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<SEC-DOCUMENT>0000950131-01-500385.txt : 20010330
<SEC-HEADER>0000950131-01-500385.hdr.sgml : 20010330
ACCESSION NUMBER: 0000950131-01-500385
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 11
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010329
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FMC CORP
CENTRAL INDEX KEY: 0000037785
STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800]
IRS NUMBER: 940479804
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-02376
FILM NUMBER: 1584052
BUSINESS ADDRESS:
STREET 1: 200 E RANDOLPH DR
CITY: CHICAGO
STATE: IL
ZIP: 60601
BUSINESS PHONE: 3128616000
FORMER COMPANY:
FORMER CONFORMED NAME: BEAN SPRAY PUMP CO
DATE OF NAME CHANGE: 19670706
FORMER COMPANY:
FORMER CONFORMED NAME: FOOD MACHINERY & CHEMICAL CORP
DATE OF NAME CHANGE: 19670706
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>d10k405.txt
<DESCRIPTION>FORM 10-K405
<TEXT>
<PAGE>
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number 1-2376
FMC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-0479804
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive,
Chicago, Illinois 60601
- ------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 312/861-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------- -------------------
Common Stock, $0.10 par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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.
YES [X] NO [ ]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
<PAGE>
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [X]
THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF FEBRUARY 28, 2001, WAS $2,334,466,263. THE NUMBER OF SHARES OF
THE REGISTRANT'S COMMON STOCK, $0.10 PAR VALUE, OUTSTANDING AS OF THAT DATE WAS
30,819,000.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
DOCUMENT FORM 10-K REFERENCE
- -------- -------------------
Portions of 2000 Annual Report Part I, Item 1; Part
to Stockholders II; and Part IV, Items
14(a)(1) and (2)
Portions of Proxy Statement for Part III
2001 Annual Meeting of Stockholders
- --------------------------------------------------------------------------------
Page 2
<PAGE>
PART I
FMC Corporation was incorporated in 1928 under Delaware law and has its
principal executive offices at 200 East Randolph Drive, Chicago, Illinois 60601.
As used in this report, except where otherwise stated or indicated by the
context, "FMC", "the company" or "the Registrant" means FMC Corporation and its
consolidated subsidiaries and their predecessors.
The company is one of the world's leading producers of machinery and chemicals
for industry and agriculture. The company employs 14,802 people at 90
manufacturing facilities and mines in 25 countries.
The company operates in five principal industry segments: Energy Systems; Food
and Transportation Systems; Agricultural Products; Specialty Chemicals; and
Industrial Chemicals. Energy Systems provides subsea drilling and production
systems, floating production, surface drilling and production systems for
companies involved in the exploration and production of crude oil and natural
gas. Food and Transportation Systems provides technologically advanced handling
and processing systems to industrial companies. Agricultural Products supplies
crop protection and pest control chemicals for worldwide markets. Specialty
Chemicals develops and manufactures highly specialized chemical products used in
food, pharmaceutical and personal care products. Industrial Chemicals provides
commodity-based chemicals produced in large quantities for industrial consumers.
Business and geographic segment data for 2000, 1999 and 1998 are summarized in
Note 18 to the consolidated financial statements on pages 51 through 53 of the
2000 Annual Report to Stockholders, which is incorporated herein by reference.
ITEM 1. BUSINESS
Incorporated by Reference From:
(a) General Development - 2000 Annual Report to Stockholders, pages 2-4 and
of Business 59 (inside back cover), Management's Discussion and
Analysis on pages 20-30, and Notes 2 through 6 to
the consolidated financial statements on pages 38-41
(b) Financial Information - 2000 Annual Report to Stockholders, Note 18 to the
About Industry consolidated financial statements, pages 51-53
Segments
(c) Narrative Description - 2000 Annual Report to Stockholders, pages 16-19 and
of Business 20-30
Source and Availability of Raw Materials
- ----------------------------------------
FMC's raw material requirements vary by business segment and include mineral-
related natural resources, processed chemicals, seaweed, steel, aluminum, steel
castings and forgings and energy sources, such as oil, gas, coal, coke,
hydroelectric power and nuclear power.
Ores used in the Industrial Chemicals manufacturing process, such as trona, are
produced from mines in the United States on property held by FMC under long-term
leases subject to periodic adjustment of royalty rates. Raw materials used by
Specialty Chemicals include lithium carbonate, which is obtained from a South
American manufacturer under a long-term sourcing agreement, and alginates and
carrageenan, which are derived from various types of seaweed that are sourced by
the company on a global basis. Raw materials used by Agricultural Products,
Page 3
<PAGE>
primarily processed chemicals, are obtained from worldwide sources. The
business segments that are involved in machinery production, Energy Systems and
Food and Transportation Systems, purchase carbon steel, stainless steel, and
aluminum and steel castings and forgings both domestically and internationally.
The company does not use single source suppliers for the majority of its raw
material purchases and believes the available supplies of raw materials are
adequate.
Patents
- -------
FMC owns a number of U.S. and foreign patents, trademarks and licenses that are
cumulatively important to its business. FMC does not believe that the loss of
any one or group of related patents, trademarks or licenses would have a
material adverse effect on the overall business of FMC.
Seasonality
- -----------
The seasonal nature of the crop protection market and the geographic spread of
the Agricultural Products business generally produce stronger earnings in the
second and third quarters. Agricultural products sold into the northern
hemisphere (North America, Europe and parts of Asia) serve seasonal agricultural
markets from March through September, while markets in the southern hemisphere
(Latin America, parts of Asia and Australasia) are served from July through
December.
The remainder of FMC's businesses is generally not subject to significant
seasonal fluctuations.
Competitive Conditions
- ----------------------
FMC encounters substantial competition in each of its five business segments.
This competition is expected to continue in both the United States and markets
outside the United States. FMC markets its products through its own sales
organization and through independent distributors and sales representatives.
Competitive factors impacting sales of the company's products include: price,
service (including the ability to deliver products on an "as needed, where
needed" basis), product quality and differentiation, warranty, technological
innovation and technical proficiency. The number of the company's principal
competitors varies from segment to segment. FMC competes by operating in a
cost-efficient manner and by leveraging its industry experience to provide
advanced technology, integrated systems, high product quality and reliability
and quality aftermarket service.
FMC's Energy Systems competes with other companies that supply subsea systems
and floating production products, and with smaller companies that are focused on
a specific application, technology or geographic area. The Energy Systems
segment differentiates itself by the depth of its industry experience,
engineering and design capabilities, product performance, integrated systems,
global manufacturing capability, quality, reliability, service and price.
FMC's Food and Transportation Systems competes with a variety of local and
regional companies, which typically are focused on a specific application,
technology or geographic area, and with a few multinational companies. This
segment also differentiates itself on the depth of its industry experience,
engineering and design capabilities, product performance, integrated systems,
reliability, service, price and on the basis of yield and hygiene.
FMC's Agricultural Products competes in the crop protection market for
insecticides and pesticides and to a lesser extent in the pest control and turf
markets. The industry structure is composed of seven major global competitors
Page 4
<PAGE>
and a large number of smaller, sometimes regional, competitors of which FMC is a
leader. This segment has a leading global position in pyrethroid chemistry and
an expanding herbicide portfolio. Agricultural Products differentiates
itself by its flexibility to react to worldwide market conditions, direct
distribution in key markets, solid product stewardship programs and focused
research and development.
Specialty Chemicals has leading or significant positions in markets that include
alginate, carrageenan, microcrystalline cellulose and lithium based products.
This segment's customers consist primarily of industries engaged in the food,
pharmaceutical, agricultural and specialty additives businesses. Specialty
Chemicals competes on the basis of product differentiation, customer service and
price.
Industrial Chemicals serves the alkali, hydrogen peroxide and phosphorus markets
predominantly in the United States and to a lesser extent, Europe. Industrial
Chemicals is the world's largest producer of natural soda ash and maintains a
leadership position in the soda ash market in the United States. In addition,
this segment maintains a leading position in the North American market for
hydrogen peroxide through operation of a freight-efficient four plant network.
In the production of both soda ash and hydrogen peroxide, FMC competes by
employing low cost processing technology. At its Spain-based phosphorus
operations, Industrial Chemicals possesses a strong cost and market position.
FMC participates in the phosphorus business in the United States through Astaris
LLC ("Astaris"), FMC's joint venture with Solutia Inc. Astaris is the lowest
cost producer of sodium tripolyphosphate in the United States. Astaris and
Rhodia are the two major global competitors in the North American phosphorus
market, and competition is based primarily on price and product differentiation
through customer service.
See pages 16 through 19 of the 2000 Annual Report to Stockholders for
information about each business segment's principal products.
Research and Development Expense
- --------------------------------
<TABLE>
<CAPTION>
In Millions
Year Ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Energy Systems $ 33.8 $ 25.7 $ 24.7
Food and Transportation Systems 22.9 26.1 26.0
Agricultural Products 66.7 60.9 60.2
Specialty Chemicals 19.1 21.2 28.0
Industrial Chemicals 12.0 18.5 18.6
Corporate -- -- 0.2
------ ------ ------
Total $154.5 $152.4 $157.7
====== ====== ======
</TABLE>
When compared with 1999, FMC's research and development ("R & D") expense
increased in 2000 for Energy Systems and Agricultural Products. These increases
were partly offset by a decrease in R & D expense for Industrial Chemicals.
Energy Systems had increased R & D spending in 2000, primarily directed at new
subsea market initiatives. Higher R & D expense for Agricultural Products in
2000 was primarily related to development of a new herbicide and to investment
in an insecticide discovery program with biotechnology alliance partner Devgen.
Lower R & D expense in 2000 for Industrial Chemicals was attributable to the
formation of a phosphorus joint venture, resulting in phosphorus-related R & D
expense no longer being recorded in the research and development expense caption
in FMC's 2000 consolidated statements of income.
When compared with 1998, the company had lower R & D expense in 1999. This
reduction was largely attributable to the Specialty Chemicals business and
resulted primarily from the divestitures of businesses.
Page 5
<PAGE>
Environmental
- -------------
Incorporated by Reference From:
Compliance with Environmental Laws - 2000 Annual Report to Stockholders,
and Regulations Note 12 to the consolidated financial
statements on pages 45-47
Employees
- ---------
FMC employs 14,802 people in its domestic and foreign operations. Approximately
1,800 such employees are represented by collective bargaining agreements in the
United States. In 2001, two of the company's 12 collective bargaining
agreements will expire, covering approximately 1,500 employees. These contracts
are under negotiation at the present time. FMC maintains good employee
relations and has successfully concluded virtually all of its recent
negotiations without a work stoppage. In those rare instances where a work
stoppage has occurred, there has been no material effect on consolidated sales
and earnings. FMC, however, cannot predict the outcome of future contract
negotiations.
Incorporated by Reference From:
(d) Financial Information About - 2000 Annual Report to Stockholders,
Foreign and Domestic Operations page 53
and Export Sales
Forward Looking Statements - Safe Harbor Provisions
- ---------------------------------------------------
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 in the Annual Report, in
the company's other filings with the Securities and Exchange Commission or in
reports to its stockholders. 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. These factors include,
among other things, the risk factors listed below.
In some cases, FMC has identified forward-looking statements by such words or
phrases as "will likely result," "is confident that," "expects," "should,"
"could," "may," "will continue to," "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 forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, these statements. The company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made.
In connection with the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995, the company is hereby identifying important
factors that could affect the company's financial performance and could cause
the company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
Page 6
<PAGE>
Among the factors that could have an impact on the company's ability to achieve
our operating results and growth plan goals are:
. Significant price competition;
. The impact of unforeseen economic and political changes in the international
markets where the company competes, including currency exchange rates, war,
civil unrest, inflation rates, recessions, trade restrictions, foreign
ownership restrictions and economic embargoes imposed by the United States or
any of the foreign countries in which FMC does business; changes in
governmental laws and regulations and the level of enforcement of these laws
and regulations; other governmental actions; and other external factors over
which the company has no control;
. The impact of significant changes in interest rates or taxation rates;
. Increases in ingredient or raw material prices compared with historical
levels, or shortages of ingredients or raw materials;
. Inherent risks in the marketplace associated with new product introductions
and technologies, particularly in agricultural and specialty chemicals;
. Changes in capital spending by customers in the petroleum exploration,
commercial food processing and airline industries;
. Risks associated with developing new manufacturing processes;
. The ability of the company to integrate possible future acquisitions or joint
ventures into existing operations;
. Risks associated with increases in the cost of energy, particularly increases
in electric power costs;
. The impact of freight transportation delays beyond the control of FMC;
. Risks associated with joint venture, partnership or limited endeavors in
which FMC may be responsible at least in part for the acts or omissions of
its partners;
. Conditions affecting domestic and international capital markets;
. Risks derived from unforeseen developments in industries served by FMC, such
as extreme weather patterns or low insect infestations in the agricultural
sector, political or economic changes in the energy industries, and other
external factors over which FMC has no control;
. Risks associated with litigation, including the possibility that current
reserves relating to FMC's ongoing litigation may prove inadequate;
. Environmental liabilities that may arise in the future that exceed the
company's current reserves; and
. Increased competition in the hiring and retention of employees.
The company wishes to caution that the foregoing list of important factors may
not be all-inclusive, and specifically declines to undertake any obligation to
publicly revise any forward-looking statements that have been made to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
Page 7
<PAGE>
With respect to forward-looking statements set forth in the notes to
consolidated financial statements, including those relating to environmental
obligations, contingent liabilities and legal proceedings, as well as FMC's 2000
Annual Report on Form 10-K, some of the factors that could affect the ultimate
disposition of those contingencies are changes in applicable laws, the
development of facts in individual cases, settlement opportunities and the
actions of plaintiffs, judges and juries.
Page 8
<PAGE>
ITEM 2. PROPERTIES
FMC leases executive offices in Chicago and administrative offices in
Philadelphia. The company operates 90 manufacturing facilities and mines in 25
countries. Its major research facility is in Princeton, NJ.
Trona ore, used for soda ash production in Green River, WY, is mined primarily
from property held under long-term leases. FMC owns the land and mineral rights
to the Salar del Hombre Muerto lithium reserves in Argentina. Many of FMC's
chemical plants require the basic raw materials, which are provided by these
FMC-owned or leased mines, without which other sources would have to be
obtained. With regard to FMC's mining properties operated under long-term
leases, no single lease or related group of leases is material to the businesses
or to the company as a whole.
Most of FMC's plant sites are owned, with an immaterial number of them being
leased. FMC believes its properties and facilities meet present requirements
and are in good operating condition and that each of its significant
manufacturing facilities is operating at a level consistent with the industry in
which it operates. The number and location of FMC's production properties for
continuing operations are:
<TABLE>
<CAPTION>
Latin
America
United And Western
States Canada Europe Other Total
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Energy Systems 8 5 5 3 21
Food and Transportation
Systems 12 2 7 1 22
Agricultural Products 5 1 - 3 9
Specialty Chemicals 3 3 7 1 14
Industrial Chemicals 8 2 14 - 24
-- -- -- -- --
Total 36 13 33 8 90
== == == = ==
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
Environmental Proceedings
- -------------------------
In June 1999, the Federal District Court in Idaho approved a Consent Decree
signed by the company, the United States Environmental Protection Agency ("EPA")
(Region X) and the United States Department of Justice ("DOJ") settling
outstanding alleged violations of the Resource Conservation and Recovery Act
("RCRA") at the company's former Phosphorus Chemicals ("PCD") plant in
Pocatello, Idaho. Continuing commitments under the Consent Decree include
injunctive relief covering remediation expense for closure of existing ponds,
estimated at $30 million, and approximately $80 million of capital costs for
waste treatment projects. These amounts will be expended over the next several
years. The company provided reserves for the estimated expenses related to the
Consent Decree in prior periods.
In addition, FMC signed a second Consent Decree with the EPA, which was lodged
in court on July 21, 1999. The Consent Decree relates to a Record of Decision
("ROD") issued by the EPA in 1998 which addresses previously closed ponds on the
FMC portion of the Eastern Michaud Flats Superfund site, including FMC's former
Pocatello, Idaho facility. The remedy the EPA selected in the ROD is a
combination of capping, surface runoff controls and institutional controls for
Page 9
<PAGE>
soils, with a contingency for extraction and recycling for hydraulic control of
groundwater. On August 3, 2000, the DOJ withdrew the CERCLA Consent Decree and
announced that it needed to review the administrative record supporting its
remedy selection decision. EPA has estimated that this review would take
approximately one year to complete. FMC believes its reserves for environmental
costs adequately provide for the estimated costs of the existing ROD for the
site and the expenses previously described related to the RCRA Consent Decree.
Management can not predict the potential changes in the scope of the ROD, if
any, resulting from the EPA's remedy review, nor estimate the potential
incremental costs, if any, of such changes.
On October 21, 1999, the Federal District Court for the Western District of
Virginia approved a Consent Decree signed by the company, the EPA (Region III)
and the DOJ regarding past response costs and future clean-up work at the
discontinued fiber manufacturing site in Front Royal, Virginia. As part of a
prior settlement, government agencies are expected to reimburse FMC for
approximately one-third of the clean-up costs due to the government's role at
the site. FMC's $70 million portion of the settlement was charged to earnings in
1998 and prior years.
See Note 12 to the consolidated financial statements (pages 45-47 of the 2000
Annual Report to Stockholders) for a discussion of legal proceedings against
other Potentially Responsible Parties and insurers for contribution and/or
coverage with respect to environmental remediation costs.
Other
- -----
In October, 2000, the company announced an agreement to settle a lawsuit related
to its discontinued Defense Systems business. As a result, the company recorded
a $65.7 million charge (net of an income tax benefit of $14.3 million) in its
results of discontinued operations during the quarter ended September 30, 2000.
After receiving approval from the DOJ and the U.S. District Court, the company
paid approximately $80 million to settle the lawsuit in January 2001.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Executive Officers of the Registrant
- ------------------------------------
The executive officers of FMC Corporation, together with the offices in FMC
Corporation currently held by them, their business experience since January 1,
1996 and earlier and their ages as of March 1, 2001, are as follows:
Age Office, year of election and other
Name 3/1/2001 information for past five years
- -------------------------------------------------------------------------------
Robert N. Burt 63 Chairman of the Board and Chief Executive
Officer (91); President (90-93)
Joseph H. Netherland 54 President (99); Executive Vice President
(98); Vice President (87) and General
Manager-Energy Systems Group (93)
William G. Walter 55 Executive Vice President (00); Vice
President and General Manager-Specialty
Chemicals Group (97); General Manager-Alkali
Division (92); International Managing
Director-Agricultural Products Group (91);
Division Manager, Defense Systems
International (86); Director
Page 10
<PAGE>
of Marketing/Sales-Construction Equipment
Group (82)
William H. Schumann III 50 Senior Vice President and Chief Financial
Officer (99); Vice President, Corporate
Development (98); Vice President and General
Manager-Agricultural Products Group (95);
Director, North American Operations,
Agricultural Products Group (93-95); Executive
Director, Corporate Development (91-93)
Stephen F. Gates 54 Senior Vice President, General Counsel and
Secretary (00); Executive Vice President, BP
Amoco plc (99-00); Vice President, General
Counsel and Secretary, Amoco Corporation
(95-98)
Charles H. Cannon, Jr. 48 Vice President and General Manager-FMC
FoodTech (94) and Transportation Systems Group
(98); Manager, Food Processing Systems
Division (92-94)
W. Kim Foster 52 Vice President and General Manager-
Agricultural Products Group (98); Director,
International, Agricultural Products Group
(97-98); Division Manager, Airport Products
and Systems Division (91-97)
Robert I. Harries 57 Vice President (92) and General Manager-
Chemical Products Group (94)
Peter D. Kinnear 53 Vice President (00); General Manager,
Petroleum Equipment and Systems Division (94);
Division Manager, Wellhead Equipment Division
(92); Division Manager, Fluid Control
Division (85)
Stephanie K. Kushner 45 Vice President and Treasurer (99); Director,
Financial Planning (97); Controller, Process
Additives Division (92)
Ronald D. Mambu 51 Vice President and Controller (95); Director,
Financial Planning (94) Director, Strategic
Planning (93); Director, Financial
Control (87)
James A. McClung 63 Vice President-Worldwide Marketing (91)
Each of the company's executive officers has been employed by the company in a
managerial capacity for the past five (5) years except for Mr. Gates. 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. All officers are
elected to hold office for one (1) year and until their successors are elected
and qualified.
Page 11
<PAGE>
PART II
Incorporated by Reference From:
ITEM 5. MARKET FOR - 2000 Annual Report to Stockholders,
REGISTRANT'S COMMON pages 29 and 59 (inside back cover)
EQUITY AND RELATED and Notes 13, 14 and 19 to the
STOCKHOLDER MATTERS consolidated financial statements
on pages 47-48 and 53
ITEM 6. SELECTED FINANCIAL - 2000 Annual Report to Stockholders,
DATA pages 54-55
ITEM 7. MANAGEMENT'S DISCUSSION - 2000 Annual Report to Stockholders,
AND ANALYSIS OF FINANCIAL pages 20-30
CONDITION AND RESULTS OF
OPERATIONS
ITEM 7A. QUANTITATIVE AND - 2000 Annual Report to Stockholders,
QUALITATIVE page 30
DISCLOSURES ABOUT
MARKET RISK
ITEM 8. FINANCIAL - 2000 Annual Report to Stockholders,
STATEMENTS AND pages 31-53
SUPPLEMENTARY DATA
(INCLUDING ALL
SCHEDULES REQUIRED
UNDER ITEM 14 OF
PART IV)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
Page 12
<PAGE>
PART III
Incorporated by Reference From:
ITEM 10. DIRECTORS AND - Part I; Proxy Statement for 2000 Annual
EXECUTIVE OFFICERS Meeting of Stockholders, pages 10-15
OF THE REGISTRANT
ITEM 11. EXECUTIVE - Proxy Statement for 2000 Annual Meeting
COMPENSATION of Stockholders, pages 22-23
ITEM 12. SECURITY OWNERSHIP - Proxy Statement for 2000 Annual Meeting
OF CERTAIN of Stockholders, pages 20-21
BENEFICIAL OWNERS
AND MANAGEMENT
ITEM 13. CERTAIN RELATION- - Proxy Statement for 2000 Annual Meeting
SHIPS AND RELATED of Stockholders, page 19
TRANSACTIONS
Page 13
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed with this Report
1. Consolidated financial statements of FMC Corporation and its
subsidiaries are incorporated under Item 8 of this Form 10-K.
2. All required financial statement schedules are included in the
consolidated financial statements or notes thereto as
incorporated under Item 8 of this Form 10-K.
All other schedules are omitted because of the absence of
conditions under which they are required or because information
called for is shown in the financial statements and notes thereto
in the 2000 Annual Report to Stockholders.
3. Exhibits: See attached Index of Exhibits
(b) Reports on Form 8-K
During the quarter ended December 31, 2000, the Registrant filed
reports on Form 8-K or Form 8-K/A as follows:
Date Subject
---- -------
October 3, 2000 Redemption of Guaranteed Preferred Stock Received
From Tyco International Ltd.
October 13, 2000 FMC Corporation Settles Lawsuit
October 31, 2000 FMC To Split Into Chemicals and Machinery Companies
November 6, 2000 Slides presented at FMC's Analyst Conference in
New York
November 9, 2000 Slides presented at FMC's Analyst Conference in
New York
December 12, 2000 FMC Corporation Elects William G. Walter as
Executive Vice President of FMC's Chemicals
Business, Also to FMC's Board of Directors
(c) Exhibits
See Index of Exhibits beginning on page 16 of this document.
Page 14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FMC CORPORATION
(Registrant)
By: /s/ William H. Schumann III
---------------------------
William H. Schumann III
Senior Vice President and
Chief Financial Officer
Date: March 26, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
Signature Title
- --------- -----
William H. Schumann III Senior Vice President and /s/ William H. Schumann III
Chief Financial Officer ---------------------------
William H. Schumann III
March 26, 2001
Ronald D. Mambu Vice President, Controller /s/ Ronald D. Mambu
and Principal Accounting -------------------------
Officer Ronald D. Mambu
March 26, 2001
Robert N. Burt Chairman of the Board and /s/ Robert N. Burt
Chief Executive Officer -------------------------
Joseph H. Netherland President /s/ Joseph H. Netherland
-------------------------
B.A. Bridgewater, Jr. Director /s/ B.A. Bridgewater, Jr.
-------------------------
Patricia A. Buffler Director /s/ Patricia A. Buffler
-------------------------
Albert J. Costello Director /s/ Albert J. Costello
-------------------------
Paul L. Davies, Jr. Director /s/ Paul L. Davies, Jr.
-------------------------
Asbjorn Larsen Director /s/ Asbjorn Larsen
-------------------------
Edward J. Mooney Director /s/ Edward J. Mooney
-------------------------
William F. Reilly Director /s/ William F. Reilly
-------------------------
Enrique J. Sosa Director /s/ Enrique J. Sosa
-------------------------
James R. Thompson Director /s/ James R. Thompson
-------------------------
William G. Walter Director /s/ William G. Walter
-------------------------
Clayton Yeutter Director /s/ Clayton Yeutter
-------------------------
Page 15
<PAGE>
INDEX OF EXHIBITS FILED WITH OR
INCORPORATED BY REFERENCE INTO
FORM 10-K OF FMC CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 2000
Exhibit
No. Exhibit Description
- ------- -------------------
3.1 Restated Certificate of Incorporation, as filed on June 23, 1998
(incorporated by reference from Exhibit 4.1 to the Form S-3 filed on
July 21, 1998)
3.2 Restated By-Laws of the company, amended as of February 20, 1998
(incorporated by reference from Exhibit 3.3 to the Annual Report on
Form 10-K filed on March 17, 1998)
4.1 Amended and Restated Rights Agreement, dated as of February 19, 1988,
between Registrant and Harris Trust and Savings Bank (incorporated by
reference from Exhibit 4 to the Form SE (File No. 1-02376) filed on
March 25, 1993)
4.2 Amendment to Amended and Restated Rights Agreement, dated February 9,
1996 (incorporated by reference from Exhibit 1 to the Form 8-K filed
on February 9, 1996)
4.3 $450,000,000 Five-Year Credit Agreement, dated as of December 6, 1996,
among FMC Corporation, the Lenders Party thereto and Morgan Guaranty
Trust Company of New York as Agent, J.P. Morgan Securities Inc.,
Arranger (incorporated by reference from Exhibit 4.3 to 1998 Annual
Report on Form 10-K filed on March 25, 1999)
4(iii)(A) Registrant undertakes to furnish to the Commission upon request, a
copy of any instrument defining the rights of holders of long-term
debt of the Registrant and its consolidated subsidiaries and for any
of its unconsolidated subsidiaries for which financial statements are
required to be filed.
10.1* FMC Corporation Compensation Plan for Non-Employee Directors (As
amended and restated May 1, 2000)
10.2* FMC 1981 Incentive Share Plan, as amended, effective May 28, 1986
(incorporated by reference from Exhibit 10.1 to the Form SE (File No.
1-02376) filed on March 25, 1993)
10.3* FMC 1990 Incentive Share Plan (incorporated by reference from Exhibit
10.1 to the Form SE (File No. 1-02376) filed on March 26, 1991)
* Indicates a management contract or compensation plan or arrangement.
Page 16
<PAGE>
10.3.a* Amendment dated April 18, 1997 to FMC 1990 Incentive Share Plan
(incorporated by reference from Exhibit 10.3.a to the Quarterly Report
on Form 10-Q filed on May 15, 1997)
10.3.b* Amendment to the FMC 1990 Incentive Share Plan (incorporated by
reference from Exhibit 10.1.a to the Annual Report on Form 10-K filed
March 29, 2000)
10.4* FMC Corporation Employees' Retirement Program, as amended and restated
effective January 1, 1999 (incorporated by reference from Exhibit
10.4 to the Annual Report on Form 10-K filed March 29, 2000)
10.4.a* First Amendment of FMC Corporation Employee's Retirement Program Part I
Salaried and Non-Union Hourly Employees' Plan (incorporated by
reference from Exhibit 10.4.a to the Annual Report on Form 10-K filed
March 29, 2000)
10.4.b* First Amendment of FMC Corporation Employees' Retirement Program Part
II Union Employees' Plan (dated September 16, 1999) (incorporated by
reference from Exhibit 10.4.b to the Annual Report on Form 10-K filed
March 29, 2000)
10.4.c* Second Amendment of FMC Corporation Employee's Retirement Program Part
I Salaried and Non-Union Hourly Employees' Plan (incorporated by
reference from Exhibit 10.4.a.1 to the Quarterly Report on Form 10-Q
filed on November 14, 2000)
10.4.d* Second Amendment of FMC Corporation Employees' Retirement Program -
Part II Union Hourly Employees' Retirement Plan (incorporated by
reference from Exhibit 10.4.b.1 to the Quarterly Report on Form 10-Q
filed on November 14, 2000)
10.5* FMC Corporation Savings and Investment Plan, as amended and restated as
of January 1, 1999 (incorporated by reference from Exhibit 10.5 to
the Annual Report on Form 10-K filed March 29, 2000)
10.5.a* FMC Corporation Savings and Investment Plan for Bargaining Unit
Employees (incorporated by reference from Exhibit 10.5.a to the
Quarterly Report on Form 10-Q filed on August 11, 2000)
10.5.b* First Amendment of FMC Corporation Savings and Investment Plan
(incorporated by reference from Exhibit 10.5.b to the Quarterly Report
on Form 10-Q filed on November 14, 2000)
10.5.c* First Amendment of FMC Corporation Savings and Investment Plan for
Bargaining Unit Employees (incorporated by reference from Exhibit
10.5.c to the Quarterly Report on Form 10-Q filed on November 14, 2000)
* Indicates a management contract or compensation plan or arrangement.
Page 17
<PAGE>
10.6* FMC Corporation Salaried Employees' Equivalent Retirement Plan (As
amended and restated effective as of January 1, 2000)
10.7* FMC Corporation Non-Qualified Savings and Investment Plan (As amended
and restated effective as of January 1, 2000)
10.7.a Revised First Amendment of FMC Corporation Non-Qualified Savings and
Investment Plan
10.8* FMC 1995 Management Incentive Plan, as amended as of October 17, 1997
(incorporated by reference from Exhibit 10.9 to the Annual Report on
Form 10-K filed on March 17, 1998)
10.9* FMC 1995 Stock Option Plan, as amended as of April 18, 1997
(incorporated by reference from Exhibit 10.10 to the Form 10-Q filed on
May 15, 1997)
10.9.a* Amendment to the FMC 1995 Stock Option Plan (As Amended 4/18/97) (Dated
September 16, 1999) (incorporated by reference from Exhibit 10.9.a to
the Annual Report on Form 10-K filed March 29, 2000)
10.10* FMC Corporation Executive Severance Plan (As amended and restated
effective as of January 1, 2000)
10.11* Master Trust Agreement between FMC Corporation and Fidelity Management
Trust Company, dated June 1, 1997 (incorporated by reference from
Exhibit 10.12 to the Annual Report on Form 10-K filed on March 17,
1998)
10.12* FMC Corporation Defined Benefit Retirement Trust, as amended and
restated as of October 2, 2000 (incorporated by reference from Exhibit
10.4.c to the Quarterly Report on Form 10-Q filed November 14, 2000)
10.13 Fiscal Agency Agreement between FMC Corporation and Union Bank of
Switzerland, Fiscal Agent, dated as of January 16, 1990 (incorporated
by reference from Exhibit 10.4 to the Form SE (File No. 1-02376) filed
on March 28, 1990)
12 Statement re Computation of Ratios of Earnings to Fixed Charges
13 2000 Annual Report to Stockholders is included as an Exhibit to this
report for the information of the Securities and Exchange Commission
and, except for those portions thereof specifically incorporated by
reference elsewhere herein, such Annual Report should not be deemed
filed as a part of this report.
* Indicates a management contract or compensation plan or arrangement.
Page 18
<PAGE>
21 List of Significant Subsidiaries of Registrant
23 Consent of KPMG LLP
24 Powers of Attorney
Page 19
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>dex101.txt
<DESCRIPTION>COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
<TEXT>
<PAGE>
Exhibit 10.1
FMC CORPORATION
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
--------------------------------------------
(As amended and restated May 1, 2000)
PART I. GENERAL PROVISIONS
---------------------------
1. Purpose. The purpose of the Plan is to provide a compensation program to
-------
attract and retain qualified individuals not employed by the Company or its
subsidiaries or affiliates to serve on the Board and to further align the
interests of those directors with those of stockholders by providing that a
substantial portion of compensation will be linked directly to increases in
stockholder value.
2. Definitions. Except as otherwise defined herein, terms used herein in
-----------
capitalized form will have the meanings attributed to them below:
a. "Accrued Retirement Benefits" means the payment or payments to which a
Participant would be entitled at his or her Separation Date under the Retirement
Plan for service as a director through April 30, 1997.
b. "Actuarial Equivalent" means an amount equal to the amount expected to
be received under Section 4a of Part II, based on the following actuarial
assumptions:
Interest - 6.5% or such other rate as the Board may from time
to time prescribe by resolution
Mortality - Joint Mortality Group Annuity
Table 1983
c. "Annual Retainer" means the retainer fee established by the Board and
paid to a director for services on the Board for a Plan Year.
d. "Board" means the Board of Directors of the Company, as it may be
constituted from time to time.
e. A "Change in Control" of the Company will be deemed to have occurred as
of the first day that any one or more of the following conditions are satisfied:
(1) the "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20% of the combined
voting power of the then outstanding voting securities
Page 1
<PAGE>
of the Company entitled to vote generally in the election of directors (the
"Company Voting Securities") is acquired by a "Person" as defined in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or an affiliate thereof, any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company); provided,
however that any acquisition from the Company or any acquisition pursuant
to a transaction that complies with Subsections (i), (ii) and (iii) of
Subsection (3) of this Subsection e. will not be a Change in Control under
this Subsection (1); or
(2) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board will be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
(3) consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets or stock of another
entity (a "Business Combination"), in each case, unless immediately
following such Business Combination: (i) more than 60% of the combined
voting power of then outstanding voting securities entitled to vote
generally in the election of directors of (x) the corporation resulting
from such Business Combination (the "Surviving Corporation"), or (y) if
applicable, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries (the "Parent Corporation"), is
represented, directly or indirectly by Company Voting Securities
outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Company Voting Securities, (ii) no Person
Page 2
<PAGE>
(excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of the combined voting power of
the then outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) except to the extent that such ownership of the Company
existed prior to the Business Combination and (iii) at least a majority of
the members of the Board of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) were members of the
Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board, providing for such Business Combination; or
(4) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
However, in no event will a Change in Control be deemed to have occurred, with
respect to the Participant, if the Participant is part of a purchasing group
which consummates the Change in Control transaction. The Participant will be
deemed "part of a purchasing group" for purposes of the preceding sentence if
the Participant is an equity participant in the purchasing company or group
(except for: (i) passive ownership of less than 3% of the stock of the
purchasing company; or (ii) ownership of equity participation in the purchasing
company or group which is otherwise not significant, as determined prior to the
Change in Control by a majority of the non-employee continuing directors).
f. "Change in Control Price" means the higher of (i) if applicable, the
price paid for the Common Stock in the transaction constituting Change in
Control and (ii) the closing price per share of Common Stock as reported in the
New York Stock Exchange Composite Transactions on the last trading day preceding
the date of the Change in Control.
g. "Committee Chairman Fee" means the fee established by the Board and
paid to a director for service as chairman of any committee of the Board.
h. "Common Stock" means (i) the common stock of the Company, par value
$.10 per share, adjusted as provided in Section 4 of Part IV, or (ii) if there
is a merger or consolidation and the Company is not the Surviving Corporation,
the capital stock of the Surviving Corporation given in exchange for such common
stock of the Company.
i. "Common Stock Unit" means a right to receive one share of Common
Stock.
Page 3
<PAGE>
j. "Common Stock Unit Account" means the record keeping account where the
number of Common Stock Units granted to the Participant are recorded.
k. "Company" means FMC Corporation.
l. "Deferral Period" means the time during which a Participant is a non-
employee director of the Company.
m. "Deferred Amount" means, with respect to each Participant, an annual
amount equal to $25,000 plus such amount as the Participant elects to defer in
accordance with Section 1 of Part II of the Plan.
n. "Deferred Stock Plan" means the FMC Deferred Stock Plan for Non-
Employee Directors, as amended and restated as of December 6, 1996.
o. "Dividend Equivalent Rights" means a right, described in Section 3 of
Part III hereof, of a holder of vested Common Stock Units and Restricted Stock
Units with respect to dividends paid on outstanding shares of Common Stock.
p. "Exchange Act" means the Securities Exchange Act of 1934, as amended
and any successor statutes or regulations of similar purpose or effect.
q. "Fair Market Value" means the closing price for a share of Common
Stock as reported in the New York Stock Exchange Composite Transactions on the
date on which the Fair Market Value is to be determined.
r. "Meeting Fees" will mean the fees, established by the Board, paid to a
director for attending a meeting of the Board or a committee of the Board,
including extraordinary or special Board and/or committee meetings.
s. "Participant" or "Participants" means all members of the Board who are
not employees of the Company or any of its subsidiaries or affiliates.
t. "Plan" means the FMC Corporation Compensation Plan for Non-Employee
Directors, as amended and restated effective on May 1, 2000, as may be amended
from time to time.
u. "Plan Year" means May 1 to April 30.
Page 4
<PAGE>
v. "Restricted Stock Unit" means a right to receive the Fair Market Value
of one share of Common Stock on the last business day of the Participant's
service on the Board paid in Common Stock.
w. "Restricted Stock Unit Account" means the record keeping account where
the number of Restricted Stock Units granted to a Participant are recorded.
x. "Retirement Plan" means the FMC Directors' Retirement Plan, as
amended.
y. "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act.
z. "Separation Date" means the date a Participant's service on the Board
terminates for any reason.
3. Effective Date. This Plan is an amendment and restatement of the FMC
--------------
Compensation Plan for Non-Employee Directors (as amended and restated January 1,
1999). This Plan is effective as of May 1, 2000.
PART II. COMPENSATION
----------------------
1. Annual Retainer. Each Participant will be entitled to receive an Annual
---------------
Retainer in such amount as will be determined from time to time by the Board.
Until changed by resolution of the Board, the Annual Retainer will be $40,000,
$25,000 of which will be paid in the form of Common Stock Units as set forth in
Section 1 of Part III and the remainder of which will be paid in cash in
quarterly installments at the end of each calendar year quarter. Not less than
60 days prior to the close of any Plan Year, a Participant may elect to defer
all of the Participant's remaining Annual Retainer of $15,000 to be paid in the
form of Common Stock Units as set forth in Section 1 of Part III by providing
written notice of such election to the Corporate Secretary of the Company. Any
such election will be effective on the first day of the next Plan Year; provided
that if and to the extent the Company, in its sole discretion, determines that
the approval of such election by the Board is necessary to assure that such
election conforms with Rule 16b-3, the effectiveness of such election will be
deferred until such later date, if any, as such approval has been obtained.
2. Meeting Fees. Each Participant will be entitled to receive a Meeting Fee,
------------
in such amount as will be determined from time to time by the Board, for
attending each meeting of the Board or a committee of the Board, including
extraordinary and/or special Board and committee meetings. Until
Page 5
<PAGE>
changed by resolution of the Board, the Meeting Fee will be $1,000 per meeting,
payable in cash at the end of each calendar year quarter.
3. Committee Chairman Fees. Each Participant who serves as chairman of a
-----------------------
committee of the Board will be entitled to receive a Committee Chairman Fee in
such amount as will be determined from time to time by the Board, for the tenure
of such service. Until changed by resolution of the Board, the Committee
Chairman Fee will be paid in cash at an annualized rate of $4,000 in equal
installments at the end of each calendar year quarter.
