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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________
 FORM 10-Q
_______________________________________________________________________
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2019
or
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File Number 1-2376
__________________________________________________________________________
FMC CORPORATION
(Exact name of registrant as specified in its charter)
__________________________________________________________________________ 
Delaware
 
94-0479804
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
2929 Walnut Street
Philadelphia, Pennsylvania
 
19104
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: 215-299-6000
__________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, par value $0.10 per share
 
FMC
 
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
x
  
Accelerated filer
 
o
 
 
 
 
 
 
 
Non-accelerated filer
 
o
  
Smaller reporting company
 
o
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company
 
o
 
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  o    No  x

As of March 31, 2019, there were 131,657,750 of the registrant's common shares outstanding.


FMC CORPORATION
INDEX
 
 
Page
No.
3
3
3
4
5
6
9
10
33
46
46
48
48
48
49
49
49
50


2

PART I - FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
 
 
Three Months Ended March 31,
2019

2018
(in Millions, Except Per Share Data)
(unaudited)
Revenue
$
1,192.1


$
1,107.9

Costs and Expenses



Costs of sales and services
647.4


605.4

Gross margin
$
544.7


$
502.5

Selling, general and administrative expenses
183.9


192.5

Research and development expenses
71.2


64.9

Restructuring and other charges (income)
7.8


(79.9
)
Total costs and expenses
$
910.3


$
782.9

Income from continuing operations before equity in (earnings) loss of affiliates, non-operating pension and postretirement charges (income), interest expense, net and income taxes
$
281.8


$
325.0

Equity in (earnings) loss of affiliates
—


(0.1
)
Non-operating pension and postretirement charges (income)
3.4


0.5

Interest expense, net
34.5


33.9

Income (loss) from continuing operations before income taxes
$
243.9


$
290.7

Provision (benefit) for income taxes
36.3


60.5

Income (loss) from continuing operations
$
207.6


$
230.2

Discontinued operations, net of income taxes
9.6


39.4

Net income (loss)
$
217.2


$
269.6

Less: Net income (loss) attributable to noncontrolling interests
1.5


2.4

Net income (loss) attributable to FMC stockholders
$
215.7


$
267.2

Amounts attributable to FMC stockholders:



Continuing operations, net of income taxes
$
206.1


$
227.8

Discontinued operations, net of income taxes
9.6


39.4

Net income (loss) attributable to FMC stockholders
$
215.7


$
267.2

Basic earnings (loss) per common share attributable to FMC stockholders:



Continuing operations
$
1.56


$
1.69

Discontinued operations
0.07


0.29

Net income (loss) attributable to FMC stockholders
$
1.63


$
1.98

Diluted earnings (loss) per common share attributable to FMC stockholders:



Continuing operations
$
1.55


$
1.67

Discontinued operations
0.07


0.29

Net income (loss) attributable to FMC stockholders
$
1.62


$
1.96

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

3

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
Three Months Ended March 31,
2019
 
2018
(in Millions)
(unaudited)
Net income (loss)
$
217.2

 
$
269.6

Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency adjustments:
 
 
 
Foreign currency translation gain (loss) arising during the period
$
(2.4
)
 
$
49.7

Total foreign currency translation adjustments (1)
$
(2.4
)
 
$
49.7

 
 
 
 
Derivative instruments:
 
 
 
Unrealized hedging gains (losses) and other, net of tax of zero and ($1.0) for the three months ended March 31, 2019 and 2018, respectively
$
0.9

 
$
1.5

Reclassification of deferred hedging (gains) losses and other, included in net income, net of tax of ($1.0) and $0.1 for the three months ended March 31, 2019 and 2018, respectively (2)
(3.6
)
 
0.4

Total derivative instruments, net of tax of ($1.0) and ($0.9) for the three months ended March 31, 2019 and 2018, respectively
$
(2.7
)
 
$
1.9

 
 
 
 
Pension and other postretirement benefits:
 
 
 
Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of zero and ($0.7) for the three months ended March 31, 2019 and 2018, respectively (3)
$
—

 
$
0.6

Reclassification of net actuarial and other (gain) loss and amortization of prior service costs, included in net income, net of tax of $0.9 and $1.6 for the three months ended March 31, 2019 and 2018, respectively (2)
3.4

 
3.0

Total pension and other postretirement benefits, net of tax of $0.9 and $0.9 for the three months ended March 31, 2019 and 2018, respectively
$
3.4

 
$
3.6

 
 
 
 
Other comprehensive income (loss), net of tax
$
(1.7
)
 
$
55.2

Comprehensive income (loss)
$
215.5

 
$
324.8

Less: Comprehensive income (loss) attributable to the noncontrolling interest
1.2

 
2.8

Comprehensive income (loss) attributable to FMC stockholders
$
214.3

 
$
322.0

____________________ 
(1)
Income taxes are not provided for other additional outside basis differences inherent in our investments in subsidiaries because the investments and related unremitted earnings are essentially permanent in duration or we have concluded that no additional tax liability will arise upon disposal or remittance.
(2)
For more detail on the components of these reclassifications and the affected line item in the condensed consolidated statements of income (loss) see Note 15.
(3)
At December 31 of each year, we remeasure our pension and postretirement plan obligations at which time we record any actuarial gains (losses) and prior service (costs) credits to other comprehensive income. The interim adjustments noted above typically reflect the foreign currency translation impacts from the unrealized actuarial gains (losses) and prior service (costs) credits related to our foreign pension and postretirement plans. See Note 16 for more information.


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

4

FMC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in Millions, Except Share and Par Value Data)
March 31, 2019

December 31, 2018
ASSETS
(unaudited)
Current assets
 
 
 
Cash and cash equivalents
$
109.5


$
134.4

Trade receivables, net of allowance of $27.3 in 2019 and $22.4 in 2018
2,530.2


2,143.8

Inventories
1,137.1


1,025.5

Prepaid and other current assets
427.3


432.6

Current assets of discontinued operations
—


293.9

Total current assets
$
4,204.1


$
4,030.2

Investments
0.7

 
0.7

Property, plant and equipment, net
733.8


756.9

Goodwill
1,470.2


1,468.1

Other intangibles, net
2,680.4


2,703.4

Other assets including long-term receivables, net
578.8

 
383.4

Deferred income taxes
278.0


272.8

Noncurrent assets of discontinued operations
—


358.8

Total assets
$
9,946.0

 
$
9,974.3

LIABILITIES AND EQUITY
 
 
 
Current liabilities
 
 
 
Short-term debt and current portion of long-term debt
$
993.8


$
547.7

Accounts payable, trade and other
884.5


795.5

Advance payments from customers
283.3


458.4

Accrued and other liabilities
537.2

 
570.8

Accrued customer rebates
460.7


365.3

Guarantees of vendor financing
78.4


67.1

Accrued pension and other postretirement benefits, current
6.2


6.2

Income taxes
93.5


85.1

Current liabilities of discontinued operations
—


97.3

Total current liabilities
$
3,337.6

 
$
2,993.4

Long-term debt, less current portion
2,145.0


2,145.0

Accrued pension and other postretirement benefits, long-term
46.1

 
47.2

Environmental liabilities, continuing and discontinued
435.5

 
458.5

Deferred income taxes
329.6

 
330.8

Other long-term liabilities
860.4

 
742.9

Noncurrent liabilities of discontinued operations
—


46.1

Commitments and contingent liabilities (Note 19)


 

Equity
 
 
 
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2019 or 2018
$
—

 
$
—

Common stock, $0.10 par value, authorized 260,000,000 shares; 185,983,792 issued shares in 2019 and 2018
18.6

 
18.6

Capital in excess of par value of common stock
785.6

 
776.2

Retained earnings
4,088.4

 
4,334.3

Accumulated other comprehensive income (loss)
(324.4
)
 
(308.9
)
Treasury stock, common, at cost - 2019: 54,326,042 shares, 2018: 53,702,178 shares
(1,807.2
)
 
(1,699.1
)
Total FMC stockholders’ equity
$
2,761.0

 
$
3,121.1

Noncontrolling interests
30.8

 
89.3

Total equity
$
2,791.8


$
3,210.4

Total liabilities and equity
$
9,946.0

 
$
9,974.3


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

5

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
Three Months Ended March 31,
2019
 
2018
 (in Millions)
(unaudited)
Cash provided (required) by operating activities of continuing operations:
 
 
 
Net income (loss)
$
217.2

 
$
269.6

Discontinued operations, net of income taxes
(9.6
)
 
(39.4
)
Income (loss) from continuing operations
$
207.6

 
$
230.2

Adjustments from income from continuing operations to cash provided (required) by operating activities of continuing operations:
 
 
 
Depreciation and amortization
$
37.3

 
$
34.8

Equity in (earnings) loss of affiliates
—

 
(0.1
)
Restructuring and other charges (income)
7.8

 
(79.9
)
Deferred income taxes
(6.1
)
 
(22.1
)
Pension and other postretirement benefits
4.6

 
2.3

Share-based compensation
6.1

 
6.3

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
Trade receivables, net
(389.4
)
 
(331.4
)
Guarantees of vendor financing
11.3

 
15.7

Inventories
(109.7
)
 
(59.8
)
Accounts payable, trade and other
91.0

 
207.3

Advance payments from customers
(175.3
)
 
(189.7
)
Accrued customer rebates
95.0

 
142.0

Income taxes
28.1

 
88.1

Pension and other postretirement benefit contributions
(1.6
)
 
(2.4
)
Environmental spending, continuing, net of recoveries
(3.5
)
 
(2.0
)
Restructuring and other spending
(5.8
)
 
(4.4
)
Transaction-related charges
(19.9
)
 
(34.0
)
Change in other operating assets and liabilities, net (1)
(60.4
)
 
(68.3
)
Cash provided (required) by operating activities of continuing operations
$
(282.9
)
 
$
(67.4
)
Cash provided (required) by operating activities of discontinued operations:
 
 
 
Environmental spending, discontinued, net of recoveries
$
(4.8
)
 
$
(3.7
)
Other discontinued spending
(5.5
)
 
(5.0
)
Operating activities of discontinued operations, net of divestiture costs
16.0

 
(2.3
)
Cash provided (required) by operating activities of discontinued operations
$
5.7

 
$
(11.0
)
                                        
(1)
Changes in all periods primarily represent timing of payments associated with all other operating assets and liabilities.


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

6

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
 
Three Months Ended March 31,
2019
 
2018
 (in Millions)
(unaudited)
Cash provided (required) by investing activities of continuing operations:
 
 
 
Capital expenditures
$
(19.1
)
 
$
(14.8
)
Proceeds from sale of product portfolios
—

 
85.0

Investment in Enterprise Resource Planning system
(12.6
)
 
(9.4
)
Acquisitions, net (2)
—

 
13.2

Other investing activities
(1.7
)
 
(2.4
)
Cash provided (required) by investing activities of continuing operations
$
(33.4
)
 
$
71.6

Cash provided (required) by investing activities of discontinued operations:
 
 
 
Proceeds from disposal of property, plant and equipment
$
26.2

 
$
—

Other discontinued investing activities
(17.0
)
 
(26.5
)
Cash provided (required) by investing activities of discontinued operations
$
9.2

 
$
(26.5
)
Cash provided (required) by financing activities of continuing operations:
 
 
 
Increase (decrease) in short-term debt
$
445.6

 
$
138.0

Repayments of long-term debt
(0.5
)
 
(0.6
)
Issuances of common stock, net
11.7

 
3.9

Dividends paid (3)
(53.2
)
 
(22.3
)
Repurchases of common stock under publicly announced program
(100.0
)
 
—

Other repurchases of common stock
(16.0
)
 
(5.1
)
Cash provided (required) by financing activities of continuing operations
$
287.6

 
$
113.9

Cash provided (required) by financing activities of discontinued operations:
 
 
 
Payment of Livent external debt
$
(27.0
)

$
—

Cash transfer to Livent due to spin
(10.2
)

—

Cash provided (required) by financing activities of discontinued operations
$
(37.2
)

$
—

Effect of exchange rate changes on cash and cash equivalents
(1.2
)
 
(3.9
)
Increase (decrease) in cash and cash equivalents
$
(52.2
)
 
$
76.7

 
 
 
 
Cash and cash equivalents of continuing operations, beginning of period
$
134.4


$
281.8

Cash and cash equivalents of discontinued operations, beginning of period (4)
27.3


1.2

Cash and cash equivalents, beginning of period
$
161.7


$
283.0

Less: cash and cash equivalent of discontinued operations, end of period
—

 
1.4

Cash and cash equivalents, end of period
$
109.5

 
$
358.3

                                               
(2)
Represents the cash received as a result of the working capital settlement associated with the consideration paid for the DuPont Crop Protection Business. See Note 5 for more information on the non-cash consideration transferred to DuPont.
(3)
See Note 15 regarding quarterly cash dividend.
(4)
Reflected within "Current assets of discontinued operations" on the condensed consolidated balance sheets.


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


7

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Supplemental disclosure of cash flow information: Cash paid for interest, net of capitalized interest was $35.8 million and $35.0 million, and income taxes paid, net of refunds were $34.1 million and $12.0 million for the three months ended March 31, 2019 and 2018, respectively. Net interest payments of zero and tax payments, net of refunds of $3.3 million were allocated to discontinued operations for the three months ended March 31, 2018, respectively. Non-cash additions to property, plant and equipment were $0.6 million and $0.3 million for the three months ended March 31, 2019 and 2018, respectively.

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

8

FMC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
 
 
FMC Stockholders’ Equity
 
 
 
 
(in Millions, Except Per Share Data)
Common
Stock,
$0.10 Par
Value
 
Capital In Excess of Par
 
Retained
Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Treasury
Stock
 
Non-controlling
Interest
 
Total
Equity
Balance at December 31, 2018
$
18.6

 
$
776.2

 
$
4,334.3

 
$
(308.9
)
 
$
(1,699.1
)
 
$
89.3

 
$
3,210.4

Adoption of accounting standards (Note 2)

 

 
55.5

 
(53.1
)
 

 


 
2.4

Net income (loss)

 


 
215.7

 

 


 
1.5

 
217.2

Stock compensation plans

 
9.4

 

 

 
7.2

 

 
16.6

Shares for benefit plan trust

 

 

 


 
(1.1
)
 

 
(1.1
)
Net pension and other benefit actuarial gains (losses) and prior service costs, net of income tax (1)

 

 

 
3.4

 

 

 
3.4

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

 

 

 
(2.7
)
 

 


 
(2.7
)
Foreign currency translation adjustments (1)

 

 


 
(2.1
)
 

 
(0.3
)
 
(2.4
)
Dividends ($0.40 per share)

 

 
(52.8
)
 

 


 

 
(52.8
)
Repurchases of common stock

 

 

 

 
(114.2
)
 


 
(114.2
)
Distribution of FMC Lithium (2)

 

 
(464.3
)
 
39.0

 

 
(59.7
)
 
(485.0
)
Balance at March 31, 2019
$
18.6

 
$
785.6

 
$
4,088.4

 
$
(324.4
)
 
$
(1,807.2
)
 
$
30.8

 
$
2,791.8


 
FMC Stockholders’ Equity
 
 
 
 
(in Millions, Except Per Share Data)
Common
Stock,
$0.10 Par
Value
 
Capital In Excess of Par
 
Retained
Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Treasury
Stock
 
Non-controlling
Interest
 
Total
Equity
Balance at December 31, 2017
$
18.6

 
$
450.7

 
$
3,952.4

 
$
(240.3
)
 
$
(1,499.6
)
 
$
25.3

 
$
2,707.1

Net income (loss)

 

 
267.2

 

 

 
2.4

 
269.6

Stock compensation plans

 
6.5

 

 

 
3.7

 

 
10.2

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

 

 

 
3.6

 

 

 
3.6

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

 

 

 
1.9

 

 

 
1.9

Foreign currency translation adjustments (1)

 

 

 
49.3

 

 
0.4

 
49.7

Dividends ($0.165 per share)

 

 
(22.3
)
 

 

 

 
(22.3
)
Repurchases of common stock

 

 

 

 
(5.1
)
 

 
(5.1
)
Balance at March 31, 2018
$
18.6

 
$
457.2

 
$
4,197.3

 
$
(185.5
)
 
$
(1,501.0
)
 
$
28.1

 
$
3,014.7

____________________
(1)
See condensed consolidated statements of comprehensive income (loss).
(2)
Represents the effects of the distribution of FMC Lithium. Refer to Note 1 for further information.


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


9

FMC CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1: Financial Information and Accounting Policies
In our opinion the condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) applicable to interim period financial statements and reflect all adjustments necessary for a fair statement of results of operations for the three months ended March 31, 2019 and 2018, cash flows for the three months ended March 31, 2019 and 2018, changes in equity for the three months ended March 31, 2019 and 2018, and our financial positions as of March 31, 2019 and December 31, 2018. All such adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the Notes. The results of operations for the three months ended March 31, 2019 and 2018 are not necessarily indicative of the results of operations for the full year. The condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018, and the related condensed consolidated statements of income (loss) and condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, 2019 and 2018, condensed consolidated statements of cash flows for the three months ended March 31, 2019 and 2018, and condensed consolidated statements of changes in equity for the three months ended March 31, 2019 and 2018 have been reviewed by our independent registered public accountants. The review is described more fully in their report included herein. Our accounting policies are set forth in detail in Note 1 to the consolidated financial statements included with our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2018 (the “2018 Form 10-K”). However, see below on changes in the composition of our segments since the 2018 Form 10-K.
In March 2017, we announced our intention to separate the FMC Lithium segment (subsequently renamed Livent Corporation, or "Livent") into a publicly traded company. The initial step of the separation, the initial public offering ("IPO") of Livent, closed on October 15, 2018. In connection with the IPO, Livent had granted the underwriters an option to purchase additional shares of common stock to cover over-allotments at the IPO price, less the underwriting discount. On November 8, 2018, the underwriters exercised in full their option to purchase additional shares. After completion of the IPO and the underwriters' exercise to purchase additional shares of common stock, we owned 123 million shares of Livent's common stock, representing approximately 84 percent of the total outstanding shares of Livent's common stock. On March 1, 2019, we completed the previously announced distribution of 123 million shares of common stock of Livent as a pro rata dividend on shares of FMC common stock outstanding at the close of business on the record date of February 25, 2019. We have recast all the data within this filing to present FMC Lithium as a discontinued operation retrospectively for all periods presented.
As a result of the FMC Lithium separation, we now operate as a single business segment providing innovative solutions to growers around the world with a robust product portfolio fueled by a market-driven discovery and development pipeline in crop protection, plant health, and professional pest and turf management. We develop, market and sell all three major classes of crop protection chemicals: insecticides, herbicides and fungicides. These products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as in non-agricultural markets for pest control. The business is also supported by global corporate staff functions. The determination of a single segment (i.e., total company basis) is consistent with the financial information regularly reviewed by the chief executive officer for purposes of evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting future periods. Refer to Note 3 for further information on product and regional revenues.

Note 2: Recently Issued and Adopted Accounting Pronouncements and Regulatory Items
New accounting guidance and regulatory items
In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard is effective for fiscal years beginning after December 15, 2019 (i.e. a January 1, 2020 effective date). We are evaluating the effect the guidance will have on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The new standard is effective for fiscal years ending after December 15, 2020. We are evaluating the effect the guidance will have on our consolidated financial statements.


10

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

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU changes the subsequent measurement of goodwill impairment by eliminating Step 2 from the impairment test. Under the new guidance, an entity will measure impairment using the difference between the carrying amount and the fair value of the reporting unit. The new standard is effective for fiscal years beginning after December 15, 2019 (i.e. a January 1, 2020 effective date), with early adoption permitted for goodwill impairment tests with measurement dates after January 1, 2017. We believe the adoption will not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses. The update is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The new standard is effective for fiscal years beginning after December 15, 2019 (i.e. a January 1, 2020 effective date), with early adoption permitted for fiscal years beginning after December 15, 2018. We are evaluating the effect the guidance will have on our consolidated financial statements.

Recently adopted accounting guidance
In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This new standard permits a company to reclassify the income tax effects of the change in the U.S federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances as well as other income tax effects related to the application of the Tax Cuts and Jobs Act (the "Act") within accumulated other comprehensive income ("AOCI") to retained earnings. The new standard also requires certain disclosures about stranded tax effects. The new standard is effective for fiscal years beginning after December 15, 2018 (i.e. a January 1, 2019 effective date), and interim periods within those fiscal years, with early adoption permitted. We adopted this standard prospectively as of January 1, 2019 and reclassified $53.1 million of the stranded income tax effects from accumulated other comprehensive income (loss) to retained earnings. The reclassification was related to the change in the U.S. federal corporate tax rate and the effect of the Act on our pension plans and derivative instruments. This reclassification is reflected within the condensed consolidated statement of changes in equity for the current period.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU amends and simplifies existing hedge accounting guidance and allows for more hedging strategies to be eligible for hedge accounting. In addition, the ASU amends disclosure requirements and how hedge effectiveness is assessed. The presentation and disclosure guidance is required to be adopted prospectively. The new standard is effective for fiscal years beginning after December 15, 2018 (i.e. a January 1, 2019 effective date), with early adoption permitted in any interim period after issuance of this ASU. We adopted this standard as of January 1, 2019. There was no material impact to our consolidated financial statements upon adoption.

In February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842) ("ASC 842"). Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use ("ROU") asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e. a January 1, 2019 effective date). In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases to make technical corrections and clarify the application of the new lease standard. In adopting this standard, we performed a detailed review of contracts of our business and assessed the terms under ASC 842. Additionally, we assessed potential impacts on our internal controls and processes related to both the implementation and ongoing compliance of the new guidance.

We have adopted this standard as of January 1, 2019 utilizing a modified retrospective approach and have elected the transition practical expedient package. Under this transition practical expedient package, ASC 842 was only applied to contracts that existed as of, or were entered into on or after, January 1, 2019, and a cumulative effect adjustment was made as of January 1, 2019. All comparative periods prior to January 1, 2019 will retain the financial reporting and disclosure requirements of ASC 840. The adoption of ASC 842 had a material impact on our consolidated balance sheet but did not have a material impact on the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of cash flows, and consolidated statement of changes in equity. As a result of adoption, we recorded additional ROU lease assets and lease liabilities of $185.3 million and $215.9 million, respectively. ROU lease assets includes a reclassification of $30.6 million of prepaid rent, accrued

11

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

rent, and lease incentives previously recorded under ASC 840. Additionally, we recorded a retained earnings impact of $2.4 million as of January 1, 2019. Refer to Note 4 for further information.

The expedient package allowed us not to reassess whether existing contracts contain a lease under the new definition of a lease, the lease classification of existing leases, and initial direct cost for existing leases including whether such costs would qualify for capitalization under the standard. Additionally, we elected the practical expedient to not separate non-lease components from lease components. In addition to these practical expedients, we elected the following exemption permissible under ASC 842: the exclusion of leases with terms 12 months or less that do not have a purchase option or extension that is reasonably certain to exercise.

The adoption of ASC 842 required adjustments to record our initial ROU asset and lease liability on the balance sheet. The initial right of use asset and lease liability are presented on a discounted basis by our incremental borrowing rate at transition.

Note 3: Revenue Recognition

Disaggregation of revenue
We disaggregate revenue from contracts with customers by geographical areas and major product categories. We have three major agricultural pesticide product categories: insecticides, herbicides, and fungicides. The disaggregated revenue tables are shown below for the three months ended March 31, 2019 and 2018.
The following table provides information about disaggregated revenue by major geographical region:
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
North America
$
318.3


$
298.2

Latin America
206.5


158.9

Europe, Middle East & Africa (EMEA)
412.0


398.8

Asia Pacific
255.3


252.0

Total Revenue
$
1,192.1


$
1,107.9


The following table provides information about disaggregated revenue by major product category:
 
Three Months Ended March 31,
(in Millions)
2019

2018
Insecticides
$
703.4

 
$
589.3

Herbicides
361.6

 
385.7

Fungicides
70.5

 
79.0

Other
56.6

 
53.9

Total Revenue
$
1,192.1

 
$
1,107.9


We earn revenue from the sale of a wide range of products to a diversified base of customers around the world. Our portfolio is comprised of three major pesticide categories: insecticides, herbicides and fungicides. These products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as in non-agricultural markets for pest control. The majority of our product lines consist of insecticides and herbicides, with a smaller portfolio of fungicides mainly used in high value crop segments. Our insecticides are used to control a wide spectrum of pests, while our herbicide portfolio primarily targets a large variety of difficult-to-control weeds. Products in the other category include various agricultural products such as smaller classes of pesticides, growth promoters, and soil enhancements.
Sale of Goods
Revenue from product sales is recognized when (or as) we satisfy a performance obligation by transferring the promised goods to a customer, that is, when control of the good transfers to the customer. The customer is then invoiced at the agreed-upon price

12

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

with payment terms generally ranging from 30 to 90 days, with some regions providing terms longer than 90 days. We do not typically give payment terms that exceed 360 days; however, in certain geographical regions such as Latin America, these terms may be given in limited circumstances. Additionally, a timing difference of over one year can exist between when products are delivered to the customer and when payment is received from the customer in these regions; however, the effect of these sales is not material to the financial statements as a whole. Furthermore, we have assessed the circumstances and arrangements in these regions and determined that the contracts with these customers do not contain a significant financing component.
In determining when the control of goods is transferred, we typically assess, among other things, the transfer of risk and title and the shipping terms of the contract. The transfer of title and risk typically occurs either upon shipment to the customer or upon receipt by the customer. As such, we typically recognize revenue when goods are shipped based on the relevant Incoterm for the product order, or in some regions, when delivery to the customer’s requested destination has occurred. When we perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. For FOB shipping point terms, revenue is recognized at the time of shipment since the customer gains control at this point in time.
We record amounts billed for shipping and handling fees as revenue. Costs incurred for shipping and handling are recorded as costs of sales and services. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue-producing transactions are presented on a net basis and excluded from sales in the consolidated income statements. We record a liability until remitted to the respective taxing authority.
Sales Incentives and Other Variable Considerations
As a part of our customary business practice, we offer a number of sales incentives to our customers including volume discounts, retailer incentives, and prepayment options. The variable considerations given can differ by products, support levels and other eligibility criteria. For all such contracts that include any variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Although determining the transaction price for these considerations requires significant judgment, we have significant historical experience with incentives provided to customers and estimate the expected consideration considering historical patterns of incentive payouts. These estimates are reassessed each reporting period as required.
In addition to the variable considerations describe above, in certain instances, we may require our customers to meet certain volume thresholds within their contract term. We estimate what amount of variable consideration should be included in the transaction price at contract inception and continually reassess this estimation each reporting period to determine situations when the minimum volume thresholds will not be met. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.
Right of Return
We extend an assurance warranty offering customers a right of refund or exchange in case delivered product does not conform to specifications. Additionally, in certain regions and arrangements, we may offer a right of return for a specified period. Both instances are accounted for as a right of return and transaction price is adjusted for an estimate of expected returns. Replacement products are accounted for under the warranty guidance if the customer exchanges one product for another of the same kind, quality, and price. We have significant experience with historical return patterns and use this experience to include returns in the estimate of transaction price.
Contract asset and contract liability balances
We satisfy our obligations by transferring goods and services in exchange for consideration from customers. The timing of performance sometimes differs from the timing the associated consideration is received from the customer, thus resulting in the recognition of a contract asset or contract liability. We recognize a contract liability if the customer's payment of consideration is received prior to completion of our related performance obligation.
The following table presents the opening and closing balances of our receivables, net of allowances and contract liabilities from contracts with customers.


13

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

(in Millions)
Balance as of December 31, 2018
 
Balance as of March 31, 2019

Increase (Decrease)
Receivables from contracts with customers, net of allowances
$
2,228.3

 
$
2,619.5

 
$
391.2

Contract liabilities: Advance payments from customers
458.4

 
283.3

 
(175.1
)


The amount of revenue recognized in the three months ended March 31, 2019 that was included in the opening contract liability balance is $175.1 million.
The balance of receivables from contracts with customers listed in the table above include both current trade receivables and long-term receivables, net of allowance for doubtful accounts. The allowance for receivables represents our best estimate of the probable losses associated with potential customer defaults. We determine the allowance based on historical experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. The change in allowance for doubtful accounts for both current trade receivables and long-term receivables is representative of the impairment of receivables as of March 31, 2019. Refer to Note 7 for further information.
We periodically enter into prepayment arrangements with customers and receive advance payments for product to be delivered in future periods. Prepayment terms are extended to customers/distributors in order to capitalize on surplus cash with growers. Growers receive bulk payments for their produce, which they leverage to buy our products from distributors through prepayment options. This in turn creates opportunity for distributors to make large prepayments to us for securing the future supply of products to be sold to growers. Prepayments are typically received in the fourth quarter of the fiscal year and are for the following marketing year indicating that the time difference between prepayment and performance of corresponding performance obligations does not exceed one year.
We recognize these prepayments as a liability under “Advance Payments from customers” on the condensed consolidated balance sheets when they are received. Revenue associated with advance payments is recognized as shipments are made and transfer of control to the customer takes place. Advance payments from customers was $458.4 million as of December 31, 2018 and $283.3 million as of March 31, 2019.

