FMC Corporation

04/30/2026 | Press release | Distributed by Public on 04/30/2026 12:51

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains certain forward-looking statements that are based on our current views and assumptions regarding future events, future business conditions and the outlook for our company based on currently available information.
In some cases, we have identified these forward-looking statements by such words or phrases as "outlook," "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "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 or phrases. Such forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. The forward-looking 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 statements are qualified by reference to the risk factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), the section captioned "Forward-Looking Information" in Part II of the 2025 Form 10-K and to similar risk factors and cautionary statements in all other reports and forms filed with the Securities and Exchange Commission ("SEC"). We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are qualified in their entirety by the above cautionary statement.
We specifically decline to undertake any obligation, and specifically disclaim any duty, 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, except as may be required by law.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have described our accounting policies in Note 1 to our consolidated financial statements included in our 2025 Form 10-K. We have reviewed these accounting policies, identifying those that we believe to be critical to the preparation and understanding of our consolidated financial statements. We have reviewed these critical accounting policies with the Audit Committee of our Board of Directors. Critical accounting policies are central to our presentation of results of operations and financial condition and require management to make estimates and judgments on certain matters. We base our estimates and judgments on historical experience, current conditions and other reasonable factors.
The following is a list of those accounting policies that we have deemed most critical to the presentation and understanding of our results of operations and financial condition. See the "Critical Accounting Policies and Estimates" section in our 2025 Form 10-K for a detailed description of these policies and their potential effects on our results of operations and financial condition.
•Revenue recognition and trade receivables
•Environmental obligations and related recoveries
•Impairment and valuation of long-lived assets and indefinite-lived assets
•Pensions and other postretirement benefits
•Income taxes
RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS AND REGULATORY ITEMS
See Note 2 to the consolidated financial statements included in this Form 10-Q for a discussion of recently issued and adopted accounting guidance and regulatory items.
OVERVIEW
FMC Corporation is a global agricultural sciences company dedicated to providing farmers innovative solutions that increase the productivity and resilience of their land. We operate in a single distinct business segment. We develop, market and sell all three major classes of crop protection chemicals (insecticides, herbicides and fungicides) as well as biologicals, crop nutrition, and seed treatment products, which we group as plant health. FMC's innovative crop protection solutions help growers produce food, feed, fiber and fuel for an expanding world population while adapting to a changing environment. FMC is committed to discovering new insecticide, herbicide, and fungicide active ingredients, product formulations and pioneering technologies that are consistently better for the planet.
India Held for Sale Business
In July 2025, the Board of Directors approved a plan to divest the Company's commercial business in India in response to ongoing challenges in the country. FMC plans to continue to actively participate in the India market through a supply agreement with the eventual buyer of the business for its patented and data-protected portfolio, ranging from new diamide technologies to active ingredients and biologicals. The Company will continue its active ingredients manufacturing operations in India. The sale process is underway and is expected to conclude during 2026; and, therefore, the assets related to this business have been classified as held for sale since the third quarter of 2025. Although the business does not qualify for recognition as discontinued operations and will continue to be presented in the Company's reported results until a transaction is completed, we believe excluding India's operating results from our non-GAAP measures during the held for sale period, beginning with the third quarter of 2025, provides management and investors with useful supplemental information regarding our ongoing financial performance. Refer to the table below for the adjustments related to the India held for sale business for the three months ended March 31, 2026.
Three Months Ended
March 31, 		Affected Line Item in the Consolidated Statements of Income (Loss)
(in Millions) 2026 2025
Operating results $ 34.1 $ -
Revenue, Cost of sales and services, and Selling, general and administrative expenses
Asset impairment (20.4) - Restructuring and other charges (income)
Third party provider costs 2.7 - Restructuring and other charges (income)
India held for sale business $ 16.4 $ -
Balance sheet impact - The carrying value of the India held for sale business decreased from $450 million as of December 31, 2025 to $425.0 million as of March 31, 2026 primarily due to receivable collections during the period. The carrying value of the held for sale business is comprised of $445.4 million of net assets held for sale as presented on the consolidated balance sheet and a gain of $20.4 million related to foreign currency translation in connection with the assets identified for disposal. The foreign currency translation gains are recorded in "Accumulated other comprehensive loss (gain)" on the consolidated balance sheet and will be reclassified to the consolidated statement of income (loss) upon close of the sale.
First Quarter 2026 Highlights
The following items are the financial highlights of our business during the three months ended March 31, 2026 compared to the three months ended March 31, 2025:
•Revenue of $758.6 million for the three months ended March 31, 2026 decreased $32.8 million, or approximately 4 percent, versus the prior year period driven by lower pricing to diamide partners, pricing actions on branded Rynaxypyr® active and a competitive market for legacy core products, particularly in Latin America. Volume improved due to strong growth in Europe, Middle East and Africa and North America. On a regional basis, sales in Europe, Middle East and Africa increased approximately 13 percent, sales in North America increased by approximately 6 percent, sales in Latin America decreased approximately 14 percent, and sales in Asia decreased approximately 39 percent. A more detailed review of revenue is discussed under the section titled "Results of Operations."
•Our gross margin of $246.6 million decreased versus the prior year quarter by $70.1 million. Gross margin as a percent of revenue of approximately 33 percent decreased compared to approximately 40 percent in the prior year period. The decrease in gross margin percentage was primarily driven by competitive pricing pressure and higher costs due to tariffs and unfavorable raw material costs partially offset by volume improvement during the period.
•Selling, general and administrative expenses increased from $172.0 million to $185.1 million, or approximately 8 percent versus the prior year period to support investment in new products. Research and development expenses of $65.5 million decreased $3.2 million or 5 percent, compared to the previous year. The decrease in spending on research and development relates to the timing of project expenses as well as continued cost reduction efforts in connection with restructuring activities.