4. Retirement Benefits. Unless a Participant who was a non-employee Director
-------------------
on December 31, 1996 elected to and did convert his or her Accrued Retirement
Benefits to Common Stock Units calculated as of April 30, 1997 under the
Retirement Plan, that Participant will be entitled to receive the following
benefits upon his or her Separation Date:
a. Benefits. Benefits will be paid to the Participant in quarterly
--------
installments of $7,500 each. Payment of benefits will begin the quarter
following the Separation Date and will continue for the number of full years
following a Participant's service as a non-employee member of the Board from the
time of his or her first election as a director to and including April 30, 1997.
b. Lump Sum Benefit. A Participant may elect to receive in a lump sum
----------------
the Actuarial Equivalent of benefits otherwise payable upon written notice to
the Corporate Secretary of the Company.
c. Surviving Spouse Benefit. In the event of the death of a Participant
------------------------
who is receiving benefits as described above under this Plan, those benefits
that would otherwise have been payable to the Participant will be paid to the
Participant's surviving spouse. Such payments to a surviving spouse will
terminate on the earlier of the death of the surviving spouse or the date that
benefit payments to the Participant would have terminated had Participant not
died.
PART III. STOCK COMPENSATION
-----------------------------
1. Common Stock Units
------------------
a. Annual Deferral. Effective as of May 1 of each Plan Year, each
---------------
Participant's Common Stock Unit Account will be credited with a number of Common
Stock Units equal to the number obtained by dividing $25,000 plus, the portion
of the Participant's remaining Annual Retainer of $15,000 that the Participant
elected to defer in accordance with Section 2 of
Page 6
<PAGE>
Part II for the Plan Year beginning on such May 1, by the Fair Market Value of
the Common Stock on such May 1.
b. Conversion of Retirement Plan Benefits. By election dated not later
--------------------------------------
than February 14, 1997, each person who was a non-employee director of the
Company on December 31, 1996 was eligible to choose to have his or her Accrued
Retirement Benefits under the Retirement Plan converted into Common Stock Units.
Such conversions were made by calculating as of April 30, 1997 the lump-sum
present value of $2,500 per month times the number of months of Board service as
of April 30, 1997, assuming benefits commence upon retirement from the Board at
age 70, and using a discount rate of 6.5%. The number of Common Stock Units were
determined by dividing the lump sum present value by $71.275, the Fair Market
Value of the Common Stock on December 31, 1996.
2. Restricted Stock Units.
----------------------
a. Annual Grant. Effective May 1, 2000, on May 1 of each year (the "Grant
------------
Date"), each Participant will be granted Restricted Stock Units, the intention
being that such Restricted Stock Units should have an approximate present value
as of the Grant Date of an amount established annually by the Board. Until
changed by resolution of the Board, the annual grant will be 800 Restricted
Stock Units.
b. Vesting. Restricted Stock Units will vest on the date of the
-------
annual stockholder's meeting next following the Grant Date. Except as provided
in the next sentence, if a Participant has a Separation Date prior to the date
his or her Restricted Stock Units vest, such Restricted Stock Units will be
forfeited and all further rights of the Participant to or with respect to such
Restricted Stock Units will terminate. If a Participant should die while serving
as a director of the Company, any vested Restricted Stock Units will be payable
to the person designated in such Participant's last will and testament or, in
the absence of such designation, to the Participant's estate. Any unvested
Restricted Stock Units will vest and become payable in a proportionate amount,
based on the full months of service completed during the vesting period from the
Grant Date to the date of death. Any Restricted Stock Units not vested under the
foregoing provisions, will vest and become immediately payable upon a Change in
Control.
3. Dividend Equivalent Rights. In the event that dividends are paid on
--------------------------
outstanding shares of Common Stock, Common Stock Units and vested Restricted
Stock Units will be credited with Dividend Equivalent Rights. Dividend
Equivalent Rights for Common Stock Units will based upon any dividends paid
between the date Common Stock Units are granted and the date of payment in
respect of such Common Stock Units. Dividend Equivalent Rights for Restricted
Stock Units will be based upon any
Page 7
<PAGE>
dividends paid between the date such Restricted Stock Units vest and the date of
payment in respect of such Restricted Stock Units. Such Dividend Equivalent
Rights, once credited, will be converted into an equivalent number of Common
Stock Units or Restricted Stock Units, as applicable (including fractional
Common Stock Units or Restricted Stock Units, as applicable). If a dividend is
paid in cash, each Participant's Common Stock Unit Account and Restricted Stock
Account will be credited, as of each dividend payment date, in accordance with
the following formula:
(A x B)/C
in which "A" equals the number of Common Stock Units or Restricted Stock Units,
as applicable, held by the Participant on the dividend payment date, "B" equals
the cash dividend per share and "C" equals the Fair Market Value per share of
Common Stock on the dividend payment date. If a dividend is paid in property
other than cash, Dividend Equivalent Rights will be credited, as of the dividend
payment date, in accordance with the formula set forth above, except that "B"
will equal the fair market value per share of the property which the Participant
would have received in respect of the number of shares of Common Stock equal to
the number of Common Stock Units and Restricted Stock Units held by the
Participant as of the dividend payment date, had such shares been owned as of
the record date for such dividend.
4. Form of Payment.
---------------
a. Except as described in Subsection b. and in Section 4 of Part IV,
payments with respect to Common Stock Units and Restricted Stock Units will be
made in shares of Common Stock all issued to the Participant on or after the
Participant's Separation Date. Common Stock Units and Restricted Stock Units
will be valued using the Fair Market Value of Common Stock on the last business
day of the Participant's service on the Board. The Company will not issue
fractions of shares. Whenever, under the terms of the Plan, a fractional share
would otherwise be required to be issued, the Participant (or his or her
beneficiary) will be paid at Fair Market Value for such fractional share by
rounding down the number of shares received to the nearest whole number and
paying in cash the value of the fractional share.
b. Any payment made upon an occurrence of a Change in Control will be
made in a single lump sum cash payment. For purposes of the preceding, the
amount of cash delivered in full or partial payment of Common Stock Units and
Restricted Stock Units will equal the Change in Control Price of the number of
shares of Common Stock relating to the
Page 8
<PAGE>
Common Stock Units and Restricted Stock Units with respect to which such cash
payment is being made.
5. Rights. Except to the extent otherwise set forth herein, Participants will
------
not have any of the rights of a stockholder with respect to Common Stock Units
or Restricted Stock Units.
6. Payments of Stock Upon Death. In the event of a Participant's death,
----------------------------
payments with respect to any Common Stock Units or vested Restricted Stock Units
will be made in Common Stock to the beneficiary designated by the Participant
or, in the absence of an executed beneficiary form, to the person legally
entitled thereto, as designated under his or her will, or to such heirs as
determined under the laws of intestacy for the jurisdiction of his or her
domicile.
7. Non-Qualified Stock Options.
---------------------------
a. Grant of Options. For periods beginning prior to May 1, 2000, on May
----------------
1 of each year, each Participant was granted an option (the "Option") to
purchase 1,500 shares of Common Stock. For periods beginning on May 1, 2000,
such annual grant will no longer be made, but the Board retains the right to
grant Options to Participants in its sole discretion. All Options granted under
the Plan will have the terms set forth in this Section 7 of Part III and be non-
statutory options not entitled to special tax treatment under Section 422 of the
Internal Revenue Code of 1986, as amended.
b. Option Exercise Price. The per share price to be paid by each
---------------------
Participant at the time an Option is exercised will be 100% of the Fair Market
Value of the Common Stock on the date of the grant of the Option.
c. Term of Option. Subject to Subsection d., each Option will expire on
--------------
the earlier of the (i) 10th anniversary of the date of grant or (ii) 5th
anniversary of the Participant's Separation Date.
d. Exercise and Vesting of Option. Each Option will vest on the date of
------------------------------
the annual stockholder's meeting next following the date of grant. Except as
provided in the next sentence, if a Participant has a Separation Date prior to
the date an Option vests, such Option will be forfeited and all further rights
of the Participant to or with respect to such Option will terminate. If a
Participant should die while serving as a director of the Company, any vested
Option may be exercised by the person designated in such Participant's last will
and testament or, in the absence of such designation, by the Participant's
estate, in either case on or before the expiration of the Option, and any
unvested Option will vest and become exercisable in a proportionate amount,
based on the full months of service
Page 9
<PAGE>
completed during the vesting period of the Option from the date of grant to the
date of death. Each Option that has not vested under the foregoing provisions
will vest and become immediately exercisable upon a Change in Control.
e. Method of Exercise and Tax Obligations. An Option may be exercised
--------------------------------------
at any time after it vests and before it expires by written notice of exercise
to the Corporate Secretary of the Company. Each notice of exercise will be
accompanied by the full purchase price of the shares being purchased. Such
payment may be made, at the election of the Participant, in cash, check or
shares of Common Stock, or in Common Stock Units, valued using the Fair Market
Value as of the exercise date or a combination thereof. The Company may also
require payment of the amount of any applicable withholding tax attributable to
the exercise of an Option or the delivery of shares of Common Stock.
f. Non-Transferability. Except as provided below, Options will not be
-------------------
transferable other than by will or the laws of descent and distribution, will
not be subject to execution, attachment or similar process and may be exercised
or otherwise realized during the Participant's lifetime only by the Participant
or the Participant's guardian or legal representative, or as otherwise
determined in the discretion of the Board.
Beginning September 1, 1999, an Option agreement may permit, or may be
amended to permit, under such terms as the Board may, in its discretion
prescribe, the Participant who received the Option, at any time prior to the
Participant's death and prior to the Participant's Separation Date, to assign
all or any portion of the vested Option granted to him or her to: (i) the
Participant's spouse or lineal descendants; (ii) the trustee of a trust for the
primary benefit of the Participant, the participant's spouse or lineal
descendants, or any combination thereof; (iii) a partnership of which the
Participant, the Participant's spouse and/or lineal descendants are the only
partners; (iv) custodianships under the Uniform Transfers of Minors Act or any
other similar statute; or (v) upon the termination of a trust by the custodian
or trustee thereof, or the dissolution or other termination of the family
partnership or the termination of a custodianship under the Uniform Transfers to
Minors Act or other similar statute, to the person or persons who, in accordance
with the terms of such trust, partnership of custodian are entitled to receive
Options held in trust, partnership or custody. In such event, the spouse, lineal
descendant, trustee, partnership or custodianship will be entitled to all of the
Participant's rights with respect to the assigned portion of such Option, and
such portion of the Option will continue to be subject to all of the terms,
conditions and restrictions applicable to the Option, as set forth herein and in
the related Option agreement. Any such assignment will be permitted only if (x)
the Participant does not receive any consideration therefor; and (y) the
assignment is expressly permitted by the
Page 10
<PAGE>
applicable Option agreement and any amendment thereto as approved by the Board.
The Board's approval of an Option agreement with assignment rights or amendment
of an Option agreement to allow for assignment rights for any one Participant
will not require the Board to include such assignment rights in an Option
agreement or any amendment thereto with any other Participant. Any such
assignment will be evidenced by an appropriate written document executed by the
Participant, and the Participant will deliver a copy thereto to the Board on or
prior to the effective date of the assignment. An assignee or transferee of an
Option must sign an agreement with the Company to be bound by the terms of the
applicable Option agreement.
PART IV. ADDITIONAL PROVISIONS
-------------------------------
1. Administration. The Board administers the Plan. The Board may act by vote
--------------
of a majority of the members present at a meeting, or without a meeting by
written consent of the majority of the members to the action taken. The Board
has full power to interpret the Plan, formulate additional details and
regulations for carrying out the Plan and amend or terminate the Plan as from
time to time it deems proper and in the best interest of the Company. Any
decision or interpretation of the Board is final and conclusive.
2. Statement of Account. Each Participant will receive an annual statement
--------------------
showing the number and status of and essential terms applicable to Common Stock
Units, Options and Restricted Stock Units that have been awarded to the
Participant under the Plan.
3. Unsegregated Funds. The Company will not segregate any funds or securities
------------------
during the Deferral Period and service as a non-employee Director of the Company
is the Participant's acknowledgment and agreement that any interests of the
Participant remain a part of the Company's general funds and are subject to the
claims of the Company's general creditors during the Deferral Period. Nothing
in this Plan will be construed as creating any trust, express or implied, for
the benefit of any Participant.
4. Change in Capital Structure. In the event of any change in the Common
---------------------------
Stock by reason of any stock dividend, split, combination of shares, exchange of
shares, warrants or rights offering to purchase Common Stock at a price below
its fair market value, reclassification, recapitalization, merger, consolidation
or other change in capitalization, appropriate adjustment may be made by the
Board in the number and kind of shares subject to the Plan and any other
relevant provisions of the Plan, and any such adjustments will be binding and
conclusive on all persons.
Page 11
<PAGE>
5. Common Stock Subject to the Plan. Common Stock to be issued under this
--------------------------------
Plan may be made available from shares of Common Stock held in the treasury,
from Common Stock purchased in the open market and, provided they have been
reserved for issuance and listed on the New York Stock Exchange and all other
exchanges on which the Common Stock are listed, as appropriate, from authorized
but unissued Common Stock.
6. Payment of Certain Costs of the Participant. If a dispute arises regarding
-------------------------------------------
the interpretation or enforcement of this Plan and the Participant (or in the
event of his or her death, his beneficiary) obtains a final judgment in his or
her favor from a court of competent jurisdiction from which no appeal may be
taken, whether because the time to do so has expired or otherwise, or his or her
claim is settled by the Company prior to the rendering of such a judgment, all
reasonable legal and other professional fees and expenses incurred by the
Participant in contesting or disputing any such claim or in seeking to obtain or
enforce any right or benefit provided for in this Plan or in otherwise pursuing
his or her claim will be promptly paid by the Company with interest thereon at
the highest Illinois statutory rate for interest on judgments against private
parties from the date of payment thereof by the Participant to the date of
reimbursement by the Company.
7. Reservation of Rights. Nothing in this Plan will be construed to (a) give
---------------------
any Participant any right to defer compensation received for services as a
director of the Company other than as expressly authorized and permitted in this
Plan or in any other plan or arrangement approved by the Board, (b) create any
obligation on the part of the Board to nominate any Participant for reelection
by the Company's stockholders or (c) limit in any way the right of the Board to
remove a Participant as a director of the Company.
8. Amendment or Termination. The Board may, at any time by resolution,
------------------------
terminate or amend this Plan provided that no such termination or amendment will
adversely affect the rights of Participants or beneficiaries of Participants,
including rights with respect to cash, Common Stock Units, Options or Restricted
Stock Units granted prior to such termination or amendment, without the consent
of the Participant or, if applicable, the Participant's beneficiaries.
9. Regulatory Compliance and Listing. The issuance or delivery of any shares
---------------------------------
of Common Stock deliverable under this Plan may be postponed by the Company for
such period as may be required to comply with any applicable requirements under
the federal securities laws, any applicable listing requirements of any national
securities exchange and requirements under any other law or regulation
applicable to the issuance or delivery of such shares, and the Company will not
be obligated to issue or deliver any such shares if the issuance or delivery of
such shares will constitute
Page 12
<PAGE>
a violation of any provision of any law or of any regulation of any governmental
authority or any national securities exchange.
10. Withholding. The Company will have the right to deduct or withhold from
-----------
all payments of compensation any taxes required by law to be withheld with
respect to such payments.
11. Pooling of Interests. Notwithstanding any other provision of the Plan to
--------------------
the contrary, in the event that the consummation of a Change in Control is
contingent on using pooling of interests accounting methodology, the Board may
take any action necessary to preserve the use of pooling of interest accounting.
12. Change in Law. If, for any reason, the anticipated benefits of the
-------------
deferral of any Deferred Amount pursuant to this Plan or any provision hereof
are frustrated by reason of any interpretation of or change in law, policy or
regulation, the Board may, in its discretion, terminate the deferral arrangement
or delete or suspend the operation of such provision.
13. Governing Law. This Plan will be governed by the laws of the State of
-------------
Illinois without regard to its choice of law or conflict of law provisions.
Page 13
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>3
<FILENAME>dex106.txt
<DESCRIPTION>FMC CORPORATION SALARIED EMPLOYEES
<TEXT>
<PAGE>
EXHIBIT 10.6
FMC Corporation Salaried Employees' Equivalent Retirement Plan
--------------------------------------------------------------
(As Amended and Restated Effective as of January 1, 2000)
Section 1. Establishment and Purposes of the Plan. The FMC Salaried
--------------------------------------
Employees' Equivalent Retirement Plan (the "Plan") was established effective
January 1, 1976 by FMC Corporation, a Delaware corporation ("FMC"). The purpose
of the Plan is to provide employees of FMC and its affiliated companies that
have adopted the Plan (collectively, the "Employer") with the retirement
benefits they would have received under the Part I - Salaried and Non-Union
Hourly Employee's Retirement Plan of the FMC Corporation Employees' Retirement
Program (the "Salaried Retirement Plan"), but for the limitations of Sections
401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended (the
"Code"), and but for the fact that amounts an employee defers under the FMC
Corporation Non-Qualified Savings and Investment Plan are not pensionable
earnings under the Salaried Retirement Plan. This document represents an
amendment and restatement of the Plan, effective as of January 1, 2000.
Section 2. Participants. An employee of any Employer who is an active
------------
participant in the Salaried Retirement Plan will become a "Participant" on the
day he or she becomes entitled to an Excess Benefit under Section 3. Once an
individual is a Participant, he or she will remain a Participant until his or
her entire Excess Benefit has been paid.
Section 3. Excess Benefit. Each employee of an Employer who is an
--------------
active participant in the Salaried Retirement Plan will be entitled to receive
an "Excess Benefit" equal to the amount, if any, by which his or her accrued
benefit under the Salaried Retirement Plan is reduced:
(a) to comply with the limitations of Section 415 of the Code;
(b) because his or her pensionable earnings exceed the annual
compensation limit under Code Section 401(a)(17), as adjusted (for
2000, $170,000); and
(c) because deferred compensation is not included in the definition of
pensionable earnings under the Salaried Retirement Plan.
If the Participant's Excess Benefit is paid in a form other than the normal form
of benefit under the Salaried Retirement Plan, his or her Excess Benefit will be
converted to the form of benefit in which it is paid, using the same actuarial
assumptions and methods as are used to determine actuarial equivalence under the
Salaried Retirement Plan.
Section 4. Funding. The amount of a Participant's Excess Benefit, if
-------
any, will be determined at the time the Participant becomes entitled to receive
a retirement benefit under the Salaried Retirement Plan, or at another time
determined by the Committee (as defined in Section 7) in its sole discretion,
according to rules of uniform application. Neither FMC nor any Employer is
required to segregate on its books or elsewhere any amount to be used to pay
-1-
<PAGE>
Excess Benefits, and no accounts will be maintained for Participants under the
Plan. This Plan will be unfunded, and Plan benefits will be payable only from
the general assets of FMC or any Employer. Each Participant has only the rights
of an unsecured creditor of FMC or any Employer, as to his or her Excess
Benefit.
Section 5. Establishment of Trust. FMC may, in its sole discretion,
----------------------
establish a grantor trust in order to accumulate assets to pay Plan obligations.
The assets and income of any trust established under this Plan will be subject
to the claims of FMC's creditors (and those of any Employer, but only to the
extent they are attributable to the contributions of such Employer) in the event
of FMC's (or any Employer's) bankruptcy or insolvency, and the trust document
will specifically contain language to that effect, and language specifying the
mandatory procedure for FMC to notify the trustee of bankruptcy or insolvency.
The establishment or maintenance of a trust will not affect FMC's (or any
Employer's) liability to pay Plan benefits, except as and to the extent amounts
from the trust are actually used to pay a Participant's Plan benefits. If FMC
does establish a trust under the Plan, FMC will determine how much will be
contributed to the trust and when, and trust assets will be invested in
accordance with the terms of the trust.
A Participant will have no direct or secured claim in any asset of the trust, or
in specific assets of FMC or any Employer, and will have the status of a general
unsecured creditor for any amounts due under this Plan.
Section 6. Payment of Excess Benefit. A Participant's Excess Benefit will
-------------------------
be paid to him or her (or, if he or she dies, to his or her beneficiary) at the
same time and in the same manner as his or her accrued benefit under the
Salaried Retirement Plan. A Participant's beneficiary under this Plan will be
the same person or persons as his or her beneficiary under the Salaried
Retirement Plan. Except as described below, no Participant will be required or
permitted to make any election or designation, including but not limited to a
payment election or a beneficiary designation, under this Plan. Instead, each
election or designation a Participant makes under the Salaried Retirement Plan
will apply to the Participant's Excess Benefit.
Effective for distributions beginning on or after January 1, 1998, a Participant
may elect a lump sum distribution of his or her Excess Benefit. A lump sum will
be paid as of the last day of the sixth calendar month after the calendar month
in which the Participant terminated employment with the Company and all other
members of the Affiliated Group, or at such other time as the Committee
determines.
Effective for distributions beginning on or after August 1, 1999, the Committee
may, in its sole discretion, give a Participant the ability to elect a special
annuity distribution option whereby FMC will purchase an annuity contract to pay
the Participant's Excess Benefit at the same time and in the same manner as his
or her accrued benefit under the Salaried Retirement Plan are to be paid.
Notwithstanding anything herein to the contrary, the Committee may on its own
initiative authorize FMC to distribute to any Participant (or, if the
Participant has died, to his or her designated beneficiary) all or any part of
the Participant's Excess Benefit. Payment under the
-2-
<PAGE>
preceding sentence is specifically authorized if there is a change in tax law, a
published ruling or a similar announcement issued by the Internal Revenue
Service, a Treasury Regulation, a decision by a court of competent jurisdiction
involving a Participant or designated beneficiary or a closing agreement
involving a Participant, that the Committee determines will cause the
Participant to have or recognize income for federal income tax purposes as to
Excess Benefits payable under this Plan.
Section 7. Administration of the Plan. This Plan will be administered
--------------------------
by the FMC Corporation Employee Welfare Benefits Plan Committee (the
"Committee"). The Committee has all necessary power to administer the Plan,
including the authority and duty to interpret and apply the Plan's terms, adopt
any rules or regulations the Committee deems necessary or desirable to operate
the Plan, make whatever determinations are permitted or required to maintain or
administer the Plan and take any other actions that prove necessary to
administer the Plan properly, in accordance with its terms. Any decision of the
Committee as to any matter within its authority will be final, binding and
conclusive upon FMC, each Employer, and each Participant, former Participant,
beneficiary or other person claiming under or through any Participant or
beneficiary. An action of the Committee regarding a particular Participant will
not be binding on the Committee regarding an action to be taken as to any other
Participant. A member of the Committee may be a Participant, but he or she may
not participate in any decision that directly affects his or her rights under
the Plan, or the computation of his or her Excess Benefit. Each determination
required or permitted under the Plan will be made by the Committee in its sole
and absolute discretion. The Committee may delegate some or all of its Plan
duties or responsibilities.
Section 8. Amendment and Termination. FMC may amend or terminate the
-------------------------
Plan by action of its Board of Directors, or by action of an officer or FMC
employee or committee authorized by the Board of Directors of FMC to amend the
Plan. Any Employer may terminate its participation in the Plan at any time by
appropriate action, in its discretion. The Plan will automatically terminate as
to any Employer upon termination of the Employer's participation in the Salaried
Retirement Plan. Notwithstanding the foregoing, no Plan amendment or termination
may adversely affect the right of a Participant (or of his or her beneficiary)
to a benefit accrued under this Plan before the date the amendment is adopted or
effective, whichever is later.
Section 9. Employment. Nothing in this Plan will be deemed to give any
----------
person the right to remain in the employ of FMC, any Employer or any of its
affiliates, or affect the right of FMC, any Employer or any of its affiliates to
terminate or change the terms of any Participant's employment, with or without
cause. By accepting any payment under this Plan, each Participant, former
Participant and designated beneficiary and each person claiming under or through
a Participant, former Participant or designated beneficiary, is conclusively
bound by any action or decision taken or made under the Plan by the Committee,
FMC or any Employer.
Section 10. Withholding for Taxes. Notwithstanding anything contained in
---------------------
this Plan to the contrary, any Employer will withhold from any distribution or
deferral under the Plan whatever amount or amounts is it required to withhold to
comply with the tax withholding
-3-
<PAGE>
provisions of the Code or any state income tax act for purposes of paying any
income, estate, inheritance, employment or other tax attributable to any amounts
distributable under the Plan.
Section 11. Immunity of Committee Members. The members of the Committee
-----------------------------
may rely upon any information, report or opinion supplied to them by any officer
of an Employer or any legal counsel, independent public accountant or actuary,
and will be fully protected in relying on any such information, report or
opinion. No member of the Committee will have any liability to FMC, any Employer
or any Participant, former Participant, beneficiary, person claiming under or
through any Participant or beneficiary, or other person interested or concerned
in connection with any Plan decision made by that member of the Committee, so
long as the decision was based on any such information, report or opinion, and
the Committee member relied on it in good faith.
Section 12. Action by Employer. Any action required or permitted to be
------------------
taken under the Plan by an Employer must be taken by its board of directors, by
a duly authorized committee of its board of directors, or by a person or persons
authorized by its board of directors or an authorized committee.
Section 13. Effect on Other Employee Benefit Plans. Compensation accrued
--------------------------------------
under this Plan will not be included in the Participant's compensation or
earnings for purposes of computing benefits under any other employee benefit
plan maintained or contributed to by FMC or any Employer, except as and to the
extent required under the terms of that employee benefit plan or applicable law.
Section 14. Non-Alienation of Benefits. A Participant's rights to Excess
--------------------------
Benefits under the Plan cannot be granted, transferred, pledged or otherwise
assigned, in whole or in part, by the voluntary or involuntary acts of any
person, or by operation of law, and will not be liable or taken for any
obligation of the Participant. Any attempted grant, transfer, pledge or
assignment of a Participant's rights to Plan benefits will be null and void and
without any legal effect.
Section 15. Employer Liability. Each Employer is liable to pay the Plan
------------------
benefits earned or accrued for its eligible employees who are Participants. With
the consent of the Board of Directors (or of a duly appointed delegate of the
Board of Directors), any Employer may assume any other Employer's Plan
liabilities and obligations. To the extent that an Employer assumes another
Employer's Plan liabilities or obligations, the second Employer will be released
from any continuing obligation under the Plan. At FMC's request, a Participant,
former Participant or designated beneficiary will sign any documents reasonably
required by FMC to effectuate the purposes of this Section 15.
Section 16. Notices. Any notice required to be given by FMC, an Employer
-------
or the Committee must be in writing and must be delivered in person, by
registered mail, return receipt requested, or by regular mail, telecopy or
electronic mail. Any notice given by mail will be deemed to have been given on
the date it was mailed, correctly addressed to the last known address of the
person to whom the notice is to be given.
-4-
<PAGE>
Section 17. Gender, Number and Headings. Except where the context
---------------------------
otherwise requires, in this Plan the masculine gender includes the feminine, the
feminine includes the masculine, the singular includes the plural, and the
plural includes the singular. Headings are inserted for convenience only, are
not part of the Plan, and are not to be considered in the Plan's construction.
Section 18. Controlling Law. The Plan will be construed according to the
---------------
internal laws of Illinois to the extent they are not preempted by any applicable
federal law.
Section 19. Successors. The Plan is binding on all persons entitled to
----------
benefits under it, on their respective heirs and legal representatives, on the
Committee and its successor, and on any Employer and its successor, whether by
way of merger, consolidation, purchase or otherwise.
Section 20. Severability. If any provision of the Plan is held to be
------------
illegal or invalid for any reason, that illegality or invalidity will not affect
the remaining provisions of the Plan, and the Plan will be enforced and
administered, from that point forward, as if the invalid provisions had never
been part of it.
Section 21. Subsequent Changes. All benefits to which any Participant,
------------------
beneficiary or other person is entitled under this Plan will be determined
according to the terms of the Plan as in effect when the Participant ceases to
be an employee for purposes of the Salaried Retirement Plan, and will not be
affected by any subsequent changes in Plan provisions, unless the Participant
again becomes an employee, or unless and to the extent the subsequent change
expressly applies to the Participant, his or her beneficiary, or other person
claiming through or on behalf of the Participant or beneficiary.
Section 22. Benefits Payable to Minors, Incompetents and Others. If any
---------------------------------------------------
benefit is payable to a minor, an incompetent, or a person otherwise under a
legal disability, or to a person the Committee reasonably believes to be
physically or mentally incapable of handling and disposing of his or her
property, the Committee has the power to apply all or any part of the benefit
directly to the care, comfort, maintenance, support, education or use of the
person, or to pay all or any part of the benefit to the person's parent,
guardian, committee, conservator or other legal representative, to the
individual with whom the person is living, or to any other individual or entity
having the care and control of the person. The Plan, the Committee, FMC and any
Employer and their employees and agents will have fully discharged their
responsibilities to the Participant or beneficiary entitled to a payment by
making payment under this Section 22.
-5-
<PAGE>
IN WITNESS WHEREOF, FMC has caused this amended and restated Plan to be
executed in its name and behalf on this 20/th/ day of March, 2000.
FMC CORPORATION
By: /s/ Tom Hester
---------------------------------
Member, Employee Welfare Benefits
Plan Committee
-6-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>4
<FILENAME>dex107.txt
<DESCRIPTION>FMC CORP. NON-QUALIFIED SAVINGS & INVESTMENT PLAN
<TEXT>
<PAGE>
EXHIBIT 10.7
FMC Corporation
Non-Qualified Savings and Investment Plan
-----------------------------------------
(As Amended and Restated Effective as of January 1, 2000)
Winston & Strawn
Chicago
<PAGE>
FMC Corporation
Non-Qualified Deferred Compensation and Retirement Plan
-------------------------------------------------------
(As Amended and Restated Effective as of January 1, 2000)
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page No.
---------
<S> <C>
Article I
Introduction........................................................................ 1
- ------------
Section 1.1. Name; Purpose.................................................... 1
Section 1.2. Administration of the Plan....................................... 1
Article II
Definitions......................................................................... 2
- -----------
Section 2.1. Account......................................................... 2
Section 2.2. Account Balance................................................. 2
Section 2.3. Accounting Date................................................. 2
Section 2.4. Adopting Affiliate.............................................. 2
Section 2.5. Affiliated Group................................................ 2
Section 2.6. Board........................................................... 2
Section 2.7. Code............................................................ 2
Section 2.8. Committee....................................................... 2
Section 2.9. Company......................................................... 2
Section 2.10. Company Stock................................................... 2
Section 2.11. Compensation.................................................... 2
Section 2.12. Deferral Contributions.......................................... 2
Section 2.13. Deferral Contributions Account.................................. 3
Section 2.14. Effective Date.................................................. 3
Section 2.15. Employer........................................................ 3
Section 2.16. ERISA........................................................... 3
Section 2.17. Excess Compensation............................................. 3
Section 2.18. Full Deferral Contributions..................................... 3
Section 2.19. Matching Contributions.......................................... 3
Section 2.20. Matching Contributions Account.................................. 3
Section 2.21. Mirror Deferral Contributions................................... 3
Section 2.22. Participant..................................................... 3
Section 2.23. Permitted Investment............................................ 3
Section 2.24. Plan............................................................ 3
Section 2.25. Plan Year....................................................... 3
Section 2.26. Tax-Qualified Savings Plan...................................... 3
Section 2.27. Year of Service................................................. 3
Article III
Plan Participation.................................................................. 4
- ------------------
Section 3.1. Eligibility...................................................... 4
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
Section 3.2. Participation.................................................... 4
Article IV
Deferral Contributions.............................................................. 4
- ----------------------
Section 4.1. Deferral Contributions........................................... 4
Section 4.2. Deferral Contributions Account................................... 5
Article V
Matching Contributions.............................................................. 5
- ----------------------
Section 5.1. Matching Contributions........................................... 5
Section 5.2. Matching Contributions Account................................... 5
Article VI
Deemed Earnings on Account Balances................................................. 6
- -----------------------------------
Section 6.1. Deemed Investments............................................... 6
Section 6.2. Crediting of Deferrals and Contributions......................... 7
Section 6.3. Statement of Accounts............................................ 7
Article VII
Establishment of Trust.............................................................. 7
- ----------------------
Section 7.1. Establishment of Trust........................................... 7
Section 7.2. Status of Trust.................................................. 7
Article VIII
Distribution of Plan Benefits....................................................... 7
- -----------------------------
Section 8.1. Vesting of Accounts.............................................. 7
Section 8.2. Payment of Account Balances...................................... 8
Section 8.3. Distribution of Accounts of Certain Former Employees............. 8
Section 8.4. Payments in the Event of Unforeseeable Emergency................. 8
Section 8.5. Involuntary Distributions........................................ 9
Section 8.6. Forfeitures...................................................... 9
Section 8.7. Designation of Beneficiaries..................................... 9
Article IX
Amendment and Termination........................................................... 10
- -------------------------
Section 9.1. Amendment........................................................ 10
Section 9.2. Plan Termination................................................. 10
Article X
General Provisions.................................................................. 10
- ------------------
Section 10.1. Non-Alienation of Benefits...................................... 10
Section 10.2. Withholding for Taxes........................................... 10
Section 10.3. Immunity of Committee Members................................... 11
Section 10.4. Plan Not to Affect Employment Relationship...................... 11
Section 10.5. Action by the Employers......................................... 11
Section 11.6. Effect on Other Employee Benefit Plans.......................... 11
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
Section 10.7. Employer Liability.............................................. 11
Section 10.8. Notices......................................................... 11
Section 10.9. Gender and Number; Headings..................................... 11
Section 10.10. Controlling Law................................................ 12
Section 10.11. Successors..................................................... 12
Section 10.12. Severability................................................... 12
Section 10.13. Subsequent Changes............................................. 12
Section 10.14. Benefits Payable to Minors, Incompetents and Others............ 12
</TABLE>
-iii-
<PAGE>
FMC Corporation
Non-Qualified Savings and Investment Plan
-----------------------------------------
(As Amended and Restated Effective as of January 1, 2000)
Article I
Introduction
------------
Section 1.1. Name; Purpose. The Company established the FMC Deferred
-------------
Compensation Equivalent Retirement and Thrift Plan effective as of January 1,
1977. That plan was amended and restated effective as of September 1, 1997 as
the FMC Corporation Non-Qualified Retirement and Thrift Plan, and it permitted a
select group of management or highly compensated employees to make deferrals and
receive contributions and benefits that could not be made or received under the
Tax-Qualified Savings Plan and FMC Corporation Employees' Retirement Program.
As of October 22, 1993, the Company adopted the Deferred Compensation Plan of
FMC Corporation, to permit a select group of management or highly compensated
employees to defer certain types of compensation not taken into account under
either the Non-Qualified Retirement and Thrift Plan or the Tax-Qualified Savings
Plan. Effective as of December 31, 1997, the Non-Qualified Retirement and
Thrift Plan and the Deferred Compensation Plan were merged. Effective as of
January 1, 2000, the merged plan was restated to reflect certain administrative
practices and changes, and name of the merged plan was changed to better reflect
its purpose to mirror the Tax-Qualified Savings Plan. This document reflects
the provisions of the merged plan as in effect January 1, 2000. Although a
rabbi trust may be established in connection with it, this Plan constitutes an
unfunded, non-qualified arrangement providing deferred compensation to a select
group of management or highly compensated employees (as defined for purposes of
Title I of ERISA) of the Company and of certain of the Company's affiliates.
Section 1.2. Administration of the Plan. The Plan is administered by the
--------------------------
Committee. The duties and authority of the Committee include:
(a) interpreting and applying the Plan's terms;
(b) adopting any rules or regulations the Committee deems necessary or
desirable to operate the Plan;
(c) making whatever determinations are permitted or required to maintain or
administer the Plan; and
(d) taking any other actions that prove necessary to administer the Plan
properly, in accordance with its terms.
Any decision of the Committee as to any matter within its authority will be
final, binding and conclusive upon the Company, any Employer and each
Participant, former Participant, designated beneficiary or other person claiming
under or through any Participant or designated
-1-
<PAGE>
beneficiary. No additional authorization or ratification by the Board is
necessary for the Committee to act on any matter within its authority. An action
taken by the Committee as to a Participant will not be binding on the Committee
regarding an action to be taken as to any other Participant. A member of the
Committee may be a Participant, but he or she may not participate in any
decision that directly affects his or her rights under the Plan, or the
computation of his or her Plan benefits. Each determination required or
permitted under the Plan will be made by the Committee in its sole and absolute
discretion. The Committee may delegate some or all of its duties or
responsibilities.
Article II
Definitions
-----------
Section 2.1. Account means a bookkeeping Account maintained by the Company
-------
for a Participant, including his or her Deferral Contributions Account and
Matching Contributions Account.
Section 2.2. Account Balance means the value, as of a specified date, of
---------------
the Participant's Account, Deferral Contributions Account or Matching
Contributions Account.
Section 2.3. Accounting Date means each business day of the Plan Year.
---------------
Section 2.4. Adopting Affiliate means an entity that, together with the
------------------
Company, is considered as a single employer under Section 414(b), (c), (m) or
(o) of the Code, and has adopted the Tax-Qualified Savings Plan for its
employees.
Section 2.5. Affiliated Group the group that consists of the Company and
----------------
every other entity that, together with the Company, is considered as a single
employer under Section 414(b), (c), (m) or (o) of the Code.
Section 2.6. Board means the Board of Directors of the Company.
-----
Section 2.7. Code means the Internal Revenue Code of 1986, as amended.
----
Section 2.8. Committee means the FMC Corporation Employee Welfare Benefits
---------
Plan Committee, or its delegate.
Section 2.9. Company means FMC Corporation.
-------
Section 2.10. Company Stock means the common stock of the Company.
-------------
Section 2.11. Compensation has the same meaning as under the Tax-Qualified
------------
Savings Plan, except that it also includes amounts deferred under this Plan.
Section 2.12. Deferral Contributions means the Mirror Deferral
----------------------
Contributions and Full Deferral Contributions credited on behalf of a
Participant pursuant to Section 4.1.
-2-
<PAGE>
Section 2.13. Deferral Contributions Account means the Account maintained
------------------------------
on behalf of a Participant to represent the amount of the Deferral Contributions
credited in his or her behalf, as adjusted to account for deemed gains and
losses, withdrawals and distributions.
Section 2.14. Effective Date means January 1, 2000, the effective date of
--------------
this amended and restated Plan.
Section 2.15. Employer means the Company and/or any Adopting Affiliate.
--------
Section 2.16. ERISA means the Employee Retirement Income Security Act of
-----
1974, as amended.
Section 2.17. Excess Compensation means an amount that would be
-------------------
Compensation, except that it exceeds the annual compensation limit under Section
401(a)(17), as adjusted, (for 2000, $170,000), as set forth in the Tax-Qualified
Savings Plan.
Section 2.18. Full Deferral Contributions means amounts credited to a
---------------------------
Participant pursuant to subsection 4.1(b).
Section 2.19. Matching Contributions means the contributions credited on
----------------------
behalf of a Participant pursuant to Section 5.1.
Section 2.20. Matching Contributions Account means the Account maintained
------------------------------
on behalf of a Participant to represent the amount of Matching Contributions
credited in his or her behalf, as adjusted to account for deemed gains and
losses, withdrawals and distributions.
Section 2.21. Mirror Deferral Contributions means the contributions
-----------------------------
credited to a Participant pursuant to subsection 4.1(a).
Section 2.22. Participant means any eligible employee of an Employer who
-----------
participates in the Plan pursuant to Article III.
Section 2.23. Permitted Investment means a notional fund or type of
--------------------
notional investment approved by the Committee for Plan purposes. One Permitted
Investment will be Company Stock.
