FMC CORPORATION PHILADELPHIA, Oct. 28, 2015 /PRNewswire/ --
Third Quarter 2015 Highlights
-- Consolidated revenues of $831 million, consolidated adjusted earnings
per diluted share of $0.42
-- Agricultural Solutions segment earnings of $59 million
-- Health and Nutrition segment earnings of $47 million
-- Lithium segment earnings of $2 million
-- Full-year adjusted earnings per share of $2.35 to $2.45
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FMC Corporation (NYSE: FMC) today reported third quarter revenue of $831 million, a 1 percent increase over the same period in 2014. The company reported a net loss of $2.4 million, or a loss of $0.02 per diluted share, in the third quarter of 2015, as compared to net income of $56 million, or $0.42 per diluted share, in the third quarter of 2014. Excluding certain gains and charges related to the exit of certain businesses and various restructuring charges, adjusted earnings were $0.42 per diluted share, as compared to the prior-year quarter adjusted earnings of $0.72 per diluted share. Adjusted EPS was lower primarily due to the impact of foreign currency headwinds, partially offset by lower operating costs and a lower tax rate.
Cost Reduction Restructuring Program
On October 12, 2015, FMC announced that it would expand and accelerate the Cheminova integration, reorganize the company's operations in Brazil, and increase cost savings targets to reduce enterprise-wide operating costs. Run-rate cost savings will be $140 million to $160 million, compared to the prior target of $90 million. FMC now expects total headcount reductions of 800 to 850 positions, an increase from the previous target of 500 to 550 positions. The majority of the actions to achieve these savings will be implemented within the next six months.
Pierre Brondeau, FMC president, CEO and chairman said: "Our October 12 announcement set out the difficult market conditions our Agricultural Solutions business is facing, particularly in Brazil, which are reflected in our third quarter results and our guidance for the remainder of the year. The actions we are taking will appropriately align Agricultural Solutions' business model and cost base to these market conditions. We are pleased with the faster-than-expected progress integrating Cheminova with FMC. Our combined product portfolio has allowed us to focus on higher margin, proprietary differentiated products and to restructure our cost position to better reflect current market opportunities. The cost reduction actions we have initiated will allow us to deliver an additional $50 million to $70 million of savings in 2016, compared to what we will deliver in 2015."
Segment Results
Third quarter results were significantly impacted by foreign exchange headwinds, particularly the rapid devaluation of the Brazilian real against the U.S. dollar. Outside Brazil, the rest of the FMC Agricultural Solutions segment performed in line with prior expectations. FMC's Health and Nutrition segment saw increased volumes from pharmaceutical applications, and delivered further improvement in operating margins. FMC Lithium continued to perform in line with expectations and saw encouraging demand and pricing trends across the portfolio. However, results for the Lithium business continue to be negatively impacted by inflation in Argentina.
FMC Agricultural Solutions
Third quarter revenue for FMC Agricultural Solutions was $578 million, an increase of 5 percent versus reported revenue for the prior-year quarter. Segment earnings were $59 million, a decline of 49 percent versus prior-year reported results. On a pro forma basis, as described in the Press Release Schedules on page 7, third quarter segment revenue declined 32 percent compared to the same period in 2014, and segment earnings were 49 percent lower compared to the third quarter of 2014, as price increases and ongoing cost reduction programs only partially offset the negative impact of foreign currency movements and reduced third-party sales.
Assuming the current foreign exchange rate for the Brazilian real remains stable through the end of 2015, full-year segment revenue is expected to be approximately $2.3 billion. Full-year segment earnings are expected to be in the range of $370 million to $390 million, with fourth quarter segment earnings in the range of $110 million to $130 million.
FMC Health and Nutrition
FMC Health and Nutrition third quarter revenue was $196 million, 3.5 percent lower versus the prior-year quarter. The business continued to experience higher demand for microcrystalline cellulose (MCC) products in pharmaceutical and nutrition applications and improved mix. However, the impact on revenue of the weaker euro compared to the same period last year more than offset the higher volumes in the quarter. Segment earnings of $47 million were up 7.5 percent compared to the prior-year quarter, as higher sales volumes, favorable raw material pricing and lower operating costs more than offset unfavorable foreign currency impacts. Segment revenue for the full year is anticipated to be approximately $800 million, while full-year segment earnings are expected to be between $193 million and $195 million. Fourth quarter segment earnings are expected to be in the range of $45 million to $47 million. Earnings growth is expected to be driven primarily by the ongoing demand in the health and pharmaceutical markets as well as the continued benefits of the operational improvements and restructuring programs implemented over the second half of the year.
FMC Lithium
FMC Lithium reported third quarter segment revenue of $57 million, a decrease of 15 percent from the prior-year quarter, and third quarter segment earnings of approximately $2 million, a decline of $3.5 million compared to the third quarter of 2014. Sales volumes declined due to lower third-party carbonate supply and the timing of the annual maintenance outage for the lithium hydroxide unit in Bessemer City, N.C. Operating efficiencies partially offset Argentina inflation, currency impacts and manufacturing costs from prior periods.