Note 4: Leases
We lease office space, vehicles and other equipment under non-cancellable leases with initial terms typically ranging from 1 to 20 years, with some leases having terms greater than 20 years. Our lease portfolio includes agreements with renewal options, purchase options and clauses for early termination based on the terms specific to the agreement.
At contract inception, we review the facts and circumstances of the arrangement to determine if the contract is a lease. We follow the guidance in ASC 842-10-15 and consider the following: whether the contract has an identified asset; if we have the right to obtain substantially all economic benefits from the asset; and if we have the right to direct the use of the underlying asset. When determining if a contract has an identified asset, we consider both explicit and implicit assets, and whether the supplier has the right to substitute the asset. When determining if we have the right to obtain substantially all economic benefits from the asset, we consider the primary outputs of the identified asset throughout the period of use and determine if we receive greater than 90% of those benefits. When determining if we have the right to direct the use of an underlying asset, we consider if we have the right to direct how and for what purpose the asset is used throughout the period of use and if we control the decision-making rights over the asset. All leased assets are classified as operating or finance under ASC 842. The lease term is determined as the non-cancellable period of the lease, together with all of the following: periods covered by an option to extend the lease which are reasonably certain to be exercised, periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option, and periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor. At commencement, we assess whether any options included in the lease are reasonably certain to be exercised by considering all economic factors relevant including, contract-based, asset-based, market-based, and company-based factors.
To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable or our incremental borrowing rate at the lease commencement date. When determining our incremental borrowing rate, we consider our centralized treasury function and our current credit profile. We then make adjustments to this rate for securitization, the length of the lease term, and leases denominated in foreign currencies. Minimum lease payments are expensed over the term of the lease on a straight-line basis. Some leases may require additional contingent or variable lease payments based on factors specific to the individual agreement. Variable lease payments for which we are typically responsible for include payment of vehicle insurance, real estate taxes, and maintenance expenses.

14

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

Most leases within our portfolio are classified as operating leases under the new standard. Operating leases are included in “Other assets including long-term receivables, net”, “Accrued and other liabilities”, and “Other long-term liabilities” in our condensed consolidated balance sheet. Operating lease right-of-use (“ROU”) assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of any lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Operating leases relate to office spaces, IT equipment, transportation equipment, machinery equipment, furniture and fixtures, and plant and facilities under non-cancellable lease agreements. Leases primarily have fixed rental periods, with many of the real estate leases requiring additional payments for property taxes and occupancy-related costs. Leases for real estate typically have initial terms ranging from 1 to 20 years, with some leases having terms greater than 20 years. Leases for non-real estate (transportation, IT) typically have initial terms ranging from 1 to 10 years. We have elected not to record short-term leases on the balance sheet whose term is 12 months or less and does not include a purchase option or extension that is reasonably certain to be exercised.
We rent or sublease a small number of assets including equipment and office space to third party companies. These third-party arrangements include a small number of TSA arrangements with E. I. du Pont de Nemours and Company. We also sublease a floor of our Corporate headquarters to our former subsidiary, Livent Corporation. Rental income from all subleases is not material to our business.
The ROU asset and lease liability balances as of March 31, 2019 were as follows:
(in Millions)
Classification
 
Balance at March 31, 2019
Assets
 
 
 
Operating lease ROU assets
Other assets including long-term receivables, net
 
$
175.5

Liabilities
 
 
 
Operating lease current liabilities
Accrued and other liabilities
 
$
31.1

Operating lease noncurrent liabilities
Other long-term liabilities
 
175.5


The components of lease expense for the three months ended March 31, 2019 were as follows:
(in Millions)
Lease Cost Classification
Three Months Ended March 31, 2019
Operating lease cost
Cost of sales and services / Selling, general and administrative expenses
$
10.0

Variable lease cost
Cost of sales and services / Selling, general and administrative expenses
1.3

Total lease cost
 
$
11.3


 
March 31, 2019
Operating Lease Term and Discount Rate
 
Weighted-average remaining lease term (years)
10.5

Weighted-average discount rate
4.30
%

(in Millions)
Three Months Ended March 31, 2019
Other Information
 
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows from operating leases
$
(10.3
)
Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets:
 
Right-of-use assets obtained in exchange for new operating lease liabilities
$
0.3




15

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

The following table represents our future minimum operating lease payments as of, and subsequent to, March 31, 2019 under ASC 842:
(in Millions)
 Operating Leases Total
Maturity of Lease Liabilities
 
2019 (excluding the three months ending March 31, 2019)
$
29.2

2020
34.7

2021
24.1

2022
20.7

2023
16.7

Thereafter
136.5

Total undiscounted lease payments
$
261.9

Less: Present value adjustment
(55.3
)
Present value of lease liabilities
$
206.6



Our future minimum lease payments as of December 31, 2018 under ASC 840 were as follows:
 
Future Minimum Lease Payments
(in Millions)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
Operating Leases
$
36.7

 
$
31.7

 
$
21.0

 
$
17.5

 
$
13.5

 
$
107.5

Capital Lease
2.9

 
2.9

 
3.1

 
3.1

 
3.1

 
4.3



Our capital lease, which was related to our research and technology center in China, represented a financing obligation, and was derecognized as part of our transition to ASC 842. This lease was assessed under ASC 842 and determined to be an operating lease. 

Note 5: Acquisitions
DuPont Crop Protection Business
On November 1, 2017, pursuant to the terms and conditions set forth in the Transaction Agreement entered into with E. I. du Pont de Nemours and Company ("DuPont"), we completed the acquisition of certain assets relating to DuPont's Crop Protection business and research and development ("R&D") organization (the "DuPont Crop Protection Business") (collectively, the "DuPont Crop Protection Business Acquisition"). In connection with this transaction, we sold to DuPont our FMC Health and Nutrition segment and paid DuPont $1.2 billion in cash which was funded with the 2017 Term Loan Facility which was secured for the purposes of the acquisition.
The following table illustrates each component of the consideration paid as part of the DuPont Crop Protection Business Acquisition:
(in Millions)
Amount
Cash purchase price, net (1)
$
1,225.6

Cash proceeds from working capital and other adjustments
(21.5
)
Fair value of FMC Health and Nutrition sold to DuPont
1,968.6

Total purchase consideration
$
3,172.7

____________________ 
(1)
Represents the cash portion of the total purchase consideration paid for the DuPont Crop Protection Business Acquisition.

As part of the DuPont Crop Protection Business Acquisition, we acquired various manufacturing contracts. The manufacturing contracts have been recognized as an asset or liability to the extent the terms of the contract are favorable or unfavorable compared with market terms of the same or similar items at the date of the acquisition.

16

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

We also entered into supply agreements with DuPont, with terms of up to five years, to supply technical insecticide products required for their retained seed treatment business at cost. The unfavorable liability is recorded within both "Accrued and other liabilities" and "Other long-term liabilities" on the condensed consolidated balance sheets and is reduced and recognized to revenues within earnings as sales are made. The amount recognized in revenue for the three months ended March 31, 2019 was approximately $27 million.
Certain manufacturing sites and R&D sites were transferred to us at a later date due to various local timing constraints; however, we obtained the economic benefit from these sites during the period from November 1, 2017 to when the sites legally transfer. No additional consideration was paid at the date of transfer. A portion of one site is expected to transfer in the fourth quarter of 2019.
The DuPont Crop Protection Business is being integrated into our business and has been included within our results of operations since the date of acquisition.
The purchase price allocation was considered complete in 2018. Refer to Note 4 of our 2018 Form 10-K for further information.

Transaction-related charges
Pursuant to U.S. GAAP, costs incurred associated with acquisition activities are expensed as incurred. Historically, these costs have primarily consisted of legal, accounting, consulting, and other professional advisory fees associated with the preparation and execution of these activities. Given the significance and complexity around the integration of the DuPont Crop Protection Business, we have incurred to date, and expect to incur, costs associated with integrating the DuPont Crop Protection Business, planning for the exit of the transitional service agreement as well as implementation of a new worldwide Enterprise Resource Planning system as a result of the transitional service agreement exit, the majority of which will be capitalized in accordance with the relevant accounting literature. These costs have been, and are expected to be, significant and we anticipate the majority of these charges will be completed by the first quarter of 2020. The following table summarizes the costs incurred associated with these activities.


Three Months Ended March 31,
(in Millions)
2019

2018
DuPont Crop Protection Business Acquisition





Legal and professional fees (1)
$
16.5


$
19.6

Inventory fair value amortization (2)
—


29.9

Total Transaction-related charges
$
16.5


$
49.5

 
 
 
 
Restructuring charges



DuPont Crop restructuring (3)
$
3.9


$
1.0

Total DuPont Crop restructuring charges
$
3.9


$
1.0

____________________ 
(1)
Represents transaction costs, costs for transitional employees, other acquired employees related costs, and transactional-related costs such as legal and professional third-party fees. These charges are recorded as a component of “Selling, general and administrative expense" on the condensed consolidated statements of income (loss).
(2)
These charges are recorded as a component of "Costs of sales and services" on the condensed consolidated statements of income (loss).
(3)
See Note 10 for more information. These charges are recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss).

Note 6: Goodwill and Intangible Assets
The changes in the carrying amount of goodwill are presented in the table below:
(in Millions)
Total
Balance, December 31, 2018
$
1,468.1

Foreign currency and other adjustments
2.1

Balance, March 31, 2019
$
1,470.2



There were no events or circumstances indicating that goodwill might be impaired as of March 31, 2019.

Our intangible assets, other than goodwill, consist of the following:
 
March 31, 2019
 
December 31, 2018
(in Millions)
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
Intangible assets subject to amortization (finite-lived)
Customer relationships
$
1,142.4

 
$
(142.4
)
 
$
1,000.0

 
$
1,146.2

 
$
(128.7
)
 
$
1,017.5

Patents
1.7

 
(0.8
)
 
0.9

 
1.7

 
(0.8
)
 
0.9

Brands (1) (2)
16.8

 
(6.2
)
 
10.6

 
17.0

 
(5.9
)
 
11.1

Purchased and licensed technologies
61.0

 
(32.8
)
 
28.2

 
61.3

 
(32.1
)
 
29.2

Other intangibles
1.9

 
(1.8
)
 
0.1

 
1.9

 
(1.8
)
 
0.1

 
$
1,223.8

 
$
(184.0
)
 
$
1,039.8

 
$
1,228.1

 
$
(169.3
)
 
$
1,058.8


Intangible assets not subject to amortization (indefinite-lived)
Crop Protection Brands (3)
$
1,259.1

 
 
 
$
1,259.1

 
$
1,259.1

 
 
 
$
1,259.1

Brands (1) (2)
380.8

 
 
 
380.8

 
384.8

 
 
 
384.8

In-process research & development
0.7

 
 
 
0.7

 
0.7

 
 
 
0.7

 
$
1,640.6

 
 
 
$
1,640.6

 
$
1,644.6

 
 
 
$
1,644.6

Total intangible assets
$
2,864.4

 
$
(184.0
)
 
$
2,680.4

 
$
2,872.7

 
$
(169.3
)
 
$
2,703.4

____________________ 
(1)
Represents trademarks, trade names and know-how.
(2)
The majority of the Brands relate to our proprietary brand portfolios acquired from the Cheminova acquisition.
(3)
Represents the proprietary brand portfolios, consisting of trademarks, trade names and know-how, acquired from the DuPont Crop Protection Business Acquisition.

 
Three Months Ended March 31,
(in Millions)
2019
 
2018
Amortization expense
$
15.6

 
$
13.5



The full year estimated pre-tax amortization expense for the year ended December 31, 2019 and each of the succeeding five years is approximately $62 million, $62 million, $62 million, $62 million, $62 million, and $61 million, respectively.

Note 7: Receivables
The following table displays a roll forward of the allowance for doubtful trade receivables.

17
FMC CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)


(in Millions)
 
Balance, December 31, 2017
$
38.6

Additions - charged to expense (1)
58.0

Transfer from (to) allowance for credit losses (see below)
(17.3
)
Net recoveries, write-offs and other (1)
(56.9
)
Balance, December 31, 2018
$
22.4

Additions - charged to expense
3.0

Net recoveries, write-offs and other
1.9

Balance, March 31, 2019
$
27.3

____________________ 
(1)
Includes the charge and write-off of approximately $42 million associated with the stranded accounts receivables written off as part of the restructuring in India. Refer to Note 8 to our consolidated financial statements included with our 2018 Form 10-K for further information. The charge was recorded as a component of "Restructuring and other charges (income)" on the consolidated statements of income (loss).

We have non-current receivables that represent long-term customer receivable balances related to past due accounts which are not expected to be collected within the current year. The net long-term customer receivables were $89.3 million as of March 31, 2019. These long-term customer receivable balances and the corresponding allowance are included in "Other assets including long-term receivables, net" on the condensed consolidated balance sheets.

A portion of these long-term receivables have payment contracts. We have no reason to believe payments will not be made based upon the credit quality of these customers. Additionally, we also hold significant collateral against these customers including rights to property or other assets as a form of credit guarantee. If the customer does not pay or gives indication that they will not pay, these guarantees allow us to start legal action to block the sale of the customer’s harvest. On an ongoing basis, we continue to evaluate the credit quality of our non-current receivables using aging of receivables, collection experience and write-offs, as well as evaluating existing economic conditions, to determine if an additional allowance is necessary.

The following table displays a roll forward of the allowance for credit losses related to long-term customer receivables.
(in Millions)
 
Balance, December 31, 2017
$
47.1

Additions - charged to expense
13.4

Transfer from (to) allowance for doubtful accounts (see above)
17.3

Foreign currency adjustments
(4.1
)
Net recoveries, write-offs and other
(13.2
)
Balance, December 31, 2018
$
60.5

Additions - charged to expense
7.4

Foreign currency adjustments
0.3

Balance, March 31, 2019
$
68.2



Note 8: Inventories
Inventories consisted of the following:
 (in Millions)
March 31, 2019
 
December 31, 2018
Finished goods
$
357.7

 
$
430.4

Work in process
584.7

 
518.8

Raw materials, supplies and other
327.8

 
206.9

First-in, first-out inventory
$
1,270.2

 
$
1,156.1

Less: Excess of first-in, first-out cost over last-in, first-out cost
(133.1
)
 
(130.6
)
Net inventories
$
1,137.1

 
$
1,025.5



Note 9: Property, Plant and Equipment
Property, plant and equipment consisted of the following:
(in Millions)
March 31, 2019
 
December 31, 2018
Property, plant and equipment
$
1,028.4

 
$
1,045.0

Accumulated depreciation
(294.6
)
 
(288.1
)
Property, plant and equipment, net
$
733.8

 
$
756.9



Note 10: Restructuring and Other Charges (Income)
Our restructuring and other charges (income) are comprised of restructuring, asset disposals and other charges (income) as noted below.
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
Restructuring charges
$
5.2

 
$
2.6

Other charges (income), net
2.6

 
(82.5
)
Total restructuring and other charges (income)
$
7.8

 
$
(79.9
)


Restructuring charges

For detail on restructuring activities which commenced prior to 2019, see Note 8 to our consolidated financial statements included within our 2018 Form 10-K.
 
Restructuring Charges
(in Millions)
Severance and Employee Benefits (1)
 
Other Charges (Income) (2)
 
Asset Disposal Charges (3)
 
Total
DuPont Crop restructuring
$
2.7

 
$
1.0

 
$
0.2

 
$
3.9

Other items
—

 
—

 
1.3

 
1.3

Three Months Ended March 31, 2019
$
2.7

 
$
1.0

 
$
1.5

 
$
5.2

 
 
 
 
 
 
 
 
DuPont Crop restructuring
$
—

 
$
—

 
$
1.0

 
$
1.0

Other Items
—

 
1.6

 
—

 
1.6

Three Months Ended March 31, 2018
$
—

 
$
1.6

 
$
1.0

 
$
2.6

____________________ 
(1)
Represents severance and employee benefit charges.
(2)
Primarily represents third-party costs associated with miscellaneous restructuring activities.
(3)
Primarily represents asset write-offs and accelerated depreciation on long-lived assets, which were or are to be abandoned. To the extent incurred, the acceleration effect of re-estimating settlement dates and revised cost estimates associated with asset retirement obligations due to facility shutdowns, are also included within the asset disposal charges.

18

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


Roll forward of restructuring reserves
The following table shows a roll forward of restructuring reserves, continuing and discontinued, that will result in cash spending. These amounts exclude asset retirement obligations.
(in Millions)
Balance at
12/31/18 (2)
 
Change in
reserves (3)
 
Cash
payments
 
Other
 
Balance at
3/31/19 (2)
DuPont Crop restructuring
$
16.2

 
$
3.7

 
$
(5.1
)
 
$
(0.2
)
 
$
14.6

Other workforce related and facility shutdowns (1)
1.0

 
—

 
(0.7
)
 
0.5

 
0.8

Total
$
17.2

 
$
3.7

 
$
(5.8
)
 
$
0.3

 
$
15.4

____________________ 
(1)
Primarily severance costs related to workforce reductions and facility shutdowns.
(2)
Included in "Accrued and other liabilities" on the condensed consolidated balance sheets.
(3)
Primarily severance, exited lease, contract termination and other miscellaneous exit costs. Any accelerated depreciation and impairment charges noted above that impacted our property, plant and equipment balances or other long-term assets are not included in the above tables.
Other charges (income), net
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
Environmental charges, net
$
2.6

 
$
2.5

Product portfolio sales
—

 
(85.0
)
Other charges (income), net
$
2.6

 
$
(82.5
)

Environmental charges, net
Environmental charges represent the net charges associated with environmental remediation at continuing operating sites. See Note 13 for additional details. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations.

Product portfolio sales
On February 1, 2018, we sold a portion of our European herbicide portfolio to Nufarm Limited. The sale was required by regulatory authorities as part of closing conditions for the DuPont acquisition. The gain on this sale is recorded within "Restructuring and other charges (income)" on the condensed consolidated statements of income (loss). Proceeds from the sale are included in investing activities on the condensed consolidated statements of cash flows.

Note 11: Debt
Debt maturing within one year:
(in Millions)
March 31, 2019
 
December 31, 2018
Short-term foreign debt (1)
$
114.7

 
$
106.5

Commercial paper (2)
493.5

 
55.2

Total short-term debt
$
608.2

 
$
161.7

Current portion of long-term debt
385.6

 
386.0

Total short-term debt and current portion of long-term debt
$
993.8

 
$
547.7


____________________
(1)
At March 31, 2019, the average interest rate on the borrowings was 7.5 percent.
(2)
At March 31, 2019, the average effective interest rate on the borrowings was 3.1 percent.


19

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

Long-term debt:
(in Millions)
March 31, 2019
 
 
 
 
Interest Rate Percentage
 
Maturity
Date
 
March 31, 2019
 
December 31, 2018
Pollution control and industrial revenue bonds (less unamortized discounts of $0.2 and $0.2, respectively)
1.7 - 6.5%
 
2021 - 2032
 
$
51.6

 
$
51.6

Senior notes (less unamortized discount of $0.7 and $0.8, respectively)
3.95 - 5.2%
 
2019 - 2024
 
999.3

 
999.2

2017 Term Loan Facility
3.7%
 
2022
 
1,400.0

 
1,400.0

Revolving Credit Facility (1)
5.1%
 
2022
 
—

 
—

Foreign debt
0 - 7.2%
 
2019 - 2024
 
88.0

 
89.1

Debt issuance cost
 
 
 
 
(8.3
)
 
(8.9
)
Total long-term debt
 
 
 
 
$
2,530.6

 
$
2,531.0

Less: debt maturing within one year
 
 
 
 
385.6

 
386.0

Total long-term debt, less current portion
 
 
 
 
$
2,145.0

 
$
2,145.0

____________________
(1)
Letters of credit outstanding under our Revolving Credit Facility totaled $192.1 million and available funds under this facility were $814.3 million at March 31, 2019.

Covenants
Among other restrictions, our Revolving Credit Facility and 2017 Term Loan Facility contain financial covenants applicable to FMC and its consolidated subsidiaries related to leverage (measured as the ratio of debt to adjusted earnings) and interest coverage (measured as the ratio of adjusted earnings to interest expense). Our actual leverage for the four consecutive quarters ended March 31, 2019 was 2.7, which is below the maximum leverage of 4.5 at March 31, 2019. Our actual interest coverage for the four consecutive quarters ended March 31, 2019 was 9.3, which is above the minimum interest coverage of 3.5. We were in compliance with all covenants at March 31, 2019.

Note 12: Discontinued Operations
FMC Lithium (Livent Corporation):
On March 1, 2019, we completed the previously announced distribution of 123 million shares of common stock of Livent as a pro rata dividend on shares of FMC common stock outstanding at the close of business on the record date of February 25, 2019. Refer to Note 1 for further information.
The results of our discontinued FMC Lithium operations are summarized below:

20

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

(in Millions)
Three Months Ended March 31,
2019
 
2018
Revenue
$
52.1

 
$
102.8

Costs of sales and services
41.3

 
50.6

 
 
 
 
Income (loss) from discontinued operations before income taxes (1)
$
1.1

 
$
43.8

Provision (benefit) for income taxes
6.0

 
8.8

Total discontinued operations of FMC Lithium, net of income taxes, before separation-related costs and other adjustments
$
(4.9
)
 
$
35.0

Separation-related costs and other adjustments of discontinued operations of FMC Lithium, net of income taxes
(5.1
)
 
(2.1
)
Discontinued operations of FMC Lithium, net of income taxes
$
(10.0
)
 
$
32.9

____________________
(1)
For the three months ended March 31, 2018, amounts include $2.2 million of restructuring and other charges (income).

The following table presents the major classes of assets and liabilities of FMC Lithium:
(in Millions)
March 31, 2019
 
December 31, 2018
Assets
 
 
 
Current assets of discontinued operations (1)
$
—

 
$
293.9

Property, plant and equipment (2)
—

 
275.7

Other noncurrent assets (2)
—

 
83.1

Total assets of discontinued operations
$
—

 
$
652.7

Liabilities

 

Current liabilities of discontinued operations (3)
$
—

 
$
97.3

Noncurrent liabilities of discontinued operations (4)
—

 
46.1

Total liabilities of discontinued operations
$
—

 
$
143.4

Total net assets
$
—

 
$
509.3

____________________
(1)
Primarily consists of cash and cash equivalents, trade receivables, and inventories. Presented as "Current assets of discontinued operations" on the condensed consolidated balance sheets as of December 31, 2018.
(2)
Presented as "Noncurrent assets of discontinued operations" on the condensed consolidated balance sheets as of December 31, 2018.
(3)
Presented as "Current liabilities of discontinued operations" on the condensed consolidated balance sheets as of December 31, 2018.
(4)
Presented as "Noncurrent liabilities of discontinued operations" on the condensed consolidated balance sheets as of December 31, 2018.

FMC Health and Nutrition:
On November 1, 2017, we completed the previously disclosed sale of our FMC Health and Nutrition business to DuPont. The sale resulted in a gain of approximately $918 million ($727 million, net of tax). In connection with the sale, we entered into a customary transitional services agreement with DuPont to provide for the orderly separation and transition of various functions and processes. These services will be provided by us to DuPont for up to an initial 24 months after closing, with an additional six months extension. These services include information technology services, accounting, human resource and facility services among other services, while DuPont assumes the operations of FMC Health and Nutrition.
Certain sites were to transfer at a later date due to various local timing constraints. In May 2018, the last site transferred to DuPont. The results of our discontinued FMC Health and Nutrition operations are summarized below, including the results of these delayed sites included in the three months ended March 31, 2018:

21

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

(in Millions)
Three Months Ended March 31,
2019

2018
Revenue
$
—

 
$
2.9

Costs of sales and services
—

 
2.8

 
 
 
 
Income (loss) from discontinued operations before income taxes (1)
$
—

 
$
(3.1
)
Provision (benefit) for income taxes
—

 
(0.6
)
Total discontinued operations of FMC Health and Nutrition, net of income taxes, before divestiture related costs and adjustments
$
—

 
$
(2.5
)
Adjustment to gain on sale of FMC Health and Nutrition, net of income taxes
—

 
16.2

Divestiture related costs and other adjustments of discontinued operations of FMC Health and Nutrition, net of income taxes
0.7

 
(0.5
)
Discontinued operations of FMC Health and Nutrition, net of income taxes, attributable to FMC Stockholders
$
0.7

 
$
13.2

____________________
(1)
Results for the three months ended March 31, 2018 include an adjustment to retained liabilities of the disposed FMC Health and Nutrition business.

Discontinued operations include the results of FMC Lithium and adjustments to retained assets and liabilities as well as provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities. The primary liabilities retained include environmental liabilities, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities.

Our discontinued operations comprised the following:
(in Millions)
Three Months Ended March 31,
2019
 
2018
Adjustment for workers’ compensation, product liability, other postretirement benefits and other, net of income tax benefit (expense) of ($4.4) and ($1.0) for the three months ended March 31, 2019 and 2018, respectively (1)
$
22.3

 
$
3.6

Provision for environmental liabilities, net of recoveries, net of income tax benefit (expense) of zero and $0.5 for the three months ended March 31, 2019 and 2018, respectively (2)
0.2

 
(3.2
)
Provision for legal reserves and expenses, net of recoveries, net of income tax benefit of $1.0 and $1.8 for the three months ended March 31, 2019 and 2018, respectively
(3.6
)
 
(7.1
)
Discontinued operations of FMC Health and Nutrition, net of income tax benefit (expense) of ($0.2) and ($2.6) for the three months ended March 31, 2019 and 2018, respectively
0.7

 
13.2

Discontinued operations of FMC Lithium, net of income tax benefit (expense) of ($4.7) and ($8.2) for the three months ended March 31, 2019 and 2018, respectively
(10.0
)
 
32.9

Discontinued operations, net of income taxes
$
9.6

 
$
39.4


____________________
(1)
During the three months ended March 31, 2019, we finalized the sale of the first of two parcels of land of our discontinued site in Newark, California and recorded a gain of approximately $21 million, net of tax. Results for the three months ended March 31, 2019 include these real estate proceeds.
(2)
See a roll forward of our environmental reserves as well as discussion on significant environmental issues that occurred during 2019 in Note 13.

Note 13: Environmental Obligations
We have reserves for potential environmental obligations which management considers probable and which management can reasonably estimate. The table below is a roll forward of our total environmental reserves, continuing and discontinued:

22

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

(in Millions)
Gross
 
Recoveries (3)
 
Net
Total environmental reserves at December 31, 2018
$
529.4

 
$
(7.9
)
 
$
521.5

Provision (Benefit)
2.5

 
—

 
2.5

(Spending) Recoveries
(8.3
)
 
—

 
(8.3
)
Foreign currency translation adjustments
(0.7
)
 
—

 
(0.7
)
Net change
$
(6.5
)
 
$
—

 
$
(6.5
)
Total environmental reserves at March 31, 2019
$
522.9

 
$
(7.9
)
 
$
515.0

 
 
 
 
 
 
Environmental reserves, current (1)
$
80.6

 
$
(1.1
)
 
$
79.5

Environmental reserves, long-term (2)
442.3

 
(6.8
)
 
435.5

Total environmental reserves at March 31, 2019
$
522.9

 
$
(7.9
)
 
$
515.0

____________________
(1)
These amounts are included within "Accrued and other liabilities" on the condensed consolidated balance sheets.
(2)
These amounts are included in "Environmental liabilities, continuing and discontinued" on the condensed consolidated balance sheets.
(3)
These recorded recoveries represent probable realization of claims against U.S. government agencies and are recorded as an offset to our environmental reserves in the condensed consolidated balance sheets.

