Environmental Obligations

3 Months Ended

Mar. 31, 2021

Environmental Remediation Obligations [Abstract]

We have reserves for potential environmental obligations which we consider probable and which we can reasonably estimate. The following table is a roll forward of our total environmental reserves, continuing and discontinued:


(in Millions)	Gross		Recoveries (3)		Net
Total environmental reserves at December 31, 2020	$	574.7	$	(10.3)	$	564.4
Provision (Benefit)	(0.7)		(0.2)		(0.9)
(Spending) Recoveries	(32.5)		—		(32.5)
Foreign currency translation adjustments	(3.0)		—		(3.0)
Net change	$	(36.2)	$	(0.2)	$	(36.4)
Total environmental reserves at March 31, 2021	$	538.5	$	(10.5)	$	528.0

Environmental reserves, current (1)	$	106.9	$	(0.8)	$	106.1
Environmental reserves, long-term (2)	431.6		(9.7)		421.9
Total environmental reserves at March 31, 2021	$	538.5	$	(10.5)	$	528.0

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(1)These amounts are included within "Accrued and other liabilities" on the condensed consolidated balance sheets.

(2)These amounts are included in "Environmental liabilities, continuing and discontinued" on the condensed consolidated balance sheets.

(3)These recorded recoveries represent probable realization of claims against U.S. government agencies and are recorded as an offset to our environmental reserves in the condensed consolidated balance sheets.

The estimated reasonably possible environmental loss contingencies, net of expected recoveries, exceed amounts accrued by approximately $170 million at March 31, 2021. This reasonably possible estimate is based upon information available as of the date of the filing but the actual future losses may be higher given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of potentially responsible parties, technology and information related to individual sites. Potential environmental obligations that have not been reserved may be material to any one quarter's or year's results of operations in the future. However, we believe any such liability arising from such potential environmental obligations is not likely to have a material adverse effect on our liquidity or financial condition as it may be satisfied over many years.

The table below provides a roll forward of our environmental recoveries representing probable realization of claims against insurance carriers and other third parties. These recoveries are recorded as "Prepaid and other current assets" and "Other assets including long-term receivables, net" in the condensed consolidated balance sheets.


(in Millions)	December 31, 2020		Increase (Decrease) in recoveries		Cash received		March 31, 2021
Environmental recoveries	$	4.4	$	0.1	$	—	$	4.5

Our net environmental provisions relate to costs for the continued cleanup of both continuing and discontinued manufacturing operations from previous years. The net provisions are comprised as follows:


	Three Months Ended March 31,
(in Millions)		2021		2020
Environmental provisions, net - recorded to liabilities (1)		$	(0.9)	$	5.3
Environmental provisions, net - recorded to assets (2)		(0.1)		3.5
Environmental provision, net		$	(1.0)	$	8.8

Continuing operations (3)		$	(4.1)	$	6.4
Discontinued operations (4)		3.1		2.4
Environmental provision, net		$	(1.0)	$	8.8

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(1) See above roll forward of our total environmental reserves as presented on the condensed consolidated balance sheets.

(2) See above roll forward of our total environmental recoveries as presented on the condensed consolidated balance sheets.

(3) Recorded as a component of "Restructuring and other charges (income)" on the condensed consolidated statements of income (loss). See Note 10. 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.

(4) Recorded as a component of "Discontinued operations, net of income taxes" on the condensed consolidated statements of income (loss). See Note 12.

A more complete description of our environmental contingencies and the nature of our potential obligations are included in Notes 1 and 12 to our consolidated financial statements in our 2020 Form 10-K. See Note 12 to our consolidated financial statements in our 2020 Form 10-K for a description of significant updates to material environmental sites. There have been no significant updates since the information included in our 2020 Form 10-K other than the update provided below.

Pocatello Tribal Litigation

As previously disclosed, on January 11, 2021, the Supreme Court denied FMC's petition to review the Ninth Circuit's decision in the Pocatello Tribal Litigation. In the first quarter of 2021, FMC made $21.4 million in payments to the Tribes for unpaid permit fees incurred from 2002 to 2014, attorney's fees, and interest charges. In April 2021, FMC made a further payment to the Tribes of $9.3 million to pay fees and interest incurred from 2015 to 2020. There was no change to our existing reserves as a result of our denied petition other than an inconsequential true up related to interest. Additionally, the reserve for this matter has been adjusted down to reflect the amounts paid to the Tribes.

The expected aggregate undiscounted amount related to this matter was $104.5 million as of December 31, 2020, of which $82.6 million, on a discounted basis, had been recognized in environmental liabilities on our balance sheet. As of March 31, 2021, the expected aggregate undiscounted amount decreased to $84.3 million of which $53.5 million, on a discounted basis, has been recognized in environmental liabilities on our balance sheet. The decrease in our liability balance from 2020 is primarily due to payments of $21.4 million made in the first quarter of 2021 and the remeasurement of our discounted liability from the change in discount rate of $8.9 million using the current U.S. Treasury bill rate. In calculating the net present value of future annual permit fees, we used a discount rate of 2.31%, which represents the appropriate risk-free rate. We believe that the application of this rate produces a result which approximates the amount that would hypothetically satisfy our liability in an arms-length transaction.