FMC Corporation delivers record fourth quarter and full-year 2022 results, guides strong growth for 2023

Fourth Quarter Adjusted EPS versus Guidance (midpoint)*

+7 cents*

Adjusted EBITDA

+4 cents

Depreciation and amortization

-1 cent

Interest expense

-1 cent

Taxes

+2 cents

Minority interest

+1 cent

Share count

+1 cent

Rounding

+1 cent

* Guidance refers to midpoint of EPS guidance presented in November 2022

FMC Revenue

Q4 2022

Full Year 2022

Total Revenue Change (GAAP)

15 %

15 %

Less FX Impact

(2 %)

(3 %)

Organic¹ Revenue Change (Non-GAAP)

17 %

18 %

2022 Full Year Adjusted EPS versus 2021  

Adjusted EBITDA

+63 cents

Depreciation and amortization

+1 cent

Interest expense

-14 cents

Tax rate

-9 cents

Minority Interest

-1 cent

Share count

+14 cents

Total Adjusted EPS Growth

+54 cents

Full Year 2023 Outlook²

Q1 2023 Outlook²

Revenue

$6.08 to $6.22 billion

$1.41 to $1.45 billion

Growth at midpoint vs. 2022*

6 %

6 %

Adjusted EBITDA

$1.48 to $1.56 billion

$345 to $365 million

Growth at midpoint vs. 2022*

8 %

0 %

Adjusted EPS^

$7.20 to $8.00

$1.63 to $1.83

Growth at midpoint vs. 2022*

3 %

(8 %)

^Adjusted EPS estimates assume 126.5 million diluted shares for full year and 126.5 million diluted shares for Q1. Outlook for Adjusted EPS and WADSO does not include the impact of any share repurchases that may take place in 2023.

*Percentages are calculated using whole numbers. Minor differences may exist due to rounding.

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(In Millions, Except Per Share Data)

2022

2021

2022

2021

Revenue

$      1,622.0

$      1,413.6

$      5,802.3

$      5,045.2

Costs of sales and services

936.4

805.5

3,475.5

2,883.9

Gross margin

$         685.6

$         608.1

$      2,326.8

$      2,161.3

Selling, general and administrative expenses

$         212.5

$         195.1

$         775.2

$         714.1

Research and development expenses

84.4

85.3

314.2

304.7

Restructuring and other charges (income)

(5.8)

55.7

93.1

108.0

Total costs and expenses

$      1,227.5

$      1,141.6

$      4,658.0

$      4,010.7

Income (loss) from continuing operations before non-operating
pension and postretirement charges (income), interest expense,
net and income taxes

$         394.5

$         272.0

$      1,144.3

$      1,034.5

Non-operating pension and postretirement charges (income)

2.1

1.7

8.6

5.6

Interest expense, net

44.8

33.0

151.8

131.1

Income (loss) from continuing operations before income taxes

$         347.6

$         237.3

$         983.9

$         897.8

Provision (benefit) for income taxes

12.2

16.7

145.2

92.5

Income (loss) from continuing operations

$         335.4

$         220.6

$         838.7

$         805.3

Discontinued operations, net of income taxes

(55.0)

(35.8)

(97.2)

(68.2)

Net income (loss)

$         280.4

$         184.8

$         741.5

$         737.1

  Less: Net income (loss) attributable to noncontrolling interests

6.5

(5.9)

5.0

(2.5)

Net income (loss) attributable to FMC stockholders

$         273.9

$         190.7

$         736.5

$         739.6

Amounts attributable to FMC stockholders:

  Income (loss) from continuing operations, net of tax

$         328.9

$         226.5

$         833.7

$         807.8

  Discontinued operations, net of tax

(55.0)

(35.8)

(97.2)

(68.2)

  Net income (loss)

$         273.9

$         190.7

$         736.5

$         739.6

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

  Continuing operations

$           2.61

$           1.79

$           6.60

$           6.29

  Discontinued operations

(0.44)

(0.28)

(0.77)

(0.53)

  Basic earnings per common share

$           2.17

$           1.51

$           5.83

$           5.76

Average number of shares outstanding used in basic earnings per
share computations

125.6

126.6

126.0

128.4

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

Continuing operations

$           2.61

$           1.78

$           6.58

$           6.26

  Discontinued operations

(0.44)

(0.28)

(0.77)

(0.53)

  Diluted earnings per common share

$           2.17

$           1.50

$           5.81

$           5.73

Average number of shares outstanding used in diluted earnings per
share computations

126.4

127.4

126.7

129.1

Other Data:

Capital additions and other investing activities

$           16.0

$           15.2

$         118.7

$         113.8

Depreciation and amortization expense

42.8

42.4

169.4

170.9

On July 1, 2022, we changed our methods of accounting for inventory costing and net periodic benefit cost. Impacts to our recasted Consolidated Statements of Income (Loss) are not material. Certain prior year amounts within these earnings tables have been recasted to reflect the policy changes, as discussed in our Q3 2022 Form 10-Q. Further detail will be included in our 2022 Form 10-K.

