Discontinued Operations

FMC Health and Nutrition:

On March 31, 2017, we signed a definitive agreement to sell FMC Health and Nutrition, excluding the Omega-3 business, as part of the Transaction Agreement with DuPont. Refer to Note 3 for more details. We expect the sale to be completed in the fourth quarter of 2017, subject to the closing of the merger between DuPont and Dow Corporation and customary regulatory approvals and closing conditions. We have concluded, as a result of the signing of the Transaction Agreement, that FMC Health and Nutrition, excluding the Omega-3 business, has met the criteria to be an asset held for sale. Due to the strategic shift as a result of exiting the Health and Nutrition business, FMC Health and Nutrition has been presented as a discontinued operation in accordance with U.S. GAAP.

As part of the strategic shift to exit the Health and Nutrition business, we began to pursue the sale of the Omega-3 business and on June 22, 2017, we signed a definitive agreement to sell the Omega-3 business to Pelagia AS. On August 1, 2017, we completed the sale of the Omega-3 business for $38 million.

We have concluded that the Omega-3 business also met the criteria to be an asset held for sale and therefore has been presented as a discontinued operation in accordance with U.S. GAAP.

Assets held for sale under U.S. GAAP are required to be reported at the lower of carrying value or fair value, less costs to sell. We expect a significant gain on the FMC Health and Nutrition assets to be sold to DuPont and therefore these assets held for sale are reported at their carrying value. However, the fair value of the Omega-3 business, which was previously part of the broader FMC Health and Nutrition reporting unit, is significantly less than its carrying value, which includes accumulated foreign currency translation adjustments that would be reclassified to earnings upon completion of sale. As a result, we recorded an impairment charge of approximately $185 million ($165 million, net of tax) during the three months ended March 31, 2017. The charge was revised during the three months ended June 30, 2017 as a result of signing a definitive agreement to sell the Omega-3 business. The impairment charge for the six months ended June 30, 2017 was approximately $171 million ($151 million, net of tax).

The results of our discontinued FMC Health and Nutrition operations are summarized below:



(in Millions)	Three Months Ended June 30					Six Months Ended June 30
(in Millions)	2017			2016		2017			2016
Revenue	$	162.1		$	195.0	$	338.8		$	387.4
Costs of sales and services	95.9			129.1		207.3			256.1
Income (loss) from discontinued operations before income taxes ⁽¹⁾	39.7			37.5		75.2			76.8
Provision for income taxes ⁽²⁾	13.5			11.5		40.2			22.0
Total discontinued operations of FMC Health and Nutrition, net of income taxes, before divestiture related costs and adjustments ⁽³⁾	$	26.2		$	26.0	$	35.0		$	54.8
Divestiture related costs of discontinued operations of FMC Health and Nutrition, net of income taxes	(3.3		)	—		(9.5		)	—
Adjustment to FMC Health and Nutrition Omega-3 net assets held for sale, net of income taxes ⁽⁴⁾	13.8			—		(150.9		)	—
Discontinued operations of FMC Health and Nutrition, net of income taxes	36.7			26.0		(125.4		)	54.8
Less: Discontinued operations of FMC Health and Nutrition attributable to noncontrolling interests	0.1			—		—			—
Discontinued operations of FMC Health and Nutrition, net of income taxes, attributable to FMC Stockholders	$	36.6		$	26.0	$	(125.4	)	$	54.8

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(1)

For the three months ended June 30, 2017 and 2016, amounts include $5.4 million and $4.8 million of allocated interest expense and $1.3 million and $3.2 million of restructuring and other charges (income), respectively. For the six months ended June 30, 2017 and 2016, amounts include $10.4 million and $9.8 million of allocated interest expense, $3.1 million and $6.1 million of restructuring and other charges (income), and $3.9 million and zero of a pension curtailment charge, respectively. See Note 14 for more information of the pension curtailment charge. Interest was allocated in accordance with relevant discontinued operations accounting guidance.


