ | 65.6 | $ | 130.9 | |||
Less: Distributed and undistributed earnings allocable to restricted award holders | (0.4 | ) | (0.5 | ) | |||
Net income allocable to common stockholders | $ | 65.2 | $ | 130.4 | |||
Basic earnings (loss) per common share attributable to FMC stockholders: | |||||||
Continuing operations | $ | 0.87 | $ | 0.97 | |||
Discontinued operations | (0.38 | ) | (0.02 | ) | |||
Net income attributable to FMC stockholders | $ | 0.49 | $ | 0.95 | |||
Diluted earnings (loss) per common share attributable to FMC stockholders: | |||||||
Continuing operations | $ | 0.86 | $ | 0.96 | |||
Discontinued operations | (0.37 | ) | (0.02 | ) | |||
Net income attributable to FMC stockholders | $ | 0.49 | $ | 0.94 | |||
Shares (in thousands): | |||||||
Weighted average number of shares of common stock outstanding - Basic | 133,139 | 137,133 | |||||
Weighted average additional shares assuming conversion of potential common shares | 1,114 | 950 | |||||
Shares – diluted basis | 134,253 | 138,083 |
(in Millions, Except Per Share Data) | FMC Stockholders’ Equity | Noncontrolling Interest | Total Equity | ||||||||
Balance at December 31, 2013 | $ | 1,519.8 | $ | 52.3 | $ | 1,572.1 | |||||
Net income | 65.6 | 4.8 | 70.4 | ||||||||
Stock compensation plans | 9.1 | — | 9.1 | ||||||||
Excess tax benefits from share-based compensation | 3.4 | — | 3.4 | ||||||||
Shares for benefit plan trust | (0.5 | ) | — | (0.5 | ) | ||||||
Net pension and other benefit actuarial gains/(losses) and prior service costs, net of income tax (1) | 6.5 | — | 6.5 | ||||||||
Net hedging gains/(losses) and other, net of income tax (1) | 3.6 | — | 3.6 | ||||||||
Foreign currency translation adjustments (1) | 49.6 | 0.3 | 49.9 | ||||||||
Dividends ($0.15 per share) | (20.1 | ) | — | (20.1 | ) | ||||||
Repurchases of common stock | (4.0 | ) | — | (4.0 | ) | ||||||
Distributions to noncontrolling interests | — | (3.0 | ) | (3.0 | ) | ||||||
Balance at March 31, 2014 | $ | 1,633.0 | $ | 54.4 | $ | 1,687.4 |
(1) | See condensed consolidated statements of comprehensive income. |
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 | ||||||||
Three Months Ended March 31 | ||||||||||
(in Millions) | 2014 | 2013 | ||||||||
Foreign currency translation adjustments: | ||||||||||
Divestiture of FMC Peroxygens (3) | $ | (49.6 | ) | $ | — | Discontinued operations, net of income taxes | ||||
Derivative instruments: | ||||||||||
Foreign currency contracts | $ | (0.9 | ) | $ | (0.1 | ) | Costs of sales and services | |||
Energy contracts | 1.0 | (0.3 | ) | Costs of sales and services | ||||||
Foreign currency contracts | (1.6 | ) | 1.5 | Selling, general and administrative expenses | ||||||
Total before tax | $ | (1.5 | ) | $ | 1.1 | |||||
0.4 | (0.4 | ) | Provision for income taxes | |||||||
Amount included in net income | $ | (1.1 | ) | $ | 0.7 | |||||
Pension and other postretirement benefits (2): | ||||||||||
Amortization of prior service costs | $ | (0.4 | ) | $ | (0.5 | ) | Selling, general and administrative expenses | |||
Amortization of unrecognized net actuarial and other gains (losses) | (7.2 | ) | (16.7 | ) | Selling, general and administrative expenses | |||||
Recognized loss due to settlement | $ | (1.6 | ) | $ | — | Selling, general and administrative expenses | ||||
Total before tax | $ | (9.2 | ) | $ | (17.2 | ) | ||||
3.2 | 6.4 | Provision for income taxes | ||||||||
Amount included in net income | $ | (6.0 | ) | $ | (10.8 | ) | ||||
Total reclassifications for the period | $ | (56.7 | ) | $ | (10.1 | ) | Amount included in net income |
(1) | Amounts in parentheses indicate charges to the condensed consolidated statements of income. |
(2) | Pension and other postretirement benefits amounts include the impact from both continuing and discontinued operations. For detail on the continuing operations components of pension and other postretirement benefits, see Note 15. |
(3) | The reclassification of historical cumulative translation adjustments was the result of the divestiture of our FMC Peroxygens business during the quarter ended March 31, 2014. The loss recognized from this reclassification is considered permanent for tax purposes and therefore no tax has been provided. See Note 10 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. |
