Fourth quarter performance driven by volume and pricing
gains; 2023 outlook reflects pricing momentum and robust
demand.
Fourth Quarter 2022 Highlights
- Revenue of $1.62 billion, an
increase of 15 percent versus Q4 2021 and up 17 percent
organically1
- Consolidated GAAP net income of $280
million, up 52 percent versus Q4 2021
- Adjusted EBITDA of $432 million,
up 17 percent versus Q4 2021
- Consolidated GAAP earnings of $2.17 per diluted share, up 45 percent versus Q4
2021
- Adjusted earnings per diluted share of $2.37, up 12 percent versus Q4 2021
Full-Year 2022 Highlights
- Revenue of $5.8 billion,
reflecting 15 percent growth and up 18 percent
organically1
- Consolidated GAAP net income of $742
million, up 1 percent versus 2021
- Adjusted EBITDA of $1.407
billion, up 7 percent versus 2021
- Consolidated GAAP earnings of $5.81 per diluted share, up 1 percent versus
2021
- Adjusted earnings per diluted share of $7.41, up 8 percent versus 2021
- Consolidated GAAP cash flow from operations of $660 million, down 27 percent versus 2021
- Free cash flow of $514 million,
down 28 percent versus 2021
- Returned $367 million to
shareholders, including $100 million
in share repurchases
Full-Year 2023 Outlook2
- Revenue in the range of $6.08 to
$6.22 billion, reflecting 6 percent
growth at the midpoint
- Adjusted EBITDA in the range of $1.48 to $1.56
billion, reflecting 8 percent growth at the midpoint
- Adjusted earnings per diluted share in the range of
$7.20 to $8.00, reflecting 3 percent growth at the
midpoint versus 2022, excluding any impact from potential 2023
share repurchases
- Free cash flow is expected to be in the range of $530 to $720
million
PHILADELPHIA, Feb. 7, 2023
/PRNewswire/ --
FMC Corporation (NYSE:FMC) today reported fourth quarter 2022
revenue of $1.62 billion, an increase
of 15 percent versus fourth quarter 2021, driven by robust volume
and strong pricing. Excluding the impact of foreign currencies,
organic revenue grew 17 percent year-over-year. On a GAAP basis,
the company reported earnings of $2.17 per diluted share in the fourth quarter, up
45 percent versus fourth quarter 2021. Adjusted earnings were
$2.37 per diluted share, an increase
of 12 percent versus fourth quarter 2021, and $0.07 above the midpoint of guidance.
|
Fourth Quarter Adjusted EPS versus Guidance
(midpoint)*
|
+7 cents*
|
|
Adjusted
EBITDA
|
+4 cents
|
|
Depreciation and
amortization
|
-1 cent
|
|
Interest
expense
|
-1 cent
|
|
Taxes
|
+2 cents
|
|
Minority
interest
|
+1 cent
|
|
Share count
|
+1 cent
|
|
Rounding
|
+1 cent
|
|
|
* Guidance refers to
midpoint of EPS guidance presented in November 2022
|
"FMC delivered record performance in the fourth quarter, driven
by robust volume growth, continued strong pricing actions as well
as growth of new products," said Mark
Douglas, FMC president and chief executive officer.
"North America delivered
exceptional revenue growth, with Latin
America and Europe,
Middle East and Africa (EMEA) posting strong gains. Pricing
actions more than offset headwinds from cost and FX in the quarter,
marking an inflection point in a year that had record input cost
inflation."
FMC revenue growth in the fourth quarter was driven by a 9
percent contribution from volume and an 8 percent contribution from
price, offset partially by a 2 percent currency headwind.
Sales in North America grew 35
percent versus the fourth quarter of 2021. The U.S. business
delivered strong volume and pricing, especially selective
herbicides for soybeans and other crops as well as fungicides for
corn. Latin America sales grew 13
percent (up 9 percent organically) year over year driven by robust
pricing and continued market access expansion. Dry weather
negatively impacted corn and soy planting in Southern Brazil and Argentina. In Asia, revenue was unchanged (up 12 percent
organically) versus prior year period. Overwatch®
herbicide continued to gain share on cereals in Australia. In
EMEA, sales were up 7 percent (up 20 percent organically) year over
year driven by robust pricing, expanded market access and
broad-based demand, especially in cereal herbicides, partially
offset by FX headwinds. The global biologicals portfolio
again grew double digit percent in the quarter.