FMC CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP)

TO ADJUSTED AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS, 

ATTRIBUTABLE TO FMC STOCKHOLDERS (NON-GAAP)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(In Millions, except per share amounts)

2022

2021

2022

2021

Net income (loss) attributable to FMC stockholders (GAAP)

$     273.9

$     190.7

$     736.5

$     739.6

Corporate special charges (income):

Restructuring and other charges (income) ^(a)

(5.8)

55.7

93.1

108.0

Non-operating pension and postretirement charges (income) ^(b)

2.1

1.7

8.6

5.6

Transaction-related charges ^(c)

—

—

—

0.4

Income tax expense (benefit) on Corporate special charges (income) ^(d)

4.3

(12.2)

1.5

(20.3)

Adjustment for noncontrolling interest, net of tax on Corporate special charges (income)

6.8

—

6.8

—

Discontinued operations attributable to FMC stockholders, net of income taxes ^(e)

55.0

35.8

97.2

68.2

Tax adjustment ^(f)

(37.3)

(2.1)

(5.3)

(14.8)

Adjusted after-tax earnings from continuing operations attributable to
FMC stockholders (Non-GAAP) ⁽¹⁾

$     299.0

$     269.6

$     938.4

$     886.7

Diluted earnings per common share (GAAP)

$       2.17

$       1.50

$       5.81

$       5.73

Corporate special charges (income) per diluted share, before tax:

Restructuring and other charges (income)

(0.04)

0.44

0.74

0.84

Non-operating pension and postretirement charges (income)

0.02

0.01

0.07

0.04

Transaction-related charges

—

—

—

—

Income tax expense (benefit) on Corporate special charges (income), per
diluted share

0.03

(0.09)

0.01

(0.16)

Adjustment for noncontrolling interest, net of tax on Corporate special
charges (income) per diluted share

0.05

—

0.05

—

Discontinued operations attributable to FMC stockholders, net of income
taxes per diluted share

0.44

0.28

0.77

0.53

Tax adjustments per diluted share

(0.30)

(0.02)

(0.04)

(0.11)

Diluted adjusted after-tax earnings from continuing operations per share,
attributable to FMC stockholders (Non-GAAP)

$       2.37

$       2.12

$       7.41

$       6.87

Average number of shares outstanding used in diluted adjusted after-tax
earnings from continuing operations per share computations

126.4

127.4

126.7

129.1

(1)

The Company believes that the Non-GAAP financial measure "Adjusted After-Tax Earnings from Continuing Operations, Attributable to FMC Stockholders" ("Adjusted earnings"), and its presentation on a per share basis, provides useful information about the Company's operating results to investors and securities analysts. Adjusted earnings excludes the effects of Corporate special charges, tax-related adjustments and the results of our discontinued operations. The Company also believes that excluding the effects of these items from operating results allows management and investors to compare more easily the financial performance of its underlying businesses from period to period.

(a)

Three Months Ended December 31, 2022:

Restructuring and other charges (income) includes $2.1 million of severance and employee separation costs, $3.0 million related to fixed asset charges, and $2.7 million of other restructuring related charges incurred as part of various restructuring initiatives.  These restructuring charges were offset by a gain of $50.5 million recognized on the disposition of land related to a closed manufacturing facility. Other charges of $36.9 million relate primarily to environmental charges.

Three Months Ended December 31, 2021: 

Restructuring and other charges (income) is partially comprised of charges of environmental sites of $23.8 million. There were restructuring charges of $10.9 million associated with certain in-flight restructuring programs from the integration of the DuPont Crop Protection Business, which primarily reflects non-cash charges and to a lesser extent remaining severance. Restructuring charges associated with the DuPont program were largely complete as of December 31, 2021. Restructuring and other charges also includes an additional $9.7 million to increase reserves for certain historical India indirect tax matters that were triggered in the third quarter of 2021. Other restructuring charges from severance and accelerated deprecation for site closures were $11.3 million.

Twelve Months Ended December 31, 2022:

Restructuring and other charges (income) is primarily comprised of $76.8 million in exit charges related to our decision to cease operations and business in Russia.  Restructuring and other charges (income) is also comprised of $5.9 million of severance and employee separation costs, $11.2 million related to fixed asset charges, and $7.3 million of other restructuring related charges incurred as part of various restructuring initiatives. These restructuring charges were partially offset by a gain of $50.5 million recognized on the disposition of land related to a closed manufacturing facility. Other charges of $42.4 million relate primarily to environmental charges.