The estimated reasonably possible environmental loss contingencies, net of expected recoveries, exceed amounts accrued by approximately $190 million at March 31, 2019. This reasonably possible estimate is based upon information available as of the date of the filing but the actual future losses may be higher given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of potentially responsible parties, technology and information related to individual sites. Potential environmental obligations that have not been reserved may be material to any one quarter's or year's results of operations in the future. However, we believe any such liability arising from such potential environmental obligations is not likely to have a material adverse effect on our liquidity or financial condition as it may be satisfied over many years.
The table below provides a roll forward of our environmental recoveries representing probable realization of claims against insurance carriers and other third parties. These recoveries are recorded as "Other assets including long-term receivables, net" in the condensed consolidated balance sheets.
(in Millions)
12/31/2018
 
Increase in recoveries
 
Cash received
 
3/31/2019
Environmental recoveries
$
30.5

 
0.1

 
—

 
$
30.6



Our net environmental provisions relate to costs for the continued cleanup of both continuing and discontinued manufacturing operations from previous years. The net provisions are comprised as follows:
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
Environmental provisions, net - recorded to liabilities (1)
$
2.5

 
$
6.2

Environmental provisions, net - recorded to assets (2)
(0.1
)
 
—

Environmental provision, net
$
2.4

 
$
6.2

 
 
 
 
Continuing operations (3)
$
2.6

 
$
2.5

Discontinued operations (4)
(0.2
)
 
3.7

Environmental provision, net
$
2.4

 
$
6.2


____________________
(1)
See above roll forward of our total environmental reserves as presented on the condensed consolidated balance sheets.
(2)
See above roll forward of our total environmental recoveries as presented on the condensed consolidated balance sheets.
(3)
Recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss). See Note 10. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations.
(4)
Recorded as a component of “Discontinued operations, net of income taxes" on the condensed consolidated statements of income (loss). See Note 12.


23

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

A more complete description of our environmental contingencies and the nature of our potential obligations are included in Notes 1 and 11 to our consolidated financial statements in our 2018 Form 10-K. See Note 11 to our consolidated financial statements in our 2018 Form 10-K for a description of significant updates to material environmental sites. There have been no significant updates since the information included in our 2018 Form 10-K.

Note 14: Earnings Per Share
Earnings per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis.
Our potentially dilutive securities include potential common shares related to our stock options, restricted stock and restricted stock units. Diluted earnings per share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss from continuing operations because the inclusion of the potential common shares would have an antidilutive effect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. For the three months ended March 31, 2019 and 2018, there were 0.4 million and 0.2 million potential common shares excluded from Diluted EPS, respectively.
Our non-vested restricted stock awards contain rights to receive non-forfeitable dividends, and thus, are participating securities requiring the two-class method of computing EPS. The two-class method determines EPS by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In calculating the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average number of shares outstanding during the period.
Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows:
(in Millions, Except Share and Per Share Data)
Three Months Ended March 31,
2019
 
2018
Earnings (loss) attributable to FMC stockholders:
 
 
 
Continuing operations, net of income taxes
$
206.1

 
$
227.8

Discontinued operations, net of income taxes
9.6

 
39.4

Net income (loss) attributable to FMC stockholders
$
215.7

 
$
267.2

Less: Distributed and undistributed earnings allocable to restricted award holders
(0.7
)
 
(1.0
)
Net income (loss) allocable to common stockholders
$
215.0

 
$
266.2

 
 
 
 
Basic earnings (loss) per common share attributable to FMC stockholders:
 
 
 
Continuing operations
$
1.56

 
$
1.69

Discontinued operations
0.07

 
0.29

Net income (loss) attributable to FMC stockholders
$
1.63

 
$
1.98

 
 
 
 
Diluted earnings (loss) per common share attributable to FMC stockholders:
 
 
 
Continuing operations
$
1.55

 
$
1.67

Discontinued operations
0.07

 
0.29

Net income (loss) attributable to FMC stockholders
$
1.62

 
$
1.96

 
 
 
 
Shares (in thousands):
 
 
 
Weighted average number of shares of common stock outstanding - Basic
131,887

 
134,589

Weighted average additional shares assuming conversion of potential common shares
1,327

 
1,568

Shares – diluted basis
133,214

 
136,157



Note 15: Equity


24

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

Accumulated other comprehensive income (loss)
Summarized below is the roll forward of accumulated other comprehensive income (loss), net of tax.
(in Millions)
Foreign currency adjustments
 
Derivative Instruments (1)
 
Pension and other postretirement benefits (2)
 
Total
Accumulated other comprehensive income (loss), net of tax at December 31, 2018
$
(101.5
)
 
$
11.2

 
$
(218.6
)
 
$
(308.9
)
2019 Activity
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
(2.1
)
 
0.9

 
—

 
(1.2
)
Amounts reclassified from accumulated other comprehensive income (loss)
—

 
(3.6
)
 
3.4

 
(0.2
)
Net current period other comprehensive income (loss)
$
(2.1
)
 
$
(2.7
)
 
$
3.4

 
$
(1.4
)
Adoption of accounting standard (Note 2)
—

 
1.0

 
(54.1
)
 
(53.1
)
Distribution of FMC Lithium (3)
39.0

 
—

 
—

 
39.0

Accumulated other comprehensive income (loss), net of tax at March 31, 2019
$
(64.6
)
 
$
9.5

 
$
(269.3
)
 
$
(324.4
)
(in Millions)
Foreign currency adjustments
 
Derivative Instruments (1)
 
Pension and other postretirement benefits (2)
 
Total
Accumulated other comprehensive income (loss), net of tax at December 31, 2017
$
(6.2
)
 
$
5.2

 
$
(239.3
)
 
$
(240.3
)
2018 Activity
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
49.3

 
1.5

 
0.6

 
51.4

Amounts reclassified from accumulated other comprehensive income (loss)
—

 
0.4

 
3.0

 
3.4

Accumulated other comprehensive income (loss), net of tax at March 31, 2018
$
43.1

 
$
7.1

 
$
(235.7
)
 
$
(185.5
)
____________________
(1)     See Note 18 for more information.
(2)    See Note 16 for more information.
(3)    Represents the effects of the distribution of FMC Lithium. Refer to Note 1 for further information.

Reclassifications of accumulated other comprehensive income (loss)
The table below provides details about the reclassifications from accumulated other comprehensive income (loss) and the affected line items in the condensed consolidated statements of income (loss) for each of the periods presented.

25

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

Details about Accumulated Other Comprehensive Income Components
 
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (1)
 
Affected Line Item in the Condensed Consolidated Statements of Income (Loss)
 
 
Three Months Ended March 31,
 
 
(in Millions)
 
2019
 
2018
 
 
Derivative instruments
 
 
 
 
 
 
Foreign currency contracts
 
$
3.3

 
$
(1.9
)
 
Costs of sales and services
Foreign currency contracts
 
1.3

 
1.4

 
Selling, general and administrative expenses
Total before tax
 
$
4.6

 
$
(0.5
)
 
 
 
 
(1.0
)
 
0.1

 
Provision for income taxes
Amount included in net income (loss)
 
$
3.6

 
$
(0.4
)
 
 
 
 
 
 
 
 
 
Pension and other postretirement benefits (2)
 
 
 
 
 
 
Amortization of prior service costs
 
$
(0.1
)
 
$
(0.1
)
 
Selling, general and administrative expenses
Amortization of unrecognized net actuarial and other gains (losses)
 
(4.2
)
 
(3.6
)
 
Selling, general and administrative expenses
Recognized loss due to curtailment and settlement
 
—

 
(0.9
)
 
Selling, general and administrative expenses
Total before tax
 
$
(4.3
)
 
$
(4.6
)
 
 
 
 
0.9

 
1.6

 
Provision for income taxes
Amount included in net income (loss)
 
$
(3.4
)
 
$
(3.0
)
 
 
Total reclassifications for the period
 
$
0.2

 
$
(3.4
)
 
Amount included in net income
____________________
(1)
Amounts in parentheses indicate charges to the condensed consolidated statements of income (loss).
(2)
Pension and other postretirement benefits amounts include the impact from both continuing and discontinued operations. For detail on the continuing operations components of pension and other postretirement benefits, see Note 16.

Dividends and Share Repurchases
For the three months ended March 31, 2019 and 2018, we paid dividends of $53.2 million and $22.3 million, respectively. On April 18, 2019, we paid dividends totaling $52.8 million to our shareholders of record as of March 29, 2019. This amount is included in “Accrued and other liabilities” on the condensed consolidated balance sheet as of March 31, 2019.

During the three months ended March 31, 2019, 1.3 million shares were repurchased under the publicly announced repurchase program. At March 31, 2019, approximately $900 million remained unused under our Board-authorized repurchase program. This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connection with the vesting, exercise and forfeiture of awards under our equity compensation plans.


26

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

Note 16: Pensions and Other Postretirement Benefits
The following table summarizes the components of net annual benefit cost (income):
(in Millions)
Three Months Ended March 31,
Pensions
 
Other Benefits
2019
 
2018
 
2019
 
2018
Service cost
$
1.1

 
$
1.7

 
$
—

 
$
—

Interest cost
12.2

 
11.4

 
0.2

 
0.1

Expected return on plan assets
(13.4
)
 
(15.8
)
 
—

 
—

Amortization of prior service cost (credit)
0.1

 
0.1

 
—

 
—

Recognized net actuarial and other (gain) loss
4.6

 
4.1

 
(0.2
)
 
(0.2
)
Recognized loss due to settlement (1)
—

 
0.9

 
—

 
—

Net periodic benefit cost (income)
$
4.6

 
$
2.4

 
$
—

 
$
(0.1
)

____________________
(1)
Settlement charge relates to the U.S. nonqualified defined benefit pension plan.

We did not make any voluntary cash contributions to our U.S. defined benefit pension plan in the three months ended March 31, 2019. We expect to make approximately $7 million in voluntary cash contributions to our U.S. defined benefit pension plan during 2019.

Note 17: Income Taxes
We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”) in accordance with U.S. GAAP. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision.
The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur in accordance with U.S. GAAP. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. As a global enterprise, our tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As a result, there can be significant volatility in interim tax provisions.
The below chart provides a reconciliation between our reported effective tax rate and the EAETR of our continuing operations.
 
Three Months Ended March 31,
 
2019
 
2018
(in Millions)
Before Tax
Tax
Effective Tax Rate %
 
Before Tax
Tax
Effective Tax Rate %
Continuing operations
$
243.9

$
36.3

14.9
%
 
$
290.7

$
60.5

20.8
%
Discrete items:
 
 
 
 
 
 
 
Currency remeasurement (1)
$
1.9

$
0.9

 
 
$
(1.7
)
$
0.6

 
Other discrete items (2)
46.0

3.3

 
 
(53.5
)
(18.1
)
 
Tax only discrete items (3)
—

2.4

 
 
—

(8.3
)
 
Total discrete items
$
47.9

$
6.6

 
 
$
(55.2
)
$
(25.8
)
 
Continuing operations, before discrete items
$
291.8

$
42.9

 
 
$
235.5

$
34.7

 
Estimated Annualized Effective Tax Rate (EAETR)
 
 
14.7
%
 
 
 
14.7
%

27

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

___________________ 
(1)
Represents transaction gains or losses for currency remeasurement offset by associated hedge gains or losses, which are accounted for discretely in accordance with U.S. GAAP. Certain transaction gains or losses for currency remeasurement are not taxable, while offsetting hedge gains or losses are taxable.
(2)
U.S. GAAP generally requires subsidiaries for which a full valuation allowance has been provided to be excluded from the EAETR. During the three months ended March 31, 2019, other discrete items were materially comprised of the discrete accounting for excluded pretax losses of subsidiaries for which a full valuation allowance has been provided. For the three months ended March 31, 2018, other discrete items represent the gain attributable to the sale of a portion of FMC’s European herbicide portfolio to Nufarm Limited partially offset by the discrete accounting for excluded pretax losses of subsidiaries for which a full valuation allowance has been provided.
(3)
For the three months ended March 31, 2019 and 2018, tax only discrete items are primarily comprised of the tax effect of currency remeasurement associated with foreign statutory operations, excess tax benefits associated with share-based compensation, and changes in prior year estimates of subsidiary tax liabilities.

Note 18: Financial Instruments, Risk Management and Fair Value Measurements
Our financial instruments include cash and cash equivalents, trade receivables, other current assets, certain receivables classified as other long-term assets, accounts payable, and amounts included in investments and accruals meeting the definition of financial instruments. The carrying value of these financial instruments approximates their fair value. Our other financial instruments include the following:
Financial Instrument
  
Valuation Method
Foreign exchange forward contracts
  
Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on current market prices for applicable currencies.
 
 
 
Commodity forward and option contracts
  
Estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices for applicable commodities.
 
 
 
Debt
  
Our estimates and information obtained from independent third parties using market data, such as bid/ask spreads for the last business day of the reporting period.

The estimated fair value of the financial instruments in the above table have been determined using standard pricing models which take into account the present value of expected future cash flows discounted to the balance sheet date. These standard pricing models utilize inputs derived from or corroborated by observable market data such as interest rate yield curves and currency and commodity spot and forward rates. In addition, we test a subset of our valuations against valuations received from the transaction's counterparty to validate the accuracy of our standard pricing models. Accordingly, the estimates presented may not be indicative of the amounts that we would realize in a market exchange at settlement date and do not represent potential gains or losses on these agreements. The estimated fair values of foreign exchange forward contracts and commodity forward and option contracts are included in the tables within this Note. The estimated fair value of debt is $3,175.8 million and $2,715.2 million and the carrying amount is $3,138.8 million and $2,692.7 million as of March 31, 2019 and December 31, 2018, respectively.
We enter into various financial instruments with off-balance-sheet risk as part of the normal course of business. These off-balance-sheet instruments include financial guarantees and contractual commitments to extend financial guarantees under letters of credit, and other assistance to customers. See Note 19 for more information. Decisions to extend financial guarantees to customers and the amount of collateral required under these guarantees are based on our evaluation of creditworthiness on a case-by-case basis.
Use of Derivative Financial Instruments to Manage Risk
We mitigate certain financial exposures, including currency risk, commodity purchase exposures and interest rate risk, through a program of risk management that includes the use of derivative financial instruments. We enter into derivative contracts, including forward contracts and purchased options, to reduce the effects of fluctuating currency exchange rates, interest rates, and commodity prices. A detailed description of these risks including a discussion on the concentration of credit risk is provided in Note 18 to our consolidated financial statements on our 2018 Form 10-K.
We formally document all relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes relating derivatives that are designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also assess, both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If we determine that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, we discontinue hedge accounting with respect to that derivative prospectively.
Accounting for Derivative Instruments and Hedging Activities

28

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

Cash Flow Hedges
We recognize all derivatives on the balance sheet at fair value. On the date the derivative instrument is entered into, we generally designate the derivative as a hedge of the variability of cash flows to be received or paid related to a forecasted transaction (cash flow hedge). We record in AOCI changes in the fair value of derivatives that are designated as and meet all the required criteria for a cash flow hedge. We then reclassify these amounts into earnings as the underlying hedged item affects earnings. In contrast, we immediately record in earnings changes in the fair value of derivatives that are not designated as cash flow hedges.
As of March 31, 2019, we had open foreign currency forward contracts in AOCI in a net after tax gain position of $13.8 million designated as cash flow hedges of underlying forecasted sales and purchases. Current open contracts hedge forecasted transactions until December 31, 2020. At March 31, 2019, we had open forward contracts designated as cash flow hedges with various expiration dates to buy, sell or exchange foreign currencies with a U.S. dollar equivalent of approximately $974 million.
As of March 31, 2019, we had open interest rate contracts in AOCI in a net after tax loss position of $6.2 million designated as cash flow hedges of underlying floating rate interest payments on a portion of our variable-rate debt and the anticipated fixed rate coupon of debt forecasted to be issued within a designated window. At March 31, 2019, we had interest rate swap contracts outstanding with a total aggregate notional value of $500.0 million.
As of March 31, 2019, we had no open commodity contracts in AOCI designated as cash flow hedges of underlying forecasted purchases. At March 31, 2019, we had zero mmBTUs (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity forward contracts to hedge forecasted purchases.
Approximately all of the $7.6 million net gains after-tax, representing open foreign currency exchange contracts and interest rate contracts, will be realized in earnings during the twelve months ending March 31, 2020 if spot rates in the future are consistent with forward rates as of March 31, 2019. The actual effect on earnings will be dependent on the actual spot rates when the forecasted transactions occur.
Derivatives Not Designated As Hedging Instruments
We hold certain forward contracts that have not been designated as cash flow hedging instruments for accounting purposes. Contracts used to hedge the exposure to foreign currency fluctuations associated with certain monetary assets and liabilities are not designated as cash flow hedging instruments, and changes in the fair value of these items are recorded in earnings.
We had open forward contracts not designated as cash flow hedging instruments for accounting purposes with various expiration dates to buy, sell or exchange foreign currencies with a U.S. dollar equivalent of approximately $1,153 million at March 31, 2019.
Fair Value of Derivative Instruments
The following tables provide the gross fair value and net balance sheet presentation of our derivative instruments.
 
March 31, 2019
 
Gross Amount of Derivatives
 
 
 
 
 
 
(in Millions)
Designated as Cash Flow Hedges
 
Not Designated as Hedging Instruments
 
Total Gross Amounts
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheet (3)
 
Net Amounts
Foreign exchange contracts
$
19.9

 
$
4.2

 
$
24.1

 
$
(6.8
)
 
$
17.3

Interest rate contracts
0.1

 
—

 
0.1

 
—

 
0.1

Total derivative assets (1)
$
20.0

 
$
4.2

 
$
24.2

 
$
(6.8
)
 
$
17.4

 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
$
(6.8
)
 
$
(0.1
)
 
$
(6.9
)
 
$
6.8

 
$
(0.1
)
Interest rate contracts
(7.9
)
 
—

 
(7.9
)
 
—

 
(7.9
)
Total derivative liabilities (2)
$
(14.7
)
 
$
(0.1
)
 
$
(14.8
)
 
$
6.8

 
$
(8.0
)
 
 
 
 
 
 
 
 
 
 
Net derivative assets (liabilities)
$
5.3

 
$
4.1

 
$
9.4

 
$
—

 
$
9.4


29

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

 
December 31, 2018
 
Gross Amount of Derivatives
 
 
(in Millions)
Designated as Cash Flow Hedges
 
Not Designated as Hedging Instruments
 
Total Gross Amounts
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheet (3)
 
Net Amounts
Foreign exchange contracts
$
18.3

 
$
1.5

 
$
19.8

 
$
(8.1
)
 
$
11.7

Total derivative assets (1)
$
18.3

 
$
1.5

 
$
19.8

 
$
(8.1
)
 
$
11.7

 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
$
(8.0
)
 
$
(0.2
)
 
$
(8.2
)
 
$
8.1

 
$
(0.1
)
Interest rate contracts
(0.2
)
 
—

 
(0.2
)
 
—

 
(0.2
)
Total derivative liabilities (2)
$
(8.2
)
 
$
(0.2
)
 
$
(8.4
)
 
$
8.1

 
$
(0.3
)
 
 
 
 
 
 
 
 
 
 
Net derivative assets (liabilities)
$
10.1

 
$
1.3

 
$
11.4

 
$
—

 
$
11.4

____________________
(1)
Net balance is included in “Prepaid and other current assets” in the condensed consolidated balance sheets.
(2)
Net balance is included in “Accrued and other liabilities” in the condensed consolidated balance sheets.
(3)
Represents net derivatives positions subject to master netting arrangements.

The tables below summarize the gains or losses related to our cash flow hedges and derivatives not designated as hedging instruments.
Derivatives in Cash Flow Hedging Relationships
 
Three Months Ended March 31,
 
Contracts
 
 
 
Foreign Exchange
 
Other
 
Total
(in Millions)
2019

2018

2019

2018

2019

2018
Unrealized hedging gains (losses) and other, net of tax
$
6.9

 
$
1.5

 
$
(6.0
)
 
$
—

 
$
0.9

 
$
1.5

Reclassification of deferred hedging (gains) losses, net of tax (1)
(3.6
)
 
0.2

 
—

 
0.2

 
(3.6
)
 
0.4

Total derivative instrument impact on comprehensive income, net of tax
$
3.3

 
$
1.7

 
$
(6.0
)
 
$
0.2

 
$
(2.7
)
 
$
1.9

___________________
(1)
See Note 15 for classification of amounts within the condensed consolidated statements of income (loss).

Derivatives Not Designated as Hedging Instruments
 
 
Amount of Pre-tax Gain or (Loss) 
Recognized in Income on Derivatives (1)
 
 
Three Months Ended March 31,
(in Millions)
Location of Gain or (Loss)
Recognized in Income on Derivatives
2019
 
2018
Foreign exchange contracts
Cost of sales and services
$
(2.9
)
 
$
(1.1
)
Total
 
$
(2.9
)
 
$
(1.1
)

___________________
(1)
Amounts represent the gain or loss on the derivative instrument offset by the gain or loss on the hedged item.

Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are defined as buyers or sellers in the principle or most advantageous market for the asset or liability that are independent of the reporting entity, knowledgeable and able and willing to transact for the asset or liability.


30

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

Fair Value Hierarchy
We have categorized our assets and liabilities that are recorded at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets and liabilities fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Recurring Fair Value Measurements
The following tables present our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets. During the periods presented there were no transfers between fair value hierarchy levels.
(in Millions)
March 31, 2019
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Derivatives – Foreign exchange (1)
$
17.3

 
$
—

 
$
17.3

 
$
—

Derivatives – Interest rate (1)
0.1

 
—

 
0.1

 
—

Other (2)
20.9

 
20.9

 
—

 
—

Total assets
$
38.3

 
$
20.9

 
$
17.4

 
$
—

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Derivatives – Foreign exchange (1)
$
0.1

 
$
—

 
$
0.1

 
$
—

Derivatives – Interest rate (1)
7.9

 
—

 
7.9

 
—

Other (3)
31.2

 
28.7

 
2.5

 
—

Total liabilities
$
39.2

 
$
28.7

 
$
10.5

 
$
—


(in Millions)
December 31, 2018
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Derivatives – Foreign exchange (1)
$
11.7

 
$
—

 
$
11.7

 
$
—

Other (2)
17.7

 
17.7

 
—

 
—

Total assets
$
29.4

 
$
17.7

 
$
11.7

 
$
—

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Derivatives – Foreign exchange (1)
$
0.1

 
$
—

 
$
0.1

 
$
—

Derivatives – Interest rate (1)
0.2

 
—

 
0.2

 
—

Other (3)
27.4

 
24.3

 
3.1

 
—

Total liabilities
$
27.7

 
$
24.3

 
$
3.4

 
$
—

____________________
(1)
See the Fair Value of Derivative Instruments table within this Note for classification on the condensed consolidated balance sheets.
(2)
Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheets. Both the asset and liability are recorded at fair value. Asset amounts are included in “Other assets including long-term receivables, net” in the condensed consolidated balance sheets.
(3)
Primarily consists of a deferred compensation arrangement recognized on our balance sheets. Both the asset and liability are recorded at fair value. Liability amounts are included in “Other long-term liabilities” in the condensed consolidated balance sheets.

Nonrecurring Fair Value Measurements
The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis in the condensed consolidated balance sheets during the year ended December 31, 2018. There were no non-recurring fair value measurements in the condensed consolidated balance sheets during the three months ended March 31, 2019.

31

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

(in Millions)
December 31, 2018
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total Gains (Losses) (Year Ended December 31, 2018)
Assets
 
 
 
 
 
 
 
 
 
Impairment of intangibles (1)
$
3.1

 
$
—

 
$
—

 
$
3.1

 
$
(1.8
)
Total assets
$
3.1

 
$
—

 
$
—

 
$
3.1

 
$
(1.8
)

____________________
(1)
We recorded an impairment charge to write down the carrying value of the generic brand portfolio of approximately $2 million to its fair value.


Note 19: Guarantees, Commitments, and Contingencies
We continue to monitor the conditions that are subject to guarantees and indemnifications to identify whether a liability must be recognized in our financial statements.
Guarantees and Other Commitments
The following table provides the estimated undiscounted amount of potential future payments for each major group of guarantees at March 31, 2019. These guarantees arise during the ordinary course of business from relationships with customers and nonconsolidated affiliates. Non-performance by the guaranteed party triggers the obligation requiring us to make payments to the beneficiary of the guarantee. Based on our experience these types of guarantees have not had a material effect on our consolidated financial position or on our liquidity. Our expectation is that future payment or performance related to the non-performance of others is considered unlikely.
(in Millions)
 
Guarantees:
 
Guarantees of vendor financing - short-term (1)
$
78.4

Other debt guarantees (2)
4.2

Total
$
82.6


____________________
(1)
Represents guarantees to financial institutions on behalf of certain customers for their seasonal borrowing. This short-term amount is recorded within “Guarantees of vendor financing” on the condensed consolidated balance sheets.
(2)
These guarantees represent support provided to third-party banks for credit extended to various customers and nonconsolidated affiliates. The liability for the guarantees is recorded at an amount that approximates fair value (i.e. representing the stand-ready obligation) based on our historical collection experience and a current assessment of credit exposure. We believe the fair value of these guarantees is immaterial. The majority of these guarantees have an expiration date of less than one year.

Excluded from the chart above are parent-company guarantees we provide to lending institutions that extend credit to our foreign subsidiaries. Since these guarantees are provided for consolidated subsidiaries, the consolidated financial position is not affected by the issuance of these guarantees. Also excluded from the chart, in connection with our property and asset sales and divestitures, we have agreed to indemnify the buyer for certain liabilities, including environmental contamination and taxes that occurred prior to the date of sale or provided guarantees to third parties relating to certain contracts assumed by the buyer. Our indemnification or guarantee obligations with respect to certain liabilities may be indefinite as to duration and may or may not be subject to a deductible, minimum claim amount or cap. As such, it is not possible for us to predict the likelihood that a claim will be made or to make a reasonable estimate of the maximum potential loss or range of loss. If triggered, we may be able to recover some of the indemnity payments from third parties. Therefore, we have not recorded any specific liabilities for these guarantees. For certain obligations related to our divestitures for which we can make a reasonable estimate of the maximum potential loss or range of loss and is probable, a liability in those instances has been recorded.
Contingencies
A detailed discussion related to our outstanding contingencies, other than as discussed below, can be found in Note 18 to our consolidated financial statements included within our 2018 Form 10-K.


32

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2 of this report contains certain forward-looking statements that are based on our current views and assumptions regarding future events, future business conditions and the outlook for our company based on currently available information.
Whenever possible, we have identified these 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 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 section “Forward-Looking Information” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”) and to similar disclaimers 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.
We specifically decline to undertake any obligation to publicly 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.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have described our accounting policies in Note 1 to our consolidated financial statements included in our 2018 Form 10-K. We have reviewed these accounting policies, identifying those that we believe to be critical to the preparation and understanding of our consolidated financial statements. We have reviewed these critical accounting policies with the Audit Committee of our Board of Directors. Critical accounting policies are central to our presentation of results of operations and financial condition and require management to make estimates and judgments on certain matters. We base our estimates and judgments on historical experience, current conditions and other reasonable factors.
The following is a list of those accounting policies that we have deemed most critical to the presentation and understanding of our results of operations and financial condition. See the “Critical Accounting Policies” section in our 2018 Form 10-K for a detailed description of these policies and their potential effects on our results of operations and financial condition.
•
Revenue recognition and trade receivables
•
Environmental obligations and related recoveries
•
Impairment and valuation of long-lived assets and indefinite-lived assets
•
Pensions and other postretirement benefits
•
Income taxes

RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS AND REGULATORY ITEMS
See Note 2 to the condensed consolidated financial statements included in this Form 10-Q for a discussion of recently adopted accounting guidance and other new accounting guidance.


