Chairman's - FMC Corporation

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value exceeds the estimated fair value of assets, which is based on discounted cash flows at the lowest level determinable. The estimated cash flows reflect our assumptions about selling prices, volumes, costs and market conditions over a reasonable period of time. We perform an annual impairment test of goodwill in the third quarter. The assumptions used to estimate fair value include our best estimate of future growth rates, discount rates and market conditions over a reasonable period. We performed this test in 2009 and determined that no impairment charge was required. Pensions and other postretirement benefits We provide qualified and nonqualified defined benefit and defined contribution pension plans, as well as postretirement health care and life insurance benefit plans to our employees. The costs (benefits) and obligations related to these benefits reflect key assumptions related to general economic conditions, including interest (discount) rates, healthcare cost trend rates, expected rates of return on plan assets and the rates of compensation increases for employees. The costs (benefits) and obligations for these benefit programs are also affected by other assumptions, such as average retirement age, mortality, employee turnover, and plan participation. To the extent our plans’ actual experience, as influenced by changing economic and financial market conditions or by changes to our own plans’ demographics, differs from these assumptions, the costs and obligations for providing these benefits, as well as the plans’ funding requirements, could increase or decrease. When actual results differ from our assumptions, the difference is typically recognized over future periods. In addition, the unrealized gains and losses related to our pension and postretirement benefit obligations may also affect periodic benefit costs (benefits) in future periods. We use certain calculated values of assets under methods both to estimate the expected rate of return on assets component of pension cost and to calculate our plans’ funding requirements. The expected rate of return on plan assets is based on a market-related value of assets that recognizes investment gains and losses over a five-year period. We use an actuarial value of assets to determine our plans’ funding requirements. The actuarial value of assets must be within a certain range, high or low, of the actual market value of assets, and is adjusted accordingly. We select the discount rate used to calculate pension and other postretirement obligations based on a review of available yields on high-quality corporate bonds, including Moody’s Investors Service, Inc. (“Moody’s”) Aa-rated Corporate and Industrial bond indices. In selecting the discount rate for 2009, we placed particular emphasis on a yield-curve approach designed by our actuary to derive an appropriate discount rate for computing the present value of the future cash flows associated with our pension and other postretirement obligations taking into consideration both the timing and amount of the cash flows. The specific interest rates supporting the yield curve were derived from calculated returns (yields) from a portfolio of high-quality (Aa-graded or higher) bond investments constructed by our actuary. In developing the assumption for the long-term rate of return on assets for our U.S. Plan, we take into consideration the technical analysis performed by our outside actuaries, including historical market returns, information on the assumption for long-term real returns by asset class, inflation assumptions, and expectations for standard deviation related to these best estimates. We also consider the historical performance of our own plan’s trust, which has earned a compound annual rate of return of approximately 9.71 percent over the last 20 years (which is in excess of comparable market indices for the same period) as well as other factors which are discussed in Note 13 to our consolidated financial statements in this Form 10-K. For the sensitivity of our pension costs to incremental changes in assumptions see our discussion below. 50
Sensitivity analysis related to key pension and postretirement benefit assumptions. A one-half percent increase in the assumed discount rate would have decreased pension and other postretirement benefit obligations by $54.7 million at December 31, 2009 and $45.4 million at December 31, 2008, and decreased pension and other postretirement benefit costs by $3.1 million, $0.5 million and $3.7 million for 2009, 2008 and 2007, respectively. A one-half percent decrease in the assumed discount rate would have increased pension and other postretirement benefit obligations by $59.9 million at December 31, 2009 and $49.7 million at December 31, 2008, and increased pension and other postretirement benefit net periodic benefit cost by $4.5million, $0.5 million and $6.1 million for 2009, 2008 and 2007, respectively. A one-half percent increase in the assumed expected long-term rate of return on plan assets would have decreased pension costs by $4.2 million, $4.2 million and $4.0 million for 2009, 2008 and 2007, respectively. A one-half percent decrease in the assumed long-term rate of return on plan assets would have increased pension costs by $4.2 million, $4.2 million and $4.0 million for 2009, 2008 and 2007, respectively. Further details on our pension and other postretirement benefit obligations and net periodic benefit costs (benefits) are found in Note 13 to our consolidated financial statements in this Form 10-K. Income taxes We have recorded a valuation allowance to reduce deferred tax assets to the amount that we believe is more likely than not to be realized. In assessing the need for this allowance, we have considered a number of factors including future taxable income, the jurisdictions in which such income is earned and our ongoing tax planning strategies. In the event that we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. Similarly, should we conclude that we would be able to realize certain deferred tax assets in the future in excess of the net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. Additionally, we file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The income tax returns for <strong>FMC</strong> entities taxable in the U.S. and significant foreign jurisdictions are open for examination and adjustment. We assess our income tax positions and record a liability for all years open to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. We adjust these liabilities, if necessary, upon the completion of tax audits or changes in tax law. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Dividends On January 21, 2010, we paid dividends aggregating $9.1 million to our shareholders of record as of December 31, 2009. This amount is included in “Accrued and other liabilities” on the consolidated balance sheets as of December 31, 2009. For the years ended December 31, 2009, 2008 and 2007, we paid $36.3 million, $34.4 million and $29.7 million in dividends, respectively. 51
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Chairman’s LETTER Eight years ago
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from acquisitions made in 2008. Lit
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1000 800 600 400 Dollars in Million
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Dollars in Millions 800 700 600 500
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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 and 52: Segment Results Agricultural Produc
Page 53 and 54: Other Charges (Income), Net • Sol
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: Environmental obligations. We provi
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
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CFO CERTIFICATION OF ANNUAL REPORT
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Chairman's - FMC Corporation

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