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Acquisitions (Tables) | 9 Months Ended
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Sep. 30, 2016
Business Combinations [Abstract] |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the consideration paid for Cheminova and the amounts of the assets acquired and liabilities assumed as of the acquisition date.
Purchase Price Allocation
(in Millions) |
Trade receivables | $ | 488.1 |
Inventories (1) | 362.4 |
Other current assets | 53.6 |
Property, plant & equipment | 186.4 |
Intangible assets (2) |
Customer relationships | 294.1 |
Brands | 362.8 |
In-process research & development | 1.4 |
Goodwill (3) | 468.8 |
Other assets | 84.5 |
Total fair value of assets acquired | $ | 2,302.1 |
Short-term debt | 140.5 |
Other current liabilities | 432.3 |
Environmental reserves | 47.2 |
Long-term debt (4) | 273.1 |
Deferred tax liabilities | 165.1 |
Other liabilities | 38.8 |
Total fair value of liabilities assumed | 1,097.0 |
Total cash paid, less cash acquired | $ | 1,205.1 |
____________________
(1) | Fair value of finished goods inventory acquired included a step-up in the value of approximately $57.8 million, of which $28.8 million and $48.1 million was expensed in the three and nine months ended September 30, 2015, all of which was expensed in the full year 2015 and included in "Cost of sales and services" on the condensed consolidated income statement.
(2) | The weighted average useful life of the acquired finite-lived intangibles, which primarily represents the customer relationships, is approximately 20 years.
(3) | Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. None of the acquired goodwill will be deductible for income tax purposes.
(4) | Long-term debt assumed primarily consisted of mortgage debt and borrowings under existing Cheminova credit facilities that were settled by FMC’s term loan in the second quarter of 2015.
Business Acquisition, Pro Forma Information | The following unaudited pro forma results of operations assume that the Acquisition occurred at the beginning of the periods presented. The pro forma amounts include certain adjustments, including interest expense on the borrowings utilized to complete the acquisition, depreciation and amortization expense and income taxes. The pro forma amounts for the three and nine month periods below exclude acquisition-related charges. The pro forma results do not include adjustments related to cost savings or other synergies that are anticipated as a result of the Acquisition. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisition had occurred as of January 1, 2015, nor are they indicative of future results of operations.
| Nine Months Ended September 30
(in Millions) | 2016 |  | 2015
Pro forma Revenue (1) | $ | 2,416.8 |  |  | $ | 2,739.2 |
Pro forma Diluted earnings per share (1) | $ | 1.44 |  |  | $ | 6.40 |
____________________
(1) | For the three and nine months ended September 30, 2016 and for the three months ended September 30, 2015, pro forma results and actual results are the same.
Acquisition costs | The following table summarizes the costs incurred associated with these combined activities.
| Three Months Ended September 30 |  | Nine Months Ended September 30
(in Millions) | 2016 |  | 2015 |  | 2016 |  | 2015
Acquisition-related charges |  |  |  |  |  |  |  |  |  |  |
Legal and professional fees (1) | $ | 4.4 |  |  | $ | 14.2 |  |  | $ | 16.8 |  |  | $ | 53.8 |
Inventory fair value amortization (2) | — |  |  | 28.8 |  |  | — |  |  | 48.1 |
(Gain)/loss on hedging purchase price (3) | — |  |  | — |  |  | — |  |  | 172.1 |
Total Acquisition-related charges (4) | $ | 4.4 |  |  | $ | 43.0 |  |  | $ | 16.8 |  |  | $ | 274.0 |
Restructuring charges and asset disposals |  |  |  |  |  |  |  |  |
Cheminova restructuring | 5.8 |  |  | 50.7 |  |  | 14.7 |  |  | 55.5 |
Total Cheminova restructuring charges (4) (5) | $ | 5.8 |  |  | $ | 50.7 |  |  | $ | 14.7 |  |  | $ | 55.5 |
____________________
(1) | Represents transaction costs, costs for transitional employees, other acquired employees related costs and integration-related legal and professional third-party fees. These charges are recorded as a component of “Selling, general and administrative expense" on the condensed consolidated statements of income (loss).
(2) | On the condensed consolidated statements of income (loss), these charges are included in “Costs of sales and services.”
(3) | See "Cheminova Acquisition Hedge Costs" below for more information on these charges. These charges are recorded as a component of “Selling, general and administrative expense" on the condensed consolidated statements of income (loss).
(4) | Acquisition-related charges and restructuring charges to integrate Cheminova with Agricultural Solutions are expected to be completed in 2016.
(5) | See Note 8 for more information. These charges are recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss).
Charges relate to the expensing of the inventory fair value step-up resulting from the application of purchase accounting, transaction costs, costs for transitional employees, other acquired employee related costs, integration related legal and professional third-party fees and gains or losses on hedging purchase price associated with the planned or completed acquisitions. Amounts represent the following:
| Three Months Ended September 30 |  | Nine Months Ended September 30
(in Millions) | 2016 |  | 2015 |  | 2016 |  | 2015
Acquisition-related charges - Cheminova |  |  |  |  |  |  |
Legal and professional fees (1) | $ | 4.4 |  |  | $ | 14.2 |  |  | $ | 16.8 |  |  | $ | 53.8 |
Inventory fair value amortization (2) | — |  |  | 28.8 |  |  | — |  |  | 48.1 |
(Gain)/loss on hedging purchase price (1) | — |  |  | — |  |  | — |  |  | 172.1 |
Acquisition-related charges | $ | 4.4 |  |  | $ | 43.0 |  |  | $ | 16.8 |  |  | $ | 274.0 |

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