33

OVERVIEW
We are an agricultural sciences company providing innovative solutions to growers around the world with a robust product portfolio fueled by a market-driven discovery and development pipeline in crop protection, plant health, and professional pest and turf management. We operate in a single distinct business segment and develop, market and sell all three major classes of crop protection chemicals: insecticides, herbicides and fungicides. These products are used in agriculture to enhance crop yield and quality by controlling a broad spectrum of insects, weeds and disease, as well as in non-agricultural markets for pest control.
First Quarter 2019 Highlights

The following items are the more significant developments or financial highlights in our business during the three months ended March 31, 2019:
•
On March 1, 2019, we successfully completed the separation of our FMC Lithium segment through a pro rata dividend on shares of FMC common stock which was a significant milestone and transformed FMC into a pure-play agricultural sciences company. The results of our FMC Lithium segment for periods up to separation are included within discontinued operations.
•
Revenue of $1,192.1 million for the three months ended March 31, 2019 increased $84.2 million or approximately 8 percent versus the same period last year. A more detailed review of revenue is discussed under the section titled "Results of Operations". On a regional basis, sales in North America increased by approximately 7 percent, sales in Asia increased approximately 1 percent, sales in Latin America increased approximately 30 percent, and sales in Europe, Middle East and Africa increased by approximately 3 percent.
•
Our gross margin, excluding transaction-related charges, of $544.7 million increased versus the prior year's first quarter by $12.3 million. Gross margin percent, excluding transaction-related charges, of approximately 46 percent decreased compared to approximately 48 percent in the prior year period.
•
Selling, general and administrative expenses, excluding transaction-related charges, of $167.4 million slightly decreased compared to the prior year period.
•
Research and development expenses of $71.2 million increased $6.3 million or approximately 10 percent. The increase was primarily due to continued investments in our global discovery and product development.
•
Net income (loss) attributable to FMC stockholders decreased from $267.2 million to $215.7 million which represents a decrease of $51.5 million, or approximately 19 percent. The decrease was primarily due to a gain of $85.0 million from the sale of product portfolio in the prior year period that did not recur, partially offset by higher business results in the current period.
•
Adjusted after-tax earnings from continuing operations attributable to FMC stockholders of $229.3 million increased compared to the prior year amount of $214.9 million primarily due to higher gross margins driven by increased volumes and pricing in the current period. See the disclosure of our Adjusted Earnings Non-GAAP financial measurement below, under the section titled "Results of Operations".


34

RESULTS OF OPERATIONS
Overview
The following charts provide a reconciliation of Total Company Adjusted EBITDA ("Adjusted EBITDA") and Adjusted Earnings, both of which are Non-GAAP financial measures, from the most directly comparable GAAP measure. Total Company Adjusted EBITDA is provided to assist the readers of our financial statements with useful information regarding our operating results. Our operating results are presented based on how we assess operating performance and internally report financial information. For management purposes, we report operating performance based on earnings before interest, income taxes, and depreciation and amortization, and corporate special charges. Our Adjusted Earnings measure excludes corporate special charges, net of income taxes and discontinued operations attributable to FMC stockholders, net of income taxes. These are excluded by us in the measure we use to evaluate business performance and determine certain performance-based compensation. These items are discussed in detail within the “Other Results of Operations” section that follows. In addition to providing useful information about our operating results to investors, we also believe that excluding the effect of corporate special charges, net of income taxes, and certain Non-GAAP tax adjustments from operating results and discontinued operations allows management and investors to compare more easily the financial performance of our underlying business from period to period. These measures should not be considered as substitutes for net income (loss) or other measures of performance or liquidity reported in accordance with U.S. GAAP.
 
Three Months Ended March 31,
2019
 
2018
(in Millions)
(unaudited)
Revenue
$
1,192.1

 
$
1,107.9

Costs and Expenses
 
 
 
Costs of sales and services
647.4

 
605.4

Gross margin
$
544.7

 
$
502.5

Selling, general and administrative expenses
183.9

 
192.5

Research and development expenses
71.2

 
64.9

Restructuring and other charges (income)
7.8

 
(79.9
)
Total costs and expenses
$
910.3

 
$
782.9

Income from continuing operations before equity in (earnings) loss of affiliates, non-operating pension and postretirement charges (income), interest expense, net and income taxes
$
281.8

 
$
325.0

Equity in (earnings) loss of affiliates
—

 
(0.1
)
Non-operating pension and postretirement charges (income)
3.4

 
0.5

Interest expense, net
34.5

 
33.9

Income (loss) from continuing operations before income taxes
$
243.9

 
$
290.7

Provision (benefit) for income taxes
36.3

 
60.5

Income (loss) from continuing operations
$
207.6

 
$
230.2

Discontinued operations, net of income taxes
9.6

 
39.4

Net income (loss) (GAAP)
$
217.2

 
$
269.6

Adjustments to arrive at Adjusted EBITDA:
 
 
 
Corporate special charges (income):
 
 
 
Restructuring and other (charges) income (2)
$
7.8

 
$
(79.9
)
Non-operating pension and postretirement (charges) income (3)
3.4

 
0.5

Transaction-related charges (4)
16.5

 
49.5

Discontinued operations, net of income taxes
(9.6
)
 
(39.4
)
Interest expense, net
34.5

 
33.9

Depreciation and amortization
37.3

 
34.8

Provision (benefit) for income taxes
36.3

 
60.5

Adjusted EBITDA (Non-GAAP) (1)
$
343.4

 
$
329.5

____________________
(1)
Referred to as Total Company Adjusted EBITDA. Defined as operating profit excluding corporate special charges (income) and depreciation and amortization expense.
(2)
See Note 10 for details of restructuring and other charges (income).

35

(3)
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 operating results 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 operating results noted above. These elements reflect the current year operating costs to our business for the employment benefits provided to active employees.
(4)
Charges relate to the expensing of the inventory fair value step-up resulting from the application of purchase accounting, transaction costs, costs for transitional employees, other acquired employee related costs, and integration related legal and professional third-party fees. Amounts represent the following:
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
DuPont Crop Protection Business Acquisition
 
 
 
Legal and professional fees (1)
$
16.5

 
$
19.6

Inventory fair value amortization (2)
—

 
29.9

Total Transaction-related charges
$
16.5

 
$
49.5

____________________ 
(1)
Represents transaction costs, costs for transitional employees, other acquired employees related costs, and transactional-related costs such as legal and professional third-party fees. These charges are recorded as a component of “Selling, general and administrative expense" on the condensed consolidated statements of income (loss).
(2)
These charges are recorded as a component of "Costs of sales and services" on the condensed consolidated statements of income (loss).


ADJUSTED EARNINGS RECONCILIATION
(in Millions)
Three Months Ended March 31,
2019
 
2018
Net income (loss) attributable to FMC stockholders (GAAP)
$
215.7

 
$
267.2

Corporate special charges (income), pre-tax (1)
27.7

 
(29.9
)
Income tax expense (benefit) on Corporate special charges (income) (2)
(5.7
)
 
8.4

Corporate special charges (income), net of income taxes
$
22.0

 
$
(21.5
)
Discontinued operations attributable to FMC Stockholders, net of income taxes
(9.6
)
 
(39.4
)
Non-GAAP tax adjustments (3)
1.2

 
8.6

Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP)
$
229.3

 
$
214.9

____________________
(1)
Represents restructuring and other charges (income), non-operating pension and postretirement charges (income) and transaction-related charges.
(2)
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 (income) occurred and includes both current and deferred income tax expense (benefit) based on the nature of the Non-GAAP performance measure.
(3)
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 current year ongoing business operations; 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 which includes the impact of the Act enacted on December 22, 2017. 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.

Results of Operations
For management purposes, Adjusted EBITDA is defined as total revenue less operating expenses (operating expenses consist of costs of sales and services, selling, general and administrative expenses including corporate staff expense, and research and development expenses), excluding depreciation and amortization. We have excluded the following items from Adjusted EBITDA: interest income and expense associated with corporate debt facilities and investments, income taxes, gains (losses) on divestitures

36

of businesses, restructuring and other charges (income), non-operating pension and postretirement charges (income), investment gains and losses, loss on extinguishment of debt, asset impairments, transaction-related charges, and other income and expense items.
In the discussion below, all comparisons are between the periods unless otherwise noted.
Revenue
Three Months Ended March 31, 2019 vs. 2018
Revenue of $1,192.1 million increased $84.2 million, or approximately 8 percent, versus the prior year period. The increase was driven by higher volumes, which contributed approximately 9 percent to the increase, primarily in Latin America, as well as favorable pricing across all regions which impacted revenue by approximately 5 percent. Foreign currency had an unfavorable impact on the change in revenue of approximately 6 percent. The increase in revenue was driven by strong commercial execution and demand for our products. See below for a discussion of revenue by region.
Total Revenue by Region
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
North America
$
318.3

 
$
298.2

Latin America
206.5

 
158.9

Europe, Middle East & Africa (EMEA)
412.0

 
398.8

Asia Pacific
255.3

 
252.0

Total Revenue
$
1,192.1

 
$
1,107.9


North America: Revenue increased approximately 7 percent versus the prior year period due to the launch of a new fungicide in addition to demand in pre-emergent herbicides for soybeans and insecticides for tree fruits and vegetables. These were partially offset by adverse weather conditions in the United States.
Latin America: Revenue increased approximately 30 percent versus the prior year period, or approximately 40 percent excluding foreign currency headwinds, primarily due to Brazil. Increased cotton acreage as well as a boll weevil infestation drove strong demand in Brazil for cotton insecticides. Additionally, demand for herbicides in sugarcane, as well as robust demand for our insecticides in soybean applications contributed to the increase in revenue. Price increases in the region offset nearly all the effects of negative foreign currency.
Europe, Middle East & Africa ("EMEA"): Revenue increased approximately 3 percent versus the prior year period, or approximately 11 percent excluding foreign currency headwinds, primarily due to favorable weather, demand for our diamide products, and higher pricing throughout the region. There were higher sales in Turkey and southwestern Europe, as well as new direct market access in Belgium and the Netherlands. These increases were partially offset by unfavorable foreign currency impacts.
Asia Pacific: Revenue increased approximately 1 percent versus the prior year period, or approximately 8 percent excluding foreign currency headwinds, due to the high growth in China driven by the diamide products. Additionally, the continued sales synergy in India and strong growth in Pakistan and Japan contributed to the increase in revenue. These factors were nearly offset by unfavorable foreign currency impacts, as well as unfavorable weather conditions in Australia.
In late March, there was an explosion within an industrial park in China which impacted one plant operated by one of our contract manufacturing tollers. The local government has temporarily shut down the entire park to investigate the cause of the explosion. The target date to reopen the industrial park is unknown at this time. However, FMC’s global manufacturing network provides significant supply chain flexibility. Due to the strength of our partnerships and our alternate sourcing options, we believe we can continue to secure supply of the active ingredients normally manufactured at this location as needed.
For 2019, full-year revenue is expected to be in the range of approximately $4.5 billion to $4.6 billion.

37

Gross margin
Three Months Ended March 31, 2019 vs. 2018
Gross margin of $544.7 million increased $42.2 million, or approximately 8 percent versus the prior year period. Gross margin, excluding transaction-related charges, also increased versus the prior year period by $12.3 million. The increase was primarily due to the higher revenues which were driven by increased volumes and pricing, partially offset by higher raw material costs.
Gross margin percent of approximately 46 percent slightly increased from approximately 45 percent in the prior year period. The increase from higher pricing was nearly offset by higher raw material costs. Gross margin percent, excluding transaction-related charges, of approximately 46 percent decreased compared to approximately 48 percent in the prior year period primarily due to the higher costs and partially offset by increased pricing as discussed above.
Selling, general and administrative expenses
Three Months Ended March 31, 2019 vs. 2018
Selling, general and administrative expenses of $183.9 million decreased $8.6 million, or approximately 4 percent versus the prior year period. Selling, general and administrative expenses, excluding transaction-related charges, also slightly decreased to $167.4 million, a $5.5 million, or approximately 3 percent, decrease. Favorable foreign currency impacts, primarily in Latin America, more than offset the incremental administrative expenses in Asia Pacific and EMEA.
Research and development expenses
Three Months Ended March 31, 2019 vs. 2018
Research and development expenses of $71.2 million increased $6.3 million, or approximately 10 percent versus the prior year period. The increase was primarily due to continued investments in our global discovery and product development.
Adjusted EBITDA
Three Months Ended March 31, 2019 vs. 2018
Adjusted EBITDA of $343.4 million increased $13.9 million, or approximately 4 percent versus the prior year period. The increase was due to the strong demand which led to higher volumes and higher pricing as discussed above which contributed 17 percent and 16 percent to the increase, respectively. The price increases were primarily seen in EMEA and Latin America. These factors more than offset the higher raw material costs and unfavorable foreign currency which impacted the change in Adjusted EBITDA by 17 percent and 12 percent, respectively.
For 2019, full-year Adjusted EBITDA is expected to be in the range of $1.18 billion to $1.22 billion. Although we provide a forecast for Adjusted EBITDA, a Non-GAAP financial measure, we are not able to forecast the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Certain elements of the composition of the U.S. GAAP amount 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 U.S. GAAP outlook is provided.
Other Results of Operations

Depreciation and amortization
Three Months Ended March 31, 2019 vs. 2018
Depreciation and amortization of $37.3 million increased approximately 7 percent as compared to the prior year period of $34.8 million.

Interest expense, net
Three Months Ended March 31, 2019 vs. 2018
Interest expense, net of $34.5 million slightly increased compared to the prior year period of $33.9 million. The increase was driven primarily by higher interest rates, partially offset by paydowns of both the 2014 and 2017 Term Loan Facilities.





38

Corporate special charges (income)
Restructuring and other charges (income)
 
Three Months Ended March 31,
(in Millions)
2019
 
2018
Restructuring charges
$
5.2

 
$
2.6

Other charges (income), net
2.6

 
(82.5
)
Total restructuring and other charges (income)
$
7.8

 
$
(79.9
)

Three Months Ended March 31, 2019 vs. 2018
Restructuring and asset disposal charges in 2019 of $5.2 million primarily comprised of charges associated with the integration of the DuPont Crop Protection Business. These charges include severance, accelerated depreciation on certain fixed assets, and other costs (benefits) of $3.9 million. Additionally, charges include Corporate charges of $1.3 million.
Restructuring and asset disposal charges in 2018 of $2.6 million were primarily associated with charges of approximately $1 million of accelerated depreciation charges related to certain fixed assets that will no longer be used when we exit our Ewing R&D facility as well as miscellaneous restructuring efforts.
Other charges, net in 2019 of $2.6 million consists of charges of continuing environmental sites treated as a Corporate charge.
Other charges (income), net in 2018 of $(82.5) million primarily consists of a gain on sale of $85.0 million from the divestment of a portion of FMC's European herbicide portfolio to Nufarm Limited. This divestiture satisfied FMC's commitment to the European Commission for regulatory requirements in order to complete the DuPont Crop Protection Acquisition. The remaining other charges (income) represents $2.5 million of environmental related charges for remediation activities.
Non-operating pension and postretirement charges (income)
Charges for the three months ended March 31, 2019 was $3.4 million compared to $0.5 million for the three months ended March 31, 2018. The increase in expense was primarily due to a lower expected return on plan assets of $2.4 million. See Note 16 to the condensed consolidated financial statements included in this Form 10-Q for more information. Our U.S. qualified pensions plan reached fully funded status during 2018. The primary investment strategy is a liability hedging approach with an objective of maintain the funded status of the plan such that the funded status volatility is minimized.
Transaction-related charges
A detailed description of the transaction-related charges is included in Note 5 to the condensed consolidated financial statements included within this Form 10-Q.

Provision for income taxes
A significant amount of our earnings are generated by foreign subsidiaries and taxed at lower statutory rates than the United States federal statutory rate (e.g., Singapore, Hong Kong, and Switzerland). Our future effective tax rates may be materially impacted by numerous items including: a future change in the composition of earnings from foreign and domestic tax jurisdictions, as earnings in foreign jurisdictions are typically taxed at more favorable rates than the United States federal statutory rate; accounting for uncertain tax positions; business combinations; expiration of statute of limitations or settlement of tax audits; changes in valuation allowance; changes in tax law; and the potential decision to repatriate certain future foreign earnings on which United States or foreign withholding taxes have not been previously accrued.

Three Months Ended March 31, 2019 vs. 2018
Provision for income taxes for the three months ended March 31, 2019 was $36.3 million resulting in an effective tax rate of 14.9 percent. Provision for income taxes for the three months ended March 31, 2018 was $60.5 million resulting in an effective tax rate of 20.8 percent. Additional detail explaining the change in the GAAP effective tax rate is presented in Note 17 to the condensed consolidated financial statements included within this Form 10-Q. Below is a table that adjusts our income and taxes for the effect of corporate special charges and certain tax adjustments. We believe showing this reconciliation of our GAAP to Non-GAAP effective tax rate provides investors with useful supplemental information about our tax rate on the core underlying business.

39

 
Three Months Ended March 31,
 
2019
 
2018
(in Millions)
Income (Expense)
Tax Provision (Benefit)
Effective Tax Rate
 
Income (Expense)
Tax Provision (Benefit)
Effective Tax Rate
GAAP - Continuing operations
$
243.9

$
36.3

14.9
%
 
$
290.7

$
60.5

20.8
%
Corporate special charges (income)
27.7

5.7

 
 
(29.9
)
(8.4
)
 
Tax adjustments (1)
 
(1.2
)
 
 
 
(8.6
)
 
Non-GAAP - Continuing operations
$
271.6

$
40.8

15.0
%
 
$
260.8

$
43.5

16.7
%
_______________
(1)
Refer to Note 3 of the Adjusted Earnings Reconciliation table within this section of this Form 10-Q for an explanation of tax adjustments.

The primary drivers for the decrease in the year-to-date effective tax rate for 2019 compared to 2018 are shown in the table above. The remaining change was due to the integration of the DuPont Crop Protection Business into our global supply chain.

Discontinued operations, net of income taxes
Our discontinued operations include results of our discontinued FMC Lithium segment, in periods up to its separation on March 1, 2019, as well as adjustments to retained liabilities from other previously discontinued operations. The primary liabilities retained include environmental liabilities, other postretirement benefit liabilities, stock compensation, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities.
Three Months Ended March 31, 2019 vs. 2018
Discontinued operations, net of income taxes representing income of $9.6 million for the three months ended March 31, 2019 decreased compared to income of $39.4 million for the three months ended March 31, 2018. During the three months ended March 31, 2019, we finalized the sale of the first of two parcels of land of our discontinued site in Newark, California and recorded a gain of approximately $21 million, net of tax. The gain on sale was partially offset by results of our discontinued FMC Lithium segment, including separation-related costs, as well as from other previously discontinued operations. Discontinued operations, net of income taxes for the three months ended March 31, 2018 includes an additional gain on sale of the FMC Health and Nutrition business to DuPont of approximately $16 million as a result of the adjustment to the final working capital. The prior year period also includes a full quarter of higher results from our discontinued FMC Lithium segment as compared two months during 2019. Refer to Note 12 to the condensed consolidated financial statements included within this Form 10-Q for further information.

Net income (loss)
Three Months Ended March 31, 2019 vs. 2018
Net income (loss) decreased to $217.2 million from income of $269.6 million in the prior-year period. The decrease was primarily due to the gain on sale of $85.0 million from the divestment of a portion of FMC's European herbicide portfolio in the prior year period. This was partially offset by higher gross margins in the current period as discussed above.

40

LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at March 31, 2019 and December 31, 2018, were $109.5 million and $134.4 million, respectively. Of the cash and cash equivalents balance at March 31, 2019, $105.9 million were held by our foreign subsidiaries. The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries’ operating activities and future foreign investments. We have not provided income taxes for other additional outside basis differences inherent in our investments in subsidiaries because the investments are essentially permanent in duration or we have concluded that no additional tax liability will arise upon disposal or remittance. Determining the amount of unrecognized deferred tax liability related to permanent undistributed foreign earnings is not practicable due to the complexity of the hypothetical calculation.
At March 31, 2019, we had total debt of $3,138.8 million as compared to $2,692.7 million at December 31, 2018. Total debt included $2,145.0 million and $2,145.0 million of long-term debt (excluding current portions of $385.6 million and $386.0 million) at March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, we were in compliance with all of our debt covenants. See Note 11 in the condensed consolidated financial statements included in this Form 10-Q for further details.
Short-term debt, which consists of borrowings under our commercial paper program as well as short-term foreign borrowings, increased from $547.7 million at December 31, 2018 to $993.8 million at March 31, 2019. The increase was primarily due to the increase in borrowings under our commercial paper program. Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. Proceeds from the commercial paper program were primarily used for the seasonal build in working capital and our continued purchases of FMC stock. At March 31, 2019, we had $493.5 million of borrowings under the commercial paper program and the average effective interest rate on the borrowings was 3.1 percent.

Statement of Cash Flows
Cash provided (required) by operating activities of continuing operations was $(282.9) million and $(67.4) million for the three months ended March 31, 2019 and 2018, respectively.
The cash required for the three months ended March 31, 2019 was due to a more normal seasonal build of working capital. Additionally, the cash required was substantially more than the prior year period due to several non-recurring impacts that benefitted working capital in the prior year period including a step-down in past due balances in Brazil which reduced cash used for receivables, lower cash use for inventory, given inventory levels in the acquired DuPont Crop Protection Business at acquisition, and a significant increase in account payables associated with the ramp-up of the acquired DuPont Crop Protection Business post acquisition. The table below presents the components of cash provided (required) by operating activities of continuing operations.
(in Millions)
Three Months Ended March 31,
2019
 
2018
Income from continuing operations before equity in (earnings) loss of affiliates, non-operating pension and postretirement charges (income), interest expense, net and income taxes
$
281.8

 
$
325.0

Restructuring and other charges (income), transaction-related charges and depreciation and amortization
61.6

 
4.4

Operating income before depreciation and amortization (Non-GAAP)
$
343.4

 
$
329.4

Change in trade receivables, net (1)
(389.4
)
 
(331.4
)
Change in inventories (2)
(109.7
)
 
(59.8
)
Change in accounts payable (3)
91.0

 
207.3

Change in accrued customer rebates (4)
95.0

 
142.0

Change in advance payments from customers (5)
(175.3
)
 
(189.7
)
Change in all other operating assets and liabilities (6)
(37.2
)
 
(78.7
)
Operating cash flows (Non-GAAP)
$
(182.2
)
 
$
19.1

 
 
 
 
Restructuring and other spending (7)
$
(5.8
)
 
$
(4.4
)
Environmental spending, continuing, net of recoveries (8)
(3.5
)
 
(2.0
)
Pension and other postretirement benefit contributions (9)
(1.6
)
 
(2.4
)
Net interest payments (10)
(35.8
)
 
(35.0
)
Tax payments, net of refunds (10)
(34.1
)
 
(8.7
)
Transactional-related legal and professional fees (11)
(19.9
)
 
(34.0
)
Cash provided (required) by operating activities of continuing operations
$
(282.9
)
 
$
(67.4
)

41

____________________ 
(1)
Both periods include the impacts of seasonality and the receivable build intrinsic in our business. The change in cash flows related to trade receivables in 2019 was driven by timing of collections. Collection timing is more pronounced in certain countries such as Brazil where there may be terms significantly longer than the rest of our business. Additionally, timing of collection is impacted as amounts for both periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks. During the three months ended March 31, 2019, we collected approximately $165 million of receivables in Brazil. Additionally, the prior year period included a step-down in past due balances in Brazil which reduced cash used for receivables.
(2)
Changes in inventory are a result of inventory levels being adjusted to take into consideration the change in market conditions. Additionally, there was lower cash use for inventory in the prior year period, given inventory levels in the acquired DuPont Crop Protection Business at acquisition.
(3)
The change in cash flows related to accounts payable is primarily due to timing of payments made to suppliers and vendors. Additionally, in the prior year period there was a significant increase in account payables associated with the ramp-up of the acquired DuPont Crop Protection Business post acquisition.
(4)
These rebates are primarily associated within North America and Brazil and generally settle in the fourth quarter of each year. The changes year over year are associated with the mix in sales eligible for rebates and incentives in 2019 compared to 2018 and timing of rebate payments.
(5)
Advance payments are primarily associated within North America and these payments are received in the fourth quarter of each year and recorded as deferred revenue on the balance sheet at December 31. Revenue associated with advance payments is recognized, generally in the first half of each year, as shipments are made and control to the customer takes place.
(6)
Changes in all periods presented primarily represent timing of payments associated with all other operating assets and liabilities, including guarantees issued to vendors under our vendor finance program. Additionally, both periods include the effects of the unfavorable contracts amortization of approximately $27 million and $18 million, respectively.
(7)
See Note 10 in our condensed consolidated financial statements included in this Form 10-Q for further details.
(8)
The amounts represent environmental remediation spending at our operating sites which were recorded against pre-existing reserves, net of recoveries.
(9)
There were no voluntary contributions to our U.S. qualified defined benefit plan for the three months ended March 31, 2019 and 2018.
(10)
Amounts shown in the chart represent net payments of our continuing operations.
(11)
Represents payments for legal and professional fees associated with the DuPont's Crop Protection Business Acquisition. See Note 5 to the condensed consolidated financial statements included in this Form 10-Q for more information.
    
Cash provided (required) by operating activities of discontinued operations was $5.7 million and $(11.0) million for the three months ended March 31, 2019 and 2018, respectively.
Cash provided (required) by operating activities of discontinued operations is directly related to environmental, other postretirement benefit liabilities, stock compensation, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities. Both periods include the operating activities related to our discontinued FMC Lithium segment while 2018 includes activity related to the divestiture of the FMC Health and Nutrition segment.
Cash provided (required) by investing activities of continuing operations was $(33.4) million and $71.6 million for the three months ended March 31, 2019 and 2018, respectively.
The decrease in cash provided during the three months ended March 31, 2019, as compared to the same period in 2018 was primarily due to proceeds from the sales of our product portfolio of approximately $85 million in the prior period that were required to complete the DuPont Crop Protection Business Acquisition. Additionally, there was higher capital expenditure spending and capitalizable corporate level spending associated with the implementation of a new SAP system in the current period.
Cash provided (required) by investing activities of discontinued operations was $9.2 million and $(26.5) million for the three months ended March 31, 2019 and 2018, respectively.
Cash provided by investing activities of discontinued operations for the three months ended March 31, 2019 represents the proceeds from the sale of the first of two parcels of land of our discontinued site in Newark, California partially offset by capital expenditures of our discontinued FMC Lithium segment. Cash required by investing activities of discontinued operations for the three months ended March 31, 2018 includes the final working capital payment associated with the divestiture of FMC Health and Nutrition as well as capital expenditures of our discontinued FMC Lithium segment.
Cash provided (required) by financing activities of continuing operations was $287.6 million and $113.9 million for the three months ended March 31, 2019 and 2018, respectively.
The change period over period in financing activities is partially due to higher borrowings of short-term debt, primarily under our commercial paper program of approximately $309 million to fund seasonal working capital and due to the timing of share repurchases in the quarter, partially offset by repurchases of common stock of approximately $100 million and higher dividend payments of approximately $31 million in the current period as a result of the dividend payment increase announced in December 2018.
Cash provided (required) by financing activities of discontinued operations was $(37.2) million and zero for the three months ended March 31, 2019 and 2018, respectively.

42

Cash required by financing activities of discontinued operations for the three months ended March 31, 2019 represents debt repayments as well as cash payments associated with the separation of FMC Lithium.

Other potential liquidity needs
Our cash needs outside of the DuPont Crop Protection Business related integration expenses for 2019 include operating cash requirements, capital expenditures, scheduled mandatory payments of long-term debt, dividend payments, share repurchases, contributions to our pension plans, environmental and asset retirement obligation spending and restructuring. We plan to meet our liquidity needs through available cash, cash generated from operations, commercial paper issuances and borrowings under our committed revolving credit facility. At March 31, 2019, our remaining borrowing capacity under our credit facility was $814.3 million (which includes borrowing capacity under our commercial paper program).
Projected 2019 capital expenditures as well as expenditures related to contract manufacturers are expected to be approximately $150 million, at the midpoint of the range, primarily driven by expenditures associated with capacity expansion. Additionally, we will continue to incur spending associated with the two-year implementation of a new SAP system.
As a result of the Act, we will continue to pay the remaining $161.3 million of transition tax over the next seven years.
Projected 2019 spending includes approximately $75 million to $80 million of net environmental remediation spending at both our continuing and discontinued sites. This projected spending for 2019 includes spending as a result of active negotiations for a settlement agreement primarily to address discontinued operations at our Middleport, New York site. This projected spending does not include expected spending on capital projects relating to environmental control facilities or expected spending for environmental compliance costs, which we will include as a component of "Costs of sales and services" in our condensed consolidated statements of income (loss) since these amounts are not covered by established reserves. Capital spending to expand, maintain or replace equipment at our production facilities may trigger requirements for upgrading our environmental controls, which may increase our spending for environmental controls over the foregoing projections.
In order to reduce future funding volatility in our U.S. qualified defined benefit pension plan, we expect to make voluntary cash contributions of approximately $7 million during 2019. These projected contributions are in excess of the minimum requirements. We did not make any contributions in the first quarter of 2019. We do not believe that these projected contributions will have a significant negative impact on our current and future liquidity needs. However, any volatility of interest rates or negative equity returns may require greater contributions to the U.S. Plan in the future.
For the three months ended March 31, 2019 and 2018, we paid dividends of $53.2 million and $22.3 million, respectively. On April 18, 2019, we paid dividends totaling $52.8 million to our shareholders of record as of March 29, 2019. This amount is included in “Accrued and other liabilities” on the condensed consolidated balance sheet as of March 31, 2019.
During the three months ended March 31, 2019, 1.3 million shares were repurchased under the publicly announced repurchase program. At March 31, 2019, approximately $900 million remained unused under our Board-authorized repurchase program. We intend to purchase a total of up to $500 million of our common shares in 2019. This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connection with the vesting, exercise and forfeiture of awards under our equity compensation plans.

