New products and
branded diamides delivered strong
results despite continued
destocking.
Fourth Quarter 2023 Highlights
- Revenue of $1.15 billion, a
decrease of 29 percent versus Q4 2022 and down 30 percent
organically1
- Consolidated GAAP net income of $1.10
billion, up 291 percent versus Q4 2022
- Adjusted EBITDA of $254 million,
down 41 percent versus Q4 2022
- Consolidated GAAP earnings of $8.77 per diluted share, up 304 percent versus Q4
2022
- Adjusted earnings of $1.07 per
diluted share, down 55 percent versus Q4 2022
- 14 percent of sales in the quarter from new product
introductions (NPI)
Full-Year 2023 Highlights
- Revenue of $4.49 billion,
reflecting a year-over-year decline of 23 percent and down 22
percent organically1
- Consolidated GAAP net income of $1.32
billion, up 78 percent versus 2022
- Adjusted EBITDA of $978 million,
down 30 percent versus 2022
- Consolidated GAAP earnings of $10.53 per diluted share, up 81 percent versus
2022
- Adjusted earnings of $3.78 per
diluted share, down 49 percent versus 2022
- Consolidated GAAP cash flow from operations of negative
$300 million, down 145 percent versus
2022
- Free cash flow of negative $524
million, down 202 percent versus 2022
- NPI sales of $590 million
represented annual record 13 percent of total revenue
Full-Year 2024 Outlook2
- Revenue of $4.50 to $4.70 billion, reflecting 2.5 percent growth at
the midpoint
- Adjusted EBITDA of $900 million
to $1.05 billion, essentially flat to
prior year at the midpoint
- Restructuring fully underway and expect to receive $50 to $75 million
of adjusted EBITDA benefit
- Adjusted earnings per diluted share of $3.23 to $4.41,
reflecting 1 percent growth at the midpoint
- Free cash flow is expected to be in the range of $400 to $600
million, reflecting greater than 100 percent cash flow
conversion at the midpoint
PHILADELPHIA, Feb. 5, 2024
/PRNewswire/ --
FMC Corporation (NYSE: FMC) today reported fourth quarter 2023
revenue of $1.15 billion, a decrease
of 29 percent versus fourth quarter 2022, driven by continued
channel destocking in all regions with adverse weather in
Brazil being a further headwind in
Latin America. Excluding the
impact of foreign currencies, organic revenue declined
30 percent year-over-year. On a GAAP basis, the company
reported earnings of $8.77 per
diluted share in the fourth quarter, up 304 percent versus
fourth quarter 2022 due to significant one-time tax benefits
largely driven by new tax incentives granted to the company's Swiss
subsidiaries. Adjusted earnings were $1.07 per diluted share, a decline of 55 percent
versus fourth quarter 2022.
Fourth Quarter
Adjusted EPS versus Guidance (midpoint)*
|
-7
cents*
|
Adjusted
EBITDA
|
-15
cents
|
Depreciation and
amortization
|
0 cent
|
Interest
expense
|
+4 cents
|
Taxes
|
+2 cents
|
Minority
interest
|
+2 cents
|
Share count
|
0 cent
|
* Guidance refers to
midpoint of EPS guidance presented in October 2023
|
"During the fourth quarter we observed continued channel
destocking in all regions, while drought in Brazil also amplified challenges in
Latin America," said Mark Douglas, FMC president and chief executive
officer. "Despite this, sales of our newer and more
differentiated products were robust, including branded diamide
growth of 5 percent. Our leading technologies continue to gain
traction with growers, who remain invested in protecting their
yields with steady on-the-ground application of crop protection
products."
FMC revenue in the fourth quarter was driven by a 25 percent
decline from volume. A 5 percent decline in pricing was
partially offset by a 1 percent FX tailwind. Sales of
products launched in the last five years comprised 14 percent of
total revenue in the quarter.
Sales in North America declined
37 percent versus a very strong fourth quarter 2022 driven by lower
volume. Latin America sales declined 38 percent (down 41
percent organically) mainly from lower volume from weaker demand,
as well as adverse weather in Brazil. Pricing in the region declined
by low-double digits. Despite the overall decrease in sales
in the region, branded diamide sales in Latin America were essentially flat to prior
year, aided by the successful launch of Premio® Star
insecticide in Brazil. In Asia, fourth quarter revenue was
flat versus prior year period as fungicides grew and branded
diamides were essentially flat. In EMEA, sales declined 24
percent (down 22 percent organically) driven by volume declines due
to channel destocking, mainly in herbicides. This was
partially offset by a low-to-mid single digit price increase as
well as strong growth in branded diamides. The Plant Health
business was down 25 percent versus the prior-year period as the
business experienced similar volume headwinds as the rest of the
portfolio.