FMC Revenue
|
Q4 2022
|
Full Year 2022
|
|
Total Revenue Change (GAAP)
|
15 %
|
15 %
|
|
Less FX
Impact
|
(2 %)
|
(3 %)
|
|
Organic1 Revenue Change
(Non-GAAP)
|
17 %
|
18 %
|
|
|
|
|
|
Fourth quarter adjusted EBITDA was $432
million, an increase of 17 percent from the prior-year
period. Strong pricing gains in every region, especially
North America and EMEA, robust
volume in North America, market
access expansion in Brazil and new
product introductions more than offset cost and currency headwinds
in the quarter.
For the full year, FMC reported revenue of $5.8 billion, an increase of 15 percent compared
to 2021. Excluding the impact of foreign exchange, year-over-year
sales grew 18 percent organically. On a GAAP basis, the company
reported full-year net income of $742
million, up 1 percent versus the previous year, and
consolidated earnings of $5.81 per
diluted share, a year-over-year increase of 1 percent. Full-year
adjusted earnings were $7.41 per
diluted share, an increase of 8 percent compared to 2021.
"Full-year results were driven by significant volume and price
gains in every region. Our continued focus on new product
development, commercial launches and market access investments
delivered record results in 2022. More than $600 million in revenue was from new products
introduced in the last five years, an increase of over 50 percent
from the prior year, and approximately $100
million in revenue from launches in 2022," Douglas said.
|
2022 Full Year Adjusted EPS versus 2021
|
|
|
Adjusted
EBITDA
|
+63 cents
|
|
Depreciation and
amortization
|
+1 cent
|
|
Interest
expense
|
-14 cents
|
|
Tax rate
|
-9 cents
|
|
Minority
Interest
|
-1 cent
|
|
Share count
|
+14 cents
|
|
Total Adjusted EPS Growth
|
+54 cents
|
On a GAAP basis, cash flow from operations was $660 million, a decrease of 27 percent versus
2021, driven by inflation-fueled growth and working capital. Free
cash flow in 2022 was $514 million, a
decrease of 28 percent versus 2021.
Full Year 2023 Outlook2
Full-year 2023 revenue is forecasted to be in the range of
$6.08 billion to $6.22 billion, representing an increase of 6
percent at the midpoint versus 2022, driven by strong pricing in
all regions and growth in volume driven by new launches and market
access. Full-year adjusted EBITDA range is expected to be
$1.48 billion to $1.56 billion, representing 8 percent
year-over-year growth at the midpoint. The range for 2023 adjusted
earnings per share (EPS) is expected to be $7.20 to $8.00 per
diluted share, representing an increase of 3 percent year-over-year
at the midpoint, with EPS growth limited by higher interest and tax
rates. Interest expense is now expected to be $200 million to $210
million, an increase of approximately $50 million at the midpoint, reflecting the
rapidly rising interest rate environment. Adjusted earnings per
share excludes any impact from potential 2023 share repurchases and
assumes weighted average diluted shares outstanding (WADSO) of
approximately 126.5 million. Full-year free cash flow is expected
to be $530 million to $720 million.
"We anticipate a positive market backdrop for 2023 that will
support our pricing actions as well as continued healthy demand for
FMC's synthetic and biological product portfolios. We will continue
to invest in our R&D pipeline as well as in SG&A resources
to further expand our market access in key geographies. In
addition, we will continue to closely manage our supply chain in
2023 to take advantage of any cost improvement opportunities while
ensuring product availability for our customers," said Douglas.
First Quarter Outlook2
First quarter revenue is expected to be in the range of
$1.41 billion to $1.45 billion, a 6 percent increase at the
midpoint compared to first quarter 2022. Adjusted EBITDA is
forecasted to be in the range of $345
million to $365 million, flat
at the midpoint versus the prior year period given the
significantly higher costs expected in the quarter. Adjusted
earnings per diluted share is expected to be in the range of
$1.63 to $1.83 in the first quarter, representing a
decrease of 8 percent at the midpoint versus first quarter 2022 due
to anticipated higher interest and tax rates.