•Net loss attributable to FMC stockholders of $281.3 million increased $265.8 million from net loss of $15.5 million in the prior year period largely driven by the provision for income taxes of $112.1 million, which included an increase to our valuation allowance in Switzerland primarily as a result of changes in global earnings mix and ongoing tax planning implemented in March 2026. During the three months ended March 31, 2026, our restructuring and other charges (income) also increased by $59.2 million primarily due to costs incurred in connection with Project Foundation, which is the recently announced comprehensive plan to further optimize FMC's cost structure and organizational operations. Favorable adjustments recorded in connection with the India held for sale business partially offset the costs incurred for Project Foundation. Increased interest expense and adjustments related to the retained liabilities from our previous discontinued operations also contributed to the change in net loss for the period. Adjusted after-tax loss from continuing operations attributable to FMC stockholders of $28.9 million decreased compared to the prior year adjusted after-tax earnings of $22.4 million, or approximately $51.3 million, primarily as a result of competitive pricing pressure and higher costs partially offset by higher volumes during the period. See the disclosure of our Adjusted earnings (loss) non-GAAP financial measurement below, under the section titled "Results of Operations."
2026 Priorities and Strategic Review
In 2026, we plan to focus on executing our operational priorities, one of which is strengthening the balance sheet by paying down debt through asset sales and licensing agreements, including the previously announced sale of our India commercial business which is classified as held for sale. Our priorities also include improving the competitiveness of the company's legacy core portfolio, managing the post-patent transition for Rynaxypyr® active, and supporting the growth of new active ingredients, such as Isoflex® active, fluindapyr, Dodhylex™ active and rimisoxafen. However, we expect continued pressure on price during the year due to competitive market dynamics for core portfolio products and lower Rynaxypyr® active pricing. We will maintain our focus on reducing costs, which are expected to be lower for the full year despite pressure in the first quarter due to the timing of tariffs and manufacturing variances.
Additionally, as announced in February 2026, the Board of Directors has authorized the exploration of strategic options, including but not limited to, the sale of the company. FMC's four new active ingredients, along with its broader development pipeline, are unique and transformative. The company believes there is significant opportunity to enhance shareholder value and ensure the long-term success of our portfolio by accelerating growth and delivering enhanced financial results with additional investment in these technologies. The strategic review is at a preliminary stage, and there can be no assurance that the process will result in any transaction.
RESULTS OF OPERATIONS
Overview
The following charts provide a reconciliation of adjusted EBITDA, adjusted Earnings, revenue excluding India, organic revenue growth and return on invested capital ("ROIC"), all of which are non-GAAP financial measures, from the most directly comparable GAAP measure. Adjusted EBITDA, revenue excluding India, and organic revenue growth are provided to assist the readers of our financial statements with useful information regarding our operating results. Our operating results are presented based on how we assess operating performance and internally report financial information. For management purposes, we report operating performance based on earnings before interest, income taxes, depreciation and amortization, discontinued operations, and corporate special charges. Our adjusted earnings measure excludes corporate special charges, net of income taxes, discontinued operations attributable to FMC stockholders, net of income taxes, and certain non-GAAP tax adjustments. Beginning in the third quarter of 2025, the operating results of the India commercial business during the held for sale period are excluded from our adjusted EBITDA and adjusted Earnings measures. The adjustments previously noted, as well as the India held for sale business, are excluded by us in the measure we use to evaluate business performance and determine certain performance-based compensation. Organic revenue growth excludes the impacts of foreign currency changes and the India held for sale business during the held for sale period beginning in the third quarter of 2025, which we believe is a meaningful metric to evaluate our revenue changes. These items are discussed in detail within the "Other Results of Operations" section that follows. In addition to providing useful information about our operating results to investors, we also believe that excluding the effect of corporate special charges, net of income taxes, and certain non-GAAP tax adjustments from operating results and discontinued operations allows management and investors to compare more easily the financial performance of our underlying business from period to period. These measures should not be considered as substitutes for net income (loss) or other measures of performance or liquidity reported in accordance with U.S. GAAP.
Three Months Ended March 31,
2026 2025
(in Millions) (unaudited)
Revenue $ 758.6 $ 791.4
Costs and Expenses
Costs of sales and services 512.0 474.7
Gross margin $ 246.6 $ 316.7
Selling, general and administrative expenses 185.1 172.0
Research and development expenses 65.5 68.7
Restructuring and other charges (income) 77.0 17.8
Total costs and expenses $ 839.6 $ 733.2
Income from continuing operations before non-operating pension, postretirement and other charges (income), interest expense, net and income taxes(1)
$ (81.0) $ 58.2
Non-operating pension, postretirement and other charges (income) 3.4 3.2
Income from continuing operations before interest expense, net and income taxes $ (84.4) $ 55.0
Interest expense, net 64.8 50.1
Income (loss) from continuing operations before income taxes $ (149.2) $ 4.9
Provision (benefit) for income taxes 112.1 13.5
Income (loss) from continuing operations $ (261.3) $ (8.6)
Discontinued operations, net of income taxes (19.9) (7.0)
Net income (loss) (GAAP) $ (281.2) $ (15.6)
Adjustments to arrive at Adjusted EBITDA (non-GAAP):
Corporate special charges (income):
Restructuring and other charges (income)(3)
$ 94.7 $ 17.8
Non-operating pension, postretirement and other charges (income)(4)
3.4 3.2
India held for sale business (5)
16.4 -
Discontinued operations, net of income taxes 19.9 7.0
Interest expense, net 64.8 50.1
Depreciation and amortization 42.0 43.7
Provision (benefit) for income taxes 112.1 13.5
Adjusted EBITDA (non-GAAP)(2)
$ 72.1 $ 119.7
____________________
(1)Referred to as operating profit.
(2)Adjusted EBITDA is defined as operating profit excluding corporate special charges (income), depreciation and amortization expense, and the India held for sale business.
(3)In the reconciliation above, favorable adjustments recorded in connection with the India held for sale business of $17.7 million for the three ended March 31, 2026 are presented in the India held for sale business line. On the consolidated statements of income (loss), these adjustments are recorded to "Restructuring and other charges (income)." See Note 8 for details of restructuring and other charges (income).
(4)Our non-operating pension, postretirement and other charges (income) includes those costs (benefits) related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These are excluded from our operating results and are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance, and we consider these costs to be outside our operational performance. We continue to include the service cost and amortization of prior service cost in our operating results noted above. These elements reflect the current year operating costs to our business for the employment benefits provided to active employees.
(5)Beginning with the third quarter of 2025, we excluded the operating results of the India commercial business during the held for sale period for non-GAAP purposes. Refer to the India Held for Sale Business section for further details on the charges and write-downs recorded during the period.
