10q10k10q10k.net

What changed in FMC CORP's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of FMC CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+401 added−391 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-24)

Top changes in FMC CORP's 2023 10-K

401 paragraphs added · 391 removed · 282 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+27 added−31 removed32 unchanged
Biggest changeFinancial Information About Our Business (Financial Information in Millions) The following table shows the principal products produced by our business, its raw materials and uses: Product Raw Materials Uses Insecticides Synthetic chemical intermediates Protection of crops, including soybean, corn, fruits and vegetables, cotton, sugarcane, rice, and cereals, from insects and for non-agricultural applications including pest control for home, garden and other specialty markets Herbicides Synthetic chemical intermediates Protection of crops, including cotton, sugarcane, rice, corn, soybeans, cereals, fruits and vegetables from weed growth and for non-agricultural applications including turf and roadsides Fungicides Synthetic chemical intermediates Protection of crops, including cereals, fruits and vegetables from fungal disease Plant Health Biological intermediates Protection of crops, including soybean, corn, fruits and vegetables, cotton, sugarcane, rice, and cereals, from insects and diseases and enhancement of yields Our worldwide manufacturing and distribution infrastructure enables us to respond rapidly to global customer needs, offset downward economic trends in one region with positive trends in another and match local revenues to local costs to reduce the impact of currency volatility.
Biggest changeAcquisitions and Divestitures We continued to make investments through FMC Ventures, our venture capital arm targeting strategic investments in start-ups and early-stage companies that are developing and applying emerging technologies in the agricultural industry. 4 Table of Contents Financial Information About Our Business (Financial Information in Millions) The following table shows the principal products produced by our business, its raw materials and uses: Product Raw Materials Uses Insecticides Synthetic chemical intermediates Protection of crops, including soybean, corn, fruits and vegetables, cotton, sugarcane, rice, and cereals, from insects and for non-agricultural applications including pest control for home, garden and other specialty markets Herbicides Synthetic chemical intermediates Protection of crops, including cotton, sugarcane, rice, corn, soybeans, cereals, fruits and vegetables from weed growth and for non-agricultural applications including turf and roadsides Fungicides Synthetic chemical intermediates Protection of crops, including cereals, fruits and vegetables from fungal disease Plant Health Biological intermediates Protection of crops, including soybean, corn, fruits and vegetables, cotton, sugarcane, rice, and cereals, from insects and diseases and enhancement of yields The following charts detail our sales by major geographic region and major product category.
Talent Engagement and Retention At FMC, it is important that we focus our programs and initiatives on sustaining strong leaders who are committed to engaging and developing employees, so they can lead competitively, innovate change, improve business performance, and successfully maintain a competitive advantage. FMC provides leadership development through structured leadership programs worldwide.
Talent Development and Retention At FMC, it is important that we focus our programs and initiatives on sustaining strong leaders who are committed to engaging and developing employees, so they can lead competitively, innovate change, improve business performance, and successfully maintain a competitive advantage. FMC provides leadership development through structured leadership programs worldwide.
To meet regulatory requirements for such difficult-to-manufacture molecules, we believe that third parties will have to produce these active ingredients using the same processes that are patented by FMC and if so, would be infringing before patent expiration and subject to our challenge for infringement.
To meet regulatory requirements for such difficult-to-manufacture molecules, we believe that third parties will likely have to produce these active ingredients using the same processes that are patented by FMC and if so, would be infringing before patent expiration and subject to our challenge for infringement.
Arc™ farm intelligence, which is now available in over 20 countries across 20 million acres, allows growers to address pest pressure more efficiently, manage infestations before they escalate and target applications in a more sustainable manner.
Arc™ farm intelligence, which is now available in over 25 countries across 20 million acres, allows growers to address pest pressure more efficiently, manage infestations before they escalate and target applications in a more sustainable manner.
However, even in situations in which we are not able to prevail on interim relief, we intend to continue litigating in such cases and seek permanent injunctive relief and recovery of damages after a full trial.
Even in situations in which we are not able to prevail on interim relief, we intend to continue litigating in such cases and seek permanent injunctive relief and recovery of damages after a full trial.
Our venture capital arm, FMC Ventures, continued to build its portfolio in 2022 with new collaborations and strategic investments in start-ups and early stage companies working on new or disruptive technologies. These engagements, which support or augment our internal capabilities, span several important technology segments, including robotics, drone technology, Ag-FinTech, pathogen detection, soil health, peptides and pheromones.
Our venture capital arm, FMC Ventures, continued to build its portfolio in 2023 with new collaborations and strategic investments in start-ups and early stage companies working on new or disruptive technologies. These engagements, which support or augment our internal capabilities, span several important technology segments, including robotics, drone technology, Ag-FinTech, pathogen detection, soil health, peptides and pheromones.
Collectively, these four factors – deep patent estate, proprietary regulatory data, strong commercial approach leveraging our brand recognition, and capabilities of managing large scale manufacturing complexity – provide us the basis for our expectation that FMC will be the company of choice to supply chlorantraniliprole and cyantraniliprole products to third-party partners, and ultimately to farmers, well into the future.
Collectively, these four factors – deep patent estate, proprietary regulatory data and regulatory advocacy, strong commercial approach leveraging our brand recognition, and capabilities of managing large scale manufacturing complexity – provide the basis for our expectation that FMC will be the company of choice to supply chlorantraniliprole and cyantraniliprole products to third-party partners, and ultimately to farmers, well into the future.
The agrochemicals industry is more consolidated following several mergers of the leading crop protection companies, which now include FMC, ChemChina (owner of Syngenta Group, which includes the former Syngenta and Adama), Bayer AG (acquired Monsanto in 2018), BASF AG and Corteva Agriscience. These five innovation companies currently represent approximately 71 percent of the crop protection industry’s global sales.
The agrochemicals industry is more consolidated following several mergers of the leading crop protection companies, which now include FMC, ChemChina (owner of Syngenta Group, which includes the former Syngenta and Adama), Bayer AG (acquired Monsanto in 2018), BASF AG and Corteva Agriscience. These five innovation companies currently represent approximately 73 percent of the crop protection industry’s global sales.
To reflect this commitment, we established sustainability goals to challenge ourselves and ensure that we are helping to create a better world. We recognize that sustainability goes beyond reducing emissions, it also encompasses how we utilize scarce resources, such as water, and the importance of nature, including biodiversity.
To reflect this commitment, we established sustainability goals to challenge ourselves and ensure that we are helping to create a better world. We recognize that sustainability goes beyond reducing emissions, it also encompasses human rights, the importance of nature, including biodiversity and how we utilize scarce resources such as water.
In addition, given our manufacturing know-how, scale of our operations, and continual investment in manufacturing process improvement, we believe FMC’s manufacturing costs will be substantially lower than any other party seeking to produce these diamide products in compliance with all applicable laws.
Given our manufacturing know-how, scale of our operations, and continual investment in manufacturing process improvement, we believe FMC’s manufacturing costs will be substantially lower than any other party seeking to produce these diamide products at scale and in compliance with all applicable laws.
This expectation is based not only on our broad patent estate and the timing of key patent milestones, but also on other critical elements that will allow FMC to continue to profitably grow the diamide franchise well beyond the expiration of key patents.
This expectation is based not only on our broad patent estate and the timing of key patent milestones, but also on other critical elements that we believe will allow FMC to continue to profitably grow the diamide franchise well beyond the expiration of key patents.
We are deploying a multi-pronged strategy to defend that business after active ingredient patent expiration, including enforcement of our patents in many countries which continue to cover chemical intermediates and manufacturing processes that are essential in the production of chlorantraniliprole.
We continue to deploy a multi-pronged strategy to defend that business after active ingredient patent expiration, including enforcement of our patents in many countries which continue to cover chemical intermediates and manufacturing processes that are essential in the production of chlorantraniliprole.
Performance- 11 Table of Contents based direct pay programs include competitive base pay, annual bonus opportunities, sales incentive plans, and long-term incentives. These compensation elements along with benefits, work-life flexibility, recognition awards, talent and career development, enable FMC to offer a comprehensive total reward package designed for employees throughout their career.
Performance-based direct pay programs include competitive base pay, annual bonus opportunities, sales incentive plans, and long-term incentives. These compensation elements along with benefits, work-life flexibility, recognition awards, talent and career development, enable FMC to offer a comprehensive total reward package designed for employees throughout their career.
As a result of our firm commitment to safety, our Total Recordable Incident Rate ("TRIR") of 0.0795 continues to be among the lowest in the industry globally and in the top decile of peer companies in North America, placing our company among the safest organizations in the chemical industry.
As a result of our firm commitment to safety, our Total Recordable Incident Rate of 0.0547 continues to be among the lowest in the industry globally and in the top decile of peer companies in North America, placing our company among the safest organizations in the chemical industry.
Many of these intermediate process patents run well past the expiration of the composition of matter patents, and in some cases stretch until the end of this decade.
Many of these intermediate process patents run well past the expiration of the active ingredient composition of matter patents, and in some cases stretch until the end of this decade.
Further, in certain countries, even after the period of exclusive use has expired, a generic entrant seeking to rely on the initial registrant’s reference data may have to pay significant compensation to the initial registrant. For FMC’s diamide products, such rights apply in key markets including United States and the European Union. Growing the FMC Diamide Franchise.
Further, in certain countries, even after the period of exclusive use has expired, a generic entrant seeking to rely on the initial registrant’s reference data may have to pay compensation to the initial registrant. For FMC’s diamide products, such rights apply in key markets including United States and the European Union.
Several products from our portfolio are based on patent-protected active ingredients and continue to grow well above market patterns. Our complementary technologies combine 7 Table of Contents improved formulation capabilities and a broader innovation pipeline, resulting in new and differentiated products. We continue to take advantage of enhanced market access positions and an expanded portfolio to deliver near-term growth.
Several products from our portfolio are based on patent-protected active ingredients and position us to grow well above market patterns. Our complementary technologies combine improved formulation capabilities and a broader innovation pipeline, resulting in new and differentiated products. We continue to take advantage of enhanced market access positions and an expanded portfolio to deliver near-term growth.
FMC Ventures continues to scout for and invest in game changing innovations that shape the future of crop protection. Diamide Growth Strategy Our product portfolio features two key diamide-class molecules – Rynaxypyr ® (chlorantraniliprole) and Cyazypyr ® (cyantraniliprole) actives – with combined annual revenues of approximately $2.1 billion in 2022.
FMC Ventures continues to scout for and invest in game changing innovations that will shape the future of crop protection. Diamide Growth Strategy Our product portfolio features two key diamide-class molecules – Rynaxypyr ® (chlorantraniliprole) and Cyazypyr ® (cyantraniliprole) actives – with combined annual revenues of approximately $1.8 billion in 2023.
These agreements can require the third-party to use the well-known and trusted Rynaxypyr ® or Cyazypyr ® brand names on the end-use products formulated with active ingredient supplied by FMC. As of December 31, 2022, we had global agreements with five major multinational companies and approximately 50 separate local-country agreements covering over 15 countries.
These agreements can require the third-party to use the well-known and trusted Rynaxypyr ® or Cyazypyr ® brand names on the end-use products formulated with active ingredient supplied by FMC. As of December 31, 2023, we had global agreements with five major multinational companies and approximately 56 separate local-country agreements covering over 19 countries.
For Rynaxypyr ® and Cyazypyr ® actives related patents, as of December 31, 2022, we had 33 families with granted patents filed in up to 76 countries, with a total of 727 active granted patents as well as numerous pending patent applications. See "Patents, Trademarks and Licenses" within this Item 1 for more details.
For Rynaxypyr ® and Cyazypyr ® actives related patents, as of December 31, 2023, we had 42 families with granted patents filed in up to 76 countries, with a total of 755 active granted patents as well as numerous pending patent applications. See "Patents, Trademarks and Licenses" within this Item 1 for more details.
The first of these products, under the trademarks Elevest ® , Vantacor ® , and Altacor ® eVo, were launched in the US and other countries, including Canada and Australia, starting in late 2020 through 2022 and will be launched in additional countries in 2023 onward.
The first of these Rynaxypyr® active containing products, under the trademarks Elevest ® , Vantacor ® , and Altacor ® eVo, were launched in the US and other countries, including Canada and Australia, starting in late 2020 through 2023 and will be launched in additional countries in 2024 onward.
Some of the critical elements supporting diamide growth include registration and data protection, commercial strategies, brand recognition, as well as manufacturing and supply chain complexity and FMC efficiencies. Patents and Trade Secrets.
Some of the critical elements supporting our view of diamide growth include development of new formulations, registration and data protection, commercial strategies, brand recognition, as well as manufacturing and supply chain complexity and FMC efficiencies. Patents and Trade Secrets.
FMC also owns formulation patents which cover the use of chlorantraniliprole or cyantraniliprole in specific formulations found in commercially important end-use products. 8 Table of Contents Regulatory Data Protection.
FMC also owns formulation patents which cover the use of chlorantraniliprole or cyantraniliprole in specific formulations found in commercially important end-use products. 7 Table of Contents Regulatory Requirements.
We expect Cyazypyr ® active to continue to grow strongly notwithstanding the expiration of its active ingredient composition of matter patents starting in the mid-2020s.
We expect Cyazypyr ® active to continue to grow strongly notwithstanding the expiration of its active ingredient composition of matter patents starting in early 2024.
This reduction of HHPs in our portfolio can be attributed to our internal processes which include continuous evaluation, close monitoring and subsequent phase out along with strong stewardship actions. SEC Filings SEC filings are available free of charge on our website, www.fmc.com.
In 2023, HHPs accounted for approximately 0.1 percent of our total sales. This reduction of HHPs in our portfolio can be attributed to our internal processes which include continuous evaluation, close monitoring and subsequent phase out along with strong stewardship actions. SEC Filings SEC filings are available free of charge on our website, www.fmc.com.
FMC is aligned with the UN Sustainable Development Goals ("SDGs") #2 (Zero Hunger), #8 (Decent Work and Economic Growth), #13 (Climate Action) and #15 (Life on Land).
FMC is aligned with the UN Sustainable Development Goals #2 (Zero Hunger), #8 (Decent Work and Economic Growth), #13 (Climate Action) and #15 (Life on Land). FMC has established 2025 and 2035 sustainability goals.
Given the unique and specific Chinese patent laws and legal procedures at issue in that situation, we do not believe that the China Patent Review Board’s decisions would materially impact our enforcement of similar patents in other countries.
Given the unique and specific Chinese patent law issues at issue in that situation, we do not believe that the Review Board’s decisions would materially adversely impact our enforcement of similar patents in other countries.
Our business competes primarily in the global crop protection market for insecticides, herbicides and fungicides. Industry products include crop protection chemicals and biologicals, for certain major competitors, genetically engineered (crop biotechnology) products. Competition from generic agrochemical producers is significant as a number of key product patents have expired in the last two decades.
Industry products include crop protection chemicals and biologicals, for certain major competitors, genetically engineered (crop biotechnology) products. Competition from generic agrochemical producers is significant as a number of key product patents have expired in the last two decades.
Patents involve complex factual and legal issues and thus each case is being litigated on the merits; we often seek preliminary injunctive relief to stop sales of products which we believe to be infringing – since equitable relief at the early stage of a litigation is subject to a higher standard of proof than decisions made after a trial on the merits, we may have difficulty prevailing in all cases at that preliminary stage.
Patents involve complex factual and legal issues and thus each case is being litigated on the merits; we often seek preliminary injunctive relief to stop sales of products which we believe to be infringing – since equitable relief at the early stage of a litigation is subject to a higher standard of proof than decisions made after a trial on the merits, we may have 9 Table of Contents difficulty prevailing in all cases at that preliminary stage, and in a number of cases in India and China, we have not obtained that requested relief, allowing products to be launched while the underlying cases on the merits continue.
