Chairman's - FMC Corporation

Provision for income taxes
We recorded a provision of $125.4 million in 2008 compared with a provision of $29.0 million in 2007
resulting in effective tax rates of 26.6 percent and 14.8 percent, respectively. The change in the effective tax rate
is primarily a result of a change in the mix of domestic income compared to income earned outside the U.S. The
mix of domestic income was impacted by significantly lower Baltimore restructuring charges incurred during
2008 compared to 2007. The effective tax rates were also impacted by tax adjustments recorded during 2008 and
2007. These tax adjustments are described below.
2008 tax adjustments were favorable in the amount of $8.7 million and primarily result from a benefit to
adjust our reserve for unrecognized tax benefits due to favorable settlements of tax audits. Partially offsetting this
benefit are charges associated with adjustments for prior years’ tax matters.
2007 tax adjustments were favorable in the amount of $15.4 million and primarily include tax benefits
related to the reversal of certain tax valuation allowances. These valuation allowances were no longer necessary
because of our expectation that the related deferred tax assets were likely to be realized. Partially offsetting these
valuation adjustments were charges associated with adjustments for prior years’ tax matters.
Discontinued operations, net of income tax
Discontinued operations, net of income tax totaled a loss of $24.9 million in 2008 versus a loss of $24.3
million in 2007. The 2008 loss is primarily related to environmental charges associated with our Front Royal and
Middleport sites and charges for legal reserves and expenses related to discontinued operations. The 2007 loss is
primarily related to environmental charges associated with our Middleport, Front Royal and Modesto sites and
charges for legal reserves and expenses related to discontinued operations.
Net income attributable to FMC stockholders
Net income attributable to FMC stockholders increased to $304.6 million in 2008 compared with $132.4
million in 2007 primarily due to higher profits in all three of our segments and significantly reduced restructuring
and other charges (income).
Liquidity and Capital Resources
Cash and cash equivalents at December 31, 2009 and 2008 were $76.6 million and $52.4 million,
respectively. We had total debt of $643.9 million and $623.6 million at December 31, 2009 and 2008,
respectively. This included $588.0 million and $592.9 million of long-term debt (excluding current portions of
$22.5 million and $2.1 million) at December 31, 2009 and 2008, respectively. The $15.5 million increase in total
long-term debt at December 31, 2009 from December 31, 2008 was primarily due to the proceeds from the 2009
senior notes offering partially offset by the full pay down of existing indebtedness under our revolving credit
agreements. Short-term debt, which consists of foreign borrowings, increased to $33.4 million at December 31,
2009 compared to $28.6 million at December 31, 2008.
2009 Senior Notes Offering
On November 30, 2009, we issued $300 million aggregate principal amount of 5.20% Senior Notes due
2019. The net proceeds from the offering were used to pay down existing indebtedness under our revolving credit
agreements and for general corporate purposes.
Domestic Credit Agreement
On August 28, 2007, we executed a credit agreement (the “Domestic Credit Agreement”) which provided
for a five-year, $600 million revolving credit facility. The proceeds from this facility are available for general
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