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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Domestic and foreign components of income (loss) from continuing operations before income taxes are shown below: 
 Year Ended December 31,
(in Millions)202420232022
Domestic$(271.6)$(312.7)$(89.6)
Foreign524.1 612.9 1,073.5 
Total$252.5 $300.2 $983.9 

The provision (benefit) for income taxes attributable to income (loss) from continuing operations consisted of: 
 Year Ended December 31,
(in Millions)202420232022
Current:
Federal$28.2 $58.5 $45.7 
Foreign160.2 113.9 152.1 
State1.0 1.1 0.1 
Total current$189.4 $173.5 $197.9 
Deferred:
Federal$(66.0)$(82.7)$(28.6)
Foreign(271.9)(1,212.0)(27.4)
State(2.4)1.9 3.3 
Total deferred$(340.3)$(1,292.8)$(52.7)
Total$(150.9)$(1,119.3)$145.2 


The effective income tax rate applicable to income from continuing operations before income taxes was different from the statutory U.S. federal income tax rate due to the factors listed in the following table: 
 Year Ended December 31,
(in Millions)202420232022
U.S. Federal statutory rate$53.0 $63.0 $206.6 
Foreign earnings subject to different tax rates (1)
(137.3)(130.7)(152.7)
State and local income taxes, less federal income tax benefit(7.7)2.5 5.5 
Research and development and miscellaneous tax credits(5.7)(5.4)(5.7)
Tax on dividends, deemed dividends, and GILTI (2)
41.9 37.0 24.6 
Changes to unrecognized tax benefits9.6 10.5 10.5 
Nondeductible expenses9.3 9.3 19.6 
Change in valuation allowance (3)
639.7 172.5 71.3 
Exchange gains and losses (4)
30.3 (18.4)(12.0)
Impact of Switzerland tax incentives (5)
(645.0)(1,149.2)— 
Other (6)
(139.0)(110.4)(22.5)
Total Tax Provision$(150.9)$(1,119.3)$145.2 
___________________________
(1)A significant amount of our earnings is generated by our foreign subsidiaries (e.g., Switzerland, Singapore, Hong Kong), which tax earnings at lower statutory rates than the United States federal statutory rate. Our future effective tax rates may be materially impacted by a future change in the composition of earnings from foreign and domestic tax jurisdictions.
(2)The years ended December 31, 2024, 2023, and 2022 includes tax expense of $18.1 million, $25.5 million, and $17.8 million, respectively, associated with the global intangible low-taxed income (GILTI) provisions.
(3)The year ended December 31, 2024 is primarily related to the estimated portion of nonrefundable tax credits within our Swiss operations that are not expected to be utilized, the impact of the step-up in tax basis to the fair value of the transferred intellectual property by the Company’s Swiss subsidiary, and net operating losses within our full valuation allowance Luxembourg operations. The year ended December 31, 2023 is primarily related to the estimated portion of nonrefundable tax credits within our Swiss operations that are not expected to be utilized and net operating losses and other deferred tax assets within our Argentina operations, partially offset by the release of the valuation allowance within our Brazil operations, as described further below. The year ended December 31, 2022 is primarily related to net operating losses and other deferred tax assets within our Brazil and Argentina operations.
(4)Includes the impact of transaction gains or losses on net monetary assets for which no corresponding tax expense or benefit is realized and the tax provision for statutory taxable gains or losses in foreign jurisdictions for which there is no corresponding amount in income before taxes.
(5)The year ended December 31, 2024 represents the recognition of a step-up in tax basis to the fair value of the transferred intellectual property by the Company's Swiss subsidiary. The year ended December 31, 2023 is related to ten-year nonrefundable tax credits granted to the Company's Swiss subsidiaries, as discussed above.
(6)The year ended December 31, 2024 includes a U.S. capital loss in the amount of $38.6 million and additional amounts materially attributable to internal restructuring in our full valuation allowance Luxembourg entities. The year ended December 31, 2023 includes a net decrease of approximately $120 million related to adjustments of deferred tax balances in Singapore, Puerto Rico, and Switzerland. The year ended December 31, 2022 included a $39.7 million decrease related to certain deferred tax liabilities as a result of the extension of our incentive tax rate in Puerto Rico.
During the year ended December 31, 2023, the Company’s Swiss subsidiaries were granted ten-year tax incentives effective for 2023 and retroactively for 2021 and 2022. The tax incentives were awarded for the Company’s commitment to invest in additional headcount and transfer significant intellectual property as well as commitment to establish a new global technology and innovation center in Switzerland. Net deferred tax benefits of $1,149 million and related valuation allowances of $318 million were recorded during the three months ended December 31, 2023 to reflect the estimated net future reductions in tax of $831 million associated with the incentives.
In connection with our plans to establish a global technology and innovation center in Switzerland, we initiated changes to our corporate entity structure, including intra-entity transfers of certain intellectual property, during the second quarter of 2024. As a result, we recorded a net tax benefit of approximately $300 million. This benefit, net of valuation allowance, was primarily a result of the recognition of a step-up in tax basis to the fair value of the transferred intellectual property by one of the Company’s Swiss subsidiaries. In addition, local tax impacts associated with the disposition of the transferred intellectual property were recorded as well as an increase in our valuation allowance associated with Swiss nonrefundable tax credits as a result of indirect effects of the transferred intellectual property. During the fourth quarter of 2024, the Company recorded additional valuation allowances of approximately $120 million as a result of updated projections of future earnings associated with the 2023 deferred tax benefits noted above.
Historically, FMC’s Brazil valuation allowance position was based on long-standing local transfer pricing rules, as well as certain material favorable permanent statutory tax deductions available to FMC Brazil as part of local tax law. During the three months ended December 31, 2023, the Company released its FMC Brazil valuation allowance and recorded a tax benefit of approximately $223 million as a result of the Brazilian Government enacting a new tax law that significantly limits FMC Brazil’s ability to benefit in the future from the material favorable permanent statutory tax deductions previously available as part of local tax law.
Subsequent Event - 2025
In January of 2025, the Organization for Economic Co-operation and Development ("OECD") issued administrative guidance on the Global Anti-Base Erosion Model (GLOBE) rules that clarify how certain rules are to be interpreted. This administrative guidance includes changes to certain tax credits and other tax benefits that arose from governmental arrangements granted after November 2021. It has been concluded that this new administrative guidance is part of Swiss tax law when issued and is retro-active. FMC’s non-refundable tax credits which were granted in 2023 to our Swiss subsidiaries are impacted by this new guidance. The tax credits were previously grandfathered in for full use under the GLOBE rules. FMC is currently evaluating the impacts of this on its financial statements.
Significant components of our deferred tax assets and liabilities were attributable to:
 December 31,
(in Millions)20242023
Reserves for discontinued operations, environmental and restructuring$190.1 $144.7 
Accrued pension and other postretirement benefits5.3 9.8 
Capital loss, foreign tax and other credit carryforwards1,128.1 1,136.0 
Net operating loss carryforwards564.1 411.2 
Deferred expenditures capitalized for tax108.6 94.5 
Intangibles, Property, plant and equipment, and Investments, net387.9 — 
Other accruals and reserves267.5 234.0 
Deferred tax assets$2,651.6 $2,030.2 
Valuation allowance, net(1,213.8)(588.4)
Deferred tax assets, net of valuation allowance$1,437.8 $1,441.8 
Intangibles, Property, plant and equipment, and Investments, net— 263.3 
Deferred tax liabilities$— $263.3 
Net deferred tax assets (liabilities)$1,437.8 $1,178.5 

We evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires companies to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative, using a "more likely than not" standard. In assessing the need for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of deferred tax assets. This assessment considers, among other matters, the nature and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, and tax planning alternatives. We operate and derive income across multiple jurisdictions. As our business experiences changes in operating results across its geographic footprint, we may encounter losses in jurisdictions that have been historically profitable, and as a result might require additional valuation allowances to be recorded. We are committed to implementing tax planning actions, when deemed appropriate, in jurisdictions that experience losses in order to realize deferred tax assets prior to their expiration.
At December 31, 2024, we had net operating loss and tax credit carryforwards as follows: U.S. state net operating loss carryforwards of $19.8 million (tax-effected) expiring in future tax years through 2042, foreign net operating loss carryforwards of $544.3 million (tax-effected) expiring in various future years, and other tax credit carryforwards of $1,128.1 million expiring in various future years through 2034.
Uncertain Income Tax Positions
U.S. GAAP accounting guidance for uncertainty in income taxes prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition.
We file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. The income tax returns for FMC entities taxable in the U.S. and significant foreign jurisdictions are open for examination and adjustment. As of December 31, 2024, the U.S. federal and state income tax returns are open for examination and adjustment for the years 2017 — 2024 and 2004 — 2024, respectively. Our significant foreign jurisdictions, which total 11, are open for examination and adjustment during varying periods from 2014 — 2024.
As of December 31, 2024, we had total unrecognized tax benefits of $53.1 million, of which $41.5 million would favorably impact the effective tax rate from continuing operations if recognized. As of December 31, 2023, we had total unrecognized tax benefits of $51.2 million, of which $37.1 million would favorably impact the effective tax rate if recognized. Interest and penalties related to unrecognized tax benefits are reported as a component of income tax expense. For the years ended December 31, 2024, 2023 and 2022, we had interest and penalties for a net expense (benefit) of $2.3 million, $4.3 million, and $2.6 million, respectively, on the consolidated statements of income (loss). As of December 31, 2024 and 2023, we have accrued interest and penalties on the consolidated balance sheets of $18.6 million and $16.3 million, respectively.
Due to the potential for resolution of federal, state, or foreign examinations, and the expiration of various jurisdictional statutes of limitation, it is reasonably possible that our liability for unrecognized tax benefits will decrease within the next 12 months by a range of $3.6 million to $23.9 million.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 
December 31,
(in Millions)202420232022
Balance at beginning of year$51.2 $46.1 $41.9 
Increases related to positions taken in the current year8.6 2.4 4.8 
Increases and decreases related to positions taken in prior years(1.2)3.5 2.9 
Decreases related to lapse of statutes of limitations(5.5)(0.8)(3.5)
Settlements during the current year— — — 
Decreases for tax positions on dispositions— — — 
Balance at end of year (1)
$53.1 $51.2 $46.1 
___________________________
(1)At December 31, 2024, 2023, and 2022 we recognized an offsetting non-current asset of $10.5 million, $12.9 million, and $12.8 million respectively, relating to the indirect income tax benefits associated with specific uncertain tax positions presented above.