In addition, we sell directly to large growers in select countries such as Brazil. Through these and other alliances, along with our own targeted marketing efforts, access to novel technologies and our innovation initiatives, we expect to maintain and enhance our access in key agricultural and non-crop markets and develop new products that will help us continue to compete effectively.
Through these and other alliances, along with our own targeted marketing efforts, access to novel technologies and our innovation initiatives, we expect to maintain and enhance our access in key agricultural and non-crop markets and develop new products that will help us continue to compete effectively.
More details regarding our diamide granted patent estate are set forth in the tables below: Numbers of active Granted Patents by type*: Chlorantraniliprole and Cyantraniliprole, as of December 31, 2022 United States Foreign Active Ingredients 2 162 Intermediates and Methods of Manufacturing 19 230 Formulations/Mixtures/Applications 6 308 Total 27 700 *Patent families were only placed under one type but may cover several types.
More details regarding our diamide granted patent estate are set forth in the tables below: Numbers of active Granted Patents by type*: Chlorantraniliprole and Cyantraniliprole, as of December 31, 2023 United States Foreign Active Ingredients 2 169 Intermediates and Methods of Manufacturing 21 245 Formulations/Mixtures/Applications 7 311 Total 30 725 *Patent families were only placed under one type but may cover several types.
Industry Overview The three principal categories of agricultural and non-crop chemicals are: insecticides, herbicides, and fungicides, representing approximately 40 percent, 29 percent and 28 percent of global industry revenue, respectively.
Industry Overview The three principal categories of agricultural and non-crop chemicals are: herbicides, insecticides, and fungicides, representing approximately 42 percent, 29 percent and 26 percent of global agricultural crop protection market value, respectively.
Markets in the southern hemisphere (Latin America 10 Table of Contents and parts of the Asia Pacific region, including Australia) are served from July through February, generally resulting in earnings in the third, fourth and first quarters. Competition We encounter substantial competition in our business.
Markets in the southern hemisphere (Latin America and parts of the Asia Pacific region, including Australia) are served from July through February, generally resulting in earnings in the third, fourth and first quarters. Competition We encounter substantial competition in our business. We market our products through our own sales organization and through alliance partners, independent distributors and sales representatives.
FMC is committed to discovering new insecticide, herbicide and fungicide active ingredients, product formulations and pioneering technologies that are consistently better for the planet. FMC Strategy We have streamlined our portfolio over the past ten years to become a tier-one leader and the fifth largest global innovator in the agricultural chemicals market.
FMC is committed to discovering new insecticide, herbicide and fungicide active ingredients, product formulations and pioneering technologies that are consistently better for the planet. FMC Strategy We are a tier-one leader and the fifth largest global innovator in the agrochemicals/crop protection market.
Research and Development Expense The R&D efforts in our business focus on discovering and developing environmentally sound solutions — both new active ingredients and new product formulations — that meet the needs of farmers to maximize yields and control pests.
Research and Development Expense The R&D efforts in our business focus on discovering and developing environmentally sound solutions — both new active ingredients and new product formulations — that meet the needs of farmers to maximize yields and control pests. We are continuously investing into our FMC Stine Research Center in Newark, Delaware, to upgrade the site infrastructure and equipment.
The following charts detail our sales by major geographic region and major product category. 5 Table of Contents The following table provides our long-lived assets by major geographical region: (in Millions) December 31, 2022 2021 Long-lived assets North America $ 1,060.7 $ 1,091.3 Latin America 759.0 742.6 Europe, Middle East, and Africa 1,684.1 1,499.0 Asia 2,018.2 2,092.3 Total $ 5,522.0 $ 5,425.2 6 Table of Contents Products and Markets Our portfolio is comprised of three major pesticide categories: insecticides, herbicides and fungicides.
The following table provides our long-lived assets by major geographical region: (in Millions) December 31, 2023 2022 Long-lived assets North America $ 1,063.4 $ 1,060.7 Latin America 714.8 759.0 Europe, Middle East, and Africa 1,718.2 1,684.1 Asia 1,964.1 2,018.2 Total $ 5,460.5 $ 5,522.0 5 Table of Contents Products and Markets Our portfolio is comprised of three major pesticide categories: insecticides, herbicides and fungicides.
During 2022, we initiated proceedings to enforce several of our patents and trademarks against generic producers and infringers, resulting in multiple favorable judgments and settlements, including in India and China.
Since 2022, continuing through 2023 and into 2024, we initiated proceedings to enforce several of our patents and trademarks against generic producers and infringers, resulting in multiple favorable judgments and settlements in several countries, including in the United States, India, and China.
Our patents cover many aspects of our business, including our chemical and biological active ingredients, intermediate chemicals, manufacturing processes to produce such active ingredients or intermediates, formulations, and product uses, as well as many aspects of our research and development activities that support the FMC new product pipeline.
We also in-license certain active ingredients and other technologies under patents held by third parties, and have granted licenses to certain of our patents to third parties. 8 Table of Contents Our patents cover many aspects of our business, including our chemical and biological active ingredients, intermediate chemicals, manufacturing processes to produce such active ingredients or intermediates, formulations, and product uses, as well as many aspects of our research and development activities that support the FMC new product pipeline.
During the third quarter of 2022, the China Patent Review Board issued rulings which held that the two challenged patents were not valid in China. We believe the Review Board’s decisions are seriously flawed both on procedural and substantive ground and we have filed appeals. Under Chinese law, the patents remain valid but are not enforceable pending appeal.
During the third quarter of 2022, the China Patent Review Board ("Review Board") issued rulings which held that the two challenged patents were not valid in China. We believe the Review Board’s decisions are seriously flawed both on procedural and substantive grounds and we have appealed the Review Board's decision to the Beijing IP Court.
Environmental Laws and Regulations A discussion of environmental related factors can be found in Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in Note 12 "Environmental Obligations" in the notes to our consolidated financial statements included in this Form 10-K.
Environmental Laws and Regulations A discussion of environmental related factors can be found in Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in Note 11 "Environmental Obligations" in the notes to our consolidated financial statements included in this Form 10-K. 10 Table of Contents Human Capital At FMC, employees are guided by our purpose: Innovation for agriculture; Solutions for the planet .
Remaining Life of Granted Patents: Chlorantraniliprole and Cyantraniliprole, as of December 31, 2022 United States Foreign Through December 31, 2027 11 520 2028 - 2032 14 163 2033 - 2038 2 17 Total 27 700 We also own many trademarks that are well recognized by customers or product end-users.
Remaining Life of Granted Patents: Chlorantraniliprole and Cyantraniliprole, as of December 31, 2023 United States Foreign Through December 31, 2028 15 524 2029 - 2033 11 132 2034 - 2039 2 17 2040 - 2043 2 52 Total 30 725 We also own many trademarks that are well recognized by customers or product end-users.
Employees leverage their experiences in these programs to develop leadership abilities to their highest levels, enabling them to deliver innovative solutions, strong results and continued growth. FMC creates an environment where we promote our values, embrace diversity, and build an inclusive culture.
Employees leverage their experiences in these programs to develop leadership abilities to their highest levels, enabling them to deliver innovative solutions, strong results and continued growth.
We market our products through our own sales organization and through alliance partners, independent distributors and sales representatives. The number of our principal competitors varies from market to market. In general, we compete by providing advanced technology, high product quality, reliability, quality customer and technical service, and by operating in a cost-efficient manner.
The number of our principal competitors varies from market to market. In general, we compete by providing advanced technology, high product quality, reliability, quality customer and technical service, and by operating in a cost-efficient manner. Our business competes primarily in the global crop protection market for insecticides, herbicides and fungicides.
We cannot predict, however, the outcome of future contract negotiations. In 2023, 5 foreign collective-bargaining agreements will be expiring. These contracts affect approximately 21 percent of our foreign-based employees. There are no U.S. collective-bargaining agreements expiring in 2023.
These contracts affect approximately 21 percent of our foreign-based employees. There are no U.S. collective-bargaining agreements expiring in 2024.
In early 2022, we received notice that certain third parties are seeking to invalidate our Chinese patents on a certain intermediate involved in producing chlorantraniliprole and a process to produce chlorantraniliprole; we intend to defend vigorously the validity of both patents.
Patent challenges in response to enforcement efforts are expected as an ordinary defense tactic in patent enforcement cases; we intend to defend vigorously any diamide patents that are challenged. In early 2022, we received notice that certain third parties were seeking to invalidate our Chinese patents on a certain intermediate involved in producing chlorantraniliprole and a process to produce chlorantraniliprole.
We are investing in one of the agricultural industry’s most productive crop protection pipeline, featuring 23 new active ingredients in discovery and 11 new active ingredients in development. More than 18 of these molecules feature new modes of action.
Helping farmers grow more food sustainably on less arable land requires a continual stream of new products and technologies. We are investing in one of the agricultural industry’s most productive crop protection pipeline, featuring over 20 new active areas in discovery and 18 new active ingredients in development. More than 25 of these molecules feature new modes of action.
Human Capital Employees We employ approximately 6,600 people with about 1,600 people in our domestic operations and 5,000 people in our foreign operations. Approximately 3 percent of our U.S.-based and 37 percent of our foreign-based employees, respectively, are represented by collective bargaining agreements. We have successfully concluded our recent contract negotiations without any material work stoppages.
Approximately 3 percent of our U.S.-based and 31 percent of our foreign-based employees, respectively, are represented by collective bargaining agreements. We have successfully concluded our recent contract negotiations without any material work stoppages. We cannot predict, however, the outcome of future contract negotiations. In 2024, 6 foreign collective-bargaining agreements will be expiring.
Our external growth efforts include product acquisitions, in-licensing of chemistries and technologies and alliances that bolster our market access, complement our existing product portfolio or provide entry into adjacent spaces. We have entered into a range of development and distribution agreements with other companies that provide access to new technologies and products which we can subsequently commercialize.
We have entered into a range of development and distribution agreements with other companies that provide access to new technologies and products which we can subsequently commercialize.
We strive for an injury-free workplace, where every person returns home the same way they arrived. We encourage a culture of open reporting, to learn from our mistakes and work towards continuous improvement in behaviors and processes.
We encourage a culture of open reporting, to learn from our mistakes and work towards continuous improvement in behaviors and processes.
FMC is executing a strategy to supply end-use products containing Rynaxypyr ® and Cyazypyr ® actives to a broad range of companies prior to patent expiration, and in return establishing long-term purchase commitments from these companies. These arrangements may also include limited patent, data and/or trademark licenses.
In some countries, we have initiated administrative proceedings regarding compliance with applicable regulations. Growing the FMC Diamide Franchise. FMC is executing a strategy to supply end-use products containing Rynaxypyr ® and Cyazypyr ® actives to a broad range of companies prior to patent expiration, and in return establishing long-term purchase commitments from these companies.
In addition, we are also investing substantially in our Plant Health program which includes biologicals, crop nutrition, and seed treatment products. Biological technologies developed by FMC’s R&D team in Denmark offer excellent sustainability profiles and serve as strong complements to our synthetic products.
In addition, we are also investing substantially in our Plant Health program which includes biologicals, crop nutrition, and seed treatment products. Biological technologies offer excellent sustainability profiles and serve as strong complements to our synthetic products. Our biologicals feature attributes that exceed the competition, such as high stability, long shelf life, low use rates and compatibility with other chemistries.
Products launched in 2022 accounted for approximately $100 million in sales. Our diamides, Rynaxypyr ® and Cyazypyr ® active ingredients, continued to be a significant part of our portfolio, representing approximately $2.1 billion in combined sales and approximately 36 percent of the total revenue in 2022.
Our diamides, Rynaxypyr ® and Cyazypyr ® active ingredients, continued to be a significant part of our portfolio, representing approximately $1.8 billion in combined sales and approximately 39 percent of the total revenue in 2023. _________________ (1) Organic revenue growth is a non-GAAP term which excludes the impact of foreign currency changes.
As of December 31, 2022, the Company owned a total of approximately 200 active granted U.S. patents and 2,600 active granted foreign patents (includes Supplemental Patent Certificates); we also have approximately 2,100 patent applications pending globally. 9 Table of Contents In our current product portfolio, our diamide insect control products based on Rynaxypyr ® (Chlorantraniliprole) and Cyazypyr ® (Cyantraniliprole) active ingredients have a substantial patent estate which will remain in force well into the future.
In our current product portfolio, our diamide insect control products based on Rynaxypyr ® (Chlorantraniliprole) and Cyazypyr ® (Cyantraniliprole) active ingredients have a substantial patent estate which will remain in force well into the future.
We continue to grow by obtaining new and approved uses for existing product lines and acquiring, accessing, developing, marketing, distributing and/or selling complementary chemistries, biologicals, and related technologies in order to strengthen our product portfolio and our capabilities to effectively service our target markets and customers.
We have a growth strategy driven by obtaining new and improved uses for existing product lines and acquiring, accessing, developing, marketing, distributing and/or selling complementary chemistries, biologicals, and related technologies in order to strengthen our product portfolio and our capabilities to effectively service our target markets and customers. 6 Table of Contents Our growth efforts focus on developing environmentally compatible and sustainable solutions that can effectively increase farmers’ yields and provide alternatives to products which may be prone to resistance.
We continue to strive for open and transparent communications about our product stewardship successes and challenges. FMC is continuing to phase out Highly Hazardous Pesticides ("HHPs") from our product portfolio. In 2022, HHPs accounted for approximately 0.2 percent of our total sales.
At FMC, we embed stewardship at each stage of the product life cycle, and stewardship priorities are built into the core of research and development, portfolio and marketing strategies. We continue to strive for open and transparent communications about our product stewardship successes and challenges. FMC is continuing to phase out Highly Hazardous Pesticides (“HHPs”) from our product portfolio.
FMC’s technology innovation processes capture those innovations and protect them through the most appropriate form of intellectual property rights. We also in-license certain active ingredients and other technologies under patents held by third parties, and have granted licenses to certain of our patents to third parties.
FMC’s technology innovation processes capture those innovations and protect them through the most appropriate form of intellectual property rights.
Our biologicals feature attributes that exceed the competition, such as high stability, long shelf life, low use rates and compatibility with other chemistries. We have our own sales and marketing organizations and access the market through a combination of distributors, retailers and co-ops in all four regions.
We have our own sales and marketing organizations and access the market through a combination of distributors, retailers and co-ops in all four regions. In addition, we sell directly to large growers in select countries such as Brazil.
Refer to the "Results of Operations" section of our Management's Discussion and Analysis in Item 7 for our organic revenue non-GAAP reconciliation. 4 Table of Contents Acquisitions and Divestitures On June 29, 2022, we announced a definitive agreement to acquire BioPhero ApS ("BioPhero"), a Denmark-based pheromone research and production company.
Refer to the "Results of Operations" section of our Management's Discussion and Analysis in Item 7 for our organic revenue non-GAAP reconciliation.
Our leading insecticides, herbicides and fungicides, including our biological technologies, that farmers rely on to protect their crops from disease and pests were produced at five active ingredient plants, 16 formulation and packaging sites and sold in approximately 120 countries. Helping farmers grow more food sustainably on less arable land requires a continual stream of new products and technologies.
Our strong competitive position is driven by our technology and innovation, as well as our geographic balance and crop diversity. Our leading conventional and biological technologies that farmers rely on to protect their crops from disease and pests were produced at five active ingredient plants, 16 formulation and packaging sites and sold in approximately 110 countries.