Commitments and Contingencies
See Note 19 to the condensed consolidated financial statements included in this Form 10-Q.

Contractual Commitments
Information related to our contractual commitments at December 31, 2018 can be found in a table included within Part II, Item 7 of our 2018 Form 10-K. There have been no significant changes to our contractual commitments during the three months ended March 31, 2019.

Climate Change
A detailed discussion related to climate change can be found in Part II, Item 7 of our 2018 Form 10-K.


43

Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Fair Value Measurements
See Note 18 to the condensed consolidated financial statements in this Form 10-Q for additional discussion surrounding our fair value measurements.

DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISKS
Our earnings, cash flows, and financial position are exposed to market risks relating to fluctuations in commodity prices, interest rates and foreign currency exchange rates. Our policy is to minimize exposure to our cash flow over time caused by changes in commodity, interest and currency exchange rates. To accomplish this, we have implemented a controlled program of risk management consisting of appropriate derivative contracts entered into with major financial institutions.
The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates and prices. The range of changes chosen reflects our view of changes that are reasonably possible over a one-year period. Market-value estimates are based on the present value of projected future cash flows considering the market rates and prices chosen.
At March 31, 2019, our financial instrument position was a net asset of $9.4 million compared to a net asset of $11.4 million at December 31, 2018. The change in the net financial instrument position was primarily due to changes in exchange and interest rates.
Since our risk management programs are generally highly effective, the potential loss in value for each risk management portfolio described below would be largely offset by changes in the value of the underlying exposure.
Commodity Price Risk
Energy costs are diversified among electricity and natural gas. We attempt to mitigate our exposure to increasing energy costs by hedging the cost of future deliveries of natural gas and electricity. To analyze the effect of changing energy prices, we perform a sensitivity analysis in which we assume an instantaneous 10 percent change in energy market prices from their levels at March 31, 2019 and December 31, 2018, with all other variables (including interest rates) held constant. Note, as of March 31, 2019 and December 31, 2018, we had no open commodity contracts. As a result, there was no sensitivity analysis performed over commodity price risk for the periods presented.
Foreign Currency Exchange Rate Risk
The primary currencies for which we have exchange rate exposure are the U.S. dollar versus the Euro, the U.S. dollar versus the Chinese yuan, the U.S. dollar versus the Brazilian real and the U.S. dollar versus the Argentine peso. Foreign currency debt and foreign exchange forward contracts and options are used in countries where we do business, thereby reducing our net asset exposure. Foreign exchange forward contracts and options are also used to hedge firm and highly anticipated foreign currency cash flows.
To analyze the effects of changing foreign currency rates, we have performed a sensitivity analysis in which we assume an instantaneous 10 percent change in the foreign currency exchange rates from their levels at March 31, 2019 and December 31, 2018, with all other variables (including interest rates) held constant.
(in Millions)
Net Asset / (Liability) Position on Condensed Consolidated Balance Sheets
 
10% Strengthening
 
10% Weakening
Net asset (liability) position at March 31, 2019
$17.2
 
$32.8
 
$1.7
 
 
 
 
 
 
Net asset (liability) position at December 31, 2018
$11.6
 
$19.2
 
$(16.7)
Interest Rate Risk
One of the strategies that we can use to manage interest rate exposure is to enter into interest rate swap agreements. In these agreements, we agree to exchange, at specified intervals, the difference between fixed and variable interest amounts calculated on an agreed-upon notional principal amount. As of March 31, 2019, we had outstanding interest rate swap contracts in place with an aggregate notional value of $500.0 million.

44

To analyze the effects of changing interest rates, we have performed a sensitivity analysis in which we assume an instantaneous one percent change in the interest rates from their levels at March 31, 2019 and December 31, 2018, with all other variables held constant.
(in Millions)
Net Asset / (Liability) Position on Condensed Consolidated Balance Sheets
 
1% Increase
 
1% Decrease
Net asset (liability) position at March 31, 2019
$(7.8)
 
$36.6
 
$(45.3)
 
 
 
 
 
 
Net asset (liability) position at December 31, 2018
$(0.2)
 
$2.2
 
$(2.7)
Our debt portfolio, at March 31, 2019, is composed of 45 percent fixed-rate debt and 55 percent variable-rate debt. The variable-rate component of our debt portfolio principally consists of borrowings under our 2017 Term Loan Facility, Revolving Credit Facility, commercial paper program, variable-rate industrial and pollution control revenue bonds, and amounts outstanding under foreign subsidiary credit lines. Changes in interest rates affect different portions of our variable-rate debt portfolio in different ways.
Based on the variable-rate debt in our debt portfolio at March 31, 2019, a one percentage point increase in interest rates then in effect would have increased gross interest expense by $4.3 million and a one percentage point decrease in interest rates then in effect would have decreased gross interest expense by $4.3 million for the three months ended March 31, 2019.

45

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is provided in “Derivative Financial Instruments and Market Risks,” under ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 4.    CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Based on management’s evaluation (with the participation of the Company’s Chief Executive Officer and Chief Financial Officer), the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2019, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to provide reasonable assurance that information required to be disclosed by the Company in reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Change in Internal Controls. On January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842). As part of our adoption activities, we assessed any potential impacts on our internal controls and processes related to both the implementation and ongoing compliance of the new guidance. As a result of this assessment, we have implemented updates and changes to our current processes related to leases and the control activities within them. These changes included updates to our lease accounting policies in order to be aligned with the new standard, implementing new lease identification and review controls specific to ASC 842, and the development of new processes for maintaining an accurate lease population and gathering data for the new disclosure requirements.


46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
FMC Corporation:

Results of Review of Interim Financial Information
We have reviewed the condensed consolidated balance sheet of FMC Corporation and subsidiaries (the Company) as of March 31, 2019, the related condensed consolidated statements of income (loss), comprehensive income (loss), changes in equity and cash flows for the three-month periods ended March 31, 2019 and 2018, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated statements of income (loss), comprehensive income (loss), changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 28, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP
Philadelphia, Pennsylvania
May 8, 2019


47

PART II - OTHER INFORMATION
 
ITEM 1.    LEGAL PROCEEDINGS

Other matters. For additional discussion of developments in the legal proceedings disclosed in Part I, Item 3 of our 2018 Form 10-K, see Note 13 and 19 to the condensed consolidated financial statements included within this Form 10-Q.

ITEM 1A.    RISK FACTORS
In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A "Risk Factors" of our 2018 Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) for the fiscal year ended December 31, 2018 and the Company’s other filings with the SEC, which are available at www.sec.gov and on the Company’s website at www.fmc.com.

Forward-Looking Information
We wish to caution readers not to place undue reliance on any forward-looking statements contained herein, which speak only as of the date made. We specifically decline to undertake any obligation to publicly 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.


48

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ISSUER PURCHASES OF EQUITY SECURITIES
 
 
 
 
 
 
 
Publicly Announced Program
Period
 
Total Number
of Shares
Purchased
 
Average
Price Paid
Per Share
 
Total Number of
Shares Purchased
 
Total Dollar
Amount
Purchased
 
Maximum Dollar Value of
Shares that May Yet be
Purchased
January 2019
 
1,055,280

 
$
78.80

 
1,050,000

 
$
82,732,105

 
$
917,267,895

February 2019
 
443,225

 
84.16

 
202,436

 
17,267,821

 
900,000,074

March 2019
 
644

 
75.42

 
—

 
—

 
900,000,074

Total Q1 2019
 
1,499,149

 
$
80.38

 
1,252,436

 
$
99,999,926

 
$
900,000,074


During the three months ended March 31, 2019, 1.3 million shares were repurchased under the publicly announced repurchase program. At March 31, 2019, approximately $900 million remained unused under our Board-authorized repurchase program. This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connection with the vesting, exercise and forfeiture of awards under our equity compensation plans.

ITEM 5.    OTHER INFORMATION
None.
ITEM 6.    EXHIBITS
3.1
 
 
 
 
3.2
 
 
 
 
†10.8e

 
 
 
 
†10.8f
 
 
 
 
15
 
 
 
 
31.1
 
 
 
 
31.2
 
 
 
 
32.1
 
 
 
 
32.2
 
 
 
 
101
 
Interactive Data File (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.)
† Management contract or compensatory plan or arrangement



49


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
FMC CORPORATION
(Registrant)
 
 
 
 
 
By:
/s/ ANDREW D. SANDIFER
 
 
Andrew D. Sandifer
Executive Vice President and Chief Financial Officer
Date: May 8, 2019

50
RESTATED CERTIFICATE OF INCORPORATION OF FMC CORPORATION (as amended through April 30, 2019) FIRST: The name of the Corporation is FMC CORPORATION. SECOND: The registered office of the Corporation in the State of Delaware is located at 1209 Orange Street, in the City of Wilmington, County of New Castle. The name and address of its registered agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. THIRD: The nature of the business, or objects or purposes to be transacted, promoted or carried on by the Corporation, are as follows: (a) To manufacture, design, buy, sell, lease or otherwise deal in machinery, tractors, pumps, agricultural implements, equipment, appliances and apparatus of every description and for any use or purpose whatsoever. (b) To manufacture, produce, buy, sell and deal in chemicals of every description, organic and inorganic, natural or synthetic, in the form of raw materials, intermediates, or finished products (including films and fibers) and any other related products whatsoever and by-products derived from the manufacture thereof and products to be made therefrom and to do all things incident thereto. To produce, manufacture, store, transport, buy, sell, exchange and generally deal in chemicals and chemical products, minerals and mineral products of every nature and description. (c) To engage in, conduct and carry on the business of manufacturing, buying, selling, erecting and dealing in materials handling, processing, construction and mechanical power transmission machinery, electronic, mechanical and industrial equipment, and the parts therefor and components thereof. (d) To lay down, construct, manufacture, own and operate tanks, cars, pipes, pipe lines, tubes, pump stations, connections, fixtures, storage houses, laboratory, and such machinery, apparatus, devices and arrangements as may be necessary to operate the same. To own, hold, use and occupy such lands, rights of way, easements, franchises, buildings and structures as may be necessary to the purposes of the Corporation. (e) To manufacture, buy, contract for, lease and in any and all other ways acquire, take, hold, own and to deal in, sell, transfer, mortgage, pledge, hypothecate or convey in trust, lease or otherwise dispose of, goods, wares and merchandise of every name, nature and description whatsoever.

 
(f) To apply for, obtain, register, purchase, license or otherwise acquire, and to hold, own, use, operate, sell, assign, license or otherwise dispose of, trademarks, trade names, copyrights, patents, inventions, improvements, processes and formulae of any nature whatsoever, and letters patent of the United States or elsewhere. (g) To buy, contract for, and in any and all other ways acquire, take, hold, own and deal in, sell, transfer, mortgage, pledge, hypothecate or convey in trust, or otherwise dispose of, the stock and bonds of this and other corporations, domestic or foreign. (h) To enter upon, purchase, lease or otherwise acquire, hold, develop, improve, lease or otherwise use, mortgage or otherwise encumber and sell, convey, transfer, exchange or otherwise dispose of real property, either improved or unimproved, and leases, leaseholds, easements, rights of way, franchises and other rights and interests therein of every kind and description, and to engage in mining. (i) To act as agent or broker for any other person, firm or corporation. (j) To loan money, without security therefor, to any person, firm or corporation; to borrow money for any of the objects or purposes of the Corporation without limit as to amount, and from time to time to issue evidences of indebtedness, secured or unsecured, of the Corporation, for moneys so borrowed, or in payment for property acquired, or for any other of the objects or purposes of the Corporation or in connection with its business; and to secure such evidences of indebtedness by mortgage, pledge, deed of trust or other lien upon, or assignment of or agreement in respect of, any or all the property, assets, rights, licenses, privileges or franchises of the Corporation acquired or to be acquired, and to pledge, sell or otherwise dispose of any or all such evidences of indebtedness of the Corporation for its corporate purposes. (k) To promote, or to aid in any manner financially or otherwise, any corporation or association of which any stocks, bonds, or other evidences of indebtedness or securities are held directly or indirectly by the Corporation; and for this purpose to guarantee the contracts, dividends, stocks, bonds, notes and other obligations of such other corporations or associations; and to do any other acts or things designed to protect, preserve, improve or enhance the value of such stocks, bonds or other evidences of indebtedness or securities. (l) To carry on any other lawful business whatsoever, including the providing of services, which may seem to the Corporation capable of being carried on in connection with the above, or calculated directly or indirectly to promote the interest of the Corporation or to enhance the value of its properties; and to have, enjoy and exercise all the rights,

 
powers and privileges which are now or which may hereafter be conferred upon corporations organized under the General Corporation Law of the State of Delaware. (m) To conduct its business (including the holding, purchasing, mortgaging and conveying of real and personal property) in the State of Delaware, other states, the District of Columbia, the territories, colonies and possessions of the United States and in foreign countries; and to maintain such offices either within or without the State of Delaware as may be convenient; provided, however, that nothing herein contained shall be deemed to authorize the Corporation to construct, hold, maintain or operate within the State of Delaware railroads, railways, telegraph or telephone lines, or to carry on within said State any public utility business. (n) To have one or more offices, to carry on any or all of its operations and business, and, without restriction or limit as to amount, to purchase, lease or otherwise acquire, hold and own, and to mortgage, sell, convey, lease or otherwise dispose of, real and personal property of every class and description, in any of the states or territories of the United States and in the District of Columbia, and in any and all foreign countries, subject to the laws of such state, district, territory or country. (o) To do any and all things herein set forth and in addition such other acts and things as are necessary or convenient to the attainment of the purposes of the Corporation, or any of them, to the same extent as natural persons lawfully might or could do in any part of the world, in so far as such acts are permitted to be done by a corporation organized under the General Corporation Law of the State of Delaware. (p) To enter into a partnership or joint venture with any person, association, firm or corporation. The foregoing clauses shall be construed both as objects and powers, and it is hereby expressly provided that the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the powers of the Corporation, and are in furtherance of, and in addition to, and not in limitation of the general powers conferred by the laws of the State of Delaware. FOURTH: (a) The total number of shares of stock which the Corporation shall have authority to issue is 265,000,000 shares, consisting of 260,000,000 shares of Common Stock, par value $.10 per share, and 5,000,000 shares of Preferred Stock, without par value. (b) The shares of Preferred Stock shall be issued in series, as may be determined from time to time by the Board of Directors, each such series to be appropriately designated by a distinguishing number, letter of title prior to the issue of any shares thereof, and there is hereby expressly

 
granted to the Board of Directors of the Corporation authority to fix the voting power, the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of each such series of Preferred Stock in the resolution or resolutions adopted by the Board of Directors providing for the issue of such Preferred Stock. Whenever the term Preferred Stock is used in this Article FOURTH, it shall be deemed to mean and include all series of the Preferred Stock, unless the context shall otherwise require. (c) The description of the Common Stock and of its designations, powers, preferences and rights, and of its qualifications, limitations, or restrictions are as follows: 1. Out of the assets of the corporation, which are by law available for the payment of dividends remaining after full cumulative dividends upon any Preferred Stock then outstanding and entitled thereto shall have been declared and paid or set apart for payment for all past dividend periods, and after full dividends on any Preferred Stock for the current dividend period shall have been declared and paid or set apart for payment, and after making such provisions, if any, as the Board of Directors may deem advisable for working capital or for any reserve or reserves, including reserves for payment of future dividends upon any Preferred Stock, then, and not otherwise, dividends may be declared and paid upon the Common Stock to the exclusion of the holders of Preferred Stock. 2. The holders of the Common Stock shall vote share for share, together with the holders of any series of the Preferred Stock entitled to have voting rights, as one class for the election of directors and for all other purposes, except as may be provided by the Board of Directors with any series of the Preferred Stock. (d) The shares of all classes of stock of the corporation may be issued by the corporation from time to time for such consideration as from time to time may be fixed by the Board of Directors of the corporation, provided that shares of stock having a par value shall not be issued for a consideration less than such par value. No holders of stock of the corporation of any class, as such, shall have any preemptive or preferential right of subscription to any shares of any class of stock of the corporation whether now or hereafter authorized, or to any obligations convertible into stock of the corporation, or any right of subscription to any thereof other than such, if any, as the Board of Directors in its discretion may, from time to time, determine with respect thereto; and any shares of stock or convertible obligations which the Board of Directors may determine to offer for subscription to the holders of stock of the corporation may, as said Board shall determine, be offered to the holders of any class or classes of stock exclusively, or to the holders of all classes of stock, and, if offered to more

 
than one class of stock, in such proportion as between said classes of stock as the Board of Directors in its discretion may determine. As used herein, the expression "convertible obligations" shall include any notes, bonds or other evidences of indebtedness to which are attached or with which are issued warrants or other rights to purchase stock of the corporation of any class or classes. The Board of Directors is hereby expressly authorized, in its discretion, in connection with the issue of any obligations or stock of the corporation (but without intending hereby to limit its general power so to do in other cases), to grant rights or options to purchase stock of the corporation of any class upon such terms and during such period as the Board of Directors shall determine, and to cause such rights to be evidenced by such warrants or other instruments as it may deem advisable. At any time, or from time to time, the corporation may grant rights or options to purchase from the corporation any shares of its stock of any class or classes to run for such period of time, for such consideration, upon such terms and conditions, and in such form as the Board of Directors may determine. The Board of Directors shall have authority, as provided by law, to determine that only a part of the consideration, which shall be received by the corporation for the shares of its stock which it shall issue from time to time, shall be capital, provided, however, that, if all the shares issued shall be shares having a par value, the amount of the part of such consideration so determined to be capital shall be equal to the aggregate par value of such shares. The excess, if any, at any time, of the total net assets of the corporation over the amount so determined to be capital, as aforesaid, shall be surplus. All classes of stock of the corporation shall be and remain at all times nonassessable. FIFTH: The minimum amount of capital with which the Corporation shall commence business is $1,000. SIXTH: The Corporation is to have perpetual existence. SEVENTH: The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatsoever. EIGHTH: The following additional provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and its directors and stockholders: (a) A director of the Corporation shall not in the absence of fraud be disqualified by his office from dealing or contracting with the Corporation either as a vendor, purchaser or otherwise, nor in the absence of fraud shall any transaction or contract of the Corporation be void or voidable or affected by reason of the fact that any director, or any firm of which any director is a member, or any corporation of which any director is an officer, director or stockholder, is in any way interested in such transaction or contract; provided that at the meeting of the Board of

 
Directors or of a committee thereof having authority in the premises, authorizing or affirming such contract or transaction, the existence of the interest of such director, firm or corporation is disclosed or made known and there shall be present a quorum of the Board of Directors or of the directors constituting such committee, and such contract or transaction shall be approved by a majority of such quorum, which majority shall consist of directors not so interested or connected. Nor shall any director be liable to account to the Corporation for any profit realized by him from or through any such transaction or contract of the Corporation ratified or approved as aforesaid, by reason of the fact that he or any firm of which he is a member, or any corporation of which he is an officer, director or stockholder, was interested in such transaction or contract. Directors so interested may be counted when present at meetings of the Board of Directors or such committee for the purpose of determining the existence of a quorum. Any contract, transaction or act of the Corporation or of the Board of Directors or of any committee thereof (whether or not approved or ratified as hereinabove in this paragraph provided) which shall be ratified by a majority in interest of a quorum of the stockholders having voting power at any annual meeting or any special meeting called for such purpose, shall be as valid and as binding as though ratified by every stockholder of the Corporation. (b) The number of directors which shall constitute the whole Board shall be fixed by, and may be amended from time to time by, resolution adopted by the affirmative vote of a majority of the whole Board except that such number shall not be less than three (3) nor more than fifteen (15). Commencing with the 2014 annual meeting of the stockholders of the Corporation, each director elected shall be elected for a one-year term and such director shall hold office until the next Annual Meeting and until his or her successor has been elected and qualified, subject to prior death, resignation or removal. In no case will the manner of election prescribed in this paragraph (b) of Article EIGHTH, or any decrease in the number of directors constituting the whole Board, shorten the term of any incumbent director. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, and any other vacancy occurring in the Board of Directors may be filled by a majority of the directors then in office, although less than quorum, or by a sole remaining director. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office,

 
filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto. (c) Except to the extent prohibited by law, the Board of Directors shall have the right (which, to the extent exercised, shall be exclusive) to establish the rights, powers, duties, rules and procedures that from time to time shall govern the Board of Directors and each of its members, including without limitation the vote required for any action by the Board of Directors, and that from time to time shall affect the director's power to manage the business and affairs of the Corporation; and no By-Law shall be adopted by stockholders which shall impair or impede the implementation of the foregoing. (d) The directors shall have the power to make, alter, amend, change, add to or repeal the By-Laws of the Corporation. (e) The Board of Directors shall have authority from time to time to set apart out of any assets of the Corporation otherwise available for dividends a reserve or reserves as working capital or for any other purpose or purposes, and to abolish or add to any such reserve or reserves from time to time as said Board may deem to be in the interest of the Corporation; and said Board shall likewise have power to determine in its discretion, except as herein otherwise provided, what part of the assets of the Corporation available for dividends in excess of such reserve or reserves shall be declared in dividends and paid to the stockholders of the Corporation. (f) The Board of Directors shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by resolution of the Board of Directors or of the stockholders of the Corporation. (g) Except as otherwise provided in the By-Laws, the stockholders of the Corporation and the Board of Directors may hold their meetings and have an office or offices outside of the State of Delaware, and, subject to the provisions of the laws of said State, may keep the books of the Corporation outside of said State at such places as may, from time to time, be designated by the Board of Directors. (h) The By-Laws of the Corporation may confer powers upon the directors in addition to those granted in the Certificate of Incorporation, as amended,

 
and in addition to the powers expressly conferred upon them by the laws of the State of Delaware. (i) Any action required or permitted to be taken by the stockholders of the Corporation must be effected as a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Except as otherwise required by law and subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors. (j) No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty by such director as a director; provided, however, that this Article EIGHTH shall not eliminate or limit the liability of a director to the extent provided by applicable law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article EIGHTH shall apply to, or have any effect on, the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. NINTH: Certain Business Combinations Vote Required for Certain Business Combinations. (A) Higher Vote for Certain Business Combinations. In addition to any affirmative vote required by law or this Certificate of Incorporation, and except as otherwise expressly provided in section 2 of this Article NINTH: (i) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (a) any Interested Shareholder (as hereinafter defined) or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value of $50,000,000 or more; or

 
(iii) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $50,000,000 or more; or (iv) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder of any Affiliate of any Interested Stockholder; or (v) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder; shall require the affirmative vote of the holders of at least 80% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock"), voting together as a single class (it being understood that for purposes of this Article NINTH, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article FOURTH of this Certificate of Incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise. (B) Definition of "Business Combination". The term "Business Combination" as used in this Article NINTH shall mean any transaction which is referred to in any one or more of clauses (i) through (v) of paragraph A of this Section 1. When Higher Vote is Not Required. The provisions of Section 1 of this Article NINTH shall not be applicable to any particular Business Combination involving an Interested Stockholder, and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this Certificate of Incorporation, if the Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined). Certain Definitions. For the purposes of this Article NINTH: (A) A "person" shall mean any individual, firm, corporation or other entity. (B) "Interested Stockholder" shall mean any person (other than the Corporation, any Subsidiary or any employee benefit plan of the Corporation) who or which: (i) is the beneficial owner, directly or indirectly, of more than 10% of the voting power of the outstanding Voting Stock; or

 
(ii) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than 10% of the voting power of the then outstanding Voting Stock; or (iii) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. (C) A person shall be a "beneficial owner" of any Voting Stock: (i) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or (ii) which such person or any of its Affiliates or Associates has (a) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (b) the right to vote pursuant to any agreement, arrangement or understanding; or (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock. (D) For the purposes of determining whether a person is an Interested Stockholder pursuant to paragraph B of this Section 3, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of paragraph C of this Section 3 but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or, upon exercise of conversion rights, warrants or options, or otherwise. (E) "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on February 22, 1986. (F) "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph B of this section 3, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. (G) "Disinterested Director" means any member of the Board of Directors of the Corporation (the "Board") who is unaffiliated with the Interested Stockholder and was a member

 
of the Board prior to the time that the Interested Stockholder became an Interested Stockholder, and any other Director who is unaffiliated with the Interested Stockholder and, prior to such Director's election or appointment as a director, was recommended or approved by a majority of Disinterested Directors then on the Board. Powers of the Board of Directors. A majority of the directors of the Corporation shall have the power and duty to determine for the purposes of this Article NINTH, on the basis of information known to them after reasonable inquiry, (A) whether a person is an Interested Stockholder, (B) the number of shares of Voting Stock beneficially owned by any person, (C) whether a person is an Affiliate or Associate of another, (D) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $50,000,000 or more. A majority of the directors of the Corporation shall have the further power to interpret all the terms and provisions of this Article NINTH. No Effect of Fiduciary Obligations of Interested Stockholders. Nothing contained in this Article NINTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. Amendment, Repeal, etc. Notwithstanding any other provisions of this Certificate of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that a lesser percentage may be specified by law, this Certificate of Incorporation or the Bylaws of the Corporation), the affirmative vote of the holders of 80% or more of the outstanding Voting Stock, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with this Article NINTH. TENTH: (a) Notwithstanding anything contained in this Certificate of Incorporation to the contrary, paragraphs (b) and (i) of Article EIGHTH hereof and Article III, Sections 1(b) and 5 and Article IV, Section 2 of the Bylaws of the Corporation shall not be altered, amended or repealed and no provision inconsistent therewith shall be adopted without the affirmative vote of the holders of at least 80% of the voting power of all the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of all the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with or repeal this paragraph (a) of Article TENTH. (b) The Corporation reserves the right to amend, alter, change or repeal any provision contained in its Certificate of Incorporation, or any amendment thereof, in the manner now or hereafter prescribed by the laws of the State of Delaware or this Certificate of Incorporation, and all rights conferred upon the stockholders of the Corporation are granted subject to this reservation.

 
1. The foregoing Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation at a meeting of such Board of Directors duly called, convened and held in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware. 2. The foregoing Restated Certificate of Incorporation of the Corporation only restates and integrates and does not further amend the provisions of said Corporation's Restated Certificate of Incorporation as heretofore amended or supplemented and there is no discrepancy between those provisions and the provisions of the foregoing Restated Certificate of Incorporation.

 
RESTATED BY-LAWS OF FMC CORPORATION (as of April 30, 2019) ARTICLE I Location of Offices SECTION 1. Principal Delaware Office. The principal office of the Corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle, and the name and address of the Resident Agent in charge thereof shall be the Corporation Trust Company, 100 West Tenth Street, Wilmington, Delaware. SECTION 2. Principal Pennsylvania Office. The Corporation shall also have and maintain an office or principal place of business in the State of Pennsylvania at 2929 Walnut Street, Philadelphia, Pennsylvania, the location of such office to be subject to change by resolution of the Board of Directors. SECTION 3. Other Offices. The Corporation may also have offices in such other places, both within and without the State of Delaware, as the Board of Directors from time to time may designate or the business of the Corporation require. ARTICLE II Corporate Seal The corporate seal shall be circular in form and have inscribed thereon the following: “FMC Corporation, Incorporated Delaware 1928.” ARTICLE III Stockholders SECTION 1. Meetings of Stockholders. Annual Meetings. The annual meeting of the stockholders of the Corporation shall be held on such date and at such time as may be fixed by resolution of the Board of Directors. At the annual meeting stockholders shall elect Directors and transact such other business as properly may be brought before the meeting. (a) Special Meetings. Special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors.