ADJUSTED EARNINGS (LOSS) RECONCILIATION
Three Months Ended March 31,
2026 2025
(in Millions) (unaudited)
Net income (loss) attributable to FMC stockholders (GAAP) $ (281.3) $ (15.5)
Corporate special charges (income), pre-tax (1)
98.1 21.0
India held for sale business (2)
16.4 -
Income tax expense (benefit) on Corporate special charges (income) (3)
(18.3) (4.4)
Corporate special charges (income), net of income taxes $ 96.2 $ 16.6
Discontinued operations attributable to FMC Stockholders, net of income taxes 19.9 7.0
Non-GAAP tax adjustments (4)
136.3 14.3
Adjusted after-tax earnings (loss) from continuing operations attributable to FMC stockholders (non-GAAP) $ (28.9) $ 22.4
____________________
(1)Represents restructuring and other charges (income), and non-operating pension, postretirement and other charges (income). In the reconciliation above, favorable adjustments recorded in connection with the India held for sale business of $17.7 million for the three ended March 31, 2026 are presented in the India held for sale business line. On the consolidated statements of income (loss), these adjustments are recorded to "Restructuring and other charges (income)." See Note 8 for details of restructuring and other charges (income).
(2)Beginning with the third quarter of 2025, we excluded the operating results of the India commercial business during the held for sale period for non-GAAP purposes. Refer to the India Held for Sale Business section for further details on the charges and write-downs recorded during the period.
(3)The income tax expense (benefit) on corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the corporate special charge (income) occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure.
(4)We exclude the GAAP tax provision, including discrete items, from the non-GAAP measure of income, and include a non-GAAP tax provision based upon the projected annual non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax items including, but are not limited to: income tax expenses or benefits that are not related to continuing operating results in the current year; tax adjustments associated with fluctuations in foreign currency remeasurement of certain foreign operations; certain changes in estimates of tax matters related to prior fiscal years; certain changes in the realizability of deferred tax assets and related interim accounting impacts; and changes in tax law. In 2024 and 2023, we recorded significant deferred tax assets due to various tax incentives granted to the Company's Swiss subsidiaries (the "Swiss Tax Incentives"). The initial recognition of these Swiss Tax Incentives did not impact our adjusted non-GAAP effective tax rate but will be considered annually as we realize the benefits. Management believes excluding these discrete tax items, as well as the impacts of the Swiss Tax Incentives annually as the related benefits are realized, assists investors and securities analysts in understanding the tax provision and the effective tax rate related to continuing operating results thereby providing investors with useful supplemental information about FMC's operational performance. See Provision for income taxes within this section of this Form 10-Q for a reconciliation of the non-GAAP tax provision from the GAAP tax provision.
RECONCILIATION OF REVENUE (GAAP)
TO REVENUE EXCLUDING INDIA (NON-GAAP)(2)
Three Months Ended March 31,
2026 2025
Revenue (GAAP) $ 758.6 $ 791.4
Less: Revenue from India commercial business (1)
(3.8) -
Revenue excluding India (non-GAAP)(2)
$ 762.4 $ 791.4
___________________
(1)Beginning with the third quarter of 2025, revenue from the India commercial business is excluded from our adjusted results during the held for sale period for non-GAAP purposes.
(2)Although the India held for sale business does not qualify for recognition as discontinued operations, we believe Revenue excluding India (non-GAAP) provides management and investors with useful supplemental information regarding our ongoing revenue performance.
RECONCILIATION OF REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE CHANGE (NON-GAAP)(1)
Three Months Ended March 31, 2026 vs. 2025
Total Revenue Change (GAAP) (4) %
Less: Revenue for India held for sale business for the three months ended March 31, 2026
- %
Revenue Excluding India Change (non-GAAP)(1)
(4) %
Less: Foreign Currency Impact 5 %
Organic Revenue Change (non-GAAP) (9) %
___________________
(1)Beginning with the third quarter of 2025, revenue from the India commercial business is excluded from our adjusted results during the held for sale period for non-GAAP purposes, as described in note 4 in the Adjusted EBITDA reconciliation above.
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO
FMC STOCKHOLDERS (GAAP) TO RETURN ON INVESTED CAPITAL ("ROIC")
NUMERATOR (NON-GAAP) AND ADJUSTED ROIC (USING NON-GAAP NUMERATOR)
We believe Adjusted ROIC provides management and investors with useful supplemental information regarding our utilization of capital provided by both equity and debt as well as our working capital and free cash flow management. Additionally, vesting of certain restricted stock awards granted to officers is connected to Adjusted ROIC as a performance metric.
Twelve Months Ended
March 31, 2026
Net income (loss) attributable to FMC stockholders (GAAP)
$ (2,504.7)
Interest expense, net, net of income taxes 218.7
Corporate special charges (income) 1,871.5
India held for sale business 538.1
Income tax expense (benefit) on Corporate special charges (income) (172.0)
Discontinued operations attributable to FMC stockholders, net of income taxes 49.5
Tax adjustments 538.3
ROIC numerator (non-GAAP) $ 539.4
March 31, 2026 March 31, 2025
Total debt $ 4,533.6 $ 4,003.5
Total FMC stockholders' equity 1,822.1 4,382.0
Total debt and FMC stockholders' equity (GAAP)
$ 6,355.7 $ 8,385.5
ROIC denominator (2 yr average total debt and FMC stockholders' equity) $ 7,370.6
ROIC (using Net income (loss) attributable to FMC stockholders (GAAP) as numerator)
(33.98) %
Adjusted ROIC (using non-GAAP numerator) 7.32 %
Results of Operations
In the discussion below, all comparisons are between the periods unless otherwise noted. In certain instances, parts included in the variance explanations in the discussion below may not sum to the total variance for the financial statement line item due to rounding.
Revenue
Three Months Ended March 31, 2026 vs. 2025
Revenue of $758.6 million decreased $32.8 million, or approximately 4 percent, versus the prior year period. Excluding the India held for sale business for the three months ended March 31, 2026, revenue decreased $29.0 million, or approximately 4 percent, primarily driven by a price decline of 6 percent driven by lower pricing to diamide partners, pricing actions on branded Rynaxypyr® and a competitive market for legacy core products, particularly in Latin America. The decrease in price was partially offset by an increase in volumes of 2 percent due to strong growth in Europe, Middle East and Africa and North America. Foreign currency was a tailwind of approximately 5 percent during the period. The removal of India revenue for the three months ended March 31, 2026 as compared to the inclusion of India revenue in the three months ended March 31, 2025 accounted for a decrease in revenue of approximately 5 percent during the period.