Our growth efforts focus on developing environmentally compatible and sustainable solutions that can effectively increase farmers’ yields and provide alternatives to products which may be prone to resistance. We are committed to providing unique, differentiated products to our customers by acquiring and further developing technologies as well as investing in innovation to extend product life cycles.
We are committed to providing unique, differentiated products to our customers by acquiring and further developing technologies as well as investing in innovation to extend product life cycles. Our external growth efforts include product acquisitions, in-licensing of chemistries and technologies and alliances that bolster our market access, complement our existing product portfolio or provide entry into adjacent spaces.
Our goals include achieving (i) 100 percent research and development spend on developing sustainable products by 2025, (ii) FMC developed and utilizes its award-winning Sustainability Assessment Tool to determine the sustainability of new active ingredients and formulated products in the research and development pipeline.
FMC developed and utilizes its Sustainability Assessment Tool to determine the sustainability of new active ingredients and formulated products in the research and development pipeline. This assessment, along with other product stewardship processes and tools, promotes the introduction and use of environmentally sustainable agricultural solutions.
This level of performance underscores our collective commitment to work safely every day. We empower our people to always put safety first. 2022 continued to challenge us with issues related to the COVID pandemic, as well as the war in Ukraine and continued growth of our business.
This level of performance underscores our collective commitment to work safely every day. We empower our people to always put safety first at work and at home. Sustainability We are committed to delivering products that improve agricultural productivity protecting the environment for future generations.
Patents are granted by individual jurisdictions and the duration of our patents depends on their respective jurisdictions and payment of annuities.
Patents are granted by individual jurisdictions and the duration of our patents depends on their respective jurisdictions and payment of annuities. As of December 31, 2023, the Company owned a total of approximately 200 active granted U.S. patents and 2,800 active granted foreign patents (includes Supplemental Patent Certificates); we also have approximately 2,300 patent applications pending globally.
Our network of Regional Inclusion Councils and ERGs remain critical to driving strong employee engagement, providing learning/awareness initiatives, and building greater allyship and advocacy for our employees across various dimensions of diversity.
This is enabled by our Regional Inclusion Councils which include workstreams that represent our Employee Resource Groups. These employee-led teams provide and host impactful learning and awareness initiatives that help provide stronger allyship & advocacy for employees through informal connections, engagement, and support across various dimensions of diversity.
Removed
Our strong competitive position is driven by our technology and innovation, as well as our geographic balance and crop diversity, which helped FMC to take share in 2020, 2021 and 2022 in our key markets.
Added
In addition, we are focused on strengthening our relationship to the grower as a trusted advisor in order to increase awareness of our products and educate growers on the value these products can provide.
Removed
We own and operate a total of 21 manufacturing plants, and we have the scale to operate with strong resources and global reach to address changing market conditions. Our supply chain organization effectively managed to continue supplying customers and growing our business, despite multiple shutdowns and other disruptions in the chemical sector in the last several years.
Added
In response to improved security of supply and increased carrying cost of inventory, distributors, retailers and growers rapidly reduced purchases across all four regions beginning in the latter half of the second quarter of 2023 and persisting through the remainder of the year.
Removed
FMC revenues grew approximately 15 percent, or 18 percent organically (1) excluding the impacts of foreign currency, year over year in 2022, driven by strong volume growth and pricing gains in North America and Latin America. Approximately $600 million in 2022 sales came from products launched in the last five years, representing 10 percent of the total revenue.
Added
This inventory destocking has affected the industry broadly and we do not believe it is specific to our products as grower consumption remained steady during 2023.
Removed
In 2022, we had new product launches in Canada of Coragen ® Max insecticide based on Rynaxypyr ® active and in Brazil of Boral ® Full, our new herbicide mixture product. We had new product launches in Argentina and Paraguay of Onsuva ® fungicide based on our new Fluindapyr active ingredient.
Added
We have experienced a slower sell-through of our inventory due to inventory destocking, and, as a result, volumes were down significantly driving a decline in our revenues, results of operations and cash flows as compared to the prior year.
Removed
We also grew our Plant Health program, which includes FMC’s biologicals platform, by 8 percent. Plant Health is now over $230 million in sales and outpacing market growth. FMC performed better than the overall crop protection market in 2022, which we estimate grew in the low-double digit percentage range versus 2021. Foreign currency was a headwind to full-year revenue.
Added
FMC revenues year over year declined approximately 23 percent during 2023, or 22 percent organically (1) excluding the impacts of foreign currency. While market conditions negatively impacted our results, sales of our newer and more differentiated products, including diamides, outperformed the overall portfolio demonstrating the resilience of these products.
Removed
As mentioned above, our revenue growth rate was 15 percent, and excluding the impact of foreign currency, our organic (1) growth rate was 18 percent. FMC’s innovation, from our current portfolio of advanced products to our R&D discovery, development and new formulations, contributed to our performance.
Added
Approximately $590 million in 2023 sales came from products launched in the last five years, representing 14 percent of the total revenue. In 2023, we had new product launches in Brazil, including Premio ® Star insecticide based on Rynaxypyr ® active, and in the United States, including our new insecticide for tree nuts, Altacor ® Evo.
Removed
Our technology portfolio includes specific innovations in plant health, application technology and delivery systems, as well as advanced agronomic insights through Arc™ farm intelligence, our precision agriculture platform that leverages artificial intelligence and machine learning. __________________ (1) Organic revenue growth is a non-GAAP term which excludes the impact of foreign currency changes.
Added
Products launched in 2023 accounted for approximately $146 million in sales.
Removed
The acquisition adds state-of-the-art biologically produced pheromone insect control technology to our product portfolio and R&D pipeline, underscoring our role as a leader in delivering innovative and sustainable crop protection solutions. The purchase price of approximately $193 million was primarily paid at closing on July 19, 2022.
Added
We also have actively advocated with regulatory agencies who are reviewing the applications of generic producers to ensure that regulators are aware of relevant regulatory considerations, such as the legal production status of the producing company, applicable FMC patents, and evidence of potential impurities or other data that are inconsistent with the FMC-registered product safety profile.

… 42 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

48 edited+12 added−8 removed47 unchanged
Biggest changeCustomers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency, or sell their commodities at prevailing international prices, and we may be unable to collect receivables from such customers. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Biggest changeCustomers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency, or sell their commodities at prevailing international prices, and we may be unable to collect receivables from such customers. • Restructuring – On December 15, 2023, the Board of Directors authorized management to proceed with a global restructuring plan which is referred to as “Project Focus.” Project Focus is designed to right-size our cost base and optimize our footprint and organizational structure with a focus on driving significant cost improvement and productivity in light of the precipitous drop in demand across the crop protection industry in 2023.
These potential hazards include explosions, fires, severe weather and natural disasters, mechanical failure, unscheduled downtimes, supplier disruptions, labor shortages or other labor difficulties, information technology systems outages, disruption in our supply chain or manufacturing and distribution operations, transportation interruptions, chemical spills, discharges or releases of toxic or hazardous substances or gases, shipment of contaminated or off-specification product to customers, storage tank leaks, other environmental risks, cyberattacks, or other sudden disruption in business operations beyond our control as a result of events such as acts of sabotage, terrorism or war, civil or political unrest, natural disasters, large scale power outages and public health epidemics/pandemics.
These potential hazards include explosions, fires, mechanical failure, unscheduled downtimes, supplier disruptions, labor shortages or other labor difficulties, information technology systems outages, disruption in our supply chain or manufacturing and distribution operations, transportation interruptions, chemical spills, discharges or releases of toxic or hazardous substances or gases, shipment of contaminated or off-specification product to customers, storage tank leaks, other environmental risks, cyberattacks, or other sudden disruption in business operations beyond our control as a result of events such as acts of sabotage, terrorism or war, civil or political unrest, severe weather and natural disasters, large scale power outages and public health epidemics and pandemics.
It is possible that the IRS or a state or local taxing authority could take the position that aforementioned transaction results in the recognition of significant taxable gain by FMC, in which case FMC may be subject to material tax liabilities.
It is possible that the IRS or a state or local taxing authority could take the position that the aforementioned transaction results in the recognition of significant taxable gain by FMC, in which case FMC may be subject to material tax liabilities.
While we engage in hedging and other strategies to mitigate those risks, unexpected severe changes in foreign exchange may create risks that could materially and adversely affect our expected performance. • Uncertain tax rates - Our future effective tax rates may be materially impacted by numerous items such as: a future change in the composition of earnings from foreign and domestic tax jurisdictions, as earnings in foreign jurisdictions are typically taxed at different statutory rates than the U.S. 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; currency gains and losses; and decisions to repatriate certain future foreign earnings on which U.S. or foreign withholding taxes have not been previously accrued. • Uncertain recoverability of investments in long-lived assets - We have significant investments in long-lived assets and continually review the carrying value of these assets for recoverability in light of changing market conditions and alternative product sourcing opportunities.
While we engage in hedging and other strategies to mitigate these risks, unexpected severe changes in foreign exchange may create risks that could materially and adversely affect our expected performance. • Uncertain tax rates - Our future effective tax rates may be materially impacted by numerous items such as: a future change in the composition of earnings from foreign and domestic tax jurisdictions, as earnings in foreign jurisdictions are typically taxed at different statutory rates than the U.S. 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; currency gains and losses; and decisions to repatriate certain future foreign earnings on which U.S. or foreign withholding taxes have not been previously accrued. • Uncertain recoverability of investments in long-lived assets - We have significant investments in long-lived assets and continually review the carrying value of these assets for recoverability in light of changing market conditions and alternative product sourcing opportunities.
Unexpected market conditions in any such predominating geography(ies), such as adverse weather, pest pressures, or other risks described herein, may impact our business if occurring during a calendar quarter in which such geography(ies) is predominating. • Changing regulatory environment and public perception - Changes in the regulatory environment, particularly in the U.S., Brazil, China, India, Argentina and the European Union, could adversely impact our ability to continue producing and/or selling certain products in our domestic and foreign markets or could increase the cost of doing so.
Unexpected market conditions in any such predominating geography, such as adverse weather, pest pressures, or other risks described herein, may impact our business if occurring during a calendar quarter in which such geography is predominating. • Changing regulatory environment and public perception - Changes in the regulatory environment, particularly in the U.S., Brazil, China, India, Argentina and the European Union, could adversely impact our ability to continue producing and/or selling certain products in our domestic and foreign markets or could increase the cost of doing so.
We may not be able to raise prices or improve productivity sufficiently to offset future increases in chemical raw material or energy commodity pricing. Accordingly, increases in such commodity prices may negatively affect our financial results. We use hedging strategies to address energy and material commodity price risks, where hedging strategies are available on reasonable terms.
We may not be able to raise prices or improve productivity sufficiently to offset future increases in chemical raw material or energy commodity pricing. Accordingly, increases in such commodity prices may negatively affect our financial results. We use hedging strategies, where available on reasonable terms, to address energy and material commodity price risks.
We source critical intermediates and finished products from a number of suppliers, largely outside of the U.S. and principally in China. An inability to obtain these products or execute under contract sourcing arrangements would adversely impact our ability to sell products.
We source critical intermediates and finished products from a number of suppliers, largely outside of the U.S. and principally in China and India. An inability to obtain these products or execute under contract sourcing arrangements would adversely impact our ability to sell products.
We have a broad estate of additional patents regarding the production of Rynaxypyr ® active ingredient, as well as trademark and data exclusivity protection in certain countries that extend well beyond the active ingredient composition of matter patents. (See "Diamide Growth Strategy" and "Patents, Trademarks and Licenses" in Item 1).
We have a broad estate of additional patents regarding the production of Rynaxypyr ® active ingredient, as well as trademark and data exclusivity protection in certain countries that extend well beyond the scope of the active ingredient composition of matter patents. (See "Diamide Growth Strategy" and "Patents, Trademarks and Licenses" in Item 1).
Significant effort will likely be required to ensure that the right mix of resources are trained, engaged and focused on achieving business objectives while adhering to our core values of safety, ethics and compliance. • Economic and geopolitical change - Our business has been and could continue to be adversely affected by economic and political changes in the markets where we compete including: trade restrictions, tariff increases or potential new 17 Table of Contents tariffs, foreign ownership restrictions and economic embargoes imposed by the U.S. or any of the foreign countries in which we do business; changes in laws, taxation, and regulations and the interpretation and application of these laws, taxes, and regulations; restrictions imposed by the U.S. government or foreign governments through exchange controls or taxation policy; nationalization or expropriation of property, undeveloped property rights, and legal systems or political instability; other governmental actions; inflation rates and inflationary pressures leading to higher input costs, recessions; and other external factors over which we have no control.
Significant effort will likely be required to ensure that the right mix of resources are trained, engaged and focused on achieving business objectives while adhering to our core values of safety, ethics and compliance. • Economic and geopolitical change - Our business has been and could continue to be adversely affected by economic and political changes in the markets where we compete including: trade restrictions, tariff increases or potential new tariffs, foreign ownership restrictions and economic embargoes imposed by the U.S. or any of the foreign countries in which we do business; changes in laws, taxation, and regulations and the interpretation and application of these laws, taxes, and regulations; restrictions imposed by the U.S. government or foreign governments through exchange controls or taxation policy; nationalization or expropriation of property, undeveloped property rights, and legal systems or political instability; other governmental actions; inflation rates and inflationary pressures leading to higher input costs, recessions; and other external factors over which we have no control.
Failure to adapt to similar trends in Business to Business and Business to Consumer could place FMC at a competitive disadvantage. • Compliance with laws and regulations - The global regulatory environment is becoming increasingly complex and requires more resources to effectively manage, which may increase the potential for misunderstanding or misapplication of regulatory standards. • Talent engagement and ethics/culture - The inability to recruit and retain key personnel, the unexpected loss of key personnel, or other external and internal factors and events could culminate in employee attrition and may adversely affect our operations.
Failure to adapt to similar trends in business to business and business to consumer could place FMC at a competitive disadvantage. 16 Table of Contents • Compliance with laws and regulations - The global regulatory environment is becoming increasingly complex and requires more resources to effectively manage, which may increase the potential for misunderstanding or misapplication of regulatory standards. • Talent engagement and ethics/culture - The inability to recruit and retain key personnel, the unexpected loss of key personnel, or other external and internal factors and events could culminate in employee attrition and may adversely affect our operations.
While we take precautions to handle and transport these materials in a safe manner, if they are mishandled or released into the environment, they could cause property damage or result in personal injury claims against us. • Environmental compliance - We are subject to extensive federal, state, local, and foreign environmental and safety laws, regulations, directives, rules and ordinances concerning, among other things, emissions in the air, discharges to land and water, and the generation, handling, treatment, disposal and remediation of hazardous waste and other 15 Table of Contents materials.
While we take precautions to handle and transport these materials in a safe manner, if they are mishandled or released into the environment, they could cause property damage or result in personal injury claims against us. • Environmental compliance - We are subject to extensive federal, state, local, and foreign environmental and safety laws, regulations, directives, rules and ordinances concerning, among other things, emissions in the air, discharges to land and water, and the generation, handling, treatment, disposal and remediation of hazardous waste and other materials.
Financial Risks: • Foreign exchange rate risks - We are an international company operating in many countries around the world, and thus face foreign exchange rate risks in the normal course of our business. We are particularly sensitive to the Brazilian real, Chinese yuan, Indian rupee, Euro, Mexican peso and Argentine peso.
Financial Risks: • Foreign exchange rate risks - We are an international company operating in many countries around the world, and thus face foreign exchange rate risks in the normal course of business. We are particularly sensitive to the movements of the Brazilian real, Chinese yuan, Indian rupee, Euro, Mexican peso and Argentine peso.