Section 2.24. Plan means this FMC Corporation Non-Qualified Savings and
----
Investment Plan (As Amended and Restated Effective as of January 1, 2000).
Section 2.25. Plan Year means the calendar year.
---------
Section 2.26. Tax-Qualified Savings Plan means the FMC Corporation Savings
--------------------------
and Investment Plan, as amended from time to time.
-3-
<PAGE>
Section 2.27. Year of Service means, as to a Participant, the
---------------
Participant's number of calendar months of employment by the Affiliated Group
(including any interruption of employment of up to 12 months) divided by 12. A
partial month counts as a whole month, and any fractional year of service is
ignored. A period longer than 12 months for which a Participant does not
receive Compensation, including (without limitation) any unpaid leave of absence
is not counted in determining the Participant's Years of Service, nor does any
other interruption of employment longer than 12 months.
Article III
Plan Participation
------------------
Section 3.1. Eligibility. An employee of an Employer will be eligible to
-----------
participate in any Plan Year if he or she meets all of the following conditions:
(a) the employee is part of a select group of management or highly
compensated employees, within the meaning of Title I of ERISA;
(b) the employee is eligible to participate in the Tax-Qualified Savings
Plan for the Plan Year;
(c) the employee is expected to receive Excess Compensation during the Plan
Year; and
(d) the Committee, or its delegate, designates the employee as eligible to
participate in the Plan.
Section 3.2. Participation. An employee who meets the conditions of
-------------
Section 3.1 becomes a Participant by executing and filing with the Committee a
deferral election form, in the manner and at the time required under Article IV.
Once an individual is a Participant, he or she will remain a Participant for so
long as he or she has an Account Balance, although a Participant may continue to
make Deferral Contributions and receive allocations under the Plan only so long
as he or she remains an eligible employee.
Article IV
Deferral Contributions
----------------------
Section 4.1. Deferral Contributions. Each eligible employee who has made
----------------------
an election to defer a portion of his or her Compensation under the Tax-
Qualified Savings Plan for a Plan Year may elect to defer an additional amount
under this Plan for that Plan Year, as Mirror Deferral Contributions, Full
Deferral Contributions, or both.
(a) A Mirror Deferral Contribution is an amount, between 1% and 20%
(between 1% and 15%, before October 1, 1999) of the Participant's
Compensation and Excess Compensation, that the Participant cannot defer
under the Tax-Qualified Savings
-4-
<PAGE>
Plan because it exceeds the limit on deferrals under Code Section 402(g),
represents a deferral of Excess Compensation, or represents an amount that
the Participant cannot defer under the Tax-Qualified Savings Plan because
of the limits of Code Section 415(c).
(b) A Full Deferral Contribution is an amount, between 1% and 80%
(between 1% and 85%, before October 1, 1999) of the total of the
Participant's Compensation and Excess Compensation.
A Participant's Mirror Deferral Contributions and Full Deferral Contributions
for a Plan Year may not exceed the sum of his or her Compensation and Excess
Compensation. A Participant must make his or her deferral election for a Plan
Year no later than the last day of the preceding Plan Year, and may not change
his or her deferral election during the Plan Year. Notwithstanding the
foregoing, when an employee first becomes an eligible employee, he or she may
make a deferral election no later than thirty days after becoming an eligible
employee, so long as the deferral election applies to Compensation and Excess
Compensation earned during the Plan Year after the date of the deferral
election.
4.2. Deferral Contributions Account. The Committee will establish and
------------------------------
maintain a Deferral Contributions Account on behalf of each Participant who
elects to make Deferral Contributions. The Deferral Contributions Account will
be a bookkeeping account maintained by the Company, and will reflect the Mirror
Deferral Contributions and Full Deferral Contributions the Participant has
elected to make to the Plan, as adjusted pursuant to Article VI to reflect
deemed gains and losses, withdrawals and distributions.
Article V
Matching Contributions
----------------------
Section 5.1. Matching Contributions. Each Participant will be credited
----------------------
with a Matching Contribution in an amount equal to the matching contributions
that would have been made with respect to his or her Mirror Deferral
Contributions, if they had been made under the Tax-Qualified Savings Plan, at
such time as described in Section 6.2.
Section 5.2. Matching Contributions Account. The Committee will
------------------------------
establish and maintain a Matching Contributions Account on behalf of each
Participant who is credited with Matching Contributions. The Matching
Contributions Account will be a bookkeeping account maintained by the Company,
and will reflect the Matching Contributions that have been credited to the
Participant, as adjusted pursuant to Article VI to reflect deemed gains and
losses, withdrawals and distributions.
-5-
<PAGE>
Article VI
Deemed Earnings on Account Balances
-----------------------------------
Section 6.1. Deemed Investments.
------------------
(a) Each Participant may designate from time to time, in the manner
prescribed by the Committee, that all or a portion of his or her Deferral
Contributions Account be deemed to be invested in one or more Permitted
Investments. The Committee will establish rules governing the dates as of which
amounts will be deemed to be invested in the Permitted Investments chosen by
the Participant, and the time and manner in which amounts will be deemed to be
transferred from one Permitted Investment to another, pursuant to a
Participant's election to change his or her deemed investments. The Committee
will also establish a default Permitted Investment, in which the Deferral
Contributions Account of a Participant who fails to make an investment election
will be deemed to be invested. Effective September 1, 1997, the Committee's
Plan investment election rules permit a Participant to transfer any or all of
his or her Account (including any or all of his or her Matching Contribution
Account) out of the Company Stock Permitted Investment.
(b) All amounts credited to a Participant's Matching Contributions Account
will be deemed to be invested initially in Company Stock. For periods beginning
prior to September 1, 1997, a Participant was prohibited from transferring any
portion of his or her Matching Contributions Account into a Permitted
Investment other than Company Stock.
(c) Each Account will be deemed to receive all interest, dividends,
earnings and other property which would be received by it if it were actually
invested in the Permitted Investment in which it is deemed to be invested.
Similarly, each Account will be deemed to suffer all investment losses and
other diminutions it would suffer if it were actually invested in the Permitted
Investment in which it is deemed to be invested. Gains and losses will be
credited to or debited from each Account at the times and in the manner
specified by the Committee.
(d) Elections required or permitted to be made pursuant to this Article VI
must be made only by the Participant. Notwithstanding the foregoing, if a
Participant dies before his or her entire Account Balance is distributed, or if
the Committee determines that a Participant is legally incompetent or otherwise
incapable of managing his or her own affairs, the Committee may itself make
Plan elections on behalf of the Participant, or may declare that the
Participant's designated beneficiary, legal representative or near relative
will be permitted to make Plan elections on behalf of the Participant.
(e) Neither the Company nor the Plan need make any Permitted Investment.
If, from time to time, the Company actually makes an investment similar to a
Permitted Investment, that investment will be solely for the Company's own
account, and the
-6-
<PAGE>
Participant will have no right, title or interest in that investment.
Each Participant has only the rights of an unsecured creditor of the
Company or any Employer, as to any amount owing to him or her under
the Plan.
6.2. Crediting of Deferrals and Contributions. The Company will
----------------------------------------
credit all Deferral Contributions to a Participant's Deferral Contributions
Account within a reasonable period of time after the date they would have been
paid to the Participant if the Participant had not elected to defer them. The
Company will credit all Matching Contributions made on a Participant's behalf to
the Participant's Matching Contributions Account within a reasonable period
after the date they would have been contributed to the Tax-Qualified Savings
Plan, if they could have been permitted allocated under that Plan.
6.3. Statement of Accounts. Within a reasonable period of time
---------------------
after the end of each calendar quarter, the Company will furnish each
Participant with a statement showing the value of his or her Account as of the
end of that calendar quarter.
Article VII
Establishment of Trust
----------------------
Section 7.1. Establishment of Trust. The Company may, in its sole
----------------------
discretion, establish a grantor trust in order to accumulate assets to pay Plan
obligations. The assets and income of any trust established under this Plan will
be subject to the claims of the Employers' general creditors, but only to the
extent they are attributable to the contributions of that individual Employer.
The establishment or maintenance of a Plan trust will not affect the Employers'
liability to pay Plan benefits, except as and to the extent amounts from the
trust are actually used to pay a Participant's Plan benefits. If the Company
does establish a trust under the Plan, the Company will determine how much will
be contributed to the trust and when, and trust assets will be invested in
accordance with the terms of the trust.
Section 7.2. Status of Trust. A Participant will have no direct
---------------
or secured claim in any asset of the trust, or in specific assets of the Company
or of his or her Employer, and will have the status of a general unsecured
creditor of his or her Employer, for any amounts due under this Plan. The assets
and income of any trust established in connection with this Plan will be subject
to the claims of each Employer's creditors, but only to the extent those assets
are attributable to the contributions of that individual Employer.
Article VIII
Distribution of Plan Benefits
-----------------------------
Section 8.1. Vesting of Accounts. Each Participant will at all
-------------------
times be fully vested in his or her Deferral Contributions Account. A
Participant's vested interest in his or her Matching Contributions Account is
determined in the same manner, at the same time and to the same extent as his or
her vested interest in the matching contribution account under the Tax-Qualified
Savings Plan.
-7-
<PAGE>
Section 8.2. Payment of Account Balances. This Section 8.2 governs
---------------------------
payment of most Account Balances. The Account Balances of certain former
employees will be paid as described in Section 8.3.
(a) Generally, the vested portion of a Participant's Account Balance
will be paid to him or her (or, if the Participant has died, to his or her
designated beneficiary) in cash, in a single lump sum, as of the last day
of the sixth calendar month after the calendar month in which the
Participant terminated employment with the Company and all other members of
the Affiliated Group. The only in-service withdrawals permitted under the
Plan are described in Section 8.4.
(b) Notwithstanding subsection 8.2(a), a Participant to whom this
Section 8.2 applies may make an irrevocable election to have the vested
portion of his or her Account paid in any form of distribution permitted
under the Tax-Qualified Savings Plan. Payment under this subsection 8.2(b)
will begin as of the last day of the sixth calendar month after the
calendar month in which the Participant terminated employment with the
Company and all other members of the Affiliated Group or, if earlier,
within 90 days after the Participant's death. A Participant must elect a
form of payment under this subsection 8.2(b) no later than the last day of
the first calendar month following the calendar month in which the
Participant terminated employment with the Company and all other members of
the Affiliated Group. Notwithstanding any other provision of this Article
VIII, the Committee may establish a minimum amount of any installment
payment to be made under the Plan.
Section 8.3. Distribution of Accounts of Certain Former Employees. The
-----------------------------------------------------
vested portions of the Accounts of most Participants who terminated employment
with the Company and all other members of the Affiliated Group before September
1, 1997 were paid to them (or, if they had died, to their designated
beneficiaries) in cash, in lump sums, on April 1, 1998. Notwithstanding the
foregoing, some of those Participants made irrevocable elections before January
1, 1998 to have the vested portions of their Accounts paid in distribution forms
permitted under the Tax-Qualified Savings Plan, beginning, in each case, at a
later date selected by the Participant. The vested portions of the Account of
each Participant who made an irrevocable election described in the preceding
sentence will be distributed in the manner elected by the Participant, with
payments commencing at the time he or she elected or, if earlier, within 90 days
after his or her death. Notwithstanding any other provision of this Article
VIII, the Committee may establish a minimum amount of any installment payment to
be made to a Participant who made an election described in this Section 8.3.
Section 8.4. Payments in the Event of Unforeseeable Emergency. A
------------------------------------------------
Participant may request, in the manner and within the time constraints
established by the Committee, to receive an emergency payment of some or all of
his or her vested Account Balance. The Committee will authorize an emergency
payment under this Section 8.4 only if the Participant experiences an
unforeseeable emergency. An emergency payment must be limited to the amount the
Participant reasonably needs to satisfy the unforeseeable emergency. An
unforeseeable emergency is severe financial hardship to the Participant
resulting from:
-8-
<PAGE>
(a) a sudden and unexpected illness or accident to the Participant or to
his or her dependent (as defined in Code Section 152(a));
(b) the Participant's losing his or her property due to casualty; or
(c) other similar extraordinary and unforeseeable circumstances arising as
a result of unforeseeable events beyond the Participant's control.
Whether a Participant suffers an unforeseeable emergency depends upon the facts
of each case; in no event, however, may the Participant receive an emergency
payment if his or her hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise, by liquidation of the Participant's
assets (to the extent liquidation of those assets would not itself cause severe
financial hardship) or by ceasing to make deferrals under the Plan. The need to
send a Participant's child to college or the desire to purchase a home are not
unforeseeable emergencies.
Section 8.5. Involuntary Distributions. Notwithstanding the foregoing
-------------------------
provisions of this Article VIII, the Committee may on its own initiative
authorize the Company to distribute to any Participant (or, if the Participant
has died, to his or her designated beneficiary) all or any part of the
Participant's vested Account Balance. Payment under the preceding sentence is
specifically authorized if there is a change in tax law, a published ruling or a
similar announcement issued by the Internal Revenue Service, a Treasury
Regulation, a decision by a court of competent jurisdiction involving a
Participant or designated beneficiary, or a closing agreement made under Code
Section 7121 involving a Participant, that the Committee determines will cause
the Participant to have or recognize income for federal income tax purposes as
to amounts deferred under this Plan.
Section 8.6. Forfeitures. The portion of a Participant's Matching
-----------
Contributions Account that is not fully vested will become a forfeiture as and
to the same extent it would have become a forfeiture under the Tax-Qualified
Savings Plan, if the contributions to which it is attributable could have been
allocated under that plan, and will be applied in the same manner as if it had
become a forfeiture under the Tax-Qualified Savings Plan.
Section 8.7. Designation of Beneficiaries. Each Participant may name
----------------------------
any person or persons to whom his or her vested Account Balance will be paid if
the Participant dies before they have been fully distributed. Each beneficiary
designation will revoke all prior beneficiary designations made by that
Participant. The Committee will designate the time and manner in which a
Participant must made a beneficiary designation, but will not require a
Participant to obtain the consent of his or her current beneficiary to the
naming a new or additional beneficiaries. A beneficiary designation will be
effective only if it meets the requirements specified by the Committee. If a
Participant fails to designate a beneficiary, or if the Participant's
beneficiary dies before the Participant does or before receiving the full amount
to which he or she is entitled, the Committee may, in its discretion, pay the
vested portion of the Participant's Account Balance (or the portion that remains
unpaid) to one or more of the Participant's relatives by blood, adoption or
marriage, in the proportions it determines, or to the
-9-
<PAGE>
legal representative of the estate of the later to die of the Participant and
his or her designated beneficiary.
Article IX
Amendment and Termination
-------------------------
Amendment and Termination. The Company has the right to amend or terminate
-------------------------
the Plan by action of the Board, or by action of an officer or Company employee
or committee authorized by the Board to amend the Plan. Any Employer may
terminate its participation in the Plan at any time by appropriate action, in
its discretion. The Plan will automatically terminate as to any Employer upon
termination of the Employer's participation in the Tax-Qualified Savings Plan.
Notwithstanding the foregoing, no Plan amendment or termination may adversely
affect the right of a Participant (or his or her designated beneficiary) to
vested benefits already accrued in the Participant's behalf under this Plan,
unless the Participant (or beneficiary) consents to the amendment.
Article X
General Provisions
------------------
Section 10.1. Non-Alienation of Benefits. A Participant's rights to the
--------------------------
amounts credited to his or her Account under the Plan cannot be granted,
transferred, pledged or otherwise assigned, in whole or in part, by the
voluntary or involuntary acts of any person, or by operation of law, and will
not be liable or taken for any obligation of the Participant. Any attempted
grant, transfer, pledge or assignment of a Participant's rights to Plan benefits
will be null and void and without any legal effect.
Section 10.2. Withholding for Taxes. Notwithstanding anything contained
---------------------
in this Plan to the contrary, each Employer will withhold from any distribution,
deferral or accrual under the Plan whatever amount or amounts may be required to
comply with the tax withholding provisions of the Code or any State income tax
act for purposes of paying any income, estate, inheritance, employment or other
tax attributable to any amounts distributable or creditable under the Plan.
Section 10.3. Immunity of Committee Members. The members of the Committee
-----------------------------
may rely upon any information, report or opinion supplied to them by any officer
of an Employer or any legal counsel, independent public accountant or actuary,
and will be fully protected in relying on any such information, report or
opinion. No member of the Committee will have any liability to the Company, any
Employer or any Participant, former Participant, designated beneficiary, person
claiming under or through any Participant or designated beneficiary, or other
person interested or concerned in connection with any Plan decision made by that
member of the Committee, so long as the decision was based on any such
information, report or opinion, and the Committee member relied on it in good
faith.
10.4. Plan Not to Affect Employment Relationship. Neither the adoption of
------------------------------------------
the Plan nor its operation will in any way affect the right and power of an
Employer to dismiss or
-10-
<PAGE>
otherwise terminate the employment, or change the terms of employment or amount
of compensation, of any Participant at any time, for any reason or without
cause. By accepting any payment under this Plan, each Participant, former
Participant, and designated beneficiary, and each person claiming under or
through a Participant, former Participant or designated beneficiary, is
conclusively bound by any action or decision taken or made under the Plan by the
Committee, the Company or any Employer
10.5. Action by the Employers. Any action required or permitted to be
-----------------------
taken under the Plan by an Employer must be taken by its Board of Directors, by
a duly authorized committee of its Board of Directors, or by a person or persons
authorized by its Board of Directors or an authorized committee.
11.6. Effect on Other Employee Benefit Plans. Any compensation deferred
--------------------------------------
or accrued under this Plan, and any amount credited to a Participant's Account
under this Plan, will not be included in the Participant's compensation or
earnings for purposes of computing benefits under any other employee benefit
plan maintained or contributed to by the Employer, except as and to the extent
required under the terms of that employee benefit plan or applicable law.
10.7. Employer Liability. Each Employer is liable to pay the Plan
------------------
benefits earned or accrued for its eligible employees who are Participants. With
the consent of the Board (or of a duly appointed delegate of the Board), any
Employer may assume any other Employer's Plan liabilities and obligations. To
the extent that an Employer assumes another Employer's Plan liabilities or
obligations, the second Employer will be released from any continuing obligation
under the Plan. At the Company's request, a Participant or designated
beneficiary will sign any documents reasonably required by the Company to
effectuate the purposes of this Section 10.7.
10.8. Notices. Any notice required to be given by the Company, any
-------
Employer or the Committee must be in writing and must be delivered in person, by
registered mail, return receipt requested, or by regular mail, telecopy or
electronic mail. Any notice given by mail will be deemed to have been given on
the date it was mailed, correctly addressed to the last known address of the
person to whom the notice is to be given.
10.9. Gender, Number and Headings. Except where the context otherwise
---------------------------
requires, in this Plan the masculine gender includes the feminine, the feminine
includes the masculine, the singular includes the plural, and the plural
includes the singular. Headings are inserted for convenience only, are not part
of the Plan, and are not to be considered in the Plan's construction.
10.10. Controlling Law. The Plan will be construed according to the
---------------
internal laws of Illinois, to the extent they are not preempted by any
applicable federal law.
10.11. Successors. The Plan is binding on all persons entitled to benefits
----------
under it, on their respective heirs and legal representatives, on the Committee
and its successor, and on any Employer and its successor, whether by way of
merger, consolidation, purchase or otherwise.
-11-
<PAGE>
10.12. Severability. If any provision of the Plan is held to be illegal
------------
or invalid for any reason, that illegality or invalidity will not affect the
remaining provisions of the Plan, and the Plan will be enforced and
administered, from that point forward, as if the invalid provisions had never
been part of it.
10.13. Subsequent Changes. All benefits to which any Participant,
------------------
designated beneficiary or other person is entitled under this Plan will be
determined according to the terms of the Plan as in effect when the Participant
ceases to be an eligible employee, and will not be affected by any subsequent
change in Plan provisions, unless the Participant again becomes an eligible
employee, or unless and to the extent the subsequent change expressly applies to
the Participant, his or her designated beneficiary or other person claiming
through or on behalf of the Participant or designated beneficiary.
Section 10.14. Benefits Payable to Minors, Incompetents and Others. If
---------------------------------------------------
any benefit is payable to a minor, an incompetent, or a person otherwise under a
legal disability, or to a person the Committee reasonably believes to be
physically or mentally incapable of handling and disposing of his or her
property, the Committee has the power to apply all or any part of the benefit
directly to the care, comfort, maintenance, support, education or use of the
person, or to pay all or any part of the benefit to the person's parent,
guardian, committee, conservator or other legal representative, to the
individual with whom the person is living, or to any other individual or entity
having the care and control of the person. The Plan, the Committee, FMC, any
Employer and their employees and agents will have fully discharged their
responsibilities to the Participant or beneficiary entitled to a payment by
making payment under this Section 10.14.
-12-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this amended and restated Plan
to be executed in its name and behalf on this 20/th/ day of March, 2000.
FMC CORPORATION
By: /s/ Tom Hester
-------------------------------------
Member, Employee Welfare Benefits
Plan Committee
-13-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7.A
<SEQUENCE>5
<FILENAME>dex107a.txt
<DESCRIPTION>REVISED FIRST AMENDMENT OF NON-QUALIFIED PLAN
<TEXT>
<PAGE>
EXHIBIT 10.7.a
PAGE 1 OF 1
REVISED
First Amendment
of
FMC Corporation Non-Qualified Savings and Investment Plan
---------------------------------------------------------
(As Amended and Restated Effective as of January 1,2000)
WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation
Non-Qualified Savings and Investment Plan (the "Plan") and administers the Plan
through the FMC Corporation Employee Welfare Benefits Plan Committee (the
"Committee"); and
WHEREAS, the Plan has previously been amended, most recently in the form
of an amendment and restatement effective as of January 1, 2000, and the Company
now considers it desirable to amend the Plan further;
NOW, THEREFORE, by virtue of the authority reserved to the Committee by
Article IX of the Plan, the Plan is hereby amended effective as of January 1,
2000 as follows:
Section 8.2 Payment of Account Balances is hereby amended for
---------------------------
clarification purposes by adding the following as the first sentence of
Subsection (a) thereof: "All payments under this Plan shall be made in cash.";
and, by adding the following to the end of the first sentence of Subsection (b)
thereof: ";provided, however, that a Participant may not elect to receive a
distribution in Company Stock instead of cash."
IN WITNESS WHEREOF, the undersigned member of the Committee has executed
the foregoing amendment on behalf of the Company and the Committee on this
30th day of January, 2001.
FMC Corporation
By:/s/ Stephen F. Gates
---------------------------------
Member, FMC Corporation Employee
Welfare Benefits Plan Committee
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>6
<FILENAME>dex1010.txt
<DESCRIPTION>FMC CORP. EXECUTIVE SEVERANCE PLAN
<TEXT>
<PAGE>
EXHIBIT 10.10
FMC Corporation
Executive Severance Plan
------------------------
(As Amended and Restated Effective as of January 1, 2000)
Winston & Strawn
Chicago
<PAGE>
FMC Corporation
Executive Severance Plan
------------------------
(As Amended and Restated Effective as of January 1, 2000)
1. History and Purpose. The Company adopted the Plan in 1983 and amended and
-------------------
restated the Plan in 1997. The Plan is hereby amended and restated as of January
1, 2000. The purpose of the Plan is to assure the Company that it will have the
continued dedication and the availability of objective advise and counsel from
key executives of the Company, notwithstanding the possibility, threat or
occurrence of a bid to take over control of the Company
The Board of Directors believes it is imperative that, if the Company
receives any proposals from a third person concerning a possible business
combination with the Company or the acquisition of the Company's equity
securities, both the Company and the Board of Directors be able to rely upon key
executives to continue in their positions and to be available for advice,
without concern that those individuals might be distracted by their own personal
financial situations and the risks to themselves created by the proposal.
If the Company receives any such proposal, key executives will be called
upon to assist in assessing the proposal, to advise management and the Board of
Directors regarding whether the proposal is in the best interest of the Company
and its stockholders, and to take such other actions as the Board of Directors
might deem appropriate.
2. Eligible Executives. The following individuals will be Participants:
-------------------
a. the Chairman of the Board of Directors;
b. the President, the Executive Vice Presidents, and the Senior Vice
Presidents of the Company;
c. the Group and Regional Managers of the Company;
d. other officers of the Company, except Assistant Secretaries and
Assistant Treasurers;
e. Company Division Managers of the Company; and
f. other key executives of the Company and its Subsidiaries who are from
time to time named as Participants by the Committee in its sole discretion.
A Participant will cease to be a Participant if and when the Committee
determines he or she should no longer be a Participant. The Committee will not
determine that a Participant has ceased to be a Participant during any period
that the Company knows a Person has taken steps reasonably calculated to effect
a Change in Control, and before the Board of Directors has determined that that
Person has abandoned or terminated its efforts to effect a Change in Control.
-1-
<PAGE>
The decision of the Board of Directors that a Person has abandoned or terminated
its efforts to effect a Change in Control will be conclusive and binding on all
Participants.
3. Terms of the Plan. The terms of the Plan are as set forth in the forms of
-----------------
agreement attached to this Plan, with Form IA applicable to Tier IA
Participants, Form I applicable to Tier I Participants, Form II applicable to
Tier II Participants and Form III applicable to Tier III Participants.
The Company will enter into Executive Severance Agreements with each Participant
containing the terms set forth in the applicable form. Even though the Company
or a Participant has not executed an Agreement, the Participant will be entitled
to participate in the Plan on the terms and conditions set forth in the form of
agreement applicable to the Participant.
4. Certain Definitions. Capitalized terms used in this Plan will have the
-------------------
meanings set forth below.
a. Agreements means the Executive Severance Agreements, in the forms
----------
attached to the Plan, that the Company enters into with Participants to
memorialize the terms of their entitlement to executive severance benefits.
b. Board of Directors means the duly elected board of directors of FMC
------------------
Corporation, as it is constituted from time to time.
c. Change in Control of the Company shall be deemed to have occurred as of
-----------------
the first day that any one or more of the following conditions is
satisfied:
(1) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Company Voting Securities") is acquired by a Person (other than the
Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or an affiliate thereof, any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company); provided, however that any acquisition from the Company or
any acquisition pursuant to a transaction which complies with clauses (i),
(ii), and (iii) of paragraph (3) of this Section 2.6 shall not be a Change
in Control under this paragraph; or
(2) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with
-2-
<PAGE>
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(3) Consummation by the Company of a reorganization, merger, or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets or stock or another
entity (a "Business Combination"), in each case, unless immediately
following such Business Combination: (i) more than 60% of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of (x) the corporation resulting
from such Business Combination (the "Surviving Corporation"), or (y) if
applicable, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries (the "Parent Corporation"), is
represented, directly or indirectly by Company Voting Securities
outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Company Voting Securities, (ii) no Person (excluding
any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of the
then outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) except to the extent that such ownership of the Company
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) were members of
the Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination; or
(4) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Executive, if the Executive is part of a purchasing
group which consummates the Change-in-Control transaction. The Executive
shall be deemed "part of a purchasing group" for purposes of the preceding
sentence if the Executive is an equity participant in the purchasing
company or group (except for: (i) passive ownership of less than three
percent (3%) of the stock of the purchasing company; or (ii) ownership of
equity participation in the purchasing company or group which is otherwise
not significant, as determined prior to the Change in Control by a majority
of the nonemployee continuing Directors).
d. Committee means the Compensation and Organization Committee of the
---------
Board of Directors, or any other Committee of the Board of Directors that
has, on the date of
<PAGE>
termination, the duties and responsibilities delegated to the Compensation
and Organization Committee as of January 1, 2000.
e. Company means FMC Corporation.
-------
f. Exchange Act means the Securities Exchange Act of 1934, as amended.
------------
g. Participant means one of the Tier IA Participants, Tier I Participants,
-----------
Tier II Participants or Tier III Participants.
h. Person has the meaning specified in Sections 13(d)(3) and 14(d)(2) of
------
the Exchange Act.
i. Plan means the FMC Corporation Executive Severance Plan (As Amended and
----
Restated Effective as of January 1, 2000).
j. Subsidiary means any domestic or foreign corporation, a majority of
----------
whose voting shares is owned directly or indirectly by the Company, by one
or more other Subsidiaries, or by a combination of the Company and one or
more Subsidiaries.
k. Tier IA Participants means the Chairman of the Board, the Chief
--------------------
Executive Officer and the President of the Company, and any other employees
of the Company or a Subsidiary designated by the Committee as Tier IA
Participants.
l. Tier I Participants means the Executive Vice Presidents, Senior Vice
-------------------
Presidents, Group Managers, and International Regional Managers of the
Company, and any other employees of the Company or a Subsidiary designated
by the Committee as Tier I Participants.
m. Tier II Participants means all officers of the Company other than
--------------------
Assistant Secretaries and Assistant Treasurers, and any other employees of
the Company or a Subsidiary designated by the Committee to be Tier II
Participants.
n. Tier III Participants means Division Managers of the Company and any
---------------------
other employees of the Company or a Subsidiary designated by the Committee
to be Tier III Participants , and any other employees of the Company or a
Subsidiary designated by the Committee as Tier III Participants.
5. Trust. The Company has created a trust in accordance with the terms of the
-----
forms of Agreement. The trust will have such assets as the forms of Agreement
provide. Any assets contained in the trust will, at all times, be specifically
subject to the claims of the Company's general creditors in the event of
bankruptcy or insolvency. The trust document must specifically state that any
assets held under it will be subject to the claims of the Company's general
creditors in the event of bankruptcy or insolvency, and must detail the required
procedure for notifying the trustee of the Company's bankruptcy or insolvency.
-4-
<PAGE>
6. Termination and Amendment of the Plan. The Board of Directors or the
-------------------------------------
Committee will have the power at any time, in its discretion, to amend, abandon
or terminate the Plan, in whole or in part. Notwithstanding the foregoing, no
amendment, abandonment or termination may modify, waive or discharge any
provisions of the Agreements, unless each affected Executive agrees in writing,
signed by the Executive and an authorized member of the Committee (or by either
or both parties' legal representatives or successors), to the modification,
waiver or discharge.
7. Governing Law. The validity, interpretation, construction and enforcement
-------------
of this Plan will be governed by the laws of the State of Illinois, without
giving effect to that state's conflicts of laws principles. Notwithstanding the
foregoing, to the extent state laws are preempted by the laws of the United
States, the laws of the United States will control the validity, interpretation,
construction and enforcement of this Plan.
8. Administration by the Committee. The Committee will be responsible for the
-------------------------------
general operation and administration of the Plan, and for carrying out the
provisions of the Plan. The Committee will administer the Plan in accordance
with its terms, and will have all powers necessary to carry out the Plan's
provisions. The Committee has the power to interpret the Plan and the
Agreements, and to determine all questions arising in their administration,
construction and application, including but not limited to questions of
eligibility and the status and rights of employees, Participants and other
persons. Any determination within the Committee's power will be final,
conclusive and binding on all persons. The regularly kept records of the Company
and its Subsidiaries will be final, conclusive and binding on all persons
regarding a Participant's date and length of service, amount of compensation and
the manner of its payment, type and length of absences from work and all other
matters contained in those records. All rules and determinations of the
Committee will be uniformly and consistently applied to all persons in similar
circumstances.
9. Incapacity. If any person entitled to a distribution under the Plan is
----------
deemed by the Company or the Committee or their delegates to be incapable of
personally receiving and giving a valid receipt for the distribution, then,
unless and until a duly appointed guardian or other representative of the person
claims the distribution, the Company or its delegate may pay the distribution or
any part of it to any other person or institution then contributing toward or
providing for the care and maintenance of the person entitled to the
distribution. Any payment pursuant to the preceding payment will be a payment
for the account of the person entitled to it, and a complete discharge of the
Company, the Committee, their delegates and the Plan from any liability for the
payment.
10. Indemnification. The Company and each Subsidiary will indemnify and hold
---------------
harmless each member of the Committee, or any employee of the Company or any
Subsidiary (to the extend not indemnified or saved harmless under any liability
insurance or any other indemnification arrangement) from any and all claims,
losses, liabilities, costs and expenses (including attorneys' fees) arising out
of any actual or alleged act or failure to act made in good faith pursuant to
the provisions of the Plan or the trust, including expenses reasonably incurred
in the defense of any claim regarding the administration of the Plan or the
trust. Notwithstanding the foregoing, no indemnification or defense will be
provided under this Plan or trust to any
-5-
<PAGE>
person, regarding any conduct that has been judicially determined, or agreed by
the parties, either to have constituted willful misconduct by that person, or to
have resulted in his or her receipt of personal profit or advantage to which he
or she was not entitled.
11. Limitations on Liability. Notwithstanding any of the preceding provisions
------------------------
of this Plan, neither the Company, the Committee nor any individual acting as an
employee or agent of the Company will be liable to any Participant, former
Participant or other person for any claim, loss, liability or expense incurred
in connection with the Plan.
12. Unclaimed Benefit. If all or any portion of a distribution payable to a
-----------------
Participant remains unpaid five years after it became payable because the
Committee was unable to locate the Participant, after sending a registered
letter, return receipt requested, to the last known address of the Participant,
then the amount payable to the Participant will become a forfeiture, and will be
retained by the Company as part of its general assets.
-6-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this amended and restated Plan
to be executed in its name and behalf on this 20/th/ day of March, 2000.
FMC CORPORATION
By:/s/ Tom Hester
-------------------------------------
Member, Employee Welfare Benefits
Plan Committee
-7-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>7
<FILENAME>dex12.txt
<DESCRIPTION>STATEMENT RE: COMPUTATION OF RATIOS OF EARNINGS
<TEXT>
<PAGE>
Exhibit 12
FMC CORPORATION
STATEMENT RE COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In millions, except ratios)
<TABLE>
<CAPTION>
Years ended December 31,
-----------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing operations
before income taxes and cumulative effect
of a change in accounting principle $ 222.6 $ 274.3 $ 249.5 $ (59.7) $ 235.8
Minority interests 4.6 5.1 6.2 8.9 9.6
Undistributed (earnings) losses
of affiliates (13.5) 1.3 (3.4) (2.0) (6.7)
Interests expense and amortization
of debt discount, fees and
expenses 99.7 117.1 120.3 118.3 103.0
Amortization of capitalized interest 3.9 3.4 3.5 7.0 7.5
Interest included in rental expense 15.7 15.0 14.8 14.2 12.7
-------------------------------------------------------------
Total earnings $ 333.0 $ 416.2 $ 390.9 $ 86.7 $ 361.9
=============================================================
Fixed charges:
Interest expense and amortization
of debt discount, fees and
expenses $ 99.7 $ 117.1 $ 120.3 $ 118.3 $ 103.0
Interest capitalized as part of
fixed assets 10.1 2.3 4.4 6.6 15.5
Interest included in rental expense 15.7 15.0 14.8 14.2 12.7
--------------------------------------------------------------
Total fixed charges $ 125.5 $ 134.4 $ 139.5 $ 139.1 $ 131.2
==============================================================
Ratio of earnings to fixed charges 2.7 3.1 2.8 0.6 2.8
==============================================================
(A) (A) (B)
</TABLE>
(A) The ratio of earnings to fixed charges for the years ended December 31, 2000
and 1999 before the gain on the sale businesses (in 1999), and asset
impairments, and restructuring and other charges (in 2000 and 1999) was 3.2x
and 2.9x respectively.
(B) Earnings did not cover fixed charges by $52.4 million for the year ended
December 31, 1997. The ratio of earnings to fixed charges for the year ended
December 31, 1997 before asset impairments and restructuring and other
charges was 2.5x.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>8
<FILENAME>dex13.txt
<DESCRIPTION>2000 ANNUAL REPORT
<TEXT>
<PAGE>
Annual Report
/2/
FMC 2000
<PAGE>
Profile
As one of the world's leading producers of chemicals and machinery for industry
and agriculture, FMC participates on a worldwide basis in five broad markets:
Energy Systems, Food and Transportation Systems, Agricultural Products,
Specialty Chemicals, and Industrial Chemicals. FMC operates 90 manufacturing
facilities and mines in 25 countries.
About the Cover
For more than 125 years, FMC has provided innovative, quality products and
services to our customers and, ultimately, to our customers' customers. Our
longevity is built on our ability to operate in and respond to an ever-changing,
increasingly competitive marketplace.
At the beginning of this 21st century, we are raising our market focus and
responsiveness to the second power. FMC is becoming FMC2. By fourth quarter
2001, we expect to complete a reorganization that will split our existing
company into two independent, publicly traded organizations-a chemical company
and a machinery company.
These two companies will continue the FMC tradition of providing quality,
innovation and outstanding service to their customers while strengthening their
own identities, maximizing growth potential and allowing shareholders to realize
the value inherent in both businesses.
<PAGE>
Financial Summary
<TABLE>
<CAPTION>
(in millions, except per share, common stock, return on
investment, employee and stockholder data) 2000 1999
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue
In the United States $ 1,700.2 $ 1,880.5
Outside the United States, including exports 2,225.3 2,393.1
Total revenue/(1)/ $ 3,925.5 $ 4,273.6
- ------------------------------------------------------------------------------------------------------------------------
Income (after tax)
Income from continuing operations $ 177.3 $ 216.0
Income from continuing operations (excluding special income and expense
items)/(2)/ $ 212.2 $ 195.1
Earnings per share from continuing operations
Basic $ 5.83 $ 6.86
Diluted $ 5.62 $ 6.67
Income per share from continuing operations
(excluding special income and expense items)/(2)/
Basic $ 6.97 $ 6.19
Diluted $ 6.72 $ 6.03
- ------------------------------------------------------------------------------------------------------------------------
Financial and other data
Common stock price range $76.4375 - $46.6875 $74.3125 - $39.6250
Return on investment based on income from continuing operations
(excluding special income and expense items)/(2)(3)/ 14.1% 12.5%
Capital expenditures $ 240.4 $ 236.3
Research and development expenses $ 154.5 $ 152.4
At December 31 Operating working capital/(4)/ $ 57.1 $ 111.2
Number of employees 14,802 15,609
Number of stockholders of record 9,055 9,549
</TABLE>
(1) Revenue in 1999 has been increased as a result of a reclassification made
to apply accounting guidance released in 2000 by the Emerging Issues Task
Force. The reclassifications, which were related to shipping and handling
costs, had no effect on the company's previously reported income or
earnings per share. See Note 1 to the company's consolidated financial
statements.
(2) Special income and expense items consist of gains on divestitures of
businesses (1999) and asset impairments and restructuring and other charges
(2000 and 1999). Income from continuing operations excluding special income
and expense items, and income per share or return on investment from
continuing operations excluding special income and expense items are not
measures of financial performance under generally accepted accounting
principles and should not be considered in isolation from, or as a
substitute for, income from continuing operations, net income, earnings per
share or return on investment determined in accordance with generally
accepted accounting principles, nor as the sole measure of the company's
profitability.
(3) Return on investment is calculated as income from continuing operations
excluding special income and expense items, plus after-tax interest expense
on debt as a percentage of total average debt (includes short-term and
total long-term debt) and equity, as follows, in millions: ($212.2 +
$60.9)/$1,943.1 in 2000 and ($195.1 + $71.4)/$2,124.1 in 1999.
(4) Operating working capital includes trade receivables (net), inventories,
other current assets, accounts payable, accrued payroll, other current
liabilities and the current portion of accrued pension and other
postretirement benefits.