|
Full Year 2023
Outlook2
|
Q1 2023 Outlook2
|
|
Revenue
|
$6.08 to $6.22 billion
|
$1.41 to $1.45 billion
|
|
Growth at midpoint vs. 2022*
|
6 %
|
6 %
|
|
Adjusted EBITDA
|
$1.48 to $1.56 billion
|
$345 to $365 million
|
|
Growth at midpoint vs. 2022*
|
8 %
|
0 %
|
|
Adjusted EPS^
|
$7.20 to $8.00
|
$1.63 to $1.83
|
|
Growth at midpoint vs. 2022*
|
3 %
|
(8 %)
|
|
|
|
^Adjusted EPS
estimates assume 126.5 million diluted shares for full year and
126.5 million diluted shares for Q1. Outlook for Adjusted EPS and
WADSO does not include the impact of any share repurchases that may
take place in 2023.
|
|
|
*Percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
Supplemental Information
The company will post supplemental information on the web at
https://investors.fmc.com, including its webcast slides for
tomorrow's earnings call, definitions of non-GAAP terms and
reconciliations of non-GAAP figures to the nearest available GAAP
term.
About FMC
FMC Corporation is a global agricultural sciences company
dedicated to helping growers produce food,
feed, fiber and fuel for an expanding world population
while adapting to a changing environment. FMC's innovative
crop protection solutions – including biologicals, crop nutrition,
digital and precision agriculture – enable growers, crop advisers
and turf and pest management professionals to address their
toughest challenges economically while protecting the environment.
With approximately 6,600 employees at more than 100 sites
worldwide, FMC is committed to discovering new herbicide,
insecticide and fungicide active ingredients, product formulations
and pioneering technologies that are consistently better for the
planet. Visit fmc.com to learn more and follow us
on LinkedIn® and Twitter®.
Always read and follow all label directions, restrictions and
precautions for use. Products listed here may not be registered for
sale or use in all states, countries or jurisdictions. FMC, the FMC
logo and Overwatch are trademarks of FMC Corporation or an
affiliate.
Statement under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995: FMC and its
representatives may from time to time make written or oral
statements that are "forward-looking" and provide other than
historical information, including statements contained in this
press release, in FMC's other filings with the SEC, and in reports
or letters to FMC stockholders.
In some cases, FMC has identified forward-looking statements
by such words or phrases as "will likely result," "is confident
that," "expect," "expects," "should," "could," "may," "will
continue to," "believe," "believes," "anticipates," "predicts,"
"forecasts," "estimates," "projects," "potential," "intends" or
similar expressions identifying "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including the negative of those words and phrases. Such
forward-looking statements are based on management's current views
and assumptions regarding future events, future business conditions
and the outlook for the company based on currently available
information. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be
materially different from any results, levels of activity,
performance or achievements expressed or implied by any
forward-looking statement. In addition to the continued
uncertainty generated by the ongoing COVID pandemic on our
financial condition, results of operations, cash flows and
performance, additional factors include, among other things, the
risk factors and other cautionary statements included within FMC's
2021 Form 10-K filed with the SEC as well as other SEC filings and
public communications. Moreover, investors are cautioned to
interpret many of these factors as being heightened as a result of
the ongoing and numerous adverse impacts of COVID.
FMC cautions readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.
Forward-looking statements are qualified in their entirety by the
above cautionary statement. FMC undertakes no obligation, and
specifically disclaims any duty, to update or revise any
forward-looking statements to reflect events or circumstances
arising after the date on which they were made, except as otherwise
required by law.
This press release contains certain "non-GAAP financial
terms" which are defined on our website www.fmc.com/investors. Such
terms include adjusted EBITDA, adjusted earnings, free cash flow
and organic revenue growth. In addition, we have also provided on
our website reconciliations of non-GAAP terms to the most directly
comparable GAAP term.
- Organic revenue growth (non-GAAP) excludes the impact of
foreign currency changes.
- Although we provide forecasts for adjusted earnings per share,
adjusted EBITDA and free cash flow (non-GAAP financial measures),
we are not able to forecast the most directly comparable measures
calculated and presented in accordance with GAAP. Certain elements
of the composition of the GAAP amounts are not predictable, making
it impractical for us to forecast. Such elements include, but are
not limited to, restructuring, acquisition charges, and
discontinued operations. As a result, no GAAP outlook is
provided.