Total Revenue by Region
Three Months Ended March 31,
(in Millions) 2026 2025
North America $ 197.6 $ 186.4
Latin America 177.0 206.8
Europe, Middle East & Africa (EMEA) 306.9 272.8
Asia 77.1 125.4
Total Revenue $ 758.6 $ 791.4
Three Months Ended March 31, 2026 vs. 2025
North America: Revenue increased approximately 6 percent year-over-year (up 4 percent organically) driven by volume growth for branded products, particularly herbicides, partially offset by lower pricing due to competition and actions on branded Rynaxypyr® active.
Latin America: Revenue decreased approximately 14 percent versus the first quarter of 2025 (down 21 percent organically) primarily due to lower pricing and limited volume growth on core portfolio products driven by generic pressure in the market.
EMEA: Revenue increased approximately 13 percent (up 4 percent organically) compared to the prior year period driven by growth in branded products specifically herbicides and Cyazypyr® active. The increase was partially offset by expected registration losses during the period.
Asia: Revenue decreased approximately 39 percent year-over-year. Revenue excluding India (non-GAAP) for the three months ended March 31, 2026 was down 36 percent (down 38 percent organically) year-over-year primarily due to pricing pressure caused by generic competition in the region. Grower economics were challenged amid current geopolitical uncertainty, which led to lower volumes primarily for insecticides.
Gross margin
Three Months Ended March 31, 2026 vs. 2025
Gross margin of $246.6 million decreased by $70.1 million, or approximately 22 percent versus the prior year period. Volume improvement and foreign currency tailwinds during the period resulted in an increase of 3 percent and 7 percent, respectively. These increases were fully offset by lower pricing of 16 percent due to competitive market pressure and higher costs of 10 percent due to tariffs and unfavorable raw material costs. The change in gross margin for the India held for sale business contributed to the decrease in gross margin by approximately 6 percent. Gross margin percent of approximately 33 percent decreased compared to approximately 40 percent in the prior year period as a result of the lower pricing and higher costs during the period.
Selling, general and administrative expenses
Three Months Ended March 31, 2026 vs. 2025
Selling, general and administrative expenses of $185.1 million increased by $13.1 million, or 8 percent, versus the prior year period primarily as a result of continued investment to support new products.
Research and development expenses
Three Months Ended March 31, 2026 vs. 2025
Research and development expenses of $65.5 million decreased by $3.2 million or 5 percent compared to the previous year primarily due to the timing of project expenses as well as continued cost reduction efforts in connection with restructuring activities.
Depreciation and amortization
Three Months Ended March 31, 2026 vs. 2025
Depreciation and amortization of $42.0 million decreased by $1.7 million or 4 percent compared to the prior year period of $43.7 million primarily as a result of certain assets being fully amortized during the prior year.
Interest expense, net
Three Months Ended March 31, 2026 vs. 2025
Interest expense, net of $64.8 million increased by $14.7 million or 29 percent compared to the prior year period of $50.1 million primarily driven by higher domestic long-term balances and rates as a result of our Subordinated Notes offering completed in May 2025, which increased interest expense by $9.4 million as well as an increase of $6.5 million driven by higher domestic debt balances. The increase was partially offset by a decrease of $1.2 million driven by lower foreign debt balances and rates.
Corporate special charges (income)
Restructuring and other charges (income)
Three Months Ended March 31,
(in Millions) 2026 2025
Restructuring charges $ 94.5 $ 13.6
Other charges (income), net (17.5) 4.2
Total restructuring and other charges (income) $ 77.0 $ 17.8
Three Months Ended March 31, 2026 vs. 2025
Restructuring and other charges (income) of $94.5 million is primarily comprised of $90.1 million in charges related to Project Foundation, which is management's comprehensive plan to further optimize FMC's cost structure and organizational operations. The charges for Project Foundation include non-cash asset write-off and accelerated depreciation costs of $64.7 million primarily associated with the planned exit of certain production activities. We also incurred severance and employee separation costs of $6.2 million and other miscellaneous charges of $19.2 million, which include contract exit costs and professional service provider costs.
In connection with Project Foundation, the Company expects to incur pre-tax restructuring charges over the life of the program in the range of approximately $560 million to $635 million, which is subject to future changes, in connection with these efforts. The Company expects non-cash asset write-off and/or accelerated depreciation charges in the range of $420 million to $440 million, primarily related to the planned exit of production activities and manufacturing operations at certain manufacturing sites. In addition to the non-cash write-off charges, the Company expects to incur $140 to $195 million of cash expenditures in connection with these activities: the Company estimates total severance charges and related benefit costs to be in the range of $50 to $80 million; the Company expects to incur cash consulting and other professional service fees totaling approximately $10 to $20 million to help execute these actions; and additionally, we may incur $80 to $95 million in other cash charges, such as decommissioning costs and contract termination charges. We may incur additional charges in connection with Project Foundation and will provide an estimate of any additional charges when known. Restructuring actions under the program are expected to be substantially complete by the end of 2027.
During the three months ended March 31, 2026, we also recorded Project Focus-related costs of $4.3 million, primarily related to miscellaneous charges associated with previously implemented activities. Any remaining amounts incurred in connection with remaining activities under the program, which are not expected to be material, will be reflected in our consolidated results of operations as they become probable and estimable or a triggering event is identified in accordance with the relevant accounting guidance. During the three months ended March 31, 2026, we also recorded charges of $0.1 million for miscellaneous activity related to previously implemented restructuring initiatives.
Other income of $17.5 million is primarily related to adjustments recorded in connection with the India held for sale business. The carrying value of the India held for sale business decreased from $450 million as of December 31, 2025 to $425 million as of March 31, 2026 primarily due to receivable collections during the period. As a result of the activity during the period as well as foreign currency translation gains related to the assets identified for disposal, we recorded an impairment reversal of $20.4 million to record the assets at the estimated fair value, less costs to sell. During the three months ended March 31, 2026, we also incurred $2.7 million in charges for third party provider costs in connection with preparing the India business for sale. Other income also included charges of $3.9 million associated with our environmental sites and other miscellaneous income of $3.7 million.