Twelve Months Ended December 31, 2021:

Restructuring and other charges (income) is comprised of costs related to historical India indirect tax matters of $33.5 million for the establishment of reserves which were largely triggered in the third quarter of 2021. These charges also include charges associated with certain in-flight restructuring programs from the integration of the DuPont Crop Protection Business, including severance, accelerated depreciation on certain fixed assets, and other costs of $16.7 million, which primarily reflects non-cash charges and to a lesser extent remaining severance. Restructuring charges associated with the DuPont program were largely complete as of December 31, 2021. Additionally, restructuring and other charges (income) is comprised of regional realignment activities, primarily the move of our European headquarters, including severance and employee relocation costs, of $11.0 million. These charges also include severance and restructuring charges of $13.4 million from other restructuring programs, as well as environmental sites and other miscellaneous charges of $27.1 million and $6.3 million, respectively.

(b)

Our non-operating pension and postretirement charges (income) are defined as those costs (benefits) related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These are excluded from our Adjusted Earnings and are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance and we consider these costs to be outside our operational performance. We continue to include the service cost and amortization of prior service cost in our Adjusted Earnings results noted above. These elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees.

(c)

Charges related to legal and professional fees associated with acquisition activities, primarily associated with the DuPont Crop Protection Business Acquisition.   

(d)

The income tax expense (benefit) on Corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the Corporate special charge or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure.

(e)

Three and Twelve Months Ended December 31, 2022 and 2021:

Discontinued operations for all periods presented includes provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities. Discontinued operations, net of income taxes for the twelve months ended December 31, 2021 also includes a gain on sale, net of tax, of approximately $15.4 million, from the sale of land at two separate discontinued sites.

(f)

We exclude the GAAP tax provision, including discrete items, from the Non-GAAP measure of income, and instead include a Non-GAAP tax provision based upon the annual Non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax items including, but not limited to: income tax expenses or benefits that are not related to ongoing business operations in the current year; unusual or infrequently occurring items; tax adjustments associated with fluctuations in foreign currency remeasurement of certain foreign operations; certain changes in estimates of tax matters related to prior fiscal years; certain changes in the realizability of deferred tax assets; and changes in tax law. Management believes excluding these discrete tax items assists investors and securities analysts in understanding the tax provision and the effective tax rate related to ongoing operations thereby providing investors with useful supplemental information about FMC's operational performance.

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(in Millions)

2022

2021

2022

2021

Tax adjustments:

Revisions to valuation allowances of historical deferred
tax assets

1.8

(16.1)

1.8

(21.5)

Foreign currency remeasurement and other discrete items

(39.1)

14.0

(7.1)

6.7

Total Non-GAAP tax adjustments

$         (37.3)

$            (2.1)

$            (5.3)

$         (14.8)

RECONCILIATION OF NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS, BEFORE INTEREST AND INCOME TAXES, DEPRECIATION AND AMORTIZATION, AND
NONCONTROLLING INTERESTS (NON-GAAP)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(In Millions)

2022

2021

2022

2021

Net income (loss) (GAAP)

$         280.4

$         184.8

$         741.5

$         737.1

Restructuring and other charges (income)

(5.8)

55.7

93.1

108.0

Non-operating pension and postretirement charges (income)

2.1

1.7

8.6

5.6

Transaction-related charges

—

—

—

0.4

Discontinued operations, net of income taxes

55.0

35.8

97.2

68.2

Interest expense, net

44.8

33.0

151.8

131.1

Depreciation and amortization

42.8

42.4

169.4

170.9

Provision (benefit) for income taxes

12.2

16.7

145.2

92.5

Adjusted earnings from continuing operations, before interest,
income taxes, depreciation and amortization, and noncontrolling
interests (Non-GAAP) ⁽¹⁾

$         431.5

$         370.1

$      1,406.8

$      1,313.8

(1)

Referred to as Adjusted EBITDA. Adjusted EBITDA is defined as operating profit excluding depreciation and amortization expense.

