Chairman's - FMC Corporation

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31 percent due mainly to higher pricing for phosphates, the effect of a stronger euro and improved electricity selling prices. Foret operates electricity cogeneration facilities and sells excess electricity into the Spanish electrical grid. Segment operating profit of $201.4 million was 118 percent higher than the prior period. Higher pricing in Alkali and Foret more than offset the increase in raw materials, particularly for phosphate rock for the segment of $54.6 million period over period. Other Results of Operations Corporate Expenses We recorded charges of $49.8 million in 2008 compared to $52.3 million in 2007. The decrease was primarily due to reduced legal costs associated with the legal settlement with Solutia that occurred in 2007. Corporate expenses are included as a component of the line item “Selling, general and administrative expenses” on our consolidated statements of income. Other income (expense), net Other income (expense), net is comprised primarily of LIFO inventory adjustments and pension expense. Other expense was $8.6 million in 2008 compared to $12.0 million in expense in 2007. This decrease was primarily due to the mark to market impact of our deferred compensation liability, reduced incentive accruals, lower pension expense partially offset by a charge related to LIFO inventory reserves. Other income (expense), net is included as a component of the line item “Costs of sales and services” on our consolidated statements of income. Interest Expense, net The 2008 amount decreased to $31.9 million compared to $34.9 million in 2007 primarily due to the replacement of high-interest fixed-rate U.S. debt with lower interest floating-rate U.S. debt. Corporate special income (charges) Restructuring and other charges (income) were $49.6 million in 2008 compared to $164.9 million in 2007. Refer to page 35 for a list of the charges in this category for the year ended December 31, 2008. The restructuring and other charges (income) of $164.9 million recorded in 2007 were a result of the following: Restructuring Charges and Asset Impairments • Charges totaling $104.9 million for our phase-out of the Agricultural Products chemical facility in Baltimore, Maryland in our Agricultural Products segment. These charges consisted of (i) plant and equipment impairment charges and accelerated depreciation on fixed assets of $98.7 million and (ii) severance and employee benefits of $6.2 million. • Asset abandonment charges of $12.2 million at Foret which is part of our Industrial Chemicals business. These charges include an impairment charge of $8.2 million related to a co-generation facility at Foret. This facility produced electric power and thermal energy by co-generation for use at one of Foret’s production properties. Additionally, we abandoned certain fixed assets also at Foret and recorded impairment charges of $4.0 million. • $6.8 million of severance costs, of which $5.6 million related to our Industrial Chemicals segment and $1.2 million related to our Agricultural Products segment. • $1.1 million of asset abandonment charges in our Industrial Chemicals segment. 38
Other Charges (Income), Net • Solutia legal settlement of $22.5 million in our Industrial Chemicals segment. This settlement was approved by the U.S. Bankruptcy Court in the Southern District of New York (where Solutia had filed for Chapter 11 bankruptcy protection in 2003) on May 1, 2007, without any appeal having been taken. • We recorded $1.8 million of charges related to an agreement to settle state court cases alleging violations of antitrust law involving our microcrystalline cellulose product (“MCC”) in our Specialty Chemicals segment. • $10.2 million relating to environmental remediation at operating sites as a Corporate charge. • A $2.0 million charge related to our Agricultural Products segment acquiring the original rights under a collaboration and license agreement with a third-party company for the purpose of obtaining certain technology and intellectual property rights as well as acquiring the rights from a third-party company to develop their proprietary fungicide. • $3.4 million of other charges primarily in our Industrial Chemicals and Specialty Chemicals segments. Impairment of Perorsa joint venture represents a $1.4 million charge related to the impairment of our Perorsa joint venture in our Industrial Chemicals segment. On the consolidated statements of income this charge is included in “Equity in (earnings) loss of affiliates” for the year ended December 31, 2008. There were no comparable charges in 2007. LIFO inventory correction adjustment represents a non-cash gain of $6.1 million related to an adjustment to our last in, first out (LIFO) inventory reserves as a result of a correction in determining our initial LIFO inventory base year. This gain was