fmc-20241231
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________
FORM 10-K
__________________________________________________________________________
For the fiscal year ended December 31, 2024
or
For the transition period from _______ to _______
Commission File Number 1-2376
__________________________________________________________________________
FMC CORPORATION
(Exact name of registrant as specified in its charter)
__________________________________________________________________________
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
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yesx No ̈
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ̈Nox
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.Yesx No ̈
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).Yesx No ̈
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.
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Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2024, the last day of the registrant’s second fiscal quarter, was $7,145,820,070. The market value of voting stock held by non-affiliates excludes the value of those shares held by executive officers and directors of the registrant.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
As of December 31, 2024, there were 124,840,902 of the registrant's common shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT FORM 10-K REFERENCE
Portions of Proxy Statement for 2025 Annual Meeting of Stockholders Part III
Table of Contents
FMC Corporation
2024 Form 10-K
Table of Contents
Page
PART I
Item 1. Business 4
Item 1A. Risk Factors 13
Item 1B. Unresolved Staff Comments 19
Item 1C. Cybersecurity 19
Item 2. Properties 21
Item 3. Legal Proceedings 21
Item 4. Mine Safety Disclosures 21
Item 4A. Information about our Executive Officers 22
PART II
Item 6. [Reserved] 24
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 48
Item 8. Financial Statements and Supplementary Data 49
Item 9A. Controls and Procedures 112
Item 9B. Other Information 113
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 113
PART III
Item 10. Directors, Executive Officers and Corporate Governance 114
Item 11. Executive Compensation 114
Item 14. Principal Accountant Fees and Services 114
PART IV
Item 15. Exhibits and Financial Statement Schedules 115
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PART I
FMC Corporation was incorporated in 1928 under Delaware law and has its principal executive offices at 2929 Walnut Street, Philadelphia, Pennsylvania 19104. Throughout this annual report on Form 10-K, except where otherwise stated or indicated by the context, "FMC", the "Company", "We," "Us," or "Our" means FMC Corporation and its consolidated subsidiaries and their predecessors. Copies of the annual, quarterly and current reports we file with the Securities and Exchange Commission ("SEC"), and any amendments to those reports, are available on our website at www.fmc.com as soon as practicable after we furnish such materials to the SEC.
ITEM 1. BUSINESS
General
FMC Corporation is a global agricultural sciences company dedicated to providing farmers innovative solutions that increase the productivity and resilience of their land. From our industry-leading development pipeline to novel biologicals and precision technologies, we are passionate about the power of science to solve agriculture’s biggest challenges. FMC’s innovative crop protection solutions help growers produce food, feed, fiber and fuel for an expanding world population while adapting to a changing environment. 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. Our strong competitive position is driven by our technology and innovation, as well as our geographic balance and crop diversity.
FMC is guided by our strategic plan which aims to transform our relationship with growers to become a trusted source for technical expertise and innovative solutions, to deliver superior growth and returns to our stakeholders, and to lead the crop protection industry in safety, talent, sustainability, and innovation. FMC expects to deliver on its growth ambitions by accelerating development and commercialization of our pipeline, driving profitability and competitiveness of our diamides brands and core synthetic portfolio, and growing the leading plant health business driven by our pheromones platform. To enable our growth and help achieve our ambitions, FMC is implementing strategies to be a trusted advisor to the grower through dedicated technical personnel and events, expanded precision technologies, and other digital and communication tools. We believe that expanded business development activities will capture local market innovation in new and existing geographies and further accelerate FMC’s growth.
FMC’s strategy also includes a focus on increasing operating leverage, optimizing functional costs, and driving a fit-for-purpose and resilient supply network. In 2024, FMC’s restructuring efforts generated $165 million in cost benefits and helped shape an FMC that is focused, efficient, and strong in the near-term, and structured to deliver sustained growth and superior results in the long-term. Our supply network is rigorously maintained to balance risk, cost, and quality to enable FMC to generate the greatest possible competitive advantage and profitability from our portfolio.
FMC remains committed to leading the industry in safety, inclusion, and sustainability. We are collectively committed to working safely every day to ensure the safety of our people and products. We also strive to create an environment that fosters a culture of belonging across our team of 5,700 global employees. Additionally, we are committed to delivering products that improve agricultural productivity while protecting the environment for future generations. Our focus on sustainability covers both the impacts of climate change on our business as well as our business on the climate. These values of safety, inclusion, and sustainability define FMC and guide how we do business.
Acquisitions and Divestitures
Through FMC Ventures, our venture capital arm, we have made strategic investments in start-ups and early-stage companies that are developing and applying emerging technologies in the agricultural industry. On November 1, 2024, we completed the sale of the non-core Global Specialty Solutions ("GSS") business to Environmental Science US, LLC d/b/a Envu ("Envu"). We received proceeds, net of the preliminary working capital adjustment, of approximately $340 million in connection with the completion of the sale. The GSS business did not qualify for discontinued operations during 2024.
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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
The following charts detail our sales by major geographic region and major product category.
The following table provides our long-lived assets by major geographical region:
(in Millions) December 31,
Long-lived assets (1)
________________
(1)Geographic long-lived assets exclude long-term deferred income taxes.
(2)In connection with our plans to establish a global technology and innovation center in Switzerland, we completed intra-entity transfers of certain intellectual property to one of the Company's Swiss subsidiaries during 2024.
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Products and Markets
Our portfolio is comprised of three major pesticide categories: insecticides, herbicides and fungicides. The majority of our product lines consist of insecticides and herbicides, and we have a growing 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. 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.
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. 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.
Industry Overview
The three principal categories of agricultural and non-crop chemicals are: herbicides, insecticides, and fungicides, representing approximately 41 percent, 29 percent and 27 percent of global agricultural crop protection market value, respectively.
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 72 percent of the crop protection industry’s global sales. The next group of agrochemical producers include UPL Ltd., Sumitomo Chemical Company Ltd., and Nufarm Ltd. FMC employs various differentiated strategies and competes with unique technologies focusing on certain crops, markets and geographies, while also being supported by a low-cost manufacturing model.
Growth
We are among the leading agrochemical producers in the world. Several products from our portfolio are based on proprietary active ingredients with a range of intellectual property protections which should 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.
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We have a growth strategy driven by obtaining new and improved uses for existing product lines and developing, acquiring, accessing, marketing, distributing and/or selling complementary chemistries, biologicals, and related technologies to strengthen our product portfolio and our capabilities to effectively service our target markets and customers.
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, introduce new modes of action, and enter new market segments. 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.
In FMC Precision Agriculture, we are broadening our award-winning ArcTM farm intelligence platform, a proprietary mobile solution that helps farmers better understand and manage pest pressure through predictive modeling based on real-time and historical data, entomological models, hyper-local weather information and in-field sensors. ArcTM 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.
Our venture capital arm, FMC Ventures, continued to build its portfolio in 2024 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.
Core Portfolio Strategy
Our core portfolio includes one of our two diamide-class molecules – Rynaxypyr® (chlorantraniliprole) active, the world’s leading insect control technology – with annual revenues of approximately $1.0 billion in 2024. The core portfolio also includes our long standing synthetic herbicides and insecticides which continue to deliver strong performance across a variety of crops around the world. Our current diamide pipeline contains approximately eleven new products containing Rynaxypyr® active to be launched this decade and we expect Rynaxypyr® active to continue a steady growth trajectory notwithstanding the expiration of composition of matter patents covering Rynaxypyr® active in certain countries which started in late 2022. Our growth strategy for Rynaxypyr® active includes the introduction of novel formulations and mixture products as well as lower cost solo formulations. 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 and will be launched in additional countries in 2025 onward. In 2023, Premio® Star insect control formulation was launched in Brazil and launches in other Latin American countries starting in 2025. The implementation of our lower cost diamide manufacturing strategy will also support our ability to compete with expected generic competitors.
Growth Portfolio Strategy
FMC’s growth portfolio includes products under patent or data protection in important markets and/or providing novel modes of action. We believe that FMC has one of the most productive crop protection pipelines in agriculture. The pipeline is highly valuable because it is biased toward new modes of action. The current R&D pipeline features over 20 new active areas in discovery and 18 new active ingredients in development.
The growth portfolio includes our second diamide-class molecule, Cyazypyr® active (cyantraniliprole), which supports a portfolio of products that generated revenues of approximately $0.5 billion in 2024. The Cyazypyr® product portfolio continues to be protected by patents and data protection for key global markets. Cyazypyr® active-containing brands, under the trademarks Verimark®, Benevia®, and Exirel® were launched in certain southern European countries starting in 2023. Our current diamide pipeline contains approximately nine new products containing Cyazypyr® active expected to be launched this decade and we continue to explore further innovations based on this diamide chemistry. We anticipate strong growth of Cyazypyr® active due to its patent portfolio, complex manufacturing profile and regulatory data protection in key markets. Additionally, we are developing novel formulations containing Cyazypyr® active which are intended to expand the spectrum of pest control and provide growers with lower cost in use. We also expect that implementation of our lower cost diamide manufacturing strategy will allow for continued competitiveness of Cyazypyr® active as generic entry begins following patent and data protection expiry.
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Our growth portfolio also includes herbicide pipeline products featuring three molecules - DodhylexTM active, IsoflexTM active and rimisoxafen. IsoflexTM active offers a new mode of action against weeds in cereals. We have launched herbicide brands powered by IsoflexTM active for cereals in Australia, Argentina, China, India and Pakistan. In Brazil, we have launched for use in cotton and rice and will expand into wheat. We anticipate launching other herbicide brands powered by IsoflexTM active in Chile and Uruguay during 2025 and we expect to significantly expand sales of these products to other parts of our EMEA and NA regions over the next five years.
DodhylexTM active is the first active ingredient in the HRAC/ WSSA Group 28 and the first new herbicide with a novel mode of action in the industry in over three decades. This new mode of action herbicide was discovered at the FMC Stine Research Center and is a testament to FMC's commitment to innovation and our disciplined approach to advancing the most promising new molecules. FMC is working towards registering DodhylexTM active for use in all major rice-growing countries across the globe and other additional crops. DodhylexTM active is not currently registered and is not available for sale in any country. We have, however, received a conditional registration for DodhylexTM active in the Philippines and anticipate first sales later in 2025. The registration dossier for DodhylexTM active and products containing DodhylexTM active were submitted for review in India, Brazil, the United States, Colombia, South Korea, Peru, Taiwan, Japan, and Malaysia.