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(In Millions, Except
Per Share Data)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Revenue
|
$ 1,622.0
|
|
$ 1,413.6
|
|
$ 5,802.3
|
|
$ 5,045.2
|
|
|
|
|
|
|
|
|
|
Costs of sales and
services
|
936.4
|
|
805.5
|
|
3,475.5
|
|
2,883.9
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
$
685.6
|
|
$
608.1
|
|
$ 2,326.8
|
|
$ 2,161.3
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
212.5
|
|
$
195.1
|
|
$
775.2
|
|
$
714.1
|
|
Research and
development expenses
|
84.4
|
|
85.3
|
|
314.2
|
|
304.7
|
|
Restructuring and other
charges (income)
|
(5.8)
|
|
55.7
|
|
93.1
|
|
108.0
|
|
Total costs and
expenses
|
$ 1,227.5
|
|
$ 1,141.6
|
|
$ 4,658.0
|
|
$ 4,010.7
|
|
Income (loss) from
continuing operations before non-operating
pension and postretirement charges (income), interest expense,
net and income taxes
|
$
394.5
|
|
$
272.0
|
|
$
1,144.3
|
|
$
1,034.5
|
|
Non-operating pension
and postretirement charges (income)
|
2.1
|
|
1.7
|
|
8.6
|
|
5.6
|
|
Interest expense,
net
|
44.8
|
|
33.0
|
|
151.8
|
|
131.1
|
|
Income (loss) from
continuing operations before income taxes
|
$
347.6
|
|
$
237.3
|
|
$
983.9
|
|
$
897.8
|
|
Provision (benefit) for
income taxes
|
12.2
|
|
16.7
|
|
145.2
|
|
92.5
|
|
Income (loss) from
continuing operations
|
$
335.4
|
|
$
220.6
|
|
$
838.7
|
|
$
805.3
|
|
Discontinued
operations, net of income taxes
|
(55.0)
|
|
(35.8)
|
|
(97.2)
|
|
(68.2)
|
|
Net income
(loss)
|
$
280.4
|
|
$
184.8
|
|
$
741.5
|
|
$
737.1
|
|
Less: Net
income (loss) attributable to noncontrolling interests
|
6.5
|
|
(5.9)
|
|
5.0
|
|
(2.5)
|
|
Net income (loss)
attributable to FMC stockholders
|
$
273.9
|
|
$
190.7
|
|
$
736.5
|
|
$
739.6
|
|
|
|
|
|
|
|
|
|
Amounts attributable
to FMC stockholders:
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations, net of tax
|
$
328.9
|
|
$
226.5
|
|
$
833.7
|
|
$
807.8
|
|
Discontinued
operations, net of tax
|
(55.0)
|
|
(35.8)
|
|
(97.2)
|
|
(68.2)
|
|
Net income
(loss)
|
$
273.9
|
|
$
190.7
|
|
$
736.5
|
|
$
739.6
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per common share attributable to FMC
stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
2.61
|
|
$
1.79
|
|
$
6.60
|
|
$
6.29
|
|
Discontinued
operations
|
(0.44)
|
|
(0.28)
|
|
(0.77)
|
|
(0.53)
|
|
Basic earnings
per common share
|
$
2.17
|
|
$
1.51
|
|
$
5.83
|
|
$
5.76
|
|
Average number of
shares outstanding used in basic earnings per
share computations
|
125.6
|
|
126.6
|
|
126.0
|
|
128.4
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share attributable to FMC
stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
2.61
|
|
$
1.78
|
|
$
6.58
|
|
$
6.26
|
|
Discontinued
operations
|
(0.44)
|
|
(0.28)
|
|
(0.77)
|
|
(0.53)
|
|
Diluted
earnings per common share
|
$
2.17
|
|
$
1.50
|
|
$
5.81
|
|
$
5.73
|
|
Average number of
shares outstanding used in diluted earnings per
share computations
|
126.4
|
|
127.4
|
|
126.7
|
|
129.1
|
|
|
|
|
|
|
|
|
|
Other
Data:
|
|
|
|
|
|
|
|
|
Capital additions and
other investing activities
|
$
16.0
|
|
$
15.2
|
|
$
118.7
|
|
$
113.8
|
|
Depreciation and
amortization expense
|
42.8
|
|
42.4
|
|
169.4
|
|
170.9
|
|
|
On July 1, 2022, we
changed our methods of accounting for inventory costing and net
periodic benefit cost. Impacts to our recasted Consolidated
Statements of Income (Loss) are not material. Certain prior year
amounts within these earnings tables have been recasted to reflect
the policy changes, as discussed in our Q3 2022 Form 10-Q. Further
detail will be included in our 2022 Form 10-K.