At this time, the scope and potential impact of these technologies are largely unknown but could have the potential to disrupt our business. • Climatic conditions - Our markets are affected by climatic conditions, both chronic and acute, which could adversely impact crop pricing and pest infestations.
At this time, the scope and potential impact of these technologies are largely unknown but could have the potential to disrupt our business. • Climate conditions - Our markets are affected by climatic conditions, both chronic and acute, which could adversely impact crop yields, pricing and pest infestations.
If we are unable to generate sufficient cash flow or raise adequate external financing, including as a result of significant disruptions in the global credit markets, we could be forced to restrict our operations and growth opportunities, which could adversely affect our operating results. 18 Table of Contents • Credit default risks - We may use our existing revolving credit facility to meet our cash needs, to the extent available.
If we are unable to generate sufficient cash flow or raise adequate external financing, including as a result of significant disruptions in the global credit markets, we could be forced to restrict our operations and growth opportunities, which could adversely affect our operating results. • Credit default risks - We may use our existing revolving credit facility to meet our cash needs, to the extent available.
Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations and those of our contract manufacturers are subject to hazards inherent in chemical manufacturing and the related storage and transportation of raw materials, products and wastes.
Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations and those of our contract manufacturers are subject to hazards inherent in chemical manufacturing and the related storage and transportation of raw materials, products and waste.
Portfolio Management Risks: • Portfolio management risks - We continuously review our portfolio which includes the evaluation of potential business acquisitions that may strategically fit our business and strategic growth initiatives. If we are unable to successfully integrate and develop our acquired businesses, we could fail to achieve anticipated synergies which would include expected cost savings and revenue growth.
Portfolio Management Risks: • Portfolio management risks - We continuously review our portfolio which includes the evaluation of potential business acquisitions that may strategically fit our business and strategic growth initiatives. If we are unable to successfully integrate and develop our acquired businesses, we could fail to achieve anticipated synergies including expected cost savings and revenue growth.
We may face liability arising out of the normal course of business, including alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our current or former facilities or chemicals that we manufacture, handle or own.
We may face liability arising out of the normal course of business or now discontinued operations, including alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our current or former facilities or chemicals that we manufacture, handle or own.
Competition for our business includes not only generic suppliers of the same pesticidal active ingredients but also alternative proprietary pesticide chemistries and crop protection technologies that are bred into or applied onto seeds.
Competition for our business 12 Table of Contents includes not only generic suppliers of the same pesticidal active ingredients but also alternative proprietary pesticide chemistries and crop protection technologies that are bred into or applied onto seeds.
Unmanaged or poorly managed system and hardware changes across the enterprise may disrupt operations, introduce vulnerabilities, and result in increased maintenance while decreasing user acceptance and adoption. • Potential tax implications of FMC Lithium separation - We have received an opinion from outside counsel to the effect that the spin-off of FMC Lithium as a distribution to our stockholders, completed in March 2019, qualified as a non-taxable transaction for U.S. federal income tax purposes.
Unmanaged or poorly managed system and hardware changes across the enterprise may disrupt operations, introduce vulnerabilities, and result in increased maintenance. • Potential tax implications of FMC Lithium separation - We received an opinion from outside counsel to the effect that the spin-off of FMC Lithium as a distribution to our stockholders, completed in March 2019, qualified as a non-taxable transaction for U.S. federal income tax purposes.
Inadequate customer liquidity could affect our 14 Table of Contents customers’ abilities to pay for our products and, therefore, affect existing and future sales or our ability to collect on customer receivables. • Supply arrangements - Certain raw materials are critical to our production processes and our purchasing strategy and supply chain design are complex.
Inadequate customer liquidity could affect our customers’ abilities to pay for our products and, therefore, affect existing and future sales or our ability to collect on customer receivables. • Supply arrangements - Certain raw materials are critical to our production processes and our purchasing strategy and supply chain design are complex.
The nature of these events makes them difficult to predict. • Geographic cyclicality - While our business is well balanced geographically, in any given calendar quarter a certain geography(ies) will predominate in light of seasonal variations in the demand for our products given the nature of the crop protection market and the geographic regions in which we operate.
The nature of these events makes them difficult to predict. • Geographic cyclicality - While our business is well balanced geographically, in any given calendar quarter a certain geography(ies) may predominate the demand for our products in light of seasonal variations typically associated with the crop protection market and the geographic regions in which we operate.
Growers may need more climate-adaptive products as climate change impacts global crop yields and shifts harvestable regions and pest pressures. • Fluctuations in commodity prices - Our operating results could be significantly affected by the cost of commodities such as chemical raw material commodities, energy commodities, and harvested crop commodities.
Growers may need to implement regenerative practices and shift to more climate-adaptive products as climate change impacts global crop yields and shifts harvestable regions and pest pressures. • Fluctuations in commodity prices - Our operating results could be significantly affected by the cost of commodities such as chemical raw material commodities, energy commodities, and harvested crop commodities.
We could incur significant expense in facilitating and responding to investigations and if the measures we have taken prove to be inadequate, we could face fines or penalties.
We could incur 17 Table of Contents significant expense in facilitating and responding to investigations and if the measures we have taken prove to be inadequate, we could face fines or penalties.
If our innovation efforts fail to continue to make process improvements to reduce costs, such conditions could impede our competitive position.
If our innovation efforts fail to result in process improvements to reduce costs, such conditions could impede our competitive position.
These uncertainties could have a material adverse effect on our business and our results of operation and financial condition. A widespread health crisis could adversely affect the global economy, resulting in an economic downturn that could impact demand for our products. The COVID-19 pandemic caused significant disruptions in the U.S. and global economies.
These uncertainties could have a material adverse effect on our business and our results of operation and financial condition. A widespread health crisis could adversely affect the global economy, resulting in an economic downturn that could impact demand for our products.
Failure to achieve these anticipated synergies could materially and adversely affect our financial results. In addition to strategic acquisitions we evaluate the diversity of our portfolio in light of our objectives and alignment with our growth strategy. In implementing this strategy we may not be successful in separating underperforming or non-strategic assets.
Failure to achieve these anticipated synergies could materially and adversely affect our financial results. In addition to strategic acquisitions we evaluate the diversity of our portfolio in light of our objectives and alignment with our growth strategy, which may result in divestiture of underperforming or non-strategic assets.
We have not experienced a significant or material impact from these events to date and we may need to expend significant resources to maintain or continue to mature our protective and preventative measures to stay abreast of the ever-changing cybersecurity threat.
We have not experienced a significant or material impact from these events to date and we may need to expend significant resources to maintain or continue to mature our protective and preventative measures to stay abreast of the ever-changing cybersecurity threat. We maintain a multifaceted cybersecurity program designed to identify, protect, detect, respond, and recover from a cybersecurity event.
Our future performance will depend on our ability to address active ingredient composition of matter patent expirations through effective enforcement of our patents that continue to cover key chemical intermediates and process patents, as well as portfolio life cycle management, particularly for our high value diamide insecticides (see "Diamide Growth Strategy" and "Patents, Trademarks and Licenses" in Item 1 for more details).
We address patent expirations through effective enforcement of our patents that continue to cover key chemical intermediates and process patents, as well as portfolio life cycle management, particularly for our high value diamide insecticides (see "Diamide Growth Strategy" and "Patents, Trademarks and Licenses" in Item 1 for more details).
The more gradual effects of persistent temperature change in geographies with significant agricultural lands may result in changes in lands suitable for agriculture or changes in the mix of crops suitable for cultivation and the pests that may be present in such geographies. These shifts in pests may become more rapid and persistent with rising temperatures and increasing GHG levels.
The more gradual effects of persistent temperature change in geographies with significant agricultural lands may result in changes in lands suitable for agriculture or changes in the mix of crops suitable for cultivation and the pests that may be present in such geographies.
For example, drought may reduce the need for fungicides, which could result 13 Table of Contents in fewer sales and greater unsold inventories in the market, whereas excessive rain could lead to increased plant disease or weed growth requiring growers to purchase and use more pesticides.
For example, drought may reduce the need for fungicides, which could result in fewer sales and greater unsold inventories in the market, whereas excessive rain could lead to increased plant disease or weed growth requiring growers to purchase and use more pesticides. Drought and/or increased temperatures may change insect pest pressures, requiring growers to use more, less, or different insecticides.
Trademarks protect valuable brands associated with our products. Patents and trademarks are granted by individual jurisdictions and the duration of our patents depends on their respective jurisdictions and payment of annuities.
Trademarks protect valuable brands associated with our products. Patents and trademarks are granted by individual jurisdictions and the duration of our patents depends on their respective jurisdictions and payment of annuities. Our future performance will depend on our ability to address expiration of active ingredient composition of matter patents.
The timeline from active ingredient discovery through full development and product launch averages 8-10 years depending on local regulatory requirements; the complexity and duration of developing new products create risks that product concepts may fail during development or, when launched, may not meet then-current market needs or competitive conditions.
The timeline from active ingredient discovery through full development and product launch averages 8-10 years depending on local regulatory requirements; the complexity and duration of developing new products create risks that product concepts may fail during development or, when launched, may not meet then-current market needs or competitive conditions. • Innovation and intellectual property - Our innovation efforts are protected by patents, trade secrets and other intellectual property rights that cover many of our current products, manufacturing processes, and product uses, as well as many aspects of our research and development activities supporting our new product pipeline.
In such circumstances, an adverse patent enforcement decision which could lead to the entry of competing chlorantraniliprole products in relevant markets may materially and adversely impact our financial results. 16 Table of Contents • ERP change governance - In the fourth quarter of 2020, we completed the go-live on a single global instance of SAP S/4 HANA.
In such circumstances, an adverse patent enforcement decision could lead to the entry of competing chlorantraniliprole products in relevant markets and may result in a material adverse impact our financial results. • ERP governance - We operate on a single global instance of SAP.
Additionally, we continually engage in response planning, simulations, trainings, tabletop exercises, and other efforts to mitigate risk and prepare for a rapid response to any cybersecurity events.
We ensure that the program is aligned with the National Institute of Standards and Technology ("NIST") Cybersecurity Framework. Additionally, we continually engage in response planning, simulations, trainings, tabletop exercises, and other efforts to mitigate risk and prepare for a rapid response to any cybersecurity events.
Extreme weather events attributable to climate change may result in, among other things, physical damage to our property and equipment, increased resource scarcity, including water, and interruptions to our supply chain. • Litigation and environmental risks - Current reserves relating to our ongoing litigation and environmental liabilities may ultimately prove to be inadequate.
Extreme weather events attributable to climate change may result in, among other 14 Table of Contents things, physical damage to our property and equipment, increased resource scarcity, including water, and interruptions to our supply chain.
Technology Risks: • Technological and new product discovery/development - Our ability to compete successfully depends in part upon our ability to maintain a superior technological capability and to continue to identify, develop and commercialize new and innovative, high value-added products for existing and future customers.
Moreover, we may incur asset impairment charges related to acquisitions or divestitures that negatively impact earnings and our financial position. • Technological and new product discovery/development - Our ability to compete successfully depends in part upon our ability to maintain a superior technological capability and to continue to identify, develop and commercialize new and innovative, high value-added products for existing and future customers.
Depending on their nature and scope, this could subject our manufacturing operations and suppliers to significant additional costs or limits on operations and affect the sources and supply of energy. • Geographic presence outside of U.S. - We have a strong presence in Latin America, Europe and Asia, as well as in the U.S.
Depending on their nature and scope, this could subject our manufacturing operations and suppliers to significant additional costs or limits on operations and affect the sources and supply of energy.
We have seen some logistics challenges, pointed supply chain shortages, and increased cost of goods due to the energy crisis and inflation.
In recent years, we have seen some logistics challenges, pointed supply chain shortages, and increased cost of goods due to disruptions in energy markets (such as that caused by the Russian war on Ukraine) and inflation.
An open conflict or war across any region significant to our business could result in plant closures, employee displacement, and an inability to obtain key supplies and materials. In mid-April 2022, we announced the decision to discontinue our operations and business in Russia. Our values as a company did not allow us to operate and grow our business in Russia.
An open conflict or war across any region significant to our business could result in plant closures, employee displacement, and an inability to obtain key supplies and materials.
We intend to strategically and vigorously enforce our patents and other forms of intellectual property and have done so already against several third parties.
We intend to strategically and vigorously enforce our patents and other 15 Table of Contents forms of intellectual property and have done so already against several third parties. Other third parties may seek to enter markets with infringing products or may find alternative production methods that avoid infringement.
The gains or losses on the divestiture of, or lost operating income from, such assets (e.g., divesting) may affect the Company’s earnings.
In implementing this strategy, we may not be successful and the gains or losses on the divestiture of, or lost operating income from, such assets may affect the Company’s earnings and debt levels.
We are currently and may in the future be a party to various lawsuits or administrative proceedings involving our patents. (See "Patents, Trademarks and Licenses" in Item 1). Such challenges can result in some or all of the claims of the asserted patent being invalidated or deemed unenforceable. Two such proceedings in China are currently on appeal.
Patents may be challenged in the courts, as well as in various administrative proceedings before U.S. or foreign patent offices, and may be deemed unenforceable, invalidated or circumvented. We are currently and may in the future be a party to various lawsuits or administrative proceedings involving our patents. (See "Patents, Trademarks and Licenses" in Item 1).
We own and operate large-scale active ingredient manufacturing facilities in the U.S. (Mobile), Puerto Rico (Manati), China (Jinshan), Denmark (Ronland), and India (Panoli). Our operating results are dependent in part on the continued operation of these production facilities.
(Mobile), Puerto Rico (Manati), China (Jinshan), Denmark (Ronland), and India (Panoli). Our operating results are dependent in part on the continued operation of these production facilities. Interruptions at these facilities may materially reduce the productivity of a particular manufacturing facility, or the profitability of our business as a whole.
In Argentina, continued inflation and foreign exchange controls could adversely affect our business. Realignment of change in regional economic arrangements could have an operational impact on our businesses. Our enforcement of intellectual property rights in jurisdictions outside of the United States may be impacted by geopolitical tensions between the United States and those other countries.
Our enforcement of intellectual property rights in jurisdictions outside of the United States may be impacted by geopolitical tensions between the United States and those other countries.
For example, prolonged increase in average temperature may make northern lands suitable for growing crops not grown historically in such climes, leading growers to shift from crops such as wheat to soybean and may result in new or different weed, plant disease or insect pressures on such crops – such changes would impact the mix of pesticide products growers would purchase, which may be adverse for us, depending on the local market and our product mix.
It may also result in new or different weed, plant disease or insect pressures and such changes could impact the mix of crop protection products growers would purchase and, depending on the local market and our product offering, may be adverse for us.
Such discovery processes depend on our scientists being able to find new molecules and strains, which are novel and outside of patents held by others, and such molecules/strains being efficacious against target pests, and our ability to develop those molecules and strains into new products without creating an undue risk to human health and the environment, and then meeting applicable regulatory criteria.
Our investment in the discovery and development of new pesticidal active ingredients relies on discovery of new chemical molecules, biological strains or formulations. Such discovery processes depend on our scientists being able to find new molecules, strains and formulations, which are novel and outside of patents held by others, and such molecules/strains/formulations being efficacious against target pests.
Patents involve complex factual and legal issues and, thus, the scope, validity or enforceability of any patent claims we have or may obtain cannot be clearly predicted. Patents may be challenged in the courts, as well as in various administrative proceedings before U.S. or foreign patent offices, and may be deemed unenforceable, invalidated or circumvented.
We may not be successful in litigating to enforce our patents due to the risks inherent in any litigation. Patents involve complex factual and legal issues and, thus, the scope, validity or enforceability of any patent claims we have or may obtain cannot be clearly predicted.
