Company Quick10K Filing
Quick10K
FMC
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$79.71 132 $10,490
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-29 Quarter: 2017-09-29
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-17 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-05-06 Earnings, Exhibits
8-K 2019-04-30 Shareholder Vote
8-K 2019-03-22 Earnings, Exhibits
8-K 2019-02-11 Earnings, Exhibits
8-K 2019-02-11 Suspend Trading, Other Events, Exhibits
8-K 2019-01-31 Earnings, Exhibits
8-K 2019-01-15 Officers, Exhibits
8-K 2018-12-03 Other Events, Exhibits
8-K 2018-11-08 Regulation FD
8-K 2018-11-05 Earnings, Exhibits
8-K 2018-10-19 Other Events
8-K 2018-10-15 Enter Agreement, Other Events, Exhibits
8-K 2018-09-28 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-08-01 Earnings, Exhibits
8-K 2018-05-21 Officers, Exhibits
8-K 2018-05-02 Earnings, Exhibits
8-K 2018-04-24 Shareholder Vote
8-K 2018-03-29 Regulation FD, Exhibits
8-K 2018-03-09 Officers, Exhibits
8-K 2018-02-12 Earnings, Exhibits
SCCO Southern Copper 27,390
HSY Hershey 26,200
IP International Paper 18,160
BPL Buckeye Partners 5,230
GOSS Gossamer Bio 1,230
RGLS Regulus Therapeutics 13
SLDV Security Land & Development 0
USL United States 12 Month Oil Fund 0
GQM Golden Queen Mining 0
PNTTE Punto Group 0
FMC 2019-03-31
Part I - Financial Information
Item 1. Financial Statements
Note 1: Financial Information and Accounting Policies
Note 2: Recently Issued and Adopted Accounting Pronouncements and Regulatory Items
Note 3: Revenue Recognition
Note 4: Leases
Note 5: Acquisitions
Note 6: Goodwill and Intangible Assets
Note 7: Receivables
Note 8: Inventories
Note 9: Property, Plant and Equipment
Note 10: Restructuring and Other Charges (Income)
Note 11: Debt
Note 13: Environmental Obligations
Note 14: Earnings per Share
Note 15: Equity
Note 16: Pensions and Other Postretirement Benefits
Note 17: Income Taxes
Note 18: Financial Instruments, Risk Management and Fair Value Measurements
Note 19: Guarantees, Commitments, and Contingencies
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 5. Other Information
Item 6. Exhibits
EX-3.1 exhibit31restatedcertifi.htm
EX-3.2 exhibit32restatedbylawsa.htm
EX-10.E exhibit108efmcperformanceba.htm
EX-10.F exhibit108ffmcperformancebas.htm
EX-15 fmcex15033119.htm
EX-31.1 fmcex311033119.htm
EX-31.2 fmcex312033119.htm
EX-32.1 fmcex321033119.htm
EX-32.2 fmcex322033119.htm

FMC Earnings 2019-03-31

FMC 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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us-gaap:FairValueMeasurementsNonrecurringMember 2019-03-31 0000037785 us-gaap:FairValueMeasurementsNonrecurringMember fmc:BrandsMember 2019-01-01 2019-03-31 0000037785 us-gaap:FairValueMeasurementsNonrecurringMember 2019-01-01 2019-03-31 0000037785 us-gaap:NondesignatedMember 2018-01-01 2018-03-31 0000037785 us-gaap:NondesignatedMember 2019-01-01 2019-03-31 0000037785 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember fmc:CostOfSalesAndServicesMember 2019-01-01 2019-03-31 0000037785 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember fmc:CostOfSalesAndServicesMember 2018-01-01 2018-03-31 0000037785 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000037785 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000037785 us-gaap:InterestRateSwapMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000037785 us-gaap:ForeignExchangeContractMember 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us-gaap:FairValueMeasurementsRecurringMember 2019-03-31 0000037785 us-gaap:FinancialGuaranteeMember 2019-03-31 0000037785 us-gaap:GuaranteeOfIndebtednessOfOthersMember 2019-03-31 fmc:product xbrli:shares iso4217:USD xbrli:pure iso4217:USD xbrli:shares utreg:MMBTU
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________
 FORM 10-Q
_______________________________________________________________________
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2019
or
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File Number 1-2376
__________________________________________________________________________
FMC CORPORATION
(Exact name of registrant as specified in its charter)
__________________________________________________________________________ 
Delaware
 
94-0479804
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
2929 Walnut Street
Philadelphia, Pennsylvania
 
19104
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: 215-299-6000
__________________________________________________________________________

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

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



FMC CORPORATION
INDEX
 
 
Page
No.