RECONCILIATION OF CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES (GAAP) TO
FREE CASH FLOW (NON-GAAP)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(In Millions)

2022

2021

2022

2021

Cash provided (required) by operating activities of continuing
operations (GAAP) ⁽¹⁾

$        644.3

$        600.4

$        660.0

$        898.6

Transaction and integration costs

—

1.1

0.5

9.5

Adjusted cash from operations ⁽²⁾

$        644.3

$        601.5

$        660.5

$        908.1

Capital expenditures

$         (33.9)

$         (23.7)

$       (142.3)

$       (100.1)

Other investing activities

17.9

8.5

23.6

(13.7)

Capital additions and other investing activities

$         (16.0)

$         (15.2)

$       (118.7)

$       (113.8)

Cash provided (required) by operating activities of discontinued
operations

$         (25.8)

$         (24.6)

$         (77.6)

$         (78.5)

Cash provided (required) by investing activities of discontinued
operations

—

2.9

—

19.7

Transaction and integration costs

—

(1.1)

(0.5)

(9.5)

Investment in Enterprise Resource Planning system

—

—

—

(12.7)

Proceeds from land disposition ⁽³⁾

50.5

—

50.5

—

Legacy and transformation

$          24.7

$         (22.8)

$         (27.6)

$         (81.0)

Free cash flow (Non-GAAP) ⁽⁴⁾

$        653.0

$        563.5

$        514.2

$        713.3

(1)

The cash provided (required) by operating activities for the three months ended December 31, 2022 and 2021 is the calculation of the twelve months ended December 31, 2022 and 2021 less the previously reported nine months ended September 30, 2022 and 2021, respectively.

(2)

Adjusted cash from operations is defined as cash provided (required) by operating activities of continuing operations excluding the effects of transaction-related cash flows.

(3)

Amounts for the year ended December 31, 2022 include proceeds of of $50.5 million received on the disposition of land related to a closed manufacturing facility.

(4)

Free cash flow is defined as Adjusted cash from operations reduced by spending for capital additions and other investing activities as well as legacy and transformation spending. We believe that this Non-GAAP financial measure provides a useful basis for investors and securities analysts about the cash generated by routine business operations, including capital expenditures, in addition to assessing our ability to repay debt, fund acquisitions and return capital to shareholders through share repurchases and dividends.

RECONCILIATION OF REVENUE CHANGE (GAAP) TO

ORGANIC REVENUE CHANGE (NON-GAAP) ⁽¹⁾

(Unaudited)

Three Months Ended
December 31, 2022 vs. 2021

 Twelve Months Ended
December 31, 2022 vs. 2021

Total Revenue Change (GAAP)

15 %

15 %

Less: Foreign Currency Impact

(2) %

(3) %

Organic Revenue Change (Non-GAAP)

17 %

18 %

(1)

We believe organic revenue growth (non-GAAP) provides management and investors with useful supplemental information regarding our ongoing revenue performance and trends by presenting revenue growth excluding the impact of fluctuations in foreign exchange rates.

FMC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Millions)

December 31, 2022

December 31, 2021

Cash and cash equivalents

$                         572.0

$                         516.8

Trade receivables, net of allowance of $33.9 in 2022 and $37.4 in 2021

2,871.4

2,583.7

Inventories

1,651.6

1,521.9

Prepaid and other current assets

343.6

431.4

Total current assets

$                     5,438.6

$                     5,053.8

Property, plant and equipment, net

849.6

817.0

Goodwill

1,589.3

1,463.3

Other intangibles, net

2,508.1

2,521.9

Deferred income taxes

210.7

194.1

Other long-term assets

575.0

623.0

Total assets

$                   11,171.3

$                   10,673.1

Short-term debt and current portion of long-term debt

$                        540.8

$                        440.8

Accounts payable, trade and other

1,252.2

1,135.0

Advanced payments from customers

680.5

630.7

Accrued and other liabilities

601.8

631.2

Accrued customer rebates

465.3

406.7

Guarantees of vendor financing

142.0

206.2

Accrued pensions and other postretirement benefits, current

2.3

4.3

Income taxes

114.7

65.4

Total current liabilities

$                     3,799.6

$                     3,520.3

Long-term debt, less current portion

$                     2,733.2

$                     2,731.7

Long-term liabilities

1,237.6

1,277.4

Equity

3,400.9

3,143.7

Total liabilities and equity

$                   11,171.3

$                   10,673.1

FMC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Year Ended December 31,

(In Millions)

2022

2021

Cash provided (required) by operating activities of continuing operations

$                    660.0

$                    898.6

Cash provided (required) by operating activities of discontinued operations

(77.6)

(78.5)

Cash provided (required) by investing activities of continuing operations

(266.4)

(131.7)

Cash provided (required) by investing activities of discontinued operations

—

19.7

Cash provided (required) by financing activities of continuing operations

(237.4)

(747.9)

Effect of exchange rate changes on cash

(23.4)

(12.3)

Increase (decrease) in cash and cash equivalents

$                       55.2

$                     (52.1)

Cash and cash equivalents, beginning of period

516.8

568.9

Cash and cash equivalents, end of period

$                    572.0

$                    516.8