FMC
Revenue
|
Q4
2023
|
Full Year
2023
|
Total Revenue Change
(GAAP)
|
(29 %)
|
(23 %)
|
Less FX Impact
|
1 %
|
(1 %)
|
Organic1
Revenue Change (Non-GAAP)
|
(30 %)
|
(22 %)
|
Fourth quarter adjusted EBITDA was $254
million, 41 percent lower than prior-year period primarily
driven by volume decline, with lower pricing more than offset by
cost tailwinds. Costs were favorable due to lower input costs
as well as aggressive cost controls. FX was a modest
tailwind.
For the full year, FMC reported revenue of $4.49 billion, a decrease of 23 percent compared
to 2022. Excluding the impact of FX, year-over-year sales declined
22 percent organically. On a GAAP basis, the company reported
full-year net income of $1.32
billion, up 78 percent versus the previous year due to
one-time tax benefits reported in the fourth quarter.
Consolidated earnings of $10.53
per diluted share represents a year-over-year increase of 81
percent. Full-year adjusted earnings were $3.78 per diluted share, a decrease of 49 percent
compared to 2022.
"Despite challenging market conditions in 2023, we maintained
very healthy adjusted EBITDA margins by holding or raising price in
most countries and by aggressively managing costs in response to
the demand decline. NPI sales were down 2 percent, while our
branded diamides were down by 7 percent, outperforming the rest of
our portfolio and the broader market. The resilient
performance of these differentiated products illustrates the
importance of innovation in our business," Douglas said.
On a GAAP basis, cash flow from operations was negative
$300 million, a decrease of 145
percent versus 2022, primarily due to significantly lower payables
and lower adjusted EBITDA, partially offset by lower use of cash
for receivables and inventory with additional headwinds primarily
from cash interest and taxes. Free cash flow in 2023 was
negative $524 million, down 202
percent versus 2022, primarily due to lower cash from
operations.
Full Year 2024 Outlook2
Full-year 2024 revenue is forecasted to be in the range of
$4.50 billion to $4.70 billion. The increase of 2.5 percent
at the midpoint versus 2023 is expected to be largely driven by
growth of new products, primarily in the second half. The
midpoint of revenue guidance assumes the crop protection market is
flat-to-down low-single digits as modest market growth during the
second half is offset by market contraction in the first half.
Full-year adjusted EBITDA is expected to be between
$900 million and $1.05 billion, essentially flat at the midpoint
to the prior year. Headwinds to adjusted EBITDA in the first
half are expected from continued destocking, higher inventory costs
and modest pricing pressure. Tailwinds in the second half are
expected from sales growth of new products, a greater portion of
savings from restructuring actions and some benefit from market
recovery. The range for 2024 adjusted EPS is expected to be
$3.23 to $4.41 per diluted share, representing an increase
of 1 percent year-over-year at the midpoint due to lower interest
expense and D&A. Full-year free cash flow is expected to
be $400 million to $600 million, an increase of over $1.0 billion versus 2023 at the midpoint driven
largely by rebuilding of payables and lower inventory.
"Our outlook for this year largely relies on factors within our
control. We are viewing 2024 as a transition year, with
momentum expected to build as the year progresses, driven by our
new technologies and the benefits of our restructuring actions
along with an improving demand backdrop. The structural
actions we are taking now combined with the transitory nature of
the majority of the cost headwinds should provide a strong setup
for us to achieve our mid-term goals, including our unchanged 2026
financial projections." said Douglas.
First Quarter Outlook2
First quarter revenue is expected to be in the range of
$925 million to $1.075 billion, a 26 percent decrease at the
midpoint compared to first quarter 2023 due to lower volume from
destocking activity in all regions. In addition, price is
expected to be a low-to-mid single digit headwind, mainly in
Latin America and Asia.
Adjusted EBITDA is forecasted to be in the range of $135 million to $165
million, a decline of 59 percent at the midpoint versus the
prior-year period due to lower sales as well as the gross margin
impacts of high-cost inventory carried over from prior year.