2


PART I - FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS

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

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


$
1,107.9

Costs and Expenses



Costs of sales and services
647.4


605.4

Gross margin
$
544.7


$
502.5

Selling, general and administrative expenses
183.9


192.5

Research and development expenses
71.2


64.9

Restructuring and other charges (income)
7.8


(79.9
)
Total costs and expenses
$
910.3


$
782.9

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


$
325.0

Equity in (earnings) loss of affiliates


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


0.5

Interest expense, net
34.5


33.9

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


$
290.7

Provision (benefit) for income taxes
36.3


60.5

Income (loss) from continuing operations
$
207.6


$
230.2

Discontinued operations, net of income taxes
9.6


39.4

Net income (loss)
$
217.2


$
269.6

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


2.4

Net income (loss) attributable to FMC stockholders
$
215.7


$
267.2

Amounts attributable to FMC stockholders:



Continuing operations, net of income taxes
$
206.1


$
227.8

Discontinued operations, net of income taxes
9.6


39.4

Net income (loss) attributable to FMC stockholders
$
215.7


$
267.2

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



Continuing operations
$
1.56


$
1.69

Discontinued operations
0.07


0.29

Net income (loss) attributable to FMC stockholders
$
1.63


$
1.98

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



Continuing operations
$
1.55


$
1.67

Discontinued operations
0.07


0.29

Net income (loss) attributable to FMC stockholders
$
1.62


$
1.96

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

3


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

 
$
269.6

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

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

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

 
$
1.5

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

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

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

 
$
0.6

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

 
3.0

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

 
$
3.6

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

Comprehensive income (loss)
$
215.5

 
$
324.8

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

 
2.8

Comprehensive income (loss) attributable to FMC stockholders
$
214.3

 
$
322.0

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


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

4


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

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


$
134.4

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


2,143.8

Inventories
1,137.1


1,025.5

Prepaid and other current assets
427.3


432.6

Current assets of discontinued operations


293.9

Total current assets
$
4,204.1


$
4,030.2

Investments
0.7

 
0.7

Property, plant and equipment, net
733.8


756.9

Goodwill
1,470.2


1,468.1

Other intangibles, net
2,680.4


2,703.4

Other assets including long-term receivables, net
578.8

 
383.4

Deferred income taxes
278.0


272.8

Noncurrent assets of discontinued operations


358.8

Total assets
$
9,946.0

 
$
9,974.3

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


$
547.7

Accounts payable, trade and other
884.5


795.5

Advance payments from customers
283.3


458.4

Accrued and other liabilities
537.2

 
570.8

Accrued customer rebates
460.7


365.3

Guarantees of vendor financing
78.4


67.1

Accrued pension and other postretirement benefits, current
6.2


6.2

Income taxes
93.5


85.1

Current liabilities of discontinued operations


97.3

Total current liabilities
$
3,337.6

 
$
2,993.4

Long-term debt, less current portion
2,145.0


2,145.0

Accrued pension and other postretirement benefits, long-term
46.1

 
47.2

Environmental liabilities, continuing and discontinued
435.5

 
458.5

Deferred income taxes
329.6

 
330.8

Other long-term liabilities
860.4

 
742.9

Noncurrent liabilities of discontinued operations


46.1

Commitments and contingent liabilities (Note 19)


 

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

 
$

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

 
18.6

Capital in excess of par value of common stock
785.6

 
776.2

Retained earnings
4,088.4

 
4,334.3

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

 
$
3,121.1

Noncontrolling interests
30.8

 
89.3

Total equity
$
2,791.8


$
3,210.4

Total liabilities and equity
$
9,946.0

 
$
9,974.3


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

5


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

 
$
269.6

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

 
$
230.2

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

 
$
34.8

Equity in (earnings) loss of affiliates

 
(0.1
)
Restructuring and other charges (income)
7.8

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

 
2.3

Share-based compensation
6.1

 
6.3

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

 
15.7

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

 
207.3

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

 
142.0

Income taxes
28.1

 
88.1

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

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

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


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

6


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

 
85.0

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

 
13.2

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

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

 
$

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

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

 
$
138.0

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

 
3.9

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

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

 
$
113.9

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

$

Cash transfer to Livent due to spin
(10.2
)


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

$

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

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


$
281.8

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


1.2

Cash and cash equivalents, beginning of period
$
161.7


$
283.0

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

 
1.4

Cash and cash equivalents, end of period
$
109.5

 
$
358.3

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


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


7


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

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

8


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

 
$
776.2

 
$
4,334.3

 
$
(308.9
)
 
$
(1,699.1
)
 
$
89.3

 
$
3,210.4

Adoption of accounting standards (Note 2)

 

 
55.5

 
(53.1
)
 

 


 
2.4

Net income (loss)

 


 
215.7

 

 


 
1.5

 
217.2

Stock compensation plans

 
9.4

 

 

 
7.2

 

 
16.6

Shares for benefit plan trust

 

 

 


 
(1.1
)
 

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

 

 

 
3.4

 

 

 
3.4

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

 

 

 
(2.7
)
 

 