Restructuring and other charges (income) during 2025 primarily consists of costs associated with the Project Focus restructuring initiative. Charges incurred related to Project Focus consist of $6.6 million of professional service provider costs and other miscellaneous charges associated with the project, $4.2 million of severance and employee separation costs, and accelerated depreciation of $3.1 million on assets identified for disposal in connection with the restructuring initiative. During the three months ended March 31, 2025, we also recorded income of $0.3 million for miscellaneous activity related to previously implemented restructuring initiatives.
Other charges (income) net in 2025 of $4.2 million is comprised of $3.5 million of charges associated with our environmental sites, and $0.7 million of other miscellaneous charges.
Non-operating pension, postretirement and other charges (income)
Three Months Ended March 31, 2026 vs. 2025
Charges for the three months ended March 31, 2026 were $3.4 million compared to $3.2 million for the three months ended March 31, 2025.
Provision for income taxes
Three Months Ended March 31, 2026 vs. 2025
The provision for income taxes for the three months ended March 31, 2026 was $112.1 million resulting in an effective tax rate of negative 75.1 percent. The provision for income taxes for the three months ended March 31, 2025 was $13.5 million resulting in an effective tax rate of 275.5 percent. The change in the effective tax rate from GAAP continuing operations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was driven by the factors shown in the table below as well as global mix of earnings.
Three Months Ended March 31,
2026 2025
(in Millions) Income (Expense) Tax Provision (Benefit) Effective Tax Rate Income (Expense) Tax Provision (Benefit) Effective Tax Rate
GAAP - Continuing operations $ (149.2) $ 112.1 (75.1) % $ 4.9 $ 13.5 275.5 %
Corporate special charges (income) 114.5 18.3 21.0 4.4
Revisions to valuation allowances of historical deferred tax assets (1)(2)
- (124.7) - 1.2
Net impact of Switzerland tax incentives(2)
- 5.5 - (2.8)
Foreign currency and other discrete items(2)
- (17.1) - (12.7)
Non-GAAP - Continuing operations $ (34.7) $ (5.9) 17.0 % $ 25.9 $ 3.6 14.0 %
_______________
(1)As a result of changes in global earnings mix and ongoing tax planning implemented in March 2026, we reevaluated the realizability of our historical deferred tax assets and recorded an increase to our valuation allowance in Switzerland of approximately $123 million during the three months ended March 31, 2026.
(2)Refer to Notes 3 and 4 of the Adjusted Earnings Reconciliation table within this section of this Form 10-Q for an explanation of tax adjustments.
Discontinued operations, net of income taxes
Our discontinued operations include provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities.
Three Months Ended March 31, 2026 vs. 2025
Discontinued operations, net of income taxes represented loss of $19.9 million for the three months ended March 31, 2026 compared to a loss of $7 million for the three months ended March 31, 2025. The activity in both the three months ended March 31, 2026 and 2025 was primarily due to adjustments related to the retained liabilities from our previous discontinued operations.
Net income (loss)
Three Months Ended March 31, 2026 vs. 2025
The net loss recognized during the period was $281.2 million as compared to net loss of $15.6 million in the prior year period. During the three months ended March 31, 2026, our net loss increased as a result of the provision for income taxes of $112.1 million driven by an increase to our valuation allowance in Switzerland primarily as a result of changes in global earnings mix and ongoing tax planning implemented in March 2026. The net loss was also driven by an increase in restructuring and other charges (income) incurred during the period in connection with Project Foundation. Favorable adjustments recorded in connection with the India held for sale business partially offset the costs incurred for Project Foundation. Increased interest expense and adjustments related to the retained liabilities from our previous discontinued operations also contributed to the change in net loss for the period.
The only difference between Net income (loss) and Net income (loss) attributable to FMC stockholders is noncontrolling interest, which period over period is immaterial.
Adjusted EBITDA (non-GAAP)
The Adjusted EBITDA amounts discussed below for three months ended March 31, 2026 and 2025 are reconciled from Net Income (loss) within this Form 10-Q. Refer to our Overview under the section titled "Results of Operations" above.
Three Months Ended March 31, 2026 vs. 2025
Adjusted EBITDA of $72.1 million decreased $47.6 million, or approximately 40 percent versus the prior year period. Higher volumes and foreign currency impacts resulted in an increase of approximately 9 percent and 18 percent. However, the increase was more than offset by pricing pressure of 42 percent resulting from increased competition in the market and unfavorable costs of approximately 25 percent primarily due to tariffs and unfavorable raw material costs.
LIQUIDITY AND CAPITAL RESOURCES
As a global agricultural sciences company, we require cash primarily for seasonal working capital needs, capital expenditures, and return of capital to shareholders. We plan to meet these liquidity needs through available cash, cash generated from operations, and borrowings under our committed Revolving Credit Facility as well as other liquidity facilities, and in certain instances access to debt capital markets.
Cash
Cash and cash equivalents at March 31, 2026 and December 31, 2025, were $390.9 million and $584.5 million, respectively. Of the cash and cash equivalents balance at March 31, 2026, $376.9 million was held by our foreign subsidiaries. We have established plans to repatriate cash from certain foreign subsidiaries with minimal tax on a go forward basis. Other cash held by foreign subsidiaries is generally used to finance subsidiaries' operating activities and future foreign investments. See Note 11 to the consolidated financial statements included within our 2025 Form 10-K for more information on our indefinite reinvestment assertion.
Outstanding debt
At March 31, 2026, we had total debt of $4,533.6 million as compared to $4,074.9 million at December 31, 2025. Total debt included $2,770.6 million and $2,769.8 million of long-term debt (excluding current portions of $590.1 million and $585.6 million) at March 31, 2026 and December 31, 2025, respectively. Our short-term debt consists of foreign borrowings and borrowings under our Revolving Credit Facility. Foreign borrowings decreased from $76.5 million at December 31, 2025 to $63.4 million at March 31, 2026. We had borrowings of $1,109.5 million and $643.0 million under our Revolving Credit Facility at March 31, 2026 and December 31, 2025, respectively. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries. See Note 9 and Note 18 in the consolidated financial statements included in this Form 10-Q for further details.