Demand for lithium remains strong and pricing trends continue to be favorable. Strategic sourcing agreements for lithium carbonate and the completion of the third quarter maintenance shutdowns are expected to deliver significantly higher sequential sales volumes in the fourth quarter. Recently implemented cost savings projects will also begin to have an increased impact near year end. Segment earnings are expected to be between $4 million and $6 million for the fourth quarter and between $16 and $18 million for the full year.
Corporate and Other
For the quarter, corporate and other expenses were $14 million, and net interest expense was $21 million. In the third quarter, depreciation and amortization was $38 million, and capital expenditures were $22 million. On September 30, 2015, gross consolidated debt was $2.2 billion, and debt, net of cash, was $2.0 billion. The Adjusted Tax Rate was 20 percent in the quarter and 25.5 percent in the first nine months of the year.
2015 Outlook
Adjusted earnings per share are expected to be in the range of $2.35 to $2.45 for the full year 2015.
Webcast and Supplemental Information
The company will post supplemental information on the web at www.FMC.com, including its 2015 Outlook Statement, definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.
About FMC
For more than a century, FMC Corporation has served the global agricultural, industrial and consumer markets with innovative solutions, applications and quality products. FMC acquired Cheminova in April of 2015. Pro forma revenue totaled approximately $4.5 billion in 2014. FMC employs approximately 6,600 people throughout the world and operates its businesses in three segments: FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium. For more information, visit www.FMC.com.
Safe Harbor Statement under the Private Securities Act of 1995: Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning specific factors described in FMC Corporation's 2014 Form 10-K and other SEC filings. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. FMC Corporation does not intend to update this information and disclaims any legal obligation to the contrary. Historical information is not necessarily indicative of future performance.
FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share amounts)
-------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Revenue $830.7 $819.1 $2,377.2 $2,370.9
Costs of sales and services 610.4 535.6 1,600.4 1,478.3
Gross margin 220.3 283.5 776.8 892.6
----- ----- ----- -----
Selling, general and administrative expenses 137.0 140.7 590.9 374.9
Research and development expenses 37.2 30.2 102.8 88.5
Restructuring and other charges (income) 45.6 35.6 78.2 44.9
Business separation costs - 6.8 - 23.6
Total costs and expenses 830.2 748.9 2,372.3 2,010.2
----- ----- ------- -------
Income (loss) from operations 0.5 70.2 4.9 360.7
Equity in (earnings) loss of affiliates - 0.1 - (0.2)
Interest expense, net 20.2 12.8 58.9 37.6
Income (loss) from continuing operations before income taxes (19.7) 57.3 (54.0) 323.3
Provision (benefit) for income taxes (25.1) 3.6 (56.4) 74.6
Income (loss) from continuing operations 5.4 53.7 2.4 248.7
Discontinued operations, net of income taxes (5.0) 6.4 698.8 (4.9)
Net income (loss) $0.4 $60.1 $701.2 $243.8
---- ----- ------ ------
Less: Net income attributable to noncontrolling interests 2.8 3.8 8.1 12.8
Net income (loss) attributable to FMC stockholders $(2.4) $56.3 $693.1 $231.0
===== ===== ====== ======
Amounts attributable to FMC stockholders:
Income (loss) from continuing operations, net of tax $2.6 $51.6 $(5.7) $241.1
Discontinued operations, net of tax (5.0) 4.7 698.8 (10.1)
Net income (loss) $(2.4) $56.3 $693.1 $231.0
===== ===== ====== ======
Basic earnings (loss) per common share attributable to FMC stockholders:
Continuing operations $0.02 $0.39 $(0.04) $1.81
Discontinued operations (0.04) 0.03 5.22 (0.08)
Basic earnings per common share $(0.02) $0.42 $5.18 $1.73
====== ===== ===== =====
Average number of shares outstanding used in basic earnings per share computations 133.8 133.4 133.7 133.3
===== ===== ===== =====
Diluted earnings (loss) per common share attributable to FMC stockholders:
Continuing operations $0.02 $0.39 $(0.04) $1.80
Discontinued operations (0.04) 0.03 5.22 (0.08)
Diluted earnings per common share $(0.02) $0.42 $5.18 $1.72
====== ===== ===== =====
Average number of shares outstanding used in diluted earnings per share computations 134.4 134.3 133.7 134.3
===== ===== ===== =====
Other Data:
-----------
Capital additions $31.6 $42.0 $76.1 $121.1
Depreciation and amortization expense $38.0 $23.0 $92.2 $70.9
FMC CORPORATION
SCHEDULE OF ADJUSTED EARNINGS FROM CONTINUING OPERATIONS (NON-GAAP)(2)
(Unaudited, in millions, except per share amounts)
-------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Revenue $830.7 $819.1 $2,377.2 $2,370.9
Costs of sales and
services 581.6 535.6 1,552.3 1,474.1
Gross margin 249.1 283.5 824.9 896.8
----- ----- ----- -----
Selling, general and
administrative
expenses 117.3 102.7 345.1 330.0
Research and
development expenses 37.2 30.2 102.8 88.5
Equity in (earnings)
loss of affiliates - 0.1 - (0.2)
--- --- --- ----
Total costs and
expenses 736.1 668.6 2,000.2 1,892.4
Adjusted earnings from
continuing operations,
before interest,
income taxes and
noncontrolling
interests (Non-GAAP)
(1) $94.6 $150.5 $377.0 $478.5
Interest expense, net 20.2 12.8 58.9 37.6
Adjusted earnings from
continuing operations,
before income taxes
and noncontrolling
interests $74.4 $137.7 $318.1 $440.9
Provision for income
taxes 15.2 39.2 81.1 120.8
Net income attributable
to noncontrolling
interests 2.8 2.1 8.1 7.6
--- --- --- ---
Adjusted after-tax
earnings from
continuing operations,
attributable to FMC
stockholders (Non-
GAAP) (2) $56.4 $96.4 $228.9 $312.5
===== ===== ====== ======
Diluted adjusted after-
tax earnings from
continuing operations
per share,
attributable to FMC
stockholders $0.42 $0.72 $1.70 $2.33
===== ===== ===== =====
Average number of
shares outstanding
used in diluted
adjusted after-tax
earnings from
continuing operations
per share computations
(3) 134.4 134.3 134.4 134.3
===== ===== ===== =====
(1) Referred to as
Adjusted
Operating
Profit.