1
<PAGE>
Message to Shareholders
[PHOTO]
2000 Revenue and Profit by Segment
Revenue
Total 2000 Revenue $3.9B
[PIE CHART HERE]
Energy Systems $1.03B
Industrial Chem. $ 906M
Ag. Products $ 665M
Spec. Chem. $ 489M
Food & Trans. Systems $ 839M
Operating Profit
Total 2000 Operating
Profit $436M
[PIE CHART HERE]
Energy Systems $ 72M
Industrial Chem. $ 115M
Ag. Products $ 88M
Specialty Chem. $ 92M
Food & Trans. Systems $ 69M
Year 2000 was momentous for FMC. We recorded an all-time high for earnings from
continuing operations, and we increased our return on investment. Our stock
price increased 25 percent-significantly outperforming market indices and our
peer companies. We identified and are implementing an approach to further
increase shareholder value through a strategic restructuring that ultimately
would split the corporation into two independent, publicly traded companies-a
machinery business and a chemicals business.
In summary, year 2000 brought record earnings, superior shareholder value and a
plan to further increase that value.
The year's results reflect the hard work of all our employees, allowing us to
take additional steps in the strategy we laid out three years ago. After-tax
income per share from continuing operations, excluding one-time items, was
$6.72-an increase of 11 percent from $6.03 in 1999-despite higher energy costs
and foreign exchange losses. Sales for the full year were $3.9 billion compared
with $4.3 billion in 1999. FMC's return on investment increased to 14.1 percent
from 12.5 percent in 1999.
We positioned our businesses and our shareholders for further value creation by
implementing a plan that will split FMC into a chemical company and a machinery
company. Our businesses will take a more focused approach to their individual
markets, with better speed, customer orientation, innovation and, above all,
growth. The restructuring will allow investors to put their funds into more
clearly defined industry sectors.
2
<PAGE>
We chose a two-step process. As the first step, we are planning an initial
public offering of just under 20 percent of the machinery business by the second
quarter of 2001. The new company will be named FMC Technologies, Inc. Subject to
market conditions, final board approval and a favorable tax ruling, we intend to
make a tax-free distribution of the remaining shares of FMC Technologies,
completing the spin-off by the end of 2001. We continue to be on schedule. We
filed our IPO registration statement with the Securities and Exchange Commission
on February 20.
Overall, our businesses performed well in 2000. Agricultural Products had a
strong year based on better market conditions and lower costs following a sub-
par 1999. Specialty Chemicals reported earnings growth based on synergies from
the Pronova alginate acquisition, lower manufacturing costs and improved lithium
profitability. Industrial Chemicals reported lower earnings, reflecting high
energy costs and the translation impact of the weak euro.
Food and Transportation Systems reported stronger sales and earnings based on
the Northfield acquisition and lower costs. A major accomplishment within this
segment was winning the contract to build the Next Generation Small Loader for
the U.S. Air Force.
We were disappointed that Energy Systems reported lower sales and earnings due
to continuing delays by the major oil companies in awarding subsea projects.
However, we're already seeing stepped-up activity in this area. Within the first
two months of 2001, we were awarded two new contracts to provide subsea
equipment and service. Our technology and existing relationships with major oil
companies position us well to benefit over the next several years.
We continue to benefit from strong leadership, and we're pleased that the skills
and experience of our FMC management team will transfer into the two new
companies. Bill Walter was promoted to executive vice president, with the
chemical operations reporting to him, and was elected to the board of directors.
These roles position him to be the chief executive officer of the chemicals
company. During his more than 25-year career with FMC, Bill has shown strong
leadership, gaining extensive international experience, strong financial and
commercial skills, and profit-and-loss responsibility in all three chemical
groups.
We also welcomed Steve Gates as senior vice president, general counsel and
secretary. Steve has become a valued adviser, bringing significant legal and
operational experience to FMC from his previous positions as executive vice
president and group chief of staff for BP Amoco, London, and more than 20 years
with Amoco, most recently as vice president and general counsel.
Congratulations to Bill and Steve.
Congratulations also to Joe Netherland, who is the designated CEO of FMC
Technologies. Joe will continue in his current role as FMC president until the
reorganization of the company is completed.
Two senior executives retired in year 2000. After almost 40 years with FMC-most
recently as senior vice president, administration-William "Jay" Kirby retired in
May 2000. Jay's hard work, wise counsel and outstanding commitment to FMC has
had a positive impact on the fortunes of our company and on the careers of
thousands of FMC employees.
Alfredo Bernad has been head of FMC Foret since 1978, and an FMC vice president
and president of FMC Europe since 1994. Alfredo is the model worldwide
executive, possessing a keen understanding of economics, manufacturing expertise
and customer relationships. His insights and know-how have helped build FMC
Foret into a global powerhouse-and enhanced the reputation of FMC around the
world.
Historical Earnings Growth-Continuing Operations
excludes special income and expense items
[BAR GRAPH HERE]
1993 1.53
1994 2.94
1995 4.01
1996 4.28
1997 4.13
1998 5.30
1999 6.03
2000 6.72
3
<PAGE>
Thank you, Jay and Alfredo, for continuing our tradition of excellence within
FMC. We wish you many years of happiness and good fortune.
We expect another year of record earnings per share in 2001. However, we expect
first quarter 2001 earnings to be down about 50 percent from first quarter 2000
results. We face a slowing economy and high energy costs-with unprecedented
increases in electric power costs in the western United States, which is
significantly increasing costs at our Astaris joint-venture phosphorus-producing
plant in Pocatello, Idaho. As a result, Astaris has idled two of the operation's
four furnaces, which will result in significant negative volume variances at
Pocatello, as well as higher costs for purchased phosphorus.
In addition to these phosphorus issues, difficult business conditions will keep
our other chemical operations roughly even in first quarter 2001. During the
quarter, we also expect lower results in machinery because orders have not yet
been placed for energy equipment, and the economic situation is delaying capital
expenditure orders in our other machinery businesses. We believe, however, that
it's a not a question of if-but when the major oil companies will develop
offshore oil and gas fields and place increased orders for subsea equipment.
We expect to make up the first quarter 2001 decline in the next three quarters,
aided by an improving economy and increased orders for energy equipment.
FMC is a company I'm proud to work for and proud to head. We've made significant
contributions to the way people live-providing safe and more abundant food,
enhancing the performance of pharmaceuticals, finding new energy sources, and
improving operations and product performance for a wide range of businesses. And
FMC is a company that, over the years, has been able to reinvent itself to meet
the needs of our customers and to be competitive in the markets in which we
operate. We concluded during year 2000 that it was time for a more radical
reinvention-separation into two companies. This new approach will allow us to
serve our customers better in a more competitive marketplace and provide more
value for our shareholders while continuing to create opportunities for
employees and being responsible citizens in our communities.
In 2001, we face another challenging and exciting year that will bring momentous
change and new opportunities based on our strong market positions. I'm confident
our employees are up to meeting these challenges.
/s/ Robert N. Burt
Robert N. Burt
Chairman of the Board and
Chief Executive Officer
February 28, 2001
Historical Chart of ROI
excludes one-time gains and losses
[BAR GRAPH HERE]
1993 11.3%
1994 13.7%
1995 13.0%
1996 10.5%
1997 9.6%
1998 12.1%
1999 12.5%
2000 14.1%
4
<PAGE>
Business Profile
FMC was built on a tradition of providing world-class products and innovative
solutions to meet our customers' needs. More than a century later, we are
working with customers around the world to design, develop and deploy effective
products and services that solve problems and change the way we live. Our
leadership positions reflect our record of providing solutions and our
commitment to providing outstanding service to each and every customer. We work
as partners with our customers because we know that their success is the true
measure of our performance.
5
<PAGE>
Machinery
/2/
FMC
one half of the equation
6
<PAGE>
Through dedicated internal development efforts and strategic, global
acquisitions and alliances, we have built leading businesses in FMC Energy
Systems, FMC FoodTech, and FMC Airport Systems. We are poised for greater
growth.
7
<PAGE>
Energy Systems
Providing technology for a world of energy solutions
Since the late 1980s, we have been growing our Energy Systems business
aggressively -through focused internal research and development as well as
strategic, global acquisitions. As the oil and gas industry began a rapid and
sustained consolidation, we set out to become a preeminent supplier-one that
could offer a fully integrated package of equipment and services for energy
exploration, development, transportation and processing.
[PICTURE APPEARS HERE]
Today, we have built a business that encompasses advanced technologies in subsea
exploration and development that take our customers into new, deepwater
fields...sophisticated floating production systems...state-of-the-art control
systems that deliver key production data...highly sensitive, highly accurate
metering systems for measurement, blending and transfer...the industry standard
for flowline products and manifold systems...as well as next-generation marine
loading and transfer systems.
Today, Energy Systems can point to a demonstrated record of growth, leading
positions in key markets and advanced technologies--attributes that position us
solidly for the future.
Energy Systems' annual sales continue to top $1 billion. Throughout much of the
1990s, our revenue was growing at an annual rate of 15 percent. Our customers'
delay in awarding subsea contracts over the last two years has curbed our sales
momentum for the short term. But forecasts indicate that sales of subsea
equipment could increase more than 10 percent per year through 2004. Clearly,
the demand for energy in our global economy is great, and the energy sector will
benefit in the coming years.
In this global arena, we're recognized as a leader. Energy Systems holds
number-one or number-two positions in each of our market segments. We're the
leader in subsea systems, loading systems, flowline products and production
manifold systems.
We continue as a technological innovator. Our R&D expenditures for 2000 were
almost double our spending level for 1996. Central to this work is the
heightening interest in deepwater energy fields, and we're building on our
expertise in this complex arena. Since 1987, when the Energy Systems and
customer team set the world record for the deepest well at that time--at 1,350
<PAGE>
[PICTURE APPEARS HERE]
Top "Reliability and on-time delivery are our top priorities," says Dennis
Schneider, project manager for Shell, here with one of FMC's standard subsea
trees destined for Shell's Crosby project. In 2000, FMC Energy Systems renewed
its working relationship with Shell to provide subsea systems for the customer's
Gulf of Mexico exploration and production activities.
Inset FMC Energy Systems has engineered a unique flow loop to test pump, valve
and fitting characteristics for all of its major oil field service companies.
The system provides added reliability for key customers such as John Sudderth,
global operations manager for Schlumberger.
feet below sea level-we have proven our subsea know-how. Together with our
customers, we have continued to set new depth records over the years. Today,
we're often operating at depths 6,000 feet below sea level.
Because all our products and services are so complex and customized, we work
hand-in-hand with our customers to meet their requirements. As a result, we've
forged a number of strategic alliances with key customers in recent years. We
have become the supplier of choice and have won multi-year contracts; we in
turn deliver advanced technology, dependability and cost savings to our
customers. Most recently, we've entered into multi-year agreements with Italy-
based Agip, Britain-based BP and Norway-based Norsk Hydro for subsea work. Our
alliance partnerships are steady relationships that are guiding us into the
future.
<PAGE>
Food and Transportation Systems
Applying superior technology to specialized handling and processing systems
The company that became FMC started with the sale of simple agricultural and
food machinery lines. Today, with an expansive portfolio of products and
services resulting from ongoing R&D efforts and targeted acquisitions, FMC
FoodTech has transformed itself into a global supplier to the food industry and
a leader in advanced technologies. Concentrating on the convenience food, fruit,
vegetable and protein segments, we can provide the equipment and application
expertise wherever food is processed, portioned, squeezed, cooked, sterilized,
fried, frozen and packaged.
Our strength lies in the powerhouse businesses we have assembled-all with
premium products differentiated by technology and service, all with number-one
or number-two positions in our niche markets. Citrus Systems, one of our long-
time leaders, provides the equipment and service that squeeze more than 75
percent of the world's citrus juice. Our Swedish-based Frigoscandia Equipment
operation is the world leader in freezing and chilling equipment, handling one-
half of the world's frozen food production. We bolstered that business with our
year 2000 acquisition of Northfield Freezing Systems-the number-two company in
freezing-to increase our scale and level of service to customers. Another of our
long-time businesses, Food Processing Systems, the maker of advanced
sterilization systems, claims the top position in its segment and registered a
record sales performance in 2000.
FMC FoodTech has become the partner of choice for large food processing
customers-a key factor as food makers scale up in a consolidating industry. As
we work with these food giants, we're focusing on the industry's critical
concern-food safety-and our solutions range from process control technology to
cooking and freezing technologies. Across the board, we're offering customers a
range of options and fully integrated systems with our broad technology
platform, and we're supporting our large base of installed equipment with full
aftermarket sales and service.
[PICTURE APPEARS HERE]
Our Airport Systems business also has built itself into an operation of
high-performing products with strong market positions. FMC is the world's
leading supplier of air cargo loaders and passenger boarding bridges-products
we build to our customers' requirements and that continue to improve with
advances in new technology.
This business, too, serves an industry that is rapidly consolidating through
acquisitions and alliances. As airlines and air freight companies combine, they
look to outsource any non-core activities-presenting opportunities for us to
provide additional aftermarket service.
8
<PAGE>
[PICTURE APPEARS HERE]
Airport Systems' largest growth opportunity for the coming years is the multi-
year U.S. Air Force contract we won in 2000 to produce the Next Generation Small
Loader. Now we'll put our decades of expertise in cargo loading technology to
work for the military, which needs small, flexible loaders for unloading
supplies and provisions at remote bases. This program has expansion potential
and may open the door to other military contracts for our airport equipment.
[PICTURE APPEARS HERE]
Top Ephraim Belcher, chairman of Scotland-based Belcher Food Products, Ltd.,
relies on FMC freezing and cooking equipment to process meat products. "As I
grow my business, I buy only the best, working with suppliers who are focused
on providing solutions and service."
Inset Airlines, airports and air freight companies depend on FMC Airport
Systems to design, manufacture and service technologically advanced ground
support equipment and systems, including passenger boarding bridges, cargo
loaders, push-back tractors and deicers.
9
<PAGE>
Chemicals /2/
FMC
a powerful component
10
<PAGE>
Our capabilities in advanced technologies, customized product development and
effective cost control have positioned us as global leaders in Agricultural
Products, Specialty Chemicals and Industrial Chemicals. We are focusing on next-
generation opportunities.
11
<PAGE>
Agricultural Products
Offering innovative products for a growing world
FMC Agricultural Products has built a solid business base--and we're in a
position to grow from there. A strong, diverse portfolio of insecticides
accounts for 75 percent of our Agricultural Products sales, and in recent years,
we added high-performance herbicides to our product mix. We're strong in the
corn, cotton and rice markets, and we have a growing presence in the fruit and
vegetable sectors. We're also a leader in termite control.
We're operating at higher capacity, we've driven costs down, and we expect
improved earnings. We've announced a new, multi-year agreement to supply
bifenthrin to The Scotts Company for use in consumer home and garden
pesticides. And we have begun development of another new herbicide to combat
broadleaf weeds. Our initial target market will be U.S. corn and wheat fields,
and other global applications are likely.
While we've been experiencing tight agricultural markets--with depressed prices
for major farm commodities and continuing consolidation in the industry--we're
optimistic about the long-term outlook. Around the world, populations are
increasing, the standard of living is improving, people want greater choices in
food.
[PICTURE]
As one of FMC's first businesses to produce and market outside the United
States, Agricultural Products is a seasoned global supplier that is meeting the
needs of changing markets worldwide. We're particularly strong in North America
and South America, and there are tremendous opportunities for us to grow in
large agricultural markets such as Brazil and elsewhere in the world.
Our new discovery efforts in insecticides are also positioning us for growth.
In the early 1990s, we became one of the first producers of crop protection
chemicals to adopt the "pharmaceutical model" of discovery, zeroing in on an
insect's protein or enzyme target site and testing how FMC compounds respond
at that site. This mode of discovery has led us to new ventures in
biotechnology.
<PAGE>
[PICTURE]
Today, we are collaborating with a Belgian partner, Devgen, a drug and drug
target discovery company, to identify optimal targets and screen our existing
compounds. Ultimately, this new, high-tech discovery approach will yield many
more promising compounds in a much faster time frame.
We're bringing the first new target site into high-scale screening this year,
and we hope to realize new chemistry within the next two years. We'll focus on
those features our customers are asking for: lower dose chemistries, compounds
that show less resistance by insects, and products that are effective in
protecting crops and are safe for humans and the environment.
[PICTURE]
Top "Bifenthrin is a breakthrough new active ingredient for The Scotts Company,
allowing us to develop new products that best meet important consumer needs,"
says Dr. Mike Kelty, group executive vice president, technology & operations.
"For example, new Scotts MaxGuard utilizes bifenthrin to deliver superior,
broad-scale insect control to our Southern consumers."
Inset As a producer of irrigated corn in the western High Plains, Roy Graham
works to maximize yields using FMC's crop protection products. FMC
insecticides-Capture, Pounce, Furadan-as well as newly introduced Aim herbicide,
play a critical role in the success of his farming operation.
<PAGE>
Specialty Chemicals
Building high-performance products and partnerships
Following a restructuring of operations in 1999--including divestitures of
businesses that offered limited potential--FMC Specialty Chemicals is
concentrating on our high--performance food ingredients, pharmaceutical products
and lithium specialties--product lines that set the stage for future growth.
These businesses are global leaders. FMC BioPolymer is a supplier of
carrageenan, alginates and microcrystalline cellulose--ingredients that have
high value-added applications in the production of food, pharmaceuticals and
other specialty consumer and industrial products. Our food ingredients add
stability and enhance texture, and we've developed a special niche market in
fat-replacement applications. In pharmaceuticals, our products bind active
ingredients together and control the disintegration of those ingredients. Our
alginates business, acquired from Pronova in 1999, focuses on heat-stable gels
and rounds out our product portfolio. These businesses share important synergies
in technology, production and marketing.
[PICTURE]
[PICTURE]
Top In his role as a product developer for Kraft Foods, Dave Kluz focuses on
creating innovative food products for people around the world. "I expect
suppliers like FMC to provide quality ingredients and in-depth knowledge of
applications, process development and food formulations."
Inset Our lithium operation's new, leading-edge kilo lab expands our development
and manufacturing capabilities to meet the growing needs of our pharmaceutical
and agricultural customers. This facility can manufacture up to 10,000 grams of
custom organic and organometallic compounds critical to successful development
of novel synthetic chemistry.
12
<PAGE>
[PICTURE]
FMC BioPolymer's top customers are the high-growth leaders in their markets. In
turn, we expect strong growth for our products. Our alginates are important
components of acid reflux drugs and are finding a new application as
fast-acting, wound-healing agents. Our carrageenan and Avicel microcrystalline
cellulose food ingredients are strong in the dairy and convenience food
segments, and we're pursuing growth opportunities in yogurt lines as well as
diet and nutritional foods and beverages. In our pharmaceutical business, we're
expanding product uses within our established markets. We're developing
proprietary technologies, our EnTec solutions, to expand into drug delivery
systems to enhance pharmaceutical features such as solubility, controlled
release and taste.
In the Lithium business, we're focusing on the high-tech--and higher-margin--
products, such as lithium cobaltate for lithium ion batteries and organolithium
for polymer and synthesis applications. Lithium products for pharmaceuticals,
energy and chemical polymers now account for more than 75 percent of this
operation's sales and a greater percentage of earnings--and growth rates for
these market segments are attractive. There is solid potential for our product
to be used in the emerging electric and hybrid electric vehicles. If lithium ion
batteries prove to be a technology of choice for these vehicles, demand for
specialty lithium could reach dramatic levels in the coming years.
For the future, Specialty Chemicals is focused on high-value markets,
aligned with a growing customer base and armed with superb technologies--and
well positioned to achieve continued growth.
13
<PAGE>
Industrial Chemicals
Enhancing chemistries for everyday products
FMC's Industrial Chemicals business--made up of our soda ash, phosphate,
hydrogen peroxide and active oxidant operations--is dominated by strong, cost-
driven positions in these high-volume lines. We serve the leading customers in
each of our market segments, including chemical processing, detergents, glass,
pulp and paper, and food processing.
[PICTURE]
In April 2000, FMC's phosphorus chemicals business was joined with our partner
Solutia Inc. to create the 50-50 phosphorus-producing joint venture, Astaris
LLC. This new company, with a 46 percent market share, boasts the leading
position in the North American specialty phosphate market. The joint venture is
increasingly realizing more operational synergies. When our new purified
phosphoric acid plant starts up in late second quarter 2001, we'll reduce
feedstock costs substantially.
FMC Foret, our European-based industrial chemicals operation, produces a broad
array of products and holds cost-leader positions in phosphates and zeolites for
detergent and other applications.
We further strengthened our position as the world's leading producer of natural
soda ash with our 1999 acquisition of Tg Soda Ash. Our businesses' adjacent
mines and similar processes produced immediate synergies, we've been able to
improve operational flexibility, and we've driven costs down. With the
acquisition, our scale has increased, and we now have a domestic market share of
more than 33 percent. We continue to be the industry leader with advanced
technologies, such as our solution mining techniques. Overall, we expect global
demand for soda ash to increase 5 percent in 2001 and 2002, with improved
pricing domestically and internationally.
We have a strong position in hydrogen peroxide in North America and Europe. Our
production facilities on both continents feature state-of-the-art process
technology. Demand for hydrogen peroxide grew over the prior year, resulting in
an increase in capacity utilization. Pricing continues to improve; however,
peroxide remains undervalued.
We also enjoy leading positions in attractive niche markets that contribute
significantly to profits. We are the world's dominant producer of
persulfates, which are used primarily as polymer initiators. We produce
14
<PAGE>
specialty peroxide grades for high-purity electronics applications. And we are
strong in sulfur derivatives in Europe, as well as silicates and zeolites for
detergents in Spain.
Even with the recent high energy costs and a slowing economy, we expect
stronger financial results for our Industrial Chemicals business going forward
because of the higher prices we're posting in some chemical lines, as well as
the significant synergies and cost controls in place at Astaris.
[PICTURE]
[PICTURE]
Top "High purity soda ash [sodium carbonate] is essential for PQ Corporation's
manufacture of sodium silicate glass," says Rob Pickens, plant manager for PQ's
production facility at Gurnee, Illinois. "We absolutely rely on FMC to deliver
exactly the product we need, when we need it. Our working relationship can only
get better as we further automate our ordering and fulfillment procedures."
Inset In Portugal, Reckitt Benckiser manufactures liquid in-wash stain removers
for export markets, using special quality hydrogen peroxide produced by FMC
Foret in Spain.
15
<PAGE>
Products and Markets
<TABLE>
<CAPTION>
[PICTURE]
- ---------------------------------------------------------------------------------------
ENERGY SYSTEMS Markets Served
- ---------------------------------------------------------------------------------------
<S> <C>
FMC Energy Systems supplies oil Oil and gas exploration, production,
and gas exploration and production refining and transportation. Power
equipment for land and and offshore generation and mining.
applications; engineering, procure-
ment and construction for subsea
oil fields; fluid control and metering
products and systems; loading systems;
marine terminals and floating production
systems; conveying and processing systems.
[PICTURE]
- ---------------------------------------------------------------------------------------
FOOD & TRANSPORTATION SYSTEMS Markets Served
- ---------------------------------------------------------------------------------------
FMC FoodTech is a global provider Meat, seafood and poultry
of integrated systems and equip- processors. Fruit and vegetable
ment for every phase of food processors. Convenience food
harvesting, preparation, processing processors, including potato and
and preservation. Leader in citrus, snack food, soups, sauces and
poultry, tomato and vegetable ready meals.
processing systems.
Airport Systems is a global supplier Global airlines, airports and material
of Jetway passenger boarding handling and services companies within
bridges, aircraft loaders, deicers, the aviation industry. Industrial
push-back tractors, 400 hz inverters, manufacturing, mining, warehouses,
pre-conditioned air and automated newsprint, publishing, chemicals
material handling systems. and utilities.
[PICTURE]
- ---------------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS Markets Served
- ---------------------------------------------------------------------------------------
Agricultural Products provides Food and fiber growers, pest
crop protection and pest control control markets, and home and
products for worldwide markets. garden markets. More than 50 per-
cent of sales derived outside the
United States.
- ---------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FMC Energy Systems combines the Continuing opportunities to build Continued high oil and gas prices
industry's broadest range of market position and long-term will lead to significant growth in
products, services and engineering customer alliances by leveraging subsea programs. FMC Energy
expertise to deliver integrated subsea technologies and systems. Systems' strong subsea and deep-
systems for subsea/floating New capabilities in light well water positions and cost reduction
production, measurement and deep- intervention, smart well technology initiatives should help generate
water applications. The business is and offshore liquefied natural gas solid performance.
well positioned in the four major loading offer growing
regions of offshore exploration. opportunities.
- ----------------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- ----------------------------------------------------------------------------------------------------------------------------
One of the top 10 suppliers of food Consumer demand for convenience-- Continued profitable growth.
processing systems in the world, such as package-ready meals--and Acquisitions of complementary
with strong technology and global industry supply chain consolidation technologies are strengthening
support capability. Market-leading drive higher-value opportunities overall market position and
positions in citrus processing, for FMC FoodTech. Increased improving competitive advantage.
thermal processing, sterilizing, involvement with global customers
cooking, frying and freezing interested in food safety and
systems. Partnerships with major service. Large installed equipment
food processors. base offers opportunities for after-
market sales and service.
Airport Systems provides a broad Largest growth opportunity is multi- The Commander Loader, the world's
range of aviation products with year, U.S. Air Force contract for top-selling family of aircraft
worldwide brand recognition and Next Generation Small Loader. cargo loaders, and Jetway, the
market leadership positions. Strong Strong growth in towbarless global market leader of aviation
and active product development tractors and pre-conditioned air passenger bridges, will continue to
approach. Global marketing, units for the aviation industry. strengthen leading positions.
management and services network. Positioned for future growth in the Military markets will grow.
military market, aviation services Continued focus on cost
and automated laser-guided vehicle improvement.
systems.
- ----------------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- ----------------------------------------------------------------------------------------------------------------------------
Solid business presence around the New, long-term agreement with The Herbicide sales and continuing cost
world. Direct distribution in key Scotts Company to supply bifenthrin improvements are key to strong
markets. Leading global position in for consumer home and garden performance. New herbicide product
pyrethroid chemistry. Attractive markets. Growing termiticide, turf in development for
portfolio of chemistries that and horticultural market segments commercialization within seven
complements other products and worldwide. Success of new herbicide years, pending regulatory approval.
provides new and established carfentrazone-ethyl, registered for R&D collaboration with Devgen to
formulation label expansion and use in major European cereal expand discovery opportunities in
volume growth. Strong insecticide markets and other countries insecticides. Continued label
and growing herbicide product worldwide, as well as in U.S. corn expansions.
portfolio. Productive R&D effort markets.
generating high profitability.
Solid product stewardship programs.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
Products and Markets
<TABLE>
<CAPTION>
[PICTURE]
- -----------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS Markets Served
- -----------------------------------------------------------------------------------------------------------
<S> <C>
FMC BioPolymer is the world's leading producer of Global food, pharmaceutical and specialty
alginates, carrageenan and microcrystalline industries.
cellulose.
Lithium is one of the world's leading producers Pharmaceutical, agricultural chemical synthesis,
of lithium-based products. Recognized as the synthetic rubber and plastics, batteries, air
technology leader in specialty organolithium conditioning and refrigeration, construction,
chemicals and related technologies. pool and spa, lubricating greases, and ceramics
and glass.
[PICTURE]
- -----------------------------------------------------------------------------------------------------------
INDUSTRIAL CHEMICALS Markets Served
- -----------------------------------------------------------------------------------------------------------
Alkali Chemicals is the world's largest producer Glass-making, chemicals, detergents, food
of natural soda ash and the market leader in products, animal feed additives, mining,
North America. Downstream products include sodium air/water treatment, and pulp and paper.
bicarbonate, sodium cyanide, sodium
sesquicarbonate, caustic soda.
Hydrogen Peroxide is a worldwide producer, with Electronics, propulsion, cosmetics, food,
manufacturing sites in the United States, Canada, chemical treatment, water treatment, textiles,
Mexico, Spain, the Netherlands and Thailand. environmental, pulp and paper.
Regional leader in North America.
Active Oxidants is the world's leading supplier Polymers, electronics, pool and spa, hair care,
of persulfate products and a major producer of industrial water treatment, environmental, paper,
peracetic acid and other specialty oxidants. pharmaceuticals, and industrial and institutional
sanitizers.
Astaris LLC, 50 percent owned by FMC, is a major Detergents, cleaning compounds, water treatment,
worldwide supplier and the leading producer of food, beverage, nutritional products and other
phosphorus and its derivatives, phosphates and industrial applications.
phosphoric acid, in the Western Hemisphere.
FMC Foret is a major European chemical producer. Detergents, pulp and paper, textiles, chemicals,
Products include hydrogen peroxide, perborates, tanning, pharmaceuticals, ceramics, food and
phosphates, silicates, zeolites, and sulfur agriculture.
derivatives.
- -----------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Worldwide brand recognition and strong New opportunities for alginate In food sector, core growth in dairy,
market positions. Superior product technology in food, pharmaceutical and convenience food, meat, poultry and
quality, research, applications specialty applications. Commercializing confectionery. Positioned for
technology, formulation support, new food ingredient products for dairy, opportunities in growing market focus on
global customer service and convenience foods and meat applications. combining taste, nutrition and
manufacturing capabilities. Continued expansion of advanced drug convenience. In pharmaceutical lines,
delivery systems. core growth in coatings, anti-reflux and
nutritional supplements.
Leading market position in diverse Growing demand for advanced Improved cost position in upstream
specialty products. Global manufacturing organolithium reagents in pharmaceutical products. Attractive growth in key
and distribution capabilities. Strong and agricultural chemical synthesis. downstream specialty markets. Great
R&D and manufacturing organizations. Commercializing proprietary polymer potential for lithium ion batteries to
initiators for synthetic rubber, be used in emerging electric and hybrid
plastics and coatings markets. Growing electric vehicles.
demand for lithium cobaltate for lithium
ion batteries used in laptop computers,
personal digital assistants, cell phones
and handheld devices. Introducing new
product line for the construction
industry.
- ---------------------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- ---------------------------------------------------------------------------------------------------------------------------------
Mining and production technology leader, Sales growth tied to improvement in Continuing focus on improving production
including proprietary, low-cost solution overseas GDP per capita. New products in efficiencies, leveraging FMC's
mining and longwall mining technology. cleaning compounds, feed additives, and leadership position and controlling
Multiple production facilities result in acid waste neutralization. Strengthened costs. Growth in overseas markets and in
increased flexibility and reliability. caustic market offers direct opportunity targeted domestic opportunities.
for caustic and indirect soda ash growth
for conversion.
Process technology and plant locations Broad-based demand growth. Strengthened pricing and growing
key to low-cost supply network. markets. Commitment to continued capital
Defendable specialty market positions. efficiency and cost improvement.
Sole producer in Mexico. Maintains
lowest-cost/capital expansion options as
market demand warrants.
Capacity share leader, cost competitive Sales volume tied to market growth and Continued focus on growth via new
plant locations and process technology. new applications. products and applications and cost
improvements.
Largest U.S. producer of sodium Growing diversity of product uses. Focus on production efficiencies and
tripolyphosphate, used in automatic Improved food phosphates for the controlling energy costs. New plant will
dishwasher detergents. Innovative new beverage, bakery and meat segments. produce purified phosphoric acid, a more
detergent builders for industrial and Wildland fire retardant chemicals. cost-effective phosphorus source. Strong
institutional applications. global markets.
Growing diversity of product uses. Continuing focus on current market Continued good performance based on
Strong market positions. Excellent cost positions. Export growth. costs and competitive advantages of the
positions. Strong manufacturing and product portfolio. Production of a new
distribution capabilities. Growing bleach--per-carbonate--to broaden our
export business. range of products for detergent markets.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
Management's Discussion and Analysis
20
<PAGE>
21
FORWARD-LOOKING INFORMATION
Statement under the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995: FMC Corporation ("FMC" or the "company") 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 in the Annual Report, in the company's other filings with
the Securities and Exchange Commission or in reports to its stockholders. 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. These factors include, among other things, the risk factors
listed below.
In some cases, FMC has identified forward-looking statements by such words
or phrases as "will likely result," "is confident that," "expects," "should,"
"could," "may," "will continue to," "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 forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, these statements. The company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made.
In connection with the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995, the company is hereby identifying important
factors that could affect the company's financial performance and could cause
the company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
Among the factors that could have an impact on the company's ability to
achieve operating results and growth plan goals are:
. Significant price competition;
. The impact of unforeseen economic and political changes in the international
markets where the company competes, including currency exchange rates, war,
civil unrest, inflation rates, recessions, trade restrictions, foreign
ownership restrictions and economic embargoes imposed by the United States or
any of the foreign countries in which FMC does business; changes in
governmental laws and regulations and the level of enforcement of these laws
and regulations; other governmental actions; and other external factors over
which the company has no control;
. The impact of significant changes in interest rates or taxation rates;
. Increases in ingredient or raw material prices compared with historical
levels, or shortages of ingredients or raw materials;
. Inherent risks in the marketplace associated with new product introductions
and technologies, particularly in agricultural and specialty chemicals;
. Changes in capital spending by customers in the petroleum exploration,
commercial food processing and airline industries;
. Risks associated with developing new manufacturing processes;
. The ability of the company to integrate possible future acquisitions or
joint ventures into existing operations;
. Risks associated with increases in the cost of energy, particularly increases
in electric power costs;
. The impact of freight transportation delays beyond the control of FMC;
. Risks associated with joint venture, partnership or limited endeavors in
which FMC may be responsible at least in part for the acts or omissions of
its partners;
. Conditions affecting domestic and international capital markets;
. Risks derived from unforeseen developments in industries served by FMC, such
as extreme weather patterns or low insect infestations in the agricultural
sector, political or economic changes in the energy industries, and other
external factors over which FMC has no control;
. Risks associated with litigation, including the possibility that current
reserves relating to FMC's ongoing litigation may prove inadequate;
. Environmental liabilities that may arise in the future that exceed the
company's current reserves; and
. Increased competition in the hiring and retention of employees.
The company wishes to caution that the foregoing list of important factors
may not be all-inclusive and specifically declines to undertake any obligation
to publicly revise any forward-looking statements that have been made to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
With respect to forward-looking statements set forth in the notes to
consolidated financial statements, including those relating to environmental
obligations, contingent liabilities and legal proceedings, as well as FMC's 2000
Annual Report on Form 10-K, some of the factors that could affect the ultimate
disposition of those contingencies are changes in applicable laws, the
development of facts in individual cases, settlement opportunities and the
actions of plaintiffs, judges and juries.
<PAGE>
22
Management's Discussion and Analysis
CONSOLIDATED RESULTS OF OPERATIONS
2000 COMPARED WITH 1999
In 2000, revenue was $3.9 billion, down from $4.3 billion in 1999. Revenue in
the United States decreased 9.6 percent compared with 1999, while revenue
outside the United States, including exports, decreased 7.0 percent from 1999.
Sales in the United States represented 43 percent of the company's 2000 revenue,
slightly less than in 1999.
Revenue and cost of sales or services for the three-year period ended
December 31, 2000 have been adjusted to apply the accounting guidance released
in 2000 by the Emerging Issues Task Force ("EITF") related to shipping and
handling costs. The EITF's consensus on Issue No. 00-10 ("EITF 00-10") requires
the company to report costs associated with shipping and handling, including
those costs passed on to customers, as cost of sales or services in the
company's consolidated income statements. In conjunction with the adoption, the
company reclassified as cost of sales or services certain amounts that had
previously been recorded as offsets (reductions) of revenue. The
reclassifications, which were limited to the Industrial Chemicals segment,
resulted in increases in revenue and cost of sales or services of $169.0
million, $163.0 million and $164.0 million for 2000, 1999 and 1998,
respectively. The reclassifications had no effect on previously reported income
or earnings per share.
Lower revenue in 2000 when compared with 1999 was principally attributable
to the contribution of FMC's phosphorus operations to a joint venture and to
divestitures of other businesses, and was offset in part by revenue from a
Specialty Chemicals business acquired in 1999. Beginning April 1, 2000, sales
of phosphorus chemicals were recorded by Astaris LLC ("Astaris"), a joint
venture owned by FMC and Solutia Inc. ("Solutia"), and are not reflected as
revenue in FMC's consolidated financial statements. FMC's interest in Astaris
is accounted for under the equity method and its share of Astaris' operating
earnings is included in operating profit for the Industrial Chemicals segment.
(See Note 3 to the company's consolidated financial statements.)
After-tax income from continuing operations before asset impairments and
restructuring and other charges (in 2000 and 1999) and gains on divestitures of
businesses (in 1999) was $212.2 million or $6.72 per share on a diluted basis
in 2000 compared with $195.1 million ($6.03 per share on a diluted basis) in
1999.
Asset impairments and restructuring and other charges recorded by the
company amounted to $56.6 million and $43.8 million on a pre-tax basis for the
years ended December 31, 2000 and 1999, respectively. (See section entitled
"Asset Impairments, and Restructuring and Other Charges," and Note 6 to the
company's consolidated financial statements.) During 1999, the company
completed the sale of its bioproducts and process additives businesses,
resulting in pre-tax gains totaling $55.5 million. (See Note 4 to the company's
consolidated financial statements.)
Average shares outstanding used in the diluted earnings per share
calculations were 31.6 million and 32.4 million for 2000 and 1999,
respectively.
Income from continuing operations of $177.3 million ($5.62 per share on a
diluted basis) in 2000 was lower when compared with $216.0 million ($6.67 per
share on a diluted basis) in 1999, primarily resulting from gains on
divestitures of businesses in 1999 and higher restructuring and other charges
recorded in 2000.
Results of discontinued operations (Note 5 to the company's consolidated
financial statements) included after-tax losses of $66.7 million ($2.12 per
share on a diluted basis) and $3.4 million ($0.10 per share on a diluted basis)
in 2000 and 1999, respectively. During 2000, the company recorded an after-tax
charge of $65.7 million resulting from settlement of litigation related to
FMC's discontinued defense business. See section entitled "Discontinued
Operations."
Net income for 2000 was $110.6 million, or $3.50 per share on a diluted
basis, compared with $212.6 million, or $6.57 per share on a diluted basis for
1999.
1999 COMPARED WITH 1998
Revenue of $4.3 billion for 1999 was down from $4.5 billion in 1998. Sales
outside the United States, including exports, represented 56 percent of the
company's total revenue, consistent with 1998. U.S. sales and non-U.S. sales
decreased by 6.1 percent and 5.8 percent, respectively, from 1998.
After-tax income from continuing operations before asset impairments,
restructuring and other charges, and gains on divestitures of businesses (in
1999) and the cumulative effect of a change in accounting principle (in 1998)
was $195.1 million ($6.03 per share on a diluted basis) in 1999 compared with
$185.3 million ($5.30 per diluted share) in 1998.
Average shares outstanding used in the diluted earnings per share
calculations decreased to 32.4 million in 1999 from 34.9 million in 1998 due
to the company's share repurchase program.
Income from continuing operations, including special income and expense
items, was $216.0 million, or $6.67 per share on a diluted basis, in 1999
compared with $185.3 million, or $5.30 per diluted share, in 1998.
Net loss from discontinued operations (Note 5 to the consolidated financial
statements) was $3.4 million in 1999 compared with $42.7 million in 1998, or
$0.10 and $1.22 per share on a diluted basis in 1999 and 1998, respectively. In
1999, gains on the sale of real estate used by the company's discontinued
Defense Systems operations were offset by charges recorded primarily for
environmental remediation and changes in actuarial estimates of general
liability and workers' compensation liabilities. In 1998, the company recorded a
$70.0 million pre-tax charge to increase environmental reserves related to
discontinued operations (Notes 5 and 12 to the company's consolidated financial
statements).
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23
Net income for 1999 was $212.6 million, or $6.57 per share on a diluted
basis, compared with $106.5 million, or $3.05 per share on a diluted basis for
1998. The company adopted AICPA Statement of Position No. 98-5, "Reporting on
the Costs of Start-Up Activities," effective January 1, 1998. In conjunction
with the adoption, the company charged $46.5 million ($36.1 million after tax,
or $1.03 per share on a diluted basis) of previously capitalized start-up costs
to expense. This charge was recorded in 1998 as the cumulative effect of a
change in accounting principle.