On April 16, 2026, the Company amended its credit agreement to modify the maximum leverage ratio and the minimum interest coverage ratio for certain quarters. As defined in Amendment No 6 (the "April 2026 Amendment"), the maximum leverage ratio shall not be tested in the first three quarters of 2026 and is then increased to 6.75 through the period ending December 31, 2027. The maximum leverage ratio will incrementally step down during the covenant relief period ending at 3.75 for the quarter ended March 31, 2029. The April 2026 Amendment also lowers the minimum interest coverage ratio to 2.00 through the period ending June 30, 2027. The minimum interest coverage ratio will incrementally step up during the covenant relief period ending at 3.50 for the quarter ended March 31, 2029. To secure the obligations under the Revolving Credit Facility, the Company designated certain of its subsidiaries as guarantors (the "Subsidiary Guarantors") and granted security interests in certain assets and pledged certain equity interests of the Company and the Subsidiary Guarantors. The April 2026 Amendment also makes certain modifications to the negative covenants on liens, fundamental changes, and indebtedness, and adds negative covenants on transfers of material assets and other items. Additionally, the April 2026 Amendment establishes a maximum secured leverage ratio (measured as the ratio of secured debt to adjusted earnings) of not more than 3.50 as of the last day of each quarter. We were in compliance with all covenants at March 31, 2026.
Access to credit and future liquidity and funding needs
As of March 31, 2026, borrowings under our Revolving Credit Facility were $1,109.5 million and letters of credit outstanding under the Revolving Credit Facility totaled $223.6 million. At March 31, 2026, our remaining borrowing capacity under our credit facility was $666.9 million. In accordance with U.S. GAAP, we have classified the borrowings under the Revolving Credit Facility as short-term debt. The Company intends to refinance any draw under the line of credit with successive short-term borrowings, as needed, through the maturity date in 2028. Our balances under the Revolving Credit Facility fluctuate from year to year depending on working capital needs.
Refer to the discussion regarding dividends in the Free Cash Flow (non-GAAP) section below for further details on the Board's decision to reduce the quarterly dividend beginning in December 2025.
Working Capital Initiatives
We offer to a select group of suppliers a voluntary supply chain finance program as part of our continued efforts to improve our working capital efficiency. We do not believe that changes in the availability of the supply chain finance program would have a significant impact on our liquidity. See Note 18 for more information on the key terms and balances of the program.
From time to time, the Company may sell receivables on a non-recourse basis to third-party financial institutions. These sales are normally driven by specific market conditions, including, but not limited to, foreign exchange environments, customer credit management, as well as other factors where the receivables may lay. See Note 5 for more information on receivables factoring.
Statement of Cash Flows
Cash provided (required) by operating activities of continuing operations was $(600.9) million and $(545.0) million for the three months ended March 31, 2026 and 2025, respectively.
The table below presents the components of net cash provided (required) by operating activities of continuing operations.
(in Millions) Three Months Ended March 31,
2026 2025
Income from continuing operations before non-operating pension, postretirement and other charges (income), interest expense, net and income taxes (GAAP)
$ (81.0) $ 58.2
Restructuring and other charges (income), non-cash commercial actions for India held for sale business and depreciation and amortization 153.1 61.5
Change in trade receivables, net (1)
(79.7) 19.5
Change in guarantees of vendor financing
(8.7) (12.1)
Change in advance payments from customers (2)
(256.8) (452.0)
Change in accrued customer rebates (3)
70.0 77.9
Change in inventories (4)
(82.5) (164.9)
Change in accounts payable (5)
(128.2) 46.1
Change in all other operating assets and liabilities (6)
(77.3) (61.9)
Restructuring and other spending (7)
(66.4) (57.2)
Environmental spending, continuing, net of recoveries (8)
(9.5) (6.2)
Pension and other postretirement benefit contributions (9)
(3.9) (1.3)
Net interest payments (10)
(22.9) (15.4)
Tax payments, net of refunds (11)
(7.1) (37.2)
Cash provided (required) by operating activities of continuing operations (GAAP) $ (600.9) $ (545.0)
____________________
(1)Both periods include the impacts of seasonality and the receivable build intrinsic in our business. The change in cash flows related to trade receivables in 2026 was driven by timing of collections as well as the timing of the application of advance payments as compared to prior year. Collection timing is more pronounced in certain countries such as Brazil where there may be terms significantly longer than the rest of our business. Additionally, timing of collection is impacted as amounts for both periods include carry-over balances remaining to be collected in Latin America, where collection periods are measured in months rather than weeks.
(2)Advance payments are primarily within North America and these payments are received in the fourth quarter of each year and recorded as deferred revenue on the balance sheet at December 31. Revenue associated with advance payments is recognized, generally in the first half of each year, as shipments are made and transfer of control to the customer takes place. The change in cash flows during 2026 was driven by the timing of the application of advance payments as compared to prior year.
(3)These rebates are primarily associated within North America, and to a lesser extent Brazil, and in North America generally settle in the fourth quarter of each year given the end of the respective crop cycle.
(4)Changes in inventory reflect the inventory build required in each period to meet projected demand.
(5)The 2026 change in cash flows was driven by the timing of payments made to suppliers and vendors. As of March 31, 2026, approximately 100% of our accounts payable balance was considered current, which we define as outstanding less than 30 days past the invoice due date. In accordance with our standard terms, invoices are held for payment when there is an open dispute with the vendor. The remaining balance of accounts payable primarily consists of invoices that meet this criterion.
(6)Changes in all periods presented primarily represent timing of payments associated with all other operating assets and liabilities.
(7)For additional detail on restructuring and other charges activities, see Note 8.
(8)The amounts represent environmental remediation spending at our operating sites which were recorded against pre-existing reserves, net of recoveries. Refer to Note 11 for more details.
(9)There were no voluntary contributions to our U.S. qualified defined benefit plan, which is slightly over funded, for the three months ended March 31, 2026 and 2025.
(10)Cash paid for interest, net was higher during 2026 primarily due to higher domestic long-term balances and rates as a result of the Subordinated Notes offering completed in May 2025.
(11)The change in net tax payments year over year primarily relates to Brazil and Mexico.
