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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (“the Act”) was enacted in the United States. The Act significantly revised the U.S. corporate income tax structure resulting in changes to the Company’s expected U.S. corporate taxes due for 2017 and in future periods. Effective January 1, 2018, the Act, among other things, reduces the U.S. federal corporate tax rate from 35% to 21%, creates new provisions related to foreign sourced earnings, and eliminates the deduction for domestic production activities. The Act also requires companies to pay a one-time transition tax on the cumulative earnings and profits of certain foreign subsidiaries that were previously not repatriated and therefore not taxed for U.S. income tax purposes. Taxes due on the one-time transition tax are payable as of December 31, 2017 and may be paid to the tax authority over eight years. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which addresses situations where the accounting is incomplete for the income tax effects of the Act. SAB 118 directs taxpayers to consider the impact of the Act as “provisional” when the Company does not have the necessary information available, prepared, or analyzed (including computations) to finalize the accounting for the change in tax law. Companies are provided a measurement period of up to one year to obtain, prepare, and analyze information necessary to finalize the accounting for provisional amounts or amounts that cannot be estimated as of December 31, 2017. For the period ending December 31, 2017, we recognized provisional tax expense of $315.9 million as our reasonable estimate of the impact of the provisions of the Act, which was included as a component of income tax expense in our consolidated financial statements. The $315.9 million is comprised of $202.7 million for the net transition tax to be paid over eight years and $113.2 million from the remeasurement of our U.S. net deferred tax assets. For the nine months ended September 30, 2018, we recorded an adjustment to our provisional tax expense of $18.3 million of income tax expense comprised of a change of $3.2 million in the estimated impact of the remeasurement of the Company’s U.S. net deferred tax assets and a $15.1 million change in the net transition tax to be paid. The revisions to our provisional tax expense include the impact of the 2017 U.S. federal tax return filing. We will continue to refine our calculations as additional information is obtained and analyzed related to the Act. Additional information that may affect our provisional amounts would include further clarification and guidance on how the IRS and state taxing authorities will implement tax reform, such as guidance with respect to foreign sourced earnings, executive compensation, and transition tax; the completion of certain 2017 state tax returns; and the potential for additional guidance from the SEC or the FASB related to tax reform. The accounting is expected to be finalized during the fourth quarter of 2018. We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”) in accordance with GAAP. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur in accordance with GAAP. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. As a global enterprise, our tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As a result, there can be significant volatility in interim tax provisions. The below chart provides a reconciliation between our reported effective tax rate and the EAETR of our continuing operations.
| Three Months Ended September 30,
| 2018 |  | 2017
(in Millions) | Before Tax | Tax | Effective Tax Rate % |  | Before Tax | Tax | Effective Tax Rate %
Continuing operations | $ | 109.6 |  | $ | 30.1 |  | 27.5 | % |  | $ | 59.3 |  | $ | (11.6 | ) | (19.6 | )%
Discrete items: |  |  |  |  |  |  |
Transaction-related charges (1) | $ | 6.8 |  | $ | 1.5 |  |  |  | $ | 48.8 |  | $ | 15.4 |  |
Currency remeasurement (2) | — |  | 1.8 |  |  |  | 4.6 |  | 1.2 |  |
Other discrete items (3) | 32.8 |  | 6.1 |  |  |  | (4.1 | ) | 1.3 |  |
Tax only discrete items (4) | — |  | (17.2 | ) |  |  | — |  | 4.7 |  |
Total discrete items | $ | 39.6 |  | $ | (7.8 | ) |  |  | $ | 49.3 |  | $ | 22.6 |  |
Continuing operations, before discrete items | $ | 149.2 |  | $ | 22.3 |  |  |  | $ | 108.6 |  | $ | 11.0 |  |
Estimated Annualized Effective Tax Rate (EAETR) (5) |  |  | 14.9 | % |  |  |  | 10.1 | %
| Nine Months Ended September 30,
| 2018 |  | 2017
(in Millions) | Before Tax | Tax | Effective Tax Rate % |  | Before Tax | Tax | Effective Tax Rate %
Continuing operations | $ | 581.5 |  | $ | 100.4 |  | 17.3 | % |  | $ | 165.7 |  | $ | 1.1 |  | 0.7 | %
Discrete items: |  |  |  |  |  |  |
Transaction-related charges (1) | $ | 14.8 |  | $ | 3.1 |  |  |  | $ | 78.7 |  | $ | 24.5 |  |
Currency remeasurement (2) | 3.3 |  | 3.4 |  |  |  | 16.1 |  | 5.4 |  |
Other discrete items (3) | 104.4 |  | 13.2 |  |  |  | 83.4 |  | 4.6 |  |
Tax only discrete items (4) | — |  | (12.4 | ) |  |  | — |  | 5.8 |  |
Total discrete items | $ | 122.5 |  | $ | 7.3 |  |  |  | $ | 178.2 |  | $ | 40.3 |  |
Continuing operations, before discrete items | $ | 704.0 |  | $ | 107.7 |  |  |  | $ | 343.9 |  | $ | 41.4 |  |
Estimated Annualized Effective Tax Rate (EAETR) (5) |  |  | 15.3 | % |  |  |  | 12.0 | %
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(1) | As of the three and nine months ended September 30, 2018, amount relates to FMC Lithium separation-related charges. As of the three and nine months ended September 30, 2017, amount relates to DuPont acquisition-related charges.
(2) | Represents transaction gains or losses for currency remeasurement offset by associated hedge gains or losses, which are accounted for discretely in accordance with GAAP. Certain transaction gains or losses for currency remeasurement are not taxable, while offsetting hedge gains or losses are taxable.
(3) | GAAP generally requires subsidiaries for which a full valuation allowance has been provided to be excluded from the EAETR. During the three months ended September 30, 2018, other discrete items were materially comprised of restructuring charges and other integration related costs associated with the acquired DuPont Crop Protection Business and the discrete accounting for excluded pretax losses of subsidiaries for which a full valuation allowance has been provided. During the nine months ended September 30, 2018, other discrete items also included the gain attributable to the sale of a portion of FMC's European herbicide portfolio to Nufarm Limited recorded in the first quarter. See Note 4 for additional information on the Company’s Nufarm divestment. For the three and nine months ended September 30, 2017, the other discrete items component of the EAETR reconciliation primarily relates to the discrete accounting for the excluded pretax losses of subsidiaries for which a full valuation allowance has been provided.
(4) | For the three and nine months ended September 30, 2017 and September 30, 2018, tax only discrete items are primarily comprised of the tax effect of currency remeasurement associated with foreign statutory operations, changes in realizability of certain deferred tax assets, changes in uncertain tax liabilities and related interest, excess tax benefits associated with share-based compensation, changes in prior year estimates of subsidiary tax liabilities, and adjustments to our provisional tax expense related to the Act.
(5) | The primary drivers for the increase in effective tax rate for both the three and nine months ended September 30, 2018 as compared to 2017 are shown in the table above. The remaining change was due to the integration of the DuPont Crop Protection Business into our global supply chain as well as the effect of the global intangible low-taxed income (GILTI) provisions of the Act.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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