Adjusted EPS is expected to be in the range of $0.21 to $0.43 in
the first quarter, representing a decrease of 82 percent at the
midpoint versus first quarter 2023 mainly due to lower adjusted
EBITDA.
|
Full Year 2024
Outlook2
|
Q1 2024
Outlook2
|
Revenue
|
$4.5 to $4.7
billion
|
$925 million to
$1.075 billion
|
Growth at midpoint
vs. 2023*
|
2.5 %
|
-26 %
|
Adjusted
EBITDA
|
$900 million to
$1.05 billion
|
$135 to $165
million
|
Growth at midpoint
vs. 2023*
|
0 %
|
-59 %
|
Adjusted
EPS^
|
$3.23 to
$4.41
|
$0.21 to
$0.43
|
Growth at midpoint
vs. 2023*
|
1 %
|
-82 %
|
|
^Adjusted EPS
estimates assume 125.5 million diluted shares for full year and
125.5 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 2024.
|
|
*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.
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 Premio Star are trademarks of FMC Corporation or an
affiliate.
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®.
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
presentations, reports or letters to FMC stockholders.
In some cases, FMC has identified these forward-looking
statements by such words or phrases as "outlook", "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 or phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for the company based on
currently available information. The forward-looking 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. These statements are
qualified by reference to the risk factors included in Part I, Item
1A of our Annual Report on Form 10-K for the year ended
December 31, 2022 (the "2022 Form
10-K"), the section captioned "Forward-Looking Information" in Part
II of the 2022 Form 10-K and to similar risk factors and cautionary
statements in all other reports and forms filed with the Securities
and Exchange Commission ("SEC"). We wish to caution 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.
We specifically decline to undertake any obligation, and
specifically disclaims any duty, to publicly update or revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events, except as may be
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
amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$ 1,146.1
|
|
$ 1,622.0
|
|
$ 4,486.8
|
|
$ 5,802.3
|
Costs of sales and
services
|
710.4
|
|
936.4
|
|
2,655.8
|
|
3,475.5
|
Gross margin
|
$
435.7
|
|
$
685.6
|
|
$ 1,831.0
|
|
$ 2,326.8
|
Selling, general and
administrative expenses
|
$
171.5
|
|
$
212.5
|
|
$
734.3
|
|
$
775.2
|
Research and
development expenses
|
81.8
|
|
84.4
|
|
328.8
|
|
314.2
|
Restructuring and other
charges (income)
|
164.3
|
|
(5.8)
|
|
212.3
|
|
93.1
|
Total costs and
expenses
|
$ 1,128.0
|
|
$ 1,227.5
|
|
$ 3,931.2
|
|
$ 4,658.0
|
Income (loss) from continuing operations before
non-operating
pension and postretirement charges (income), interest expense,
net and income taxes
|
$
18.1
|
|
$
394.5
|
|
$
555.6
|
|
$ 1,144.3
|
Non-operating pension
and postretirement charges (income)
|
4.8
|
|
2.1
|
|
18.2
|
|
8.6
|
Interest expense,
net
|
56.7
|
|
44.8
|
|
237.2
|
|
151.8
|
Income (loss) from continuing operations before
income taxes
|
$
(43.4)
|
|
$
347.6
|
|
$
300.2
|
|
$
983.9
|
Provision (benefit) for
income taxes
|
(1,197.0)
|
|
12.2
|
|
(1,119.3)
|
|
145.2
|
Income (loss) from
continuing operations
|
$ 1,153.6
|
|
$
335.4
|
|
$ 1,419.5
|
|
$
838.7
|
Discontinued
operations, net of income taxes
|
(57.2)
|
|
(55.0)
|
|
(98.5)
|
|
(97.2)
|
Net income (loss)
|
$ 1,096.4
|
|
$
280.4
|
|
$ 1,321.0
|
|
$
741.5
|
Less: Net
income (loss) attributable to noncontrolling interests
|
(2.1)
|
|
6.5
|
|
(0.5)
|
|
5.0
|
Net income (loss) attributable to FMC
stockholders
|
$ 1,098.5
|
|
$
273.9
|
|
$ 1,321.5
|
|
$
736.5
|
Amounts attributable to FMC
stockholders:
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations, net of tax
|
$ 1,155.7
|
|
$
328.9
|
|
$ 1,420.0
|
|
$
833.7
|
Discontinued
operations, net of tax
|
(57.2)
|
|
(55.0)
|
|
(98.5)
|
|
(97.2)
|
Net income (loss)
|
$ 1,098.5
|
|
$
273.9
|
|
$ 1,321.5