Rimisoxafen is a new dual mode of action herbicide for resistant broadleaf weeds including Palmer amaranth, a fast growing and harmful weed that has developed resistance to most herbicides on the market. Rimisoxafen provides excellent control of key Amaranthus species (Palmer, waterhemp, redroot pigweed) with outstanding residual performance. Rimisoxafen is in the development phase of our pipeline and we are conducting regulatory studies at this time.
Our fungicide pipeline portfolio includes fluindapyr. Fluindapyr controls a variety of key diseases in row and specialty crops around the world. Fluindapyr formulations are registered in the U.S., Brazil, Paraguay, Mexico and Argentina. Key crops include soybeans, corn, cotton, cereals, oilseed rape, fruits & vegetables, tree nuts and peanuts. OnsuvaTM fungicide is available in Argentina and Brazil to prevent and control diseases affecting soybean, corn and peanut crops. AdastrioTM fungicide is registered in the U.S. for use in corn, grain sorghum, wheat, triticale and barley against anthracnose leaf blight, common rust, gray leaf spot, Northern corn leaf blight and Southern rust.
Pipeline Growth Strategy
As an agricultural sciences company, FMC believes in innovation and in protecting that innovation through intellectual property rights. We own and license a significant number of U.S. and foreign patents, trademarks, trade secrets and other intellectual property that are cumulatively important to our business. In addition, we seek to license our proprietary technologies through partnering arrangements that effectively allow us to capitalize from our intellectual property. The FMC intellectual property estate provides us with a significant competitive advantage which we seek to expand and renew on a continual basis. We manage our technology investment to discover and develop new active ingredients and biological products, as well as to continue to improve manufacturing processes and existing active ingredients through new formulations, mixtures or other concepts. 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.
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. 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, 2024, the Company owned a total of approximately 170 active granted U.S. patents and 2,531 active granted foreign patents (includes Supplemental Patent Certificates); we also have approximately 1,863 patent applications pending globally.
More details regarding our granted patent estate are set forth in the tables below:
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Diamides
Numbers of active Granted Patents by type, as of December 31, 2024:
United States Foreign
Active Ingredients — 100
Intermediates/ Method of Manufacturing 17 283
Formulations/ Mixtures/ Applications 7 308
Remaining life of Granted Patents, as of December 31, 2024:
United States Foreign
Pipeline
Numbers of active Granted Patents by type, as of December 31, 2024:
United States Foreign
Active Ingredients 8 187
Intermediates/ Method of Manufacturing 11 134
Formulations/ Mixtures/ Applications 10 242
Remaining life of Granted Patents, as of December 31, 2024:
United States Foreign
We also own many trademarks that are well recognized by customers or product end-users. Unlike patents, ownership rights in trademarks can be continued indefinitely so long as the trademarks are properly used, and renewal fees are paid.
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We actively monitor and manage our patents and trademarks to maintain our rights in these assets and we strategically act when we believe our intellectual property rights are being infringed. Since 2022, continuing through 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. Patent challenges in response to enforcement efforts are expected as an ordinary defense tactic in patent enforcement cases and have been raised in several of our enforcement cases to date; we intend to defend vigorously any patents that are challenged. While we believe that the invalidity or loss of any particular patent, trademark or licenses after appeal would be an unlikely possibility, our patent and trademark estate related to our diamide insect control products based on Rynaxypyr® and Cyazypyr® active ingredients in the aggregate are of material importance to our operations. The composition of matter patent that covers chlorantraniliprole (also known as Rynaxypyr® active) expired in a number of countries in August 2022; this patent protection for composition will end in 2027 across all geographies. The composition of matter patent that covers cyantraniliprole (also known as Cyazypyr® active) expired in a number of countries starting in January 2024; this patent will continue to remain in force in other countries throughout the world, expiring on a country-by-country basis at various dates through January 2029.
Generic competitors have, in some countries, registered and launched generic versions of our Rynaxypyr® -based products. 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.
In June 2024, FMC initiated a lawsuit against Sharda USA LLC in the U.S. District Court for the Eastern District of Pennsylvania (Philadelphia) for infringing two US Patents directed to insecticidal compositions containing the combination of bifenthrin and zeta-cypermethrin. FMC requested a preliminary injunction be granted preventing Sharda from selling its generic WINNER product in the US and causing damage to the market for FMC’s HERO® insecticide. In August 2024, FMC successfully obtained a preliminary injunction in the form of a Temporary Restraining Order (TRO). The TRO is currently being appealed.
FMC filed a patent infringement case against Albaugh in the US District Court (Iowa), based on public information disclosed in Albaugh’s EPA dossier. In the lawsuit, FMC alleged that Albaugh imported, made, or used products containing chlorantraniliprole made in violation of FMC’s U.S. patent rights protecting FMC’s processes for manufacturing chlorantraniliprole. In November 2024, FMC and Albaugh reached an agreement to resolve the case. As part of that agreement, Albaugh has agreed to pay FMC for a license to FMC’s patented technology used in the manufacture of chlorantraniliprole for agricultural uses in the United States. The specific terms of the agreement are confidential.
In December 2024, Atticus LLC filed a declaratory judgment case against FMC in the US District Court for the Western District of North Carolina. Atticus requested the Court declare that Atticus’s contemplated formulated products containing chlorantraniliprole do not infringe FMC’s patents directed to certain chlorantraniliprole product formulations. As of the date of the lawsuit, Atticus has not received EPA approval for the products at issue but Atticus nevertheless alleged that approval was expected in the coming months. Atticus has not requested declaratory relief with respect to any of FMC’s patents covering processes to manufacture chlorantraniliprole. In early February 2025, FMC filed a motion to dismiss Atticus' complaint for failure to state a case or controversy.
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, 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. 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. 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 and cyantraniliprole. 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. In 2023, we appealed the Review Board's decision to the Beijing IP Court. The Beijing IP Court upheld the decisions of the Review Board. We believe that the Beijing IP Court’s decisions were seriously flawed both on procedural and substantive grounds and we have appealed the Review Board's decision to the People’s Supreme Court of China. Under Chinese law, the patents remain valid but are not enforceable pending appeal. As of the date of this Form 10-K, we are awaiting a decision from the People’s Supreme Court of China. Given the unique and specific Chinese patent law issues involved, we do not believe the decisions of the lower courts in China would materially adversely impact our enforcement of similar patents in other countries.
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In several of our pending India patent enforcement cases, defendant infringers have sought to invalidate the asserted FMC patent(s), but as of the date of this Form 10- K no such infringer has prevailed in an invalidation claim.
Seasonality
The seasonal nature of the crop protection market and the geographic spread of our business can result in significant variations in quarterly earnings among geographic locations. Our products sold in the northern hemisphere (North America, Europe and parts of Asia) serve seasonal agricultural markets from March through September, generally resulting in significant earnings in the first and second quarters, and to a lesser extent in the fourth quarter. 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. 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. 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. In general, we compete as an innovator by focusing on product development, including novel formulations, proprietary mixes, and advanced delivery systems and by acquiring or licensing (mostly) proprietary chemistries or technologies that complement our product and geographic focus. We also differentiate ourselves by our global cost-competitiveness through our manufacturing strategies, establishing effective product stewardship programs and developing strategic alliances that strengthen market access in key countries and regions.
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 focused on maintaining the site infrastructure at our FMC Stine Research Center in Newark, Delaware, and continuously investing in high-quality equipment.
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 10 "Environmental Obligations" in the notes to our consolidated financial statements included in this Form 10-K.
Human Capital
At FMC, employees are guided by our purpose: Innovation for agriculture; Solutions for the planet. We provide farmers innovative solutions that increase the productivity and resilience of their land. From our industry-leading discovery pipeline to novel biologicals and precision technologies, we are passionate about the power of science to solve agriculture's biggest challenges. Our employees’ belief in this purpose and commitment to our core values are key to the Company’s success.
Employees
We employ approximately 5,700 people, which is split across our major geographical regions with 21 percent in North America, 12 percent in Latin America, 26 percent in Europe, Middle East & Africa, and 41 percent in Asia as of December 31, 2024.
We have one collective-bargaining agreement in the US and several collective-bargaining agreements or equivalent agreements in foreign-based locations. None of these agreements are considered material to our operations or financial position. Employees subject to these agreements do not represent a material portion of our overall employee headcount. Over the years, we have successfully renegotiated contracts without any material work stoppages. We cannot predict, however, the outcome of future contract negotiations.
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Talent Development and Retention
Developing our talent is critical to FMC’s ability to attract and retain a highly skilled and engaged workforce who can lead competitively, innovate change, improve business performance, and successfully maintain a competitive advantage. We are committed to investing in our employees’ professional development through a range of programs and initiatives, including individual development plans, stretch projects and rotational assignments. We provide all employees with access to a best-in-class on-demand learning platform featuring a vast library of courses, empowering employees to learn on their own schedule, fostering a culture of continuous learning and skill development. We also offer leadership development programs and executive coaching tailored for our leaders to equip them with the skills needed to effectively manage teams, drive performance and inspire innovation.
FMC continually strives to meet the needs of our employees, shareholders, and customers through competitive rewards, policies, and practices designed to attract, retain and motivate exceptional employees and drive both individual and Company performance. Performance-based direct pay programs include competitive base pay, short-term incentives, and long-term incentives. In addition, comprehensive global benefit packages are offered to support the health and well-being of employees and their families enabling FMC to offer a comprehensive total reward package designed for employees throughout their career.
FMC Culture
An important element of our Company’s strategy is our commitment to creating a culture of belonging where every employee can bring their full, authentic selves to work and thrive. We strive to maintain a workforce that mirrors the makeup of our growers by fostering an inclusive environment where we embrace diversity. Our goal is for everyone to feel they have a voice, and their contributions are valued at FMC. As an example of our efforts, we conduct an all-employee engagement survey designed to capture the voice of our employees and provide actionable insights to sustain an inclusive environment and support employees to perform at their best.