recorded to “Costs of sales and services” for the year ended December 31, 2007 in the consolidated statements of income. There were no comparable gains in 2008. Purchase accounting inventory fair value impact and other related inventory adjustments was a $2.3 million charge related to amortization of the inventory step-up resulting from purchase accounting associated with acquisitions that closed in the third quarter of 2008 in our Specialty Chemicals segment. On the consolidated statements of income, this charge is included in “Costs of sales and services” for the year ended December 31, 2008. There were no comparable charges in 2007. Gain from Astaris joint venture represents a gain of $0.4 million representing the difference between the carrying value of our remaining investment in the Astaris joint venture and cash received from the joint venture. This gain is included in “Equity in (earnings) of affiliates” in the consolidated statements of income for the year ended December 31, 2007. In 2005, Astaris sold substantially all of the assets of its businesses and the buyers also assumed certain of the liabilities of Astaris. There were no comparable gains in 2008. Noncontrolling interest associated with restructuring and other income (charges) represents $1.4 million associated with our decision to abandon a co-generation facility at Foret during the second quarter of 2007. This amount is shown in “Noncontrolling interests” on the consolidated statements of income for the year ended December 31, 2007. There were no comparable charges in 2008. Loss on extinguishment of debt We recorded a loss of $0.3 million for the year ended December 31, 2007, which represented losses related to the write off of certain deferred financing fees related to our previous credit agreement which was replaced in the third quarter of 2007 with our new Domestic Credit Agreement. These fees were previously a component of “Other assets” in our consolidated balance sheets. We did not incur any comparable charges for the year ended December 31, 2008. 39
Page 3 and 4: Chairman’s LETTER Eight years ago
Page 5 and 6: from acquisitions made in 2008. Lit
Page 7 and 8: 1000 800 600 400 Dollars in Million
Page 9 and 10: Dollars in Millions 800 700 600 500
Page 11 and 12: SEGMENT REVENUE AND OPERATING EARNI
Page 13 and 14: NON-GAAP RECONCILIATIONS Segment op
Page 15 and 16: UNITED STATES SECURITIES AND EXCHAN
Page 17 and 18: PART I FMC Corporation (FMC) was in
Page 19 and 20: energy storage markets to serve the
Page 21 and 22: The following table summarizes the
Page 23 and 24: Specialty Chemicals Financial Infor
Page 25 and 26: The following chart summarizes the
Page 27 and 28: Overview Our Industrial Chemicals s
Page 29 and 30: and percarbonates) also function as
Page 31 and 32: cellulose and seaweed extract as we
Page 33 and 34: • Changing regulatory environment
Page 35 and 36: ITEM 3. LEGAL PROCEEDINGS Like hund
Page 37 and 38: PART II ITEM 5. MARKET FOR THE REGI
Page 39 and 40: For the three and twelve months end
Page 41 and 42: Footnotes: (1) Discontinued operati
Page 43 and 44: driven by higher volumes in most re
Page 45 and 46: Revenue of $1,051.6 million was one
Page 47 and 48: Industrial Chemicals Revenue ......
Page 49 and 50: • $5.6 million of charges represe
Page 51: Segment Results Agricultural Produc
Page 55 and 56: corporate purposes, including issui
Page 57 and 58: Cash required by operating activiti
Page 59 and 60: indemnification obligations with re
Page 61 and 62: On January 19, 2009, the European C
Page 63 and 64: Environmental obligations. We provi
Page 65 and 66: Sensitivity analysis related to key
Page 67 and 68: Our debt portfolio, at December 31,
Page 69 and 70: FMC CORPORATION CONSOLIDATED STATEM
Page 75 and 76: FMC CORPORATION NOTES TO CONSOLIDAT
Page 83 and 84: NOTE 3: ACQUISITIONS 2009 Acquisiti
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FMC CORPORATION NOTES TO CONSOLIDAT
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MANAGEMENT’S ANNUAL REPORT ON INT
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FMC CORPORATION SCHEDULE II—VALUA
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ITEM 13. CERTAIN RELATIONSHIPS AND
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Exhibit No. Exhibit Description *10
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Exhibit No. Exhibit Description 23.
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Signature Title Date /S/ ROBERT C.
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COMPUTATION OF RATIO OF EARNINGS TO
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The Board of Directors FMC Corporat
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I, W. Kim Foster, certify that: CHI
Page 147:
CFO CERTIFICATION OF ANNUAL REPORT
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Chairman's - FMC Corporation

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