|
|
$
736.5
|
Basic earnings (loss) per common share attributable
to FMC
stockholders:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
9.23
|
|
$
2.61
|
|
$
11.34
|
|
$
6.60
|
Discontinued
operations
|
(0.46)
|
|
(0.44)
|
|
(0.79)
|
|
(0.77)
|
Basic earnings per common
share
|
$
8.77
|
|
$
2.17
|
|
$
10.55
|
|
$
5.83
|
Average number of
shares outstanding used in basic earnings per
share computations
|
124.9
|
|
125.6
|
|
125.1
|
|
126.0
|
Diluted earnings (loss) per common share attributable
to FMC
stockholders:
|
|
|
|
|
|
|
|
Continuing operations
|
$
9.23
|
|
$
2.61
|
|
$
11.31
|
|
$
6.58
|
Discontinued
operations
|
(0.46)
|
|
(0.44)
|
|
(0.78)
|
|
(0.77)
|
Diluted earnings per common
share
|
$
8.77
|
|
$
2.17
|
|
$
10.53
|
|
$
5.81
|
Average number of
shares outstanding used in diluted earnings per
share computations
|
125.2
|
|
126.4
|
|
125.5
|
|
126.7
|
|
|
|
|
|
|
|
|
Other Data:
|
|
|
|
|
|
|
|
Capital additions and
other investing activities
|
$
27.1
|
|
$
16.0
|
|
$
143.7
|
|
$
118.7
|
Depreciation and
amortization expense
|
45.9
|
|
42.8
|
|
184.3
|
|
169.4
|
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)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
1,098.5
|
|
$ 273.9
|
|
$
1,321.5
|
|
$ 736.5
|
Corporate special
charges (income):
|
|
|
|
|
|
|
|
Restructuring and
other charges (income) (a)
|
190.1
|
|
(5.8)
|
|
238.1
|
|
93.1
|
Non-operating pension
and postretirement charges (income) (b)
|
4.8
|
|
2.1
|
|
18.2
|
|
8.6
|
Income tax expense
(benefit) on Corporate special charges (income)
(c)
|
(24.3)
|
|
4.3
|
|
(32.8)
|
|
1.5
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income)
|
—
|
|
6.8
|
|
(1.6)
|
|
6.8
|
Discontinued operations
attributable to FMC stockholders, net of income taxes
(d)
|
57.2
|
|
55.0
|
|
98.5
|
|
97.2
|
Tax adjustment
(e)
|
(1,192.9)
|
|
(37.3)
|
|
(1,167.4)
|
|
(5.3)
|
Adjusted after-tax earnings from continuing
operations attributable to FMC stockholders (Non-GAAP)
(1)
|
$ 133.4
|
|
$ 299.0
|
|
$ 474.5
|
|
$ 938.4
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP)
|
$ 8.77
|
|
$ 2.17
|
|
$ 10.53
|
|
$ 5.81
|
Corporate special
charges (income) per diluted share, before tax:
|
|
|
|
|
|
|
|
Restructuring and
other charges (income)
|
1.52
|
|
(0.04)
|
|
1.90
|
|
0.74
|
Non-operating pension
and postretirement charges (income)
|
0.04
|
|
0.02
|
|
0.15
|
|
0.07
|
Income tax expense
(benefit) on Corporate special charges (income), per diluted
share
|
(0.19)
|
|
0.03
|
|
(0.26)
|
|
0.01
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income) per diluted share
|
—
|
|
0.05
|
|
(0.02)
|
|
0.05
|
Discontinued operations
attributable to FMC stockholders, net of income taxes per diluted
share
|
0.46
|
|
0.44
|
|
0.78
|
|
0.77
|
Tax adjustments per
diluted share
|
(9.53)
|
|
(0.30)
|
|
(9.30)
|
|
(0.04)
|
Diluted adjusted after-tax earnings from continuing
operations per share, attributable to FMC stockholders
(Non-GAAP)
|
$
1.07
|
|
$
2.37
|
|
$
3.78
|
|
$
7.41
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in diluted adjusted after-tax earnings from
continuing operations per share computations
|
125.2
|
|
126.4
|
|
125.5
|
|
126.7
|
____________________
|
(1)
|
Referred to as Adjusted
earnings. The Company believes that Adjusted earnings, a Non-GAAP
financial measure, and its presentation on a per share basis,
provides useful information about the Company's operating results
to management, 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, 2023:
|
|
|
|
Restructuring and other
charges (income) includes $40.1 million of severance and employee
separation costs and $5.4 million of provider costs
associated with the Project Focus restructuring initiative. We
incurred $89.2 million in currency related charges primarily driven
by the significant actions taken by the Argentine Government during
the fourth quarter of 2023. First, the adjustment of the official
exchange rate announced during December 2023 resulted in
$63.4 million of foreign exchange remeasurement losses.