 
(b) Place of Meetings. Unless otherwise directed by the Board of Directors, all meetings of the stockholders shall be held at the office of the Corporation at 2929 Walnut Street, Philadelphia, Pennsylvania. (c) Notice of Meetings. Unless otherwise provided by statute, written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder of record entitled to vote at such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. Each such notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors. SECTION 2. Quorum of Stockholders. The holders of a majority of the total number of shares issued and outstanding, and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by law, by the certificate of incorporation, or by these By-Laws. When a quorum is present at any meeting of stockholders, a majority of the number of shares of the stock entitled to vote which is represented thereat shall decide any question brought before such meeting, unless the question is one upon which by express provision of law or the certificate of incorporation or of these By-Laws a larger or different vote is required, in which case such express provision shall govern and control the decision of such question. SECTION 3. Voting by Stockholders. Unless otherwise provided in the certificate of incorporation, each stockholder of record shall be entitled at each meeting of stockholders to one vote for each share of stock entitled to vote. Each stockholder of record entitled to vote at any meeting may do so in person or by proxy appointed by instrument in writing, subscribed by such stockholder or his duly authorized attorney, and filed with the Secretary at or prior to the time designated in the order of business for delivering such proxies. Any such proxy shall not be voted or acted upon after three years from its date, unless such proxy provides for a longer period. SECTION 4. Certain Definitions. For the purposes of Section 5 of this Article III and Section 6 of Article IV, the shares of the Corporation “beneficially owned” by any person shall include (i) all shares of the Corporation beneficially owned (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), determined as if the reference to “sixty days” in Rule 13d-3(d)(1)(i) was a reference to “three years”) by such person, (ii) all shares of the Corporation beneficially owned (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, determined as if the reference to “sixty days” in Rule 13d- 3(d)(1)(i) was a reference to “three years”) by (A) all affiliates and associates of such person (determined in accordance with Rule 12b-2 under the Exchange Act), (B) all persons acting in concert with such person with respect to the acquisition, holding, voting or disposing of securities of the Corporation or with respect to the control of the Corporation, and (C) all persons -2-

 
with whom such person or any of its affiliates or associates has an agreement, arrangement or understanding with respect to the acquisition, holding, voting (except pursuant to a revocable proxy given in response to a public proxy or consent solicitation made generally to all holders of shares of the Corporation) or disposing of securities of the Corporation or to cooperate in obtaining, changing or influencing the control of the Corporation (except independent financial, legal and other advisors acting in the ordinary course of their respective businesses) (each person described in clause (A), (B) or (C) being a “Related Person” of such person) and (iii) all shares of the Corporation that are the subject of or are the reference security for or underlie any derivative securities (as defined under Rule 16a-1 under the Exchange Act) or other derivatives, short positions, profit interests, options, hedging transactions, borrowed or loaned shares or similar arrangements relating to the shares of the Corporation entered into by or on behalf of such person and all Related Persons of such person. SECTION 5. Business Brought Before a Meeting. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than sixty days nor more than ninety days prior to the meeting; provided, however, that in the event that less than seventy days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the date on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting, (b) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section. If, after the stockholder has delivered the notice under this Section 5, any information required to be contained in such notice as described above changes as of the record date for such meeting, such notice shall be deemed to be not in compliance with this Section 5 and not effective unless such stockholder, no later than 5 business days following such record date, delivers to the Secretary at the principal executive offices of the Corporation a supplemental notice describing such updated information as of such record date. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section; and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. SECTION 6. Inspectors of Elections; Opening and Closing the Polls. The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors -3-

 
may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the presiding officer of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector shall have the duties prescribed by law. The presiding officer of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting. SECTION 7. Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which the meeting is held and the record date for determining stockholders of record for any other purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. SECTION 8. Adjournments; Postponements. The presiding officer of the meeting or a majority of the votes entitled to be cast by stockholders who are present in person or by proxy at any meeting of stockholders may adjourn the meeting from time to time, whether or not there is such a quorum, without notice other than by announcement at the meeting if the time and place of the adjourned meeting are announced at the meeting at which the adjournment is taken, unless the adjournment is for more than 30 days or, after adjournment, a new record date is fixed for the adjourned meeting. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally noticed. Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders. -4-

 
ARTICLE IV Directors SECTION 1. Election, Number and Term of Office. (a) Manner of Election. Except as provided in Section 7 of this Article, each Director shall be elected by the vote of the majority of the votes cast with respect to the Director at any meeting of the stockholders called for the purpose of the election of Directors at which a quorum is present, provided that if as of a date that is fourteen (14) days in advance of the date the Corporation files its definitive proxy statement (regardless of whether or not thereafter revised or supplemented) with the Securities and Exchange Commission the number of nominees exceeds the number of Directors to be elected, the Directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote in the election of Directors generally. For purposes of this paragraph, a majority of the votes cast means that the number of shares voted “for” a Director must exceed the number of votes “withheld” with respect to that Director. (b) Number of Directors. The number of Directors of the Corporation which shall constitute the whole Board shall be fixed by resolution adopted by affirmative vote of a majority of the whole Board except that such number shall not be less than three (3) nor more than fifteen (15) the exact number to be eleven (11) until otherwise determined by resolution adopted by affirmative vote of a majority of the whole Board. (c) Term of Office. Each director shall hold office until his respective successor is elected and qualified or until the effectiveness of his or her earlier resignation or removal. SECTION 2. Nomination of Directors. Subject to the rights of holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, nominations for the election of Directors may be made by the Board of Directors or a committee appointed by the Board of Directors or by any stockholder entitled to vote in the election of Directors generally. However, any stockholder entitled to vote in the election of Directors generally may nominate one or more persons for election as Directors at a meeting only if written notice of such stockholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of stockholders, ninety days prior to the anniversary date of the immediately preceding annual meeting, and (ii) with respect to an election to be held at a special meeting of stockholders for the election of Directors, the close of business on the tenth day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Corporation in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be -5-

 
required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission; and (e) the consent of each nominee to serve as a Director of the Corporation if so elected. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. SECTION 2A. Inclusion of Stockholder Nominations In the Corporation’s Proxy Materials. (a) Proxy Access. Subject to compliance with the terms and conditions set forth in these By-Laws, in connection with an annual meeting of stockholders, the Corporation shall include (i) in its proxy statement and form of proxy, in addition to the persons nominated for election by the Board of Directors or any committee thereof, the name of any person nominated for election to the Board of Directors by a record stockholder who is, or is acting on behalf of, an Eligible Stockholder (as defined below) pursuant to this Section 2A (such nominated person, the “Stockholder Nominee”) and (ii) in its proxy statement the Required Information (as defined below) relating to any Stockholder Nominee. (b) Timeliness of Notice. To nominate a Stockholder Nominee, a record stockholder who is, or is acting on behalf of, an Eligible Stockholder must provide a timely notice that expressly elects to have the Eligible Stockholder’s Stockholder Nominee included in the Corporation’s proxy materials pursuant to this Section 2A (the “Notice of Proxy Access Nomination”). To be timely, a Notice of Proxy Access Nomination must be received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the 120th day nor earlier than the 150th day before the one-year anniversary of the date on which the Corporation first mailed its proxy materials or a notice of availability of proxy materials (whichever is earlier) for the preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or if the date of the annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after the one-year anniversary of the date of the previous year’s annual meeting, then, for a Notice of Proxy Access Nomination by the stockholder to be timely, it must be so received by the Secretary not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (x) the 90th day prior to such annual meeting, or (y) the tenth day following the day on which notice or prior public disclosure of the date of such annual meeting is given or made to stockholders (the last day on which a Notice of Proxy Access Nomination may be delivered, the “Final Proxy Access Nomination Date”). In no event shall an adjournment of an annual meeting of stockholders, or postponement of any previously scheduled annual meeting of stockholders for which notice has been given (or with respect to which public disclosure of the date of the meeting was made), commence a new time period (or extend any time period) for the giving of a Notice of Proxy Access Nomination under this Section 2A. (c) Information Included in Proxy Materials. The Eligible Stockholder may provide to the Secretary of the Corporation a written statement for inclusion in the Corporation’s proxy statement for the applicable annual meeting of stockholders, not to exceed 500 words, in support of the Eligible Stockholder’s Stockholder Nominee (the “Statement”). In order to have a Statement included in the proxy statement an Eligible Stockholder must submit the Statement to the Secretary of the Corporation at the same time that such Eligible Stockholder’s Notice of Proxy Access Nomination is submitted to the Secretary of the Corporation. For purposes of this -6-

 
Section 2A, the “Required Information” that the Corporation will include in its proxy statement is (i) the information concerning the Stockholder Nominee and the Eligible Stockholder that the Corporation determines is required to be disclosed in the Corporation’s proxy statement by the regulations promulgated under the Exchange Act and (ii) if the Eligible Stockholder so elects, a Statement. Notwithstanding anything to the contrary contained in this Section 2A, the Corporation may omit from its proxy materials any information or Statement (or portion thereof) that it believes would violate any applicable law or regulation. Nothing in this Section 2A shall limit the Corporation’s ability to solicit against and include in its proxy materials its own statements relating to any Stockholder Nominee. (d) Number of Stockholder Nominees. The number of Stockholder Nominees appearing in the Corporation’s proxy materials with respect to an annual meeting of stockholders shall not exceed the greater of (i) two or (ii) 20% of the number of directors in office and subject to election by the holders of Common Stock as of the Final Proxy Access Nomination Date, or if such number is not a whole number, the closest whole number below 20% (the number determined pursuant to clause (i) or clause (ii) of this sentence, as applicable, the “Permitted Number”); provided, that in the event that one or more vacancies for any reason occurs on the Board of Directors at any time after the Final Proxy Access Nomination Date and before the date of the applicable annual meeting of stockholders and the Board of Directors resolves to reduce the size of the Board of Directors in connection therewith such that the number of directors subject to election by the holders of Common Stock is reduced, the Permitted Number shall be calculated based on the number of directors in office as so reduced. The Permitted Number shall also be reduced by (i) the number of director candidates for which the Corporation shall have received one or more notices that a stockholder intends to nominate director candidates at such applicable annual meeting of stockholders pursuant to Section 2 of this Article, (ii) the number of director candidates that will be included in the Corporation’s proxy materials with respect to such annual meeting of stockholders as an unopposed (by the Corporation) nominee pursuant to any agreement, arrangement or other understanding with any stockholder or group of stockholders (other than any such agreement, arrangement or understanding entered into in connection with an acquisition of shares by such stockholder or group of stockholders from the Corporation), other than any such director candidate referred to in this clause (ii) who was elected, as a nominee of the Board of Directors, at both of the two annual meetings of stockholders immediately preceding the applicable annual meeting of stockholders, provided that the Permitted Number after such reduction with respect to this clause (ii) will in no event be less than one, (iii) the number of incumbent director candidates who previously were Stockholder Nominees at either of the two annual meetings of stockholders immediately preceding the applicable annual meeting and whose re-election at the upcoming annual meeting is being recommended by the Board of Directors and (iv) the number of director candidates whose names were submitted for inclusion in the Corporation’s proxy materials pursuant to this Section 2A, but who were thereafter nominated by the Board of Directors. In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 2A exceeds the Permitted Number, each Eligible Stockholder (or group thereof constituting an Eligible Stockholder) will select one Stockholder Nominee for inclusion in the Corporation’s proxy materials until the Permitted Number is reached, going in order of the amount (largest to smallest) of shares of Common Stock of the Corporation each Eligible Stockholder (or group thereof) disclosed as owned in its respective Notice of Proxy Access Nomination submitted to the Corporation. If the Permitted Number is not reached after each Eligible Stockholder (or -7-

 
group thereof) has selected one Stockholder Nominee, this selection process will continue as many times as necessary, following the same order each time, until the Permitted Number is reached. After reaching the Permitted Number of Stockholder Nominees, if any Stockholder Nominee who satisfies the eligibility requirements in this Section 2A (i) thereafter withdraws from the election (or his or her nomination is withdrawn by the applicable Eligible Stockholder) or (ii) is thereafter not submitted for director election for any reason (including the failure to comply with this Section 2A) other than due to a failure by the Corporation to include such Stockholder Nominee in the proxy materials in violation of this Section 2A, no other nominee or nominees shall be substituted for such Stockholder Nominee and included in the Corporation’s proxy materials or otherwise submitted for director election pursuant to this Section 2A. (e) Group Provisions to Determine Eligible Stockholder. An “Eligible Stockholder” is one or more persons who own and have owned, or are acting on behalf of one or more beneficial owners who own and have owned (in each case as defined in Section 2A(f)), for at least three years as of the date the Notice of Proxy Access Nomination is received by the Corporation, shares representing at least 3% of the shares of Common Stock outstanding as of the date of such Notice of Proxy Access Nomination (the “Required Shares”), and who continue to own the Required Shares at all times between the date the Notice of Proxy Access Nomination is received by the Corporation and the date of the applicable annual meeting of stockholders; provided that the aggregate number of record stockholders and beneficial owners whose stock ownership is counted for the purposes of satisfying the foregoing ownership requirement shall not exceed 20. Two or more collective investment funds that are (i) under common management and investment control, (ii) under common management and funded primarily by a single employer or (iii) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940 (as amended from time to time the “Investment Company Act”) (such funds together under each of (i), (ii) or (iii) comprising a “Qualifying Fund”) shall be treated as one record stockholder or beneficial owner for the purpose of determining the aggregate number of record stockholders and beneficial owners in this paragraph, and treated as one person for the purpose of determining “ownership” as defined in this Section 2A, provided that each fund comprising a Qualifying Fund otherwise meets the requirements set forth in this Section 2A. No record stockholder (other than a Custodian Holder (as defined below)) or beneficial owner may be a member of more than one group constituting an Eligible Stockholder under this Section 2A, and no shares may be attributed to more than one Eligible Stockholder or group constituting an Eligible Stockholder under this Section 2A. For the avoidance of doubt, the Required Shares will qualify as such if and only if the beneficial owner of such shares has itself beneficially owned such shares continuously for the three-year period ending on the date the Notice of Proxy Access Nomination is received by the Corporation and through other applicable dates referred to above (in addition to the other applicable requirements being met). (f) Definition of Ownership. For purposes of calculating the Required Shares, “ownership” shall be deemed to consist of and include only the outstanding shares as to which a person possesses both (i) the full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares; provided that the number of shares calculated in accordance with clauses (i) and (ii) shall not include any shares (A) sold by such person or any of its affiliates in any transaction that has not been settled or closed, including any short sale, (B) borrowed by such person or any of its -8-

 
affiliates for any purposes or purchased by such person or any of its affiliates pursuant to an agreement to resell, or (C) subject to any option, warrant, forward contract, swap, contract of sale, or other derivative or similar agreement entered into by such person or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of common stock, in any such case which instrument or agreement has, or is intended to have, or if exercised would have, the purpose or effect of (1) reducing in any manner, to any extent or at any time in the future, such person’s or its affiliates’ full right to vote or direct the voting of any such shares, and/or (2) hedging, offsetting, or altering to any degree any gain or loss arising from the full economic ownership of such shares by such person or its affiliate. “Ownership” shall include shares held in the name of a nominee (including a Custodian Holder) or other intermediary so long as the person claiming ownership of such shares retains the right to instruct how the shares are voted with respect to the election of directors and the right to direct disposition thereof and possesses the full economic interest in the shares; provided that this provision shall not alter the obligations of a record stockholder to provide the Notice of Proxy Access Nomination. Ownership of shares shall be deemed to continue during any period (x) in which shares have been loaned if the person claiming ownership may recall such loaned shares on no more than five business days’ notice or (y) in which any voting power has been delegated by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time without condition. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings. (g) Contents of Notice of Proxy Access Nomination. The Notice of Proxy Access Nomination shall set forth or be submitted with the following information and materials in writing (including, as applicable, with respect to each Eligible Stockholder, every member of any group that is together such Eligible Stockholder other than a Custodian Holder): (i) the written consent of each Stockholder Nominee to being named in the Corporation’s proxy materials as a nominee and to serving as a director if elected; (ii) a copy of the Schedule 14N that has been, or concurrently is, filed with the Securities and Exchange Commission as required by Rule 14a-18 under the Exchange Act; (iii) with respect to each Eligible Stockholder and its affiliates or associates or others acting in concert therewith and each Stockholder Nominee, all information as would be required to be disclosed in a solicitation of proxies for the election of such Stockholder Nominee as a director in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; (iv) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the Eligible Stockholder and its or their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each of such Eligible Stockholder’s Stockholder Nominee(s), and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Eligible Stockholder, or any affiliate or associate -9-

 
thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the Stockholder Nominee were a director or executive officer of such registrant; and (v) a completed director questionnaire pursuant to Section 8 of this Article signed by the Stockholder Nominee(s) (a form of which shall be provided by the Secretary of the Corporation promptly following a request therefor). In addition, the Notice of Proxy Access Nomination must be submitted with a signed and written agreement of the Eligible Stockholder (and each member of any group that together is an Eligible Stockholder other than a Custodian Holder) setting forth: (i) a representation that the Eligible Stockholder (1) acquired ownership of the Required Shares in the ordinary course of business and not with the intent to change or influence control of the Corporation, and does not presently have such intent, (2) has not nominated and will not nominate for election to the Board of Directors at the applicable annual meeting of stockholders any person other than its Stockholder Nominee(s), (3) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the applicable annual meeting of stockholders other than its Stockholder Nominee(s) or a nominee of the Board of Directors, (4) will not distribute to any person any form of proxy for the applicable annual meeting of stockholders other than the forms distributed by the Corporation and (5) will provide facts, statements and other information in all communications with the Corporation and its stockholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading and otherwise will comply with all applicable laws, rules and regulations in connection with any actions taken pursuant to this Section 2A; (ii) a representation that (1) within five business days after the date that the Notice of Proxy Access Nomination is sent to the Corporation, the Eligible Stockholder will provide one or more written statements from the record holder of the Required Shares (and from each intermediary through which the Required Shares are or have been held during the requisite three-year holding period) that, as of a date within seven days prior to the date that the Notice of Proxy Access Nomination was received by the Corporation, the Eligible Stockholder owns, and has owned continuously for the preceding three years, the Required Shares, (2) within five business days after the record date for determining stockholders entitled to vote at the annual meeting, the Eligible Stockholder will provide one or more written statements from the record holder (and from each intermediary through which the Required Shares are held) verifying the Eligible Stockholder’s continuous ownership of the Required Shares through such record date and (3) the Eligible Stockholder will provide immediate written notice to the Corporation if the Eligible Stockholder ceases to own any of the Required Shares prior to the applicable annual meeting of stockholders; (iii) in the case of a nomination by a group of persons that together is such an Eligible Stockholder, the designation by all group members of one group member that is authorized to act on behalf of all members of the Eligible Stockholder group with respect to the nomination and matters related thereto, including withdrawal of the nomination; and -10-

 
(iv) an undertaking that the Eligible Stockholder agrees to (1) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Stockholder’s communications with the stockholders of the Corporation or out of the information that the Eligible Stockholder provides to the Corporation, (2) indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of any nomination, solicitation or other activity by the Eligible Stockholder in connection with its efforts to elect the Stockholder Nominee(s) pursuant to this Section 2A, (3) file with the Securities and Exchange Commission any soliciting material or other communication with the Corporation’s stockholders relating to the meeting at which the Stockholder Nominee will be nominated, regardless of whether any such filing is required under Regulation 14A of the Exchange Act or whether any exemption from filing is available for such solicitation or other communication under Regulation 14A of the Exchange Act, (4) comply with all laws and regulations applicable to any solicitation in connection with the annual meeting and (5) provide the Corporation prior to the annual meeting of stockholders such additional information as necessary or reasonably requested by the Corporation. In addition, no later than the Final Proxy Access Nomination Date, a Qualifying Fund whose stock ownership is counted for purposes of qualifying as an Eligible Stockholder must provide to the Secretary of the Corporation documentation satisfactory to the Corporation that demonstrates that the funds comprising the Qualifying Fund are (x) under common management and investment control, (y) under common management and funded primarily by a single employer or (z) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act. Any information required by this Section 2A to be provided to the Corporation must be updated and supplemented by the Eligible Stockholder or Stockholder Nominee, as applicable, by delivery to the Secretary of the Corporation (1) no later than 10 days after the record date for determining the stockholders entitled to vote at the annual meeting of stockholders, of such information as of such record date and (2) no later than five days before the annual meeting of stockholders, of such information as of the date that is 10 days before the annual meeting of stockholders. Further, in the event that any information or communications provided (pursuant to this Section 2A or otherwise) by the Eligible Stockholder or the Stockholder Nominee to the Corporation or its stockholders ceases to be true and correct in any respect or omits a fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Stockholder or Stockholder Nominee, as the case may be, shall promptly notify the Secretary of the Corporation of any such inaccuracy or omission in such previously provided information and of the information that is required to make such information or communication true and correct. For the avoidance of doubt, the requirement to update, supplement and correct such information shall not permit any Eligible Stockholder or other person to change or add any proposed Stockholder Nominee or be deemed to cure any defects or limit the remedies (including without limitation under these Bylaws) available to the Corporation relating to any defect (including any inaccuracy or omission). (h) Information and Agreements from Nominees. At the request of the Corporation, each Stockholder Nominee must: -11-

 
(i) provide an executed agreement, in a form satisfactory to the Corporation, that the Stockholder Nominee (1) has read and agrees, if elected, to serve as a member of the Board of Directors, to adhere to the Corporation’s Corporate Governance Guidelines and Code of Conduct and any other policies and guidelines of the Corporation applicable to directors (which will be provided by the Corporation following a request therefor), (2) is not and will not become a party to any compensatory, payment or other financial agreement, arrangement or understanding with any person or entity in connection with his or her nomination, service or action as a Stockholder Nominee or as a director of the Corporation, in each case that has not been disclosed to the Corporation and (3) is not and will not become a party to any agreement, arrangement or understanding with any person or entity as to how the Stockholder Nominee would vote or act on any issue or question as a director and (ii) provide within five business days of the Corporation’s request such additional information as the Corporation determines may be necessary to permit the Board of Directors to determine (1) if such Stockholder Nominee is independent under the rules and listing standards of the principal U.S. exchange upon which the Common Stock of the Corporation is listed, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Corporation’s directors, (2) if such Stockholder Nominee has any direct or indirect relationship with the Corporation other than those relationships that have been deemed categorically immaterial pursuant to the standards used by the Corporation for determining director independence, (3) if such Stockholder Nominee would, by serving on the Board of Directors, violate or cause the Corporation to be in violation of these By-Laws, the Certificate of Incorporation, the rules or listing standards of the principal U.S. exchange upon which the Common Stock of the Corporation is listed or any applicable law, rule or regulation and (4) if such Stockholder Nominee is or has been subject to any event specified in Item 401(f) of Regulation S-K (or successor rule) of the Securities and Exchange Commission. (i) Ineligibility of Certain Stockholder Nominees. Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders but either (i) withdraws from or becomes ineligible or unavailable for election at that annual meeting or (ii) does not receive a number of votes cast in favor of his or her election at least equal to 25% of the votes present in person or represented by proxy and entitled to vote in the election of directors, will be ineligible to be a Stockholder Nominee pursuant to this Section 2A for the next two annual meetings of stockholders. Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders, but subsequently is determined not to satisfy the eligibility requirements of this Section 2A or any other provision of these By-Laws, the Certificate of Incorporation or applicable law or regulation at any time before the applicable annual meeting of stockholders, will not be eligible or qualified for election at such annual meeting of stockholders and no other nominee may be substituted by the Eligible Stockholder that nominated such Stockholder Nominee. (j) Exclusion of Stockholder Nominees from Proxy Materials. The Corporation shall not be required to include, pursuant to this Section 2A, a Stockholder Nominee in its proxy materials for any annual meeting of stockholders, or, if the proxy statement already has been filed, to allow the nomination of a Stockholder Nominee, notwithstanding that proxies in respect of such vote may have been received by the Board of Directors: -12-

 
(i) who is not independent under (a) the rules or listing standards of the principal U.S. exchange upon which the Common Stock of the Corporation is listed, (b) any applicable rules of the Securities and Exchange Commission or any other regulatory body with jurisdiction over the Corporation or (c) any publicly disclosed standards used by the Board of Directors in determining and disclosing independence of the Corporation’s directors, in each case as determined by the Board of Directors; (ii) whose election as a member of the Board of Directors would cause the Corporation to be in violation of these By-Laws, the Certificate of Incorporation, the rules or listing standards of the principal U.S. exchange upon which the Common Stock of the Corporation is listed or any applicable law, rule or regulation; (iii) who is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past 10 years; (iv) who is subject to an order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended; (v) who is or has been, within the past 3 years, as officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, as amended; (vi) if such Stockholder Nominee or the applicable Eligible Stockholder (or any member of any group of persons that together is such Eligible Stockholder) shall have provided information to the Corporation in connection with such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make any statement made, in light of the circumstances under which it was made, not misleading, as determined by the Corporation; (vii) if the Eligible Stockholder (or any member of any group of persons that together is such Eligible Stockholder) or applicable Stockholder Nominee otherwise breaches or fails to comply with its representations, undertakings or obligations pursuant to these By-Laws, including, without limitation, this Section 2A; or (viii) if the Eligible Stockholder ceases to be an Eligible Stockholder for any reason, including but not limited to not owning the Required Shares through the date of the applicable annual meeting of stockholders. For the purpose of this subsection (j), the occurrence of clauses (i) through (v) and, to the extent related to a breach or failure by the Stockholder Nominee, clauses (vi) and (vii) will result in the exclusion from the proxy materials pursuant to this Section 2A of the specific Stockholder Nominee to whom the ineligibility applies or, if the proxy statement for the applicable annual meeting of stockholders already has been filed, the ineligibility of such Stockholder Nominee to stand for election. The occurrence of clause (viii) and, to the extent related to a breach or failure by an Eligible Stockholder (or any member of any group of persons that together is such Eligible Stockholder), clauses (vi) or (vii) will result in the shares owned by such Eligible Stockholder (or any member of any group of persons that together is such Eligible Stockholder) being excluded from the Required Shares (and, if as a result the persons who together nominated the Stockholder -13-

 
Nominee shall no longer constitute an Eligible Stockholder, the exclusion from the proxy materials pursuant to this Section 2A of all of the applicable stockholder’s Stockholder Nominees from the applicable annual meeting of stockholders or, if the proxy statement for the applicable annual meeting has already been filed, the ineligibility of all of such stockholder’s Stockholder Nominees to stand for election). (k) Interpretation; Attendance of Eligible Stockholder at Annual Meeting. The Board of Directors (and any other person or body authorized by the Board of Directors) shall have the power and authority to interpret this Section 2A and to make any determinations necessary or advisable to apply this Section 2A to any persons, facts or circumstances, in each case, acting in good faith. Notwithstanding the foregoing provisions of this Section 2A, unless otherwise required by law or otherwise determined by the Chairman of the meeting, if none of: (i) the Eligible Stockholder, (ii) a Qualified Representative (as defined below) of the Eligible Stockholder or (iii) if the Eligible Stockholder is comprised of a group, a member of such group, appears at the annual meeting of stockholders of the Corporation to present such Eligible Stockholder’s Stockholder Nominee(s), such nomination or nominations shall be disregarded and conclusively deemed withdrawn, notwithstanding that proxies in respect of the election of the Stockholder Nominee(s) may have been received by the Corporation. (l) Exclusive Method of Proxy Access. This Section 2A shall be the exclusive method for stockholders to include nominees for director election in the Corporation’s proxy materials. (m) Definitions. As used in this Section 2A, the following terms shall have the meanings set forth below: (i) “Custodian Holder”, with respect to any Eligible Stockholder, means any broker, bank or custodian (or similar nominee) who (i) is acting solely as a nominee on behalf of a beneficial owner and (ii) does not “own” (as defined in Section 2A) any of the shares comprising the Required Shares of the Eligible Stockholder. (ii) “person” means, as applicable, any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, association, trust or other entity or organization. (iii) (iii) A “Qualified Representative” of an Eligible Stockholder means a person that is a duly authorized officer, manager or partner of such Eligible Stockholder or is authorized by a writing (i) executed by such Eligible Stockholder, (ii) delivered (or a reliable reproduction or electronic transmission of the writing is delivered) by such Eligible Stockholder to the Corporation prior to the taking of the action taken by such person on behalf of such Eligible Stockholder and (iii) stating that such person is authorized to act for such Eligible Stockholder with respect to the action to be taken. SECTION 3. Removal of Directors. Subject to the rights of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances, any director may be removed from office with or without cause and only by the affirmative vote of the holders of a majority of the combined -14-

 
voting power of the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class. SECTION 4. Conditions for Nomination. No candidate shall be eligible to be nominated for election or reelection to the Board by any Eligible Stockholder pursuant to Section 2A of this Article, by the Board of Directors, or by a Committee of the Board of Directors, unless such candidate shall have agreed to tender, promptly following the meeting at which he or she is elected as Director, an irrevocable resignation that will be effective upon (a) the failure to receive the required number of votes for reelection at the next annual meeting of stockholders at which he or she faces reelection, and (b) acceptance of such resignation by the Board of Directors. SECTION 5. Resignation Policy. If an incumbent Director nominee fails to receive the required number of votes for reelection, within ninety (90) days after certification of the election results, the Nominating and Corporate Governance Committee of the Board of Directors will recommend to the Board of Directors whether to accept or reject the resignation or whether other action should be taken and the Board of Directors will act on the Committee’s recommendation. SECTION 6. Other Resignations. With respect to resignations other than in connection with a failure to receive the required number of votes for reelection, any director or member of a committee may resign at any time by giving written notice to the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the Secretary. Such resignation shall take effect at the time specified therein, and if no time be specified, upon receipt thereof, and unless specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 7. Vacancies on Board. Vacancies on the Board of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director. At any special meeting of stockholders called for the purpose of removing Directors pursuant to Section 3 of this Article IV, the vacancy or vacancies on the Board caused by such removal may be filled by the affirmative vote of the holders of a majority in interest of the stockholders entitled to vote. Any Director elected to fill a vacancy resulting from an increase in the number of Directors shall hold office until the next election of directors, and until his successor has been selected and qualified or until his earlier death, resignation or removal. The Board of Directors shall not fill a Director vacancy or newly created Directorship with any candidate who has not agreed to tender, promptly following his or her appointment to the Board of Directors, the same form of resignation as is described under Section 4 of this Article. SECTION 8. Nomination Questionnaire. Each nominee for election as a Director (“Nominee”) must deliver to the Secretary at the principal executive offices of the Corporation a written questionnaire (to be provided by the Secretary upon written request and approved from time to time by the Board of Directors or a committee thereof) (the “Questionnaire”), which Questionnaire shall provide the following information: (i) the class and number of shares of the Corporation which are beneficially owned, as of the date of the Questionnaire, by the Nominee, (ii) a description (including the name of any counterparties) of any agreement, arrangement or understanding between the Nominee and any stockholder of the -15-