Drought and/or increased temperatures may change insect pest pressures, requiring growers to use more, less, or different insecticides. Natural disasters can impact production at our facilities in various parts of the world.
Natural disasters can impact production at our facilities in various parts of the world.
Removed
The extent to which COVID will continue to impact us will depend on future developments, many of which remain uncertain and cannot be predicted with confidence, including the duration of the pandemic, further actions to be taken to contain the pandemic or mitigate its impact, and the extent of the direct and indirect economic effects of the pandemic and containment measures, among others. • Business disruptions - We produce products through a combination of owned facilities and contract manufacturers.
Added
In addition, corporate Environmental Social and Governance (“ESG”) commitments and shifting market pressures in response to climate regulation and consumer expectations may influence demand of crop protection products. • Geographic presence outside of U.S. - We have a strong presence in Latin America, Europe and Asia, as well as in the U.S.
Removed
Interruptions at these facilities may materially reduce the productivity of a particular manufacturing facility, or the profitability of our business as a whole.
Added
These shifts in pests may become more rapid and persistent with rising temperatures and increasing GHG 13 Table of Contents levels. For example, prolonged increase in average temperature may make northern lands suitable for growing crops not grown historically in such climates, leading growers to shift from crops such as wheat to soybean.
Removed
Our investment in the discovery and development of new pesticidal active ingredients relies on discovery of new chemical molecules or biological strains.
Added
For example, the COVID-19 pandemic caused significant disruptions in the U.S. and global economies and resulted in persistent uncertainties throughout the duration of the pandemic. • Business disruptions - We produce products through a combination of owned facilities and contract manufacturers. We own and operate large-scale active ingredient manufacturing facilities in the U.S.
Removed
Moreover, we may incur asset impairment charges related to acquisitions or divestitures that reduce earnings. • Innovation and intellectual property - Our innovation efforts are protected by patents, trade secrets and other intellectual property rights that cover many of our current products, manufacturing processes, and product uses, as well as many aspects of our research and development activities supporting our new product pipeline.
Added
All of these items may have significant costs or capital expenditures. • Litigation and environmental risks - Current reserves relating to our ongoing litigation and environmental liabilities may ultimately prove to be inadequate, which may have a material adverse impact on our results of operations.
Removed
Other third parties may seek to enter markets with infringing products or may find alternative production methods that avoid infringement or we may not be successful in litigating to enforce our patents due to the risks inherent in any litigation.
Added
Our process also depends on our ability to develop those molecules, strains and formulations into new products without creating an undue risk to human health and the environment as well as meeting applicable regulatory criteria.
Removed
(See "Patents, Trademarks and Licenses" in Item 1).
Added
Such challenges can result in some or all of the claims of the asserted patent being invalidated or deemed unenforceable. As noted in Item 1 "Business," two such patents have been ruled invalid in China and are currently on appeal.
Removed
There are change management activities that may affect our ability to operationalize and monetize the investment made in the Enterprise Resource Planning ("ERP") system.
Added
In mid-April 2022, we announced the decision to discontinue our operations and business in Russia, as a result of their invasion of Ukraine, which resulted in a charge to our results of operations related to noncash asset write offs. Our values as a company did not allow us to operate and grow our business in Russia.
Removed
We maintain a multifaceted cybersecurity program designed to identify, protect, detect, respond, and recover from a cybersecurity event and recently completed an independent NIST Cybersecurity Framework assessment which concluded we maintain a robust and mature cybersecurity program.
Added
In Argentina, continued inflation and foreign exchange controls could adversely affect our business. Losses may be incurred as a result of various government actions in the country such as the devaluation of the Argentine peso, changes in tax policies, and changes in capital controls/policies. Realignment of change in regional economic arrangements could have an operational impact on our businesses.
Added
We cannot guarantee that the activities under the restructuring program will result in the desired efficiencies and estimated cost savings, if any. In addition, our failure to effectively manage organizational changes as part of the restructuring program may lead to increased attrition and harm our ability to attract and retain key talent.
Added
Failure to successfully execute and realize the expected synergies from the restructuring program could materially and adversely affect our expected performance. • Channel inventory behavior – The Company relies in many countries and in varying degrees on distribution channels to access the market and reach farmers or other end use customers.
Added
An abrupt and widespread shift in purchasing behaviors (e.g., the current inventory destocking phenomenon) by channel partners and end use customers has and may continue to negatively and materially impact the Company’s volumes across important markets, which has adversely affected and may continue to adversely affect our results of operations.
Added
Such adverse effects could include but not be limited to materially reduced volumes purchased by customers, resulting in not only reduced sales, but also the Company bearing higher volumes of unsold product inventory, excess raw materials, and correspondingly increased carrying costs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

5 edited+0 added−0 removed3 unchanged
Biggest changeFurther, the asbestos-containing parts for this machinery and equipment were accessible only at the time of infrequent repair and maintenance. A few jurisdictions have permitted claims to proceed against equipment manufacturers relating to insulation installed by other companies on such machinery and equipment. We believe that, overall, the claims against FMC are without merit.
Biggest changeA few jurisdictions have permitted claims to proceed against equipment manufacturers relating to insulation installed by other companies on such machinery and equipment. We believe that, overall, the claims against FMC are without merit. As of December 31, 2023, there were approximately 10,976 premises and product asbestos claims pending against FMC in several jurisdictions.
Please see Note 1 "Principal Accounting Policies and Related Financial Information" - Environmental obligations, Note 12 "Environmental Obligations" and Note 20 "Guarantees, Commitments and Contingencies" in the notes to our consolidated financial statements included in this Form 10-K, the content of which are incorporated by reference to this Item 3. 19 Table of Contents ITEM 4.
Please see Note 1 "Principal Accounting Policies and Related Financial Information" - Environmental obligations, Note 11 "Environmental Obligations" and Note 20 "Guarantees, Commitments and Contingencies" in the notes to our consolidated financial statements included in this Form 10-K, the content of which are incorporated by reference to this Item 3.
We intend to continue managing these asbestos-related cases in accordance with our historical experience. We have established a reserve for this litigation within our discontinued operations and believe that any exposure of a loss in excess of the established reserve cannot be reasonably estimated. Our experience has been that the overall trends in asbestos litigation have changed over time.
We have established a reserve for this litigation within our discontinued operations and believe that any exposure of a loss in excess of the established reserve cannot be reasonably estimated. Our experience has been that the overall trends in asbestos litigation have changed over time.
As of December 31, 2022, there were approximately 10,561 premises and product asbestos claims pending against FMC in several jurisdictions. Since the 1980s, approximately 120,000 asbestos claims against FMC have been discharged, the overwhelming majority of which have been dismissed without any payment to the claimant. Since the 1980s, settlements with claimants have totaled approximately $182 million.
Since the 1980s, approximately 122,000 asbestos claims against FMC have been discharged, the overwhelming majority of which have been dismissed without any payment to the claimant. Since the 1980s, settlements with claimants have totaled approximately $207 million. We intend to continue managing these asbestos-related cases in accordance with our historical experience.
The machinery and equipment businesses we owned or operated did not fabricate the asbestos-containing component parts at issue in the litigation, and to this day, neither the U.S. Occupational Safety and Health Administration nor the Environmental Protection Agency has banned the use of these components.
The machinery and equipment businesses we owned or operated did not fabricate the asbestos-containing component parts at issue in the litigation. Further, the asbestos-containing parts for this machinery and equipment were accessible only at the time of infrequent repair and maintenance.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−0 removed5 unchanged
Biggest changeIn 2022, 875,480 shares were repurchased under the publicly announced repurchase program. At December 31, 2022, approximately $900 million remained unused under our Board-authorized repurchase program. In February 2022, the Board of Directors authorized the repurchase of up to $1 billion of the Company's common stock. The $1 billion share repurchase program is replacing in its entirety the previous authorization.
Biggest changeIn February 2022, the Board of Directors authorized the repurchase of up to $1 billion of the Company's common stock. The $1 billion share repurchase program replaced in its entirety the previous authorization. In 2023, 651,052 shares were repurchased under the publicly announced repurchase program. At December 31, 2023, approximately $825 million remained unused under our Board-authorized repurchase program.
In addition, the independent trustee of our non-qualified deferred compensation plan reacquires shares from time to time through open-market purchases relating to investments by employees in our common stock, one of the investment options available under the Plan. ITEM 6. [RESERVED]
In addition, the independent trustee of our non-qualified deferred compensation plan reacquires shares from time to time through open-market purchases relating to investments by employees in our common stock, one of the investment options available under the Plan.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 20 Table of Contents FMC common stock of $0.10 par value is traded on the New York Stock Exchange (Symbol: FMC). There were 2,196 registered common stockholders as of December 31, 2022.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES FMC common stock of $0.10 par value is traded on the New York Stock Exchange (Symbol: FMC). There were 2,101 registered common stockholders as of December 31, 2023.
FMC’s annual meeting of stockholders will be held at 2:00 p.m. on Thursday, April 27, 2023 via live webcast at https://www.virtualshareholdermeeting.com/FMC2022. Notice of the meeting, together with instructions on how to access proxy materials, will be mailed approximately five weeks prior to the meeting to stockholders of record as of March 1, 2023.
FMC’s annual meeting of stockholders will be held at 2:00 p.m. on Tuesday, April 30, 2024 via live webcast at https://www.virtualshareholdermeeting.com/FMC2024. Notice of the meeting, together with instructions on how to access proxy materials, will be mailed approximately five weeks prior to the meeting to stockholders of record as of March 4, 2024.
The comparison assumes $100 was invested on December 31, 2017, in FMC’s Common Stock and in both of the indices, and the reinvestment of all dividends. 2017 2018 2019 2020 2021 2022 FMC Corporation $ 100.00 $ 78.83 $ 108.10 $ 126.37 $ 122.94 $ 141.99 S&P 500 Index 100.00 95.78 125.68 148.41 190.71 156.33 S&P 500 Chemicals Index 100.00 88.56 107.84 126.81 159.38 141.72 21 Table of Contents The following table summarizes information with respect to the purchase of our common stock during the three months ended December 31, 2022: ISSUER PURCHASES OF EQUITY SECURITIES Publicly Announced Program Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased Total Dollar Amount Purchased Maximum Dollar Value of Shares that May Yet be Purchased October 875,724 $ 114.22 875,480 $ 99,999,895 $ 900,000,105 November 399 120.29 — — 900,000,105 December 33 126.61 — — 900,000,105 Total 876,156 $ 114.23 875,480 $ 99,999,895 ___________________ (1) Includes shares purchased in open market transactions by the independent trustee of the FMC Corporation Non-Qualified Savings and Investment Plan ("NQSP").
The comparison assumes $100 was invested on December 31, 2018, in FMC’s Common Stock and in both of the indices, and the reinvestment of all dividends. 2018 2019 2020 2021 2022 2023 FMC Corporation $ 100.00 $ 137.13 $ 160.30 $ 155.95 $ 180.12 $ 94.35 S&P 500 Index 100.00 131.22 154.95 199.12 163.22 205.79 S&P 500 Chemicals Index 100.00 121.78 143.19 179.97 160.03 177.51 The following table summarizes information with respect to the purchase of our common stock during the three months ended December 31, 2023: 22 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES Publicly Announced Program Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased Total Dollar Amount Purchased Maximum Dollar Value of Shares that May Yet be Purchased October 829 $ 63.04 — $ — $ 825,000,142 November 882 53.43 — — 825,000,142 December 726 55.88 — — 825,000,142 Total 2,437 $ 57.45 — $ — ___________________ (1) Includes shares purchased in open market transactions by the independent trustee of the FMC Corporation Non-Qualified Savings and Investment Plan ("NQSP").
Added
As disclosed in more detail under the Outstanding debt caption in the Liquidity and Capital Resources section of this Form 10-K, in connection with an amendment to the Company's credit agreement, the Company agreed that it shall not repurchase shares until September 30, 2025, with the exception of share repurchases under our equity compensation plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

152 edited+78 added−70 removed90 unchanged
Biggest change(in Millions) Year Ended December 31, 2022 2021 2020 Revenue $ 5,802.3 $ 5,045.2 $ 4,642.1 Costs and Expenses Costs of sales and services 3,475.5 2,883.9 2,595.4 Gross Margin $ 2,326.8 $ 2,161.3 $ 2,046.7 Selling, general and administrative expenses 775.2 714.1 729.7 Research and development expenses 314.2 304.7 287.9 Restructuring and other charges (income) 93.1 108.0 132.2 Total costs and expenses $ 4,658.0 $ 4,010.7 $ 3,745.2 Income from continuing operations before non-operating pension and postretirement charges (income), interest income, interest expense, and provision for income taxes (1) $ 1,144.3 $ 1,034.5 $ 896.9 Non-operating pension and postretirement charges (income) 8.6 5.6 14.7 Interest income — — (0.1) Interest expense 151.8 131.1 151.3 Income from continuing operations before income taxes $ 983.9 $ 897.8 $ 731.0 Provision for income taxes 145.2 92.5 151.2 Income (loss) from continuing operations $ 838.7 $ 805.3 $ 579.8 Discontinued operations, net of income taxes (97.2) (68.2) (28.3) Net income (loss) (GAAP) $ 741.5 $ 737.1 $ 551.5 Adjustments to arrive at Adjusted EBITDA (Non-GAAP): Corporate special charges (income): Restructuring and other charges (income) (3) $ 93.1 $ 108.0 $ 132.2 Non-operating pension and postretirement charges (income) (4) 8.6 5.6 14.7 Transaction-related charges (5) — 0.4 53.3 Discontinued operations, net of income taxes 97.2 68.2 28.3 Interest expense, net 151.8 131.1 151.2 Depreciation and amortization 169.4 170.9 162.7 Provision (benefit) for income taxes 145.2 92.5 151.2 Adjusted EBITDA (Non-GAAP) (2) $ 1,406.8 $ 1,313.8 $ 1,245.1 25 Table of Contents ____________________ (1) Referred to as operating profit.
Biggest change(in Millions) Year Ended December 31, 2023 2022 2021 Revenue $ 4,486.8 $ 5,802.3 $ 5,045.2 Costs and Expenses Costs of sales and services 2,655.8 3,475.5 2,883.9 Gross Margin $ 1,831.0 $ 2,326.8 $ 2,161.3 Selling, general and administrative expenses 734.3 775.2 714.1 Research and development expenses 328.8 314.2 304.7 Restructuring and other charges (income) 212.3 93.1 108.0 Total costs and expenses $ 3,931.2 $ 4,658.0 $ 4,010.7 Income from continuing operations before non-operating pension and postretirement charges (income), interest income, interest expense, and provision for income taxes (1) $ 555.6 $ 1,144.3 $ 1,034.5 Non-operating pension and postretirement charges (income) 18.2 8.6 5.6 Interest expense, net 237.2 151.8 131.1 Income (loss) from continuing operations before income taxes $ 300.2 $ 983.9 $ 897.8 Provision (benefit) for income taxes (1,119.3) 145.2 92.5 Income (loss) from continuing operations $ 1,419.5 $ 838.7 $ 805.3 Discontinued operations, net of income taxes (98.5) (97.2) (68.2) Net income (loss) (GAAP) $ 1,321.0 $ 741.5 $ 737.1 Adjustments to arrive at Adjusted EBITDA (Non-GAAP): Corporate special charges (income): Restructuring and other charges (income) (3) $ 238.1 $ 93.1 $ 108.0 Non-operating pension and postretirement charges (income) (4) 18.2 8.6 5.6 Transaction-related charges (5) — — 0.4 Discontinued operations, net of income taxes 98.5 97.2 68.2 Interest expense, net 237.2 151.8 131.1 Depreciation and amortization 184.3 169.4 170.9 Provision (benefit) for income taxes (1,119.3) 145.2 92.5 Adjusted EBITDA (Non-GAAP) (2) $ 978.0 $ 1,406.8 $ 1,313.8 ____________________ (1) Referred to as operating profit. 26 Table of Contents (2) Adjusted EBITDA is defined as operating profit excluding corporate special charges (income) and depreciation and amortization expense.