Safety
Safety is a core value of FMC. 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. As a result of our firm commitment to safety, our Total Recordable Incident Rate of 0.0995 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. 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 while protecting the environment for future generations. 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. 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). To reflect this commitment, we have established 2025 and 2035 sustainability goals. Our 2025 goals include: 100 percent research and development spend on sustainably advantaged products, a total recordable incident rate of less than 0.1, and a score of 100 on the Community Engagement Index. Our 2035 goals, include: 100 percent implementation of sustainable water practices at all operating sites, 100 percent waste to beneficial reuse, and net-zero greenhouse gas (“GHG”) emissions across the value chain (Scopes 1, 2 and 3). FMC has worked with to the Science Based Target initiative ("SBTi"), Net-Zero Standard, in line with keeping the global temperature at 1.5°C above pre-industrial time in alignment with the Paris Agreement. FMC received validation on its near-term and net-zero targets in March 2023. We are targeting a 42% reduction in Scopes 1 and 2, and 25% reduction in Scope 3 by 2030, with a net-zero target across the value chain by 2035. FMC continues to make progress towards achieving our 2025 and 2035 environmental goals and our progress is reported annually in our sustainability report.
At FMC, we embed sustainability and 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. FMC developed and utilizes its Product Sustainability Assessment Tool to evaluate the sustainability attributes 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 sustainably advantaged agricultural solutions. 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 2024, 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.
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SEC Filings
SEC filings are available free of charge on our website, www.fmc.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are posted as soon as practicable after we furnish such materials to the SEC.
REGULATION FD DISCLOSURES
The Company’s investor relations website, located at https://investors.fmc.com, should be considered as a recognized channel of distribution, and the Company may periodically post important information to the web site for investors, including information that the Company may wish to disclose publicly for purposes of complying with the federal securities laws and our disclosure obligations under the SEC's Regulation FD. We encourage investors and others interested in the Company to monitor our investor relations website for material disclosures. Our website address is included in this Form 10-K as a textual reference only and the information on the website is not incorporated by reference into this Form 10-K.
ITEM 1A. RISK FACTORS
Among the factors that could have an impact on our ability to achieve operating results and meet our other goals are:
Industry Risks:
Pricing and volumes in our markets are sensitive to a number of industry specific and global issues and events including:
•Competition and new agricultural technologies – Our business faces competition, which could affect our ability to maintain or raise prices, successfully enter certain markets or retain our market position. 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. Increased generic presence in agricultural chemical markets has been driven by the number of significant product patents and product data protections that have expired in the last decade, and this trend is expected to continue. Also, there are changing competitive dynamics in the agrochemical industry as some of our competitors have consolidated, resulting in them having greater scale and diversity, as well as market reach. These competitive differences may not be overcome and may erode our business. Agriculture in many countries is changing and new technologies (e.g., precision pest prediction or application, data management) continue to emerge. 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. 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. Natural disasters can impact production at our facilities in various parts of the world. 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. 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 are sensitive to regulatory risk given the need to obtain and maintain pesticide registrations in every country in which we sell our products. Moreover, we are required to comply with protocols or applicable regulatory requirements of biological products. Protocols and regulations may change, or regulatory agencies may determine that a biological product is not approvable. There is a risk that future regulatory requirements may lead to delays in development of biologicals or limit growth from biologicals. Many countries require re-registration of pesticides to meet new and more challenging requirements; while we defend our products vigorously, these re-registration processes may result in significant additional data costs, reduced number of permitted product uses, or potential product cancellation. Compliance with changing laws and regulations may involve significant costs or capital expenditures or require changes in business practice that could result in reduced profitability. In the European Union, the regulatory risk specifically includes the chemicals regulation known as REACH (Registration, Evaluation, and Authorization of Chemicals), which requires manufacturers to verify through a special registration system that their chemicals can be marketed safely. Changes to the regulatory environment may be influenced by non-government public pressure as a result of negative perception regarding the use of our crop protection products. Products reviewed by regulators and
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labeled safe for use may still be challenged by others which could lead to negative public perception or regulatory action. Competing products labeled safe for use were subject to lawsuits or claims, and a similar situation for our products could result in negative impacts. In addition, climate change may result in changes to the governmental policy around greenhouse gases, including emission caps, trade regulations and other mechanisms to promote reduction of carbon emissions. 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. In addition, corporate Environmental, Social and Governance (“ESG”) commitments and shifting market pressures in response to climate regulation and consumer expectations mayinfluence 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. We have continued to grow our geographic footprint particularly in Europe and key Asian countries such as India, which means that developments outside the U.S. will generally have a more significant effect on our operations than in the past. Our operations outside the U.S. are subject to special risks and restrictions, including: fluctuations in currency values; exchange control regulations; changes in local political or economic conditions; governmental pricing directives; import and trade restrictions or tariffs; import or export licensing requirements and trade policy; restrictions on the ability to repatriate funds; and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad.
•Climate change and land use impacts – Climate change may impact markets in which we sell our products, where, for example, a prolonged drought may result in decreased demand for our products. 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. 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 crop type. 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. 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 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. However, we are unable to avoid the risk of medium- and long-term increases. Additionally, fluctuations in harvested crop commodity prices could negatively impact our customers' ability to sell their products at previously forecasted prices resulting in reduced customer liquidity. 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. Our supply chain and business operations could be disrupted from the temporary closure of third-party supplier and manufacturer facilities, interruptions in product supply or restrictions on the export or shipment of our products. We closely monitor raw material and supply chain costs. We source critical intermediates and finished products from a number of suppliers, largely outside of the U.S. and principally in China and India. There is considerable uncertainty surrounding the trade relationship between the U.S. and trading partners — e.g., the recently announced 10% tariff on goods coming into the U.S. from China, the recent announcement of reciprocal tariffs on goods imported into the U.S. to match tariffs imposed by other nations on goods imported from the U.S., and China’s recently announced tariffs on imports of certain U.S. goods. Such changes may adversely impact our business. Further, while we have made supply arrangements to meet planned operating requirements, an inability to obtain the critical raw materials or operate under contract manufacturing arrangements would adversely impact our ability to produce certain products and could lead to operational disruption and increase uncertainties around business performance. An inability to obtain these products or execute under contract sourcing arrangements would adversely impact our ability to sell products. Any disruption of our suppliers and contract manufacturers could impact our sales and operating results. 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), inflation and tariffs (such as those discussed above).
Operational Risks:
•Global catastrophic events – A global catastrophic event (e.g., nuclear incident, pandemic, natural disaster) could endanger the lives and safety of our employees, limit market access, constrain supply and would require high levels of cross-functional coordination to maintain business continuity. If not properly managed, FMC could suffer substantial
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financial losses should the event negatively impact our operations or those of our customers. Global catastrophic events could also result in social, economic, and labor instability in the countries in which we or our customers and suppliers operate. 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.
•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. (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. 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. 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. Some of these hazards may cause severe damage to or destruction of property and equipment or personal injury and loss of life and may result in suspension of operations or the shutdown of affected facilities.
•Climate change and physical risk to operation sites – The acute and chronic effects of climate change such as rising sea levels, drought, flooding, hurricanes, excessive heat and general volatility in seasonal temperatures could adversely affect our operations globally. 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. 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. Products reviewed by regulators and labeled safe for use may still be challenged by others which could result in lawsuits or claims.
•Hazardous materials – We manufacture and transport certain materials that are inherently hazardous due to their toxic or volatile nature. 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. Governmental agencies may change requirements related to the production, use, emission, disposal or remediation of chemicals or products, including chemicals or products which we may have produced or used in our discontinued operations. 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. We take our environmental responsibilities very seriously, but there is a risk of environmental impact inherent in our manufacturing operations and transportation of chemicals. Any substantial liability for environmental damage could have a material adverse effect on our financial condition, results of operations and cash flows.
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. 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. 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. 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
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innovative, high value-added products for existing and future customers. 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. 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. 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. 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. 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 for which our composition of matter patents on the active ingredient itself have expired in most countries and our process manufacturing and chemical intermediate patents only a limited remaining duration. (see "Patents, Trademarks and Licenses" in Item 1 for more details). Patent and trademark enforcement is subject to the risks inherent in litigation, and our product portfolio life cycle management efforts may not be effective in maintaining our products’ market position or profitability. If our innovation efforts fail to result in process improvements to reduce costs, such conditions could impede our competitive position. Some of our competitors may secure patents on production methods or uses of products that may limit our ability to compete cost-effectively.
•Enforcement of intellectual property rights – The composition of matter patents on our Rynaxypyr® and Cyazypyr® active ingredients have expired in all major markets. We have additional patents regarding the production of these diamide active ingredients and chemical intermediates involved in such production, which are expiring in many major markets in December 2025. For these diamide products, we also hold patents on certain formulations (including mixtures), trademark and data exclusivity protection in certain countries which have longer duration. Likewise, for other products in our commercial and development portfolios, we have a broad estate of intellectual property including patents, trademark and data protection. We intend to strategically and vigorously enforce our patents and other forms of intellectual property against suspected infringers 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. 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. 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). 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. In such circumstances, an adverse patent enforcement decision could lead to the entry of competing 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. 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. The opinion is based on certain assumptions and representations as to factual matters from both FMC and FMC Lithium, as well as certain covenants by those parties. The opinion cannot be relied upon if any of the assumptions, representations or covenants is incorrect, incomplete or inaccurate or is violated in any material respect. The opinion of counsel is not binding upon the IRS or the courts and there is no assurance that the IRS or a court will not take a contrary position. 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.
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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. 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.
•Income tax audits and 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. Additionally, further administrative guidance or other changes to the Global Anti-Base Erosion (GLOBE) rules that cause changes in tax legislation issued by the Organization for Economic Cooperation and Development (“OECD”) could potentially impact certain tax benefits previously received. There is no guarantee that administrative guidance or rules will remain unchanged or that the US government will adopt the global tax rules in accordance with the OECD approach, either of which could impact the value of the incentives granted to us and which could potentially lead to significant future international tax disputes.
•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. We may recognize future impairments of long-lived assets, which could adversely affect our results of operations.
•Pension and postretirement plans – Our U.S. Qualified Plan has been fully funded for the last several years and as such, the primary investment strategy is a liability hedging approach with an objective of maintaining the funded status of the plan such that the funded status volatility is minimized and the likelihood that we will be required to make significant contributions to the plan is limited. The portfolio is comprised of 100 percent fixed income securities and cash. Our plan assets and obligation under our U.S. Qualified Plan is in excess of $1 billion. Additionally, obligations related to our pension and postretirement plans reflect certain assumptions. To the extent actual experience differs from these assumptions, our costs and funding obligations could increase or decrease significantly. While we provide other defined benefit, defined contribution and postretirement benefits to our employees and retirees, our risk is focused on our U.S. Qualified Plan given its size to our consolidated financial position.