(2) The Company
believes that
the Non-GAAP
financial
measure
"Adjusted
After-Tax
Earnings from
Continuing
Operations,
attributable
to FMC
Stockholders",
and its
presentation
on a per
share basis,
provides
useful
information
about the
Company's
operating
results to
investors .
Adjusted
Earnings
excludes the
effects of
Corporate
special
charges, Non-
GAAP tax
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.
Additionally,
the above
schedule is
presented in
a format
which
reflects the
manner in
which we
manage our
business and
is not in
accordance
with GAAP.
(3) The average
number of
shares
outstanding
used in the
nine months
ended
September 30,
2015 diluted
adjusted
after-tax
earnings from
continuing
operations
per share
computation
(Non-GAAP)
includes 0.7
million
diluted
shares. This
number of
shares
differs from
the average
number of
shares
outstanding
used in
diluted
earnings per
share
computations
(GAAP) as we
had a net
loss from
continuing
operations
attributable
to FMC
stockholders.
Please see the reconciliation of Non-GAAP financial measures to GAAP financial results.
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, in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
2015 2014 2015 2014
---- ---- ---- ----
Net income (loss)
attributable to FMC
stockholders (GAAP) $(2.4) $56.3 $693.1 $231.0
Corporate special charges (income):
Restructuring and other
charges (income) (a) 45.6 35.6 78.2 44.9
Non-operating pension
and postretirement
charges (b) 5.5 1.5 19.9 8.4
Business separation
costs (c) - 6.8 - 23.6
Acquisition-related
charges (d) 43.0 36.5 274.0 40.7
Income tax expense
(benefit) on Corporate
special charges
(income) (13.7) (27.7) (113.8) (40.8)
Discontinued operations
attributable to FMC
stockholders, net of
income taxes (e) 5.0 (4.7) (698.8) 10.1
Non-GAAP tax
adjustments (f) (26.6) (7.9) (23.7) (5.4)
Adjusted after-tax
earnings from
continuing operations
attributable to FMC
stockholders (Non-
GAAP) $56.4 $96.4 $228.9 $312.5
===== ===== ====== ======
Diluted earnings per
common share (GAAP) $(0.02) $0.42 $5.18 $1.72
Corporate special charges (income) per
diluted share, before tax:
Restructuring and other
charges (income) 0.34 0.27 0.58 0.34
Non-operating pension
and postretirement
charges 0.04 0.01 0.15 0.06
Business separation
costs - 0.05 - 0.17
Acquisition-related
charges 0.32 0.27 2.04 0.30
Income tax expense
(benefit) on Corporate
special charges
(income), per diluted
share (0.10) (0.21) (0.85) (0.30)
Discontinued operations
per diluted share 0.04 (0.03) (5.22) 0.08
Non-GAAP tax
adjustments per diluted
share (0.20) (0.06) (0.18) (0.04)
Diluted adjusted after-
tax earnings from
continuing operations
per share, attributable
to FMC stockholders
(Non-GAAP) $0.42 $0.72 $1.70 $2.33
===== ===== ===== =====
Average number of shares
outstanding used in
diluted adjusted after-
tax earnings from
continuing operations
per share computations 134.4 134.3 134.4 134.3
===== ===== ===== =====
(a) Three Months Ended September 30,
2015:
Restructuring and other charges
(income) includes a charge of
$50.7 million, primarily related
to exit of generic crop
protection business in Brazil and
severance associated with the
integration of Cheminova, a
charge of $16.6 million
associated with the
reorganization of our FMC Health
and Nutrition segment, of which,
$11.9 million was due to the sale
of our pectin manufacturing
business. Remaining restructuring
and charges included net
miscellaneous charges of $2.0
million. Offsetting these charges
was other income associated with
sale of our remaining ownership
interest in a Belgian-based
pesticide distribution company
for $26.6 million, slightly
offset by charges from continuing
environmental sites treated as a
Corporate charge of $2.9 million.