Cash provided (required) by operating activities of discontinued operations was $(15.7) million and $(13.3) million for the three months ended March 31, 2026 and 2025, respectively.
Cash required by operating activities of discontinued operations is directly related to environmental, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities.
Cash provided (required) by investing activities of continuing operations was $(16.2) million and $(38.0) million for the three months ended March 31, 2026 and 2025, respectively.
Cash required by investing activities of continuing operations decreased during the three months ended March 31, 2026 compared to the same period in the prior year primarily due to timing of payments related to capital expenditures.
Cash provided (required) by financing activities of continuing operations was $442.3 million and $552.1 million for the three months ended March 31, 2026 and 2025, respectively.
Cash provided by financing activities of continuing operations decreased during the three months ended March 31, 2026, compared to the same period in the prior year primarily due to the change in our short-term borrowings during each period. In the first quarter of 2026, borrowings under the Revolving Credit Facility increased compared to the prior-year end. However, in the first quarter of 2025, there was a larger increase in commercial paper borrowings to support our working capital build. Our cash flows provided by financing activities also decreased due to the reduction in our quarterly dividend, which was part of a broader response to the challenges the company is facing and to further prioritize debt reduction. There were no share repurchases during the three months ended March 31, 2026 and 2025 under the publicly announced program.
Free Cash Flow (Non-GAAP)
We define free cash flow, a non-GAAP financial measure, as all cash inflows and outflows excluding those related to financing activities (such as debt repayments, dividends, and share repurchases) and acquisition related investing activities. Additionally, in 2026, free cash flow will exclude the proceeds, net of transaction costs, from the sale of our India held for sale business. Therefore, our calculation of free cash flow will almost always result in a lower amount than cash from operating activities from continuing operations, the most directly comparable U.S. GAAP measure. However, the free cash flow measure is consistent with management's assessment of operating cash flow performance and we believe it provides a useful basis for investors and securities analysts about the cash generated by routine business operations, including capital expenditures, in addition to assessing our ability to repay debt, fund acquisitions including cost and equity method investments, and return capital to shareholders through share repurchases and dividends.
Our use of free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results under U.S. GAAP. First, free cash flow is not a substitute for cash provided (required) by operating activities of continuing operations, as it is not a measure of cash available for discretionary expenditures since we have non-discretionary obligations, primarily debt service, that are not deducted from the measure. Second, other companies may calculate free cash flow or similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a tool for comparison. Additionally, the utility of free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for a given period. Because of these and other limitations, free cash flow should be considered along with cash provided (required) by operating activities of continuing operations and other comparable financial measures prepared and presented in accordance with U.S. GAAP.
The table below presents a reconciliation of free cash flow from the most directly comparable U.S. GAAP measure:
FREE CASH FLOW RECONCILIATION
(in Millions) Three Months Ended March 31,
2026 2025
Cash provided (required) by operating activities of continuing operations (GAAP) (1)
$ (600.9) $ (545.0)
Capital expenditures (2)
(16.6) (31.6)
Other investing activities (2)
0.8 (5.8)
Capital additions and other investing activities $ (15.8) $ (37.4)
Cash provided (required) by operating activities of discontinued operations(3)
(15.7) (13.3)
Divestiture transaction costs (3)
4.3 -
Free cash flow (non-GAAP) (4)
$ (628.1) $ (595.7)
___________________
(1)The three months ended March 31, 2026 includes cash payments of $66.4 million primarily for restructuring activities related to the Project Focus transformation program as well as Project Foundation. The three months ended March 31, 2025 includes cash payments of $55.7 million for Project Focus.
(2)Components of cash provided (required) by investing activities of continuing operations. Refer to the below discussion for further details.
(3)Represents third party provider costs associated with the expected sale of our India commercial business. Proceeds from the sale of our India commercial business anticipated in 2026 will be excluded from free cash flow when received. Therefore, we have also excluded the related transaction costs from free cash flow.
(4)Refer to the above discussion for further details.
2026 Cash Flow Outlook
Our cash needs for 2026 include operating cash requirements (particularly working capital, as well as environmental, asset retirement obligation, and restructuring spending), capital expenditures, as well as mandatory payments of debt and dividend payments. We plan to meet our liquidity needs through available cash, cash generated from operations and borrowings under our committed Revolving Credit Facility. At March 31, 2026, our remaining borrowing capacity under our credit facility was $666.9 million.
We expect 2026 cash provided (required) by operating activities of continuing operations and free cash flow (non-GAAP) to increase primarily due to lower cash taxes and improved working capital performance, including other assets and liabilities, partially offset by lower Adjusted EBITDA and higher restructuring spending. We also expect the proceeds from the anticipated completion of the sale of our India commercial business to be used to pay down debt.
Key cash requirements included in cash provided (required) by operating activities of continuing operations
Pension
We do not expect to make any voluntary cash contributions to our U.S. qualified defined benefit pension plan in 2026. The plan is slightly over funded and our portfolio is comprised of 100 percent fixed income securities and cash. Our investment strategy is a liability hedging approach with an objective of maintaining the funded status of the plan such that the funded status volatility is minimized and the likelihood that we will be required to make significant contributions to the plan is limited.
Environmental
Projected 2026 spending, net of recoveries includes approximately $50 million to $60 million of net environmental remediation spending for our sites accounted for within continuing operations. Environmental obligations for continuing operations primarily represent obligations at shut down or abandoned facilities within businesses that do not meet the criteria for presentation as discontinued operations.
Projected 2026 spending, net of recoveries includes approximately $40 million to $50 million of net environmental remediation spending for our discontinued sites. These projections include spending as a result of a settlement reached in 2019 at our Middleport, New York site of $10 million maximum per year, on average, until the remediation is complete.
Total projected 2026 environmental spending, inclusive of sites accounted for within both continuing operations and discontinued sites, is expected to be in the range of approximately $90 million to $110 million.
Restructuring and asset retirement obligations
We expect to make payments of approximately $130 million to $155 million in 2026, which primarily relates to Project Foundation and Project Focus activities. As previously noted in the section titled "Results of Operations," we expect to incur approximately $560 million to $635 million of pre-tax restructuring charges in connection with Project Foundation in total over the life of the program. This includes $420 million to $440 million of non-cash asset write-off charges. We expect cash payments of approximately $65 million during 2026 in connection with Project Foundation. We have implemented substantially all the activities associated with Project Focus. However, we expect cash payments of approximately $63 million during 2026 for Project Focus. During the three months ended March 31, 2026, we made cash payments of $54.6 million, which primarily include the cash payments required in association with contract abandonment activities executed under the program.