OUTLOOK FOR 2001
In October 2000, management announced that it was initiating a strategic
reorganization that ultimately is expected to split the company into two
independent publicly traded companies-a machinery business and a chemicals
business.
The machinery company will be named FMC Technologies, Inc.
("FTI") and will include FMC's Energy Systems and Food and
Transportation Systems businesses. The chemicals company will be comprised of
FMC's Specialty Chemicals, Industrial Chemicals and Agricultural Products
businesses and will continue to operate as FMC Corporation.
The company plans an initial public offering of slightly less than
20 percent of the common stock of FTI during the second quarter of
2001 and filed a Form S-1 with the Securities and Exchange
Commission on February 20, 2001. Subject to market conditions, final board
approval and a favorable ruling from the Internal Revenue
Service, FMC intends to make a tax-free distribution of the remaining shares of
FTI by the end of 2001.
Management expects that FMC will incur incremental pre-tax costs of $50
million to $60 million during 2001 related to this transaction and the
restructuring of certain corporate and business operations, although the
ultimate amount could differ significantly from this estimate.
To meet general credit needs associated in part with the reorganization,
FMC obtained an additional $200.0 million of committed credit in February 2001.
(See Note 2 to the company's consolidated financial statements.)
BUSINESS SEGMENTS
Results on a segment basis for the five years ended December 31, 2000 are
presented in Note 18 to the company's consolidated financial statements.
Segment operating profits exclude certain income and expense items as
described in Note 1 to the consolidated financial statements. Segment operating
profits are presented before asset impairments, restructuring and other charges
attributable to the company's operations and gains on the divestitures of the
process additives and bio-products businesses. Information about how each of
these items relates to FMC's businesses at the segment level is disclosed in
Note 18 to the company's consolidated financial statements.
Energy Systems
2000 COMPARED WITH 1999
Energy Systems revenue of $1,037.3 million in 2000 decreased from revenue of
$1,129.4 million in 1999, and operating profits of $72.4 million in 2000
decreased from $97.1 million in the prior year. Energy Systems had $425.1
million and $593.4 million of backlog at December 31, 2000 and 1999,
respectively.
Decreased sales and backlog in 2000 reflected continued delays by oil
companies in awarding contracts for major subsea projects, partly attributable
to the effect of restructuring and merger activity in the industry. An
additional factor affecting timing of orders has been a longer than expected
wait for oil companies to obtain the required foreign government approvals of
certain subsea projects. While revenue from large exploration and production
contracts has been slower to materialize following the recent recovery of crude
oil and natural gas prices than previously expected, increased sales of fluid
control and surface wellhead equipment partially offset this reduction in subsea
systems revenue in 2000 when compared with 1999.
The decline in operating profit in 2000 when compared with 1999 was
primarily the result of lower volumes in the subsea and floating production
markets and in measurement products and systems. Also affecting profitability
was increased spending in 2000 for research and development for enhancing
systems for the recovery of subsea crude oil and natural gas and improving
financial returns associated with subsea developments. Increased earnings from
the fluid control business partially offset this decrease in profitability.
1999 COMPARED WITH 1998
Energy Systems 1999 revenue of $1,129.4 million decreased from 1998 revenue of
$1,320.9 million, while operating profits increased to $97.1 million from $95.2
million in 1998. Backlog at December 31, 1999 and 1998 was $593.4 million and
$877.9 million, respectively.
Lower sales reflected reduced customer exploration and production spending
for 1999 due to price and market uncertainty. Uncertainty surrounding both oil
prices and oil company mergers resulted in delays in subsea projects, reflected
in reduced backlog in 1999 compared with 1998, and a depressed market for
land-based wellheads. Partly offsetting these declines were increased
deliveries arising from the Elf Girassol Angola and Terra Nova Canada projects,
and higher sales to several of the company's Energy Systems alliance
partners, such as Shell and Statoil.
Operating profits increased due to improved margins, standardization and
cost reductions when compared with 1998.
OUTLOOK FOR 2001
Recent industry surveys indicate that the major oil companies and several large
independents are planning substantial increases in their exploration and
production budgets in 2001. When compared with 2000, this expansion is expected
to be more balanced globally, and this planned increase in exploration and
production spending is
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24
Management's Discussion and Analysis
expected to provide increased opportunities for FMC. At December 31, 2000, the
company had submitted a significant number of bids for deepwater subsea
developments. Late in 2000, the company was awarded an order for $13 million in
deepwater subsea systems for two offshore Brazil developments. In February 2001,
FMC won a contract with BP for the supply of subsea systems and related services
in the Gulf of Mexico. The agreement has an estimated initial value of $250
million over a five-year period. Management expects this contract to begin to
impact results in late 2001.
Management regards recent developments, including the increased demand for
fluid control equipment, and specifically flow line equipment, as indications of
an upturn in exploration and production activity by the oil and gas industry.
Pricing, however, is expected to remain competitive. In 2001, management expects
continued growth in the fluid control business; however, the measurement
products and systems business is not expected to see a similar expansion.
Food and Transportation Systems
2000 COMPARED WITH 1999
Food and Transportation Systems revenue increased in 2000 to $839.5 million from
$826.3 million in 1999, while operating profits were $69.0 million in 2000, up
from $64.2 million in 1999. Higher revenue from the sale of food processing
equipment, combined with the acquisition of Northfield Freezing Systems
("Northfield") early in 2000, were partially offset by lower sales of airline
ground support equipment compared to 1999. Operating profit increased for
airport systems, although FMC FoodTech's profitability was flat when compared
with the prior year.
When compared with 1999, FMC FoodTech had higher revenue due to the
acquisition of Northfield in 2000 and higher sales of food processing equipment.
Higher sales volumes of tomato processing equipment to China and increased sales
of fruit processing and canning equipment were partially offset by lower sales
of agricultural machinery in Europe and the United States. Frigoscandia's
revenue was negatively affected by the strength of the U.S. dollar against the
euro and lower sales in North America because of industry consolidation in the
freezer market. FMC FoodTech's operating profits were flat when compared with
the prior year. Lower sales of poultry processing equipment essentially offset
increased profitability arising from higher sales of food processing equipment.
The decline in revenue for airport systems in 2000 was the result of lower
volumes for ground support equipment, primarily domestic sales of deicers and
loaders and lower volumes for loaders in Europe and the Middle East, partly
offset by increased sales of Jetway systems and revenue associated with
providing Next Generation Small Loaders ("NGSLs") to the U.S. Air Force under a
long-term contract initiated in 2000. Jetway's strong performance, along with
cost reductions in 2000 and the additional NGSL business, led to increased
operating profitability that was partially offset by the effect of lower volumes
and margins on sales of airline ground support equipment, as airlines responded
to higher operational costs by restricting capital purchases.
Backlog for the Food and Transportation Systems segment of $219.2 million
at December 31, 2000 was lower than the backlog of $247.2 million at December
31, 1999. This was primarily the result of lower orders for food processing
equipment and Jetways during 2000, partially offset by increases related to
NGSLs and freezers when compared to 1999.
1999 COMPARED WITH 1998
Food and Transportation Systems revenue declined to $826.3 million from $868.2
million in 1998. Operating profits were $64.2 million, down from $72.8 million
in 1998. Backlog of $247.2 million at December 31, 1999 was down slightly
compared with $256.0 million at December 31, 1998. Lower revenue and operating
profits for the segment primarily reflected a decrease in airport systems, down
from record levels in 1998.
The decline in airport systems revenue from 1998 was a result of lower
domestic sales of loaders purchased for equipment replacement programs by
airlines and reduced purchases of ground support equipment by cargo companies.
These reductions were partially offset by increased demand from European
airports and airlines. Reduced profitability in 1999 was the result of lower
sales volumes, particularly for loaders, and lower margins for Jetway projects.
FMC FoodTech's revenue was slightly lower as a result of reduced freezer
sales and the 1998 divestiture of a minor product line. Higher margins arising
from improved after-market sales, lower costs and a more favorable product mix
for FMC FoodTech in 1999 contributed to its increased profitability.
OUTLOOK FOR 2001
The company has begun work on its previously announced, five-year, $135 million
contract to provide the U.S. Air Force with NGSLs. This area of business has the
potential to generate revenue of $458 million over the next 15 years.
Although market conditions in the airline industry are not expected to
change significantly in 2001, increased operating costs for airlines may
negatively impact airlines' purchases of capital assets while more favorable
fuel prices could generate opportunities for ground support equipment sales.
The company expects to maintain or grow its market share and improve after-
market services to the food handling and processing equipment industry.
Florida's citrus crops were subjected to freezing temperatures early in
2001. The projected reduction in citrus yields may negatively impact citrus
equipment revenue and profitability.
<PAGE>
25
Agricultural Products
2000 COMPARED WITH 1999
Agricultural Products revenue of $664.7 million for 2000 was up from $632.4
million in 1999 as a result of stronger sales in Latin America and North
America, which more than offset lower sales in Asia. North American revenue
improved after a return to more normal pest pressures following 1999's unusually
low levels. Latin American sales improved due to a rapid recovery from the
devaluation of the Brazilian real in 1999, a new distribution agreement for
third-party products in Brazil and a stronger Mexican market. Increased revenue
in 2000 also reflected higher volumes for herbicides and pyrethroids, partially
offset by lower sales of carbamates. Operating profits increased to $87.8
million in 2000 from $64.3 million in 1999 on these increased volumes and lower
costs, partially offset by higher research and development spending to develop a
new herbicide and to fund FMC's strategic alliance with Devgen, a Belgian
biotechnology company, to support the company's insecticide discovery program.
1999 COMPARED WITH 1998
Revenue from Agricultural Products was $632.4 million, down from $647.8 million
in 1998. Operating profits were $64.3 million compared with $76.3 million in
1998. Lower revenue and earnings in 1999 resulted from unusually low pest
infestation levels in U.S. cotton and corn markets and from difficult economic
conditions in Latin America. Partially offsetting these factors were the
continued benefits of cost-reduction initiatives and increased profitability
from sulfentrazone.
OUTLOOK FOR 2001
Results in 2001 should be approximately the same as in 2000. The burden of
developing markets for FMC's new sulfentrazone herbicide in 2001 will shift to
FMC as DuPont will not purchase sulfentrazone during the year. Other market
opportunities for sulfentrazone plus contractual obligations from DuPont will
minimize the year over year impact on sulfentrazone profitability.
Specialty Chemicals
2000 COMPARED WITH 1999
Specialty Chemicals revenue was $488.8 million, down from $564.5 million in
1999, while operating earnings of $92.4 million in 2000 increased from $73.5
million in 1999.
Lower revenue in 2000 reflected FMC's divestitures of the process additives
and bioproducts businesses, both of which occurred in the third quarter of 1999,
and the effect of unfavorable foreign currency exchange rates. Partially
offsetting this decrease in 2000 was revenue from Pronova Biopolymer AS, an
alginate business acquired by FMC in mid-1999. The Pronova Biopolymer operation
was combined with certain FMC carrageenan and microcrystaline cellulose
businesses and renamed FMC BioPolymer AS ("BioPolymer"). BioPolymer's revenue
reflected a strong market for pharmaceutical and food-grade microcrystalline
cellulose along with growth in sales to Latin America and Asia, but was
partially offset by the impact of foreign currency translation of the euro to
the U.S. dollar. BioPolymer's increased profitability was based on lower
manufacturing costs in 2000 for carrageenan and realized synergies associated
with the acquisition of the alginate products line when compared with 1999. In
addition, having a significant portion of costs being sourced in Europe
mitigated the impact of foreign currency on the division's profitability.
Sales of lithium products were up slightly in 2000 while operating profits
increased substantially from 1999. Increased revenue reflected higher volumes of
butyllithium to the polymer and pharmaceutical markets. These increased volumes
were partially offset by lower pricing, primarily the result of weak European
currencies. Lithium's improved operating profitability in 2000 when compared
with 1999 was a result of higher sales, and the successful implementation of
manufacturing cost reduction initiatives.
1999 COMPARED WITH 1998
Specialty Chemicals revenue of $564.5 million in 1999 decreased from $598.2
million in 1998, and operating profits of $73.5 million in 1999 decreased $4.4
million from $77.9 million in 1998.
Increased revenue and operating profits of FMC BioPolymer in 1999 were more
than offset by reductions caused by the divestitures of the process additives
and bioproducts businesses in the third quarter of 1999.
Higher sales of food ingredients to Asia and Europe in 1999 increased
revenue and profits for FMC BioPolymer. The increase in profitability was
partially offset by higher manufacturing costs in 1999 in the pharmaceutical
portion of the business.
Although lithium revenue declined slightly in 1999 when compared with 1998,
the company enhanced its strategic position by executing a long-term sourcing
agreement with Sociedad Quimica y Minera de Chile S.A. ("SQM"), a South American
manufacturer of lithium carbonate. Costs related to idling production in FMC's
lithium carbonate facility in Argentina partially offset the benefits of the SQM
sourcing agreement in 1999 earnings.
OUTLOOK FOR 2001
During 2000, the company committed $30 million to upgrade and expand FMC
BioPolymer's microcrystalline manufacturing facilities in the United States and
Ireland over the next few years. Management expects this additional capacity to
enable the company to satisfy a growing market and maintain competitive economic
scale as it focuses on growth opportunities for BioPolymer in the food,
pharmaceutical and specialty markets.
For the lithium business, growth is expected to continue in the polymer,
pharmaceutical and battery markets. FMC currently sources a majority of its
lithium carbonate from SQM and continues to evaluate various strategies to
improve results of operations, including the possibility of reducing FMC's
reliance on certain components of lithium's existing asset base.
<PAGE>
26
Management's Discussion and Analysis
Industrial Chemicals
2000 COMPARED WITH 1999
Industrial Chemicals revenue decreased to $905.6 million in 2000 from $1,141.3
million in 1999, and earnings (net of minority interests) decreased to $114.5
million in 2000 from $144.4 million in 1999.
Revenue and cost of sales or services for the three-year period ended
December 31, 2000 have been adjusted to apply the accounting guidance contained
in EITF Issue No. 00-10, which requires revenue and costs related to shipping
and handling to be reported on a gross basis. See section entitled "Consolidated
Results of Operations" for additional information.
Lower revenue was primarily the result of the contribution of the
phosphorus business to the newly formed Astaris joint venture effective April 1,
2000. After that date, phosphorus revenue was no longer consolidated with FMC's
revenue. Phosphorus revenue of $327.0 million through December 31, 1999 is
included in 1999 segment revenue, while revenue in 2000 prior to the joint-
venture formation amounted to $79.2 million. Subsequent to the first quarter of
2000, FMC's equity share of Astaris earnings was included in segment operating
profit for Industrial Chemicals.
Other factors contributing to reduced revenue were the translation impact
of the weaker euro and competitive pressures both at Spain-based FMC Foret and
at Astaris. Partially offsetting the decline in revenue were increased sales of
hydrogen peroxide, reflecting both volume and price increases compared with
1999, and soda ash, a result of the Tg Soda Ash acquisition in mid-1999.
Reduced profitability for Industrial Chemicals in 2000 when compared with
1999 was primarily the result of increased energy costs for all businesses, but
especially at Astaris, while foreign currency translation losses negatively
affected reported operating profitability at Spain-based FMC Foret. Also,
segment profits were down due to phosphorus environmental compliance costs
retained by FMC for design, implementation and depreciation of capital assets in
Pocatello, Idaho in connection with a Consent Decree under the Resource
Conservation and Recovery Act ("RCRA").
Partially offsetting these declines in profitability were higher earnings
for soda ash and hydrogen peroxide. Soda ash profitability was up in 2000,
reflecting the Tg Soda Ash acquisition and reduced costs despite significant
increases in energy prices. Hydrogen peroxide's favorable operating profits were
largely the result of a strong pulp and paper market. In addition, FMC's share
of Astaris results reflected the cost reduction benefits of the joint venture's
rationalization and restructuring programs.
1999 COMPARED WITH 1998
Industrial Chemicals revenue of $1,141.3 million in 1999 was up from $1,138.4
million in 1998. Operating profits (net of minority interests) of $144.4 million
increased significantly from $117.5 million in 1998. The favorable earnings
comparison was driven largely by the impact of the company's acquisition of Tg
Soda Ash and continued significant cost reductions (including the favorable
impact of a change in the estimated useful lives of assets), partially offset by
expenses for Y2K-related compliance and higher pension costs.
Phosphorus results in 1999 included decreases in revenue and profitability
when compared with 1998, reflecting lower volumes and increased distribution
costs partially offset by higher average prices.
Higher sales volumes and profits for soda ash reflected the positive
impact of the company's acquisition of Tg Soda Ash in 1999, although the
improvements were partially offset by reduced domestic and export prices.
Revenue from FMC Foret was lower in 1999 compared with 1998 as a result of
competitive pressures on selling prices and the translation impact of the
weakened Spanish peseta against the United States dollar. Operating profits were
higher in 1999, reflecting lower raw material prices and improved efficiencies,
which more than offset the unfavorable effects of currency translation.
Hydrogen peroxide revenue and operating earnings increased on higher prices
and volumes, reflecting improvements in the pulp industry. Lower costs also
contributed to increased profitability.
OUTLOOK FOR 2001
Management is focused on mitigating the effect of competitive pressures and
unfavorable energy costs on the Industrial Chemicals businesses, especially at
Astaris and FMC Foret. At Astaris, a new purified phosphoric acid plant, coming
on stream in second quarter of 2001, is expected to result in lower energy-
related expenses and favorable business comparisons during the second half of
the year. Excluding Astaris, substantially all energy requirements have been
hedged for 2001.
In 2000, a strong pulp and paper market had a positive impact on
profitability in the U.S. and in Europe; however, this market is cyclical. While
management expects growth in 2001, projections show that this growth will be at
a slower rate than in 2000.
Operating costs, including depreciation, related to FMC's phosphorus
Consent Decree environmental compliance projects are expected to increase in
2001, and are expected to be significantly higher in the first half of 2001 than
2000 first-half levels.
OTHER INFORMATION
Corporate Expenses, Net Interest Expense and Pension-Related Costs
Corporate expenses (before restructuring and other charges in 2000 and 1999) of
$69.8 million in 2000 reflected a decrease of $6.8 million from 1999. Compared
with 1998, corporate expenses in 1999 declined by $8.5 million. The company's
cost reduction efforts are responsible for this trend.
Net interest expense was $95.1 million, $106.7 million and $108.3 million
during 2000, 1999 and 1998, respectively. The decrease in 2000 was the result of
lower average debt levels when compared with 1999, while lower interest expense
in 1999 reflected lower average interest rates when compared with 1998.
Pension and other postretirement benefit expenses decreased $9.2 million in
2000, primarily due to a higher discount rate used to value the company's
liabilities and due to reduced costs related to
<PAGE>
27
certain non-qualified plans. For 2001, a decrease in the actuarial assumption
regarding the expected rate of compensation increase is expected to result in a
reduction in expenses related to pensions, which will partially offset the
impact of lower amortization of a deferred pension transition asset. These
changes will not affect the company's cash flow.
Taxes
Although FMC's domestic earnings (losses) are generally subject to tax expense
(benefit) at the statutory rate of 35 percent, many factors alter the company's
consolidated tax rate. These factors include non-deductible or non-benefitable
transactions related to goodwill or other items, differing foreign tax rates,
state tax increments, depletion, foreign sales corporation benefits, and other
permanent differences. The company's effective tax rate of 20.4 percent on
income from continuing operations in 2000 also includes the beneficial impact of
deductible restructuring charges recorded during the year. (See Note 6 to the
company's consolidated financial statements.)
The effective tax rates in 2000 and 1999, excluding special income and
expense items, were 24.0 percent and 25.7 percent, respectively. The decrease in
2000 results primarily from increased depletion benefits, increased equity
earnings and a decrease in the deferred tax valuation allowance, partly offset
by increased state tax expense.
Accounting Changes
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, is effective for
FMC's financial statements beginning January 1, 2001. SFAS No. 133 will require
the company to recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of the derivative will either be offset against the change in
fair value of the hedged item through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be recognized in
earnings immediately. The company's adoption of SFAS No. 133 on January 1, 2001
will result in the recognition of a loss of $5.6 million after tax in the
consolidated income statements, and a gain of $24.7 million to other
comprehensive income in the first quarter of 2001, both of which will be
accounted for as the cumulative effect of a change in accounting principle.
In the fourth quarter of 2000, the company adopted the requirements of EITF
00-10, "Accounting for Shipping and Handling Fees and Costs." EITF 00-10
requires the company to report costs associated with shipping and handling,
including those costs passed on to customers, as cost of sales or services in
the company's consolidated income statements. In conjunction with the adoption,
the company reclassified as cost of sales or services certain amounts that had
previously been recorded as offsets (reductions) of revenue. The
reclassifications, which were limited to the Industrial Chemicals segment,
resulted in increases in revenue and cost of sales or services of $169.0
million, $163.0 million and $164.0 million in 2000, 1999 and 1998, respectively.
The reclassifications had no effect on previously reported income or earnings
per share.
Under generally accepted accounting principles, the company is required to
periodically evaluate the useful lives of its plants and equipment. In the first
quarter of 1999, the company extended the depreciable lives of certain equipment
used in its chemical and machinery operations to 15 years from an average of 11
to 12 years. This change better reflects the current service lives of the
company's assets. The effect of this change was to increase pre-tax profits by
approximately $32 million and $24 million in 2000 and 1999, respectively. Asset
lives used for tax purposes were not affected by this change.
Discontinued Operations
The company recorded losses from discontinued operations of $66.7 million, $3.4
million and $42.7 million (net of tax) in 2000, 1999 and
1998, respectively.
During 2000, the company recorded a net loss from discontinued operations
of $66.7 million (net of an income tax benefit of $15.0 million), substantially
all of which related to settlement of litigation related to FMC's discontinued
Defense Systems business. (See Note 17 to the company's consolidated financial
statements.) A charge of $1.7 million ($1.0 million after tax) related to
postretirement benefits for former employees of discontinued operations was also
included in the 2000 loss.
Results of discontinued operations in 1999 included gains of $53.7 million
($32.8 million after tax) from the sales of properties in California that were
formerly used by the company's divested defense business. These gains were more
than offset by charges of $59.4 million ($36.2 million after tax) for
environmental remediation and changes in actuarial estimates of general
liability and workers' compensation liabilities associated with discontinued
businesses.
Losses from discontinued operations for 1998 consisted of a $70.0 million
($42.7 million after tax) charge for environmental costs (net of anticipated
recoveries of $19.8 million), the majority of which related to clean-up work at
the discontinued fiber manufacturing site in Front Royal, Virginia (Notes 5 and
12 to the company's consolidated financial statements).
Asset Impairments and Restructuring and Other Charges
During the second quarter of 2000, the company recorded asset impairments of
$11.6 million ($7.2 million after tax) and restructuring and other charges of
$45.0 million ($27.7 million after tax).
Impairments of $9.0 million were recognized as a result of the formation of
a joint venture, Astaris (Note 3 to the company's consolidated financial
statements), including the write down of certain phosphorus assets retained by
FMC and the planned closure of two phosphorus facilities subsequent to the
joint-venture formation. Other impairments included the reduction in value of
certain petroleum business equipment in the Energy Systems segment and of
certain assets in the Specialty Chemicals segment due to changes in the
underlying businesses.
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28
Management's Discussion and Analysis
Restructuring charges of $20.6 million were attributable to the Astaris
formation and the concurrent reorganization of FMC's Industrial Chemicals sales,
marketing and support organizations; the reduction of office space requirements
in FMC's Philadelphia chemical headquarters; and pension expense related to the
separation of phosphorus personnel from FMC. Other restructuring charges
included $4.5 million for reductions in FMC's agricultural machinery work-force,
$2.0 million resulting from the integration of the Northfield Freezing Equipment
acquisition and $5.4 million for other smaller restructuring projects. In
addition, the company recorded environmental accruals of $12.5 million as a
result of increased cost estimates for ongoing remediation of several phosphorus
properties.
In the third quarter of 1999, FMC recorded asset impairments of $29.1
million ($17.7 million after tax), and restructuring and other one-time charges
of $14.7 million ($9.0 million after tax). Asset impairments of $20.7 million
were required to write off the remaining net book values of two U.S. lithium
facilities, which management determined would not be feasible to continue to
operate as configured. Additionally, an impairment charge of $8.4 million was
required to write off the remaining net book value of a caustic soda facility in
Green River, Wyoming. Restructuring and other one-time charges of $14.7 million
resulted primarily from strategic decisions to divest or restructure a number of
businesses and support departments, including certain food machinery,
agricultural products, and energy systems operations and certain corporate and
shared services support departments.
See Note 6 to the consolidated financial statements for further discussion
of the asset impairments and restructuring and other charges.
Environmental Obligations
FMC, like other industrial manufacturers, is involved with a variety of
environmental matters in the ordinary course of conducting its business and is
subject to federal, state and local environmental laws. FMC feels strongly that
the company has a responsibility to protect the environment, public health and
employee safety. This responsibility includes cooperating with other parties to
resolve issues created by past and present handling of wastes.
When issues arise, including notices from the Environmental Protection
Agency or other government agencies identifying FMC as a Potentially Responsible
Party, FMC's environmental remediation management assesses and manages the
issues. When necessary, the company uses multifunctional teams composed of
environmental, legal, financial and communications personnel to ensure that the
company's actions are consistent with its responsibilities to the environment
and public health, as well as to its employees and shareholders.
In the second quarter of 2000, the company provided additional
environmental reserves totaling $12.5 million ($7.6 million after tax) related
to ongoing remediation of several phosphorus manufacturing properties as part of
the restructuring and other charges described above. This provision and
provisions made in 1999 and 1998 are more fully described in Notes 5 and 12 to
the consolidated financial statements.
Additional information regarding the company's environmental accounting
policies and environmental liabilities is included in Notes 1 and 12,
respectively, to the company's consolidated financial statements. Information
regarding environmental obligations associated with the company's discontinued
operations is included in Note 5 to the consolidated financial statements.
Estimates of 2001 environmental spending are included in the section entitled
"Liquidity and Capital Resources."
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at December 31, 2000 and December 31, 1999 were $25.1
million and $64.0 million, respectively. The company had total borrowings of
$1.0 billion and $1.3 billion as of December 31, 2000 and 1999, respectively.
Operating working capital, which includes trade receivables (net),
inventories, other current assets, accounts payable, accrued payroll, other
current liabilities and the current portion of accrued pension and other
postretirement benefits, decreased $54.1 million to $57.1 million at December
31, 2000, from $111.2 million at December 31, 1999. Factors contributing to the
reduction in operating working capital at year end 2000 when compared with 1999
include the net effect of the contribution of the phosphorus business to the
Astaris joint venture in 2000 and the company's $80.0 million obligation
resulting from settlement of litigation relating to discontinued operations
(included in other current liabilities at December 31, 2000), which the company
paid in January 2001. This was partially offset by a reduction in advance
payments received from customers for large energy system projects in 2000 when
compared with 1999.
Cash provided from operating activities of $290.5 million for the year
ended December 31, 2000 decreased from $558.2 million in 1999 primarily as a
result of cash received in 1999 related to the sale of accounts receivable
amounting to $142.1 million, and the reduction in advance payments received from
customers in 2000.
During the fourth quarter of 1999, FMC entered into an accounts receivable
financing facility under which accounts receivable were sold without recourse
through a wholly owned, bankruptcy remote subsidiary, resulting in reductions of
accounts receivable of $151.0 million and $144.0 million at December 31, 2000
and 1999, respectively. The company accounts for the sales of receivables in
accordance with the requirements of SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." Net discounts
recognized on sales of receivables were included in selling, general and
administrative expenses in the consolidated statements of income and amounted to
$0.3 million and $1.9 million for the years ended December 31, 2000 and 1999,
respectively. The agreement for the sale of accounts receivable provides for
continuation of the program on a revolving basis for a three-year period.
Cash required by investing activities of $34.0 million in 2000 decreased
from the 1999 requirement of $255.2 million, reflecting cash received in 2000
from the redemption of Tyco International Ltd. ("Tyco") preferred stock, the
receipt of a distribution from Astaris and less acquisition activity during
2000. The company acquired
<PAGE>
29
Northfield Freezing Equipment in 2000 and Tg Soda Ash, Inc. and Pronova
Biopolymer AS in 1999. Receipt of $199.3 million from the divestitures of the
process additives and bioproducts businesses in 1999 partly offset the funding
requirements associated with the company's acquisitions during that year. In
addition, the company had other less significant acquisition expenditures in
2000 and 1999. FMC continues to evaluate potential acquisitions, divestitures
and joint ventures on an ongoing basis.
On October 3, 2000, FMC redeemed its investment in Tyco preferred stock in
exchange for cash proceeds of $128.7 million including dividends amounting to
$1.2 million. FMC received the guaranteed preferred stock from Tyco in
conjunction with FMC's divestiture of Crosby Valve in July 1998.
Effective April 1, 2000, FMC and Solutia contributed their respective
phosphorus businesses to form Astaris, a joint venture, as described further in
Note 3 to the company's consolidated financial statements. FMC accounts for its
investment in Astaris under the equity method of accounting. Formation of the
joint venture resulted in a significant decrease in the balance of consolidated
property, plant and equipment and certain other FMC accounts when compared with
the balances at December 31, 1999.
In the third quarter of 2000, FMC received a cash distribution from Astaris
of $110.3 million. This amount included $21.5 million in satisfaction of FMC's
receivable from the joint venture, resulting from FMC providing its share of
operating capital to the joint venture during the interim period between its
formation and the procurement of financing from an external source. In
connection with the finalization of Astaris' external financing agreement during
the third quarter of 2000, FMC and Solutia have independently contractually
agreed to provide Astaris with funding in the event the joint venture fails to
meet certain financial benchmarks. Subsequent to December 31, 2000, the company
received notification that such a contribution will be required in 2001. The
company believes that this obligation is not likely to have a significant impact
on FMC's earnings, cash flow or financial position.
Capital spending (excluding acquisitions) of $240.4 million for the year
ended December 31, 2000 was relatively flat when compared with 1999. Lower
spending on significant capital projects was largely offset by increased
spending related to environmental compliance at current operating sites.
During 2000 and 1999, the company entered into agreements for the sale and
leaseback of certain equipment. Net property, plant and equipment was reduced
by the equipment's respective carrying value of $13.7 million in 2000 and $29.1
million in 1999. The net cash proceeds received were $22.5 million in 2000 and
$52.1 million in 1999. Non-amortizing deferred credits were recorded in
conjunction with the sale transactions. These credits totaled $31.8 million and
$23.4 million at December 31, 2000 and 1999, respectively, and are included in
other liabilities. (See Note 8 to the company's consolidated financial
statements.)
Cash required by financing activities in 2000 of $250.9 million was lower
than the 1999 requirement of $340.2 million, primarily because of significant
repurchases of the company's common stock during 1999.
The company has $450.0 million in committed credit under a five-year, non-
amortizing revolving credit agreement due in December 2001. The company intends
to renew or replace this credit commitment prior to maturity. No amounts were
outstanding under this facility at either December 31, 2000 or December 31,
1999. The company elected to not renew an additional unused 364-day committed
credit facility for $350.0 million that expired in July 2000.
To meet general credit needs associated in part with the company's
reorganization, FMC obtained an additional $200.0 million of committed credit in
February 2001. (See Note 2 to the company's consolidated financial statements).
In August 1998, a universal shelf registration statement became effective,
under which $500.0 million of debt and/or equity securities may be offered. At
December 31, 2000, unused capacity of $345.0 million remains available under the
1998 shelf registration.
For the year ended December 31, 2000, the company reduced long-term debt by
$51.7 million (net of discounts on long-term bonds) and short-term debt by
$211.6 million (net of discounts on commercial paper and the effect of foreign
currency translation on foreign borrowings).
During 2000, the company retired $42.5 million in senior debt and medium
term notes, due in 2002, 2005, 2008 and 2011, with interest rates at 6.75 to
7.75 percent. During 1999, the company retired $250.0 million of currently due
senior debt bearing interest at 8.75 percent.
At December 31, 2000 long-term debt included $39.9 million in exchangeable
senior subordinated debentures bearing interest at 6.75 percent, maturing in
2005 and exchangeable at any time into Meridian Gold, Inc. common stock at an
exchange price of $15.125 per share, subject to adjustment. (See Note 10 to the
consolidated financial statements.) The company redeemed $8.5 million and $15.7
million of these debentures during 2000 and 1999, respectively.
During 1999, the company completed the common stock open-market repurchase
program originally authorized by the Board of Directors on August 28, 1997.
Purchases for 1999 totaled 2.5 million shares at a cost of $135.9 million. A
total of 7.7 million shares were repurchased during fiscal years 1997 through
1999 at a cost of approximately $503 million.
On August 27, 1999, the Board of Directors authorized an additional $50
million of open market repurchases of FMC common stock, which the company has
not commenced. Depending on market conditions, the company may purchase
additional shares of its common stock on the open market from time to time;
however, the company has not determined when or if it will make significant
repurchases under this authorization.
The company expects to meet operating needs, fund capital expenditures and
potential acquisitions, and meet debt service requirements for 2001 through cash
generated from operations, available credit facilities and proceeds from the
offering of FTI stock. FMC expects its cash requirements for 2001 to include
approximately $273 million for planned capital expenditures, including
approximately $120 million for capital projects related to environmental con-
<PAGE>
30
Management's Discussion and Analysis
trol facilities. Projected 2001 spending also includes approximately $33 million
for environmental compliance at current operating sites, which is an operating
expense of the company, plus approximately $35 million of remediation spending
and $8 million for environmental study costs at current operating, previously
operated and other sites, which has been accrued in prior periods. Included in
the company's cash requirements for 2001 are an $80.0 million payment in
connection with a legal matter related to the discontinued Defense Systems
business (Notes 5 and 17 to the company's consolidated financial statements) and
obligations in conjunction with the reorganization of FMC into two publicly
traded companies. To meet general credit needs associated in part with the
reorganization, FMC obtained an additional $200.0 million of committed credit in
February 2001. (See Note 2 to the company's consolidated financial statements.)
The company's foreign currency translation adjustment in accumulated other
comprehensive loss increased from $196.0 million at December 31, 1999 to $265.8
million at December 31, 2000, primarily as a result of the negative translation
impact of the euro, British pound, Scandinavian currencies and Japenese yen
against the U.S. dollar, partly offset by the strengthening of the Brazilian
real.
The company's ratios of earnings to fixed charges were 2.7x and 3.1x for
the years ended December 31, 2000 and 1999, respectively. The ratio of earnings
to fixed charges, excluding the effect of asset impairments and restructuring
and other charges in both years, and excluding gains from the divestitures of
the bioproducts and process additives businesses in 1999, were 3.2x and 2.9x for
the years ended December 31, 2000 and 1999, respectively. Lower interest expense
in 2000 was primarily responsible for this favorable comparison.
DIVIDENDS
No dividends were paid in 2000, 1999 and 1998, and no cash dividends are
expected to be paid in 2001.
DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISKS
FMC's primary financial market risks include changes in foreign currency
exchange rates, interest rates and commodity prices. In managing its exposure to
these risks, the company may use derivative financial instruments in accordance
with established policies and procedures. FMC does not use derivative financial
instruments for trading purposes. At December 31, 2000, FMC's derivative
holdings consisted primarily of foreign currency forward contracts, natural gas
forward contracts and crude oil forward contracts.
When FMC or one of its subsidiaries sells or purchases products or services
outside the United States, transactions are frequently denominated in currencies
other than the functional currency of that entity. Exposure to variability in
currency exchange rates is mitigated, when possible, through the use of natural
hedges, whereby purchases and sales in the same foreign currency and with
similar maturity dates offset one another. Additionally, FMC initiates hedging
activities by entering into foreign exchange forward or options contracts with
third parties when natural hedges do not exist. The maturity dates of the
currency exchange agreements that provide hedge coverage are consistent with
those of the underlying purchase or sales commitments.
To monitor its currency exchange rate risks, the company uses a sensitivity
analysis, which measures the impact on earnings of an immediate 10 percent
devaluation of the foreign currencies to which it has exposure. Based on a
sensitivity analysis at December 31, 2000, fluctuations in currency exchange
rates in the near term would not materially affect FMC's consolidated operating
results, financial position or cash flows. FMC's management believes that its
hedging activities have been effective in reducing its risks related to currency
exchange rate fluctuations.
During September 1998, the company entered into $65.0 million of forward
contracts to offset risks associated with the real-denominated portions of FMC's
Brazilian investments. During the first quarter of 1999, the Brazilian real
devalued. Losses from the decline in value of the company's real-denominated
investments during the 1999 devaluation, as well as 1999 economic losses related
to the Brazilian economic crisis, were offset by gains on the forward contracts.
The company is exposed to changes in interest rates as a result of its
financing and cash management activities, which include long-and short-term debt
to maintain liquidity and fund its business operations. In managing interest
rate risk, the company's strategic policy is to monitor the ratio of its fixed
to floating rate debt. The company may, from time to time, utilize interest rate
swaps to manage its exposure to changes in interest rates.
To address its exposure to risks from changes in commodity prices, FMC
enters into forward or swap contracts relating to energy purchases used in its
manufacturing processes. The gains or losses on these contracts are included as
an adjustment to the cost of sales or services when the contracts are settled.
For more information on derivative financial instruments, see Notes 1 and
16 to the company's consolidated financial statements.
CONVERSION TO THE EURO
On January 1, 1999, 11 European Union member states adopted the euro as their
common national currency. During the transition period ending January 1, 2002,
either the euro or a participating country's present currency will be accepted
as legal tender. Beginning on January 1, 2002, euro-denominated bills and coins
will be issued, and by July 1, 2002, the euro will be the only currency that the
member states will use.
FMC management continues to address the strategic, financial, legal and
systems issues related to the various phases of transition. The company is
evaluating customer and business needs on a timely basis and attempting to
anticipate and prevent complications related to the conversion. Throughout the
transition period, FMC has incurred and will continue to incur minor costs
related primarily to programming changes for its information systems.