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. Organic revenue growth excludes the impacts of foreign currency changes, which we believe is a meaningful metric to evaluate our revenue changes.
These are excluded by us in the measure we use to evaluate business performance and determine certain performance-based compensation. Organic revenue growth excludes the impacts of foreign currency changes, which we believe is a meaningful metric to evaluate our revenue changes. These items are discussed in detail within the "Other Results of Operations" section that follows.
Our most critical accounting estimates and assumptions, which are those that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations, include: Impairments and valuation of long-lived and indefinite-lived assets, Pension and other postretirement benefits, and the Allowance for credit losses on our trade receivables.
Our most critical accounting estimates and assumptions, which are those that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations, include: Impairments and valuation of long-lived and indefinite-lived assets, Pension and other postretirement benefits, valuation allowance on deferred tax assets and the Allowance for credit losses on our trade receivables.
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.
The GAAP tax provision includes, and the Non-GAAP tax provision excludes, 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.
As part of the TCFD scenario analysis, we have evaluated both physical and transitional risks and opportunities across multiple time horizons. In accordance with the TCFD guidance, we leveraged scenarios published by the International Energy Agency ("IEA") and the United Nations’ Intergovernmental Panel on Climate Change (IPCC), including a scenario below 2°C.
As part of the TCFD scenario analysis, we have evaluated both physical and transitional risks and opportunities across multiple time horizons. In accordance with the TCFD guidance, we leveraged scenarios published by the International Energy Agency (“IEA”) and the United Nations’ Intergovernmental Panel on Climate Change (IPCC), including a scenario below 2°C.
Note 13 to the consolidated financial statements included in this Form 10-K includes more details on the drivers of the GAAP effective rate and year-over-year changes. We believe showing the reconciliation below of our GAAP to Non-GAAP effective tax rate provides investors with useful supplemental information about our tax rate on the core underlying business.
Note 12 to the consolidated financial statements included in this Form 10-K includes more details on the drivers of the GAAP effective rate and year-over-year changes. We believe showing the reconciliation below of our GAAP to Non-GAAP effective tax rate provides investors with useful supplemental information about our tax rate on the core underlying business.
See our discussion under 2023 Cash Flow Outlook in the Free Cash Flow section within this Form 10-K for information on these liabilities and the related expected payments in 2023. Derivatives At times we can be in a derivative liability position that can require future cash obligations.
See our discussion under 2024 Cash Flow Outlook in the Free Cash Flow section within this Form 10-K for information on these liabilities and the related expected payments in 2024. Derivatives At times we can be in a derivative liability position that can require future cash obligations.
Environmental Projected 2023 spending, net of recoveries includes approximately $35 million to $45 million of net environmental remediation spending for our sites accounted for within continuing operations. 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.
Environmental Projected 2024 spending, net of recoveries includes approximately $35 million to $45 million of net environmental remediation spending for our sites accounted for within continuing operations. 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.
Our consolidated balance sheets contain accrued pension and other postretirement benefits, our environmental liabilities, and our other discontinued liabilities for which we are unable to make a reasonably reliable estimate of the amount and periods in which these liabilities might be paid beyond 2023.
Our consolidated balance sheets contain accrued pension and other postretirement benefits, our environmental liabilities, and our other discontinued liabilities for which we are unable to make a reasonably reliable estimate of the amount and periods in which these liabilities might be paid beyond 2024.
See Note 13 to the consolidated financial statements included within this Form 10-K for additional details related to the provisions for income taxes on continuing operations, as well as items that significantly impact our effective tax rate.
See Note 12 to the consolidated financial statements included within this Form 10-K for additional details related to the provisions for income taxes on continuing operations, as well as items that significantly impact our effective tax rate.
A substantial change in the operating environments in any of our key locations (driven by weather conditions, industry specific events, and macroeconomic conditions) may result in actual adjustments that differ from our original assumptions. 41 Table of Contents Environmental obligations and related recoveries We provide for environmental-related obligations when they are probable and amounts can be reasonably estimated.
A substantial change in the operating environments in any of our key locations (driven by weather conditions, industry specific events, and macroeconomic conditions) may result in actual adjustments that differ from our original assumptions. Environmental obligations and related recoveries We provide for environmental-related obligations when they are probable and amounts can be reasonably estimated.
See Note 9 to our consolidated financial statements included within this Form 10-K for charges associated with long-lived asset disposal costs and the activity associated with the restructuring reserves.
See Note 8 to our consolidated financial statements included within this Form 10-K for charges associated with long-lived asset disposal costs and the activity associated with the restructuring reserves.
The estimate for adjusted earnings excludes any impact from potential share repurchases in 2023. For cash flow outlook, refer to the liquidity and capital resources section below.
The estimate for adjusted earnings excludes any impact from potential share repurchases in 2024. For cash flow outlook, refer to the liquidity and capital resources section below.
Results were driven by strong pricing actions as well as volume growth, led by Northern Europe, Germany, and Turkey, demand for selective herbicides on cereals and other crops, and demand for our diamides on fruits and vegetables. 27 Table of Contents Asia: Revenue decreased approximately 1 percent versus the prior year period, however revenue increased approximately 5 percent excluding foreign currency headwinds.
Results were driven by strong pricing actions as well as volume growth, led by Northern Europe, Germany, and Turkey, demand for selective herbicides on cereals and other crops, and demand for our diamides on fruits and vegetables. Asia: Revenue decreased approximately 1 percent versus the prior year period, however revenue increased approximately 5 percent excluding foreign currency headwinds.
Based on cash generated from operations, our existing liquidity facilities, which includes the revolving credit agreement with the option to increase capacity up to $2.75 billion, and our continued access to debt capital markets, we have adequate liquidity to meet any of the company's debt obligations in the near term.
Based on cash generated from operations, our existing liquidity facilities, which includes the revolving credit agreement with the option to increase capacity up to $2.75 billion, and our continued access to debt capital markets, we have adequate liquidity to meet any of the company's debt obligations in the near term including any current portion of long-term debt.
In selecting a discount rate as of December 31, 2022, we placed particular emphasis on a discount rate yield-curve provided by our actuary.
In selecting a discount rate as of December 31, 2023, we placed particular emphasis on a discount rate yield-curve provided by our actuary.
In cases where it is possible, we have recorded a specific liability within our Reserve for Discontinued Operations. Refer to Note 11 to the consolidated financial statements included within this Form 10-K for further details. Taxes, Pension, Environmental, and Other Discontinued Liabilities As of December 31, 2022, the liability for uncertain tax positions was $52.4 million.
In cases where it is possible, we have recorded a specific liability within our Reserve for Discontinued Operations. Refer to Note 10 to the consolidated financial statements included within this Form 10-K for further details. Taxes, Pension, Environmental, and Other Discontinued Liabilities As of December 31, 2023, the liability for uncertain tax positions was $62.4 million.
We adjust these liabilities, if necessary, upon the completion of tax audits or changes in tax law. See Note 13 to our consolidated financial statements included within this Form 10-K for additional discussion surrounding income taxes. 44 Table of Contents
We adjust these liabilities, if necessary, upon the completion of tax audits or changes in tax law. See Note 12 to our consolidated financial statements included within this Form 10-K for additional discussion surrounding income taxes. 46 Table of Contents
GAAP outlook is provided. 24 Table of Contents Results of Operations — 2022, 2021 and 2020 Overview The following charts provide a reconciliation of adjusted EBITDA, adjusted earnings and organic revenue growth, all of which are Non-GAAP financial measures, from the most directly comparable GAAP measure.
GAAP outlook is provided. 25 Table of Contents Results of Operations — 2023, 2022 and 2021 Overview The following charts provide a reconciliation of adjusted EBITDA, adjusted earnings and organic revenue growth, all of which are Non-GAAP financial measures, from the most directly comparable GAAP measure.
As of December 31, 2022, we had derivative contract obligations of $4.6 million, with the full amount payable in the next 12 months. Leases We have lease arrangements for equipment and facilities, including office spaces, IT equipment, transportation equipment, and machinery equipment.
As of December 31, 2023, we had derivative contract obligations of $11.4 million, with the full amount payable in the next 12 months. Leases We have lease arrangements for equipment and facilities, including office spaces, IT equipment, transportation equipment, and machinery equipment.
A one-half percent decrease in the assumed discount rate would have increased pension and other postretirement benefit obligations by $47 million and $72.1 million at December 31, 2022 and 2021, respectively, and decreased pension and other postretirement benefit costs by zero in 2022, $0.4 million in 2021, and increased costs by $0.1 million in 2020.
A one-half percent decrease in the assumed discount rate would have increased pension and other postretirement benefit obligations by $46.1 million and $47 million at December 31, 2023 and 2022, respectively, and decreased pension and other postretirement benefit costs by $0.1 million in 2023, zero in 2022, and $0.4 million in 2021.
Further details on our pension and other postretirement benefit obligations and net periodic benefit costs (benefits) are found in Note 15 to our consolidated financial statements in this Form 10-K. Income taxes We have recorded a valuation allowance to reduce deferred tax assets in certain jurisdictions to the amount that we believe is more likely than not to be realized.
Further details on our pension and other postretirement benefit obligations and net periodic benefit costs (benefits) are found in Note 14 to our consolidated financial statements in this Form 10-K. 45 Table of Contents Income taxes We have recorded a valuation allowance to reduce deferred tax assets in certain jurisdictions to the amount that we believe is more likely than not to be realized.
However, these increases were mainly offset by higher selling, general and administrative costs, interest expense, income taxes, and discontinued operations expenses. The only difference between Net income (loss) and Net income (loss) attributable to FMC stockholders is noncontrolling interest.
The higher results were driven by higher revenues and margins. However, these increases were mainly offset by higher selling, general and administrative costs, interest expense, income taxes, and discontinued operations expenses. The only difference between Net income (loss) and Net income (loss) attributable to FMC stockholders is noncontrolling interest.
FMC has committed to achieve a goal of investing 100 percent of our research and development pipeline budget to developing sustainable products and solutions for future use. We are improving existing products and developing new platforms and technologies that help mitigate impacts of climate change. These opportunities could lead to new products and services for our existing and potential customers.
FMC has committed to investing 100 percent of our research and development pipeline budget to developing sustainable products and solutions. We are improving existing products and developing new platforms and technologies that help mitigate impacts of climate change. These opportunities could lead to new products and services for our existing and potential customers.
Of the cash and cash equivalents balance at December 31, 2022, $551.1 million was held by our foreign subsidiaries. We have established plans to repatriate cash from certain foreign subsidiaries with minimal tax on a go forward basis. Other cash held by foreign subsidiaries is generally used to finance subsidiaries’ operating activities and future foreign investments.
Of the cash and cash equivalents balance at December 31, 2023, $286.9 million was held by our foreign subsidiaries. We have established plans to repatriate cash from certain foreign subsidiaries with minimal tax on a go forward basis. Other cash held by foreign subsidiaries is generally used to finance subsidiaries’ operating activities and future foreign investments.
Additionally, timing of collection is impacted as amounts for all periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks. During 2022, we collected approximately $1,670 million of receivables in Brazil.
Additionally, timing of collection is impacted as amounts for all periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks. During 2023, we collected approximately $1.1 billion of receivables in Brazil.
A one-half percent increase in the assumed discount rate would have decreased pension and other postretirement benefit obligations by $43.5 million and $66.1 million at December 31, 2022 and 2021, respectively, and increased pension and other postretirement benefit costs by $0.1 million, $0.4 million and zero for 2022, 2021 and 2020, respectively.
A one-half percent increase in the assumed discount rate would have decreased pension and other postretirement benefit obligations by $42.4 million and $43.5 million at December 31, 2023 and 2022, respectively, and increased pension and other postretirement benefit costs by $0.5 million, $0.1 million and $0.4 million for 2023, 2022 and 2021, respectively.
The change in discount rate from 2.84 percent at December 31, 2021 to 5.16 percent at December 31, 2022 was attributable to an increase in yields on high quality corporate bonds with cash flows matching the timing and amount of our expected future benefit payments between the 2021 and 2022 measurement dates.
The change in discount rate from 5.16 percent at December 31, 2022 to 4.97 percent at December 31, 2023 was attributable to an increase in yields on high quality corporate bonds with cash flows matching the timing and amount of our expected future benefit payments between the 2022 and 2023 measurement dates.
We believe our strong financial standing and credit ratings will ensure adequate access to the debt capital markets on favorable conditions. Information involving our material cash requirements is detailed below. Cash Cash and cash equivalents at December 31, 2022 and 2021, were $572.0 million and $516.8 million, respectively.
We believe our strong financial standing and credit ratings will ensure adequate access to the debt capital markets on favorable conditions. Information involving our material cash requirements is detailed below. Cash Cash and cash equivalents at December 31, 2023 and 2022, were $302.4 million and $572.0 million, respectively.
For the years ended December 31, 2022, 2021 and 2020, we paid $267.5 million, $247.2 million and $228.5 million in dividends, respectively. We expect to continue to make quarterly dividend payments.
For the years ended December 31, 2023, 2022 and 2021, we paid $290.5 million, $267.5 million and $247.2 million in dividends, respectively. We expect to continue to make quarterly dividend payments.
Our long-term rate of return for the fiscal year ended December 31, 2022, 2021 and 2020 was 2.50 percent, 2.25 percent and 3.00 percent, respectively. For the sensitivity of our pension costs to incremental changes in assumptions see our discussion below. Sensitivity analysis related to key pension and postretirement benefit assumptions.
Our long-term rate of return for the fiscal year ended December 31, 2023, 2022 and 2021 was 4.75 percent, 2.50 percent and 2.25 percent, respectively. For the sensitivity of our pension costs to incremental changes in assumptions see our discussion below. Sensitivity analysis related to key pension and postretirement benefit assumptions.
A one-half percent increase in the assumed expected long-term rate of return on plan assets would have decreased pension costs by $6.6 million, $6.3 million and $6.2 million for 2022, 2021 and 2020, respectively.
A one-half percent increase in the assumed expected long-term rate of return on plan assets would have decreased pension costs by $5.0 million, $6.6 million and $6.3 million for 2023, 2022 and 2021, respectively.
Using the December 31, 2022 and 2021 yield curves, our U.S. qualified plan cash flows produced a single weighted-average discount rate of approximately 5.16 percent and 2.84 percent, respectively. In developing the assumption for the long-term rate of return on assets for our U.S.
Using the December 31, 2023 and 2022 yield curves, our U.S. qualified plan cash flows produced a single weighted-average discount rate of approximately 4.97 percent and 5.16 percent, respectively. In developing the assumption for the long-term rate of return on assets for our U.S.
We also have a liability attributable to the transition tax on deemed repatriated foreign earnings incurred as a result of the Tax Cuts and Jobs Act (the "Act") of $92.1 million.
We also have a liability attributable to the transition tax on deemed repatriated foreign earnings incurred as a result of the Tax Cuts and Jobs Act (the "Act") of $62.6 million.
A one-half percent decrease in the assumed long-term rate of return on plan assets would have increased pension costs by $6.6 million, $6.3 million and $6.2 million for 2022, 2021 and 2020, respectively.
A one-half percent decrease in the assumed long-term rate of return on plan assets would have increased pension costs by $5.0 million, $6.6 million and $6.3 million for 2023, 2022 and 2021, respectively.