|
|
FMC
CORPORATION
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
|
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS
(GAAP)
TO ADJUSTED
AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS,
ATTRIBUTABLE TO FMC
STOCKHOLDERS (NON-GAAP)
(Unaudited)
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(In Millions, except
per share amounts)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$ 273.9
|
|
$ 190.7
|
|
$ 736.5
|
|
$ 739.6
|
|
Corporate special
charges (income):
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income) (a)
|
(5.8)
|
|
55.7
|
|
93.1
|
|
108.0
|
|
Non-operating pension
and postretirement charges (income) (b)
|
2.1
|
|
1.7
|
|
8.6
|
|
5.6
|
|
Transaction-related
charges (c)
|
—
|
|
—
|
|
—
|
|
0.4
|
|
Income tax expense
(benefit) on Corporate special charges (income)
(d)
|
4.3
|
|
(12.2)
|
|
1.5
|
|
(20.3)
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income)
|
6.8
|
|
—
|
|
6.8
|
|
—
|
|
Discontinued operations
attributable to FMC stockholders, net of income taxes
(e)
|
55.0
|
|
35.8
|
|
97.2
|
|
68.2
|
|
Tax adjustment
(f)
|
(37.3)
|
|
(2.1)
|
|
(5.3)
|
|
(14.8)
|
|
|
|
|
|
|
|
|
|
Adjusted after-tax
earnings from continuing operations attributable to
FMC stockholders (Non-GAAP) (1)
|
$ 299.0
|
|
$ 269.6
|
|
$ 938.4
|
|
$ 886.7
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP)
|
$ 2.17
|
|
$ 1.50
|
|
$ 5.81
|
|
$ 5.73
|
|
Corporate special
charges (income) per diluted share, before tax:
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income)
|
(0.04)
|
|
0.44
|
|
0.74
|
|
0.84
|
|
Non-operating pension
and postretirement charges (income)
|
0.02
|
|
0.01
|
|
0.07
|
|
0.04
|
|
Transaction-related
charges
|
—
|
|
—
|
|
—
|
|
—
|
|
Income tax expense
(benefit) on Corporate special charges (income), per
diluted share
|
0.03
|
|
(0.09)
|
|
0.01
|
|
(0.16)
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special
charges (income) per diluted share
|
0.05
|
|
—
|
|
0.05
|
|
—
|
|
Discontinued operations
attributable to FMC stockholders, net of income
taxes per diluted share
|
0.44
|
|
0.28
|
|
0.77
|
|
0.53
|
|
Tax adjustments per
diluted share
|
(0.30)
|
|
(0.02)
|
|
(0.04)
|
|
(0.11)
|
|
|
|
|
|
|
|
|
|
Diluted adjusted
after-tax earnings from continuing operations per share,
attributable to FMC stockholders (Non-GAAP)
|
$
2.37
|
|
$
2.12
|
|
$
7.41
|
|
$
6.87
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in diluted adjusted after-tax
earnings from continuing operations per share
computations
|
126.4
|
|
127.4
|
|
126.7
|
|
129.1
|
____________________
|
|
|
(1)
|
The Company believes
that the Non-GAAP financial measure "Adjusted After-Tax Earnings
from Continuing Operations, Attributable to FMC Stockholders"
("Adjusted earnings"), and its presentation on a per share basis,
provides useful information about the Company's operating results
to investors and securities analysts. Adjusted earnings excludes
the effects of Corporate special charges, tax-related adjustments
and the results of our discontinued operations. The Company also
believes that excluding the effects of these items from operating
results allows management and investors to compare more easily the
financial performance of its underlying businesses from period to
period.
|
|
|
|
(a)
|
Three Months Ended
December 31, 2022:
|
|
|
|
Restructuring and other
charges (income) includes $2.1 million of severance and employee
separation costs, $3.0 million related to fixed asset charges, and
$2.7 million of other restructuring related charges incurred as
part of various restructuring initiatives. These
restructuring charges were offset by a gain of $50.5 million
recognized on the disposition of land related to a closed
manufacturing facility. Other charges of $36.9 million relate
primarily to environmental charges.
|
|
|
|
Three Months Ended December 31,
2021:
|
|
|
|
Restructuring and other
charges (income) is partially comprised of charges of environmental
sites of $23.8 million. There were restructuring charges of $10.9
million associated with certain in-flight restructuring programs
from the integration of the DuPont Crop Protection Business, which
primarily reflects non-cash charges and to a lesser extent
remaining severance. Restructuring charges associated with the
DuPont program were largely complete as of December 31, 2021.