<PAGE>
31
Consolidated Statements of Income
<TABLE>
<CAPTION>
(In millions, except per share data)
Year ended December 31 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $ 3,925.5 $ 4,273.6 $ 4,542.4
- ---------------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of sales or services 2,872.0 3,171.4 3,408.0
Selling, general and administrative expenses 522.5 575.4 612.7
Research and development expenses 154.5 152.4 157.7
Gains on divestitures of businesses (Note 4) - (55.5) -
Asset impairments (Note 6) 11.6 29.1 -
Restructuring and other charges (Note 6) 45.0 14.7 -
- ---------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 3,605.6 3,887.5 4,178.4
- ---------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before minority interests, interest income, interest
expense, income taxes and cumulative effect of change in accounting principle 319.9 386.1 364.0
Minority interests 4.6 5.1 6.2
Interest income 7.0 10.4 12.0
Interest expense 99.7 117.1 120.3
- ---------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes
and cumulative effect of change in accounting principle 222.6 274.3 249.5
Provision for income taxes (Note 9) 45.3 58.3 64.2
- ---------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before cumulative effect of change
in accounting principle 177.3 216.0 185.3
Discontinued operations, net of income taxes (Note 5) ( 66.7) (3.4) (42.7)
- ---------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of change in accounting principle 110.6 212.6 142.6
Cumulative effect of change in accounting principle, net of income taxes (Note 1) - - (36.1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $ 110.6 $ 212.6 $ 106.5
=================================================================================================================================
Basic earnings (loss) per common share (Note 1)
Continuing operations $ 5.83 $ 6.86 $ 5.45
Discontinued operations (Note 5) (2.20) (0.11) (1.26)
Cumulative effect of change in accounting principle (Note 1) - - (1.06)
- ---------------------------------------------------------------------------------------------------------------------------------
$ 3.63 $ 6.75 $ 3.13
=================================================================================================================================
Diluted earnings (loss) per common share (Note 1)
Continuing operations $ 5.62 $ 6.67 $ 5.30
Discontinued operations (Note 5) (2.12) (0.10) (1.22)
Cumulative effect of change in accounting principle (Note 1) - - (1.03)
- ---------------------------------------------------------------------------------------------------------------------------------
$ 3.50 $ 6.57 $ 3.05
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
32
Consolidated Balance Sheets
(In millions, except per share data)
<TABLE>
<CAPTION>
December 31 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 25.1 $ 64.0
Trade receivables, net of allowances of $13.4 in 2000 and $14.9 in 1999 (Note 1) 635.5 635.4
Inventories (Notes 1 and 7) 426.2 457.7
Other current assets 152.4 172.6
Deferred income taxes (Note 9) 90.6 86.8
- ------------------------------------------------------------------------------------------------------------------------------
Total current assets 1,329.8 1,416.5
Investments 103.0 206.8
Property, plant and equipment, net (Note 8) 1,616.1 1,691.9
Goodwill and intangible assets, net 494.6 505.7
Other assets 112.2 88.8
Deferred income taxes (Note 9) 90.2 86.1
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $ 3,745.9 $ 3,995.8
==============================================================================================================================
Liabilities and stockholders' equity
Current liabilities
Short-term debt (Note 10) $ 153.9 $ 347.5
Accounts payable, trade and other 657.3 665.5
Accrued payroll 91.7 106.9
Other current liabilities 370.5 371.6
Current portion of long-term debt (Note 10) 22.7 0.8
Current portion of accrued pensions and other postretirement benefits (Note 11) 37.5 10.5
Income taxes payable (Note 9) 66.3 73.2
- ------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,399.9 1,576.0
Long-term debt, less current portion (Note 10) 872.1 945.1
Accrued pension and other postretirement benefits, less current portion (Note 11) 189.8 237.6
Reserve for discontinued operations and other liabilities (Notes 5 and 12) 291.9 319.2
Other liabilities 144.8 128.1
Minority interests in consolidated companies 47.0 46.2
Commitments and contingent liabilities (Notes 12, 16 and 17)
- ------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity (Notes 13 and 14)
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2000 or 1999 - -
Common stock, $0.10 par value, authorized 130,000,000 shares in 2000 and 1999;
issued 38,622,349 shares in 2000 and 38,331,817 shares in 1999 3.9 3.8
Capital in excess of par value of common stock 181.6 165.8
Retained earnings 1,398.9 1,288.3
Accumulated other comprehensive loss (272.6) (203.5)
Treasury stock, common, at cost; 7,977,709 shares in 2000 and 7,968,230 shares in 1999 (511.4) (510.8)
- ------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 800.4 743.6
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 3,745.9 $ 3,995.8
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
33
Consolidated Statements of Cash Flows
(In millions)
<TABLE>
<CAPTION>
Year ended December 31 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash provided (required) by operating activities of continuing operations:
Income from continuing operations before cumulative
effect of change in accounting principle $ 177.3 $ 216.0 $ 185.3
Adjustments to reconcile income from continuing operations before cumulative
effect of change in accounting principle to cash provided by operating activities
of continuing operations:
Depreciation and amortization 188.9 190.8 215.5
Gains on divestitures of businesses (Note 4) - (55.5) -
Asset impairments (Note 6) 11.6 29.1 -
Restructuring and other charges (Note 6) 45.0 14.7 -
Deferred income taxes (Note 9) (7.9) 20.6 27.4
Minority interests 4.6 5.1 6.2
Other (13.4) (0.3) (25.8)
Changes in operating assets and liabilities, excluding the effect of acquisitions
and divestitures of businesses and formation of a joint venture:
Accounts receivable sold (Note 1) 6.7 142.1 -
Trade receivables, net (7.4) 39.4 (9.6)
Inventories (16.7) 57.0 8.2
Other current assets and other assets 33.3 1.4 68.5
Accounts payable, including advance payments, accrued payroll, other current
liabilities and other liabilities (122.1) (86.8) (6.5)
Income taxes payable 8.1 (1.7) (22.1)
Accrued pension and other postretirement benefits, net (17.5) (13.7) (17.1)
- ---------------------------------------------------------------------------------------------------------------------------------
Cash provided by operating activities of continuing operations 290.5 558.2 430.0
- ---------------------------------------------------------------------------------------------------------------------------------
Cash provided (required) by discontinued operations (Note 5) (43.4) 29.1 (61.6)
=================================================================================================================================
Cash provided (required) by investing activities:
Acquisitions and joint venture investments (Note 3) (47.4) (286.0) -
Capital expenditures (240.4) (236.3) (277.7)
Proceeds from divestitures of businesses (Note 4) - 199.3 -
Distribution from Astaris (Note 3) 88.8 - -
Redemption of Tyco preferred stock (Note 4) 127.5 - -
Receipt of Tyco preferred stock (Note 4) - - (121.6)
Proceeds from disposal of property, plant and equipment and sale-leasebacks 37.1 62.0 72.9
(Increase) decrease in investments 0.4 5.8 (25.1)
- ---------------------------------------------------------------------------------------------------------------------------------
Cash required by investing activities (34.0) (255.2) (351.5)
=================================================================================================================================
Cash provided (required) by financing activities:
Net proceeds from issuance (repayment) of commercial paper (191.5) 23.9 (10.1)
Net increase (decrease) under uncommitted credit facilities (37.9) 39.7 (69.9)
Net increase (decrease) in other short-term debt 17.8 (83.4) (34.2)
Increase in long-term debt - 84.6 288.6
Repayment of long-term debt (51.7) (270.1) (37.3)
Distributions to minority partners (2.8) (5.9) (5.3)
Repurchases of common stock, net (Note 14) (0.6) (136.4) (156.7)
Issuances of common stock 15.8 7.4 17.4
- ---------------------------------------------------------------------------------------------------------------------------------
Cash required by financing activities (250.9) (340.2) (7.5)
- ---------------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents (1.1) 10.4 (10.4)
=================================================================================================================================
Increase (decrease) in cash and cash equivalents (38.9) 2.3 (1.0)
Cash and cash equivalents, beginning of year 64.0 61.7 62.7
=================================================================================================================================
Cash and cash equivalents, end of year $ 25.1 $ 64.0 $ 61.7
=================================================================================================================================
</TABLE>
Supplemental cash flow information: Cash paid for interest was $110.4 million,
$123.3 million and $116.4 million, and cash paid for income taxes, net of
refunds, was $35.1 million, $40.8 million and $65.4 million for 2000, 1999 and
1998, respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
34
Consolidated Statements of Changes in Stockholders' Equity
(In millions, except par value)
<TABLE>
<CAPTION>
Accumulated
Common Capital other
stock, $0.10 in excess Retained comprehensive Treasury Comprehensive
par value of par earnings income (loss) stock income (loss)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1997 $3.8 $141.0 $ 969.2 $(135.7) $(217.7) $ 92.2
======
Net income 106.5 $106.5
Stock options and awards exercised (Note 13) 17.4
Purchases of treasury shares (Note 14) (150.0)
Purchases of shares for benefit plan trust (Note 14) (6.7)
Foreign currency translation adjustments (Note 15) 1.6 1.6
- -----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1998 3.8 158.4 1,075.7 (134.1) (374.4) $108.1
======
Net income 212.6 $212.6
Stock options and awards exercised (Note 13) 7.4
Purchases of treasury shares (Note 14) (135.9)
Net purchases of shares for benefit plan trust (Note 14) (0.5)
Foreign currency translation adjustments (Note 15) (61.9) (61.9)
Minimum pension liability adjustment (Note 11) (7.5) (7.5)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1999 3.8 165.8 1,288.3 (203.5) (510.8) $143.2
======
Net income 110.6 $110.6
Stock options and awards exercised (Note 13) 0.1 15.8
Net purchases of shares for benefit plan trust (Note 14) (0.6)
Foreign currency translation adjustments (Note 15) (69.8) (69.8)
Minimum pension liability adjustment (Note 11) 0.7 0.7
- -----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 2000 $3.9 $181.6 $1,398.9 $(272.6) $(511.4) $ 41.5
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
35
Notes to Consolidated Financial Statements
NOTE 1 PRINCIPAL ACCOUNTING POLICIES
Nature of operations. FMC Corporation ("FMC" or "the company") is a diversified
producer of chemicals, machinery and other products for industry and
agriculture. Further descriptions of FMC's products, its principal markets and
the relative significance of its operations are included in this annual report
in Products and Markets on pages 16 through 19 and in the Business Segment and
Geographic Segment Data in Note 18.
Use of estimates. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results are likely to
differ from those estimates, but management does not believe such differences
will materially affect the company's financial position, results of operations
or cash flows.
Consolidation. The consolidated financial statements include the accounts
of FMC and all significant majority owned subsidiaries and ventures except those
excluded because control is restricted or temporary in nature. All material
intercompany accounts and transactions are eliminated in consolidation.
Investments. Investments in companies in which FMC's ownership interest is
50 percent or less and in which FMC exercises significant influence over
operating and financial policies, and majority owned investments in which FMC's
control is restricted or temporary in nature, are accounted for using the equity
method after eliminating the effects of any material intercompany transactions.
All other investments are carried at their fair values or at cost, as
appropriate.
Cash equivalents. The company considers investments in all highly liquid
debt instruments with original maturities of three months or less to be cash
equivalents.
Accounts receivable. During the fourth quarter of 1999, FMC entered into an
accounts receivable financing facility under which accounts receivable are sold
without recourse through a wholly owned subsidiary, resulting in reductions of
accounts receivable of $151.0 million and $144.0 million at December 31, 2000
and 1999, respectively. The company accounts for the sales of receivables in
accordance with the requirements of Statement of Financial Accounting Standards
("SFAS") No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities." Net discounts recognized on sales of
receivables are included in selling, general and administrative expenses in the
consolidated statements of income and amounted to $0.3 million and $1.9 million
for the years ended December 31, 2000 and 1999, respectively. The agreement for
the sale of accounts receivable provides for continuation of the program on a
revolving basis for a three-year period.
Revenue in excess of billings on completed contracts accounted for under
the percentage-of-completion method is included in accounts receivable and
amounted to $76.3 million at December 31, 2000 and $34.5 million at December 31,
1999.
Inventories. Inventories are stated at the lower of cost or market value.
Inventory costs include those costs directly attributable to products prior to
sale, including all manufacturing overhead but excluding costs to distribute.
Cost is determined on the last-in, first-out ("LIFO") basis for all domestic
inventories, except certain inventories relating to contracts-in-progress which
are stated at the actual production cost incurred to date, reduced by amounts
identified with recognized revenue. At December 31, 2000, inventories accounted
for under the LIFO method totaled $138.6 million. The first-in, first-out
("FIFO") method is used to determine the cost for all other inventories.
Property, plant and equipment. Property, plant and equipment, including
capitalized interest, is recorded at cost. Depreciation for financial reporting
purposes is provided principally on the straight-line basis over the estimated
useful lives of the assets (land improvements-20 years, buildings-20 to 50
years, and machinery and equipment-three to 18 years). Gains and losses are
reflected in income upon sale or retirement of assets. Expenditures that extend
the useful lives of property, plant and equipment or increase productivity are
capitalized.
The company reviews the recovery of the net book value of property, plant
and equipment for impairment whenever events and circumstances indicate that the
net book value of an asset may not be recoverable from the estimated
undiscounted future cash flows expected to result from its use and eventual
disposition. In cases where undiscounted expected future cash flows are less
than the net book value, an impairment loss is recognized equal to an amount by
which the net book value exceeds the fair value of assets.
Capitalized interest. Interest costs of $10.1 million in 2000 ($2.3 million
in 1999 and $4.4 million in 1998) associated with the construction of certain
long-lived assets have been capitalized as part of the cost of those assets and
are being amortized over the assets' estimated useful lives.
Deferred costs and other assets. Unamortized capitalized software costs
totaling $46.9 million and $48.8 million at December 31, 2000 and 1999,
respectively, are components of other assets, which also include bond discounts
and other deferred charges.
Capitalized software costs are amortized over expected useful lives ranging
from three to ten years. Recoverability of deferred software costs is assessed
on an ongoing basis and writedowns to net realizable value are recorded as
necessary.
Goodwill and intangible assets. Goodwill and identifiable intangible assets
(such as trademarks) are amortized on a straight-line basis over their estimated
useful or legal lives, not exceeding 40 years. The company periodically
evaluates the recoverability of the net book value of goodwill and intangible
assets based on expected future undiscounted cash flows for each operation
having a significant goodwill balance. In cases where undiscounted expected
future cash flows are less than the net book value, an impairment loss is
recognized equal to an amount by which the net book value exceeds the fair value
of assets. Goodwill amortization amounted to $15.4 million, $12.9 million and
$11.9 million for the years ended December 31, 2000, 1999 and 1998,
respectively.
Accounts payable. Amounts advanced by customers as deposits on orders not
yet billed and progress payments on contracts-in-progress are classified with
accounts payable ($123.3 million at December 31, 2000 and $182.4 million at
December 31, 1999).
<PAGE>
36
Notes to Consolidated Financial Statements
Revenue recognition. Revenue is recognized upon transfer of title, which is
generally upon shipment. In the case of larger long-term contracts for the sale
and installation of equipment, revenue is recognized under the percentage-of-
completion method. The percentage-of-completion method involves recognition of
revenue as work progresses on each contract and is calculated under the cost-to-
cost method. Any expected losses on contracts in progress are charged to
operations in the period the losses become probable.
Income taxes. Current income taxes are provided on income reported for
financial statement purposes adjusted for transactions that do not enter into
the computation of income taxes payable. Deferred tax liabilities and assets are
recognized for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Income
taxes are not provided for the equity in undistributed earnings of foreign
subsidiaries or affiliates when it is management's intention that such earnings
will remain invested in those companies, but are provided in the year in which
the decision is made to repatriate the earnings.
Foreign currency translation. Assets and liabilities of most foreign
operations are translated at exchange rates in effect at the balance sheet date,
and the foreign operations' income statements are translated at the monthly
exchange rates for the period. For operations in non-highly inflationary
countries, translation gains and losses are recorded as a component of
accumulated other comprehensive income (loss) in stockholders' equity until the
foreign entity is sold or liquidated. For operations in highly inflationary
countries and where the local currency is not the functional currency,
inventories, property, plant and equipment, and other noncurrent assets are
converted to U.S. dollars at historical exchange rates, and all gains or losses
from conversion are included in net income. Foreign currency effects on cash and
cash equivalents and debt in hyperinflationary economies are included in
interest income or expense.
Derivative financial instruments and foreign currency transactions. The
company uses derivative financial instruments selectively to offset exposure to
market risks arising from changes in foreign exchange rates, certain commodity
prices and interest rates. Derivative financial instruments currently used by
the company primarily consist of foreign currency forward contracts and energy-
related commodity forward contracts.
Foreign currency contracts are executed centrally to minimize transaction
costs on currency conversions and minimize losses due to adverse changes in
foreign currency markets. The company evaluates and monitors consolidated net
exposures by currency and maturity, and external derivative financial
instruments correlate with that net exposure in all material respects.
Gains and losses on foreign currency hedges of existing assets and
liabilities are included in the carrying amounts of those assets or liabilities
and are ultimately recognized in income when those carrying amounts are
converted. Gains and losses related to foreign currency hedges of firm
commitments also are deferred and included in the basis of the transaction when
it is completed. Gains and losses on unhedged foreign currency transactions are
included in income as part of cost of sales or services. Gains and losses on
derivative financial instruments that protect the company from exposure in a
particular currency, but do not currently have a designated underlying
transaction, are also included in income as part of cost of sales or services.
If a hedged item matures, is sold, extinguished, or terminated, or is related to
an anticipated transaction that is no longer likely to take place, the
derivative financial instrument related to the hedged item is closed out and the
related gain or loss is included in income as part of cost of sales or services
or interest expense as appropriate in relation to the hedged item.
FMC purchases exchange-traded contracts to manage exposure to energy
purchases used in the company's manufacturing processes. Gains and losses on
these contracts are included as adjustments to cost of sales or services when
the contracts are settled.
Cash flows from hedging contracts are reported in the statements of cash
flows in the same categories as the cash flows from the transactions being
hedged.
Treasury stock. Shares of common stock repurchased under the company's
stock repurchase plans are recorded at cost as treasury stock and result in a
reduction of stockholders' equity in the consolidated balance sheet. When the
treasury shares are reissued under FMC's stock compensation plans, the company
uses a FIFO method for determining cost. The difference between the cost of the
shares and the reissuance price is added to or deducted from capital in excess
of par value of common stock.
Earnings (loss) per common share ("EPS"). Basic EPS has been computed by
dividing net income by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS has been computed by dividing net
income (loss) by the weighted average number of shares of common stock
outstanding during the year plus the weighted average number of additional
common shares that would have been outstanding during the year if potentially
dilutive common shares had been issued under the company's stock compensation
plans. The weighted average numbers of shares outstanding used to calculate the
company's annual EPS were as follows:
(In thousands)
December 31 2000 1999 1998
- ------------------------------------------------------------------
Basic 30,439 31,516 34,007
Diluted 31,576 32,377 34,939
- ------------------------------------------------------------------
At December 31, 2000, common shares outstanding plus dilutive potential
common shares totaled 31,910,352 shares.
Segment information. The company's determination of its reportable segments
on the basis of its strategic business units and the commonalities among the
products and services within each segment corresponds to the manner in which the
company's management reviews and evaluates operating performance. The company
has combined certain similar operating segments that meet applicable criteria
established under SFAS No. 131.
Energy Systems provides subsea drilling and production systems, floating
production, surface drilling and production systems for companies involved in
the exploration and production of crude oil
<PAGE>
37
and natural gas. Food and Transportation Systems provides technologically
advanced handling and processing systems to industrial companies. Agricultural
Products supplies crop protection and pest control chemicals for worldwide
markets. Specialty Chemicals develops and manufactures highly specialized
chemical products used in food, pharmaceutical and personal care products.
Industrial Chemicals provides commodity-based chemicals produced in large
quantities for industrial consumers. Business segment data are included in Note
18.
Segment operating profit is defined as total revenue less operating
expenses. The following items have been excluded in computing segment operating
profit: corporate staff expense, interest income and expense associated with
corporate debt facilities and investments, income taxes, gains on divestitures
of businesses (Note 4), restructuring and other charges (Note 6), asset
impairments (Note 6), LIFO inventory adjustments and other income and expense
items. Information about how asset impairments and restructuring and other
charges relate to FMC's businesses at the segment level is disclosed in Note 18.
Segment assets and liabilities are those assets and liabilities that are
recorded and reported by segment operations. Segment operating capital employed
represents segment assets less segment liabilities. Segment assets exclude
corporate and other assets, which are principally cash equivalents, LIFO
reserves, deferred income tax benefits, eliminations of intercompany
receivables, property and equipment not attributable to a specific segment and
credits relating to the sale of receivables. Segment liabilities exclude
substantially all debt, income taxes, pension and other postretirement benefit
liabilities, environmental reserves, restructuring reserves, deferred gains on
sale and leaseback of equipment, intercompany eliminations and reserves for
discontinued operations.
Geographic segment revenue represents sales by location of the company's
customers. Geographic segment long-lived assets include investments, net
property, plant and equipment, and other non-current assets. Geographic segment
data is included in Note 18.
Environmental obligations. The company provides for environmental-related
obligations when they are probable and amounts can be reasonably estimated.
Where the available information is sufficient to estimate the amount of
liability, that estimate has been used; where the information is only sufficient
to establish a range of probable liability and no point within the range is more
likely than any other, the lower end of the range has been used.
Estimated obligations to remediate sites that involve oversight by the U.S.
Environmental Protection Agency ("EPA"), or similar government agencies, are
generally accrued no later than when a Record of Decision ("ROD"), or
equivalent, is issued, or upon completion of a Remedial
Investigation/Feasibility Study ("RI/FS") that is accepted by FMC and the
appropriate government agency or agencies. Estimates are reviewed quarterly by
the company's environmental remediation management, as well as by financial and
legal management and, if necessary, adjusted as additional information becomes
available. The estimates can change substantially as additional information
becomes available regarding the nature or extent of site contamination, required
remediation methods, and other actions by or against governmental agencies or
private parties.
The company's environmental liabilities for continuing and discontinued
operations are principally for costs associated with the remediation and/or
study of sites at which the company is alleged to have disposed of hazardous
substances. Such costs include, among other items, RI/FS, site remediation,
costs of operation and maintenance of the remediation plan, fees to outside law
firms and consultants for work related to the environmental effort, and future
monitoring costs. Estimated site liabilities are determined based upon existing
remediation laws and technologies, specific site consultants' engineering
studies or by extrapolating experience with environmental issues at comparable
sites.
Provisions for environmental costs are reflected in income, net of probable
and estimable recoveries from named Potentially Responsible Parties ("PRPs") or
other third parties. Such provisions incorporate inflation and are not
discounted to their present values.
In calculating and evaluating the adequacy of its environmental reserves,
the company has taken into account the joint and several liability imposed by
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") and the analogous state laws on all PRPs and has considered the
identity and financial condition of each of the other PRPs at each site to the
extent possible. The company has also considered the identity and financial
condition of other third parties from whom recovery is anticipated, as well as
the status of the company's claims against such parties. In general, the company
is aware of a degree of uncertainty in disputes regarding the financial
contribution by certain named PRPs, which is common to most multi-party sites.
Although the company is unable to forecast the ultimate contributions of PRPs
and other third parties with absolute certainty, the degree of uncertainty with
respect to each party is taken into account when determining the environmental
reserve by adjusting the reserve to reflect the facts and circumstances on a
site-by-site basis. The company believes that recorded recoveries related to
PRPs are realizable in all material respects. Recoveries are recorded in the
reserve for discontinued operations and other liabilities.
Accounting standards adopted. In the fourth quarter of 2000, the company
adopted the requirements of the Securities and Exchange Commission Staff
Accounting Bulletin ("SAB") No. 101 regarding recognition, presentation and
disclosure of revenue. The adoption of SAB No. 101 did not have a material
impact on the company's consolidated financial statements.
In the fourth quarter of 2000, the company adopted the requirements of the
Emerging Issues Task Force consensus on Issue No. 00-10 ("EITF 00-10"),
"Accounting for Shipping and Handling Fees and Costs". EITF 00-10 requires the
company to report costs associated with shipping and handling, including those
costs passed on to customers, as costs of sales or services in the company's
consolidated income statements. In conjunction with the adoption, the company
reclassified as cost of sales or services certain amounts that had previously
been recorded as offsets (reductions) of revenue. In 2000, 1999 and 1998, the
reclassifications resulted in increases in revenue and cost of sales or services
of $169.0 million, $163.0 million and $164.0 million, respectively. The
reclassifications had no effect on previously reported income or earnings per
share.
<PAGE>
38
Notes to Consolidated Financial Statements
The company adopted AICPA Statement of Position ("SOP") No. 98-5,
"Reporting on the Costs of Start-Up Activities," effective January 1, 1998. SOP
No. 98-5 requires that costs of start-up activities, including organizational
costs, be expensed as incurred. In conjunction with the adoption, the company
charged $46.5 million ($36.1 million after tax, or $1.03 per share on a diluted
basis) to expense, which was reported as the cumulative effect of a change in
accounting principle. The expense represented the write-off of costs related to
the start-up of manufacturing at the Salar del Hombre Muerto lithium facility in
Argentina; the Baltimore, Maryland, sulfentrazone facility; and the Bayport,
Texas, hydrogen peroxide plant expansion.
Reclassifications. Certain prior period amounts have been reclassified to
conform with the current period's presentation.
NOTE 2 FMC'S PLAN FOR REORGANIZATION
In October 2000, management announced that it was initiating a strategic
reorganization that ultimately is expected to split the company into two
independent publicly traded companies-a machinery business and a chemicals
business.
The machinery company will be named FMC Technologies, Inc. ("FTI") and will
include FMC's Energy Systems and Food and Transportation Systems businesses. The
chemicals company will be comprised of FMC's Specialty Chemicals, Industrial
Chemicals and Agricultural Products businesses and will continue to operate as
FMC Corporation.
The company plans an initial public offering of slightly less than 20
percent of the common stock of FTI during the second quarter of 2001. Subject to
market conditions, final board approval and a favorable ruling from the Internal
Revenue Service, FMC intends to make a tax-free distribution of the remaining
shares of FTI by the end of 2001.
To meet general credit needs associated in part with the reorganization,
FMC obtained an additional $200.0 million of committed credit in February 2001,
maturing at the earlier of 180 days from inception or seven days after the
completion of the offering of FTI stock.
NOTE 3 BUSINESS COMBINATIONS AND JOINT VENTURES
Acquisitions. On February 16, 2000, the company acquired York International's
Northfield Freezing Systems Group ("Northfield") for $39.8 million in cash and
the assumption of certain liabilities. Northfield, headquartered in Northfield,
Minnesota, is a manufacturer of freezers and coolers for industrial food
processing. The company has recorded goodwill (to be amortized over 40 years)
and other intangible assets totaling $41.6 million relating to the acquisition.
Results of Northfield's operations are included in the Food and Transportation
Systems segment.
On June 30, 1999, FMC acquired the assets of Tg Soda Ash, Inc. ("TgSA")
from Elf Atochem North America, Inc. for approximately $51 million in cash and a
contingent payment due at year-end 2003. The contingent payment amount, which
will be based on the financial performance of the combined soda ash operations
between 2001 and 2003, cannot currently be determined but could be as much as
$100 million. No goodwill was recorded as a result of this transaction. TgSA's
operations are included in the Industrial Chemicals segment.
Also on June 30, 1999, the company completed the acquisition of the assets
of Pronova Biopolymer AS ("Pronova") from a wholly owned subsidiary of Norsk
Hydro for approximately $184 million in cash. The company made an additional
payment of $3.3 million in January 2000 as final settlement of the transaction.
Pronova, headquartered in Drammen, Norway, is a leading producer of alginates
used in the pharmaceutical, food and industrial markets. The company has
recorded goodwill (to be amortized over 30 years) and other intangible assets
totaling approximately $135.0 million related to the acquisition. Pronova's
operations are included in the Specialty Chemicals segment.
In August 1998, the company acquired a majority of the voting stock of CBV
Industria Mecanica S.A. ("CBV"), the leading wellhead manufacturer in Brazil.
Following a 1999 tender offer for the remaining outstanding shares of CBV, the
company owns 98 percent of the ownership interest in CBV. CBV's operations are
included in the Energy Systems segment.
The company completed a number of smaller acquisitions and joint venture
investments during the years ended December 31, 2000, 1999 and 1998.
All acquisitions were accounted for using the purchase method of accounting
and, accordingly, the purchase prices have been allocated to the assets acquired
and liabilities assumed based on the estimated fair values of such assets and
liabilities at the dates of acquisition. The excess of the purchase prices over
the fair values of the net tangible assets acquired has been recorded as
intangible assets, primarily goodwill, which is amortized over periods ranging
from 10 to 40 years. Had the acquisitions occurred at the beginning of the
earliest period presented, the effect on FMC's consolidated financial statements
would not have been significantly different than the amounts reported, and
accordingly, pro forma financial information has not been provided.
<PAGE>
39
The purchase prices for all the aforementioned acquisitions were satisfied
from cash flows from operations and external financing. Results of operations of
the acquired companies have been included in the company's consolidated
statements of income from the respective dates of acquisition.
Joint ventures. Effective April 1, 2000, FMC and Solutia Inc. ("Solutia")
formed a joint venture that includes the North American and Brazilian phosphorus
chemical operations of both companies. The joint venture, Astaris LLC
("Astaris") is a limited liability company owned equally by FMC and Solutia.
Astaris is headquartered in St. Louis, Missouri, and operates manufacturing
sites contributed to the joint venture by FMC and Solutia.
Solutia's equity interest in the Fosbrasil joint venture, which is engaged
in the production of purified phosphoric acid ("PPA"), was also transferred and
became part of Astaris. Astaris has also assumed all FMC/NuWest agreements
relating to a PPA facility being built near Soda Springs, Idaho, and will
purchase all of the PPA output from that facility as part of those agreements.
The phosphate operations of FMC Foret were retained by FMC and were not
transferred to the joint venture. Following its formation, Astaris divested
certain operations in Lawrence, Kansas, and plant assets located in Augusta,
Georgia.
Effective April 1, 2000, FMC has accounted for its investment in Astaris
under the equity method. FMC's share of Astaris' earnings are included in the
Industrial Chemicals segment. FMC's sales of phosphorus chemicals were $327.0
million and $341.7 million for the years ended December 31, 1999 and 1998,
respectively, and $79.2 million for the three months ended March 31, 2000.
In the third quarter of 2000, FMC received a cash distribution from Astaris
of $110.3 million. This amount included $21.5 million in satisfaction of FMC's
receivable from the joint venture, resulting from FMC providing its share of
operating capital to the joint venture during the interim period between its
formation and the procurement of financing from an external source.
Assets and liabilities transferred by FMC to the joint venture (including
inventory, property, and all other contributed accounts) have been
deconsolidated from FMC's balance sheet. FMC's equity investment in Astaris
totaled $24.0 million at December 31, 2000.
Beginning in July 1995, Sumitomo Corporation and Nippon Sheet Glass
Company, Ltd. ("minority owners") owned 20 percent of the common stock of FMC
Wyoming Corporation, FMC's soda ash business. Effective July 1, 1999, in
conjunction with the acquisition of TgSA, the interests of the minority owners
were diluted to 12.5 percent as a result of FMC's disproportionate investment in
TgSA and certain future capital projects. FMC retains management control of FMC
Wyoming Corporation.
NOTE 4 BUSINESS DIVESTITURES
On July 9, 1999, the company completed the sale of its bioproducts business to
Cambrex Corporation for $38.2 million in cash, resulting in a pre-tax gain of
$20.1 million ($12.2 million after tax). The bioproducts business was included
in the Specialty Chemicals segment and had 1999 revenue of $13.3 million
(through the date of divestiture) and 1998 revenue of $22.7 million.
On July 31, 1999, FMC completed the sale of its process additives business
to Great Lakes Chemical Corporation for $161.1 million in cash, resulting in a
gain of $35.4 million on both a pre-tax and after-tax basis. The process
additives business was included in the Specialty Chemicals segment and had 1999
revenue of $98.5 million (through the date of divestiture) and 1998 revenue of
$166.5 million from its operations in Manchester, England and Nitro, West
Virginia.
In July 1998, the company completed the sale of Crosby Valve to a
subsidiary of Tyco International Ltd. ("Tyco") for cash and Tyco preferred
stock. In October 2000, FMC redeemed its investment in the Tyco preferred stock
in exchange for cash proceeds of $128.7 million including dividends amounting to
$1.2 million. Crosby Valve was included in the Energy Systems segment until its
sale in July 1998.
The company also completed a number of smaller divestitures during the
years ended December 31, 2000, 1999 and 1998.
NOTE 5 DISCONTINUED OPERATIONS
The company's results of discontinued operations comprised the following:
(In millions)
Year ended December 31 2000 1999 1998
- ----------------------------------------------------------------------
Provision for liabilities related to
previously discontinued
operations (net of income tax
benefits of $15.0 in 2000;
$23.2 in 1999 and $27.3 in 1998) $ (66.7) $ (36.2) $ (42.7)
Gain on sale of Defense
Systems properties (net of
income taxes of $20.9) -- 32.8 --
- ----------------------------------------------------------------------
Discontinued operations,
net of income taxes $ (66.7) $ (3.4) $ (42.7)
- ----------------------------------------------------------------------
During 2000, the company recorded a net loss from discontinued operations
of $66.7 million (net of income taxes of $15.0 million). Of this amount, $65.7
million (net of an income tax benefit of $14.3 million) related to settlement of
litigation related to FMC's discontinued Defense Systems business, and a charge
of $1.7 million ($1.0 million after tax) for interest charges on postretirement
benefit obligations.
In the fourth quarter of 1999, FMC provided $59.4 million ($36.2 million
after tax) in response to updated estimates of environmental remediation costs,
primarily at the company's former Defense Systems sites, and increased estimates
of the company's liabilities for general liability, workers' compensation,
postretirement benefit obligations, legal defense, property maintenance and
other costs.
During the year ended December 31, 1999, FMC sold several
<PAGE>
40
Notes to Consolidated Financial Statements
real estate properties formerly used by United Defense, L.P., FMC's Defense
Systems operations divested by the company in 1997. In the second quarter of
1999, FMC received $33.5 million in cash, recognizing a gain of $29.5 million
($18.0 million after tax), and in the fourth quarter of 1999, FMC received $31.0
million in cash, recognizing a gain of $24.2 million ($14.8 million after tax),
related to property sales.
In the fourth quarter of 1998, FMC provided $70.0 million ($42.7 million
after tax) for environmental costs net of anticipated recoveries of $19.8
million. The majority of the charge related to an agreement the company
reached with the EPA and the U.S. Department of Justice ("DOJ") regarding
settlement of past costs and future clean-up work at the discontinued fiber
manufacturing site in Front Royal, Virginia (Note 12).
Reserve for discontinued operations and other liabilities. With the
exception of certain real estate for which FMC has short-term or long-term
remediation obligations, disposal of assets related to discontinued operations
has been completed in accordance with plans adopted within one year of the
measurement dates. In addition to the 1997 sale of the company's Defense Systems
operations, residual liabilities relate to operations discontinued between 1976
and 1984--primarily the Film and Fiber, Chlor-Alkali, Power Transmission and
Construction Equipment businesses. Most residual liabilities are of a long-term
nature and will be settled over a number of years.
The reserve for discontinued operations and other liabilities consists of
obligations for discontinued operations and for the long-term portion of the
company's environmental remediation at continuing operations and at other
closed sites. See Note 12 for further information regarding the nature of FMC's
environmental liabilities . Liabilities totaled $291.9 million and $319.2
million at December 31, 2000 and 1999, respectively. The liability at December
31, 2000 comprised $175.1 million (net of $46.9 million in anticipated third
party recoveries) for environmental remediation and study obligations, most of
which relate to former chemical plant sites; $52.8 million for product
liability and other potential claims principally related to the discontinued
Construction Equipment and Chlor-Alkali businesses; $57.0 million for retiree
medical and life insurance benefits provided to employees of former chemical
businesses and the Construction Equipment business; and $7.0 million related to
the sale of the Defense Systems operations.
The company's obligation related to the settlement of litigation for
discontinued operations amounted to $80.0 million and was included in other
current liabilities at December 31, 2000. See Note 17.
The company uses actuarial methods, to the extent practicable, to monitor
the adequacy of product liability and postretirement benefit reserves on an
ongoing basis. The environmental liabilities are subject to the accounting and
review practices described in Notes 1 and 12. While the amounts required to
settle the company's liabilities for discontinued operations could ultimately
differ materially from the estimates used as a basis for recording these
liabilities, management believes that changes in estimates or required expendi-
tures for any individual cost component will not have a material adverse impact
on the company's liquidity or financial condition in any single year and that,
in any event, such costs will be satisfied over many years.
Spending in 2000, 1999 and 1998, respectively, included $53.5 million,
$64.2 million and $52.8 million for environmental obligations; $11.1 million,
$12.2 million and $7.9 million for product liability and other claims; $5.5
million, $4.7 million and $6.3 million for retiree benefits; and $4.7 million,
$5.2 million and $12.2 million related to net settlements of Defense Systems
obligations. Environmental recoveries in 2000, 1999 and 1998 were $14.2 million,
$56.9 million and $4.4 million, respectively.
NOTE 6 ASSET IMPAIRMENTS AND RESTRUCTURING AND OTHER CHARGES
Pre-tax asset impairments and restructuring and other charges recorded by the
company totaled $56.6 million and $43.8 million, respectively, for the years
ended December 31, 2000 and 1999.
During the second quarter of 2000, the company recorded asset impairments
of $11.6 million ($7.2 million after tax) and restructuring and other charges of
$45.0 million ($27.7 million after tax). Impairments of $9.0 million were
recognized as a result of the formation of a joint venture, Astaris (Note 3),
including the writedown of certain phosphorus assets retained by FMC and the
accrual of costs related to the planned closure of two phosphorus
facilities. Other impairments totaling $2.6 million included the reduction in
value of certain petroleum business equipment in the Energy Systems segment
and of certain assets in the Specialty Chemicals segment due to changes in the
underlying businesses.
Restructuring charges of $20.6 million were attributable to the formation
of Astaris and the concurrent reorganization of FMC's Industrial Chemicals
sales, marketing and support organizations; the reduction of office space
requirements in FMC's Philadelphia chemical headquarters; and pension expense
related to the separation of phosphorus personnel from FMC. Other restructuring
charges included $4.5 million for reductions in FMC's agricultural machinery
workforce, $2.0 million resulting from the integration of the Northfield
Freezing Equipment acquisition and $5.4 million for other smaller restructuring
projects. In addition, the company recorded environmental accruals of $12.5
million as a result of increased cost estimates for ongoing remediation of
several phosphorus properties.
Of the approximately 350 employee severances that were expected to occur
through the completion of these programs, 281 have occurred at December 31,
2000. Restructuring spending under these programs totaled $21.9 million in 2000.
In the third quarter of 1999, FMC recorded asset impairments of $29.1
million ($17.7 million after tax) and restructuring and other one-time charges
of $14.7 million ($9.0 million after tax).
<PAGE>
41
Asset impairments of $20.7 million were required to write off the remaining
net book values of two U.S. lithium facilities. Both facilities were
constructed to run pilot and development quantities for new lithium-based
products. During the third quarter of 1999, management determined that it would
not be feasible to use the facilities as configured.
Additionally, an impairment charge of $8.4 million was required to write
off the remaining net book value of a caustic soda facility in Green River,
Wyoming. Estimated future cash flows related to this facility indicated that an
impairment of the full value had occurred.
Restructuring and other charges of $14.7 million resulted primarily from
strategic decisions to divest or restructure a number of businesses and support
departments, including certain food machinery, agricultural products, and
energy systems operations and certain corporate and shared service support
departments. Of the total charge, $2.9 million related to actions, including
headcount reductions, required to achieve planned synergies from acquisitions of
businesses in Specialty Chemicals and Energy Systems. Restructuring spending
under these programs totaled $9.4 million and $4.7 million in 2000 and 1999,
respectively.
Accruals for restructuring actions (excluding environmental-related
reserves) totaled $7.8 million at December 31, 2000 of which $7.2 million
relates to actions initiated in 2000.
NOTE 7 INVENTORIES
The current replacement costs of inventories exceeded their recorded values by
$272.9 million at December 31, 2000 and $299.5 million at December 31, 1999. The
company reduced certain LIFO inventories that were carried at lower than
prevailing costs, resulting in a reduction of LIFO expense of $2.3 million and
$3.6 million in 2000 and 1999, respectively. There was no reduction in LIFO
inventories during 1998.
NOTE 8 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
(In millions)
December 31 2000 1999
- ----------------------------------------------------------------------
Land and land improvements $ 172.7 $ 200.5
Buildings 497.7 534.3
Machinery and equipment 2,592.9 2,879.4
Construction in progress 142.9 109.8
- ----------------------------------------------------------------------
Total cost 3,406.2 3,724.0
Accumulated depreciation 1,790.1 2,032.1
- ----------------------------------------------------------------------
Net property, plant and equipment $ 1,616.1 $ 1,691.9
- ----------------------------------------------------------------------
Depreciation expense was $157.5 million, $162.7 million and $189.0 million
in 2000, 1999 and 1998, respectively.
