ANNUAL REPORT 2016//FMC CORPORATION A MESSAGE TO OUR SHAREHOLDERS A LETTER FROM PIERRE R. BRONDEAU PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD FMC CORPORATION In last year’s annual report, I discussed our journey to unlock FMC’s growth potential by transforming our enterprise into a highly focused specialty chemicals company with leading positions in agriculture, health and nutrition, and lithium technologies. We made strong progress on this important journey in 2016 by executing our strategy across the organization. BUILT FOR PERFORMANCE coming years, including our newest fungicide active ingredient FMC Agricultural Solutions (AI), bixafen, which began the registration process in the U.S. and Canada in the fourth quarter 2016. Our Agricultural Solutions business operates a unique, variable- cost manufacturing and supply chain model that provides FMC innovations extend well beyond traditional crop protection significant operating flexibility, lower costs and strong operating solutions. During the last five years, we have invested in a robust margins. We have expanded and refined this model for nearly plant health platform that includes biologicals, micronutrients 15 years. and seed treatment applications. These new products offer an improved environmental profile and give farmers more tools to The Cheminova integration, largely completed in 2016, has combat pests that destroy crops and reduce yields. In 2016, we delivered new direct-market access channels, broadened our launched a new biological seed treatment, received “fast track” product lines and technologies, and strengthened operating regulatory review for two new biopesticide products in Brazil that performance in key regions around the world. we expect to launch in 2017, submitted registrations for two new biological products and expanded the geographic reach of our The sustainable growth of FMC Agricultural Solutions, and our micronutrients business with 30 new registrations and more than ability to address farmers’ ongoing challenges to safely and 60 additional registrations initiated. efficiently protect their crops, depend on a continuing stream of innovative, differentiated products. Despite a challenging market over the last few years, we continued to invest in our technology FMC Health and Nutrition pipeline. FMC today has a strong and broad agchem innovation Demand for healthy and convenient foods, dietary supplements and pipeline that will fuel our growth over the next decade. effective pharmaceuticals continues to grow throughout the world. This trend is especially evident in Asia and other emerging markets where consumers’ standard of living and increased health awareness are accelerating the demand for protein, better food ingredients DURING THE LAST FIVE YEARS, and more effective medicines and personal care products. WE HAVE INVESTED IN A ROBUST PLANT We are the world’s premier innovator and producer of natural HEALTH PLATFORM THAT INCLUDES ingredients and excipients derived from seaweed, cellulose and BIOLOGICALS, MICRONUTRIENTS AND other renewable resources. FMC products are used in leading SEED TREATMENT APPLICATIONS. food, supplement and pharmaceutical brands around the world. Our formulation expertise is unsurpassed in the marketplace. FMC's reputation is rooted in exceptional quality and reliability, strong relationships with leading food and pharmaceutical Our R&D organization is working on nine synthetic active customers, deep experience in regulated end-markets and a ingredients, many of which are in mid- to late-stage development. network of efficient manufacturing and formulation laboratories in They will feed our formulation and new product platforms in the every region. In 2016, FMC Health and Nutrition started a new microcrystalline DELIVERING PERFORMANCE SAFELY AND SUSTAINABLY cellulose (MCC) manufacturing plant in Rayong, Thailand, to The safety of our people and the responsible development, production meet growing demand for colloidal MCC used in high protein and use of our products are central to our corporate values. beverages and foods throughout Asia. The site will produce a variety of MCC and blended MCC commercial grade products FMC’s 2016 injury rate of 0.22 is less than half of the previous starting in early 2017. two years and is considerably less than the previous record low of 0.41 in 2013. In fact, 0.22 is the lowest full-year injury rate FMC Lithium since the company began keeping records. Additionally, FMC The energy storage market is growing at double-digit rates, achieved an injury-free fourth quarter in 2016, a perfect capstone powered by the continuing adoption of hybrid and electric to a year of safety milestones. vehicles (EV) and their use of higher performance lithium ion batteries. Manufacturers