General Risk Factors:
•Market access risk – Our results may be affected by changes in distribution channels, which could impact our ability to access the market. Consolidation of the value chain may limit FMC’s access in certain markets. Acquisition of retailers and wholesalers, particularly by competitors, could restrict FMC’s distribution footprint. 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. In addition, our future success depends in part on our ability to identify and develop talent to succeed senior management and other key members of the organization. We operate in markets where business ethics and local customs may differ from our company standards, increasing the risk of impropriety and regulatory enforcement. 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. While inflationary pressures have recently eased, a resurgence of these conditions may negatively impact our revenue, gross and operating margins, and net income. Economic and political conditions within the U.S. and foreign jurisdictions or strained relations between countries could result in fluctuations in demand, price volatility, loss of property, state sponsored cyberattacks, supply
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disruptions, or other disruptions. 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. Current U.S. tariff policies may increase the costs of goods being imported into the U.S., and other nations may impose new or different tariffs or other trade sanctions that increase the cost of our importing into those other nations, which we may not be able to mitigate or avoid, leading to increased costs of materials and/or other trade disruptions. The current military conflict between Russia and Ukraine could disrupt or otherwise adversely impact our operations in Ukraine; and related sanctions, export controls or other actions that may be initiated by nations including the U.S., the European Union or Russia (e.g., potential cyberattacks, disruption of energy flows, etc.) could adversely affect our business and/or our supply chain, business partners or customers in other countries beyond Ukraine. 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. 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. In China, unpredictable enforcement of environmental regulations could result in unanticipated shutdowns in broad geographic areas, impacting our contract manufacturers and raw material suppliers.
•Information technology security and data privacy risks – As with all enterprise information systems, our information technology systems and systems operated by our vendors and third parties could be penetrated by outside parties’ intent on observing or gathering information, extracting information, corrupting information, deploying ransomware, or disrupting business processes. Remote and other work arrangements may leave the Company more vulnerable to a cyberattack. Our systems and those of our vendors and third parties have in the past been, and will likely be in the future, subject to unauthorized access attempts. Implementing system updates or security patches in an untimely manner could leave our company exposed to security breaches. Unauthorized access to our networks or systems could disrupt our business operations and potentially result in failures or interruptions in our information systems, lockouts due to ransomware, or in the loss of assets and could have a material adverse effect on our business, financial condition or results of operations. We engage in response planning, simulations, trainings, tabletop exercises, and other efforts to mitigate risks associated with cybersecurity. Breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary, sensitive, confidential or personal information about the Company, our employees, our vendors, or our customers, could result in litigation, violations of applicable data privacy regulations, and liability for the Company. 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 landscape. We maintain a multifaceted cybersecurity program designed to identify, protect, detect, respond, and recover from a cybersecurity event. We ensure that the program is aligned with the National Institute of Standards and Technology ("NIST") Cybersecurity Framework. While we have taken measures to assess the requirements of, and to comply with the rapidly growing cybersecurity and data privacy regulations in multiple jurisdictions, these measures may be challenged by authorities that regulate cybersecurity and privacy-related compliance. 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. This could damage our reputation, or otherwise harm our business, financial condition, or results of operations.
•Access to debt and capital markets – We rely on cash generated from operations and external financing to fund our growth and working capital needs. Limitations on access to external financing could adversely affect our operating results. Moreover, interest payments, dividends and the expansion of our business or other business opportunities may require significant amounts of capital. We believe that our cash from operations and available borrowings under our revolving credit facility will be sufficient to meet these needs in the foreseeable future. However, if we need external financing, our access to credit markets and pricing of our capital will be dependent upon maintaining sufficient credit ratings from credit rating agencies and the state of the capital markets generally. There can be no assurances that we would be able to obtain equity or debt financing on terms we deem acceptable, and it is possible that the cost of any financings could increase significantly, thereby increasing our expenses and decreasing our net income. 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 the extent available, to meet our cash needs. In the event of a default in this credit facility or any of our senior notes, we could be required to immediately repay all outstanding borrowings and make cash deposits as collateral for all obligations the facility supports, which we may not be able to do. Any default under any of our credit arrangements could cause a default under many of our other credit agreements and debt instruments. Without waivers from lenders party to those agreements, any such default could have a material adverse effect on our ability to continue to operate.
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•Exposure to global economic conditions – Deterioration in the global economy and worldwide credit and foreign exchange markets could adversely affect our business. A worsening of global or regional economic conditions or financial markets could adversely affect both our own and our customers' ability to meet the terms of sale or our suppliers' ability to perform all their commitments to us. A slowdown in economic growth in our international markets, or a deterioration of credit or foreign exchange markets could adversely affect customers, suppliers and our overall business there. Customers 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 – In 2023, we implemented a global restructuring plan, which is referred to as “Project Focus,” 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. While we have realized substantially all the expected synergies from the program, we may need to implement additional activities under the restructuring program to offset market headwinds and other risks should they negatively impact our results of operations. 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.
•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. 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. 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 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Processes
As noted in Item 1A. Risk Factors, FMC recognizes that the threat of cybersecurity breaches may create significant risks for the Company. Accordingly, we are committed to an ongoing and comprehensive program to protect all company data, as well as data in our supply chain, from these threats. Our cybersecurity program includes governance defined by IT policies and standards and a robust IT risk management program. FMC uses several tools and controls to manage IT risk including, but not limited to, controls for the management of privileged access, anti-malware tools, required trainings for employees including an annual training module, simulated email phishing attacks, and other email security tools to detect and prevent intrusions as well as monitor threats. FMC employees have access to formal IT policies that define and clarify expected behaviors with respect to IT resources in various areas. The Company has a Cyber Incident Response Plan, which establishes procedures to prepare for and respond to a variety of cyber incidents, and engages in response planning, simulations, trainings, tabletop exercises, and other efforts to mitigate risk and prepare for a rapid response to any incidents should they occur. FMC performs a thorough security review prior to onboarding critical third-party providers, which includes review of third-party independent assessments in the form of SOC reports prior to contracting. SOC reports are also reviewed on an annual basis once the third-party is engaged. Additionally, our contracts with third-party providers require those organizations to notify FMC of any cyber incident that occurs when our information has been impacted.
Periodically, the Company has its cybersecurity programs audited by independent third parties using the NIST Cybersecurity Framework, which provides guidance to organizations on how to identify, prevent, detect, respond, and recover from cybersecurity threats.
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Management Oversight in Cybersecurity Governance
FMC’s senior management Executive Committee and Leadership Team, which includes the Chief Executive Officer and all Company vice presidents, is responsible for review and oversight of the Company’s cybersecurity programs and risk assessment as well as the strategic direction of the program to address evolving risks. Specifically, Jas Sidhu, Senior Director - Core IT, serves as management’s expert in cybersecurity management. He has held various positions within the Company's IT department, has an educational background in Information Systems, and contributes technical expertise to the Company’s leadership team. He serves as a member of the Chemical Information Technology Center’s CIO organization and the SAP Chemicals Advisory Board. Mr. Sidhu also belongs to various business associations, including industry and government associations, to ensure timely receipt of critical threat information as well as access resources useful in developing cost-effective security solutions to protect the Company's personnel and information. Additionally, Andrew Sandifer, Executive Vice President and Chief Financial Officer, has completed continuing professional education courses covering the role of management and the board of directors in cybersecurity governance. Members of the management team are encouraged to engage in education opportunities related to cybersecurity.
FMC has established a process to assess the nature, scope and timing of a cyber incident and communicate the facts of the incident to management and the board of directors and, if needed, investors. In the event of a cybersecurity incident, the incident response team, which is managed by IT personnel, is responsible for ensuring the Chief Executive Officer and other members of the Executive Committee and Leadership Team are notified in a timely manner. For any cybersecurity incident, there will be a cross-functional review, including the IT, legal, and finance teams, to evaluate qualitative and quantitative factors related to the incident to determine if the impact of the event is material. Individuals from other departments may be involved in this review depending on the facts and circumstances of the incident. These individuals will be responsible for responding to the event and monitoring the impacts on the Company’s operations, financial position, and results of operations. This team will also evaluate cyber incidents in the aggregate if related events occur. During the response and recovery related to a cyber incident, this team will meet daily or weekly depending on the severity of the event and continuously evaluate the nature, scope, and timing of the event. Members of the senior management, including the Chief Financial Officer, Chief Accounting Officer, and General Counsel, as well as the Senior Director - Core IT will be briefed as to the facts and circumstances of a cyber incident and determine if the event is considered material to the business. If such determination is made, the matter will be escalated to Board of Directors. For material incidents, the Company will provide information regarding the nature and scope of the incident to investors in compliance with SEC regulations. Throughout this process and the recovery following an incident, the Company is focused on considering the ever-changing facts and circumstances of the event and remaining as transparent with the investment community as possible.
During 2024, FMC did not directly experience a cybersecurity breach in any FMC system. During 2024, we did receive notification of cybersecurity breaches affecting third-party vendors, but none were material in nature for FMC.
Board of Directors Oversight in Cybersecurity Governance
FMC’s Board of Directors oversees the Company’s cybersecurity program primarily through its Audit Committee, which is comprised of independent directors whose prior work experience provides them with insights as to potential cybersecurity risks and mitigation strategies.Company executives along with external and internal cybersecurity experts update the Audit Committee at least quarterly on risks related to cybersecurity and the steps taken to monitor and control risk exposure. Additionally, the results of periodic audits performed on the Company’s cybersecurity programs, described above, are communicated to the Audit Committee upon completion.
In addition to the routine updates provided to the Audit Committee, FMC has an established policy for communication of cybersecurity incidents with the Board of Directors and, if material, the investor community. Refer to the discussion above for further details of this policy.
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ITEM 2. PROPERTIES
FMC leases executive offices in Philadelphia, Pennsylvania and operates 21 manufacturing facilities in 15 countries. Our major research and development facilities are in Newark, Delaware; Shanghai, China and Copenhagen, Denmark.
We believe our facilities are in good operating condition. The number and location of our owned or leased production properties for continuing operations are as follows:
North America Latin America Europe, Middle East and Africa Asia Total
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 2024, there were approximately 11,683 premises and product asbestos claims pending against FMC in several jurisdictions. Since the 1980s, approximately 123,000 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 $230 million. For a description of pending asbestos cases as well as our other material pending legal proceedings, please see Note 1 "Principal Accounting Policies and Related Financial Information" - Environmental obligations, Note 10 "Environmental Obligations" and Note 19 "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.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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ITEM 4A. INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The executive officers of FMC Corporation, the offices they currently hold, their previous business experience and their ages as of December 31, 2024, are as follows.