During 2000 and 1999, the company entered into agreements for the sale and
leaseback of certain equipment. Net property, plant and equipment was reduced by
the equipment's respective carrying values as of the transaction dates of $13.7
million and $29.1 million in 2000 and 1999, and the net cash proceeds received
were $22.5 million and $52.1 million in 2000 and 1999. Non-amortizing deferred
credits were recorded in connection with the sale transactions. These credits
totaled $31.8 million and $23.4 million at December 31, 2000 and 1999,
respectively, and are included in other liabilities. The company has annual fair
market purchase options under the agreements. The leases, which end in December
2004, are classified as operating leases in accordance with SFAS No. 13,
"Accounting for Leases."
NOTE 9 INCOME TAXES
Domestic and foreign components of income from continuing operations before
income taxes and the cumulative effect of a change in accounting principle are
shown below:
(In millions)
Year Ended December 31 2000 1999 1998
- ----------------------------------------------------------------------
Domestic $ 49.1 $ 37.3 $ 127.9
Foreign 173.5 237.0 121.6
- ----------------------------------------------------------------------
Total $ 222.6 $ 274.3 $ 249.5
- ----------------------------------------------------------------------
The provision for income taxes attributable to income from continuing
operations before the cumulative effect of a change in accounting principle
consisted of:
(In millions)
Year Ended December 31 2000 1999 1998
- ----------------------------------------------------------------------
Current:
Federal $ 7.8 $ 8.9 $ 17.1
Foreign 43.3 29.0 15.6
State and local 2.1 (0.2) 4.1
- ----------------------------------------------------------------------
Total current 53.2 37.7 36.8
Deferred (7.9) 20.6 27.4
- ----------------------------------------------------------------------
Total $ 45.3 $ 58.3 $ 64.2
- ----------------------------------------------------------------------
<PAGE>
42
Notes to Consolidated Financial Statements
Total income tax provisions (benefits) were allocated as follows:
(In millions)
Year Ended December 31 2000 1999 1998
- ----------------------------------------------------------------------
Continuing operations before the
cumulative effect of a change
in accounting principle $ 45.3 $ 58.3 $ 64.2
Discontinued operations (15.0) (2.3) (27.3)
Cumulative effect of a change
in accounting principle -- -- (10.4)
Items charged directly to
stockholders' equity (3.0) (1.1) (3.0)
- ----------------------------------------------------------------------
Income tax provision $ 27.3 $ 54.9 $ 23.5
- ----------------------------------------------------------------------
Significant components of the deferred income tax provision (benefit)
attributable to income from continuing operations before income taxes and the
cumulative effect of a change in accounting principle are as follows:
(In millions)
Year Ended December 31 2000 1999 1998
- ----------------------------------------------------------------------
Deferred tax (exclusive of the
valuation allowance) $ (7.2) $ 18.7 $ 22.3
Increase (decrease) in the
valuation allowance for
deferred tax assets (0.7) 1.9 5.1
- ----------------------------------------------------------------------
Deferred income tax
provision (benefit) $ (7.9) $ 20.6 $ 27.4
- ----------------------------------------------------------------------
Significant components of the company's deferred tax assets and liabilities
were attributable to:
(In millions)
December 31 2000 1999
- ----------------------------------------------------------------------
Reserves for discontinued operations,
environmental and restructuring $ 128.1 $149.1
Accrued pension and other
postretirement benefits 83.4 96.4
Other reserves 109.4 69.8
Alternative minimum tax credit
carryforwards 52.4 25.8
Net operating loss carryforwards 6.6 7.4
Other 13.4 13.8
- ----------------------------------------------------------------------
Deferred tax assets 393.3 362.3
Valuation allowance (19.4) (20.1)
- ----------------------------------------------------------------------
Deferred tax assets, net of
valuation allowance $ 373.9 $342.2
- ----------------------------------------------------------------------
Property, plant and equipment $ 135.9 $147.8
Other 57.2 21.5
- ----------------------------------------------------------------------
Deferred tax liabilities $ 193.1 $169.3
- ----------------------------------------------------------------------
Net deferred tax assets $ 180.8 $172.9
- ----------------------------------------------------------------------
The effective income tax rate applicable to income from continuing
operations before income taxes and the cumulative effect of a change in
accounting principle was different from the statutory U.S. Federal income tax
rate due to the factors listed in the following table:
(Percent of income from continuing operations before income taxes and the
cumulative effect of a change in accounting principle)
Year Ended December 31 2000 1999 1998
- -------------------------------------------------------------------------------
Statutory U.S. tax rate 35% 35% 35%
- -------------------------------------------------------------------------------
Net difference:
Foreign sales corporation income
subject to different tax rates (4) (4) (3)
Percentage depletion (3) (2) (3)
State and local income taxes, less
federal income tax benefit 1 -- 2
Foreign earnings subject to
different tax rates (10) (10) (12)
Non-taxable portion of gain on
sale of business -- (5) --
Tax on intercompany dividends and
deemed dividend for tax purposes 2 2 2
Nondeductible goodwill 1 1 1
Nondeductible expenses 1 1 3
Minority interests 1 1 1
Equity in earnings of affiliates
not taxed (1) -- (1)
Change in valuation allowance (1) 4 2
Other (2) (2) (1)
- -------------------------------------------------------------------------------
Total difference (15) (14) (9)
- -------------------------------------------------------------------------------
Effective tax rate 20% 21% 26%
- -------------------------------------------------------------------------------
FMC's Federal income tax returns for years through 1997 have been examined
by the Internal Revenue Service and substantially all issues have been settled.
Management believes that adequate provision for income taxes has been made for
the open years 1998 and after and for any unsettled issues prior to 1998. U.S.
income taxes have not been provided for the equity in undistributed earnings of
foreign consolidated subsidiaries ($769.3 million and $668.9 million at December
31, 2000 and 1999, respectively) or foreign unconsolidated subsidiaries and
affiliates ($17.8 million and $18.8 million at December 31, 2000 and 1999,
respectively). Restrictions on the distribution of these earnings are not
significant. Foreign earnings taxable to the company as dividends were $86.8
million, $140.2 million and $21.7 million in 2000, 1999 and 1998, respectively.
<PAGE>
43
NOTE 10 DEBT
Long-term debt. Long-term debt consists of the following:
(In millions)
December 31 2000 1999
- --------------------------------------------------------------------
Revolving credit facility $ -- $ --
Pollution control and industrial
revenue bonds, 3.2% to 7.1%,
due 2001 to 2032 204.0 204.7
Senior debt, 6.375%, due 2003, less
unamortized discount (2000--$0.3;
1999--$0.4), effective rate 6.4% 199.7 199.6
Senior debt, 7.75%, due 2011, less
unamortized discount (2000--$0.6;
1999--$0.9), effective rate 7.9% 82.4 99.1
Medium-term notes, 6.38% to 7.32%,
due 2002 to 2008, less unamortized
discounts (2000--$1.1, 1999--$1.5),
effective rates 6.4% to 7.4% 368.4 393.5
Exchangeable senior subordinated
debentures, 6.75%, due 2005 39.9 48.4
Other 0.4 0.6
- --------------------------------------------------------------------
Total 894.8 945.9
Less current portion 22.7 0.8
- --------------------------------------------------------------------
Long-term portion $ 872.1 $ 945.1
====================================================================
The company has $450.0 million in committed credit under a five-year,
non-amortizing revolving credit agreement due in December 2001. The company
intends to renew or replace this credit commitment prior to maturity. No
amounts were outstanding under this facility at either December 31, 2000 or
December 31, 1999. Among other restrictions, the credit agreement contains
covenants relating to liens, consolidated net worth and cash flow coverage (as
defined in the agreement). The company is in compliance with all debt covenants
at December 31, 2000.
The company elected to not renew an additional, unused 364-day committed
credit facility for $350.0 million that expired in July 2000.
To meet general credit needs associated in part with the company's
reorganization, FMC obtained additional committed credit in 2001 (Note 2).
In August 1998, a universal shelf registration statement became effective,
under which $500.0 million of debt and/or equity securities may be offered. At
December 31, 2000, unused capacity of $345.0 million remains available under the
1998 shelf registration.
During 2000, the company did not issue new long-term debt. During 1999, the
company issued $35.0 million of medium-term notes, the proceeds of which were
used to repurchase FMC common stock, and borrowed $50.0 million at 6.45 percent
interest with a maturity of 2032 from the proceeds of Power County, Idaho's
Solid Waste Disposal Revenue Bonds. Undrawn bond proceeds of $9.8 million and
$21.1 million at December 31, 2000 and 1999, respectively, are included in
investments on the consolidated balance sheet and are being used to fund
phosphorus capital projects related to solid waste disposal.
On June 29, 1999, the company entered into a euro-denominated loan
amounting to 109.4 million euros (approximately $ 114.0 million), at a variable
rate of interest based upon LIBOR. The loan was repaid in October 1999; the
proceeds had been used to finance a portion of the company's acquisition of
Pronova BioPolymer AS (Note 3).
At December 31, 2000, long-term debt included $39.9 million in exchangeable
senior subordinated debentures bearing interest at 6.75 percent, maturing in
2005 and exchangeable at any time into Meridian Gold, Inc. common stock at an
exchange price of $15.125 per share, subject to adjustment. The company may, at
its option, pay an amount equal to the market price of Meridian Gold, Inc.
common stock in lieu of delivery of the shares. The debentures are subordinated
in right of payment to all existing and future senior indebtedness of the
company. Under the terms of the agreement, the debentures are currently
redeemable at the option of FMC at par. The company redeemed $8.5 million and
$15.7 million of these debentures during 2000 and 1999, respectively.
During 2000, the company retired $42.5 million in senior debt and medium
term notes, due in 2002, 2005, 2008 and 2011, with interest rates at 6.75 to
7.75 percent. During 1999, the company retired $250.0 million of currently due
senior debt bearing interest at 8.75 percent.
Aggregate maturities and sinking fund requirements over the next five years
are (in millions): 2001-$22.7, 2002-$135.2, 2003-$226.5, 2004-$0.6, 2005-$100.5
and thereafter-$409.3.
Short-term debt. Short-term debt of $153.9 million and $347.5 million at
December 31, 2000 and 1999, respectively, consists of commercial paper,
borrowings under uncommitted credit facilities and foreign borrowings. In
addition, at December 31, 2000, short-term debt also included $26.9 million in
borrowings from a joint venture.
The company's short-term commercial paper program is supported by committed
credit facilities and provides for the issuance of up to $450.0 million in
aggregate maturity value of commercial paper at any given time. Three-day
commercial paper of $16.8 million and $190.8 million was outstanding at December
31, 2000 and December 31,1999, respectively. Effective rates on commercial paper
were 6.6 percent and 5.4 percent at December 31, 2000 and 1999, respectively.
Advances under uncommitted credit facilities were $50.0 million and $89.8
million at December 31, 2000 and 1999, with effective interest rates of 6.6
percent and 5.3 percent, respectively.
Outstanding foreign short-term borrowings totaled $60.2 million and $66.9
million at December 31, 2000 and 1999, respectively. The weighted average
interest rates on outstanding foreign short-term borrowings at December 31, 2000
and 1999 were 8.6 percent and 10.7 percent, respectively. The average interest
rates have been adjusted for currency devaluation associated with borrowing in
hyperinflationary countries.
Compensating balance agreements. FMC maintains informal credit arrangements
in many foreign countries. Foreign lines of credit, which include overdraft
facilities, typically do not require the maintenance of compensating balances,
as credit extension is not guaranteed but is subject to the availability of
funds.
<PAGE>
44
Notes to Consolidated Financial Statements
NOTE 11 PENSIONS AND OTHER POSTRETIREMENT BENEFITS
The funded status of the company's domestic qualified and non-qualified pension
plans, the United Kingdom pension plan, the defined benefit portion of the
company's Canadian retirement plan, one German pension plan and the company's
domestic postretirement healthcare and life insurance benefit plans for
continuing operations, together with the associated balances recognized in the
company's consolidated financial statements as of December 31, were as follows:
(In millions)
<TABLE>
<CAPTION>
Pensions Other Benefits
December 31 2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulated benefit obligation:
Plans with unfunded accumulated benefit obligation $ 43.6 $ 38.7 $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Change in benefit obligation:
Benefit obligation at January 1 $ 1,029.5 $ 1,070.0 $ 108.9 $ 119.5
Service cost 24.9 33.2 2.2 2.5
Interest cost 72.1 68.9 7.9 7.7
Actuarial gain (19.9) (98.0) (5.4) (9.3)
Amendments 0.8 1.0 -- (1.3)
Divestiture (47.6) -- -- --
Foreign currency exchange rate changes (13.1) -- -- --
Curtailments and settlements (1.1) -- -- --
Plan conversion 5.7 -- -- --
Plan participants' contributions 1.1 2.0 5.6 4.4
Special termination benefits 3.2 -- -- --
Benefits paid (53.8) (47.6) (14.2) (14.6)
- -----------------------------------------------------------------------------------------------------------------------------------
Benefit obligation at December 31 1,001.8 1,029.5 105.0 108.9
- -----------------------------------------------------------------------------------------------------------------------------------
Change in fair value of plan assets:
Fair value of plan assets at January 1 909.4 956.5 -- --
Actual return on plan assets 140.8 (5.6) -- --
Divestiture (47.6) -- -- --
Curtailments and settlements (1.3) -- -- --
Foreign currency exchange rate changes (14.2) -- -- --
Company contributions 11.4 4.1 8.6 10.2
Plan conversion 8.1 -- -- --
Plan participants' contributions 1.1 2.0 5.6 4.4
Benefits paid (53.8) (47.6) (14.2) (14.6)
- -----------------------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at December 31 953.9 909.4 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Funded status of the plan (liability) (47.9) (120.1) (105.0) (108.9)
Unrecognized actuarial loss (gain) (31.7) 51.3 (6.7) (1.7)
Unrecognized prior service cost (income) 20.0 23.6 (30.3) (39.7)
Unrecognized transition asset (13.4) (38.6) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net amount recognized in the balance sheet at December 31 $ (73.0) $ (83.8) $ (142.0) $ (150.3)
===================================================================================================================================
Prepaid benefit cost $ 12.6 $ 4.9 $ -- $ --
Accrued benefit liability (97.9) (102.7) (142.0) (150.3)
Intangible asset 5.5 6.5 -- --
Accumulated other comprehensive income 6.8 7.5 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net amount recognized in the balance sheet at December 31 $ (73.0) $ (83.8) $ (142.0) $ (150.3)
===================================================================================================================================
</TABLE>
<PAGE>
45
The following table summarizes the assumptions used and the components of net
annual benefit cost (income) for the years ended December 31:
<TABLE>
<CAPTION>
Pensions Other Benefits
<S> <C> <C> <C> <C> <C> <C>
Assumptions as of September 30: 2000 1999 1998 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
Discount rate 7.50% 7.50% 6.75% 7.50% 7.50% 6.75%
Expected return on assets 9.25% 9.25% 9.20% -- -- --
Rate of compensation increase 4.25% 5.00% 5.00% -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Components of net annual benefit cost (in millions):
Service cost $ 24.9 $ 33.2 $ 26.4 $ 2.2 $ 2.5 $ 2.5
Interest cost 72.1 68.9 66.7 7.9 7.7 8.4
Expected return on plan assets (83.5) (81.3) (76.9) -- -- --
Amortization of transition asset (22.8) (22.8) (22.8) -- -- --
Amortization of prior service cost 4.5 4.6 4.2 (9.2) (9.2) (8.3)
Recognized net actuarial (gain) loss (0.8) 0.5 (5.6) (0.6) -- (0.9)
Curtailment and settlement 0.2 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Net annual benefit cost (income) $ (5.4) $ 3.1 $ (8.0) $ 0.3 $ 1.0 $ 1.7
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
During 2000, FMC changed its annual date for measuring its benefit
obligations and evaluating its actuarial assumptions from December 31 to
September 30. The cumulative effect of this accounting change, which was
effected to improve administrative efficiency, did not have a significant impact
on the company's current or historical results of operations or financial
condition.
The change in the rate of compensation increase used in determining pension
plan obligations from 5.0% to 4.25% decreased the projected benefit obligation
by approximately $20 million at December 31, 2000.
The change in the discount rate for determining the projected benefit
obligations from 6.75 percent to 7.50 percent decreased the projected benefit
obligations by approximately $103 million at December 31, 1999.
For measurement purposes, a six percent annual rate of increase in the per
capita cost of health care benefits was assumed for 2000 and 1999. The rate was
assumed to decrease to 5.0 percent for 2001 and remain at that level.
Assumed health care cost trend rates have an effect on the amounts reported
for the health care plan. A one-percentage point change in the assumed health
care cost trend rates would have the following effects at December 31, 2000:
One Percentage One Percentage
(In millions) Point Increase Point Decrease
- -------------------------------------------------------------------
Effect on total of service and
interest cost components of
net annual benefit cost (income) $ 0.1 $ (0.1)
Effect on postretirement benefit
obligation $ 1.0 $ (0.8)
- -------------------------------------------------------------------
The company has adopted SFAS No. 87, "Employers Accounting for Pensions",
for its defined benefit plans for substantially all employees in the United
Kingdom, Germany and Canada. The financial impact of compliance with SFAS No. 87
for other non U.S. pension plans is not materially different from the locally
reported pension expense. The cost of providing pension benefits for foreign
employees was $4.6 million in 2000, $10.4 million in 1999 and $5.2 million in
1998.
As a result of the 1999 divestiture of the process additives business (Note
4), the FMC United Kingdom pension plan transferred $47.6 million of assets and
liabilities to the buyer's pension plan in September 2000.
In April 2000, the company formed Astaris, a joint venture with Solutia
(Note 3). As a result, the former Phosphorus Chemical Division's active
employees began receiving benefits under Astaris' plans and are not accruing
further benefit in the FMC plan, the effect of which was a reduction in annual
service cost of approximately $2.0 million. Under the joint venture agreement,
Astaris agreed to fund an equal portion of FMC's and Solutia's future
postretirement benefit payments. FMC's receivable from Astaris, representing the
minimum amount of cash to be received under this portion of the agreement,
amounted to $18.9 million at December 31, 2000, and is included as part of the
company's recorded investment in the joint venture.
During 2000, the company converted a substantial portion of its defined
benefit obligation in Canada to a defined contribution plan. The effect of the
conversion was to increase FMC's benefit obligation by $5.7 million and to
increase the fair value of plan assets by $8.1 million at December 31, 2000.
Employees' Thrift and Stock Purchase Plan. The FMC Employees' Thrift and
Stock Purchase Plan is a qualified salary-reduction plan under Section 401(k) of
the Internal Revenue Code in which all domestic salaried and non-union hourly
employees of the company may participate by contributing a portion of their
compensation. The company matches contributions up to specified percentages of
each employee's compensation depending on how the employee allocates his or her
contributions. Charges against income for FMC's matching contributions, net of
forfeitures, were $15.2 million in 2000, $15.9 million in 1999 and $16.7 million
in 1998.
NOTE 12 ENVIRONMENTAL OBLIGATIONS
FMC is subject to various federal, state and local environmental laws and
regulations that govern emissions of air pollutants; discharges of water
pollutants; and the manufacture, storage, handling and disposal of hazardous
substances, hazardous wastes and other toxic materials. The company is also
subject to liabilities arising under CERCLA and similar state laws that impose
responsibility on persons
<PAGE>
46
Notes to Consolidated Financial Statements
who arranged for the disposal of hazardous substances, and on current and
previous owners and operators of a facility for the clean up of hazardous
substances released from the facility into the environment. In addition, the
company is subject to liabilities under the Resource Conservation and Recovery
Act ("RCRA") and analogous state laws that require owners and operators of
facilities that treat, store or dispose of hazardous waste to follow certain
waste management practices and to clean up releases of hazardous waste into the
environment associated with past or present practices.
The company has been named a PRP at 28 sites on the government's National
Priority List. In addition, the company also has received notice from the EPA or
other regulatory agencies that the company may be a PRP, or PRP equivalent, at
other sites, including 31 sites at which the company has determined that it is
reasonably possible that it has an environmental liability. The company, in
cooperation with appropriate government agencies, is currently participating in,
or has participated in, RI/FS or their equivalent at most of the identified
sites, with the status of each investigation varying from site to site. At
certain sites, RI/FS have just begun, providing limited information, if any,
relating to cost estimates, timing, or the involvement of other PRPs; whereas,
at other sites, the studies are complete, remedial action plans have been
chosen, or RODs have been issued.
Environmental liabilities consist of obligations relating to waste handling
and the remediation and/or study of sites at which the company is alleged to
have disposed of hazardous substances. These sites include current operations,
previously operated sites, and sites associated with discontinued operations.
The company has provided reserves for potential environmental obligations that
management considers probable and for which a reasonable estimate of the
obligation could be made. Accordingly, total reserves of $232.0 million and
$273.1 million, respectively, before recoveries, were recorded at December 31,
2000 and 1999. The long-term portion of these reserves is included in the
reserve for discontinued operations and other liabilities on the consolidated
balance sheets and amounted to $222.0 million and $244.0 million at December 31,
2000 and 1999, respectively. In addition, the company has estimated that
reasonably possible environmental loss contingencies may exceed amounts accrued
by as much as $80 million at December 31, 2000.
The company's total environmental reserves include $218.3 million and
$261.7 million for remediation activities and $13.7 million and $11.4 million
for RI/FS costs at December 31, 2000 and 1999, respectively. For the years 2000,
1999 and 1998, FMC charged $44.3 million, $20.9 million and $17.8 million,
respectively, against established reserves for remediation spending, and $9.2
million, $43.3 million and $35.0 million, respectively, against reserves for
spending on RI/FS. FMC anticipates that the remediation and RI/FS expenditures
for current operating, previously operated and other sites will continue to be
significant for the foreseeable future.
To ensure FMC is held responsible only for its equitable share of site
remediation costs, FMC has initiated, and will continue to initiate, legal
proceedings for contributions from other PRPs . FMC has recorded recoveries,
representing probable realization of claims against insurance companies, U.S.
government agencies and other third parties, of $46.9 million and $60.2 million,
respectively, at December 31, 2000 and 1999 (all of which is recorded as an
offset to the reserve for discontinued operations and other liabilities). Cash
recoveries for the years 2000, 1999 and 1998 were $14.2 million, $56.9 million
and $4.4 million, respectively. Recoveries in 1999 included a settlement with a
consortium of FMC's general liability insurance carriers. During 2000 and 1999,
the company recognized additional receivables for recoveries of $0.9 million and
$8.9 million, respectively.
In the second quarter of 2000, FMC recorded a charge of $12.5 million (net
of $0.9 million of anticipated recoveries) to provide additional reserves for
ongoing remediation of several phosphorus properties. Although these properties
are part of the Astaris joint venture (Note 3), FMC retains certain remedial
liabilities associated with the properties. In the fourth quarters of 1999 and
1998, FMC provided $25.9 million (net of recoveries of $8.9 million) and $70.0
million, respectively, for environmental costs of discontinued operations (Note
5). FMC also provided $1.6 million related to environmental costs of continuing
operations in 1999.
In June 1999, the Federal District Court in Idaho approved a Consent Decree
signed by the company, the EPA (Region X) and the DOJ settling outstanding
alleged violations of RCRA at the company's former Phosphorus Chemicals ("PCD")
plant in Pocatello, Idaho. Continuing commitments under the RCRA Consent Decree
include injunctive relief covering remediation expense for closure of existing
ponds, estimated at $30 million, and approximately $80 million of capital costs
for waste treatment projects. These amounts will be expended over the next
several years. The company provided reserves for the estimated expenses related
to the Consent Decree in prior periods.
In addition, FMC signed a second Consent Decree with the EPA, which was
lodged in court on July 21, 1999. The Consent Decree relates to an ROD issued by
the EPA in 1998 which addresses previously closed ponds on the FMC portion of
the Eastern Michaud Flats Superfund site, including FMC's former Pocatello,
Idaho facility. The remedy the EPA selected in the ROD is a combination of
capping, surface runoff controls and institutional controls for soils, with a
contingency for extraction and recycling for hydraulic control of groundwater.
On August 3, 2000, the DOJ withdrew the CERCLA Consent Decree and announced
that it needed to review the administrative record supporting its remedy
selection decision. EPA has estimated that this review would take approximately
one year to complete. FMC believes its reserves for environmental costs
adequately provide for the estimated costs of the existing ROD for the site and
the expenses previously described related to the RCRA Consent Decree. Management
can not predict the potential changes in the scope of the ROD, if any, resulting
from the EPA's remedy review, nor estimate the potential incremental costs, if
any, of such changes.
On October 21, 1999, the Federal District Court for the Western District of
Virginia approved a Consent Decree signed by the company, the EPA (Region III)
and the DOJ regarding past response costs and future clean-up work at the
discontinued fiber manufacturing site in Front Royal, Virginia. As part of a
prior settlement, government agencies are expected to reimburse FMC for
approximately one third of the clean-up costs due to the government's role at
the site. FMC's $70 million portion of the settlement was charged to
<PAGE>
47
earnings in 1998 and prior years.
Although potential environmental remediation expenditures in excess of the
current reserves and estimated loss contingencies could be significant, the
impact on the company's future financial results is not subject to reasonable
estimation due to numerous uncertainties concerning the nature and scope of
contamination at many sites, identification of remediation alternatives under
constantly changing requirements, selection of new and diverse clean-up
technologies to meet compliance standards, the timing of potential expenditures,
and the allocation of costs among PRPs as well as other third parties.
The liabilities arising from potential environmental obligations that have
not been reserved for at this time may be material to any one quarter's or
year's results of operations in the future. Management, however, believes any
liability arising from potential environmental obligations is not likely to have
a material adverse effect on the company's liquidity or financial condition and
may be satisfied over the next 20 years or longer.
Regarding current operating sites, the company spent $79.4 million, $64.0
million and $33.0 million for the years 2000, 1999 and 1998, respectively, on
capital projects relating to environmental control facilities, and expects to
spend additional capital of approximately $120 million and $25 million in 2001
and 2002, respectively, the majority of which is associated with the Pocatello
Consent Decree discussed above. Additionally, in 2000, 1999 and 1998, FMC spent
$45.2 million, $62.2 million and $56.0 million, respectively, for environmental
compliance costs, which are an operating cost of the company and are not covered
by established reserves.
NOTE 13 INCENTIVE COMPENSATION PLANS
The 1995 Management Incentive Plan (the "Incentive Plan") and the 1995 Stock
Option Plan (the "Option Plan"), approved by the stockholders on April 21, 1995,
provide certain incentives and awards to key employees. The plans are
administered by the Compensation and Organization Committee of the Board of
Directors (the "Committee") which, subject to the provisions of the plans,
reviews and approves financial targets, times and conditions for payment.
The Incentive Plan provides for the grant of multi-year incentive awards
payable partly in cash and partly in common stock.
The Option Plan (and its predecessor plans) provides for regular grants of
common stock options which may be incentive and/or nonqualified stock options.
The exercise price for options is not less than the fair market value of the
stock at the date of grant. Options are exercisable at the time designated by
the Committee in the option (four years for grants prior to 1995 and three years
for grants during 1995 and thereafter). Incentive and nonqualified options
expire not later than 10 years from the grant date (15 years for grants prior to
1996).
Under the plans adopted in 1995, three million shares became available for
awards and options granted in 1995 and later years. These shares are in addition
to the shares available from the predecessor plans. Cancellation (through
expiration, forfeiture or otherwise) of outstanding awards and options granted
after 1989 increases the shares available for future awards or grants. At
December 31, 2000, 674,870 shares were available for future use under these
plans.
The company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation". Accordingly, no compensation cost has
been recognized for the Option Plan. Had compensation cost for the Option Plan
been determined based on the fair value at the grant date for awards in 2000,
1999 and 1998 consistent with the provisions of SFAS No. 123, the company's net
income and diluted earnings per share for the three years ended December 31,
2000 would have been reduced to the pro forma amounts indicated below:
(Net income in millions) 2000 1999 1998
- -------------------------------------------------------------------
Net income--as reported $110.6 $212.6 $106.5
Net income--pro forma $107.9 $208.1 $101.7
Diluted earnings per share--
as reported $ 3.50 $ 6.57 $ 3.05
Diluted earnings per share--
pro forma $ 3.41 $ 6.42 $ 2.91
- -------------------------------------------------------------------
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 2000, 1999 and 1998, respectively: dividend yield
of 0 percent for all years; expected volatility of 30.8 percent, 22.9 percent
and 19.7 percent; risk-free interest rates of 6.7 percent, 5.1 percent and 5.5
percent; and expected lives of 5 years for all grants.
The weighted average fair value of stock options, calculated using the
Black-Scholes option-pricing model, granted during the years ended December 31,
2000, 1999 and 1998 was $20.32, $15.07 and $21.09, respectively.
The following summary shows stock option activity for the three years ended
December 31, 2000:
Number of Weighted-
Shares Average
Optioned But Exercise Price
(Number of shares in thousands) Not Exercised per Share
- -------------------------------------------------------------------
December 31, 1997
(1,012 shares exercisable) 2,917 $ 51.05
Granted 558 $ 69.92
Exercised (261) $ 41.87
Forfeited (60) $ 67.07
- -------------------------------------------------------------------
December 31, 1998
(1,734 shares exercisable) 3,154 $ 54.84
Granted 350 $ 48.00
Exercised (107) $ 41.33
Forfeited (157) $ 62.30
- -------------------------------------------------------------------
December 31, 1999
(2,023 shares exercisable) 3,240 $ 54.18
Granted 202 $ 50.88
Exercised (265) $ 43.64
Forfeited (103) $ 62.13
- -------------------------------------------------------------------
December 31, 2000
(2,160 shares exercisable) 3,074 $ 54.61
- -------------------------------------------------------------------
The following tables summarize information about fixed-priced stock options
outstanding at December 31, 2000:
<PAGE>
48
Notes to Consolidated Financial Statements
Options Outstanding
- ---------------------------------------------------------------------
Weighted- Weighted-
Number Average Average
Outstanding at Remaining Exercise
Range of December 31, 2000 Contractual Life Price
Exercise Prices (in thousands) (in years) per Share
- ---------------------------------------------------------------------
$29.50-$31.13 313 4.4 $ 30.91
$45.00-$50.06 1,282 7.9 $ 47.16
$57.75-$65.50 663 7.4 $ 60.60
$69.00-$82.50 816 6.2 $ 70.54
- ---------------------------------------------------------------------
Total 3,074 7.0 $ 54.61
- ---------------------------------------------------------------------
Options Exercisable
- ---------------------------------------------------------------------
Number Weighted-
Exercisable at Average
Range of December 31, 2000 Exercise Price
Exercise Prices (in thousands) per Share
- ---------------------------------------------------------------------
$29.50-$31.13 313 $ 30.91
$45.00-$59.63 1,048 $ 49.20
$61.25-$82.50 799 $ 66.15
- ---------------------------------------------------------------------
Total 2,160 $ 52.82
- ---------------------------------------------------------------------
On January 2, 2001, an additional 426,600 shares became exercisable at
prices ranging from $57.75 to $70.69 with an expiration date of February 24,
2008.
Under a plan adopted in 1995, discretionary awards of restricted stock may
be made to selected employees. The awards vest over a period designated by the
Committee, with payment conditional upon continued employment. Compensation cost
is recognized over the vesting period based on the market value of the stock on
the date of the award.
Under the FMC Deferred Stock Plan for Non-Employee Directors, a portion of
the annual retainer for these directors was deferred and paid in the form of
shares of the company's common stock upon retirement or other termination of
their directorships. Effective January 1, 1997, the Board of Directors approved
a comprehensive compensation plan that terminated the retirement plan for
directors and increased the proportion of director compensation paid in common
stock of the company. Benefits provided for and earned under the former plan
were converted into stock units payable in shares of common stock of the company
upon retirement from the Board based on the fair market value of the common
stock on December 31, 1996. At December 31, 2000, stock units representing an
aggregate of 39,667 shares of stock were credited to the non-employee directors'
accounts. In 1998 and 1999, non-employee directors were also granted options to
purchase shares of stock at the fair market value of the stock at the date of
grant. At December 31, 2000, options for 30,600 shares were outstanding at
prices ranging from $64.36 to $77.31. These grants vested one year from the
grant date and expire after ten years. Beginning in 2000, non-employee directors
are paid in restricted stock units in lieu of stock options. The restriction on
these shares will lapse on April 20, 2001. The shares, however, will not be paid
out until retirement from the Board. At December 31, 2000, units representing
8,000 shares of stock were outstanding.
NOTE 14 STOCKHOLDERS' EQUITY
The following is a summary of FMC's capital stock activity over the past three
years:
Common Treasury
(Number of shares in thousands) Stock Stock
- ---------------------------------------------------------------------
December 31, 1997 37,876 2,952
Stock options and awards 313 --
Stock for employee benefit trust -- 116
Stock repurchases -- 2,418
- ---------------------------------------------------------------------
December 31, 1998 38,189 5,486
Stock options and awards 143 --
Stock for employee benefit trust, net -- 12
Stock repurchases -- 2,470
- ---------------------------------------------------------------------
December 31, 1999 38,332 7,968
Stock options and awards 290 --
Stock for employee benefit trust, net -- 10
- ---------------------------------------------------------------------
December 31, 2000 38,622 7,978
- ---------------------------------------------------------------------
During 1999 and 1998, approximately 2.5 million and 2.4 million shares,
respectively, were acquired under the company's stock repurchase plans at an
aggregate cost of $135.9 million and $ 150.0 million, respectively. Shares of
common stock repurchased and contributed to a trust for an employee benefit
program (net of shares resold as needed to administer the plan) totaled 9,470
shares in 2000, 11,783 shares in 1999 and 116,467 in 1998 at a cost of
approximately $0.6 million, $0.5 million and $6.7 million, respectively.
At December 31, 2000, 4,428,420 shares of unissued FMC common stock were
reserved for stock options and awards.
At December 31, 2000 and 1999, accumulated other comprehensive loss
consisted of cumulative foreign currency translation losses of $265.8 million
and $196.0 million and minimum pension liability adjustments of $6.8 million and
$7.5 million, respectively.
Covenants of the revolving credit facility agreement (Note 10) contain
minimum net worth and other requirements, with which FMC was in compliance as of
December 31, 2000.
No cash dividends are expected to be paid on the company's common stock in
2001.
On February 22, 1986, the Board of Directors of the company declared a
dividend distribution to each recordholder of common stock as of March 7, 1986,
of one Preferred Share Purchase Right for each share of common stock outstanding
on that date. Each right entitles the holder to purchase, under certain
circumstances related to a change in control of the company, one one-hundredth
of a share of Junior Participating Preferred Stock, Series A, without par value,
at a price of $300 per share (subject to adjustment), subject to the terms and
conditions of a Rights Agreement dated February 22, 1986 as amended through
February 9, 1996. The rights expire on March 7, 2006, unless redeemed by the
company at an earlier date. The redemption price of $.05 per right is subject to
adjustment to reflect stock splits, stock dividends or similar transactions. The
company has reserved 400,000 shares of Junior Participating Preferred Stock for
possible issuance under the agreement.
<PAGE>
49
NOTE 15 FOREIGN CURRENCY
The company mitigates its transactional exposure to variability in currency
exchange rates by entering into foreign exchange forward or option contracts
with third parties.
In 2000, foreign currency transactional exposures were most affected by the
weakening of the euro, British pound, Scandinavian currencies and Japanese yen
against the U.S. dollar. Exposures in 1999 were affected primarily by the
rebound of the Brazilian real subsequent to its early 1999 devaluation (Note
16). Weakening European and Scandinavian currencies, primarily the Spanish
peseta, were partially offset by the 1999 effects of the stronger Japanese yen.
European currencies were stable against the U.S. dollar in 1998 while the
Canadian dollar and Mexican peso weakened. Also in 1998, the Japanese yen
reversed its previous trend and strengthened.
During 2000, the company's earnings were negatively affected by
approximately $10 million (before tax) due to the impact of weaker European
currencies (particularly the euro, British pound and Scandinavian currencies) on
the company's foreign currency-denominated sales. The reduction in earnings
was partly offset by the benefit of paying certain local operating costs in the
same European currencies.
Net income for 2000, 1999 and 1998 included aggregate transactional
foreign currency gains/(losses) of $9.1 million, $6.0 million and $(7.7)
million, respectively.
The following table presents the foreign currency adjustments to key
balance sheet categories and the offsetting adjustments to accumulated other
comprehensive income (for translation of foreign functional currency financial
statements) or to income (for foreign currency transaction gains or losses) at
December 31:
<TABLE>
<CAPTION>
Gains (Losses)
(In millions) 2000 1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents $ (1.1) $ 10.4 $(10.4)
Other working capital (28.5) (26.2) (1.5)
Property, plant & equipment, net (29.9) (24.5) 2.5
Investments (0.4) 5.4 (2.4)
Debt (0.4) 0.5 1.6
Other (0.4) (21.5) 4.1
-------------------------------
$(60.7) $(55.9) $(6.1)
- -------------------------------------------------------------------------------
Other comprehensive income (loss) $(69.8) $(61.9) $ 1.6
Gain (loss) in income 9.1 6.0 (7.7)
- -------------------------------------------------------------------------------
$(60.7) $(55.9) $(6.1)
- -------------------------------------------------------------------------------
</TABLE>
NOTE 16 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Fair value disclosures. The carrying amounts of cash and cash equivalents, trade
receivables, other current assets, accounts payable and amounts included in
investments and accruals meeting the definition of a financial instrument
approximate fair value. The carrying amounts and related estimated fair values
for the company's remaining financial instruments are as follows:
<TABLE>
<CAPTION>
(In millions) Carrying Estimated
December 31, 2000 Amount Fair Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets (Liabilities)
- --------------------------------------------------------------------------------
Foreign exchange forward contracts $ 6.9 $ (21.1)
Natural gas forward contracts $ -- $ 29.9
Crude oil forward contracts $ -- $ (2.3)
Debt $(1,048.7) $(1,013.6)
- --------------------------------------------------------------------------------
<CAPTION>
(In millions) Carrying Estimated
December 31, 1999 Amount Fair Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets (Liabilities)
- --------------------------------------------------------------------------------
Foreign exchange forward contracts $ (14.1) $ (12.0)
Natural gas forward contracts $ -- $ 0.4
Crude oil forward contracts $ -- $ 0.1
Debt $(1,293.4) $(1,258.3)
- --------------------------------------------------------------------------------
</TABLE>
Debt. Fair values of debt have been determined through a combination of
management estimates and information obtained from independent third parties
using market data, such as bid/ask spreads, available on the last business day
of the year.
Derivative financial instruments. Fair values relating to derivative
financial instruments reflect the estimated amounts that the company would
receive or pay to terminate the contracts at the reporting date based on quoted
market prices of comparable contracts as of December 31. At December 31, 1999,
derivative financial instruments consisted primarily of foreign exchange forward
contracts and natural gas forward contracts. The company entered into foreign
exchange forward contracts to manage the currency risk associated with purchases
and sales denominated in currencies other than the U.S. dollar. Substantially
all of the foreign exchange forward contracts relate to receivables, payables
and intercompany transactions and are accounted for as hedges. The company
entered into natural gas and crude oil forward contracts to manage its exposure
to risks from changes in energy purchases used in its manufacturing processes.
<PAGE>
50
Notes to Consolidated Financial Statements
As of December 31, 2000 and 1999, the company held foreign exchange forward
contracts with notional amounts of $605.3 million and 563.2 million,
respectively, in which foreign (currencies primarily Norwegian krone, euro,
British pound and Singapore in dollar 2000 and Norwegian krone, euro and British
pound in 1999) were purchased, and approximately $650.4 million and $574.8
million, respectively, in which foreign currencies (primarily euro, Norwegian
krone, Swedish krona, British pound, Brazilian real and Japanese yen in 2000 and
euro, Swedish krona, British pound and Japanese yen in 1999) were sold. Notional
amounts are used to measure the volume of derivative financial instruments and
do not represent potential gain or loss on these agreements.