Restructuring and other charges also includes an additional $9.7
million to increase reserves for certain historical India indirect
tax matters that were triggered in the third quarter of 2021. Other
restructuring charges from severance and accelerated deprecation
for site closures were $11.3 million.
|
|
|
|
Twelve Months Ended December 31,
2022:
|
|
|
|
Restructuring and other
charges (income) is primarily comprised of $76.8 million in exit
charges related to our decision to cease operations and business in
Russia. Restructuring and other charges (income) is also
comprised of $5.9 million of severance and employee separation
costs, $11.2 million related to fixed asset charges, and $7.3
million of other restructuring related charges incurred as part of
various restructuring initiatives. These restructuring charges were
partially offset by a gain of $50.5 million recognized on the
disposition of land related to a closed manufacturing facility.
Other charges of $42.4 million relate primarily to environmental
charges.
|
|
|
|
Twelve Months Ended December 31,
2021:
|
|
|
|
Restructuring and other
charges (income) is comprised of costs related to historical India
indirect tax matters of $33.5 million for the establishment of
reserves which were largely triggered in the third quarter of 2021.
These charges also include charges associated with certain
in-flight restructuring programs from the integration of the DuPont
Crop Protection Business, including severance, accelerated
depreciation on certain fixed assets, and other costs of $16.7
million, which primarily reflects non-cash charges and to a lesser
extent remaining severance. Restructuring charges associated with
the DuPont program were largely complete as of December 31, 2021.
Additionally, restructuring and other charges (income) is comprised
of regional realignment activities, primarily the move of our
European headquarters, including severance and employee relocation
costs, of $11.0 million. These charges also include severance and
restructuring charges of $13.4 million from other restructuring
programs, as well as environmental sites and other miscellaneous
charges of $27.1 million and $6.3 million, respectively.
|
|
|
|
(b)
|
Our non-operating
pension and postretirement charges (income) are defined as those
costs (benefits) related to interest, expected return on plan
assets, amortized actuarial gains and losses and the impacts of any
plan curtailments or settlements. These are excluded from our
Adjusted Earnings and are primarily related to changes in pension
plan assets and liabilities which are tied to financial market
performance and we consider these costs to be outside our
operational performance. We continue to include the service cost
and amortization of prior service cost in our Adjusted Earnings
results noted above. These elements reflect the current year
operating costs to our businesses for the employment benefits
provided to active employees.
|
|
|
|
(c)
|
Charges related to
legal and professional fees associated with acquisition activities,
primarily associated with the DuPont Crop Protection Business
Acquisition.
|
|
|
|
(d)
|
The income tax expense
(benefit) on Corporate special charges (income) is determined using
the applicable rates in the taxing jurisdictions in which the
Corporate special charge or income occurred and includes both
current and deferred income tax expense (benefit) based on the
nature of the non-GAAP performance measure.
|
|
|
|
(e)
|
Three and Twelve
Months Ended December 31, 2022 and 2021:
|
|
|
|
Discontinued operations
for all periods presented includes provisions, net of recoveries,
for environmental liabilities and legal reserves and expenses
related to previously discontinued operations and retained
liabilities. Discontinued operations, net of income taxes for the
twelve months ended December 31, 2021 also includes a gain on sale,
net of tax, of approximately $15.4 million, from the sale of land
at two separate discontinued sites.
|
|
|
|
(f)
|
We exclude the GAAP tax
provision, including discrete items, from the Non-GAAP measure of
income, and instead include a Non-GAAP tax provision based upon the
annual Non-GAAP effective tax rate. The GAAP tax provision includes
certain discrete tax items including, but not limited to: income
tax expenses or benefits that are not related to ongoing business
operations in the current year; unusual or infrequently occurring
items; tax adjustments associated with fluctuations in foreign
currency remeasurement of certain foreign operations; certain
changes in estimates of tax matters related to prior fiscal years;
certain changes in the realizability of deferred tax assets; and
changes in tax law. Management believes excluding these
discrete tax items assists investors and securities analysts in
understanding the tax provision and the effective tax rate related
to ongoing operations thereby providing investors with useful
supplemental information about FMC's operational
performance.