Second, in combination with the devaluation actions, the government
expanded the scope and rates of the existing Impuesto PAIS tax
("PAIS"). The tax targets the import of goods and services that
will be paid in a foreign currency. As a result of this initial
adoption, which was required to be applied retroactively, we
recognized a charge of $25.8 million recorded within our
"Cost of Sales and Services" line item within our
Consolidated Statements of Income (Loss). Additionally, we incurred
$52.6 million in environmental charges associated with remediation
activities and other miscellaneous charges of $2.8
million.
|
|
|
|
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.
|
|
|
|
Twelve Months Ended
December 31, 2023:
|
|
|
|
Restructuring and other
charges (income) includes $40.1 million of severance and employee
separation costs and $5.4 million of provider costs
associated with the Project Focus restructuring initiative. Other
restructuring costs of $8.7 million relate to employee separation
and asset impairment costs incurred as part of various ongoing
initiatives. These restructuring charges were offset by a
$5.8 million gain recognized on the disposition of land
related to a previously closed manufacturing facility. We incurred
$101.0 million in currency related charges primarily driven by the
significant actions taken by the Argentine Government during the
fourth quarter of 2023. This includes the $89.2 million discussed
above for the three month period, $25.8 million of which is
recorded within our "Cost of Sales and Services" line item
within our Consolidated Statements of Income (Loss), as well as
$11.8 million resulting from similar devaluation actions in
Argentina and Pakistan during previous quarters. Other charges
(income) also includes $13.0 million in charges primarily
resulting from the third quarter acquisition of in-process research
and development assets that do not meet the criteria for
capitalization Additionally, we incurred $66.9 million in
environmental charges associated with remediation activities and
other miscellaneous charges of $8.8 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.
|
|
|
(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)
|
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.
|
|
|
(d)
|
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.
|
|
|
(e)
|
We exclude the GAAP tax
provision, including discrete items, from the Non-GAAP measure of
income, and 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 continuing
operating results 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 continuing 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)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
Tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impacts of valuation
allowances of deferred tax assets
|
95.0
|
|
1.8
|
|
95.0
|
|
1.8
|
|
|
|
|
Foreign currency
remeasurement and other discrete items
|
(1,287.9)
|
|
(39.1)
|
|
(1,262.4)
|
|
(7.1)
|
|
|
|
|
Total Non-GAAP tax adjustments
|
$
(1,192.9)
|
|
$
(37.3)
|
|
$
(1,167.4)
|
|
$
(5.3)
|
|
During the three
months ended December 31, 2023, the Company's Swiss
subsidiaries were granted ten-year tax incentives effective for
2023 and retroactively for 2021 and 2022. The tax incentives were
awarded for the Company's commitment to invest in additional
headcount and transfer significant intellectual property, which is
planned for 2024, as well as establishing a new global technology
and innovation center in Switzerland. Deferred tax benefits of
$1,149 million and related valuation allowances of
$318 million were recorded during the three months ended
December 31, 2023 to reflect the net estimated future
reductions in tax of $831 million associated with the
incentives.
|
|
Historically, FMC's
Brazil valuation allowance position was based on long-standing
local transfer pricing rules, as well as certain material favorable
permanent statutory tax deductions available to FMC Brazil as part
of local tax law. During the three months ended June 30, 2023,
Brazil passed legislation to conform to Organization for Economic
Cooperation and Development ('OECD') transfer pricing rules
effective in 2024. Conformity to OECD transfer pricing rules
favorably impacts the statutory income level of FMC Brazil. In
2023, the Company continued to monitor its valuation allowance
throughout the third and fourth quarters considering this law
change. Further, on December 29, 2023, the Brazilian Government
enacted new tax law that significantly limits FMC Brazil's ability
to benefit in the future from the material favorable permanent
statutory tax deductions previously available as part of local tax
law. During the three months ended December 31, 2023, the
Company released its FMC Brazil valuation allowance and recorded a
tax benefit of $223 million.
