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Environmental Obligations | 12 Months Ended
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Dec. 31, 2023
Environmental Remediation Obligations [Abstract] |
Environmental Obligations | Environmental Obligations We are subject to various federal, state, local and foreign environmental laws and regulations that govern emissions of air pollutants, discharges of water pollutants, and the manufacture, storage, handling and disposal of hazardous substances, hazardous wastes and other toxic materials and remediation of contaminated sites. We are also subject to liabilities arising under CERCLA and similar state laws that impose responsibility on persons who arranged for the disposal of hazardous substances, and on current and previous owners and operators of a facility for the clean-up of hazardous substances released from the facility into the environment. We are also subject to liabilities under the Resource Conservation and Recovery Act ("RCRA") and analogous state laws that require owners and operators of facilities that have treated, stored or disposed of hazardous waste pursuant to a RCRA permit to follow certain waste management practices and to clean up releases of hazardous substances into the environment associated with past or present practices. In addition, when deemed appropriate, we enter certain sites with potential liability into voluntary remediation compliance programs, which are also subject to guidelines that require owners and operators, current and previous, to clean up releases of hazardous substances into the environment associated with past or present practices. Environmental liabilities consist of obligations relating to waste handling and the remediation and/or study of sites at which we are alleged to have released or disposed of hazardous substances. These sites include current operations, previously operated sites, and sites associated with discontinued operations. We have provided reserves for potential environmental obligations that we consider probable and for which a reasonable estimate of the obligation can be made. Accordingly, total reserves of $601.8 million and $543.1 million, respectively, before recoveries, existed at December 31, 2023 and 2022. The estimated reasonably possible environmental loss contingencies, net of expected recoveries, exceed amounts accrued by approximately $240 million at December 31, 2023. 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. Additionally, although potential environmental remediation expenditures in excess of the reserves and estimated loss contingencies could be significant, the impact on our future consolidated financial results is not subject to reasonable estimation due to numerous uncertainties concerning the nature and scope of possible contamination at many sites, identification of remediation alternatives under constantly changing requirements, selection of new and diverse clean-up technologies to meet compliance standards, the timing of potential expenditures and the allocation of costs among PRPs as well as other third parties. The liabilities arising from potential environmental obligations that have not been reserved for at this time may be material to any one quarter's or year's results of operations in the future. However, we believe any 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 is a roll forward of our total environmental reserves, continuing and discontinued, from December 31, 2020 to December 31, 2023.
(in Millions) | Operating and Discontinued Sites Total
Total environmental reserves, net of recoveries at December 31, 2020 | $ | 564.4 |
2021 Activity |
Provision | 65.8 |
Spending, net of recoveries | (121.8) |
Foreign currency translation adjustments | (5.2) |
Net Change | $ | (61.2) |
Total environmental reserves, net of recoveries at December 31, 2021 | $ | 503.2 |
2022 Activity |
Provision | 104.8 |
Spending, net of recoveries | (74.5) |
Foreign currency translation adjustments | (4.3) |
Net Change | $ | 26.0 |
Total environmental reserves, net of recoveries at December 31, 2022 | $ | 529.2 |
2023 Activity |
Provision | 152.3 |
Spending, net of recoveries | (92.6) |
Foreign currency translation adjustments and other adjustments | 3.2 |
Net Change | $ | 62.9 |
Total environmental reserves, net of recoveries at December 31, 2023 | $ | 592.1 |
To ensure we are held responsible only for our equitable share of site remediation costs, we have initiated, and will continue to initiate, legal proceedings for contributions from other PRPs. At December 31, 2023 and 2022, we have recorded recoveries representing probable realization of claims against U.S. government agencies, insurance carriers and other third parties. Recoveries are recorded as either an offset to the "Environmental liabilities, continuing and discontinued" or as "Other assets including long-term receivables, net" on the consolidated balance sheets. The table below is a roll forward of our total recorded recoveries from December 31, 2021 to December 31, 2023:
(in Millions) | December 31, 2021 |  | Increase (Decrease) in Recoveries |  | Cash Received |  |  |  | December 31, 2022 |  | Increase (Decrease) in Recoveries |  | Cash Received |  |  |  | December 31, 2023
Environmental liabilities, continuing and discontinued | $ | 11.4 |  |  | $ | 2.5 |  |  | $ | — |  |  |  |  | $ | 13.9 |  |  | $ | (3.1) |  |  | $ | (1.1) |  |  |  |  | $ | 9.7 |
Other assets (1) | 4.5 |  |  | 2.5 |  |  | (0.6) |  |  |  |  | 6.4 |  |  | 2.1 |  |  | (3.6) |  |  |  |  | 4.9 |
Total | $ | 15.9 |  |  | $ | 5.0 |  |  | $ | (0.6) |  |  |  |  | $ | 20.3 |  |  | $ | (1.0) |  |  | $ | (4.7) |  |  |  |  | $ | 14.6 |
______________ (1) The amounts are included within "Prepaid and other current assets" and "Other assets including long-term receivables, net" on the consolidated balance sheets. See Note 22 to the consolidated financial statements included within this Form 10-K for more details. The table below provides detail of current and long-term environmental reserves, continuing and discontinued.