 
(2.7
)
Foreign currency translation adjustments (1)

 

 


 
(2.1
)
 

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

 

 
(52.8
)
 

 


 

 
(52.8
)
Repurchases of common stock

 

 

 

 
(114.2
)
 


 
(114.2
)
Distribution of FMC Lithium (2)

 

 
(464.3
)
 
39.0

 

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

 
$
785.6

 
$
4,088.4

 
$
(324.4
)
 
$
(1,807.2
)
 
$
30.8

 
$
2,791.8


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

 
$
450.7

 
$
3,952.4

 
$
(240.3
)
 
$
(1,499.6
)
 
$
25.3

 
$
2,707.1

Net income (loss)

 

 
267.2

 

 

 
2.4

 
269.6

Stock compensation plans

 
6.5

 

 

 
3.7

 

 
10.2

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

 

 

 
3.6

 

 

 
3.6

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

 

 

 
1.9

 

 

 
1.9

Foreign currency translation adjustments (1)

 

 

 
49.3

 

 
0.4

 
49.7

Dividends ($0.165 per share)

 

 
(22.3
)
 

 

 

 
(22.3
)
Repurchases of common stock

 

 

 

 
(5.1
)
 

 
(5.1
)
Balance at March 31, 2018
$
18.6

 
$
457.2

 
$
4,197.3

 
$
(185.5
)
 
$
(1,501.0
)
 
$
28.1

 
$
3,014.7

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


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


9


FMC CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)

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

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

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


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

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

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

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

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

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

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

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

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

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

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

Note 3: Revenue Recognition

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


$
298.2

Latin America
206.5


158.9

Europe, Middle East & Africa (EMEA)
412.0


398.8

Asia Pacific
255.3


252.0

Total Revenue
$
1,192.1


$
1,107.9


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

2018
Insecticides
$
703.4

 
$
589.3

Herbicides
361.6

 
385.7

Fungicides
70.5

 
79.0

Other
56.6

 
53.9

Total Revenue
$
1,192.1

 
$
1,107.9


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

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

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


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

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

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

 
$
2,619.5

 
$
391.2

Contract liabilities: Advance payments from customers
458.4

 
283.3

 
(175.1
)


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

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

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

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

Liabilities
 
 
 
Operating lease current liabilities
Accrued and other liabilities
 
$
31.1

Operating lease noncurrent liabilities
Other long-term liabilities
 
175.5


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

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

Total lease cost
 
$
11.3


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

Weighted-average discount rate
4.30
%

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




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

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

2020
34.7

2021
24.1

2022
20.7

2023
16.7

Thereafter
136.5

Total undiscounted lease payments
$
261.9

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



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

 
$
31.7

 
$
21.0

 
$
17.5

 
$
13.5

 
$
107.5

Capital Lease
2.9

 
2.9

 
3.1

 
3.1

 
3.1

 
4.3



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

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

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

Total purchase consideration
$
3,172.7

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

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

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

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

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


Three Months Ended March 31,
(in Millions)
2019

2018
DuPont Crop Protection Business Acquisition





Legal and professional fees (1)
$
16.5


$
19.6

Inventory fair value amortization (2)


29.9

Total Transaction-related charges
$
16.5


$
49.5

 
 
 
 
Restructuring charges



DuPont Crop restructuring (3)
$
3.9


$
1.0

Total DuPont Crop restructuring charges
$
3.9


$
1.0

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

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

Foreign currency and other adjustments
2.1

Balance, March 31, 2019
$
1,470.2



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

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

 
$
(142.4
)
 
$
1,000.0

 
$
1,146.2

 
$
(128.7
)
 
$
1,017.5

Patents
1.7

 
(0.8
)
 
0.9

 
1.7

 
(0.8
)
 
0.9

Brands (1) (2)
16.8

 
(6.2
)
 
10.6

 
17.0

 
(5.9
)
 
11.1

Purchased and licensed technologies
61.0

 
(32.8
)
 
28.2

 
61.3

 
(32.1
)
 
29.2

Other intangibles
1.9

 
(1.8
)
 
0.1

 
1.9

 
(1.8
)
 
0.1

 
$
1,223.8

 
$
(184.0
)
 
$
1,039.8

 
$
1,228.1

 
$
(169.3
)
 
$
1,058.8


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

 
 
 
$
1,259.1

 
$
1,259.1

 
 
 
$
1,259.1

Brands (1) (2)
380.8

 
 
 
380.8

 
384.8

 
 
 
384.8

In-process research & development
0.7

 
 
 
0.7

 
0.7

 
 
 
0.7

 
$
1,640.6

 
 
 
$
1,640.6

 
$
1,644.6

 
 
 
$
1,644.6

Total intangible assets
$
2,864.4

 
$
(184.0
)
 
$
2,680.4

 
$
2,872.7

 
$
(169.3
)
 
$
2,703.4

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

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

 
$
13.5



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

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

17

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