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(in
Millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Tax
adjustments:
|
|
|
|
|
|
|
|
|
Revisions to valuation
allowances of historical deferred
tax assets
|
1.8
|
|
(16.1)
|
|
1.8
|
|
(21.5)
|
|
Foreign currency
remeasurement and other discrete items
|
(39.1)
|
|
14.0
|
|
(7.1)
|
|
6.7
|
|
Total Non-GAAP tax
adjustments
|
$
(37.3)
|
|
$
(2.1)
|
|
$
(5.3)
|
|
$
(14.8)
|
|
RECONCILIATION OF
NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS, BEFORE INTEREST AND INCOME TAXES, DEPRECIATION AND
AMORTIZATION, AND
NONCONTROLLING INTERESTS (NON-GAAP)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(In
Millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net income (loss)
(GAAP)
|
$
280.4
|
|
$
184.8
|
|
$
741.5
|
|
$
737.1
|
|
Restructuring and
other charges (income)
|
(5.8)
|
|
55.7
|
|
93.1
|
|
108.0
|
|
Non-operating pension
and postretirement charges (income)
|
2.1
|
|
1.7
|
|
8.6
|
|
5.6
|
|
Transaction-related
charges
|
—
|
|
—
|
|
—
|
|
0.4
|
|
Discontinued
operations, net of income taxes
|
55.0
|
|
35.8
|
|
97.2
|
|
68.2
|
|
Interest expense,
net
|
44.8
|
|
33.0
|
|
151.8
|
|
131.1
|
|
Depreciation and
amortization
|
42.8
|
|
42.4
|
|
169.4
|
|
170.9
|
|
Provision (benefit)
for income taxes
|
12.2
|
|
16.7
|
|
145.2
|
|
92.5
|
|
Adjusted earnings
from continuing operations, before interest,
income taxes, depreciation and amortization, and noncontrolling
interests (Non-GAAP) (1)
|
$
431.5
|
|
$
370.1
|
|
$
1,406.8
|
|
$
1,313.8
|
___________________
|
(1)
|
Referred to as Adjusted
EBITDA. Adjusted EBITDA is defined as operating profit excluding
depreciation and amortization expense.
|
|
RECONCILIATION OF
CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES (GAAP) TO
FREE CASH FLOW (NON-GAAP)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(In
Millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Cash provided
(required) by operating activities of continuing
operations (GAAP) (1)
|
$
644.3
|
|
$
600.4
|
|
$
660.0
|
|
$
898.6
|
|
Transaction and
integration costs
|
—
|
|
1.1
|
|
0.5
|
|
9.5
|
|
Adjusted cash from
operations (2)
|
$
644.3
|
|
$
601.5
|
|
$
660.5
|
|
$
908.1
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
(33.9)
|
|
$
(23.7)
|
|
$
(142.3)
|
|
$
(100.1)
|
|
Other investing
activities
|
17.9
|
|
8.5
|
|
23.6
|
|
(13.7)
|
|
Capital additions
and other investing activities
|
$
(16.0)
|
|
$
(15.2)
|
|
$
(118.7)
|
|
$
(113.8)
|
|
|
|
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
$
(25.8)
|
|
$
(24.6)
|
|
$
(77.6)
|
|
$
(78.5)
|
|
Cash provided
(required) by investing activities of discontinued
operations
|
—
|
|
2.9
|
|
—
|
|
19.7
|
|
Transaction and
integration costs
|
—
|
|
(1.1)
|
|
(0.5)
|
|
(9.5)
|
|
Investment in
Enterprise Resource Planning system
|
—
|
|
—
|
|
—
|
|
(12.7)
|
|
Proceeds from land
disposition (3)
|
50.5
|
|
—
|
|
50.5
|
|
—
|
|
Legacy and
transformation
|
$
24.7
|
|
$
(22.8)
|
|
$
(27.6)
|
|
$
(81.0)
|
|
|
|
|
|
|
|
|
|
Free cash flow
(Non-GAAP) (4)
|
$
653.0
|
|
$
563.5
|
|
$
514.2
|
|
$
713.3
|
___________________
|
(1)
|
The cash provided
(required) by operating activities for the three months ended
December 31, 2022 and 2021 is the calculation of the twelve months
ended December 31, 2022 and 2021 less the previously reported nine
months ended September 30, 2022 and 2021, respectively.