Though the nature of these events makes them difficult to predict, to respond to the uncertainty and better understand our risks and opportunities as they relate to climate change, we have conducted climate related scenario analyses consistent with the recommendations provided by the Taskforce for Climate-Related Financial Disclosures ("TCFD").
Though the nature of these events makes them difficult to predict, to respond to the uncertainty and better understand our risks and opportunities, we have conducted climate related scenario analyses consistent with the recommendations provided by the Taskforce for Climate-Related Financial Disclosures (“TCFD”).
We have entered into a number of purchase obligations for the sourcing of materials and energy where take-or-pay arrangements apply. As of December our purchase obligations were $459.4 million, with $200.2 million payable in the first 12 months.
We have entered into a number of purchase obligations for the sourcing of materials and energy where take-or-pay arrangements apply. As of December our purchase obligations were $325.4 million, with $150.3 million payable in the first 12 months.
This usage of cash was offset by the proceeds received on the disposition of land on a previously shutdown manufacturing facility. Cash required in 2021 is primarily due to capital expenditures and spending related to our contract manufacturing arrangements.
Capital expenditures in 2022 increased due to spending directed towards capacity expansion. This usage of cash was offset by the proceeds received on the disposition of land on a previously shutdown manufacturing facility. Cash required in 2021 is primarily due to capital expenditures and spending related to our contract manufacturing arrangements.
Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. At December 31, 2022, we had $370.5 million borrowings outstanding under the commercial paper program at an average borrowing rate of 4.9 percent. Our commercial paper balances fluctuate from year to year depending on working capital needs.
Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. At December 31, 2023, we had $739.5 million borrowings outstanding under the commercial paper program at an average borrowing rate of 6.11 percent. Our commercial paper balances fluctuate from year to year depending on working capital needs.
FREE CASH FLOW RECONCILIATION (in Millions) Year ended December 31, 2022 2021 2020 Cash provided (required) by operating activities of continuing operations (GAAP) $ 660.0 $ 898.6 $ 736.8 Transaction and integration costs (1) 0.5 9.5 63.9 Adjusted cash from operations (2) $ 660.5 $ 908.1 $ 800.7 Capital expenditures (3) (142.3) (100.1) (67.2) Other investing activities (3)(4) 23.6 (13.7) (20.4) Capital additions and other investing activities $ (118.7) $ (113.8) $ (87.6) Cash provided (required) by operating activities of discontinued operations (5) (77.6) (78.5) (89.0) Proceeds from land disposition (7) 50.5 — — Cash provided (required) by investing activities of discontinued operations (5) — 19.7 31.1 Transaction and integration costs (1) (0.5) (9.5) (63.9) Investment in Enterprise Resource Planning system (3) — (12.7) (47.2) Legacy and transformation (6) $ (27.6) $ (81.0) $ (169.0) Free cash flow (Non-GAAP) $ 514.2 $ 713.3 $ 544.1 ___________________ (1) Represents payments for legal and professional fees associated with the DuPont Crop Protection Business Acquisition in addition to costs related to integrating the DuPont Crop Protection Business.
FREE CASH FLOW RECONCILIATION (in Millions) Year ended December 31, 2023 2022 2021 Cash provided (required) by operating activities of continuing operations (GAAP) $ (300.3) $ 660.0 $ 898.6 Transaction and integration costs (1) — 0.5 9.5 Adjusted cash from operations (2) $ (300.3) $ 660.5 $ 908.1 Capital expenditures (3) (133.9) (142.3) (100.1) Other investing activities (3)(4) (9.8) 23.6 (13.7) Capital additions and other investing activities $ (143.7) $ (118.7) $ (113.8) Cash provided (required) by operating activities of discontinued operations (5) (86.1) (77.6) (78.5) Proceeds from land disposition (6) 5.8 50.5 — Cash provided (required) by investing activities of discontinued operations (5) — — 19.7 Transaction and integration costs (1) — (0.5) (9.5) Investment in Enterprise Resource Planning system (3) — — (12.7) Legacy and transformation (7) $ (80.3) $ (27.6) $ (81.0) Free cash flow (Non-GAAP) $ (524.3) $ 514.2 $ 713.3 ___________________ (1) Represents payments for legal and professional fees associated with the DuPont Crop Protection Business Acquisition in addition to costs related to integrating the DuPont Crop Protection Business.
Cash required by operating activities of discontinued operations in 2022 is directly related to environmental spending of $47.0 million as well as $30.6 million for other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings, collectively. 2021 and 2020 spending were of a similar nature.
Cash required by operating activities of discontinued operations in 2023 is directly related to environmental spending of $54.5 million as well as $31.6 million for other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings, collectively. 2022 and 2021 spending were of a similar nature.
See Note 13 to the consolidated financial statements included within this Form 10-K for more information on our indefinite reinvestment assertion. Outstanding debt At December 31, 2022, we had total debt of $3,274.0 million as compared to $3,172.5 million at December 31, 2021.
See Note 12 to the consolidated financial statements included within this Form 10-K for more information on our indefinite reinvestment assertion. Outstanding debt At December 31, 2023, we had total debt of $3,957.6 million as compared to $3,274.0 million at December 31, 2022.
The discount rates used to determine projected benefit obligation at our December 31, 2022 and 2021 measurement dates for the U.S. qualified plan were 5.16 percent and 2.84 percent, respectively.
The discount rates used to determine projected benefit obligation at our December 31, 2023 and 2022 measurement dates for the U.S. qualified plan were 4.97 percent and 5.16 percent, respectively.
Total projected 2023 environmental spending, inclusive of sites accounted for within both continuing operations and discontinued sites, is expected to be in the range of $75 million to $95 million. 38 Table of Contents Restructuring and asset retirement obligations We expect to make payments of approximately $25 to $35 million in 2023, of which approximately $10 million is related to exit and disposal costs as a result of our previous decision in 2019 to exit sales of all carbofuran formulations (including Furadan ® insecticide/nematicide, as well as Curaterr ® insecticide/nematicide and any other brands used with carbofuran products).
Total projected 2024 environmental spending, inclusive of sites accounted for within both continuing operations and discontinued sites, is expected to be in the range of $85 million to $105 million. 39 Table of Contents Restructuring and asset retirement obligations We expect to make payments of approximately $80 million to $100 million in 2024, of which approximately $5 million is related to exit and disposal costs as a result of our previous decision in 2019 to exit sales of all carbofuran formulations (including Furadan ® insecticide/nematicide, as well as Curaterr ® insecticide/nematicide and any other brands used with carbofuran products).
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 December 31, 2022 our remaining borrowing capacity under our credit facility was $1,469.5 million. We expect 2023 free cash flow (Non-GAAP) to fall within a range of approximately $530 million to $720 million.
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 December 31, 2023 our remaining borrowing capacity under our credit facility was $1,009.0 million. We expect 2024 free cash flow (Non-GAAP) to fall within a range of approximately $400 million to $600 million.
ADJUSTED EARNINGS RECONCILIATION (in Millions) Year Ended December 31, 2022 2021 2020 Net income (loss) attributable to FMC stockholders (GAAP) $ 736.5 $ 739.6 $ 552.4 Corporate special charges (income), pre-tax (1) 101.7 114.0 200.2 Income tax expense (benefit) on Corporate special charges (income) (2) 1.5 (20.3) (22.4) Corporate special charges (income), net of income taxes $ 103.2 $ 93.7 $ 177.8 Adjustment for noncontrolling interest, net of tax on Corporate special charges (income) 6.8 — — Discontinued operations attributable to FMC Stockholders, net of income taxes 97.2 68.2 28.3 Non-GAAP tax adjustments (3) (5.3) (14.8) 46.3 Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP) $ 938.4 $ 886.7 $ 804.8 ____________________ (1) Represents restructuring and other charges (income), non-operating pension and postretirement charges (income) and transaction-related charges.
ADJUSTED EARNINGS RECONCILIATION (in Millions) Year Ended December 31, 2023 2022 2021 Net income (loss) attributable to FMC stockholders (GAAP) $ 1,321.5 $ 736.5 $ 739.6 Corporate special charges (income), pre-tax (1) 256.3 101.7 114.0 Income tax expense (benefit) on Corporate special charges (income) (2) (32.8) 1.5 (20.3) Corporate special charges (income), net of income taxes $ 223.5 $ 103.2 $ 93.7 Adjustment for noncontrolling interest, net of tax on Corporate special charges (income) (1.6) 6.8 — Discontinued operations attributable to FMC Stockholders, net of income taxes 98.5 97.2 68.2 Non-GAAP tax adjustments (3) (1,167.4) (5.3) (14.8) Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP) $ 474.5 $ 938.4 $ 886.7 ____________________ (1) Represents restructuring and other charges (income), non-operating pension and postretirement charges (income) and transaction-related charges.
(in Millions) Year ended December 31, 2022 2021 2020 Income (loss) from continuing operations before equity in (earnings) loss of affiliates, non-operating pension expense postretirement charges, interest expense, net and income taxes (GAAP) $ 1,144.3 $ 1,034.5 $ 896.9 Restructuring and other charges (income), transaction-related charges and depreciation and amortization 262.5 279.3 348.2 Operating income before depreciation and amortization $ 1,406.8 $ 1,313.8 $ 1,245.1 Change in trade receivables, net (1) (443.9) (241.1) (71.8) Change in guarantees of vendor financing (64.2) 65.6 64.8 Change in advance payments from customers (2) 52.1 283.6 (145.5) Change in accrued customer rebates (3) 69.6 108.7 17.2 Change in inventories (4) (182.3) (320.7) (54.4) Change in accounts payable (5) 165.3 144.4 61.8 Change in all other operating assets and liabilities (6) (10.3) (77.6) (68.2) Restructuring and other spending (7) (35.2) (34.7) (17.9) Environmental spending, continuing, net of recoveries (8) (26.9) (63.6) (1.9) Pension and other postretirement benefit contributions (9) (4.5) (5.3) (4.6) Net interest payments (10) (144.0) (125.8) (141.8) Tax payments, net of refunds (11) (122.0) (139.2) (82.1) Transaction and integration costs (12) (0.5) (9.5) (63.9) Cash provided (required) by operating activities of continuing operations (GAAP) $ 660.0 $ 898.6 $ 736.8 ____________________ (1) The change in trade receivables in all periods include the impacts of seasonality and the receivable build intrinsic in our business.
(in Millions) Year ended December 31, 2023 2022 2021 Income (loss) from continuing operations before equity in (earnings) loss of affiliates, non-operating pension expense postretirement charges, interest expense, net and income taxes (GAAP) $ 555.6 $ 1,144.3 $ 1,034.5 Restructuring and other charges (income), transaction-related charges and depreciation and amortization 396.6 262.5 279.3 Operating income before depreciation and amortization $ 952.2 $ 1,406.8 $ 1,313.8 Change in trade receivables, net (1) 192.4 (443.9) (241.1) Change in guarantees of vendor financing (72.4) (64.2) 65.6 Change in advance payments from customers (2) (199.1) 52.1 283.6 Change in accrued customer rebates (3) 16.0 69.6 108.7 Change in inventories (4) (72.8) (182.3) (320.7) Change in accounts payable (5) (626.0) 165.3 144.4 Change in all other operating assets and liabilities (6) (13.7) (10.3) (77.6) Restructuring and other spending (7) (30.3) (35.2) (34.7) Environmental spending, continuing, net of recoveries (8) (34.5) (26.9) (63.6) Pension and other postretirement benefit contributions (9) (2.4) (4.5) (5.3) Net interest payments (10) (229.6) (144.0) (125.8) Tax payments, net of refunds (11) (180.1) (122.0) (139.2) Transaction and integration costs (12) — (0.5) (9.5) Cash provided (required) by operating activities of continuing operations (GAAP) $ (300.3) $ 660.0 $ 898.6 ____________________ (1) The change in trade receivables in all periods include the impacts of seasonality and the receivable build intrinsic in our business.
See Note 5 to the consolidated financial statements included within this Form 10-K for more information. Cash spending is substantially complete. (2) Adjusted cash from operations is defined as cash provided (required) by operating activities of continuing operations excluding the effects of transaction-related cash flows, which are included within Legacy and transformation.
See Note 4 to the consolidated financial statements included within this Form 10-K for more information. Cash spending associated with these initiatives is complete. 38 Table of Contents (2) Adjusted cash from operations is defined as cash provided (required) by operating activities of continuing operations excluding the effects of transaction-related cash flows, which are included within legacy and transformation.
Dividends On January 19, 2023, we paid dividends aggregating $72.7 million to our shareholders of record as of December 31, 2022. This amount is included in "Accrued and other liabilities" on the consolidated balance sheet as of December 31, 2022.
Dividends On January 18, 2024, we paid dividends aggregating $72.5 million to our shareholders of record as of December 29, 2023. This amount is included in "Accrued and other liabilities" on the consolidated balance sheet as of December 31, 2023.
Forward-looking statements are qualified in their entirety by the above cautionary statement. FMC undertakes no obligation, and specifically disclaims any duty, to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law.
Forward-looking statements are qualified in their entirety by the above cautionary statement. FMC undertakes no obligation, and specifically disclaims any duty, to update or revise any forward-looking statements to reflect events or circumstances arising after the date of such statements or to reflect the occurrence of anticipated events, except as otherwise required by law.
The increase was due to higher volumes and higher pricing which accounted for approximately 20 percent and 3 percent increases respectively.
The increase was due to higher pricing and higher volume which accounted for approximately 28 percent and 20 percent increases respectively.
As of December 31, 2022, we had fixed lease payment obligations of $180.9 million, with $27.3 million payable within 12 months. Purchase obligations Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and specify all significant terms, including fixed or minimum quantities to be purchased, price provisions and timing of the transaction.
As of December 31, 2023, we had fixed lease payment obligations of $173.8 million, with $29.9 million payable within 12 months. 35 Table of Contents Purchase obligations Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and specify all significant terms, including fixed or minimum quantities to be purchased, price provisions and timing of the transaction.
The effect of the change in the discount rate used to determine net annual benefit cost (income) from 2.49 percent at December 31, 2021 to 2.84 percent at December 31, 2022 resulted in a $1.9 million increase to the 2022 U.S. qualified pension expense.
The effect of the change in the discount rate used to determine net annual benefit cost (income) from 2.84 percent at December 31, 2022 to 5.16 percent at December 31, 2023 resulted in a $5.7 million increase to the 2023 U.S. qualified pension expense.
See Note 11 to the consolidated financial statements included within this Form 10-K for additional details on our discontinued operations. 2022 vs. 2021 Discontinued operations, net of income taxes represented a loss of $97.2 million in 2022 compared to a loss of $68.2 million in 2021.
See Note 10 to the consolidated financial statements included within this Form 10-K for additional details on our discontinued operations. 32 Table of Contents 2023 vs. 2022 Discontinued operations, net of income taxes represented a loss of $98.5 million in 2023 compared to a loss of $97.2 million in 2022.
This yield-curve, when populated with projected cash flows that represent the expected timing and amount of our plans' benefit payments, produced an effective discount rate of 43 Table of Contents 5.16 percent for our U.S. qualified plan, 4.99 percent for our U.S. nonqualified, and 5.03 percent for our U.S. other postretirement benefit plans.
This yield-curve, when populated with projected cash flows that represent the expected timing and amount of our plans' benefit payments, produced an effective discount rate of 4.97 percent for our U.S. qualified plan, 4.78 percent for our U.S. nonqualified, and 4.83 percent for our U.S. other postretirement benefit plans.