Three Months Ended September 30,
2014:
Restructuring and other charges
(income) includes a charge of
$17.0 million associated with a
license agreement entered into by
our FMC Agricultural Solutions
segment for the purpose of
obtaining certain technology and
intellectual property rights
relating to new compounds still
under development. Additionally,
this amount includes charges
associated with continuing
environmental sites treated as a
Corporate charge of $17.3
million. Remaining restructuring
and other charges (income)
includes net miscellaneous
charges of $1.3 million.
Nine Months Ended September 30,
2015:
Restructuring and other charges
(income) includes a charge of
$55.5 million, primarily related
to exit of generic crop
protection business in Brazil of
$40.1 million and severance
associated with the integration
of Cheminova of $12.2 million, a
charge of $20.5 million
associated with the
reorganization of our FMC Health
and Nutrition segment, of which,
$11.9 million was due to the sale
of our pectin manufacturing
business. Remaining restructuring
and charges included net
miscellaneous charges of $5.5
million. Offsetting these charges
was other income associated with
sale of our remaining ownership
interest in a Belgian-based
pesticide distribution company
for $26.6 million, slightly
offset by charges from continuing
environmental sites treated as a
Corporate charge of $8.3 million
and a charge of $15.0 million
associated with a license
agreement entered into for the
purpose of obtaining certain
technology and intellectual
property rights relating to new
compounds still under development
both of which pertain our FMC
Agricultural Solutions segment.
Nine Months Ended September 30,
2014:
Restructuring and other charges
(income) includes a charge of
$5.8 million associated with a
reorganization of our Health and
Nutrition segment, as well as a
charge of $17.0 million
associated a license agreement
entered into by our FMC
Agricultural Solutions segment
for the purpose of obtaining
certain technology and
intellectual property rights
relating to new compounds still
under development. Additionally,
this amount includes charges
associated with continuing
environmental sites treated as a
Corporate charge of $20.0
million. Remaining restructuring
and other charges (income)
includes net miscellaneous
charges of $2.1 million.
(b) Our non-operating pension and
postretirement costs are defined
as those costs related to
interest, expected return on plan
assets, amortized actuarial gains
and losses and the impacts of any
plan curtailments or settlements.
These costs 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 exclude these
non-operating pension and
postretirement costs from our
segments as we believe that
removing them provides a better
understanding of the underlying
profitability of our businesses,
provides increased transparency
and clarity in the performance of
our retirement plans and enhances
period-over-period
comparability. We continue to
include the service cost and
amortization of prior service
cost in our Adjusted Earnings
results noted above. We believe
these elements reflect the
current year operating costs to
our businesses for the employment
benefits provided to active
employees.
(c) There were no charges for the
three and nine months ended
September 30, 2015. On September
8, 2014, we announced that we
will no longer proceed with the
planned separation as a result of
the planned acquisition of
Cheminova A/S and divestiture of
our FMC Alkali Chemicals
division. Business separation
costs for the three and nine
months ended September 30, 2014
represent charges associated with
the planned separation activities
through September 8, 2014.
(d) Charges related to the expensing
of the inventory fair value step-
up resulting from the application
of acquisition accounting, legal
and professional fees and gains
or losses on hedging purchase
price associated with the planned
or completed acquisitions.
Amounts represent the following:
Three Months Ended Nine Months Ended
September 30 September 30
------------
(in Millions) 2015 2014 2015 2014
---- ---- ---- ----
Acquisition-related charges -
Cheminova A/S
Legal and professional fees (1) $14.2 $15.3 $53.8 $15.3
Inventory fair value amortization
(2) 28.8 - 48.1 -
Loss/(gain) on hedging purchase
price (1) - 21.2 172.1 21.2
Acquisition-related charges - Epax
Inventory fair value amortization
(2) - - - 4.2
Acquisition-related charges $43.0 $36.5 $274.0 $40.7
===== ===== ====== =====
(1) On the condensed consolidated statements of income (loss), these
charges are included in "Selling, general and administrative
expenses."
(2) On the condensed consolidated statements of income (loss), these
charges are included in "Costs of sales and services."
(e) Three and Nine Months Ended September
30, 2015
Discontinued operations includes our FMC
Alkali Chemicals division as well as
provisions, net of recoveries, for
environmental liabilities and legal
reserves and expenses related to
previously discontinued operations. The
nine months ended September 30, 2015
includes the divestiture gain of
approximately $700 million associated
with the sale of FMC Alkali Chemicals
division which was completed on April
1, 2015.
Three and Nine Months Ended September
30, 2014
Discontinued operations includes our FMC
Alkali and FMC Peroxygens business
results as well as provisions, net of
recoveries, for environmental
liabilities and legal reserves and
expenses related to previously
discontinued operations. The nine
months ended September 30, 2014
includes the final divestiture charge
associated with the sale of FMC
Peroxygens business which was completed
on February 28, 2014.