Name Age Office and year of election
All officers are elected to hold office for one year or until their successors are elected and qualified. No family relationships exist among any of the above-listed officers, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer. The above-listed officers have not been involved in any legal proceedings during the past ten years of a nature for which the SEC requires disclosure that are material to an evaluation of the ability or integrity of any such officer.
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PART II
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 2,028 registered common stockholders as of December 31, 2024.
FMC’s annual meeting of stockholders will be held at 2:00 p.m. on Tuesday, April 29, 2025 via live webcast at https://www.virtualshareholdermeeting.com/FMC2025. Notice of the meeting, together with instructions on how to access proxy materials, will be mailed approximately six weeks prior to the meeting to stockholders of record as of February 28, 2025.
Transfer Agent and Registrar of Stock:
EQ Shareowner Services
https://equiniti.com/us/
Stockholder Return Performance Presentation
The graph that follows shall not be deemed to be incorporated by reference into any filing made by FMC under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The following Stockholder Performance Graph compares the five-year cumulative total return on FMC’s Common Stock with the S&P 500 Index and the S&P 500 Chemicals Index. The comparison assumes $100 was invested on December 31, 2019, in FMC’s Common Stock and in both of the indices, and the reinvestment of all dividends.
The following table summarizes information with respect to the purchase of our common stock during the three months ended December 31, 2024:
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ISSUER PURCHASES OF EQUITY SECURITIES
Publicly Announced Program
___________________
(1) Includes shares purchased in open market transactions by the independent trustee of the FMC Corporation Non-Qualified Savings and Investment Plan ("NQSP").
In February 2022, the Board of Directors authorized the repurchase of up to $1 billion of the Company's common stock. In connection with an amendment to the Company's credit agreement in November 2023, the Company agreed that it will not repurchase shares, with the exception of share repurchases under our equity compensation plans. Therefore, there were no share repurchases under the publicly announced repurchase program during the twelve months ended December 31, 2024. As part of the amendments entered into in February 2025 and described in Note 12 to the consolidated financial statements, the Company agreed that it will not repurchase shares until December 31, 2027. At December 31, 2024, approximately $825 million remained unused under our Board-authorized repurchase program. This repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market conditions and other factors. We also reacquire shares from time to time from employees in connection with the vesting, exercise and forfeiture of awards under our equity compensation plans. 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]
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
FMC Corporation is a global agricultural sciences company dedicated to helping growers produce food, feed, fiber and fuel for an expanding world population while adapting to a changing environment. We operate in a single distinct business segment. We develop, market and sell all three major classes of crop protection chemicals (insecticides, herbicides and fungicides) as well as biologicals, crop nutrition, and seed treatment products, which we group as plant health. FMC’s innovative crop protection solutions enable growers, crop advisers and turf and pest management professionals to address their toughest challenges economically without compromising safety or the environment. FMC is committed to discovering new insecticide, herbicide, and fungicide active ingredients, product formulations and pioneering technologies that are consistently better for the planet.
FORWARD-LOOKING INFORMATION
Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: FMC and its representatives may from time to time make written or oral statements that are "forward-looking" and provide other than historical information, including statements contained herein, in FMC’s other filings with the SEC, and in reports or letters to FMC stockholders.
In some cases, FMC has identified forward-looking statements by such words or phrases as "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "believes," "anticipates," "predicts," "forecasts," "estimates," "projects," "potential," "intends" or similar expressions identifying "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words and phrases. Such forward-looking statements are based on management’s current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. Additional factors include, among other things, the risk factors and other cautionary statements filed with the SEC included within this Form 10-K as well as other SEC filings and public communications. FMC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. 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.
2024 Highlights
The following are the more significant developments in our businesses during the year ended December 31, 2024:
•In response to the unprecedented downturn in the global crop protection market during 2023, we initiated a global restructuring plan, referred to as "Project Focus," in November 2023 designed to right-size our cost base and optimize our footprint and organizational structure with a focus on driving significant cost improvement and productivity. Refer to the section titled "Results of Operations" for further discussion of the program.
•Revenue of $4,246.1 million in 2024 decreased $240.7 million or approximately 5 percent versus last year. Demand began to improve during the second quarter of 2024 resulting in improved sales volumes year over year. Price and foreign currency headwinds more than offset volume improvement during the year. On a regional basis, sales in Latin America decreased by 1 percent, sales in North America decreased 3 percent, sales in Europe, Middle East and Africa decreased by 7 percent, and sales in Asia decreased 14 percent. A more detailed review of revenues is included under the section entitled "Results of Operations".
•Our gross margin of $1,648.9 million decreased versus the prior year gross margin of $1,831.0 million. The decrease in gross margin of $182.1 million or approximately 10 percent was primarily the result of lower pricing in all regions partially offset by favorable cost and volume improvement. Gross margin as a percent of revenue of 38.8 percent decreased compared to gross margin of 40.8 percent in the prior year period driven by higher unabsorbed fixed costs during the period as well as registration removals.
•Selling, general and administrative expenses decreased from $734.3 million to $644.6 million, or approximately 12 percent. Research and development expenses of $278.0 million decreased $50.8 million or 15 percent. The decreases in both selling, general and administrative expenses and research and development costs are primarily due to cost reduction measures implemented in connection with our Project Focus initiative. Reductions in research and development spending were done without sacrificing investments in areas such as Plant Health and our new active ingredient pipeline.
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•Net income (loss) attributable to FMC stockholders of $341.1 million decreased $980.4 million from $1,321.5 million in the prior year period. As discussed further under the section titled "Results of Operations", the change in the provision (benefit) for income taxes was the primary driver of the decrease in net income (loss) attributable to FMC stockholders. Prior year results include the recognition of significant one-time tax benefits related to tax incentives granted to the Company's Swiss subsidiaries as well as the release of our FMC Brazil valuation allowance due to new tax laws enacted in the country. We also recorded higher valuation allowances on the tax benefits associated with our Swiss subsidiaries during the fourth quarter of 2024. Additionally, lower gross margin, as discussed above, negatively impacted our results for the period. During the period, we realized savings associated with the cost reduction measures implemented in connection with our Project Focus initiative contributing to a decrease in selling, general and administrative expenses and research and development costs as discussed above. Adjusted after-tax earnings from continuing operations attributable to FMC stockholders of $436.3 million decreased $38.2 million or approximately 8 percent. See the disclosure of our adjusted earnings Non-GAAP financial measurement under the section titled "Results of Operations".
2025 Outlook
We expect 2025 revenue will be in the range of approximately $4.15 billion to $4.35 billion, essentially flat at the midpoint versus 2024 and an increase of 3 percent excluding the impact of approximately $110 million in sales from the prior year due to the divestiture of the GSS business. Volume is expected to improve as increases in growth platforms are expected to more than offset weaker demand in the channel as customers in many countries prioritize holding lower than historical inventory. Price is expected to decline in the mid-single digits almost entirely driven by certain contract adjustments to diamide partners to account for lower manufacturing costs. Foreign currency impacts are expected to be a low-single digit headwind. We expect adjusted EBITDA(1) of $870 million to $950 million, an increase of 1 percent at the midpoint versus 2024 results and up 4 percent after excluding the impact of the loss of approximately $25 million in EBITDA from the prior year due to the divestiture of the GSS business. Favorable costs and a modest volume gain are expected to be mostly offset lower price, foreign currency headwinds, and increases in selling costs as the Company invests in new routes to market. 2025 adjusted earnings are expected to be in the range of $3.26 to $3.70 per diluted share(1), essentially flat at the midpoint versus 2024. The estimate for adjusted earnings excludes any impact from potential share repurchases in 2025. For cash flow outlook, refer to the liquidity and capital resources section below.
(1)Although we provide forecasts for adjusted earnings per diluted share and adjusted EBITDA (Non-GAAP financial measures), we are not able to forecast the most directly comparable measures calculated and presented in accordance with U.S. GAAP. Certain elements of the composition of the U.S. GAAP amounts are not predictable, making it impractical for us to forecast. Such elements include, but are not limited to, restructuring, acquisition charges, and discontinued operations. As a result, no U.S. GAAP outlook is provided.
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Results of Operations — 2024, 2023 and 2022
Overview
The following charts provide a reconciliation of adjusted EBITDA, adjusted earnings, organic revenue growth and return on invested capital ("ROIC"), all of which are Non-GAAP financial measures, from the most directly comparable GAAP measure. Adjusted EBITDA and organic revenue are provided to assist the readers of our financial statements with useful information regarding our operating results. Our operating results are presented based on how we assess operating performance and internally report financial information. For management purposes, we report operating performance based on earnings before interest, income taxes, depreciation and amortization, discontinued operations, and corporate special charges. Our adjusted earnings measure excludes corporate special charges, net of income taxes, discontinued operations attributable to FMC stockholders, net of income taxes, and certain Non-GAAP tax adjustments. 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. In addition to providing useful information about our operating results to investors, we also believe that excluding the effect of corporate special charges, net of income taxes, and certain Non-GAAP tax adjustments from operating results and discontinued operations allows management and investors to compare more easily the financial performance of our underlying business from period to period. These measures should not be considered as substitutes for net income (loss) or other measures of performance or liquidity reported in accordance with U.S. GAAP.
(in Millions) Year Ended December 31,
Costs and Expenses
Selling, general and administrative expenses 644.6 734.3 775.2
Restructuring and other charges (income) 219.8 212.3 93.1
Non-operating pension and postretirement charges (income) 18.2 18.2 8.6
Income (loss) from continuing operations $ 403.4 $ 1,419.5 $ 838.7
Discontinued operations, net of income taxes (61.8) (98.5) (97.2)
Adjustments to arrive at Adjusted EBITDA (Non-GAAP):
Corporate special charges (income):
Restructuring and other charges (income) (3) $ 219.8 $ 238.1 $ 93.1
Non-operating pension and postretirement charges (income) (4) 18.2 18.2 8.6
Discontinued operations, net of income taxes 61.8 98.5 97.2
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(1)Referred to as operating profit.
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(2)Adjusted EBITDA is defined as operating profit excluding corporate special charges (income) and depreciation and amortization expense.
(3)See Note 7 to the consolidated financial statements included within this Form 10-K for details of restructuring and other charges (income).
(4)Our non-operating pension and postretirement charges (income) are defined as those costs (benefits) related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These are excluded from our operating results and are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance and we consider these costs to be outside our operational performance. We continue to include the service cost and amortization of prior service cost in our operating results noted above. These elements reflect the current year operating costs to our business for the employment benefits provided to active employees.