 
Corporation as to how the Nominee, if the Nominee is at the time a Director or is subsequently elected as a Director, will act or vote on any issue or question, (iii) a description (including the name of any counterparties) of any agreement, arrangement or understanding (whether written or oral) to which the Nominee or any Related Person of the Nominee is party for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy given in response to a public proxy or consent solicitation made generally to all holders of shares of the Corporation) or disposing of any shares of the Corporation or to cooperate in obtaining, changing or influencing the control of the Corporation (except independent financial, legal and other advisors acting in the ordinary course of their respective businesses), (iv) the description (including the name of any counterparties) of any derivative securities (as defined under Rule 16a-1 under the Exchange Act) or other derivatives, short positions, profit interests, options, hedging transactions, borrowed or loaned shares or similar arrangements relating to the common stock of the Corporation, entered into as of the date of the Questionnaire by, or on behalf of, the Nominee or any Related Person of the Nominee and a list of all transactions by the Nominee and all Related Persons of the Nominee involving any shares of the Corporation or any such derivative security or similar arrangement related to any shares of the Corporation within 60 days prior to the date of the Questionnaire, (v) a description (including the names of any counterparties) of any agreement, arrangement or understanding with respect to the nomination between or among the Nominee and any Related Person of the Nominee, and (vi) all other information that, as of the date of the Questionnaire, would be required to be included in a filing with respect to the Corporation on Schedule 13D (including the exhibits thereto) under the Exchange Act (or any successor provision thereto) by the Nominee and all Related Persons of the Nominee, regardless of whether such person has publicly filed or is required to file a Schedule 13D with respect to the Corporation containing such information. If, after the Nominee has delivered the Questionnaire pursuant to this Section 8, any information required to be contained in such Questionnaire as described above changes as of the record date for the relevant meeting, such Nominee, no later than five business days following such record date, must deliver to the Secretary at the principal executive offices of the Corporation a supplemental Questionnaire describing such updated information as of such record date. SECTION 9. Powers of Directors. (a) General Powers. The Board of Directors shall have the entire management of the business of this Corporation. In addition to such powers as are herein and in the certificate of incorporation expressly conferred upon it, the Board of Directors shall have and may exercise all the powers of the Corporation, subject to the provisions of the laws of Delaware, the certificate of incorporation and these By-Laws. (b) Appointment of Committees. The Board of Directors may designate two or more of their number to constitute an Executive Committee, which Committee shall have and may exercise, when the Board is not in session, all of the powers of the Board in the management of the business and affairs of the Corporation, including the power to appoint Assistant Secretaries and Assistant Treasurers, and to authorize the seal of the Corporation to be affixed to all papers which may require it. The Executive Committee may make rules for the calling, holding and conduct of its meetings and the keeping of records thereof. -16-

 
The Board of Directors may also appoint other committees from their own number, the number (not less than two) composing such committees, and the powers conferred upon them, to be determined by such resolution or resolutions. In the absence or disqualification of any member of the Executive Committee or any other committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Meetings of any Committee designated by the Board of Directors may be called by the Board of Directors or by the Chairman of the Committee at any time or place upon at least twenty-four (24) hours’ notice. One third of the members of a Committee, but not less than two members, shall constitute a quorum of a Committee for the transaction of business. (c) Delegation of Duties of Directors. The Board of Directors may delegate for the time being the powers or duties of any officer of the Corporation, in case of his absence, disability, death or removal, or for any other reason, to any other officer or to any Director. SECTION 10. Meeting of Directors. (a) Regular Meetings. Regular meetings of the Board of Directors shall be held at such place within or without the State of Delaware, and at such times, as the Board by vote may determine from time to time, and if so determined no notice thereof need be given. After each election of Directors the newly constituted Board shall meet without notice for the purpose of electing officers and transacting such other business as lawfully may come before it. (b) Special Meetings. Special meetings of the Board of Directors may be held at any time or place, within or without the State of Delaware, whenever called by the Chairman of the Board, the President, the Chief Financial Officer, the Secretary or a majority of the whole Board of Directors. (c) Notice of Meetings. Notice of regular meetings of the Board of Directors or any adjourned meeting thereof need not be given. Notice of any special meeting of directors shall be given to each director at his or her business or residence in writing by hand delivery, first-class or overnight mail or courier service, telegram or facsimile transmission, or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five (5) days before such meeting. If by telegram, overnight mail or courier service, such notice shall be deemed adequately delivered when the telegram is delivered to the telegraph company or the notice is delivered to the overnight mail or courier service company at least twenty-four (24) hours before such meeting. If by facsimile transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least twelve (12) hours before such meeting. If by telephone or by hand delivery, the notice shall be given at least twelve (12) hours prior to the time set for the meeting. Such notice need not state the purposes of such meeting. -17-

 
(d) Telephonic and Electronic Meetings Permitted. Any one or more members of the Board of Directors or any committee thereof may participate in any meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other or as otherwise permitted by law, and such participation in a meeting shall constitute presence in person at such meeting. (e) Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his or her absence, by a chairman chosen at the meeting, the Secretary shall act as secretary of the meeting, but in his or her absence, the chairman of the meeting may appoint any person to act as secretary of the meeting. (f) Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all the members of the Board of Directors or any such committee consent thereto in writing or as otherwise permitted by law and, if required by law, the writing or writings are filed with the minutes or proceedings of the Board of Directors or of such committee. SECTION 11. Quorum of Directors. Subject to Section 7 of this Article IV, a whole number of directors equal to a majority of the whole Board of Directors shall constitute a quorum of the Board for the transaction of business. The chairman of the meeting or a majority of directors present may adjourn the meeting from time to time, whether or not a quorum is present. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. When a quorum is present at any meeting of Directors, a majority of the members present thereat shall decide any question brought before such meeting, except as otherwise provided by law, the certificate of incorporation or these By-Laws. SECTION 12. Compensation of Directors. Directors other than those who are full-time salaried officers or other employees of the Corporation may be paid compensation for their services as Directors and may also be paid additional compensation for their services as members of any committee appointed by the Board of Directors, in such amounts as the Board of Directors by resolution shall from time to time determine to be appropriate. Directors may be paid their expenses, if any, incurred for attendance at each meeting of the Board of Directors or of any committee of which they may be members. No Director shall be precluded from serving the Corporation in any other capacity and receiving compensation therefore. ARTICLE V Books and Records Unless otherwise required by the laws of Delaware, the books and records of the Corporation may be kept at the office of the Corporation in the City of Chicago, State of Illinois, or at any other place or places outside the State of Delaware, as the Board of Directors from time to time may designate. -18-

 
ARTICLE VI Officers SECTION 1. Number and Titles. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer, and a Controller, all of whom shall be elected by the Board of Directors. The Board of Directors or the Chief Executive Officer may appoint such other officers, including one or more Assistant Secretaries, Assistant Treasurers and Assistant Controllers as either of them shall deem necessary, who shall have such authority and perform such duties as may be prescribed in such appointment. The Chairman of the Board, the Vice Chairman of the Board and the President shall be members of the Board of Directors, but the other officers need not be members of such Board. Any two or more offices, other than the offices of President and Secretary, may be held by the same person. SECTION 2. Tenure of Office. Officers of the Corporation shall hold their respective offices at the pleasure of the Board of Directors and, in the case of officers who were appointed by the Executive Committee or by the Chief Executive Officer, also at the pleasure of such appointing authority. Each officer shall serve from the time of his or her appointment until a successor shall be chosen and qualified or until his or her death, resignation, removal or otherwise. SECTION 3. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the Secretary. Such resignation shall take effect at the time specified therein, and if no time be specified, upon receipt thereof, and unless specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 4. Removal. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation. SECTION 5. Vacancies. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting. SECTION 6. Duties of Officers. (a) Chairman of the Board. The Chairman of the Board shall preside at all meetings of the Board of Directors, of the Executive Committee and of the stockholders of the Corporation. He shall perform such other duties as may from time-to-time be assigned to him by the Board of Directors. (b) Chief Executive Officer. The Chief Executive Officer of the Corporation shall be in general charge and supervision of the affairs of the Corporation. -19-

 
(c) President. The President shall perform such duties as from time-to-time may be assigned to him by the Board of Directors or the Chief Executive Officer of the Corporation. (d) Vice Presidents. Each Vice President shall have such powers and shall perform such duties as may be assigned to him by the senior officers of the Corporation or by the Board of Directors. The Board of Directors may designate one or more Vice Presidents as Executive Vice Presidents or Senior Vice Presidents, or make such other designations of Vice Presidents as it may deem appropriate. (e) Secretary. The Secretary shall attend and record all proceedings of the meetings of the Board of Directors, the stockholders, and the Executive Committee; shall be custodian of the corporate seal and affix such seal to all documents requiring the same; shall cause to be maintained a stock transfer book, and a stock ledger, and such other books as the Board of Directors may direct; shall serve all notices required by law, or by these By-Laws, or by resolution of the Board of Directors; and shall perform such other duties as pertain to the office of Secretary, subject to the control of the Board of Directors. (f) Assistant Secretaries. The Assistant Secretaries shall assist the Secretary in the performance of his duties, and shall perform such other duties as the Board of Directors or the Chief Executive Officer from time to time may prescribe. If at any time the Secretary shall be unable to act, an Assistant Secretary may perform his duties. (g) Treasurer. The Treasurer shall perform all duties commonly incident to that office (including, but without limitation, the care and custody of the funds and securities of the Corporation which from time to time may come into his hands and the deposit of the funds of the Corporation in such banks or trust companies as the Board of Directors may authorize or direct) and, in addition, such other duties as the Board of Directors from time to time may prescribe. (h) Assistant Treasurers. Assistant Treasurers shall assist the Treasurer in the performance of his duties, and shall discharge such other duties as the Board of Directors or the Chief Executive Officer from time to time may prescribe. (i) Controller. The Controller shall be the principal accounting officer of the Corporation, and shall maintain adequate records of all assets, liabilities and transactions of the Corporation; and shall cause adequate audits of the Corporation’s accounting records to be currently and regularly made; and shall perform such other duties as the Board of Directors from time to time may prescribe. (j) Assistant Controllers. Assistant Controllers shall assist the Controller in performance of his duties, and shall discharge such other duties as the Board of Directors or the Chief Executive Officer from time to time may prescribe. -20-

 
ARTICLE VII Stock Certificates SECTION 1. Stock Certificates. Every holder of stock shall be entitled to have a certificate or certificates duly numbered, certifying the number and class of shares in the Corporation owned by him, in such form as may be prescribed by the Board of Directors. Each such certificate shall be signed in the name of the Corporation by the Chairman of the Board, the President or a Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. If any such certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or (2) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. All certificates shall be countersigned and registered in such manner as the Board of Directors may from time to time prescribe and there shall be impressed thereon the seal of the Corporation or imprinted thereon a facsimile of such seal. Any transfer agent may countersign by facsimile signature. No registrar of any stock of the Corporation appointed pursuant to this Section 1 shall be the Corporation or its employee. SECTION 2. Lost Certificates. In the case of the loss, mutilation or destruction of a stock certificate, a duplicate certificate may be issued upon such terms and conditions as the Board of Directors from time to time may prescribe. SECTION 3. Transfers of Stock. Transfer of shares of stock of the Corporation shall be made on the books of the Corporation only by the person named in the certificate evidencing such stock or by any attorney lawfully constituted in writing, and upon surrender and cancellation of such certificate, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of authenticity of the signatures and authority of the signatories as the Corporation or its agents may reasonably require, except that a new certificate may be issued in the name of an-appropriate state officer or office, without the surrender of the former certificate for shares presumed abandoned under the provisions of applicable state escheat or abandoned property laws. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and accordingly is not bound to recognize any equitable or other claim or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly otherwise provided by the laws of the state of Delaware. SECTION 4. Uncertificated Stock. Notwithstanding anything herein to the contrary, any and all classes and series of shares, or any part thereof, may be represented by uncertificated stock, except that shares represented by a certificate that is issued and outstanding shall continue to be represented thereby until the certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated stock, the Corporation shall send to the registered owner thereof, a written notice containing the information required to -21-

 
be set forth or stated on certificates. The rights and obligation of the holders of shares represented by certificates and the rights and obligations of the holder of uncertificated shares of the same class or series shall be identical. The provisions of Sections 2 and 3 of this Article VII shall be inapplicable to uncertificated stock and in lieu thereof the Corporation shall adopt alternative procedures for the registration of transfers. ARTICLE VIII Depositaries and Checks Depositaries of the funds of the Corporation shall be designated by the Board of Directors; and all checks on such funds shall be signed by such officers or other employees of the Corporation as the Board of Directors from time to time may designate. ARTICLE IX Waiver of Notice Any notice required to be given by law, by the certificate of incorporation, or by these By-Laws, may be waived by the person entitled thereto, either before or after the time stated in such notice. ARTICLE X Amendment of By-Laws Subject to Section (c) of Article EIGHTH and Section (a) of Article TENTH of the Certificate of Incorporation of the Corporation these By-Laws may be amended, repealed or added to at any regular or special meeting of the Board of Directors or of the stockholders, by the affirmative vote of a majority of the whole Board of Directors, or by the affirmative vote of a majority of the stock issued and outstanding and entitled to vote, as the case may be. ARTICLE XI Indemnification of Officers, Directors and Employees (a) Each person who was or is a director or officer of the Corporation and who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “Proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such -22-

 
amendment and unless applicable law otherwise requires, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in Paragraph (d) of this Article XI, the Corporation shall indemnify any such person seeking indemnification in connection with a Proceeding (or part thereof) initiated by such person only if such Proceeding (or part thereof) was authorized by the whole Board of Directors. The right to indemnification conferred in this Article XI shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such Proceeding in advance of its final disposition, consistent with the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such amendment and unless applicable law otherwise requires, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), such advances to be paid by the Corporation within 30 days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a Proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article XI or otherwise. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. (b) To obtain indemnification under this Article XI, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification pursuant to the first sentence of this Paragraph (b), a determination, if required by applicable law, with respect to the claimant’s entitlement thereto shall be made as follows: (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the claimant for a determination by Independent Counsel, (i) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant, the Independent Counsel shall be selected by the Board of Directors unless there shall have occurred within two years prior to the date of the commencement of the Proceeding for which indemnification is claimed a -23-

 
“Change of Control” as defined in the Executive Severance Plan of FMC Corporation (as amended as of April 18, 1997), in which case the Independent Counsel shall be selected by the claimant unless the claimant shall request that such selection be made by the Board of Directors. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within 10 days after such determination. (c) Except as provided for in Paragraph (d) of this Article XI, no person shall be entitled to indemnification or advancement of expenses under this Article XI with respect to any Proceeding, or any claim therein, brought or made by him against the Corporation. (d) If a claim under Paragraph (a) of this Article XI is not paid in full by the Corporation within thirty days after a written claim pursuant to Paragraph (b) of this Article XI has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any Proceeding in advance of its final disposition whether the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed. With respect to any suit brought by a person seeking to enforce a right of indemnification or a right to advancement of expenses, neither the failure of the Corporation (including its Board of Directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth under applicable law, nor an actual determination by the Corporation (including its Board of Directors, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (e) In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses or by the Corporation to recover an advancement of expenses, the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article XI or otherwise. (f) If a determination shall have been made pursuant to Paragraph (b) of this Article XI that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial Proceeding commenced pursuant to Paragraph (d) of this Article XI. (g) The Corporation shall be precluded from asserting in any judicial Proceeding commenced pursuant to Paragraph (d) of this Article XI that the procedures and presumptions of this Article XI are not valid, binding and enforceable and shall stipulate in such Proceeding that the Corporation is bound by all the provisions of this Article XI. -24-

 
(h) The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Article XI shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Laws, agreement, vote of stockholders or Disinterested Directors or otherwise. No repeal or modification of this Article XI shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation to indemnification and to advancement of expenses that any person may have at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification. (i) The Corporation’s obligation, if any, to indemnify any person who was or is serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust or other enterprise. (j) The Corporation may, but shall not be obligated to, purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation against any liability, cost or expense. The Corporation may enter into contracts with any director, officer, employee or agent of the Corporation or of any corporation, partnership, joint venture, trust or other enterprise where a director or officer of the Corporation was serving at the request of the Corporation as a director, officer, employee or agent in furtherance of this Article XI and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided or authorized in this Article XI. (k) The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any Proceeding in advance of its final disposition, to any employee or agent or class of employees or agents of the Corporation (including the heirs, executors, administrators or estate of each such person) to the fullest extent of the provisions of this Article XI with respect to the indemnification and advancement of expenses of directors and officers of the Corporation. (l) If any provisions or provision of this Article XI shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the remaining provisions of this Article XI (including, without limitation, each provision of any paragraph of this Article XI containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Article XI including, without limitation, each such portion of any paragraph of this Article XI containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. -25-

 
(m) For purposes of this Article XI: (i) “Disinterested Director” means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant. (ii) “Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of Corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this Article XI. (n) Any notice, request or other communication required or permitted to be given to the Corporation under this Article XI shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary. ARTICLE XII Emergency By-Laws The Emergency By-Laws provided in this Article XII shall be operative during any emergency in the conduct of the business of the Corporation resulting from an attack on the United States or on a locality in which the Corporation does business or customarily holds meetings of its board of directors or stockholders or during any nuclear or atomic disaster or during the existence of any catastrophe or other similar emergency condition as a result of which a quorum of the board of directors or a standing committee thereof cannot readily be convened for action notwithstanding any different provision in the preceding Articles of these By-Laws or in the Certificate of Incorporation of the Corporation or in the General Corporation Law of the State of Delaware. To the extent not inconsistent with the provisions of this Article, the By- Laws provided in the preceding Articles shall remain in effect during such emergency and upon its termination the Emergency By-Laws shall cease to be operative. During any such emergency: (a) A meeting of the Board of Directors or a committee thereof may be called by any officer or director of the Corporation. Notice of the time and place of the meeting shall be given by the person calling the meeting to such of the directors as it may be feasible to reach by any available means of communication. Such notice shall be given at such time in advance of the meeting as circumstances permit in the judgment of the person calling the meeting. (b) At any such meeting of the Board of Directors, a quorum shall consist of the director or directors in attendance at the meeting. (c) The Board of Directors, either before or during any such emergency, may provide, and from time to time modify, lines of succession in the event that during such an -26-

 
emergency any or all officers or agents of the Corporation shall for any reason be rendered incapable of discharging their duties. (d) To the extent required to constitute a quorum at any meeting of the Board of Directors during such an emergency, the officers of the Corporation who are present shall, unless otherwise provided in Emergency By-Laws, be deemed, in order of rank and within the same rank in order of seniority, directors for such meeting. (e) The Board of Directors, either before or during any such emergency, may, effective in the emergency, change the head office or designate several alternative head offices or regional offices or authorize the officers so to do. No officer, director or employee acting in accordance with these Emergency By- Laws shall be liable except for willful misconduct. These Emergency By-Laws shall be subject to repeal or change by further action of the Board of Directors or by action of the stockholders, but no such repeal or change shall modify the provisions of the next preceding paragraph with regard to action taken prior to the time of such repeal or change. Any amendment of these Emergency By-Laws may make any further or different provision that may be practical and necessary for the circumstances of the emergency. ARTICLE XIII Exclusive Forum Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XIII. -27-

 
PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT FMC CORPORATION INCENTIVE COMPENSATION AND STOCK PLAN THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made by and between FMC Corporation (the “Company”) and [_________________________]1 (the “Participant”). WHEREAS, the Company maintains the FMC Corporation Incentive Compensation and Stock Plan (the “Plan”); and WHEREAS, the Plan authorizes the grant of Restricted Stock Units; and WHEREAS, to compensate the Participant for his or her past and anticipated future contributions to the Company and to further align the Participant’s personal financial interests with those of the Company’s stockholders, the Compensation and Organization Committee of the Company’s Board of Directors (the “Committee”) approved this grant of Restricted Stock Units to the Participant on the terms described below, effective [____________________]2 (the “Grant Date”). NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Grant of Restricted Stock Units. (a) Pursuant to the Plan and as of the Grant Date, the Company hereby awards to the Participant a target number of [__________] Restricted Stock Units (the “Target Units”) up to a maximum number of [__________] Restricted Stock Units on the terms and conditions set forth herein (collectively, the “Units”). The terms of the Plan, as it may be amended and continued, are incorporated herein by this reference and made a part of this Agreement and will control the rights and obligations of the Company and the Participant under this Agreement. Capitalized terms not otherwise defined herein will have the same meanings as in the Plan. To the extent there is a conflict between the Plan and this Agreement, the Plan will prevail. (b) Each Unit, once vested, represents an unfunded, unsecured right of the Participant to receive one share of Common Stock (each a “Share”) at a specified time. The Units will become vested, and Shares will be issued in respect of vested Units, as set forth in this Agreement. 2. Banked Units. For purposes of this Agreement, the term “Banked Unit” means a Unit that has been tentatively credited for the Participant’s benefit based on the Participant’s service through a specified date and the satisfaction of applicable performance conditions as provided in 1 Insert name of participant. 2 Insert date of committee action to approve the grant.

 
this Section 2, or under the provisions of Section 7(b)(ii) or 7(b)(iii) relating to additional Banked Units, provided, however, that a Banked Unit is not vested except to the extent provided in Section 3. Banked Units shall vest, and Shares associated with Banked Units shall become deliverable exclusively in accordance with Section 3. (a) Calendar Year [Year 1]. Subject to the Participant’s continued employment by the Company or any of its Affiliates through December 31, [Year 1], 25% of the Target Units shall become “Banked Units”, subject to adjustment based upon the Company’s “Total Shareholder Return” (as defined below) relative to the Total Shareholder Return of the “Peer Companies” (as defined below) from January 1, [Year 1] until December 31, [Year 1] in accordance with the Relative Total Shareholder Return Table (the “Relative Total Shareholder Return”) set forth in Section 2(e). (b) Calendar Year [Year 2]. Subject to the Participant’s continued employment by the Company or any of its Affiliates through December 31, [Year 2], 25% of the Target Units shall become “Banked Units”, subject to adjustment based upon the Company’s “Total Shareholder Return” relative to the Total Shareholder Return of the “Peer Companies” from January 1, [Year 2] until December 31, [Year 2] in accordance with the Relative Total Shareholder Return Table. (c) Calendar Year [Year 3]. Subject to the Participant’s continued employment by the Company or any of its Affiliates through December 31, [Year 3], 25% of the Target Units shall become “Banked Units”, subject to adjustment based upon the Company’s “Total Shareholder Return” relative to the Total Shareholder Return of the “Peer Companies” from January 1, [Year 3] until December 31, [Year 3] in accordance with the Relative Total Shareholder Return Table. (d) Cumulative Period [Year 1]-[Year 3]. Subject to the Participant’s continued employment by the Company or any of its Affiliates through December 31, [Year 3], 25% of the Target Units shall become “Banked Units”, subject to adjustment based upon the Company’s “Total Shareholder Return” relative to the Total Shareholder Return of the “Peer Companies” from January 1, [Year 1] until December 31, [Year 3] in accordance with the Relative Total Shareholder Return Table, provided that notwithstanding the Relative Total Shareholder Return Table, if the Company’s Total Shareholder Return for the cumulative period extending from January 1, [Year 1] through December 31, [Year 3] is negative, the maximum number of Units that may become Banked Units for this Cumulative Period shall not exceed 25% of the Target Units. (e) Relative Total Shareholder Return Table. Percentile Ranking of Company’s Total Percentage of the Shareholder Return Versus Peer Group Relevant Target Units Level Total Shareholder Return Banked Below Threshold Below the 35th Percentile 0% Threshold 35th Percentile 50% Target 50th Percentile 100% -2-

 
Maximum 80th Percentile or higher 200% (f) If the Company’s Relative Total Shareholder Return over the applicable Measurement Period is between the levels set forth above, then the percentage of the relevant Target Units that will become Banked Units will be ratably interpolated. If the Relative Total Shareholder Return at the end of the applicable Measurement Period is below the 35th percentile, then no Units shall be banked with respect to such Measurement Period. (g) In the event the Participant’s employment terminates by reason of (i) Disability, (ii) death, (iii) Non-Approved Retirement, or (iv) by the Company without Cause other than within two years following a Change in Control, then the extent to which the Target Units subject to any Measurement Period shall become Banked Units shall be determined on a prorated basis based on the number of days the Participant was employed by the Company during that Measurement Period, based on the actual Relative Total Shareholder Return for the full Measurement Period. (h) In the event the Participant’s employment terminates by reason of Approved Retirement, then the extent to which the Target Units shall become Banked Units shall be determined on the same basis as if the Participant had continued in active service to the Company through December 31, [Year 3]. (i) Definitions. (i) “Approved Retirement” means the cessation of the Participant’s employment after June 30, [Year 1] and after the Participant has (A) both attained age 62 and completed 10 years of service with the Company or its Affiliates or (B) attained age 65, provided that the Participant has commenced succession planning with the Company’s chief human resources executive (in accordance with procedures established by the Company) at least six months before the effective date of the Participant’s cessation of employment. (ii) “Measurement Period” means, as applicable, the [Year 1] calendar year, [Year 2] calendar year, [Year 3] calendar year or the three year period beginning on January 1, [Year 1] and ending on December 31, [Year 3]. (iii) “Non-Approved Retirement” means the cessation of the Participant’s employment after the Participant has (A) both attained age 62 and completed 10 years of service with the Company or its Affiliates or (B) attained age 65, other than an Approved Retirement. (iv) The “Peer Companies” shall consist of the following entities, provided that such entities are still publicly traded as of the last day of the relevant Measurement Period: [ ]3. Any entity which is not publicly traded as of the last day of the relevant Measurement Period due to acquisition or through a going private transaction shall be removed from the Peer Companies from the beginning of the relevant Measurement Period without replacement. Any entity which declares bankruptcy, is liquidated or is otherwise 3 Insert peer companies. -3-

 
delisted during the relevant Measurement Period shall remain in the Peer Companies and such entity’s performance shall be considered to have been at the bottom of the Peer Companies. (v) “Total Shareholder Return” means with respect to any publicly traded company, including the Company, the positive or negative change in the market price of one share of such entity’s common stock over the relevant Measurement Period, plus the aggregate amount of dividends paid with respect to a share of such company’s common stock over the Measurement Period, with such sum being divided by the market price of one share of such entity’s common stock at the commencement of the relevant Measurement Period (in each case appropriately adjusted for any stock dividends, stock splits or other corporate transaction affecting shares of such company’s common stock). 3. Vesting. (a) Subject to the Participant’s continued employment by the Company or any of its Affiliates through December 31, [Year 3], (the “Specified Date”), the Banked Units shall vest on the Specified Date. (b) In the event the Participant’s employment terminates by reason of (i) Disability, (ii) death, (iii) Non-Approved Retirement, or (iv) by the Company without Cause other than within two years following a Change in Control, then such Participant’s previously Banked Units and those Banked Units determined in accordance with Section 2(g) will remain outstanding and will vest and be delivered to the Participant, at the same time as delivery would have been made had the Participant not had a cessation of employment. (c) In the event the Participant’s cessation of employment occurs by reason of Approved Retirement, then all of the Participant’s previously Banked Units and those Banked Units determined in accordance with Section 2(h) will remain outstanding and will vest and be delivered to the Participant, at the same time as delivery would have been made had the Participant not had a cessation of employment. (d) If prior to the date the Units otherwise vest and within two years following a Change in Control the Participant’s employment is terminated either by the Company without Cause or by the Participant due to a resignation with Good Reason (as defined in Section 20), any of the Participant’s then outstanding previously Banked Units and the Target Units subject to Measurement Periods that have not concluded prior to such termination, will vest immediately prior to such event and will be delivered to the Participant at the same time as delivery would have been made had the Participant not had a cessation of employment. For avoidance of doubt, this section will not apply if the Participant has satisfied the conditions for Approved or Non- Approved Retirement as of the date of his or her termination (in that case, Section 3(b)(iii) or 3(c) will apply, as applicable). (e) Upon a cessation of the Participant’s employment with the Company or any of its Affiliates, any Target Unit or Banked Unit that has not become vested on or prior to the effective date of such cessation and any Unit that does not specifically remain outstanding pursuant to Section 3(b), 3(c) or 3(d) will then be forfeited immediately and automatically and the Participant will have no further rights with respect thereto. -4-