|
|
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)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
(GAAP)
|
$ 1,096.4
|
|
$
280.4
|
|
$ 1,321.0
|
|
$
741.5
|
Restructuring and
other charges (income) (2)
|
190.1
|
|
(5.8)
|
|
238.1
|
|
93.1
|
Non-operating pension
and postretirement charges (income)
|
4.8
|
|
2.1
|
|
18.2
|
|
8.6
|
Discontinued
operations, net of income taxes
|
57.2
|
|
55.0
|
|
98.5
|
|
97.2
|
Interest expense,
net
|
56.7
|
|
44.8
|
|
237.2
|
|
151.8
|
Depreciation and
amortization
|
45.9
|
|
42.8
|
|
184.3
|
|
169.4
|
Provision (benefit)
for income taxes
|
(1,197.0)
|
|
12.2
|
|
(1,119.3)
|
|
145.2
|
Adjusted earnings from continuing operations, before
interest,
income taxes, depreciation and amortization, and noncontrolling
interests (Non-GAAP) (1)
|
$
254.1
|
|
$
431.5
|
|
$
978.0
|
|
$ 1,406.8
|
___________________
|
(1)
|
Referred to as Adjusted
EBITDA. Defined as operating profit excluding corporate special
charges (income) and depreciation and amortization
expense.
|
(2)
|
Includes $25.8 million
of charges related to the PAIS tax which was recorded to "Cost
of Sales and services" on the consolidated statements of income
(loss) as well as $164.3 million and $212.3 million shown as
Restructuring and other charges (income) on the consolidated
statements of income (loss) for the three and twelve months ended
December 31, 2023, respectively. The PAIS tax is related to
significant actions taken by the Argentine Government during the
fourth quarter of 2023, which also resulted in foreign exchange
remeasurement losses included within the "Restructuring and
other charges (income)" line item on our Consolidated
Statements of Income (Loss).
|
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)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash provided
(required) by operating activities of continuing operations
(GAAP) (1)
|
$
317.9
|
|
$
644.3
|
|
$
(300.3)
|
|
$
660.0
|
Transaction and
integration costs
|
—
|
|
—
|
|
—
|
|
0.5
|
Adjusted cash from operations
(2)
|
$
317.9
|
|
$
644.3
|
|
$
(300.3)
|
|
$
660.5
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
(25.1)
|
|
$
(33.9)
|
|
$
(133.9)
|
|
$
(142.3)
|
Other investing
activities
|
(2.0)
|
|
17.9
|
|
(9.8)
|
|
23.6
|
Capital additions and other investing
activities
|
$
(27.1)
|
|
$
(16.0)
|
|
$
(143.7)
|
|
$
(118.7)
|
|
|
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
$
(25.1)
|
|
$
(25.8)
|
|
$
(86.1)
|
|
$
(77.6)
|
Transaction and
integration costs
|
—
|
|
—
|
|
—
|
|
(0.5)
|
Proceeds from land
disposition (3)
|
—
|
|
50.5
|
|
5.8
|
|
50.5
|
Legacy and transformation
|
$
(25.1)
|
|
$
24.7
|
|
$
(80.3)
|
|
$
(27.6)
|
Free cash flow (Non-GAAP)
(4)
|
$
265.7
|
|
$
653.0
|
|
$
(524.3)
|
|
$
514.2
|
___________________
|
(1)
|
The cash provided
(required) by operating activities for the three months ended
December 31, 2023 and 2022 is the calculation of the twelve months
ended December 31, 2023 and 2022 less the previously reported nine
months ended September 30, 2023 and 2022, 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, 2023 and 2022 include proceeds of
$5.8 million and $50.5 million, respectively, 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.