|
|
(2)
|
Adjusted cash from
operations is defined as cash provided (required) by operating
activities of continuing operations excluding the effects of
transaction-related cash flows.
|
|
(3)
|
Amounts for the year
ended December 31, 2022 include proceeds of of $50.5 million
received on the disposition of land related to a closed
manufacturing facility.
|
|
(4)
|
Free cash flow is
defined as Adjusted cash from operations reduced by spending for
capital additions and other investing activities as well as legacy
and transformation spending. We believe that this Non-GAAP
financial measure provides a useful basis for investors and
securities analysts about the cash generated by routine business
operations, including capital expenditures, in addition to
assessing our ability to repay debt, fund acquisitions and return
capital to shareholders through share repurchases and
dividends.
|
|
RECONCILIATION OF
REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE
CHANGE (NON-GAAP) (1)
(Unaudited)
|
|
|
Three Months
Ended
December 31, 2022 vs. 2021
|
|
Twelve Months
Ended
December 31, 2022 vs. 2021
|
|
Total Revenue Change
(GAAP)
|
15 %
|
|
15 %
|
|
Less: Foreign Currency
Impact
|
(2) %
|
|
(3) %
|
|
Organic Revenue
Change (Non-GAAP)
|
17 %
|
|
18 %
|
___________________
|
(1)
|
We believe organic
revenue growth (non-GAAP) provides management and investors with
useful supplemental information regarding our ongoing revenue
performance and trends by presenting revenue growth excluding the
impact of fluctuations in foreign exchange rates.
|
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(In
Millions)
|
December 31,
2022
|
|
December 31,
2021
|
|
Cash and cash
equivalents
|
$
572.0
|
|
$
516.8
|
|
Trade receivables, net
of allowance of $33.9 in 2022 and $37.4 in 2021
|
2,871.4
|
|
2,583.7
|
|
Inventories
|
1,651.6
|
|
1,521.9
|
|
Prepaid and other
current assets
|
343.6
|
|
431.4
|
|
Total current
assets
|
$
5,438.6
|
|
$
5,053.8
|
|
Property, plant and
equipment, net
|
849.6
|
|
817.0
|
|
Goodwill
|
1,589.3
|
|
1,463.3
|
|
Other intangibles,
net
|
2,508.1
|
|
2,521.9
|
|
Deferred income
taxes
|
210.7
|
|
194.1
|
|
Other long-term
assets
|
575.0
|
|
623.0
|
|
Total
assets
|
$
11,171.3
|
|
$
10,673.1
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
540.8
|
|
$
440.8
|
|
Accounts payable, trade
and other
|
1,252.2
|
|
1,135.0
|
|
Advanced payments from
customers
|
680.5
|
|
630.7
|
|
Accrued and other
liabilities
|
601.8
|
|
631.2
|
|
Accrued customer
rebates
|
465.3
|
|
406.7
|
|
Guarantees of vendor
financing
|
142.0
|
|
206.2
|
|
Accrued pensions and
other postretirement benefits, current
|
2.3
|
|
4.3
|
|
Income taxes
|
114.7
|
|
65.4
|
|
Total current
liabilities
|
$
3,799.6
|
|
$
3,520.3
|
|
|
|
|
|
Long-term debt, less
current portion
|
$
2,733.2
|
|
$
2,731.7
|
|
Long-term
liabilities
|
1,237.6
|
|
1,277.4
|
|
Equity
|
3,400.9
|
|
3,143.7
|
|
Total liabilities
and equity
|
$
11,171.3
|
|
$
10,673.1
|
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Year Ended December
31,
|
|
(In
Millions)
|
2022
|
|
2021
|
|
Cash provided
(required) by operating activities of continuing
operations
|
$
660.0
|
|
$
898.6
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(77.6)
|
|
(78.5)
|
|
|
|
|
|
Cash provided
(required) by investing activities of continuing
operations
|
(266.4)
|
|
(131.7)
|
|
|
|
|
|
Cash provided
(required) by investing activities of discontinued
operations
|
—
|
|
19.7
|
|
|
|
|
|
Cash provided
(required) by financing activities of continuing
operations
|
(237.4)
|
|
(747.9)
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(23.4)
|
|
(12.3)
|
|
Increase (decrease) in
cash and cash equivalents
|
$
55.2
|
|
$
(52.1)
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
516.8
|
|
568.9
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
572.0
|
|
$
516.8
|
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SOURCE FMC Corporation