During 1998, the company entered into forward contracts with a notional
value of $65.0 million to offset various risks associated with the potential
devaluation of the Brazilian real. The matured contracts in 1999, subsequent to
the devaluation of the real. Losses from the decline in value of the company's
real-denominated investments during the 1999 devaluation, as well as 1999
economic losses related to the Brazilian economic crisis, were offset by gains
on the forward contracts.
Standby letters of credit and financial guarantees. In the ordinary course
of business with customers, vendors and others,the company is contingently
liable for performance under of letters credit and other financial guarantees
totaling approximately $148 million at December 31, 2000. Management does not
believe it is practicable to estimate the fair value of these financial
instruments and does not expect any losses from their resolution.
NOTE 17 COMMITMENTS AND CONTINGENT LIABILITIES
In October, 2000, the company announced an agreement to settle a lawsuit related
to its discontinued Defense Systems business. As a result, the Company recorded
a $65.7 million charge (net of an income tax benefit of $14.3 million) in its
results of discontinued operations during the quarter ended September 30, 2000.
After receiving approval from the DOJ and the U.S. District Court, the company
paid approximately $80 million to settle the lawsuit in January 2001.
FMC leases office space, plants and facilities, and various types of
manufacturing, data processing and transportation equipment. Leases of real
estate generally provide for payment of property taxes, insurance and repairs by
FMC. Capital leases are not significant. Rent expense under operating leases
amounted to $47.0 million, $45.0 million and $44.4 million in 2000, 1999 and
1998, respectively. Rent expense is net of credits (received for the use of
leased transportation assets) of $18.6 million, $20.4 million and $19.5 million
in 2000, 1999 and 1998, respectively.
Minimum future rentals under noncancelable leases aggregated approximately
$332.3 million as of December 31, 2000 and are estimated to be payable as
follows: $47.3 million in 2001, $45.2 million in 2002, $42.8 million in 2003,
$40.0 million in 2004, $29.6 million in 2005 and $127.4 million thereafter.
Minimum future rentals for transportation assets included above aggregated
approximately $177 million, against which the company expects to continue to
receive credits to substantially defray its rental expense.
In connection with the finalization of Astaris' external financing
agreement during the third quarter of 2000, FMC and Solutia have independently
contractually agreed to provide Astaris with funding to the extent that the
joint venture fails to meet certain financial benchmarks. Subsequent to
December 31, 2000, the company received notification that such a contribution
will be required in 2001. The company believes that this obligation is not
likely to have a significant impact on FMC's earnings, cash flow or financial
position.
The company also has certain other contingent liabilities arising from
litigation, claims, performance guarantees, and other commitments incident to
the ordinary course of business. Management believes that the ultimate
resolution of its known contingencies will not materially affect the
consolidated financial position, results of operations or cash flows of FMC.
<PAGE>
51
NOTE 18 BUSINESS SEGMENT AND GEOGRAPHIC SEGMENT DATA
(In millions)
<TABLE>
<CAPTION>
Year ended December 31 2000 1999 1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
- ----------------------------------------------------------------------------------------------------------------------------------
Energy Systems $1,037.3 $1,129.4 $1,320.9 $1,144.3 $ 949.0
Food and Transportation Systems 839.5 826.3 868.2 889.5 738.8
Agricultural Products 664.7 632.4 647.8 637.6 650.2
Specialty Chemicals 488.8 564.5 598.2 604.8 602.0
Industrial Chemicals/(1)/ 905.6 1,141.3 1,138.4 1,012.0 1,041.3
Eliminations (10.4) (20.3) (31.1) (29.2) (30.6)
- ----------------------------------------------------------------------------------------------------------------------------------
Total/(1)/ $3,925.5 $4,273.6 $4,542.4 $4,259.0 $3,950.7
==================================================================================================================================
Income (loss) from continuing operations before income taxes
and cumulative effect of changes in accounting principles
- ----------------------------------------------------------------------------------------------------------------------------------
Energy Systems $ 72.4 $ 97.1 $ 95.2 $ 76.5 $ 33.9
Food and Transportation Systems 69.0 64.2 72.8 63.9 42.0
Agricultural Products 87.8 64.3 76.3 35.1 93.7
Specialty Chemicals 92.4 73.5 77.9 77.2 65.5
Industrial Chemicals 114.5 144.4 117.5 135.7 181.8
- ----------------------------------------------------------------------------------------------------------------------------------
Segment operating profit/(2)/ 436.1 443.5 439.7 388.4 416.9
Corporate (69.8) (76.6) (85.1) (86.2) (91.3)
Other income and expense, net 8.0 2.4 3.2 11.8 3.2
- ----------------------------------------------------------------------------------------------------------------------------------
Operating profit before gains on divestitures of businesses, asset
impairments, restructuring and other charges, and net
interest expense 374.3 369.3 357.8 314.0 328.8
Gains on divestitures of businesses(3) -- 55.5 -- -- --
Asset impairments/(4)/ (11.6) (29.1) -- (224.0) --
Restructuring and other charges/(5)/ (45.0) (14.7) -- (40.9) --
Net interest expense/(6)/ (95.1) (106.7) (108.3) (108.8) (93.0)
- ----------------------------------------------------------------------------------------------------------------------------------
Total $ 222.6 $ 274.3 $ 249.5 $ (59.7) $ 235.8
==================================================================================================================================
</TABLE>
Business segment results are presented net of minority interests,
reflecting only FMC's share of earnings. The corporate line primarily includes
staff expenses, and other income and expense consists of all other corporate
items, including LIFO inventory adjustments and pension income or expense.
(1) Revenue for 2000, 1999 and 1998 has been increased as a result of
reclassifications made to apply accounting guidance released in 2000 by the
EITF. The reclassifications, which were related to shipping and handling
costs, increased sales and cost of sales or services for Industrial
Chemicals by $169.0 million, $163.0 million and $164.0 million,
respectively. The reclassifications had no effect on the company's
previously reported income or earnings per share. Reclassifications were
not made for years prior to 1998. (See Note 1.)
(2) Results for all segments are net of minority interests in 2000, 1999, 1998,
1997 and 1996 of $4.6 million, $5.1 million, $6.2 million, $8.9 million and
$9.6 million, respectively, the majority of which pertain to Industrial
Chemicals.
(3) Gains on divestitures of businesses in 1999 (Note 4) relate to the process
additives ($35.4 million) and bioproducts ($20.1 million) operations, both
of which are attributable to Specialty Chemicals.
(4) Asset impairments in 2000 (Note 6) are related to Energy Systems ($1.5
million), Specialty Chemicals ($1.1 million) and Industrial Chemicals ($9.0
million). Asset impairments in 1999 are related to Specialty Chemicals
($20.7 million) and Industrial Chemicals ($8.4 million). Asset impairments
in 1997 are related to Energy Systems ($18.0 million), Food and
Transportation Systems ($9.0 million), Agricultural Products ($9.0
million), Specialty Chemicals ($62.0 million) and Industrial Chemicals
($126.0 million).
(5) Restructuring and other charges in 2000 (Note 6) are related to Energy
Systems ($1.4 million), Food and Transportation Systems ($8.0 million),
Specialty Chemicals ($ 1.8 million), Industrial Chemicals ($33.0 million)
and Corporate ($0.8 million). Restructuring and other charges in 1999 are
related to Energy Systems ($1.5 million), Food and Transportation Systems
($7.1 million), Agricultural Products ($2.2 million), Specialty Chemicals
($1.3 million), Industrial Chemicals ($0.6 million) and Corporate ($2.0
million). Restructuring and other charges in 1997 are related to Energy
Systems ($17.9 million), Food and Transportation Systems ($10.0 million)
and Agricultural Products ($13.0 million).
(6) Net interest expense in 2000 includes interest expense of $2.4 million from
external financing of the phosphorus joint venture.
<PAGE>
52
Notes to Consolidated Financial Statements
(In millions)
<TABLE>
<CAPTION>
December 31 2000 1999 1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Capital Employed/(1)/
Energy Systems $ 505.0 $ 439.3 $ 471.4 $ 550.6 $ 649.5
Food and Transportation Systems 428.1 370.4 384.4 429.3 495.4
Agricultural Products 490.3 552.0 567.3 503.9 546.8
Specialty Chemicals 661.2 652.9 638.8 642.8 630.4
Industrial Chemicals 715.2 818.0 740.8 731.7 920.1
- -----------------------------------------------------------------------------------------------------------------------------------
Total operating capital employed 2,799.8 2,832.6 2,802.7 2,858.3 3,242.2
Segment liabilities included in total operating capital employed 975.6 1,070.7 1,125.0 1,087.0 917.2
Corporate items (29.5) 92.5 238.7 167.8 194.5
- -----------------------------------------------------------------------------------------------------------------------------------
Assets of continuing operations 3,745.9 3,995.8 4,166.4 4,113.1 4,353.9
Net assets of discontinued operations/(2)/ -- -- -- -- 113.5
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $3,745.9 $3,995.8 $4,166.4 $4,113.1 $4,467.4
===================================================================================================================================
Segment Assets/(3)/
Energy Systems $ 752.1 $ 749.4 $ 848.1 $ 829.0 $ 874.2
Food and Transportation Systems 627.5 571.7 618.7 654.2 709.4
Agricultural Products 687.1 735.1 702.3 697.0 646.7
Specialty Chemicals 724.3 732.6 722.8 723.6 714.7
Industrial Chemicals 984.4 1,114.5 1,035.8 1,041.5 1,214.4
- -----------------------------------------------------------------------------------------------------------------------------------
Total segment assets 3,775.4 3,903.3 3,927.7 3,945.3 4,159.4
Corporate items (29.5) 92.5 238.7 167.8 194.5
- -----------------------------------------------------------------------------------------------------------------------------------
Assets of continuing operations 3,745.9 3,995.8 4,166.4 4,113.1 4,353.9
Net assets of discontinued operations/(2)/ -- -- -- -- 113.5
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $3,745.9 $3,995.8 $4,166.4 $4,113.1 $4,467.4
===================================================================================================================================
</TABLE>
(1) Company management views operating capital employed, which consists of
assets, net of liabilities, reported by the company's operations (and
excludes corporate items such as cash equivalents, debt, pension
liabilities, income taxes and LIFO reserves), as its primary measure of
segment capital.
(2) Net assets of discontinued operations comprise the net assets of FMC's
Defense Systems operations. (See Note 5.)
(3) Segment assets are assets recorded and reported by the segments, and are
equal to segment operating capital employed plus segment liabilities. (See
Note 1.)
<TABLE>
<CAPTION>
Depreciation Research and
(In millions) Capital expenditures and amortization development expenses
Year ended December 31 2000 1999 1998 2000 1999 1998 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Energy Systems $ 20.2 $ 14.7 $ 30.4 $ 29.8 $ 31.4 $ 36.5 $ 33.8 $ 25.7 $ 24.7
Food and Transportation Systems 21.8 26.1 28.9 28.2 28.2 26.9 22.9 26.1 26.0
Agricultural Products 21.8 36.6 37.4 26.1 23.1 29.2 66.7 60.9 60.2
Specialty Chemicals 39.2 40.0 60.5 34.8 36.7 36.8 19.1 21.2 28.0
Industrial Chemicals 126.0 115.5 102.3 62.9 63.4 76.6 12.0 18.5 18.6
Corporate 11.4 3.4 6.4 7.1 8.0 9.5 -- -- 0.2
- -----------------------------------------------------------------------------------------------------------------------------------
Total $240.4 $236.3 $265.9 $188.9 $190.8 $215.5 $154.5 $152.4 $157.7
===================================================================================================================================
</TABLE>
<PAGE>
[53]
Order backlog (unaudited)
- --------------------------------------------------------------------------------
(In millions)
December 31 2000 1999 1998
- --------------------------------------------------------------------------------
Energy Systems $ 425.1 $ 593.4 $ 877.9
Food and Transportation Systems $ 219.2 $ 247.2 $ 256.0
- --------------------------------------------------------------------------------
Order backlog is calculated as the estimated sales value of unfilled, confirmed
customer orders at the reporting date. Backlog is not reported for Agricultural
Products, Specialty Chemicals or Industrial Chemicals due to the nature of these
businesses.
Geographic Segment Information Revenue
- --------------------------------------------------------------------------------
(In millions)
Year ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
Third party revenue (by
location of customer):
United States $ 1,700.2 $ 1,880.5 $ 2,003.1
All other countries 2,225.3 2,393.1 2,539.3
- --------------------------------------------------------------------------------
Total revenue $ 3,925.5 $ 4,273.6 $ 4,542.4
- --------------------------------------------------------------------------------
Long-lived assets
- --------------------------------------------------------------------------------
(In millions)
December 31 2000 1999
- --------------------------------------------------------------------------------
United States $ 1,290.0 $ 1,427.3
All other countries 541.3 560.2
- --------------------------------------------------------------------------------
Total long-lived assets $ 1,831.3 $ 1,987.5
- --------------------------------------------------------------------------------
NOTE 19 QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
(In millions, except per share data and
common stock prices) 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue/(1)/ $1,003.6 $1,010.9 $ 958.7 $ 952.3 $ 1,010.2 $ 1,107.4 $ 1,078.3 $ 1,077.7
Income from continuing operations before
minority interests, net interest
expense and income taxes $ 67.1 $ 66.3 $ 101.6 $ 84.9 $ 69.3 $ 120.7 $ 98.5 $ 97.6
Income from continuing operations $ 32.8 $ 38.0 $ 56.5 $ 50.0 $ 30.3 $ 68.9 $ 64.0 $ 52.8
Income (loss) from discontinued
operations, net of income taxes -- -- (66.7) -- -- 18.0 -- (21.4)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 32.8 $ 38.0 $ (10.2) $ 50.0 $ 30.3 $ 86.9 $ 64.0 $ 31.4
- -----------------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per common
share/(2)/ $ 1.08 $ 1.25 $ (0.34) $ 1.64 $ 0.94 $ 2.73 $ 2.04 $ 1.03
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted net income (loss) per common
share/(2)/ $ 1.05 $ 1.20 $ (0.32) $ 1.57 $ 0.92 $ 2.65 $ 1.98 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding:
Basic 30.4 30.4 30.4 30.6 32.3 31.8 31.4 30.5
Diluted 31.3 31.5 31.6 31.8 33.0 32.8 32.3 31.3
- -----------------------------------------------------------------------------------------------------------------------------------
Common stock prices:
High $59.6250 $66.0000 $71.37500 $76.4375 $59.1875 $74.3125 $70.5000 $57.3125
Low $46.6875 $56.5625 $58.34375 $65.7500 $48.5000 $49.8750 $46.5000 $39.6250
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Significant transactions that affected quarterly results in 2000 and 1999 are
described in Notes 1, 3, 4, 5 and 6.
/(1)/ Revenue for all periods has been increased as a result of
reclassifications made to apply the accounting guidance released in 2000
by the EITF. The reclassifications, which were related to shipping and
handling costs, had no effect on the company's previously reported income
or earnings per share. (See Note 1.)
/(2)/ The sum of quarterly earnings per common share in 1999 differs from the
full-year amount due to changes in the number of shares outstanding during
the year.
<PAGE>
54
Ten-Year Financial Summary
(In millions, except share data and per share amounts)
<TABLE>
<CAPTION>
2000 1999 1998
Summary of earnings
Revenue/(1)/ $ 3,925.5 4,273.6 4,542.4
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income (loss) from continuing operations before minority interests, net interest
expense, income taxes, extraordinary items and cumulative effect of changes
in accounting principles $ 319.9 386.1 364.0
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before income taxes, extraordinary items
and cumulative effect of changes in accounting principles $ 222.6 274.3 249.5
Provision (benefit) for income taxes 45.3 58.3 64.2
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before extraordinary items and cumulative
effect of changes in accounting principles $ 177.3 216.0 185.3
Discontinued operations, net of income taxes (66.7) (3.4) (42.7)
Extraordinary items, net of income taxes -- -- --
Cumulative effect of changes in accounting principles, net of income taxes -- -- (36.1)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 110.6 212.6 106.5
- ------------------------------------------------------------------------------------------------------------------------------------
After-tax income from continuing operations excluding special income and
expense items/(2)//(3)/, and before extraordinary items and cumulative
effect of changes in accounting principles $ 212.2 195.1 185.3
- -----------------------------------------------------------------------------------------------------------------------------------
Total dividends -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Share data
Average number of shares used in earnings per share computations (thousands):
Basic 30,439 31,516 34,007
Diluted 31,576 32,377 34,939
- ------------------------------------------------------------------------------------------------------------------------------------
Basic earnings (loss) per share
Continuing operations $ 5.83 6.86 5.45
Discontinued operations (2.20) (0.11) (1.26)
Extraordinary items -- -- --
Cumulative effect of changes in accounting principles -- -- (1.06)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 3.63 6.75 3.13
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted earnings (loss) per share
Continuing operations $ 5.62 6.67 5.30
Discontinued operations (2.12) (0.10) (1.22)
Extraordinary items -- -- --
Cumulative effect of changes in accounting principles -- -- (1.03)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 3.50 6.57 3.05
- -----------------------------------------------------------------------------------------------------------------------------------
Other information
After-tax income per share from continuing operations excluding special
income and expense items/(2)//(3)/
Basic $ 6.97 6.19 5.45
Diluted $ 6.72 6.03 5.30
- -----------------------------------------------------------------------------------------------------------------------------------
Financial position at year end
Total assets $ 3,745.9 3,995.8 4,166.4
Long-term debt (less current portion) $ 872.1 945.1 1,326.4
Stockholders' equity $ 800.4 743.6 729.4
- -----------------------------------------------------------------------------------------------------------------------------------
Other data
Capital expenditures $ 240.4 236.3 265.9
Depreciation expense $ 157.5 162.7 189.0
Amortization expense $ 31.4 28.1 26.5
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Revenue for 2000, 1999 and 1998 has been increased as a result of
reclassifications made to apply accounting guidance released in 2000 by the
Emerging Issues Task Force. The reclassifications, which were related to
shipping and handling costs, had no effect on the company's previously
reported income or earnings per share. Reclassifications were not made for
years prior to 1998. See Note 1 to the company's consolidated financial
statements.
(2) Income from continuing operations excluding special income and expense
items and income per share from continuing operations excluding special
income and expense items are not measures of financial performance under
generally accepted accounting principles and should not be considered in
isolation from, or as a subtitute for, income from continuing operations,
net income or earnings per share determined in accordance with generally
accepted accounting principles, nor as the sole measure of the company's
profitability.
<PAGE>
55
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
4,259.0 3,950.7 3,482.6 2,869.4 2,678.8 2,692.1 2,568.6
- -------------------------------------------------------------------------------------------------------------------------------
58.0 338.4 234.2 212.0 (17.3) 143.0 172.7
- -------------------------------------------------------------------------------------------------------------------------------
(59.7) 235.8 152.7 150.9 (79.9) 59.9 63.8
(35.2) 73.0 (2.0) 41.6 (62.8) 9.4 9.4
- -------------------------------------------------------------------------------------------------------------------------------
(24.5) 162.8 154.7 109.3 (17.1) 50.5 54.4
191.4 47.9 60.9 64.1 58.1 68.9 118.7
-- -- -- -- (4.7) (11.4) (9.2)
(4.5) -- -- -- -- (183.7) --
- -------------------------------------------------------------------------------------------------------------------------------
162.4 210.7 215.6 173.4 36.3 (75.7) 163.9
- -------------------------------------------------------------------------------------------------------------------------------
156.4 162.8 151.2 109.3 56.4 50.5 54.4
- -------------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
36,805 37,024 36,615 36,369 35,976 35,595 35,024
36,805 38,058 37,721 37,195 35,976 36,796 36,267
- -------------------------------------------------------------------------------------------------------------------------------
(0.67) 4.40 4.23 3.01 (0.48) 1.42 1.55
5.20 1.29 1.66 1.76 1.62 1.94 3.39
-- -- -- -- (0.13) (0.32) (0.26)
(0.12) -- -- -- -- (5.16) --
- -------------------------------------------------------------------------------------------------------------------------------
4.41 5.69 5.89 4.77 1.01 (2.12) 4.68
- -------------------------------------------------------------------------------------------------------------------------------
(0.67) 4.28 4.10 2.94 (0.48) 1.37 1.50
5.20 1.26 1.62 1.72 1.62 1.87 3.27
-- -- -- -- (0.13) (0.31) (0.25)
(0.12) -- -- -- -- (4.99) --
- -------------------------------------------------------------------------------------------------------------------------------
4.41 5.54 5.72 4.66 1.01 (2.06) 4.52
- -------------------------------------------------------------------------------------------------------------------------------
4.25 4.40 4.13 3.01 1.56 1.42 1.55
4.13 4.28 4.01 2.94 1.53 1.37 1.50
- -------------------------------------------------------------------------------------------------------------------------------
4,113.1 4,467.4 3,751.8 2,857.1 2,532.1 2,565.3 2,393.6
1,140.2 1,268.4 974.4 901.2 749.8 843.4 928.6
760.6 855.8 653.5 416.6 216.9 219.0 309.8
- -------------------------------------------------------------------------------------------------------------------------------
316.7 485.1 427.8 271.0 204.6 179.6 168.7
218.3 205.7 182.6 173.8 172.8 179.9 166.7
25.3 19.3 13.0 6.0 4.3 2.0 1.7
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(3) Summary of special income (expense) items:
(in millions except per share amounts)
<TABLE>
<CAPTION>
Year ended December 31 2000 1999 1997 1995 1993
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pre-tax basis
Asset impairments $ (11.6) $ (29.1) $ (224.0) $ (26.4) $ (8.1)
Restructuring and other charges (45.0) (14.7) (40.9) (108.1) (114.4)
Gains on divestitures of business - 55.5 - - -
Gain on sale of FMC Wyoming stock - - - 99.7 -
Write off of aquired in-process research and
development - - - (15.5) -
- ------------------------------------------------------------------------------------------------------------------
Total special income (expense) items, pre-tax $ (56.6) $ 11.7 $ (264.9) $ (50.3) $ (122.5)
- ------------------------------------------------------------------------------------------------------------------
After-tax basis
Total special income (expense) items, net of
income taxes $ (34.9) $ 20.9 $ (180.9) $ 3.5 $ (73.5)
- -----------------------------------------------------------------------------------------------------------------
Per share
Total special income (expense) items, per share:
Basic $ (1.14) $ 0.67 $ (4.92) $ 0.10 $ (2.04)
- -----------------------------------------------------------------------------------------------------------------
Diluted $ (1.10) $ 0.64 $ (4.77) $ 0.09 $ (1.99)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
56
Independent Auditors' Report
[LOGO]
The Board of Directors and Stockholders, FMC Corporation:
We have audited the accompanying consolidated balance sheets of FMC Corporation
and consolidated subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, cash flows and changes in stockholders'
equity for each of the years in the three-year period ended December 31, 2000.
These consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of FMC
Corporation and consolidated subsidiaries as of December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
KPMG LLP
Chicago, Illinois
February 9, 2001
Management's Report on Financial Statements
The consolidated financial statements and related information have been prepared
by management, who are responsible for the integrity and objectivity of that
information. Where appropriate, they reflect estimates based on judgments of
management. The statements have been prepared in conformity with accounting
principles generally accepted in the United States. Financial information
included elsewhere in this annual report is consistent with that contained in
the consolidated financial statements.
FMC maintains a system of internal control over financial reporting and
over safeguarding of assets against unauthorized acquisition, use or disposition
which is designed to provide reasonable assurance as to the reliability of
financial records and the safeguarding of such assets. The system is maintained
by the selection and training of qualified personnel, by establishing and
communicating sound accounting and business policies, and by an internal
auditing program that constantly evaluates the adequacy and effectiveness of
such internal controls, policies and procedures.
The Audit Committee of the Board of Directors, composed of directors who
are not officers or employees of the company, meets regularly with management,
with the company's internal auditors, and with its independent auditors to
discuss their evaluation of internal accounting controls and the quality of
financial reporting. Both the independent auditors and the internal auditors
have free access to the Audit Committee to discuss the results of their audits.
The company's independent auditors have been engaged to render an opinion
on the consolidated financial statements. They review and make appropriate tests
of the data included in the financial statements. As independent auditors,
they also provide an objective, outside review of management's performance in
reporting operating results and financial condition.
/s/ William H. Schumann III /s/ Ronald D. Mambu
William H. Schumann III Ronald D. Mambu
Senior Vice President Vice President
and Chief Financial Officer and Controller
Chicago, Illinois
February 9, 2001
<PAGE>
57
Directors and Officers
Board of Directors
Robert N. Burt/1/
Chairman of the Board and
Chief Executive Officer
Joseph H. Netherland/4/
President
William G. Walter
Executive Vice President;
General Manager
Specialty Chemicals Group
B. A. Bridgewater, Jr./1,2,5/
Retired Chairman of the Board,
President and Chief Executive Officer,
Brown Group, Inc.
Patricia A. Buffler/3,4/
Dean Emerita,
Professor of Epidemiology,
School of Public Health,
University of California, Berkeley
Albert J. Costello/2,5/
Retired Chairman, President
and Chief Executive Officer,
W. R. Grace & Co.
Paul L. Davies, Jr./1,2/
President, Lakeside Corporation,
a private real estate investment
company
Asbjorn Larsen/3,5/
Retired President and
Chief Executive Officer,
Saga Petroleum ASA
Edward J. Mooney/2,3/
Retired Delegue General-North America,
Suez Lyonnaise des Eaux
William F. Reilly/1,2,3/
Founder
PRIMEDIA Inc.,
Founding Partner,
Aurelian Communications
Enrique J. Sosa/3,4/
Former President,
BP Amoco Chemicals
James R. Thompson/4,5/
Former Governor of Illinois;
Chairman, Chairman of the
Executive Committee
and Partner, Law Firm of
Winston & Strawn
Clayton Yeutter/4,5/
Of Counsel, Hogan & Hartson,
former U.S. Trade Representative,
and former Secretary,
U.S. Department of Agriculture
/1/ Executive Committee
/2/ Compensation and Organization
Committee
/3/ Audit Committee
/4/ Public Policy Committee
/5/ Nominating and Board Procedures
Committee
Officers
Robert N. Burt *
Chairman of the Board and
Chief Executive Officer
Joseph H. Netherland *
President
William G. Walter *
Executive Vice President;
General Manager
Specialty Chemicals Group
Stephen F. Gates *
Senior Vice President,
General Counsel and
Corporate Secretary
William H. Schumann III *
Senior Vice President and
Chief Financial Officer
Patricia D. Brozowski
Vice President
Communications
Charles H. Cannon, Jr.*
Vice President;
General Manager
FMC FoodTech
Airport Systems
W. Kim Foster *
Vice President;
General Manager
Agricultural Products Group
Robert I. Harries *
Vice President;
General Manager
Chemical Products Group
Stephanie K. Kushner *
Vice President and
Treasurer
Peter D. Kinnear *
Vice President;
General Manager
Petroleum Equipment
and Systems
Ronald D. Mambu *
Vice President and
Controller
James A. McClung *
Vice President
Worldwide Marketing
Eugene M. McCluskey
Vice President
Tax
Michael W. Murray
Vice President
Human Resources
Gerald R. Prout
Vice President
Government Affairs
Craig M. Watson
Vice President and
Chief Information Officer
Peter E. Weber
Vice President;
President
FMC Latin America
*Executive Officer
<PAGE>
58
Major Operating
Units
Energy Systems
Energy Transportation
and Measurement
Petroleum Equipment
and Systems
Food and
Transportation Systems
Airport Systems
FMC FoodTech
Citrus Systems
Food Processing Systems
Food Systems and Handling
Frigoscandia Freezer
Agricultural Products
Specialty Chemicals
FMC BioPolymer
Lithium
Industrial Chemicals
Active Oxidants
Alkali Chemicals
FMC Foret, S.A.
Hydrogen Peroxide
Astaris LLC,
a joint-venture company
Executive Offices
FMC Corporation
200 E. Randolph Drive
Chicago, Illinois 60601
Internet: www.fmc.com
Subsidiaries and Affiliates in Other Nations
Angola
FMC International AG
Argentina
FMC Argentina, S.A.
Minera Del Altiplano S.A.
Australia
FMC (Australia), Ltd.
FMC International, AG
Austria
FMC Chemikalien
Handelsgesellschaft G.m.b.H.
Bangladesh
FMC International AG
Barbados
FMC International Sales Corporation
Belgium
FMC Europe N.V.
Brazil
FMC do Brasil Industria e
Commercio S.A.
Canada
FMC of Canada Limited
FMC Offshore Canada Company
Chile
Chile Limitada
FMC Corporation, Inc.
Neogel S.A.
China
FMC Asia Pacific, Inc.
FMC Hong Kong Limited
Suzhou Fu Mei-Shi Crop Care
Company, Ltd.
Colombia
FMC Latino America, S.A.
Czech Republic
F&N Agro Ceska Republika, spol s.r.o.
Denmark
FMC A/S
Egypt
FMC International AG
Equatorial Guinea
FMC Subsea Service, Inc.
France
FMC BioPolymer France S.A.S.
FMC Europe, S.A.
FMC Food Machinery S.A.
FMC France S.A.
FMC Overseas, S.A.
Frigoscandia Equipment S.A.
Gabon
FMC Gabon S.A.R.L.
Germany
FMC BioPolymer GmbH
FMC GmbH
Frigoscandia Equipment GmbH
Jetway GmbH
F.A. Sening GmbH
Smith Meter GmbH
Greece
FMC Hellas EPE
FMC International AG
Guatemala
FMC Guatemala, S.A.
Hong Kong
FMC Agricultural
Products International AG
FMC Asia Pacific, Inc.
FMC Hong Kong Limited
India
FMC Sanmar Limited
FMC Asia Pacific, Inc.
FMC India (Pvt.) Ltd.
Indonesia
FMC Hong Kong Limited
PT Bina Guna Kimia (Indonesia)
PT FMC Santana Petroleum
Equipment Indonesia
Ireland
FMC International AG
Italy
FMC Italia S.p.A.
Japan
Asia Lithium Corporation
FMC, K.K.
Honjo-FMC Energy Systems Inc.
L.H. Company, Ltd.
Jordan
FMC International AG
Kenya
FMC International AG
Korea
FMC Korea Limited
Malaysia
FMC Wellhead Equipment Sdn. Bhd.
FMC Petroleum Equipment (Malaysia)
Sdn. Bhd.
Jetway Systems Asia Inc.
Mexico
FMC Agroquimica de Mexico,
S.R.L. de C.V.
Electro Quimica Mexicana, S.A. de C.V.
E.M.D., S.A. de C.V.
FMC Ingredientes Alimenticios, S.A. de
C.V.
FMC Alimentos S.A. de C.V.
FMC Productos y Servicios, S.A. de C.V.
Netherlands
FMC Fluid Control (Nederland) B.V.
FMC Industrial Chemicals
(Netherlands) B.V.
Nigeria
FMC International Nigeria Ltd.
Norway
FMC BioPolymer AS
Kongsberg Offshore, AS
Pakistan
FMC International AG
FMC United (Private) Limited
Panama
FMC Latino America, S.A.
Philippines
FMC International AG
Marine Colloids Philippines, Inc.
Poland
F&R Agro Sp. z.o.o.
Puerto Rico
FMC International AG
Singapore
FMC Singapore Pte. Ltd.
FMC Southeast Asia Pte., Ltd.
Slovakia
F&N Agro Slovensko, spol s.r.o.
South Africa
FMC (South Africa)(Proprietary) Limited
Spain
Comercial e Industrial
de Productos Quimicos S.A.
FMC Airline Equipment Europe, S.A.
FMC Foret, S.A.
Forel, S.L.
Forenato, S.L.
Forsean, S.A.
Frigoscandia Equipment Iberica, S.A.
Peroxidos Organicos, S.A.
Sibelco Espanola, S.A.
Valentin Herraiz, S.A.
Sweden
Frigoscandia Equipment Holding AB
Frigoscandia Equipment AB
Frigoscandia Equipment International AB
Frigoscandia Equipment Norden AB
Frigoscandia Freezer AB
Potato Processing Machinery AB
Switzerland
FMC Agricultural
Products International AG
FMC International AG
FMC Kongsberg International AG
Thailand
FMC (Thailand) Limited
Thai Peroxide Company, Ltd.
Turkey
FMC BioPolymer Kimyevi Urunler
Ticaret Ltd. Sti.
Ukraine
FMC International AG
United Arab Emirates
FMC International AG
United Kingdom
FMC Corporation (UK) Limited
Venezuela
Tripoliven, C.A.
FMC Wellhead de Venezuela, S.A.
Italicized brand names used throughout this report are the trademarks of FMC
Corporation or its subsidiaries. (C) 2001 FMC Corporation.
<PAGE>
Stockholder Data
Annual Meeting of Stockholders
FMC's annual meeting of stockholders will be held at 2 p.m. on Friday, April 20,
2001, at 200 E. Randolph Drive, Chicago, Illinois.
Notice of the meeting, together with proxy materials, will be mailed
approximately 40 days prior to the meeting to stockholders of record as of
February 23, 2001.
Transfer Agent and Registrar of Stock
Harris Trust and Savings Bank
P.O. Box 755, Chicago, Illinois 60690
Questions concerning FMC common stock should be sent to the above address, or
call (877) 360-5143.
Stock Exchange Listing
New York Stock Exchange
Pacific Stock Exchange
Chicago Stock Exchange
Stock Exchange Symbol
FMC
Form 10-K
A copy of the company's annual report to the Securities and Exchange Commission
on Form 10-K for 2000 is available upon written request to:
FMC Corporation
Communications Department
200 E. Randolph Drive
Chicago, Illinois 60601
However, most information required under Parts II and III of Form 10-K has been
incorporated by reference to the annual report to stockholders or the proxy
statement.
FMC was incorporated in Delaware in 1928.
<PAGE>
FMC www.fmc.com
FMC Corporation 200 East Randolph Drive Chicago, Illinois 60601
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>9
<FILENAME>dex21.txt
<DESCRIPTION>LIST OF SIGNIFICANT SUBSIDIARIES
<TEXT>
<PAGE>
EXHIBIT 21
LIST OF SIGNIFICANT SUBSIDIARIES OF REGISTRANT
December 31, 2000
<TABLE>
<CAPTION>
Organized Under Percent of Voting
Company(1) Laws of Securities Owned(2)
- ---------- ------- -------------------
<S> <C> <C>
FMC Corporation Delaware Registrant
Direct Measurement Corporation Colorado 100.0%
Electro Quimica Mexicana, S.A. de C.V. Mexico 100.0%
FMC A/S Denmark 100.0%
FMC Airline Equipment Europe, S.A. Spain 100.0%
FMC Argentina, Sociedad Anonyma, Comercial, Industrial Y Financiera Argentina 100.0%
FMC Asia-Pacific, Inc. Delaware 100.0%
FMC Biopolymer AS Norway 100.0%
FMC Corporation (UK) Limited England 100.0%
FMC de Mexico, S.A. de C.V. Mexico 100.0%
FMC Defense Corporation Wyoming 100.0%
FMC do Brasil Industria e Comercio S.A. Brazil 100.0%
FMC Europe N.V. Belgium 100.0%
FMC Europe, S.A. France 100.0%
FMC Food Machinery and Chemical Holding Company B.V. The Netherlands 100.0%
FMC Food Machinery S.A. France 100.0%
FMC Foret, S.A. Spain 100.0%
FMC Funding Corporation Delaware 100.0%
FMC Holding Norway AS Norway 100.0%
FMC Hong Kong Limited Hong Kong 100.0%
FMC Industrial Chemicals (Netherlands) B.V. Holland 100.0%
FMC International AG Switzerland 100.0%
FMC International Sales Corporation Barbados 100.0%
FMC Italia S.p.A. Italy 100.0%
FMC Korea Ltd. Korea 100.0%
FMC of Canada Limited Ontario 100.0%
FMC Productos Y Servicios, S.A. de C.V. Mexico 100.0%
FMC Southeast Asia Pte. Ltd. Singapore 100.0%
FMC Subsea Service, Inc. Delaware 100.0%
FMC Wellhead Equipment Sdn. Bhd. Malaysia 100.0%
FMC WFC I, Inc. Wyoming 100.0%
FMC Wyoming Corporation Delaware 87.5%
Food Machinery Coordination Center S.C.R.L./C.V.B.A. Belgium 100.0%
Forel, S.L. Spain 60.0%
Forsean, S.L. Spain 70.0%
Frigoscandia Equipment AB Sweden 100.0%
Frigoscandia Equipment Holding AB Sweden 100.0%
Frigoscandia Equipment Inc. Delaware 100.0%
Frigoscandia Inc. Maryland 100.0%
Intermountain Research and Development Corporation Wyoming 100.0%
Intertrade Corporation Delaware 100.0%
Kongsberg Offshore AS Norway 100.0%
Minera Del Altiplano S.A. Argentina 100.0%
Smith Meter GmbH Germany 100.0%
Smith Meter Inc. Delaware 100.0%
Sofec, Inc. Texas 100.0%
</TABLE>
(1) The names of various active and inactive subsidiaries have been omitted.
Such subsidiaries, considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary.
(2) Percentages shown for indirect subsidiaries reflect the percentage of voting
securities owned by the parent subsidiary.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>10
<FILENAME>dex23.txt
<DESCRIPTION>CONSENT OF KPMG LLP
<TEXT>
<PAGE>
Exhibit 23
CONSENT OF KPMG LLP
The Board of Directors
FMC Corporation:
We consent to incorporation by reference in the Registration Statements on Form
S-8 (Nos. 33-10661, 33-7749, 33-41745, 33-48984, 333-18383, 333-24039, 333-62683
and 333-68905) and the Registration Statement on Form S-3 (No. 333-59543) of FMC
Corporation of our report dated February 9, 2001 relating to the consolidated
balance sheets of FMC Corporation and consolidated subsidiaries as of December
31, 2000 and 1999, and the related consolidated statements of income, cash
flows, and changes in stockholders' equity for each of the years in the three-
year period ended December 31, 2000, which report is incorporated by reference
in the December 31, 2000 annual report on Form 10-K of FMC Corporation.
/s/ KPMG LLP
Chicago, Illinois
March 26, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>11
<FILENAME>dex24.txt
<DESCRIPTION>POWERS OF ATTORNEY
<TEXT>
<PAGE>
Ex24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 14th day of March, 2001.
/s/ Robert N. Burt
------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 14th day of March, 2001.
/s/ Joseph H. Netherland
------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 17th day of March, 2001.
/s/ William G. Walter
---------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ Albert J. Costello
----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ Enrique J. Sosa
-------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ James R. Thompson
---------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 14th day of March, 2001.
/s/ Patricia A. Buffler
-----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 13th day of March, 2001.
/s/ Clayton Yeutter
-------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ Asbjorn Larsen
------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ Edward J. Mooney
--------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold
one or more positions in the Corporation whether as an Officer, a Director, or
both, such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ B. A. Bridgewater, Jr.
--------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 2000 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold
one or more positions in the Corporation whether as an Officer, a Director, or
both, such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 16th day of February, 2001.
/s/ William F. Reilly
---------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred
to as the "Company"), proposes to file with the Securities and Exchange
Commission an Annual Report on Form 10-K for the year ended December 31, 2000
under the Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold
one or more positions in the Corporation whether as an Officer, a Director, or
both, such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W. H.
Schumann, S. F. Gates, and S. H. Shapiro or any of them, his attorney for him or
her and in his or her name, place and stead, and in each of his or her offices
and capacities in the Company as may now or hereafter exist, to sign and file
said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as
of the 16th day of February, 2001.
/s/ Paul L. Davies, Jr.
-----------------------
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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