| December 31,
(in Millions) | 2023 |  | 2022
Environmental reserves, current, net of recoveries (1) | $ | 97.4 |  |  | $ | 90.1 |
Environmental reserves, long-term continuing and discontinued, net of recoveries (2) | 494.7 |  |  | 439.1 |
Total environmental reserves, net of recoveries | $ | 592.1 |  |  | $ | 529.2 |
______________ (1)These amounts are included within "Accrued and other liabilities" on the consolidated balance sheets. (2)These amounts are included in "Environmental liabilities, continuing and discontinued" on the consolidated balance sheets. Our net environmental provisions relate to costs for the continued remediation of both operating sites and for certain discontinued manufacturing operations from previous years. The net provisions are comprised as follows:
| Year Ended December 31,
(in Millions) | 2023 |  | 2022 |  | 2021
Continuing operations (1) | $ | 66.9 |  |  | $ | 34.7 |  |  | $ | 27.1 |
Discontinued operations (2) | 83.6 |  |  | 67.6 |  |  | 37.9 |
Net environmental provision | $ | 150.5 |  |  | $ | 102.3 |  |  | $ | 65.0 |
______________ (1)Recorded as a component of "Restructuring and other charges (income)" on our consolidated statements of income. See Note 8 to the consolidated financial statements included within this Form 10-K. 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. (2)Recorded as a component of "Discontinued operations, net of income taxes" on our consolidated statements of income (loss). The year ended December 31, 2023 includes a $11.7 million charge resulting from a settlement agreement with the other party involved at one of our foreign environmental remediation sites. See Note 10 to the consolidated financial statements included within this Form 10-K for further details. On our consolidated balance sheets, the net environmental provisions affect assets and liabilities as follows:
| Year Ended December 31,
(in Millions) | 2023 |  | 2022 |  | 2021
Environmental reserves (1) | $ | 152.3 |  |  | $ | 104.8 |  |  | $ | 65.8 |
Other assets (2) | (1.8) |  |  | (2.5) |  |  | (0.8) |
Net environmental provision | $ | 150.5 |  |  | $ | 102.3 |  |  | $ | 65.0 |
______________ (1)See above roll forward of our total environmental reserves as presented on our consolidated balance sheets. (2)Represents certain environmental recoveries. See Note 22 to the consolidated financial statements included within this Form 10-K for details of "Other assets including long-term receivables, net" as presented on our consolidated balance sheets. Significant Environmental Sites Pocatello From 1949 until 2001, we operated the world's largest elemental phosphorus plant in Power County, Idaho, just outside the city of Pocatello. Since the plant's closure, FMC has worked with the EPA, the State of Idaho, and the Shoshone-Bannock Tribes ("Tribes") to develop a proposed cleanup plan for the property. In September 2012, the EPA issued an Interim Record of Decision ("IROD") that is environmentally protective and that ensures the health and safety of both workers and the general public. Since the plant's closure, we have successfully decommissioned our Pocatello plant, completed closure of the RCRA ponds and formally requested that the EPA acknowledge completion of work under a June 1999 RCRA Consent Decree. Future remediation costs include completion of the IROD that addresses groundwater contamination and existing waste disposal areas on the Pocatello plant portion of the Eastern Michaud Flats Superfund Site. In June 2013, the EPA issued a Unilateral Administrative Order to us under which we will implement the IROD remedy. Our current reserves factor in the estimated costs associated with implementing the IROD. In addition to implementing the IROD, we continue to conduct work pursuant to CERCLA unilateral administrative orders to address air emissions from beneath the cap of several of the closed RCRA ponds. Actions also involve impacts of the Tribal Litigation discussed below. The amount of the reserve for this site was $82.9 million and $75.8 million at December 31, 2023 and 2022, respectively. The reserve includes $31.1 million at December 31, 2023 for the Pocatello Tribal Litigation as described below. Annual Tribal Waste Permit Fee After prolonged litigation with the Tribes concerning an annual $1.5 million waste permit fee, we were ordered to pay this annual fee for the duration of time that waste material remains buried on site. Given that on-site waste burial is the approved remedy, this fee is presumptively without end. Our reserves reflect this annual waste permit fee. In calculating the net present value of these future annual permit fees, we used a discount rate of 4.20%, 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. Estimates for expenditures for 2023 and beyond are $1.5 million in annual fees payable each year thereafter. The expected aggregate undiscounted amount related to this matter is $75.0 million of which $31.1 million, on a discounted basis, has been recognized in environmental liabilities on the balance sheet. Middleport Our Middleport, NY facility is currently a formulation and packaging plant that formerly manufactured arsenic-based and other products. As a result of past manufacturing operations and waste disposal practices at this facility, releases of hazardous substances have occurred at the site that have affected soil, sediment, surface water and groundwater at the facility's property and also in adjacent off-site areas. The impact of our discontinued operations was the subject of an Administrative Order on Consent entered into with the EPA and New York State Department of Environmental Conservation ("NYSDEC", and collectively with EPA, the "Agencies") in 1991, which was replaced by a New Order on Consent and Administrative Settlement with the NYSDEC, effective June 6, 2019 ("2019 Order"). Like the prior order, the 2019 Order requires us to (1) define the nature and extent of contamination caused by our historical plant operations, (2) take interim corrective measures and (3) evaluate Corrective Measure Alternatives ("CMA") for discrete contaminated areas, known as operable units ("OUs") of which there are 11. We have defined the nature and extent of the contamination in certain areas, have constructed an engineered cover, taken certain closure actions regarding RCRA regulated surface water impoundments and are collecting and treating both surface water runoff and ground water. To date, we have evaluated and proposed CMAs for six of the 11 identified operable units. Middleport Reserves Our total reserve for the Middleport site is $130.8 million and $108.2 million at December 31, 2023 and 2022, respectively. FMC is in various stages of evaluating the remaining operable units. The reserve represents the estimated remediation costs for OUs 2,4 and 5 as well as our best estimate for remediation costs associated with the operable unit that comprises the southern portion of the tributary ("OU 6") plus the impact of inflation. In 2023 and 2022, the Middleport site resulted in cash outflows of $12.5 million and $11.7 million respectively. In accordance with the 2019 Order, cash outflows will not exceed an average of $10 million per year until the remediation is complete for activities associated with the 2019 Order. Portland Harbor FMC is listed as a PRP is the Portland Harbor Superfund Site ("Portland Harbor"), that consists of the river sediment and upland area of a 10 mile section of the Lower Willamette River in Portland, Oregon that runs through an industrialized area. Portland Harbor is listed on the federal government’s National Priorities List ("NPL"). FMC formerly owned and operated a manufacturing site adjacent to this section of the river and has since sold its interest in this discontinued business. FMC and several other parties have been sued by the Confederated Bands and Tribes of the Yakama Nation for reimbursement of cleanup costs and the costs of performing a natural damage assessment. Based on the information known to date, we are unable to develop a reasonable estimate of our potential exposure of loss at this time. We intend to defend this matter. In addition, the Portland Harbor Natural Resource Trustee Council ("Trustee Council"), composed of federal, state and tribal trustees, was formed in 2002 to develop and coordinate an assessment of injury to natural resources associated with the Portland Harbor Superfund Site, the restoration of injured natural resources associated with Portland Harbor, and pursue the recovery of natural resources damages associated with Portland Harbor. The Trustee Council has advised the Company that it intends to pursue litigation for the recovery of natural resources damages and of the costs of assessment. To date, no lawsuit has been filed by the Trustee Council against the Company. On January 6, 2017, the EPA issued its ROD for Portland Harbor. On December 30, 2019, FMC and EPA entered into an Administrative Settlement Agreement and Order on Consent to perform the remedial design for the area at and around FMC's former operations. The cost of performing predesign investigation work and preparing the basis of design report is included in our reserves. Based on the current information available in the ROD as well as the large number of responsible parties for Portland Harbor, we are unable to develop a reasonable estimate of our potential exposure of loss for Portland Harbor at this time. Currently, FMC and approximately 100 other parties are involved in a non-judicial allocation process to determine each party’s respective share of the cleanup costs. The allocation process has been ongoing since November 2021 and a final report is expected to be issued in 2025 under the current schedule. We intend to continue defending this matter vigorously. Because of this uncertainty related to the cost of the remedy and the potential share allocable to FMC, we cannot say whether the ultimate resolution of our potential obligations at Portland Harbor will have a material adverse effect on our consolidated financial position, liquidity or results of operations. However, adverse results in the outcome of the allocation could have a material adverse effect on our consolidated financial position, results of operations in any one reporting period, or liquidity. Other Potentially Responsible Party ("PRP") Sites In addition to Portland Harbor, we have been named a PRP at 28 sites on the NPL, at which our potential liability has not yet been settled. We have received notice from the EPA or other regulatory agencies that we may be a PRP, or PRP equivalent, at other sites, including 46 sites at which we have determined that it is probable that we have an environmental liability for which we have recorded an estimate of our potential liability in the consolidated financial statements. At other sites, such as at a former phosphorus facility in Carteret, NJ, we are performing remedial investigation work under state regulatory programs but have not established reserves due to the inability to estimate potential liability at this time. In cooperation with appropriate government agencies, we are currently participating in, or have participated in, an RI/FS, or equivalent, at most of the identified sites, with the status of each investigation varying from site to site. At certain sites, a RI/FS has only recently begun, providing limited information, if any, relating to cost estimates, timing, or the involvement of other PRPs; whereas, at other sites, the studies are complete, remedial action plans have been chosen, or a ROD has been issued.

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