ADJUSTED EARNINGS RECONCILIATION
(in Millions, except per share amounts) Year Ended December 31,
Corporate special charges (income), net of income taxes $ 200.9 $ 223.5 $ 103.2
Diluted earnings per common share (GAAP) $ 2.72 $ 10.53 $ 5.81
Corporate special charges (income), pre-tax per diluted share 1.90 2.05 0.81
Tax adjustments per diluted share (1.33) (9.30) (0.04)
____________________
(1)Represents restructuring and other charges (income), and non-operating pension and postretirement charges (income).
(2)The income tax expense (benefit) on Corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the Corporate special charge or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the Non-GAAP performance measure.
(3)We exclude the GAAP tax provision, including discrete items, from the Non-GAAP measure of income, and instead include a Non-GAAP tax provision based upon the annual Non-GAAP effective tax rate. The GAAP tax provision includes, 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. 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. Refer to the explanation below on the provision for income taxes for further detail of the non-GAAP tax adjustments for the twelve months ended December 31, 2024.
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ORGANIC REVENUE GROWTH RECONCILIATION
Total Revenue Change (GAAP) (5) %
Less: Foreign Currency Impact (2) %
Organic Revenue Change (Non-GAAP) (3) %
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO
FMC STOCKHOLDERS (GAAP) TO RETURN ON INVESTED CAPITAL ("ROIC")
NUMERATOR (NON-GAAP) AND ADJUSTED ROIC (USING NON-GAAP NUMERATOR)
We believe Adjusted ROIC provides management and investors with useful supplemental information regarding our utilization of capital provided by both equity and debt as well as our working capital and free cash flow management. Additionally, vesting of certain restricted stock awards granted to officers is connected to Adjusted ROIC as a performance metric.
Twelve Months Ended
Net income (loss) attributable to FMC stockholders (GAAP) $ 341.1
Interest expense, net, net of income taxes 210.1
Corporate special charges (income) 238.0
Income tax expense (benefit) on Corporate special charges (income) (37.1)
Tax adjustments (167.5)
ROIC numerator (Non-GAAP) $ 646.4
Total debt and FMC stockholders' equity (GAAP) $ 7,852.8 $ 8,368.5
Adjusted ROIC (using Non-GAAP numerator) 7.97 %
Results of Operations
In the discussion below, all comparisons are between the periods unless otherwise noted.
Revenue
2024 vs. 2023
Revenue of $4,246.1 million decreased $240.7 million, or approximately 5 percent versus the prior year period. Volume improved as the year progressed and resulted in a 3 percent increase in revenue year over year. Price and foreign currency impacts were headwinds during the period of 6 percent and 2 percent, respectively. Higher volume was driven by the Company’s growth portfolio, and particularly the new active ingredients IsoflexTM and fluindapyr.
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2023 vs. 2022
Revenue of $4,486.8 million decreased $1,315.5 million, or approximately 23 percent versus the prior year period. The decrease was primarily driven by a 22 percent decrease from volumes, which were down across all four regions due to the channel destocking by growers and the distribution channel. The decrease in revenues was also due to an unfavorable foreign currency impact of approximately 1 percent.
See below for a discussion of revenue by region.
Total Revenue by Region
Year Ended December 31,
2024 vs. 2023
North America: Revenue decreased approximately 3 percent in the year ended December 31, 2024 due to a significant decline in volumes during the first quarter as a result of continued pressure from channel destocking behavior. Volume recovery as a result of improved inventory levels in the channel during the following quarters partially offset the decrease in the first quarter. Unfavorable pricing actions also contributed to the decrease in the revenue during the period. Strong growth in fungicides, particularly from flutriafol and fluindapyr products, positively impacted sales in the region.
Latin America: Revenue decreased approximately 1 percent for the year ended December 31, 2024 compared to the prior year period. Organically, revenue increased approximately 5 percent driven by volume growth primarily related to branded diamides and Onsuva®, a fluindapyr-based fungicide. The volume growth was partially offset by unfavorable impacts from pricing actions, primarily in Brazil, during the period, which were caused by competitive pressure as demand returned as well as one-time customer incentives, offered primarily during the second quarter, aimed at addressing high cost inventory in the channel.
EMEA: Revenue decreased approximately 7 percent, or approximately 4 percent organically, versus the prior year period. Branded Cyazypyr® products contributed to volume growth in the region that partially offset the impact of registration removals and the rationalization of some lower margin products.
Asia: Revenue decreased approximately 14 percent, or approximately 12 percent organically, versus the prior year period caused by lower volumes, primarily due to ongoing destocking behavior, specifically in India. Pricing pressure caused by competitive pressure was an additional headwind in the region.
For 2025, full-year revenue is expected to be in the range of approximately $4.15 billion to $4.35 billion, which is essentially flat at the midpoint versus 2024 and an increase of 3 percent excluding the impact of approximately $110 million in sales from the prior year due to the divestiture of the GSS business.
2023 vs. 2022
North America: Revenue decreased approximately 16 percent in the year ended December 31, 2023. The significant decrease in volumes period over period was due to the channel destocking by growers and the distribution channel. The decrease in volumes was partially offset by improved product mix in the region due to new branded products launched within the last five years as well as positive pricing actions.
Latin America: Revenue decreased approximately 33 percent, or approximately 35 percent organically, for the year ended December 31, 2023 compared to the prior year period driven primarily by the pressure on volumes due to channel destocking as well as drought conditions in Brazil. Additionally, pricing actions were a headwind during the period. The decreases in volumes and pricing were partially offset by positive FX movements during the period. During the fourth quarter, we successfully launched Premio® Star insecticide in Brazil contributing to branded diamide sales in Latin America.
EMEA: Revenue decreased approximately 14 percent, or approximately 10 percent organically, versus the prior year period as a result of the decline in volumes due to a channel destocking as well as adverse weather conditions in the region partially offset by positive pricing actions and strong diamides sales in the region.
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Asia: Revenue decreased approximately 21 percent, or approximately 16 percent organically, versus the prior year period caused by channel destocking during the period resulting in a decline in volumes during the period. FX continued to be a headwind in the region.
Gross margin
2024 vs. 2023
Gross margin of $1,648.9 million decreased by $182.1 million, or approximately 10 percent versus the prior year period resulting from a 13 percent decrease due to lower pricing in all regions due to competitive pressure as demand returned. The decrease in price was partially offset by a 2 percent increase due to positive input cost improvement and a 1 percent increase from volume growth. Gross margin percent of approximately 38.8 percent slightly decreased from approximately 40.8 percent in the prior year period driven by higher unabsorbed fixed costs as well as registration removals during the period.
2023 vs. 2022
Gross margin of $1,831.0 million decreased by $495.8 million, or approximately 21 percent versus the prior year period resulting from a 29 percent decrease in volumes caused by a significant channel destocking partially offset by a 10 percent increase due to positive input cost improvement. Unfavorable foreign currency impacts of 2 percent also contributed to the decline in gross margin during the period. Gross margin percent of approximately 40.8 percent remained consistent with gross margin percent of 40.1 percent in the prior year period.
Selling, general and administrative expenses
2024 vs. 2023
Selling, general and administrative expenses of $644.6 million decreased by $89.7 million, or approximately 12 percent versus the prior year period. The decrease in selling, general and administrative expenses is primarily due to cost reduction measures implemented in connection with our Project Focus initiative as well as operating cost mitigation actions in effect since last year due to lower business performance.
2023 vs. 2022
Selling, general and administrative expenses of $734.3 million decreased by $40.9 million, or approximately 5 percent versus the prior year period. The decrease in selling, general and administrative expenses is a result of the operating cost mitigation actions we undertook beginning in the latter half second quarter in response to the volume pressures.
Research and development expenses
2024 vs. 2023
Research and development expenses of $278.0 million decreased by $50.8 million, or approximately 15 percent versus the prior year period. The decrease in research and development costs is a result of cost reduction efforts related to Project Focus. Reductions in research and development spending were done without sacrificing investments in areas such as Plant Health and our new active ingredient pipeline.
2023 vs. 2022
Research and development expenses of $328.8 million increased by $14.6 million, or approximately 5 percent versus the prior year period. The increase in research and development expenditures is related to continued investment in our new active ingredient pipeline, including our recently acquired pheromones business, as well as inflation and labor cost increases. However, inflation conditions improved in the second half of the year indicating the peak of inflationary headwinds.
Other Results of Operations
Depreciation and amortization
2024 vs. 2023
Depreciation and amortization of $176.3 million decreased $8.0 million, or approximately 4 percent, as compared to 2023 of $184.3 million. The decrease was the result of the write off of certain amortizable assets in the first half of 2024 as part of our Project Focus restructuring initiative.
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2023 vs. 2022
Depreciation and amortization of $184.3 million increased $14.9 million, or approximately 9 percent, as compared to 2022 of $169.4 million. The increase was driven by additional assets placed into service during 2023 and accelerated depreciation associated with certain assets at one of our research facilities.
Interest expense, net
2024 vs. 2023
Interest expense, net of $235.8 million decreased by $1.4 million, or approximately 1 percent, compared to $237.2 million in 2023 primarily driven by lower debt balances and rates. Specifically, lower foreign balances and rates resulted in a decrease in interest expense of approximately $6.5 million. The decrease in interest expense was partially offset by an increase of approximately $5.1 million due to higher domestic short-term interest rates.
2023 vs. 2022
Interest expense, net of $237.2 million increased by $85.4 million, or approximately 56 percent, compared to $151.8 million in 2022. The increase was primarily driven by higher interest rates and, to a lesser extent, higher debt balances. Specifically, higher domestic interest rates increased interest expense by approximately $63 million and higher domestic short-term balances increased interest expense by approximately $18 million during the period. Higher foreign interest rates and debt balances also contributed to the increase by approximately $7 million.
Corporate special charges (income)
Restructuring and other charges (income)
Our restructuring and other charges (income) are comprised of restructuring, assets disposals and other charges (income) as described below:
Year Ended December 31,
Total restructuring and other charges (income) (1) $ 219.8 $ 212.3 $ 93.1
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(1) See Note 7 to the consolidated financial statements included in this Form 10-K for more information.