(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 projected annual Non-GAAP
effective tax rate. The GAAP tax
provision includes certain discrete tax
items including, but are 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 Nine Months Ended
September 30 September 30
------------
(in Millions) 2015 2014 2015 2014
---- ---- ---- ----
Non-GAAP tax adjustments:
Revisions to our tax liabilities due to
finalization of prior year tax returns $(0.9) $(1.2) $0.1 $(0.2)
Revisions to valuation allowances of
historical deferred tax assets - - 7.6 -
Foreign currency remeasurement and
foreign currency discrete items (25.7) (6.7) (31.4) (5.2)
Non-GAAP tax adjustments $(26.6) $(7.9) $(23.7) $(5.4)
====== ===== ====== =====
RECONCILIATION OF NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING OPERATIONS, BEFORE INTEREST AND INCOME TAXES (NON-GAAP)
(Unaudited, in millions)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Net income (loss)
(GAAP) $0.4 $60.1 $701.2 $243.8
Restructuring and other
charges (income) 45.6 35.6 78.2 44.9
Non-operating pension
and postretirement
charges 5.5 1.5 19.9 8.4
Business separation
costs - 6.8 - 23.6
Acquisition-related
charges 43.0 36.5 274.0 40.7
Discontinued
operations, net of
income taxes 5.0 (6.4) (698.8) 4.9
Interest expense, net 20.2 12.8 58.9 37.6
Provision (benefit) for
income taxes (25.1) 3.6 (56.4) 74.6
----- --- ----- ----
Adjusted earnings from
continuing operations,
before interest,
income taxes and
noncontrolling
interests (Non-GAAP)
(1) $94.6 $150.5 $377.0 $478.5
===== ====== ====== ======
(1) Referred
to as
Adjusted
Operating
Profit.
FMC CORPORATION
INDUSTRY SEGMENT DATA
(Unaudited, in millions)
-----------------------
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Revenue
-------
FMC Agricultural
Solutions $577.6 $548.8 $1,595.6 $1,546.9
FMC Health and Nutrition 195.9 203.1 613.5 636.4
FMC Lithium 57.2 67.2 168.1 187.6
Total $830.7 $819.1 $2,377.2 $2,370.9
====== ====== ======== ========
Income from continuing operations
before income taxes
---------------------------------
FMC Agricultural
Solutions 59.4 116.7 262.6 367.5
FMC Health and Nutrition 47.0 43.7 148.5 143.7
FMC Lithium 1.8 5.3 11.9 19.4
Segment operating profit
(a) 108.2 165.7 423.0 530.6
----- ----- ----- -----
Corporate and other (13.6) (15.2) (46.0) (52.1)
Adjusted earnings from
continuing operations,
before interest, income
taxes and
noncontrolling
interests (Non-GAAP) $94.6 $150.5 $377.0 $478.5
----- ------ ------ ------
Interest expense, net (20.2) (12.8) (58.9) (37.6)
Corporate special (charges) income:
Restructuring and other
(charges) income (b) (45.6) (35.6) (78.2) (44.9)
Non-operating pension
and postretirement
charges (c) (5.5) (1.5) (19.9) (8.4)
Business separation
charges (d) - (6.8) - (23.6)
Acquisition-related
charges (e) (43.0) (36.5) (274.0) (40.7)
(Provision) benefit for
income taxes 25.1 (3.6) 56.4 (74.6)
Discontinued operations,
net of income taxes (f) (5.0) 6.4 698.8 (4.9)
Net income attributable
to noncontrolling
interests (2.8) (3.8) (8.1) (12.8)
---- ---- ---- -----
Net income (loss)
attributable to FMC
stockholders $(2.4) $56.3 $693.1 $231.0
===== ===== ====== ======
(a) Referred to
as Segment
Earnings.
(b) Below
provides the
details of
restructuring
and other
charges
(income) by
segment.
Three Months Ended September 30 Nine Months Ended September 30
------------------------------- ------------------------------
2015 2014 2015 2014
---- ---- ---- ----
FMC Agricultural Solutions $(24.1) $(17.0) $(47.2) $(17.0)
FMC Health and Nutrition (16.6) - (20.6) (5.9)
FMC Lithium - (0.1) (0.5) -
Corporate (4.9) (18.5) (9.9) (22.0)
Restructuring and other (charges) income $(45.6) $(35.6) $(78.2) $(44.9)
====== ====== ====== ======
(c) See Note (b)
to the
schedule
"Reconciliation
of Net
Income
(Loss)
Attributable
to FMC
Stockholders
(GAAP) to
Adjusted
After-Tax
Earnings
from
Continuing
Operations,
Attributable
to FMC
Stockholders
(Non-GAAP)"
for further
details on
the
components
that make up
this line
item.
(d) See Note (c)
to the
schedule
"Reconciliation
of Net
Income
(Loss)
Attributable
to FMC
Stockholders
(GAAP) to
Adjusted
After-Tax
Earnings
from
Continuing
Operations,
Attributable
to FMC
Stockholders
(Non-GAAP)"
for further
details on
the
components
that make up
this line
item.
(e) See Note (d)
to the
schedule
"Reconciliation
of Net
Income
(Loss)
Attributable
to FMC
Stockholders
(GAAP) to
Adjusted
After-Tax
Earnings
from
Continuing
Operations,
Attributable
to FMC
Stockholders
(Non-GAAP)"
for further
details on
the
components
that make up
this line
item.
(f) See Note (e)
to the
schedule
"Reconciliation
of Net
Income
(Loss)
Attributable
to FMC
Stockholders
(GAAP) to
Adjusted
After-Tax
Earnings
from
Continuing
Operations,
Attributable
to FMC
Stockholders
(Non-GAAP)"
for further
details on
the
components
that make up
this line
item.