(in Millions) | Three Months Ended March 31 | ||||||||||||||
Pensions | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Components of net annual benefit cost (income): | |||||||||||||||
Service cost | $ | 4.9 | $ | 5.4 | $ | — | $ | — | |||||||
Interest cost | 15.5 | 14.5 | 0.3 | 0.3 | |||||||||||
Expected return on plan assets | (21.6 | ) | (19.2 | ) | — | — | |||||||||
Amortization of prior service cost (credit) | 0.4 | 0.5 | — | — | |||||||||||
Recognized net actuarial and other (gain) loss | 7.8 | 17.5 | (0.4 | ) | (0.4 | ) | |||||||||
Recognized loss due to settlement (1) | 1.6 | — | — | — | |||||||||||
Net periodic benefit cost from continuing operations | $ | 8.6 | $ | 18.7 | $ | (0.1 | ) | $ | (0.1 | ) |
(1) | Settlement charge is associated with the acceleration of previously deferred pension actuarial losses and was triggered by a lump-sum payout to certain former executives. |
Financial Instrument | Valuation Method | |
Foreign exchange forward contracts | Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on current market prices for applicable currencies. | |
Commodity forward and option contracts | Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices for applicable commodities. | |
Debt | Our estimates and information obtained from independent third parties using market data, such as bid/ask spreads for the last business day of the reporting period. |
March 31, 2014 | |||||||||||||||||||
Gross Amount of Derivatives | |||||||||||||||||||
(in Millions) | Designated as Cash Flow Hedges | Not Designated as Hedging Instruments | Total Gross Amounts | Gross Amounts Offset in the Consolidated Balance Sheet (3) | Net Amounts | ||||||||||||||
Derivatives | |||||||||||||||||||
Foreign exchange contracts | $ | 3.0 | $ | 0.3 | $ | 3.3 | $ | (3.0 | ) | $ | 0.3 | ||||||||
Energy contracts | 1.6 | — | 1.6 | (0.1 | ) | 1.5 | |||||||||||||
Total derivative assets (1) | $ | 4.6 | $ | 0.3 | $ | 4.9 | $ | (3.1 | ) | $ | 1.8 | ||||||||
Foreign exchange contracts | $ | (9.8 | ) | $ | (13.3 | ) | $ | (23.1 | ) | $ | 3.0 | $ | (20.1 | ) | |||||
Energy contracts | (0.4 | ) | — | (0.4 | ) | 0.1 | (0.3 | ) | |||||||||||
Total derivative liabilities (2) | $ | (10.2 | ) | $ | (13.3 | ) | $ | (23.5 | ) | $ | 3.1 | $ | (20.4 | ) | |||||
Net derivative assets/(liabilities) | $ | (5.6 | ) | $ | (13.0 | ) | $ | (18.6 | ) | $ | — | $ | (18.6 | ) | |||||
December 31, 2013 | |||||||||||||||||||
Gross Amount of Derivatives | |||||||||||||||||||
(in Millions) | Designated as Cash Flow Hedges | Not Designated as Hedging Instruments | Gross Amounts | Gross Amounts Offset in the Consolidated Balance Sheet (3) | Net Amounts | ||||||||||||||
Derivatives | |||||||||||||||||||
Foreign exchange contracts | $ | 6.3 | $ | 5.5 | $ | 11.8 | $ | (6.7 | ) | $ | 5.1 | ||||||||
Energy contracts | 0.7 | — | 0.7 | (0.2 | ) | 0.5 | |||||||||||||
Total derivative assets (1) | $ | 7.0 | $ | 5.5 | $ | 12.5 | $ | (6.9 | ) | $ | 5.6 | ||||||||
Foreign exchange contracts | $ | (17.7 | ) | $ | (0.6 | ) | $ | (18.3 | ) | $ | 6.7 | $ | (11.6 | ) | |||||
Energy contracts | (0.6 | ) | — | (0.6 | ) | 0.2 | (0.4 | ) | |||||||||||
Total derivative liabilities (2) | $ | (18.3 | ) | $ | (0.6 | ) | $ | (18.9 | ) | $ | 6.9 | $ | (12.0 | ) | |||||
Net derivative assets/(liabilities) | $ | (11.3 | ) | $ | 4.9 | $ | (6.4 | ) | $ | — | $ | (6.4 | ) |
(1) | Net balance is included in “Prepaid and other current assets” in the condensed consolidated balance sheets. |
(2) | Net balance is included in “Accrued and other liabilities” in the condensed consolidated balance sheets. |
(3) | Represents net derivatives positions subject to master netting arrangements. |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||
Contracts | |||||||||||||||||||||||||||||||
Foreign Exchange | Energy | Other | Total | ||||||||||||||||||||||||||||
(in Millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||
Unrealized hedging gains (losses) and other, net of tax | $ | 1.1 | $ | 3.8 | $ | 1.4 | $ | 2.4 | $ | — | $ | — | $ | 2.5 | $ | 6.2 | |||||||||||||||
Reclassification of deferred hedging (gains) losses, net of tax (1) | |||||||||||||||||||||||||||||||
Effective portion | 1.8 | (0.9 | ) | (0.7 | ) | 0.2 | — | — | 1.1 | (0.7 | ) | ||||||||||||||||||||