Our use of free cash flow has limitations as an analytical tool and
should not be considered in isolation or as a substitute for an
analysis of our results under U.S. GAAP.
|
RECONCILIATION OF
REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE
CHANGE (NON-GAAP) (1)
(Unaudited)
|
|
|
Three Months Ended
December 31, 2023 vs. 2022
|
|
Twelve Months Ended
December 31, 2023 vs. 2022
|
Total Revenue Change (GAAP)
|
(29) %
|
|
(23) %
|
Less: Foreign Currency
Impact
|
1 %
|
|
(1) %
|
Organic Revenue Change
(Non-GAAP)
|
(30) %
|
|
(22) %
|
___________________
|
(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.
|
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO
FMC STOCKHOLDERS
(GAAP) TO RETURN ON INVESTED CAPITAL ("ROIC")
NUMERATOR
(NON-GAAP) AND ROIC (USING NON-GAAP
NUMERATOR)(1)
(Unaudited)
|
|
|
Twelve Months Ended
|
|
|
|
December 31, 2023
|
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
1,321.5
|
|
|
Interest expense, net,
net of income taxes
|
202.8
|
|
|
Corporate special
charges (income)
|
256.3
|
|
|
Income tax expense
(benefit) on Corporate special charges (income)
|
(32.8)
|
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income)
|
(1.6)
|
|
|
Discontinued
operations attributable to FMC stockholders, net of income
taxes
|
98.5
|
|
|
Tax
adjustments
|
(1,167.4)
|
|
|
ROIC numerator
(Non-GAAP)
|
677.3
|
|
|
|
|
|
|
|
December 31, 2023
|
|
December 31, 2022
|
Total debt
|
3,957.6
|
|
3,274.0
|
Total FMC
stockholders' equity
|
4,410.9
|
|
3,377.9
|
Total debt and FMC
stockholders' equity (GAAP)
|
8,368.5
|
|
6,651.9
|
ROIC denominator (2 yr
average total debt and FMC stockholders' equity)
|
7,510.2
|
|
|
|
|
|
|
ROIC (using Non-GAAP
numerator)
|
9.02 %
|
|
|
___________________
|
(1)
|
We believe ROIC
provides management and investors with useful supplemental
information regarding our utilization of capital provided by both
equity and debt as well as our working capital and free cash flow
management.
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(In millions)
|
December 31, 2023
|
|
December 31, 2022
|
Cash and cash
equivalents
|
$
302.4
|
|
$
572.0
|
Trade receivables, net
of allowance of $29.1 in 2023 and $33.9 in 2022
|
2,703.2
|
|
2,871.4
|
Inventories
|
1,724.6
|
|
1,651.6
|
Prepaid and other
current assets
|
398.9
|
|
343.6
|
Total current assets
|
$
5,129.1
|
|
$
5,438.6
|
Property, plant and
equipment, net
|
892.5
|
|
849.6
|
Goodwill
|
1,593.6
|
|
1,589.3
|
Other intangibles,
net
|
2,465.1
|
|
2,508.1
|
Deferred income
taxes
|
1,336.6
|
|
210.7
|
Other long-term
assets
|
509.3
|
|
575.0
|
Total assets
|
$
11,926.2
|
|
$
11,171.3
|
Short-term debt and
current portion of long-term debt
|
$
934.0
|
|
$
540.8
|
Accounts payable, trade
and other
|
602.4
|
|
1,252.2
|
Advanced payments from
customers
|
482.1
|
|
680.5
|
Accrued and other
liabilities
|
684.8
|
|
601.8
|
Accrued customer
rebates
|
480.9
|
|
465.3
|
Guarantees of vendor
financing
|
69.6
|
|
142.0
|
Accrued pensions and
other postretirement benefits, current
|
6.4
|
|
2.3
|
Income taxes
|
124.4
|
|
114.7
|
Total current liabilities
|
$
3,384.6
|
|
$
3,799.6
|
Long-term debt, less
current portion
|
$
3,023.6
|
|
$
2,733.2
|
Long-term
liabilities
|
1,084.6
|
|
1,237.6
|
Equity
|
4,433.4
|
|
3,400.9
|
Total liabilities and equity
|
$
11,926.2
|
|
$
11,171.3
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Year Ended December 31,
|
(In millions)
|
2023
|
|
2022
|
Cash provided
(required) by operating activities of continuing
operations
|
$
(300.3)
|
|
$
660.0
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(86.1)
|
|
(77.6)
|
|
|
|
|
Cash provided
(required) by investing activities of continuing
operations
|
(154.4)
|
|
(266.4)
|
|
|
|
|
Cash provided
(required) by financing activities of continuing
operations
|
331.5
|
|
(237.4)
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(60.3)
|
|
(23.4)
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
$
(269.6)
|
|
$
55.2
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
572.0
|
|
516.8
|
|
|
|
|
Cash and cash equivalents, end of
period
|
$
302.4
|
|
$
572.0
|
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SOURCE FMC Corporation