2024
Restructuring and other charges (income) primarily includes restructuring charges incurred in connection with the Project Focus initiative. For the year ended December 31, 2024, we incurred $132.1 million of contract abandonment charges as a result of the continued evaluation of our supply chain footprint during the fourth quarter of 2024 and $53.3 million of non-cash asset write off charges resulting from the contract cessation with one of our third-party manufacturers during the second quarter of 2024. The decision to exit these agreements was driven in part by our ability to source these materials from lower cost locations. Charges incurred in connection with Project Focus also consist of $55.8 million in severance and employee separation charges, including costs associated with the CEO transition, $31.0 million of professional service provider costs and other miscellaneous charges associated with the project, accelerated depreciation of $20.5 million on assets identified for disposal in connection with the restructuring initiative, and $13.2 million of asset impairment charges.
In connection with Project Focus, the Company expects to incur pre-tax restructuring charges in the range of approximately $375 million to $425 million, inclusive of charges incurred during 2024 as well as $45.5 million of charges incurred in 2023. The estimate for total Project Focus charges, which is subject to future changes, includes severance and related benefit costs in the range of $90 to $100 million, asset write-off and contract abandonment charges of approximately $250 to $270 million, and other costs of $35 to $55 million. We have implemented substantially all the activities associated with the plan and expect the plan to be complete by the end of 2025. However, we may incur additional asset write-off charges and other exit and disposal costs should additional activities be implemented under the restructuring program. The remaining amounts will be reflected in our consolidated results of operations as they become probable and estimable or a triggering event is identified in accordance with the relevant accounting guidance.
During the year ended December 31, 2024, we also recognized income of $2.9 million related to previously implemented restructuring initiatives including a $3.1 million gain recognized on the disposition of a previously closed manufacturing site.
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Other charges (income) of $(83.2) million is comprised of a gain, net of full year incurred transaction costs, of $174.4 million from the sale of our GSS business, which was completed on November 1, 2024. The divestiture of GSS, which includes a line of products that serve a diverse mix of non-crop markets such as golf courses, professional sports stadiums and pest control, is a key step in FMC's strategic plan to focus solely on innovating products and services for the global crop protection market. The gain from the GSS sale was partially offset by $74.7 million of charges associated with our environmental sites and $16.5 million of other miscellaneous charges.
2023
Restructuring and other charges (income) includes $40.1 million of severance and employee separation costs and $5.4 million of provider costs associated with the Project Focus restructuring initiative. Other restructuring costs of $8.7 million relate to employee separation and asset impairment costs incurred as part of various ongoing initiatives. These restructuring charges were offset by a $5.8 million gain recognized on the disposition of land related to a previously closed manufacturing facility.
Other charges (income) of $163.9 million is comprised of $75.2 million in currency related charges driven by significant devaluation actions taken by the Argentine Government during the fourth quarter of 2023 as well as similar devaluation actions in Pakistan and Argentina during previous quarts of 2023. Other charges (income) also includes $13.0 million in charges primarily resulting from the third quarter acquisition of in-process research and development assets that do not meet the criteria for capitalization. We also incurred $66.9 million in environmental charges associated with remediation and other miscellaneous charges of $8.8 million.
2022
Restructuring and other charges (income) is primarily comprised of a gain of $50.5 million recognized on the disposition of land related to a closed manufacturing facility. Restructuring and other charges (income) is also comprised of charges 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 disclosed in previous periods.
Other charges (income) is primarily comprised of $76.8 million in exit charges related to our decision to cease operations and business in Russia. Additional charges of $42.4 million relate primarily to environmental charges, which were impacted by higher inflation rates.
Non-operating pension and postretirement charges (income)
2024 vs. 2023
Charges for each of the years ended December 31, 2024 and 2023 were $18.2 million.
2023 vs. 2022
The charge for 2023 was $18.2 million compared to $8.6 million in 2022. Higher interest rates during the period resulted in an increase to interest costs for pension and other postretirement benefits.
Provision (benefit) for income taxes
In 2024, we recognized an income tax benefit of $150.9 million, which resulted in an effective tax rate of negative 59.8 percent. For the year ended December 31, 2023, we recorded an income tax benefit of $1,119.3 million resulting in an effective tax rate of negative 372.9 percent. Income tax provision for 2022 was $145.2 million resulting in an effective tax rate of 14.8 percent. Note 11 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.
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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.
Year Ended December 31,
Net impact of Switzerland tax incentives (1) — 153.9 — 830.8 — —
Foreign currency and other discrete items (1) — 12.0 — 113.1 — 5.3
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(1)Refer to note 3 of the Adjusted Earnings Reconciliation table within this section of this Form 10-K for an explanation of tax adjustments.
The primary drivers for the fluctuations in the effective tax rate for each period are provided in the table above.
During the three months ended December 31, 2023, the Company’s Swiss subsidiaries were granted ten-year tax incentives effective for 2023 and retroactively for 2021 and 2022. The tax incentives were awarded for the Company’s commitment to invest in additional headcount and transfer significant intellectual property as well as establishing a new global technology and innovation center in Switzerland. Deferred tax benefits of $1,149 million and related valuation allowances of $318 million were recorded during the three months ended December 31, 2023 to reflect the net estimated future reductions in tax of $831 million associated with the incentives.
In connection with our plans to establish a global technology and innovation center in Switzerland, we initiated changes to our corporate entity structure, including intra-entity transfers of certain intellectual property, during the second quarter of 2024. As a result, we recorded a net tax benefit of approximately $300 million. This benefit, net of valuation allowance, was primarily a result of the recognition of a step-up in tax basis to the fair value of the transferred intellectual property by one of the Company’s Swiss subsidiaries. In addition, local tax impacts associated with the disposition of the transferred intellectual property were recorded as well as an increase in our valuation allowance associated with Swiss nonrefundable tax credits as a result of indirect effects of the transferred intellectual property. During the fourth quarter of 2024, the Company recorded additional valuation allowances of approximately $120 million as a result of updated projections of future earnings associated with the 2023 deferred tax benefits noted above.
Historically, FMC’s Brazil valuation allowance position was based on long-standing local transfer pricing rules, as well as certain material favorable permanent statutory tax deductions available to FMC Brazil as part of local tax law. During the three months ended December 31, 2023, the Company released its FMC Brazil valuation allowance and recorded a tax benefit of approximately $223 million as a result of the Brazilian Government enacting a new tax law that significantly limits FMC Brazil’s ability to benefit in the future from the material favorable permanent statutory tax deductions previously available as part of local tax law.
Excluding the items in the table above, changes in the non-GAAP effective tax rate were primarily due to the impact of geographic mix of earnings among our global subsidiaries. See Note 11 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.
Discontinued operations, net of income taxes
Our discontinued operations primarily reflect adjustments to retained liabilities from previously discontinued operations and include environmental liabilities, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities. See Note 9 to the consolidated financial statements included within this Form 10-K for additional details on our discontinued operations.
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2024 vs. 2023
Discontinued operations, net of income taxes represented a loss of $61.8 million in 2024 compared to a loss of $98.5 million in 2023. The loss during both periods was primarily due to adjustments related to the retained liabilities from our previously discontinued operations. The twelve months ended December 31, 2024 includes an offsetting gain of $18.0 million recognized as the result of an insurance settlement for retained legal reserves.
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. The loss during both periods was primarily due to adjustments related to the retained liabilities from our previously discontinued operations.
Net income (loss)
2024 vs. 2023
Net income decreased to $341.6 million from $1,321.0 million primarily as a result of a decrease of $968.4 million to our benefit for income taxes. We recorded significant one-time tax benefits in the prior year related to tax incentives granted to our Swiss subsidiaries as discussed above. In the fourth quarter of 2024, we recorded higher valuation allowances on these tax benefits. In 2024, we also recorded a $300 million income tax benefit in connection with the changes to our corporate entity structure made as part of establishing our global technology and innovation center in Switzerland. Additionally, lower gross margin, as discussed above, negatively impacted our results for the period. The change in our gross margin and benefit for income taxes was partially offset by a gain of $18.0 million in discontinued operations during the second quarter as the result of an insurance settlement for retained legal reserves. Our research and development expenses and our selling, general, and administrative expenses were also lower as a result of cost containment.
The only difference between Net income (loss) and Net income (loss) attributable to FMC stockholders is noncontrolling interest.
2023 vs. 2022
Net income increased to $1,321.0 million from $741.5 million. Results in the current year period were higher than the prior year period primarily as a result of a decrease to our provision for income taxes of $1,264.5 million resulting in an income tax benefit for the year. During the fourth quarter, we recognized significant one-time tax benefits related to new tax incentives granted to the Company's Swiss subsidiaries. In addition, we released our FMC Brazil valuation allowance as a result of new tax laws enacted in the country, resulting in the recognition of additional tax benefit. The increase in the benefit for income taxes was partially offset by the unprecedented decline in volumes as the distribution channel focused on channel destocking significantly decreasing our revenues and gross margin as discussed above. Additionally, an increase in interest expense of $85.4 million, primarily driven by higher interest rates, also offset the increase in net income as well as higher restructuring and other charges.
Adjusted EBITDA (Non-GAAP)
2024 vs. 2023
Adjusted EBITDA of $902.6 million decreased $75.4 million, or approximately 8 percent versus the prior year period. Cost as well as volume improvement of approximately 14 percent and 1 percent, respectively, were fully offset by unfavorable pricing impacts of approximately 25 percent. Favorable foreign currency impacts of approximately 2 percent also increased adjusted EBITDA.
2023 vs. 2022
Adjusted EBITDA of $978.0 million decreased $428.8 million, or approximately 30 percent versus the prior year period. The decrease was due to lower volumes impacting adjusted EBITDA by 48 percent as well as unfavorable foreign currency impacts of approximately 2 percent. The decrease was partially offset by cost and price movements, which both increased adjusted EBITDA by approximately 18 percent and 2 percent, respectively.
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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. We plan to meet these liquidity needs through available cash, cash generated from operations, commercial paper issuances and borrowings under our committed revolving credit facility as well as other liquidity facilities, and in certain instances access to debt capital markets. We believe our solid 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, 2024 and 2023, were $357.3 million and $302.4 million, respectively. Of the cash and cash equivalents balance at December 31, 2024, $348.9 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. See Note 11 to the consolidated financial statements included within this Form 10-K for more information on our indefinite reinvestment assertion.