FMC CORPORATION
FMC AGRICULTURAL SOLUTIONS PRO FORMA FINANCIAL RESULTS
(Unaudited, in millions)
-----------------------
In the second quarter of 2015, we began to present pro forma combined results for the FMC Agricultural Solutions segment for 2015 and 2014. We believe that reviewing our operating results by combining actual and pro forma results for the FMC Agricultural Solutions segment for 2015 and 2014 is more
useful in identifying trends in, or reaching conclusions regarding, the overall operating performance of this segment. Our pro forma segment information will include adjustments as if the Cheminova transaction had occurred on January 1, 2014. Our pro forma data will also be adjusted for the effects
of acquisition accounting but will not include adjustments for cost related to integration activities, cost savings or synergies that might be achieved by the combined businesses. Pro forma amounts to be presented will not necessarily be indicative of what our results would have been had we operated
Cheminova since January 1, 2014, nor our future results. We believe that reviewing our operating results by combining actual and pro forma results for the FMC Agricultural Solutions segment for these interim periods is more useful in identifying trends in, or reaching conclusions regarding, the
overall operating performance of the segment.
FMC Agricultural Solutions Pro Forma Financial Results
Three Months Ended September 30 Nine Months Ended September 30
-------------------------------
(in Millions) 2015 2014 2015 2014
---- ---- ---- ----
Revenue
Revenue, FMC Agricultural Solutions, as reported (1) $577.6 $548.8 $1,595.6 $1,546.9
Revenue, Cheminova, pro forma (2) - 305.4 362.0 999.1
Pro Forma Combined, Revenue (3) $577.6 $854.2 $1,957.6 $2,546.0
====== ====== ======== ========
Operating Profit
Operating Profit, FMC Agricultural Solutions, as reported (1) $59.4 $116.7 $262.6 $367.5
Operating Profit, Cheminova, pro forma (2) - (1.4) 19.9 58.1
Pro Forma Combined, Operating Profit (3) $59.4 $115.3 $282.5 $425.6
===== ====== ====== ======
(1) As reported
amounts are
the results
of operations
of FMC
Agricultural
Solutions,
including the
results of
the Cheminova
acquisition
from April
21, 2015
onward.
(2) Cheminova pro
forma amounts
include the
historical
results of
Cheminova,
prior to
April 21,
2015. These
amounts also
include
adjustments
as if the
Cheminova
transaction
had occurred
on January 1,
2014,
including the
effects of
acquisition
accounting.
The pro forma
amounts do
not include
adjustments
for expenses
related to
integration
activities,
cost savings
or synergies
that may have
been or may
be achieved
by the
combined
segment.
(3) The pro forma
combined
amounts are
not
necessarily
indicative of
what the
results would
have been had
we acquired
Cheminova on
January 1,
2014 or
indicative of
future
results.
FMC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
-----------------------
September 30, December 31,
2015 2014
-------------- -------------
Cash and
cash
equivalents $173.7 $109.5
Trade
receivables,
net 1,689.6 1,602.5
Inventories 906.1 607.6
Other
current
assets 251.3 188.8
Deferred
income
taxes 158.1 222.7
Current
assets
held for
sale 59.3 203.3
---- -----
Total
current
assets 3,238.1 2,934.4
Property,
plant and
equipment,
net 1,082.8 930.0
Goodwill 733.5 352.5
Other
intangibles,
net 847.7 246.9
Deferred
income
taxes 208.1 200.1
Other
long-
term
assets 336.8 275.1
Noncurrent
assets
held for
sale - 401.5
Total
assets $6,447.0 $5,340.5
======== ========
Short-
term
debt and
current
portion
of long-
term
debt $121.2 $525.2
Accounts
payable,
trade
and
other 484.2 378.3
Accrued
customer
rebates 357.3 236.0
Guarantees
of
vendor
financing 65.7 50.2
Accrued
pensions
and
other
postretirement
benefits,
current 6.6 12.7
Other
current
liabilities 419.8 619.6
Current
liabilities
held for
sale 0.2 88.4
--- ----
Total
current
liabilities 1,455.0 1,910.4
Long-
term
debt 2,048.5 1,153.4
Long-
term
liabilities 788.9 708.0
Long-
term
liabilities
held for
sale - 4.7
Equity 2,154.6 1,564.0
Total
liabilities
and
equity $6,447.0 $5,340.5
======== ========
FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
-----------------------
Nine Months ended September 30
------------------------------
2015 2014
---- ----
Cash provided
(required) by
operating
activities of
continuing
operations
(1) $(246.8) $132.4
------- ------
Cash provided
(required) by
operating
activities of
discontinued
operations (63.7) 69.3
----- ----
Cash provided
(required) by
investing
activities of
continuing
operations (1,281.7) (167.8)
-------- ------
Cash provided
(required) by
investing
activities of
discontinued
operations 1,634.3 168.4
------- -----
Cash provided (required) by
financing activities of
continuing operations:
Increase
(decrease) in
short-term
debt (537.6) (101.2)
Financing fees - (8.8)
Repayments of
long-term
debt (1,024.4) (17.7)
Proceeds from
borrowings of
long-term
debt 1,650.1 -
Net
distributions
to and
acquisitions
of
noncontrolling
interests - (21.4)
Dividends paid (64.3) (58.1)
Other
repurchases
of common
stock (3.2) (4.3)
Excess tax
benefits from
share-based
compensation 1.6 4.4
Issuances of
common stock,
net 5.8 7.5
Cash provided
(required) by
financing
activities 28.0 (199.6)
---- ------
Effect of
exchange rate
changes on
cash (5.9) (1.6)
---- ----
Increase
(decrease) in
cash and cash
equivalents 64.2 1.1
Cash and cash
equivalents,
beginning of
year 109.5 123.2
Cash and cash
equivalents,
end of period $173.7 $124.3
====== ======
(1) The nine
months ended
September 30,
2015 includes
$264.8
million in
payments
associated
with the
Cheminova
acquisition
purchase
price hedges
and
approximately
$239 million
in U.S.