(2)	Includes the accrual for income taxes of $17.8 million associated with unremitted earnings of foreign FMC Health and Nutrition subsidiaries held for sale for the six months ended June 30, 2017. Refer to Note 15 for more information.


(3)	In accordance with US GAAP, effective March 2017 we stopped amortizing and depreciating all assets classified as held for sale.


(4)	Represents the impairment charge of approximately $171 million ($151 million, net of tax) associated with the disposal activities of the Omega-3 business to write down the carrying value to its fair value.

The following table presents the major classes of assets and liabilities of FMC Health and Nutrition:



(in Millions)	June 30, 2017			December 31, 2016
Assets
Current assets of discontinued operations held for sale (primarily trade receivables and inventories)	$	424.9		$	381.5
Property, plant & equipment ⁽¹⁾	481.4			464.0
Goodwill ⁽¹⁾	300.3			278.8
Other intangibles, net ⁽¹⁾	77.3			73.5
Other non-current assets ^{(1) (3)}	9.6			19.3
Total assets of discontinued operations held for sale ⁽²⁾	$	1,293.5		$	1,217.1
Liabilities
Current liabilities of discontinued operations held for sale	(90.4		)	(59.0		)
Noncurrent liabilities of discontinued operations held for sale ^{(1) (3)}	(49.2		)	(67.7		)
Total liabilities of discontinued operations held for sale ⁽²⁾	(139.6		)	(126.7		)
Total net assets before adjustment to Omega-3 assets held for sale	$	1,153.9		$	1,090.4
Adjustment to Omega-3 assets held for sale	(170.9		)	—
Total net assets	$	983.0		$	1,090.4

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(1)	Presented as "Noncurrent assets / Long-term liabilities of discontinued operations held for sale" on the condensed consolidated balance sheet as of December 31, 2016.


(2)	Presented as "Current assets / liabilities of discontinued operations held for sale" on the condensed consolidated balance sheet as of June 30, 2017.


(3)	Amounts related to uncertain tax positions associated with FMC Health and Nutrition of $13 million, net were reclassified to noncurrent assets / long-term liabilities of discontinued operations held for sale on the condensed consolidated balance sheet as of December 31, 2016 within this Form 10-Q.

Discontinued operations include the results of the FMC Health and Nutrition segment as well as provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities. The primary liabilities retained include environmental liabilities, other postretirement benefit liabilities, self-insurance, long-term obligations related to legal proceedings and historical restructuring activities.

Our discontinued operations comprised the following:



(in Millions)	Three Months Ended June 30						Six Months Ended June 30
(in Millions)	2017			2016			2017			2016
Adjustment for workers’ compensation, product liability, other postretirement benefits and other, net of income tax benefit (expense) of ($1.7) and ($0.4) for the three and six months ended June 30, 2017 and ($0.5) and $0.2 for the three and six months ended 2016, respectively ⁽¹⁾	$	2.1		$	0.3		$	1.7		$	(0.1	)
Provision for environmental liabilities, net of recoveries, net of income tax benefit (expense) of $3.5 and $4.5 for the three and six months ended June 30, 2017 and $1.2 and $2.5 for the three and six months ended 2016, respectively ⁽²⁾	(7.9		)	(1.9		)	(10.7		)	(4.8		)
Provision for legal reserves and expenses, net of recoveries, net of income tax benefit (expense) of $2.3 and $4.2 for the three and six months ended June 30, 2017 and $2.4 and $4.1 for the three and six months ended 2016, respectively	(4.3		)	(4.2		)	(7.8		)	(7.0		)
Discontinued operations of FMC Health and Nutrition, net of income tax benefit (expense) of ($12.5) and ($17.6) for the three and six months ended June 30, 2017 and ($11.5) and ($22.0) for the three and six months ended 2016, respectively	36.7			26.0			(125.4		)	54.8
Discontinued operations, net of income taxes	$	26.6		$	20.2		$	(142.2	)	$	42.9

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(1)	See a roll forward of our restructuring reserves in Note 8.


(2)	See a roll forward of our environmental reserves as well as discussion on significant environmental issues that occurred during 2017 in Note 11.