Outstanding debt
At December 31, 2024, we had total debt of $3,365.3 million as compared to $3,957.6 million at December 31, 2023. Total debt included $3,027.9 million and $3,023.6 million of long-term debt (excluding current portions of $76.1 million and $96.5 million) at December 31, 2024 and 2023, respectively. Our short-term debt consists of foreign borrowings and borrowings under our commercial paper program. Foreign borrowings increased from $98.0 million at December 31, 2023 to $135.7 million at December 31, 2024 while outstanding commercial paper decreased from $739.5 million at December 31, 2023 to $125.6 million at December 31, 2024. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries.
As of December 31, 2024, we were in compliance with all of our debt covenants. In February 2025, we entered into new amendments to our Revolving Credit Facility to amend the maximum leverage and minimum interest coverage ratios and to extend the maturity date of the facility to 2028. See Note 12 to the consolidated financial statements included within this Form 10-K for further details. We remain committed to solid investment grade credit metrics.
Our total debt maturities, excluding discounts, is $3,387.4 million at December 31, 2024, with $337.4 million payable in the next 12 months. As of December 31, 2024, we had contractual interest obligations of $1,872.3 million outstanding, with $144.9 million payable in the next 12 months. Contractual interest is the interest we are contracted to pay on our long-term debt obligations. We do not have any long-term debt subject to variable interest rates at December 31, 2024.
Access to credit and future liquidity and funding needs
At December 31, 2024, our remaining borrowing capacity under our credit facility was $1,664.3 million. Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. At December 31, 2024, we had $125.6 million borrowings outstanding under the commercial paper program at an average borrowing rate of 5 percent. Our commercial paper balances fluctuate from year to year depending on working capital needs. 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.
Working Capital Initiatives
We offer to a select group of suppliers a voluntary supply chain finance program as part of our continued efforts to improve our working capital efficiency. We do not believe that changes in the availability of the supply chain finance program would have a significant impact on our liquidity. See Note 2 for more information on the key terms and balances of the program.
From time to time, the Company may sell receivables on a non-recourse basis to third-party financial institutions. These sales are normally driven by specific market conditions, including, but not limited to, foreign exchange environments, customer credit management, as well as other factors where the receivables may lay. See Note 8 for more information on receivables factoring.
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Commitments
We provide guarantees to financial institutions on behalf of certain customers, principally customers in Brazil for their seasonal borrowing. The total of these guarantees was $157.9 million at December 31, 2024. These guarantees arise during the ordinary course of business from relationships with customers and nonconsolidated affiliates. Non-performance by the guaranteed party triggers the obligation requiring us to make payments to the beneficiary of the guarantee. Based on our experience these types of guarantees have not had a material effect on our consolidated financial position or on our liquidity. Our expectation is that future payment or performance related to the non-performance of others is considered unlikely.
In connection with certain of our property and asset sales and divestitures, we have agreed to indemnify the buyer for certain liabilities, including environmental contamination and taxes that occurred prior to the date of sale. Our indemnification obligations with respect to these liabilities may be indefinite as to duration and may or may not be subject to a deductible, minimum claim amount or cap. In cases where it is not possible for us to predict the likelihood that a claim will be made or to make a reasonable estimate of the maximum potential loss or range of loss, no specific liability has been recorded. If triggered, we may be able to recover certain of the indemnity payments from third parties. In cases where it is possible, we have recorded a specific liability within our Reserve for Discontinued Operations. Refer to Note 9 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, 2024, the liability for uncertain tax positions was $58.3 million. 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 2025. We believe any liability arising from potential environmental obligations is not likely to have a material adverse effect on our liquidity or financial condition as it may be satisfied over many years. See our discussion under 2025 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 2025.
Derivatives
At times we can be in a derivative liability position that can require future cash obligations. However, as of December 31, 2024, we had no such obligations.
Leases
We have lease arrangements for equipment and facilities, including office spaces, IT equipment, transportation equipment, and machinery equipment. As of December 31, 2024, we had fixed lease payment obligations of $152.7 million, with $29.8 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. 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 31, 2024, our purchase obligations were $288.1 million, with $90.1 million payable in the first 12 months. The majority of the minimum obligations under these contracts are take-or-pay commitments over the life of the contract and not a year by year take-or-pay, and as such, the obligations related to these types of contacts are presented in the earliest period in which the minimum obligation could be payable under these types of contracts.
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Statement of Cash Flows
Cash provided (required) by operating activities was $736.7 million, $(300.3) million and $660.0 million for 2024, 2023 and 2022, respectively.
The table below presents the components of net cash provided (required) by operating activities of continuing operations.
(in Millions) Year ended December 31,
Change in guarantees of vendor financing 15.9 (72.4) (64.2)
Change in advance payments from customers (2) (26.5) (199.1) 52.1
Change in accrued customer rebates (3) 30.7 16.0 69.6
Change in all other operating assets and liabilities (6) 74.7 (13.7) (10.3)
Restructuring and other spending (7) (130.0) (30.3) (35.2)
Environmental spending, continuing, net of recoveries (8) (35.4) (34.5) (26.9)
Pension and other postretirement benefit contributions (9) (5.5) (2.4) (4.5)
Transaction and integration costs (12) — — (0.5)
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(1)The change in trade receivables in all periods include the impacts of seasonality and the receivable build intrinsic in our business. The change in cash flows related to trade receivables in 2024 was driven by timing of collections, due in part, to sales growth during the second half of the year compared to the same period in 2023. Collection timing is more pronounced in certain countries such as Brazil where there may be terms significantly longer than the rest of our business. Additionally, timing of collection is impacted as amounts for all periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks. During 2024, we collected approximately $474.8 million of receivables in Brazil.
(2)Advance payments are typically received in the fourth quarter of each year, primarily in our North America operations as revenue associated with advance payments is recognized, generally in the first half of each year following the seasonality of that business, as shipments are made and title, ownership and risk of loss pass to the customer. The change in 2024 was driven by higher advance payments received during 2024 compared to the same period in 2023 offset by the higher application of those advances against current period sales. The change in 2023 was related to lower advance payments received during the year compared to the prior year. The change in 2022 was related to higher overall payments received primarily due to strong North America seasons in both years.
(3)These rebates are primarily associated within North America, and to a lesser extent Brazil, and in North America generally settle in the fourth quarter of each year given the end of the respective crop cycle. The changes year over year are mostly associated with the mix in sales eligible for rebates and incentives as well as timing of certain rebate payments.
(4)The changes in inventory during 2024 reflect the lower inventory build required following the lower sales volume in 2023 resulting from the channel destocking. Higher sales during the second half of 2024 contributed to the decrease in inventories. The change in cash flows during 2023 is the result of lower than expected sales volume during the period. The change in cash flows during 2022 reflects the inventory build required to meet forecasted business demand.
(5)The change in cash flows related to accounts payable in 2024 was driven by the timing of payments to suppliers and vendors following a period of reducing spending in the prior period. The change in cash flows related to accounts payable in 2023 is primarily due to lower raw material inventory purchases due to the decline in demand and, to a lesser extent, the timing of payments made to suppliers and vendors. The change in accounts payable in 2022 is primarily due to timing of payments made to suppliers and vendors as well as the impact of cost inflation. As of December 31, 2024, approximately 99 percent of our accounts payable balance was considered current, which we define as outstanding less than 30 days past the invoice due date. In accordance with our standard terms, invoices are held for payment when there is an open dispute with the vendor. The remaining balance of accounts payable primarily consists of invoices that meet this criteria.
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(6)Changes in all periods presented primarily represent timing of payments associated with all other operating assets and liabilities. Additionally, the 2022 period includes the effects of the unfavorable contracts amortization of approximately $82 million. The contract expired during the fourth quarter of 2022.
(7)See Note 7 to the consolidated financial statements included within this Form 10-K for further details.
(8)In addition to the environmental cash spend presented in the table above, our results for each of the years presented also include environmental charges for environmental remediation of $74.7 million, $66.9 million and $34.7 million, respectively. 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. The amounts recorded against pre-existing reserves in 2024 will be spent in future years.
(9)There were no voluntary contributions to our U.S. qualified defined benefit plan, which is slightly over funded, in 2024, 2023 and 2022.
(10)Interest payments were consistent in 2024 as compared to 2023. Interest payments were higher during 2023 compared to 2022 largely due to the timing of interest payments as well as higher commercial paper rates.
(11)Amounts shown in the chart represent net tax payments of our continuing operations across various jurisdictions.
(12)Represents payments for legal and professional fees associated with integrating the DuPont Crop Protection Business. The integration is complete and the 2022 payments are associated with settlement of final amounts payable.
Cash provided (required) by operating activities of discontinued operations was $(65.6) million, $(86.1) million and $(77.6) million for 2024, 2023 and 2022, respectively.
Cash required by operating activities of discontinued operations in 2024 is directly related to environmental spending of $52.1 million as well as $13.5 million for other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings, collectively. 2023 and 2022 spending were of a similar nature. Discontinued operations for 2024 also includes cash proceeds, net of fees of $18.0 million received as the result of an insurance settlement for retained legal reserves. Additionally, during 2023, we paid $16.5 million for a portion of settlement amount related to one of our discontinued foreign environmental remediation sites and the remaining payment of $11.3 million was paid in 2024.
Cash provided (required) by investing activities of continuing operations was $263.6 million, $(154.4) million and $(266.4) million for 2024, 2023 and 2022, respectively.
Cash provided by investing activities of continuing operations for 2024 is primarily the result of the sale of our GSS business, which was completed on November 1, 2024. We received proceeds, net of the preliminary working capital adjustment, of approximately $340 million in connection with the completion of the sale. The proceeds from the GSS sale were partially offset by capital expenditures, which were lower than the prior year as we continue to constrain investment to only the most critical, high-return projects.
Cash required for 2023 is primarily due to capital expenditures for increased capacity, and to a lesser extent, acquisition related spending associated with the acquired IPR&D assets completed during the third quarter of 2023.
Cash required for 2022 is primarily related to capital expenditures needed for increased capacity, as well the consideration paid for the BioPhero acquisition. 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 provided (required) by financing activities was $(870.1) million, $331.5 million and $(237.4) million in 2024, 2023 and 2022, respectively.
The change in cash provided by financing activities in 2024 is primarily due to lower commercial paper borrowings during the period as well as the absence of the net impact of the 2023 bond issuance and repayment of the 2021 term loan. The proceeds from the GSS sale were used to pay down outstanding debt. There were no share repurchases during 2024 under the publicly announced program.
The change in cash provided by financing activities in 2023 is primarily due to higher commercial paper balances and an increase in short term foreign borrowings as well as the proceeds from the Senior Notes. 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.
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.
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Free Cash Flow