 
(f) The application of Sections 3(b)(iii), 3(b)(iv), 3(c), and 3(d) is in each case conditioned on (i) the Participant’s execution and delivery to the Company of a general release of claims against the Company and its affiliates in a form prescribed by the Company, and (ii) such release becoming irrevocable within 60 days following the cessation of the Participant’s employment or such shorter period specified by the Company. For avoidance of doubt, if this release requirement is not timely satisfied, the Units will be forfeited as of the effective date of the cessation of the Participant’s employment and the Participant will have no further rights with respect thereto. 4. Timing of Issuance. (a) Subject to Section 4(b), Shares will be issued in respect of all vested Units during the first two and a half months of the calendar year beginning after the Specified Date (or upon the Company’s termination of this arrangement in a manner consistent with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix)). (b) Notwithstanding anything herein to the contrary: (i) to the extent permitted by Treas. Reg. § 1.409A-3(j)(4)(vi), the issuance of Shares in respect of a number of vested Units will be accelerated to the date that employment taxes become payable with respect to this Award. Such number of Units will be equal to the reasonably estimated amount of employment taxes then required to be withheld and remitted, divided by the then current Fair Market Value; (ii) to the extent the requirements of Treas. Reg. § 1.409A-2(b)(7)(ii) are met, the issuance of Shares hereunder will be delayed to the extent the Company reasonably anticipates that the issuance will violate Federal securities laws or other applicable laws; and (iii) to the extent compliance with the requirements of Treas. Reg. § 1.409A- 3(i)(2) is necessary to avoid the application of an additional tax under Section 409A of the Code, Shares that are otherwise issuable upon the Grantee’s “separation from service” (as that term is defined in Treas. Reg. § 1.409A-1(h)) will be deferred (without interest) and issued to the Grantee immediately following that six month period. (c) Fractional Shares will be rounded up to the next whole Share, except that where the number of Target Units granted is not divisible by 4, in calculating the portion of Target Units to be adjusted during each Measurement Period pursuant to Section 2 (the “25 % Calculation”), such 25% Calculation may be rounded up or down in any single Measurement Period so that the total of the 25% Calculations for all Measurement Periods shall not exceed the number of Target Units granted. 5. Non-Transferability. Neither the Units nor any right with respect thereto may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance will be void and unenforceable against the Company. -5-

 
6. Clawback Policy. To the extent the Participant is a current or former executive officer of the Company, the Award, any cash paid in respect of the Award, and the rights of the Participant hereunder, are subject to any policy (whether currently in existence or later adopted) established by the Company providing for clawback or recovery of amounts paid or credited to current or former executive officers of the Company. The Committee will make any determination for clawback or recovery under any such policy in its sole discretion and in accordance with any applicable law or regulation, and the Participant agrees to be bound by any such determination. 7. Stockholder Rights. (a) In General. The Participant will not have any stockholder rights or privileges, other than dividend equivalent rights as set forth below, with respect to the Shares subject to Units until such Shares are actually issued and registered in the Participant’s name in the Company’s books and records. (b) Dividend Equivalent Rights. (i) Additional Banked Unit Credits. If the Participant is credited with Banked Units under Section 2(a), 2(b), 2(c), or 2(d); then (ii) the Participant shall be credited with an additional number of Banked Units as of: (A) December 31, [Year 1] (with respect to Banked Units credited under Section 2(a)); (B) December 31, [Year 2] (with respect to Banked Units credited under Section 2(b)); (C) December 31, [Year 3] (with respect to Banked Units credited under Section 2(c)); in each case determined as the quotient of “w” divided by “x” where “w” equals the amount of any cash dividends paid with respect to Shares during the period beginning January 1, [Year 1] and ending on December 31 of the applicable calendar year with respect to a number of Shares equal to the number of Banked Units creditable under Section 2(a), 2(b) and 2(c), as applicable, as of the last day of each such calendar year, and “x” equals the closing price per Share on the last day of the applicable calendar year, rounded to the nearest whole Share; and (iii) the Participant shall be credited with an additional number of Banked Units as of December 31, [Year 3] (with respect to Banked Units credited under Section 2(d)), determined as the quotient of “y” divided by “z” where “y” equals the aggregate amount of any cash dividends paid with respect to Shares during calendar years [Year 1], [Year 2] and [Year 3] with respect to a number of Shares equal to the number of Banked Units creditable under Section 2(d) as of December 31, [Year 3], and “z” equals the closing price per Share on December 31, [Year 3], rounded to the nearest whole Share. -6-

 
(iv) Additional Dividend Equivalent Unit Credits In Connection with a Change In Control. If: (A) Cash dividends are paid with respect to Shares during any Measurement Period that ends early as the result of the Participant’s termination of employment as described in Section 3(d) (a “Partial Measurement Period”); and (B) The Participant is credited with vested Units under Section 3(d); then the Participant shall be credited with an additional number of vested Units as of the date of the Participant’s termination of employment. The additional number of vested Units for each Partial Measurement Period shall be determined as the quotient of “x” divided by “y” where “x” equals the aggregate amount of cash dividends paid during the applicable Partial Measurement Period (ending on the date of such termination of employment) with respect to a number of Shares equal to 25 percent of the Target Units, and “y” equals the closing price per Share on such termination date (or, if such date is not a trading date, the closing price per Share on the next preceding trading date), rounded to the nearest whole Share. (v) Dividend Equivalent Payments. (A) [Year 2]. As soon as reasonably practicable following each cash dividend payment date with respect to Shares in [Year 2] (but not later than March 15, [Year 3]), the Company shall make a dividend equivalent payment to the Participant equal to the product of “x” multiplied by “y” where “x” is the cash dividend per Share and “y” is the number of Banked Units credited as of December 31, [Year 1]. (B) [Year 3]. As soon as reasonably practicable following each cash dividend payment date with respect to Shares in [Year 3] (but not later than March 15, [Year 4]), the Company shall make a dividend equivalent payment to the Participant equal to the product of “x” multiplied by “y” where “x” is the cash dividend per Share and “y” is the number of Banked Units credited as of December 31, [Year 2]. Notwithstanding Section 7(b)(v)(A) and Section 7(b)(v)(B), upon a cessation of the Participant’s employment with the Company or any of its Affiliates, the Company shall not make any further dividend equivalent payments with respect to any Banked Unit that has not become vested on or prior to the effective date of such cessation or with respect to any Banked Unit that does not specifically remain outstanding pursuant to Section 3(b), 3(c), or 3(d). 8. No Limitation on Rights of the Company. The granting of Units will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 9. Employment. Nothing in this Agreement or in the Plan will confer on the Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or Affiliate employing or retaining the Participant) to terminate the Participant’s employment at any time for any reason, with or without cause. -7-

 
10. Tax Treatment and Withholding. (a) The Participant has had the opportunity to review with his or her own tax advisors the federal, state and local tax consequences of the transactions contemplated by this Agreement. The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. (b) It is a condition to the Company’s obligation to issue Shares hereunder that the Participant pay to the Company such amount as may be required to satisfy all tax withholding obligations arising in connection with this Award (or otherwise make arrangements acceptable to the Company for the satisfaction of such tax withholding obligations). If the required withholding amount required is not timely paid or satisfied, the Participant’s right to receive such Shares will be permanently forfeited. The Company, in its discretion, may withhold Shares otherwise issuable hereunder in satisfaction of the amount required to be withheld in connection with this Award (based on the Fair Market Value of such Shares on the date of such withholding). All cash payments under this Agreement are subject to applicable withholding, as determined by the Company in its discretion. 11. Notices. (a) Any notice required to be given or delivered to the Company under the terms of this Agreement will be addressed to it in care of its Secretary, FMC Corporation, at FMC Tower at Cira Centre South, 2929 Walnut Street, Philadelphia, PA 19104, and any notice to the Participant (or other person entitled to receive the Units) will be addressed to such person at the Participant’s address now on file with the Company, or to such other address as either may designate to the other in writing. Except as otherwise provided below in Section 11(b), any notice will be deemed to be duly given when enclosed in a properly sealed envelope addressed as stated above and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government. (b) The Participant hereby authorizes the Company to deliver electronically any prospectuses or other documentation related to this Award, the Plan and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such plans or arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by means of e-mail or e-mail notification that such documentation is available on the Company’s Intranet site. Upon written request, the Company will provide to the Participant a paper copy of any document also delivered to the Participant electronically. The authorization described in this paragraph may be revoked by the Participant at any time by written notice to the Company. 12. Beneficiaries. In the event of the death of the Participant, the issuance of Shares, if any, under this Agreement shall be made in accordance with the Participant’s written beneficiary designation on file with the Company or its representative and/or agent (if such a designation has been duly filed with the Company or its representative and/or agent, in the form prescribed by the Company and in accordance with the notice provisions of Section 11(a)). In the absence of -8-

 
any such beneficiary designation, the delivery of Shares, if any, hereunder will be made to the Participant’s estate. 13. Administration. By entering into this Agreement, the Participant agrees and acknowledges that (a) the Company has provided or made available to the Participant a copy of the Plan, (b) he or she has read the Plan, (c) all Units are subject to the Plan, (d) in the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern, and (e) pursuant to the Plan, the Committee is authorized to interpret the Plan and to adopt rules and regulations not inconsistent with the Plan as it deems appropriate. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee with respect to questions arising under the Plan or this Agreement. 14. Entire Agreement. This Agreement, together with the Plan, represents the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior agreement, written or otherwise, relating to the subject matter hereof. This Agreement may only be amended by a writing signed by each of the parties hereto. 15. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without regard to the principles of conflicts-of-laws. 16. Privacy. By signing this Agreement, the Participant hereby acknowledges and agrees to the Company’s transfer of certain personal data of such Participant to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Participant expressly gives his or her consent to the Company to process such personal data. 17. Claims Procedure. (a) To the extent the issuance of Shares hereunder is deferred until cessation of employment or beyond, this Agreement is intended to constitute part of a “top-hat” plan described in Section 201(2) of ERISA. Therefore, to initiate a claim with respect to the settlement of Units, the Participant (or the person to whom ownership rights may have passed by will or the laws of descent and distribution) (the “Claimant”) must file a written request with the Company. Upon receipt of such claim, the Company will advise the Claimant within ninety (90) days of receipt of the claim whether the claim is denied. If special circumstances require more than ninety (90) days for processing, the Claimant will be notified in writing within ninety (90) days of filing the claims than the Company requires up to an additional ninety (90) days to reply. The notice will explain what special circumstances make an extension necessary and indicate the date a final decision is expected to be made. (b) If the claim is denied in whole or in part, the Claimant will be provided a written opinion, in language calculated to be understood by the Claimant, setting forth (i) the specific reason(s) for the denial of the claim, or any part of it, (ii) specific reference(s) to pertinent provisions of the Plan or this Agreement upon which such denial was based, (iii) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary, (iv) an explanation of the claim -9-

 
appeal procedure set forth in Section 17(c), below; and (v) a statement of the Claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse determination upon appeal. (c) Within sixty (60) days after receiving a notice from the Company that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Company a written request for a review of the denial of the claim. The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Company. If the Claimant does not request a review of the initial determination within such sixty (60) days period, the Claimant will be barred and estopped from challenging the determination. (d) Within sixty (60) days after the Company’s receipt of a request for review, it will review the initial determination. After considering all materials presented by the Claimant, without regard to whether such materials were submitted or considered in the initial review, the Company will render a written opinion. The manner and content of the final decision will include the same information described above in Section 17(b) with respect to the initial determination. If special circumstances require that the sixty (60) day time period be extended, the Company will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review. The notice will explain what special circumstances make an extension necessary and indicate the date a final decision is expected to be made. Any decision on appeal will be final, conclusive and binding upon all parties. 18. Section Headings. The headings of sections and paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 19. Counterparts; Facsimile. This Agreement may be executed in multiple counterparts (including by facsimile signature), each of which will be deemed to be an original, but all of which together will constitute but one and the same instrument. 20. Good Reason. For purposes of this Agreement, “Good Reason” will have the meaning defined in the Participant’s Individual Agreement, if any. If no Individual Agreement exists, “Good Reason” will mean the occurrence of any one or more of the following: (a) The assignment to the Participant of duties materially inconsistent with his or her authorities, duties, responsibilities or position, or a material adverse change in the Participant’s authorities, duties, responsibilities, position or reporting requirements; (b) The Company’s relocation of the Participant’s principal worksite by more than (50) miles, excepting travel substantially consistent with the Participant’s business obligations; or (c) A material reduction in the Participant’s base salary, provided that any such event will constitute Good Reason only if the Participant notifies the Company in writing of such event within 90 days following the initial occurrence thereof, the -10-

 
Company fails to cure such event within 30 days after receipt from the Participant of written notice thereof, and the Participant resigns his or her employment within 180 days following the initial occurrence of such event. -11-

 
IN WITNESS WHEREOF, the Company’s duly authorized representative and the Participant have each executed this Agreement on the respective date below indicated. FMC CORPORATION By: Title: Date: PARTICIPANT Signature: Address: Date: -12-

 
PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT FMC CORPORATION INCENTIVE COMPENSATION AND STOCK PLAN THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made by and between FMC Corporation (the “Company”) and [_________________________]1 (the “Participant”). WHEREAS, the Company maintains the FMC Corporation Incentive Compensation and Stock Plan (the “Plan”); and WHEREAS, the Plan authorizes the grant of Restricted Stock Units; and WHEREAS, to compensate the Participant for his or her past and anticipated future contributions to the Company and to further align the Participant’s personal financial interests with those of the Company’s stockholders, the Compensation and Organization Committee of the Company’s Board of Directors (the “Committee”) approved this grant of Restricted Stock Units to the Participant on the terms described below, effective _________________, [Year1]2 (the “Grant Date”). NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Grant of Restricted Stock Units. (a) Pursuant to the Plan and as of the Grant Date, the Company hereby awards to the Participant a target number of [__________] Restricted Stock Units (the “Units”). The terms of the Plan are incorporated herein by this reference and made a part of this Agreement. Capitalized terms not otherwise defined herein will have the same meanings as in the Plan. To the extent there is a conflict between the Plan and this Agreement, the Plan will prevail. (b) Each Unit, once vested, represents an unfunded, unsecured right of the Participant to receive one share of Common Stock (each a “Share”) at a specified time. The Units will be earned, and Shares will be issued in respect of earned Units, as set forth in this Agreement. 2. Determination of Units Earned. Subject to the Participant’s continued employment by the Company or any of its Affiliates through December 31, [Year 3] (the “Specified Date”), between 0%-200% of the Units shall become earned in accordance with the table set forth below based on the Company’s operating cash flow (as defined in Exhibit A hereto, the “Operating Cash Flow”) during the three year period beginning on January 1, [Year 1] and ending on December 31, [Year 3] (the “Measurement Period”): 1 Insert name of participant. 2 Insert date of committee action to approve the grant.

 
Level Operating Cash Flow Percentage of Units Earned Below Threshold [__________] 0% Threshold [__________] 25% Target [__________] 100% Maximum [__________] 200% If the Company’s Operating Cash Flow is between the levels set forth above, then the percentage of the Units earned will be ratably interpolated. Any Units that are not earned as of the end of the Measurement Period will be forfeited immediately and automatically and the Participant will have no further rights with respect thereto. (b) If the Participant’s employment terminates by reason of (i) Disability, (ii) death, (iii) Non-Approved Retirement, or (iv) by the Company without Cause other than within two years following a Change in Control, then the extent to which the Units are earned shall be determined as if the Participant had continued in active service to the Company through the Specified Date, but shall be prorated based on the number of days the Participant was employed by the Company during the Measurement Period. (c) In the event the Participant’s employment terminates by reason of Approved Retirement, then the extent to which the Units are earned shall be determined as if the Participant had continued in active service to the Company through the Specified Date. (d) In the event the Participant’s employment terminates within two years following a Change in Control due to either (i) a termination by the Company without Cause or (ii) a resignation by the Participant with Good Reason, then the Units shall be deemed earned at the target (i.e., 100%) level and Shares will be distributed in respect thereof in accordance with Section 4(a) below. For avoidance of doubt, this section will not apply if the Participant has satisfied the conditions for Approved Retirement or Non-Approved Retirement as of the date of his or her termination (in that case, Section 2(b)(iii) or 2(c) will apply, as applicable). (e) The application of Sections 2(b)(iii), 2(b)(iv), 2(c), and 2(d) is in each case conditioned on (i) the Participant’s execution and delivery to the Company of a general release of claims against the Company and its affiliates in a form prescribed by the Company, and (ii) such release becoming irrevocable within 60 days following the cessation of the Participant’s employment or such shorter period specified by the Company. For avoidance of doubt, if this release requirement is not timely satisfied, all the Units will be forfeited as of the effective date of the cessation of the Participant’s employment and the Participant will have no further rights with respect thereto. (f) Upon a cessation of the Participant’s employment with the Company or any of its Affiliates, all Units that do not specifically remain outstanding pursuant to Section 2(b), 2(c) or 2(d) will then be forfeited immediately and automatically and the Participant will have no further rights with respect thereto. -2-

 
3. Definitions. (a) “Approved Retirement” means the cessation of the Participant’s employment after June 30, [Year 1] and after the Participant has (A) both attained age 62 and completed 10 years of service with the Company or its Affiliates or (B) attained age 65, provided that the Participant has commenced succession planning with the Company’s chief human resources executive (in accordance with procedures established by the Company) at least six months before the effective date of the Participant’s cessation of employment. (b) “Good Reason” will have the meaning defined in the Participant’s Individual Agreement, if any. If no Individual Agreement exists, “Good Reason” will mean the occurrence of any one or more of the following: (i) the assignment to the Participant of duties materially inconsistent with his or her authorities, duties, responsibilities or position, or a material adverse change in the Participant’s authorities, duties, responsibilities, position or reporting requirements; (ii) the Company’s relocation of the Participant’s principal worksite by more than (50) miles, excepting travel substantially consistent with the Participant’s business obligations; or (iii) a material reduction in the Participant’s base salary; provided that any such event will constitute Good Reason only if the Participant notifies the Company in writing of such event within 90 days following the initial occurrence thereof, the Company fails to cure such event within 30 days after receipt from the Participant of written notice thereof, and the Participant resigns his or her employment within 180 days following the initial occurrence of such event. (c) “Non-Approved Retirement” means the cessation of the Participant’s employment after the Participant has (i) both attained age 62 and completed 10 years of service with the Company or its Affiliates or (ii) attained age 65, other than an Approved Retirement. 4. Timing of Issuance. (a) Subject to Section 4(b), Shares will be issued in respect of all earned Units (including any additional Units credited under Section 7(b)) during the first two and a half months of the calendar year beginning after the Specified Date. (b) Notwithstanding anything herein to the contrary: (i) to the extent permitted by Treas. Reg. § 1.409A-3(j)(4)(vi), the issuance of Shares in respect of a number of earned Units may be accelerated to the date that employment taxes become payable with respect to this Award. Such number of Units will be equal to the reasonably estimated amount of employment taxes then required to be withheld and remitted, divided by the then current Fair Market Value; (ii) to the extent the requirements of Treas. Reg. § 1.409A-2(b)(7)(ii) are met, the issuance of Shares hereunder will be delayed to the extent the Company reasonably anticipates that the issuance will violate Federal securities laws or other applicable laws; and (iii) the Company may terminate this arrangement at any time prior to the end of the Measurement Period in a manner consistent with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix). -3-

 
(c) Fractional Shares will be rounded down to the next whole Share. 5. Non-Transferability. Neither the Units nor any right with respect thereto may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance will be void and unenforceable against the Company. 6. Clawback Policy. To the extent the Participant is a current or former executive officer of the Company, the Award, any cash paid in respect of the Award, and the rights of the Participant hereunder, are subject to any policy (whether currently in existence or later adopted) established by the Company providing for clawback or recovery of amounts paid or credited to current or former executive officers of the Company. The Committee will make any determination for clawback or recovery under any such policy in its sole discretion and in accordance with any applicable law or regulation, and the Participant agrees to be bound by any such determination. 7. Stockholder Rights. (a) In General. The Participant will not have any stockholder rights or privileges, other than dividend equivalent rights as set forth below, with respect to the Shares subject to Units until such Shares are actually issued and registered in the Participant’s name in the Company’s books and records. (b) Dividend Equivalent Credits. The Participant shall be credited with an additional number of earned Units as of the Specified Date determined as the quotient of “y” divided by “z” where “y” equals the aggregate amount of any cash dividends paid with respect to Shares during the Measurement Period with respect to a number of Shares equal to the number of Units earned under Section 2 and “z” equals the closing price per Share on the Specified Date, rounded to the nearest whole Share. 8. No Limitation on Rights of the Company. The granting of Units will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 9. Employment. Nothing in this Agreement or in the Plan will confer on the Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or Affiliate employing or retaining the Participant) to terminate the Participant’s employment at any time for any reason, with or without cause. 10. Tax Treatment and Withholding. (a) The Participant has had the opportunity to review with his or her own tax advisors the federal, state and local tax consequences of the transactions contemplated by this Agreement. The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. -4-

 
(b) It is a condition to the Company’s obligation to issue Shares hereunder that the Participant pay to the Company such amount as may be required to satisfy all tax withholding obligations arising in connection with this Award (or otherwise make arrangements acceptable to the Company for the satisfaction of such tax withholding obligations). If the required withholding amount required is not timely paid or satisfied, the Participant’s right to receive such Shares will be permanently forfeited. The Company, in its discretion, may withhold Shares otherwise issuable hereunder in satisfaction of the amount required to be withheld in connection with this Award (based on the Fair Market Value of such Shares on the date of such withholding). All cash payments under this Agreement are subject to applicable withholding, as determined by the Company in its discretion. 11. Notices. (a) Any notice required to be given or delivered to the Company under the terms of this Agreement will be addressed to it in care of its Secretary, FMC Corporation, at FMC Tower at Cira Centre South, 2929 Walnut Street, Philadelphia, PA 19104, and any notice to the Participant (or other person entitled to receive the Units) will be addressed to such person at the Participant’s address now on file with the Company, or to such other address as either may designate to the other in writing. Except as otherwise provided below in Section 11(b), any notice will be deemed to be duly given when enclosed in a properly sealed envelope addressed as stated above and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government. (b) The Participant hereby authorizes the Company to deliver electronically any prospectuses or other documentation related to this Award, the Plan and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such plans or arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by means of e-mail or e-mail notification that such documentation is available on the Company’s Intranet site. Upon written request, the Company will provide to the Participant a paper copy of any document also delivered to the Participant electronically. The authorization described in this paragraph may be revoked by the Participant at any time by written notice to the Company. 12. Beneficiaries. In the event of the death of the Participant, the issuance of Shares, if any, under this Agreement shall be made in accordance with the Participant’s written beneficiary designation on file with the Company or its representative and/or agent (if such a designation has been duly filed with the Company or its representative and/or agent, in the form prescribed by the Company and in accordance with the notice provisions of Section 11(a)). In the absence of any such beneficiary designation, the delivery of Shares, if any, hereunder will be made to the Participant’s estate. 13. Administration. By entering into this Agreement, the Participant agrees and acknowledges that (a) the Company has provided or made available to the Participant a copy of the Plan, (b) he or she has read the Plan, (c) all Units are subject to the Plan, (d) in the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern, and (e) pursuant to the Plan, the -5-

 
Committee is authorized to interpret the Plan and to adopt rules and regulations not inconsistent with the Plan as it deems appropriate. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee with respect to questions arising under the Plan or this Agreement. 14. Entire Agreement. This Agreement, together with the Plan, represents the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior agreement, written or otherwise, relating to the subject matter hereof. This Agreement may only be amended by a writing signed by each of the parties hereto. 15. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without regard to the principles of conflicts-of-laws. 16. Privacy. By signing this Agreement, the Participant hereby acknowledges and agrees to the Company’s transfer of certain personal data of such Participant to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Participant expressly gives his or her consent to the Company to process such personal data. 17. Section Headings. The headings of sections and paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 18. Counterparts; Facsimile. This Agreement may be executed in multiple counterparts (including by facsimile signature), each of which will be deemed to be an original, but all of which together will constitute but one and the same instrument. -6-

 
IN WITNESS WHEREOF, the Company’s duly authorized representative and the Participant have each executed this Agreement on the respective date below indicated. FMC CORPORATION By: Title: Date: PARTICIPANT Signature: Address: Date: -7-

 
Exhibit A “Operating Cash Flow” means the sum of the Company’s Adjusted Operating Cash Flow for each of the three years in the Measurement Period. The Company’s Adjusted Operating Cash Flow for each year is the sum of (1) and (2) below: 1. the “adjusted EBITDA” for such year, which represents the Company’s total revenue less operating expenses (which operating expenses consist of costs of sales and services, selling, general and administrative expenses, including corporate staff expense, and research and development expenses), excluding depreciation and amortization, as reported in the Company’s audited financial statements for the relevant year, and 2. the “change in Working Capital” for such year (which change might be positive or negative), which represents the sum of (a) trade receivables (net), (b) guarantees of vendor financing, (c) inventories, (d) accounts payable (trade and other), (e) advance payments from customers, and (f) accrued customer rebates, each as reported in the Company’s consolidated statements of cash flow for the relevant year. The Operating Cash Flow may be equitably adjusted in the discretion of the Committee, to account for changes in accounting rules, laws, or regulations, acquisitions or divestitures, interest expenses associated with the Company’s repurchase of shares of common stock, business restructuring, material changes in the North America crop pre-payment program, and other extraordinary events or transactions. -8-

 


Exhibit 15

May 8, 2019

FMC Corporation
Philadelphia, PA

Re: Registration Statement on form S-3 (No. 333-229962) and Form S-8 (Nos. 333-64702, 333-62683, 333-36973, 333-24039, 333-18383, 333-69805, 333-69714, 333-111456, 333-172387, and 333-172388)

With respect to the subject registration statement, we acknowledge our awareness of the use therein of our report dated May 8, 2019 related to our review of interim financial information.

Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP
Philadelphia, Pennsylvania







Exhibit 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, Pierre R. Brondeau, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of FMC Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 

Date: May 8, 2019
 
/s/ Pierre R. Brondeau
 
Pierre R. Brondeau
Chief Executive Officer and Chairman
 




Exhibit 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Andrew D. Sandifer, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of FMC Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 

Date: May 8, 2019
 
/s/ Andrew D. Sandifer
 
Andrew D. Sandifer
Executive Vice President
and Chief Financial Officer

 





 Exhibit 32.1
CEO CERTIFICATION OF QUARTERLY REPORT
I, Pierre R. Brondeau, Chief Executive Officer and Chairman of FMC Corporation (“the Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, based on my knowledge that:
(1)
the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 8, 2019
 
/s/ Pierre R. Brondeau
 
Pierre R. Brondeau
Chief Executive Officer and Chairman
 




 Exhibit 32.2
CFO CERTIFICATION OF QUARTERLY REPORT
I, Andrew D. Sandifer, Executive Vice President and Chief Financial Officer of FMC Corporation (“the Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, based on my knowledge that:
(1)
the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 8, 2019
 
/s/ Andrew D. Sandifer
 
Andrew D. Sandifer
Executive Vice President
and Chief Financial Officer