are extending the EV market to a In 2016, FMC was recognized with the American Chemistry broader audience by designing and producing next generation Council’s (ACC) “Initiative of the Year” Award for our new EVs with longer driving ranges and more attractive price points. approach to identifying, analyzing and managing process safety risks. This is the second consecutive “Initiative of the Year” Award Total EV sales are expected to grow at a compounded annual ® growth rate of over 30 percent through 2020. for FMC, following ACC’s 2015 recognition for our TH!NK. SAFE. global safety awareness and education program. During the last several years, FMC developed a specialty lithium strategy that addressed market trends while taking full advantage of our technology. Today, we are a leading TOTAL RECORDABLE INCIDENT RATE // 2011 - 2016 producer of lithium hydroxide for high performance EV batteries. Our manufacturing expertise, technology, product quality and collaborative relationships with battery and EV manufacturers are .74 unmatched. Furthermore, we continue to lead in other specialty lithium products, such as butyllithium used in the production of .63 polymers, pharmaceuticals and agricultural products. .51 .51 FMC took several actions in 2016 to meet the growing demand .41 for these lithium products. We invested in a new lithium hydroxide unit near Shanghai, China, which will increase our capacity by 80 percent. Also in 2016, we pursued important .22 projects to bolster our supply of lithium carbonate, the feedstock for downstream lithium products. These actions included a new long-term carbonate supply agreement and production debottlenecking at our Argentina facility. 2011 2012 2013 2014 2015 2016 10% SAFETY // A Core Value Leadership Accountability Focus Learning Investing in supervisor training Ensuring that safety is first in Introducing targeted safety Expanding the sharing of across the organization; everything we do; encouraging improvement programs, such as lessons learned from injuries engaging safety leadership individual accountability for hand safety, manual handling and incidents across businesses at all levels of the company. taking actions, controlling improvements and greater and regions; improving training hazards and stopping work hazard recognition. and implementation of safety when hazards are encountered. critical standards. 2016 Annual Report 1 We continued to advance our sustainability commitments by * focusing on three pillars: People, Products and Responsibility. $578 Throughout 2016 the company achieved significant milestones $3.3 by fulfilling its top sustainability commitments, including: ADJUSTED • Receiving an A- from the CDP climate change program, ANNUAL placing the company in the “Leadership” scoring category OPERATING after its first time reporting. SALES PROFIT • Publishing 2020 (Innovation and Business Practices) and (BILLIONS) (MILLIONS) 2025 (Operations) sustainability metrics and goals, which include targets for Innovation, Safety and Community Engagement; and reductions in Water, Waste, Energy and Greenhouse Gas intensities. * * • Publishing FMC’s first “Communication on Progress” for $2.82 11.3% the United Nations Global Compact that addresses the 10 Human Rights Principles. ADJUSTED RETURN ON • Earning LEED Gold certification for energy and water EARNINGS INVESTED efficiency, superior indoor air quality and use of sustainable PER SHARE materials in the interior space of our new headquarters CAPITAL in Philadelphia. FMC IS BUILT FOR PERFORMANCE— $1.56 $212 TODAY AND WELL INTO THE FUTURE. GAAP GAAP NET EARNINGS INCOME PER SHARE (MILLIONS) 2016 FINANCIAL PERFORMANCE HIGHLIGHTS *See Non-GAAP Reconciliations on page 8. For the year ending December 31, 2016, FMC Corporation posted the following results: EXECUTING OUR STRATEGY FMC Agricultural Solutions 2016 was a strong year for FMC. We continued to manage • Full-year segment revenue: $2.27 billion our Agricultural Solutions business with discipline in the face of ongoing market challenges. We began operations at a new • Full-year segment earnings: $400 million Health and Nutrition plant in Thailand to meet growing demand FMC Health and Nutrition for our market-leading MCC products. We increased investments in FMC Lithium to ensure the business can meet the short- and • Full-year segment revenue: $744 million long-term demands for high-purity lithium products in an exciting, • Full-year segment earnings: $191 million growing market. We aggressively managed working capital and paid down $240 million in Cheminova acquistion-related debt. FMC Lithium And we made great progress toward accomplishing our ultimate • Full-year segment revenue: $264 million goal of zero injuries. FMC is built for performance—today and • Full-year segment