Year Ended December 31, 2022 2021 2020 (in Millions) Income (Expense) Tax Provision (Benefit) Effective Tax Rate Income (Expense) Tax Provision (Benefit) Effective Tax Rate Income (Expense) Tax Provision (Benefit) Effective Tax Rate GAAP - Continuing operations $ 983.9 $ 145.2 14.8 % $ 897.8 $ 92.5 10.3 % $ 731.0 $ 151.2 20.7 % Corporate special charges (income) (1) 101.7 (1.5) 114.0 20.3 200.2 22.4 Tax adjustments (2) 5.3 14.8 (46.3) Non-GAAP - Continuing operations $ 1,085.6 $ 149.0 13.7 % $ 1,011.8 $ 127.6 12.6 % $ 931.2 $ 127.3 13.7 % _______________ (1) Primarily our decision to cease operations and business in Russia in 2022.
Year Ended December 31, 2023 2022 2021 (in Millions) Income (Expense) Tax Provision (Benefit) Effective Tax Rate Income (Expense) Tax Provision (Benefit) Effective Tax Rate Income (Expense) Tax Provision (Benefit) Effective Tax Rate GAAP - Continuing operations $ 300.2 $ (1,119.3) (372.9) % $ 983.9 $ 145.2 14.8 % $ 897.8 $ 92.5 10.3 % Corporate special charges (income) (1) 256.3 32.8 101.7 (1.5) 114.0 20.3 Tax adjustments (2) 1,167.4 5.3 14.8 Non-GAAP - Continuing operations $ 556.5 $ 80.9 14.5 % $ 1,085.6 $ 149.0 13.7 % $ 1,011.8 $ 127.6 12.6 % _______________ (1) Primarily our decision to cease operations and business in Russia in 2022.
The increase in gross margin was primarily driven by top line revenue growth which was partially offset by higher costs due to rising input costs from inflationary pressures, as well as foreign currency headwinds.
The increase was primarily due to top line revenue growth which was partially offset by higher costs due to rising input costs from inflationary pressures and foreign currency headwinds.
Future cash dividends, as always, will depend on a variety of factors, including earnings, capital requirements, financial condition, general economic conditions and other factors considered relevant by us and is subject to final determination by our Board of Directors. Contingencies See Note 20 to our consolidated financial statements included within this Form 10-K.
Future cash dividends, as always, will depend on a variety of factors, including earnings, capital requirements, financial condition, general economic conditions and other factors considered relevant by us and is subject to final determination by our Board of Directors.
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.
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.
Foreign borrowings decreased from $112.2 million at December 31, 2021 to $81.8 million at December 31, 2022 while outstanding commercial paper increased from $244.1 million at December 31, 2021 to $370.5 million at December 31, 2022. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries.
Foreign borrowings increased from $81.8 million at December 31, 2022 to $98.0 million at December 31, 2023 while outstanding commercial paper increased from $370.5 million at December 31, 2022 to $739.5 million at December 31, 2023. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries.
The effect of the change in the discount rate from 2.84 percent to 5.16 percent at December 31, 2022 resulted in a $259.4 million decrease to our U.S. qualified pension benefit obligations.
The effect of the change in the discount rate from 5.16 percent to 4.97 percent at December 31, 2023 resulted in a $16.8 million increase to our U.S. qualified pension benefit obligations.
Results of this analysis are integrated in enterprise risk management and long-term business strategy, and are used to determine where strategic capital could be deployed to address risks and opportunities. Risks identified in Item 1A are aligned with the TCFD requirements. In our product portfolio, we see transition market opportunities for our products to address climate change and its impacts.
Results of this analysis are integrated in our enterprise risk management process, long-term business strategy, and are used to determine where strategic capital could be deployed to address risks and opportunities. Risks identified in Item 1A are aligned with the TCFD requirements.
Provision for income taxes for 2021 was expense of $92.5 million resulting in an effective tax rate of 10.3 percent. Provision for income taxes for 2020 was expense of $151.2 million resulting in an effective tax rate of 20.7 percent.
Provision for income taxes for 2022 was expense of $145.2 million resulting in an effective tax rate of 14.8 percent. Provision for income taxes for 2021 was expense of $92.5 million resulting in an effective tax rate of 10.3 percent.
The increase was driven by higher interest rates and higher debt balances which increased interest expense by approximately $28 million for domestic debt and $7 million for foreign debt, partially offset by the benefits of the refinancing activity completed in the fourth quarter of 2021 which decreased interest expense by approximately $12 million. 2021 vs. 2020 Interest expense, net of $131.1 million decreased by $20.1 million, or approximately 13 percent, compared to $151.2 million in 2020.
The increase was driven by higher interest rates and higher debt balances which increased interest expense by approximately $28 million for domestic debt and $7 million for foreign debt, partially offset by the benefits of the refinancing activity completed in the fourth quarter of 2021 which decreased interest expense by approximately $12 million.
The determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations.
The determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations. Although the estimates were deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain.
Therefore, we will actively work with our entire value chain - suppliers, contractors, and customers - to seek to improve their energy efficiencies and to reduce their GHG emissions. We continue to follow legislative and regulatory developments regarding climate change, including climate-related disclosures.
Therefore, we will actively work with our entire value chain – suppliers, contractors, and customers – with a goal to reduce their GHG emissions and to mitigate their potential impacts on climate change. We continue to follow legislative and regulatory developments regarding climate change, including climate-related financial disclosures and green taxes.
These factors more than offset cost increases in raw materials, packaging, and logistics costs, and to a lesser extent the reversal of some temporary cost savings in the prior year, which had an unfavorable impact of approximately 15 percent and foreign currency fluctuations which had an unfavorable impact of approximately 2 percent on adjusted EBITDA. 32 Table of Contents Liquidity and Capital Resources As a global agricultural sciences company, we require cash primarily for seasonal working capital needs, capital expenditures, and return of capital to shareholders.
These factors more than offset significant cost increases, primarily attributable to raw materials, which had an unfavorable impact of approximately 35 percent and foreign currency fluctuations which had an unfavorable impact of approximately 6 percent on adjusted EBITDA. 33 Table of Contents Liquidity and Capital Resources As a global agricultural sciences company, we require cash primarily for seasonal working capital needs, capital expenditures, and return of capital to shareholders.
The change in cash flows related to trade receivables in 2022 was driven by timing of collections, higher sales year over year, and the inflationary impact of price increases to offset cost headwinds. Collection timing is more pronounced in certain countries such as Brazil where there may be terms significantly longer than the rest of our business.
The change in cash flows related to trade receivables in 2023 was driven by timing of collections as well as lower volumes for revenue year over year. Collection timing is more pronounced in certain countries such as Brazil where there may be terms significantly longer than the rest of our business.
The loss during both periods was primarily due to adjustments related to the retained liabilities from our previously discontinued operations. Higher inflation rates negatively impacted adjustments to our environmental and other retained liabilities in 2022.
The loss during both periods was primarily due to adjustments related to the retained liabilities from our previously discontinued operations. Higher inflation rates negatively impacted adjustments to our environmental and other retained liabilities in 2022. Offsetting the losses in 2021 was the gain on sales of land in our discontinued sites of $15 million, net of taxes.
Total Revenue by Region Year Ended December 31, (in Millions) 2022 2021 2020 North America $ 1,435.8 $ 1,117.2 $ 1,032.5 Latin America 2,088.2 1,633.4 1,456.5 Europe, Middle East and Africa (EMEA) 1,039.7 1,040.0 1,046.3 Asia 1,238.6 1,254.6 1,106.8 Total Revenue $ 5,802.3 $ 5,045.2 $ 4,642.1 2022 vs. 2021 North America: Revenue increased approximately 29 percent in the year ended December 31, 2022, driven by strong volumes and pricing actions.
Total Revenue by Region Year Ended December 31, (in Millions) 2023 2022 2021 North America $ 1,204.8 $ 1,435.8 $ 1,117.2 Latin America 1,401.1 2,088.2 1,633.4 Europe, Middle East and Africa (EMEA) 899.2 1,039.7 1,040.0 Asia 981.7 1,238.6 1,254.6 Total Revenue $ 4,486.8 $ 5,802.3 $ 5,045.2 2023 vs. 2022 North America: Revenue decreased approximately 16 percent in the year ended December 31, 2023.
Beyond our products and operations, FMC recognizes that energy consumption throughout our supply chain can impact climate change and product costs. FMC has committed to an expected target of net-zero GHG emissions across our entire value, which would include reductions across our entire supply chain.
Beyond our products and operations, FMC recognizes that energy consumption and dependencies on nature throughout our supply chain can impact climate change and product costs. FMC has a SBTi-validated target of net-zero GHG emissions, which includes reductions across our entire supply chain.
Gross margin percent of approximately 40 percent decreased from 43 percent in the prior year period, driven by significant cost headwinds, primarily due to input cost inflation, and foreign currency headwinds. 2021 vs. 2020 Gross margin of $2,161.3 million increased by $114.6 million, or approximately 6 percent versus the prior year period.
Gross margin percent of approximately 40 percent slightly decreased from approximately 43 percent in the prior year period, driven by significant cost headwinds, primarily due to input cost inflation, and foreign currency headwinds.
Foreign currency tailwinds had a favorable impact of approximately 1 percent on revenue. Excluding foreign currency impacts, revenue increased approximately 8 percent. See below for a discussion of revenue by region.
Excluding foreign currency impacts, revenue increased approximately 18 percent. See below for a discussion of revenue by region.
We base our estimates and judgments on historical experience, current conditions and other reasonable factors.
GAAP 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 excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangibles, is recorded as goodwill.
The assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangibles, is recorded as goodwill.
Although the estimates were deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain. 42 Table of Contents We test for impairment whenever events or circumstances indicate that the net book value of our property, plant and equipment may not be recoverable from the estimated undiscounted expected future cash flows expected to result from their use and eventual disposition.
We test for impairment whenever events or circumstances indicate that the net book value of our property, plant and equipment may not be recoverable from the estimated undiscounted expected future cash flows expected to result from their use and eventual disposition.
Capital additions and other investing activities Projected 2023 capital expenditures and expenditures related to contract manufacturers are expected to be in the range of approximately $140 million to $180 million. The spending is mainly driven by continuing to expand capacity to meet growing demand, especially for our new products. Expenditures related to contract manufacturers are included within "other investing activities".
The spending is mainly driven by investments for our new products. Expenditures related to contract manufacturers are included within "other investing activities". Legacy and transformation Projected 2024 legacy and transformation spending are expected to be in the range of approximately $155 million to $165 million.
The change in cash required by financing activities in 2022 is primarily driven by lower share repurchases under our publicly announced program as well as lower repayments on long term debt.
This increase was partially offset by the repayment of the $800 million term loan, and $75 million in repurchases of common stock under the publicly announced program. 37 Table of Contents The change in cash required by financing activities in 2022 is primarily driven by lower share repurchases under our publicly announced program as well as lower repayments on long term debt.
Recently Adopted and Issued Accounting Pronouncements and Regulatory Items See Note 2 "Recently Issued and Adopted Accounting Pronouncements and Regulatory Items" to our consolidated financial statements included within this Form 10-K. 40 Table of Contents Fair Value Measurements See Note 19 to our consolidated financial statements included in this Form 10-K for additional discussion surrounding our fair value measurements.
Risk Factors for additional considerations related to risks of climate change and sustainability. 41 Table of Contents Recently Adopted and Issued Accounting Pronouncements and Regulatory Items See Note 2 "Recently Issued and Adopted Accounting Pronouncements and Regulatory Items" to our consolidated financial statements included within this Form 10-K.
The amounts represent environmental remediation spending which were recorded against pre-existing reserves, net of recoveries. 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. Amounts in 2021 include payments of $32.2 million related to the Pocatello Tribal Litigation.
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. Amounts in 2021 include payments of $32.2 million related to the Pocatello Tribal Litigation. Refer to Note 11 to the consolidated financial statements included within this Form 10-K for more details.

… 220 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−0 removed6 unchanged
Biggest changeAt December 31, 2022, our net financial instrument position was a net liability of $4.6 million compared to a net asset of $19.4 million at December 31, 2021. The change in the net financial instrument position was primarily due to exchange and interest rate fluctuations in our foreign exchange interest rate portfolios.
Biggest changeAt December 31, 2023, our net financial instrument position was a net liability of $11.4 million compared to a net liability of $4.6 million at December 31, 2022. The change in the net financial instrument position was primarily due to fluctuations in our foreign exchange portfolios as well as the lack of outstanding interest rate swap contracts.
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 December 31, 2022 and 2021, with all other variables (including interest rates) held constant. Hedged Currency vs.
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 December 31, 2023 and 2022, with all other variables (including interest rates) held constant. Hedged Currency vs.
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 December 31, 2022 and 2021, with all other variables held constant.
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 December 31, 2022, with all other variables held constant.
Based on the variable-rate debt in our debt portfolio at December 31, 2022, a one percentage point increase in interest rates would have increased gross interest expense by $12.4 million and a one percentage point decrease in interest rates would have decreased gross interest expense by $12.4 million for the year ended December 31, 2022. 45 Table of Contents
Based on the variable-rate debt in our debt portfolio at December 31, 2023, a one percentage point increase in interest rates would have increased gross interest expense by $8.4 million and a one percentage point decrease in interest rates would have decreased gross interest expense by $8.4 million for the year ended December 31, 2023. 47 Table of Contents
The variable-rate component of our debt portfolio principally consists of borrowings under our 2021 Term Loan Facility, 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.
The variable-rate component of our debt portfolio principally consists of borrowings under our Credit Facility, commercial paper program, and amounts outstanding under foreign subsidiary credit lines. Changes in interest rates affect different portions of our variable-rate debt portfolio in different ways.
Functional Currency (in Millions) Net Asset / (Liability) Position on Consolidated Balance Sheets Net Asset / (Liability) Position with 10% Strengthening Net Asset / (Liability) Position with 10% Weakening Net asset/(liability) position at December 31, 2022 $ (17.0) $ 45.9 $ (79.7) Net asset/(liability) position at December 31, 2021 15.6 84.1 (50.8) Interest Rate Risk One of the strategies that we can use to manage interest rate exposure is to enter into interest rate swap agreements.
Functional Currency (in Millions) Net Asset / (Liability) Position on Consolidated Balance Sheets Net Asset / (Liability) Position with 10% Strengthening Net Asset / (Liability) Position with 10% Weakening Net asset/(liability) position at December 31, 2023 $ (11.4) $ 34.4 $ (56.2) Net asset/(liability) position at December 31, 2022 (17.0) 45.9 (79.7) 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 Millions) Net Asset / (Liability) Position on Consolidated Balance Sheets 1% Increase 1% Decrease Net asset/(liability) position at December 31, 2022 $ 12.4 $ 33.4 $ (8.6) Net asset/(liability) position at December 31, 2021 3.7 13.1 (5.6) Our debt portfolio at December 31, 2022 is composed of 62 percent fixed-rate debt and 38 percent variable-rate debt.
(in Millions) Net Asset / (Liability) Position on Consolidated Balance Sheets 1% Increase 1% Decrease Net asset/(liability) position at December 31, 2023 $ — $ — $ — Net asset/(liability) position at December 31, 2022 12.4 33.4 (8.6) Our debt portfolio at December 31, 2023 is composed of 79 percent fixed-rate debt and 21 percent variable-rate debt.
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. In the quarter ended December 31, 2022, we had outstanding interest rate swap contracts in place with an aggregate notional value of $200.0 million.
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 December 31, 2023, we had no outstanding interest rate swap contracts.
Added
As a result of having no outstanding interest rate swaps at December 31, 2023, there was no sensitivity analysis performed over interest rate risk for that period.

Other FMC 10-K year-over-year comparisons