Capital additions and other investing activities
Projected 2026 capital expenditures are expected to be in the range of approximately $90 million to $110 million. The spending is mainly driven by investments for our new products.
Share repurchases
Except for purchases associated with our equity compensation plans, we have not made any share repurchases during the three months ended March 31, 2026 and we do not anticipate any share repurchases during 2026 in compliance with the amendment to the Company's credit agreement. See Item 5. Market for the Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities for additional information regarding the Company's publicly announced repurchased program authorized in February 2022.
Dividends
During the three months ended March 31, 2026 and March 31, 2025, we paid dividends of $10.0 million and $72.7 million, respectively. As part of a broader response to the challenges the company is facing and to further prioritize debt reduction, the Board of Directors in October 2025 made the decision to reduce the quarterly dividend to $0.08 per share. On April 16, 2026, we paid dividends totaling $10.0 million to our shareholders of record as of March 31, 2026. Future cash dividends, as always, will depend on a variety of factors, including earnings, capital requirements, financial condition, general economic conditions and other factors considered relevant by us and is subject to final determination by our Board of Directors. The company has a long history of returning cash to shareholders and will continue to evaluate its capital allocation on an ongoing basis. Increases to the Company's regular quarterly dividend are limited in connection with the Company's credit agreement as amended in December 2025.
Commitments and Contingencies
See Note 18 to the consolidated financial statements included in this Form 10-Q.
Contractual Commitments
Information related to our contractual commitments at December 31, 2025 can be found within Part II, Item 7 of our 2025 Form 10-K. There have been no significant changes to our contractual commitments during the three months ended March 31, 2026.
Climate Change
A detailed discussion related to climate change can be found in Part II, Item 7 of our 2025 Form 10-K.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Fair Value Measurements
See Note 17 to the consolidated financial statements in this Form 10-Q for additional discussion surrounding our fair value measurements.
DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISKS
Our earnings, cash flows, and financial position are exposed to market risks relating to fluctuations in commodity prices, interest rates, and foreign currency exchange rates. Our policy is to minimize exposure to our cash flow over time caused by changes in commodity, interest, and currency exchange rates. To accomplish this, we have implemented a controlled program of risk management consisting of appropriate derivative contracts entered into with major financial institutions.
The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates and prices. The range of changes chosen reflects our view of changes that are reasonably possible over a one-year period. Market-value estimates are based on the present value of projected future cash flows considering the market rates and prices chosen.
At March 31, 2026, our financial instrument position was a net asset of $10.0 million compared to a net liability of $9.5 million at December 31, 2025. The change in the net financial instrument position was primarily due to fluctuations in our foreign exchange portfolios.
Since our risk management programs are generally highly effective, the potential loss in value for each risk management portfolio described below would be largely offset by changes in the value of the underlying exposure.
Commodity Price Risk
Energy costs are diversified among electricity and natural gas. We may attempt to mitigate our exposure to increasing energy costs by hedging the cost of future deliveries of natural gas and electricity by entering into physical and financial derivative contracts. To analyze the effect of changing energy prices, we perform a sensitivity analysis in which we assume an instantaneous 10 percent change in energy market prices from their levels at March 31, 2026 and December 31, 2025, with all other variables (including interest rates) held constant. As of March 31, 2026 and December 31, 2025, we had no open commodity contracts, and, as a result, there was no sensitivity analysis performed over commodity price risk for the periods presented.
Foreign Currency Exchange Rate Risk
The primary currencies for which we have exchange rate exposure are the U.S. dollar versus the Euro, the Chinese yuan, the Brazilian real, Mexican peso, and the Argentine peso. Foreign currency debt and foreign exchange forward contracts are used in countries where we do business, thereby reducing our net asset exposure. Foreign exchange forward contracts are also used to hedge firm and highly anticipated foreign currency cash flows.
To analyze the effects of changing foreign currency rates, we have performed a sensitivity analysis in which we assume an instantaneous 10 percent change in the foreign currency exchange rates from their levels at March 31, 2026 and December 31, 2025, with all other variables (including interest rates) held constant.
(in Millions) Net Asset / (Liability) Position on Consolidated Balance Sheets 10% Strengthening 10% Weakening
Net asset (liability) position at March 31, 2026 $ 10.0 $ (57.9) $ 58.0
Net asset (liability) position at December 31, 2025 $ (9.5) $ (69.9) $ 22.7
Interest Rate Risk
One of the strategies that we can use to manage interest rate exposure is to enter into interest rate swap agreements. In these agreements, we agree to exchange, at specified intervals, the difference between fixed and variable interest amounts calculated on an agreed-upon notional principal amount. As of March 31, 2026 and December 31, 2025, we had no outstanding interest rate swap contracts, and, as a result, there was no sensitivity analysis performed over interest rate risk for the periods presented.
Our debt portfolio, at March 31, 2026, is composed of 74 percent fixed-rate debt and 26 percent variable-rate debt. The variable-rate component of our debt portfolio principally consists of borrowings under our Credit Facility and amounts outstanding under foreign subsidiary credit lines. Changes in interest rates affect different portions of our variable-rate debt portfolio in different ways.
Based on the variable-rate debt in our debt portfolio at March 31, 2026, a one percentage point increase in interest rates then in effect would have increased gross interest expense by $2.9 million and a one percentage point decrease in interest rates then in effect would have decreased gross interest expense by $2.9 million for the three months ended March 31, 2026.
REGULATION FD DISCLOSURES
The Company's investor relations website, located at https://investors.fmc.com, should be considered as a recognized channel of distribution, and the Company may periodically post important information to the web site for investors, including information that the Company may wish to disclose publicly for purposes of complying with the federal securities laws and our disclosure obligations under the SEC's Regulation FD. We encourage investors and others interested in the Company to monitor our investor relations website for material disclosures. Our website address is included in this Form 10-Q as a textual reference only and the information on the website is not incorporated by reference into this Form 10-Q.
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