Total derivative instrument impact on comprehensive income | $ | 2.9 | $ | 2.9 | $ | 0.7 | $ | 2.6 | $ | — | $ | — | $ | 3.6 | $ | 5.5 |
(1) | See Note 14 for classification of amounts within the condensed consolidated statements of income. |
Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives | |||||||
Three Months Ended March 31 | ||||||||
(in Millions) | 2014 | 2013 | ||||||
Foreign exchange contracts | Cost of sales and services | $ | 4.9 | $ | (1.9 | ) | ||
Total | $ | 4.9 | $ | (1.9 | ) |
(in Millions) | March 31, 2014 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Assets | |||||||||||||||
Derivatives – Commodities (1): | |||||||||||||||
Energy contracts | $ | 1.5 | $ | — | $ | 1.5 | $ | — | |||||||
Derivatives – Foreign exchange (1) | 0.3 | — | 0.3 | — | |||||||||||
Other (2) | 31.8 | 31.8 | — | — | |||||||||||
Total assets | $ | 33.6 | $ | 31.8 | $ | 1.8 | $ | — | |||||||
Liabilities | |||||||||||||||
Derivatives – Commodities (1): | |||||||||||||||
Energy contracts | $ | 0.3 | $ | — | $ | 0.3 | $ | — | |||||||
Derivatives – Foreign exchange (1) | 20.1 | — | 20.1 | — | |||||||||||
Other (3) | 38.4 | 36.9 | 1.5 | — | |||||||||||
Total liabilities | $ | 58.8 | $ | 36.9 | $ | 21.9 | $ | — |
(1) | See the Fair Value of Derivative Instruments table within this Note for classifications on our condensed consolidated balance sheet. |
(2) | Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheet. Both the asset and liability are recorded at fair value. Asset amounts included in “Other assets” in the condensed consolidated balance sheets. |
(3) | Consists of a deferred compensation arrangement recognized on our balance sheet. Both the asset and liability are recorded at fair value. Liability amounts due are included in “Other long-term liabilities” in the condensed consolidated balance sheets. Level 2 liabilities represent liability-based awards associated with non-employees. |
(in Millions) | December 31, 2013 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Assets | |||||||||||||||
Derivatives – Commodities (1): | |||||||||||||||
Energy contracts | $ | 0.5 | $ | — | $ | 0.5 | $ | — | |||||||
Derivatives – Foreign exchange (1) | 5.1 | — | 5.1 | — | |||||||||||
Other (2) | 32.7 | 32.7 | — | — | |||||||||||
Total assets | $ | 38.3 | $ | 32.7 | $ | 5.6 | $ | — | |||||||
Liabilities | |||||||||||||||
Derivatives – Commodities (1): | |||||||||||||||
Energy contracts | $ | 0.4 | $ | — | $ | 0.4 | $ | — | |||||||
Derivatives – Foreign exchange (1) | 11.6 | — | 11.6 | — | |||||||||||
Other (3) | 37.4 | 37.4 | — | — | |||||||||||
Total liabilities | $ | 49.4 | $ | 37.4 | $ | 12.0 | $ | — |
(1) | See the Fair Value of Derivative Instruments table within this Note for classification on our condensed consolidated balance sheet. |
(2) | Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheet. Both the asset and liability are recorded at fair value. Asset amounts included in “Other assets” in the condensed consolidated balance sheets. |
(3) | Consist of a deferred compensation arrangement recognized on our balance sheet. Both the asset and liability are recorded at fair value. Liability amounts included in “Other long-term liabilities” in the condensed consolidated balance sheets. |
(in Millions) | March 31, 2014 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Gains (Losses) (Three Months Ended March 31, 2014) | ||||||||||||||
Liabilities | |||||||||||||||||||
Liabilities associated with exit activities (1) | $ | 3.7 | $ | — | $ | 3.7 | $ | — | $ | (4.9 | ) | ||||||||
Total liabilities | $ | 3.7 | $ | — | $ | 3.7 | $ | — | $ | (4.9 | ) |
(1) | This amount represents severance liabilities associated with the Health and Nutrition restructuring as further described in Note 7. |
(in Millions) | December 31, 2013 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Gains (Losses) (Year Ended December 31, 2013) | ||||||||||||||
Assets | |||||||||||||||||||
Net assets of discontinued operations held for sale (1) | $ | 150.1 | $ | — | $ | — | $ | 150.1 | $ | (156.7 | ) | ||||||||
Long-lived assets associated with exit activities (2) | 2.6 | — | — | 2.6 | (1.9 | ) | |||||||||||||
Total assets | $ | 152.7 | $ | — | $ | — | $ | 152.7 | $ | (158.6 | ) | ||||||||
Liabilities |