federal
income tax
payments
principally
driven by the
sale of our
Alkali
Chemicals
business.
Exhibit 99.2
Schedule of Adjusted Earnings From Continuing
Operations (Non-GAAP) Recasting
As a global enterprise, our tax expense can be
impacted by changes in tax rates or laws, the
finalization of tax audits and reviews, and the
impact of fluctuations in foreign currency
remeasurement, as well as other discrete items.
As a result, we can experience significant
volatility in our tax provision as a result of
factors unrelated to ongoing business operations.
Management believes that excluding this
volatility assists investors in understanding the
Adjusted Earnings tax provision and the effective
tax rate related to ongoing operations thereby
providing investors with useful supplemental
information about FMC's operational performance.
Historically, we have excluded most of these
types of items for our Adjusted Earnings tax
provision. However, we have not historically
excluded the tax impact of fluctuations of
foreign currency remeasurement. This
remeasurement is primarily associated with U.S.
dollar denominated monetary assets and
liabilities of our foreign subsidiaries whose
functional currency is the U.S. dollar. In these
instances, changes in the exchange rate between
the U.S. dollar and the statutory foreign
currency give rise to a tax effect, even though
there is no corresponding pre-tax exchange rate
gain or loss in the remeasured financial
statements. Significant volatility between the
U.S dollar and the statutory foreign currency
(most recently, for instance, the volatility in
the Brazilian real) creates significant
volatility in our GAAP tax provision. We will now
be excluding the effect of these items from our
adjusted earning tax provision for the reasons
described herein.
Prospectively, we will exclude the GAAP tax
provision, including all discrete items, from our
Non-GAAP measure of income, and instead include
a Non-GAAP tax provision based upon the
projected annual Non-GAAP effective tax rate.
The difference between the GAAP tax provision and
our Non-GAAP tax provision will be referred to
as "Non-GAAP tax adjustments" and will be
presented as a reconciling item within our
Reconciliation of Net Income (Loss) attributable
to FMC Stockholders (GAAP) to Adjusted After-Tax
Earnings from Continuing Operations, attributable
to FMC Stockholders (Non-GAAP).
This Exhibit 99.2 provides the recasted quarterly
periods of 2015 and 2014 to recast our Adjusted
Earnings tax provision for the impacts of the
foreign currency remeasurement and foreign
currency discrete items. We are providing this
information to assist investors and securities
analysts in understanding the impact of this
change on recent historical periods. The column
labeled as "Adj." below provides the impact, each
period, of this change on both the Adjusted
Earnings tax provision and earnings per a share.
FMC CORPORATION
RECASTED - SCHEDULE OF ADJUSTED EARNINGS FROM CONTINUING OPERATIONS (NON-GAAP)
(Unaudited, in millions, except per share amounts)
-------------------------------------------------
2015
----
1Q 2Q
--- ---
As filed Adj. Recasted As filed Adj. Recasted
-------- -------- -------- --------
Revenue $659.4 $ - $659.4 $887.1 $ - $887.1
Costs of sales and services 408.7 - 408.7 562.0 - 562.0
Gross margin 250.7 - 250.7 325.1 - 325.1
----- --- ----- ----- --- -----
Selling, general and
administrative expenses 101.0 - 101.0 126.8 - 126.8
Research and development
expenses 26.6 - 26.6 39.0 - 39.0
Equity in (earnings) loss
of affiliates 0.1 - 0.1 (0.1) - (0.1)
Total costs and expenses 536.4 - 536.4 727.7 - 727.7
Adjusted earnings from
continuing operations,
before interest, income
taxes and noncontrolling
interests (1) $123.0 $ - $123.0 $159.4 $ - $159.4
Interest expense, net 14.0 - 14.0 24.7 - 24.7
Adjusted earnings from
continuing operations,
before income taxes and
noncontrolling interests $109.0 $ - $109.0 $134.7 $ - $134.7
Provision for income taxes 23.9 6.1 30.0 36.4 (0.4) 36.0
Net income attributable to
noncontrolling interests 1.3 - 1.3 4.0 - 4.0
Adjusted after-tax
earnings from continuing
operations, attributable
to FMC stockholders (Non-
GAAP) (2) $83.8 $(6.1) $77.7 $94.3 $0.4 $94.7
===== ===== ===== ===== ==== =====
Diluted adjusted after-tax
earnings from continuing
operations per share,
attributable to FMC
stockholders (Non-GAAP)
(3) $0.62 $(0.04) $0.58 $0.70 $ - $0.70
Reconciling items to
diluted earnings per
common share (3) (0.97) 0.04 (0.93) 4.82 - 4.82
Diluted earnings per common
share (GAAP) (3) $(0.35) $ - $(0.35) $5.52 $ - $5.52
====== === === ====== ===== === === =====
(1) Referred to as Adjusted Operating
Profit.
(2) The Company believes that the Non-
GAAP financial measure "Adjusted
After-Tax Earnings from
Continuing Operations,
attributable to FMC
Stockholders", and its
presentation on a per share
basis, provides useful
information about the Company's
operating results to investors.
Adjusted Earnings excludes the
effects of Corporate special
charges, Non-GAAP tax
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. Additionally, the
above schedule is presented in a
format which reflects the manner
in which we manage our business
and is not in accordance with
GAAP.
(3) The sum of quarterly earnings per
common share may differ from the
full year amounts due to
rounding.
FMC CORPORATION
RECASTED - SCHEDULE OF ADJUSTED EARNINGS FROM CONTINUING OPERATIONS (NON-GAAP)
(Unaudited, in millions, except per share amounts)
-------------------------------------------------
2014
----
1Q 2Q 3Q 4Q
--- --- --- ---
As filed Adj. Recasted As filed Adj. Recasted As filed Adj. Recasted As filed Adj. Recasted
-------- -------- -------- -------- -------- -------- -------- --------
Revenue $756.9 $ - $756.9 $794.9 $ - $794.9 $819.1 $ - $819.1 $887.8 $ - $887.8
Costs of sales and services 460.8 - 460.8 477.7 - 477.7 535.6 - 535.6 569.5 - 569.5
Gross margin 296.1 - 296.1 317.2 - 317.2 283.5 - 283.5 318.3 - 318.3
----- --- ----- ----- --- ----- ----- --- ----- ----- --- -----
Selling, general and administrative
expenses 110.4 - 110.4 116.9 - 116.9 102.7 - 102.7 117.5 - 117.5
Research and development expenses 25.8 - 25.8 32.5 - 32.5 30.2 - 30.2 37.8 - 37.8
Equity in (earnings) loss of affiliates (0.3) - (0.3) - - - 0.1 - 0.1 - - -
Total costs and expenses 596.7 - 596.7 627.1 - 627.1 668.6 - 668.6 724.8 - 724.8
Adjusted earnings from continuing
operations, before interest, income
taxes and noncontrolling interests (1) $160.2 $ - $160.2 $167.8 $ - $167.8 $150.5 $ - $150.5 $163.0 $ - $163.0
Interest expense, net 11.6 - 11.6 13.2 - 13.2 12.8 - 12.8 13.6 - 13.6
Adjusted earnings from continuing
operations, before income taxes and
noncontrolling interests $148.6 $ - $148.6 $154.6 $ - $154.6 $137.7 $ - $137.7 $149.4 $ - $149.4
Provision for income taxes 40.4 - 40.4 42.7 (1.5) 41.2 32.5 6.7 39.2 27.2 6.1 33.3
Net income attributable to noncontrolling
interests 3.2 - 3.2 2.3 - 2.3 2.1 - 2.1 1.8 - 1.8
Adjusted after-tax earnings from
continuing operations, attributable to
FMC stockholders (Non-GAAP) (2) $105.0 $ - $105.0 $109.6 $1.5 $111.1 $103.1 $(6.7) $96.4 $120.4 $(6.1) $114.3
====== === === ====== ====== ==== ====== ====== ===== ===== ====== ===== ======
Diluted adjusted after-tax earnings from
continuing operations per share,
attributable to FMC stockholders (Non-
GAAP) (3) $0.78 $ - $0.78 $0.82 $0.01 $0.83 $0.77 $(0.05) $0.72 $0.90 $(0.05) $0.85
Reconciling items to diluted earnings per
common share (3) (0.29) - (0.29) (0.01) (0.01) (0.02) (0.35) 0.05 (0.30) (0.33) 0.05 (0.28)
Diluted earnings per common share (GAAP)
(3) $0.49 $ - $0.49 $0.81 $ - $0.81 $0.42 $ - $0.42 $0.57 $ - $0.57
===== === === ===== ===== === === ===== ===== === === ===== ===== === === =====
(1) Referred to as Adjusted Operating
Profit.
(2) The Company believes that the Non-
GAAP financial measure "Adjusted
After-Tax Earnings from
Continuing Operations,
attributable to FMC
Stockholders", and its
presentation on a per share
basis, provides useful
information about the Company's
operating results to investors.
Adjusted Earnings excludes the
effects of Corporate special
charges, Non-GAAP tax
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. Additionally, the
above schedule is presented in a
format which reflects the manner
in which we manage our business
and is not in accordance with
GAAP.
(3) The sum of quarterly earnings per
common share may differ from the
full year amounts due to
rounding.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/fmc-corporation-announces-third-quarter-results-300168243.html
SOURCE FMC Corporation
