FMC CORPORATION Item 2 of this report contains certain forward-looking statements that are based on our current views and assumptions regarding future events, future business conditions and the outlook for our company based on currently available information. Whenever possible, we have identified these forward-looking statements by such words or phrases as "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "believes," "anticipates," "predicts," "forecasts," "estimates," "projects," "potential," "intends" or similar expressions identifying "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words or phrases. Such forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. The potential adverse effect of the COVID-19 pandemic on our financial condition, results of operations, cash flows and performance, which is substantially influenced by the potential adverse effect of the pandemic on our customers and suppliers and the global economy and financial markets, has been one of the most significant risk factors for our company. Thus far, we have mitigated the risks associated with the pandemic during the most intense periods of interruptions in global and nationwide economic activity and now expect the pandemic to represent less of a risk for ongoing operations. The extent to which COVID-19 will continue to impact us will depend on future developments, many of which remain uncertain and cannot be predicted with confidence, including the duration of the pandemic, further actions to be taken to contain the pandemic or mitigate its impact, and the extent of the direct and indirect economic effects of the pandemic and containment measures, among others. Additional factors include, among other things, the risk factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year endedDecember 31, 2020 (the "2020 Form 10-K"), the section captioned "Forward-Looking Information" in Part II of the 2020 Form 10-K and to similar risk factors and cautionary statements in all other reports and forms filed with theSecurities and Exchange Commission ("SEC"). Moreover, investors are cautioned to interpret many of these factors as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We specifically decline to undertake any obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. APPLICATION OF CRITICAL ACCOUNTING POLICIES Our consolidated financial statements are prepared in conformity withU.S. generally accepted accounting principles. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have described our accounting policies in Note 1 to our consolidated financial statements included in our 2020 Form 10-K. We have reviewed these accounting policies, identifying those that we believe to be critical to the preparation and understanding of our consolidated financial statements. We have reviewed these critical accounting policies with the Audit Committee of our Board of Directors. Critical accounting policies are central to our presentation of results of operations and financial condition and require management to make estimates and judgments on certain matters. We base our estimates and judgments on historical experience, current conditions and other reasonable factors. The following is a list of those accounting policies that we have deemed most critical to the presentation and understanding of our results of operations and financial condition. See the "Critical Accounting Policies" section in our 2020 Form 10-K for a detailed description of these policies and their potential effects on our results of operations and financial condition. •Revenue recognition and trade receivables •Environmental obligations and related recoveries •Impairment and valuation of long-lived assets and indefinite-lived assets •Pensions and other postretirement benefits •Income taxes RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS AND REGULATORY ITEMS See Note 2 to the condensed consolidated financial statements included in this Form 10-Q for a discussion of recently adopted accounting guidance and other new accounting guidance.
OVERVIEW
We are an agricultural sciences company, providing innovative solutions to growers around the world with a robust product portfolio fueled by a market-driven discovery and development pipeline in crop protection, crop enhancement, and professional
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pest and turf management. We operate in a single distinct business segment. We
develop, market and sell all three major classes of crop protection chemicals
(insecticides, herbicides and fungicides) as well as biologicals, crop
nutrition, and seed treatment, which we group as plant health. These products
are used in agriculture to enhance crop yield and quality by controlling a broad
spectrum of insects, weeds and disease, as well as in non-agricultural markets
for pest control. This powerful combination of advanced technologies includes
leading insect control products based on Rynaxypyr® and Cyazypyr® active
ingredients; Authority®, Boral®, Centium®, Command® and Gamit® branded
herbicides; Isoflex™ active herbicide ingredient; Talstar® and Hero® branded
insecticides; and flutriafol-based fungicides and biologicals such as Quartzo®
and Presence® bionematicides as well as crop enhancers such as Accudo®. The FMC
portfolio also includes Arc™ farm intelligence.
COVID-19 Pandemic
As an agricultural sciences company, we are considered an "essential" industry
in the countries in which we operate; we have avoided significant plant closures
and all our manufacturing facilities and distribution warehouses remain
operational and properly staffed. Our research laboratories and greenhouses also
have continued to operate throughout the pandemic. However, we did have a
third-party U.S. toller that was disrupted in the fourth quarter of 2020 because
of COVID-related staffing issues, which signifies one of the ongoing business
risks that the pandemic creates. We are closely monitoring raw material and
supply chain costs. The extent to which COVID-19 will continue to impact us will
depend on future developments, many of which remain uncertain and cannot be
predicted with confidence, including the duration of the pandemic, further
actions to be taken to contain the pandemic or mitigate its impact, and the
extent of the direct and indirect economic effects of the pandemic and
containment measures, among others.
We have implemented procedures to support the health and safety of our employees
and we are following all U.S. Centers for Disease Control and Prevention , as
well as state and regional health department guidelines. The well-being of our
employees is FMC's top priority. In June 2021 , we introduced flexible work
arrangements to facilitate the return of all staff to our headquarters in
Philadelphia as well as some other locations in adherence with local guidelines,
and we are resuming in-office operations where permitted by local authorities.
In addition, we have thousands of employees who continue operating our
manufacturing sites and distribution warehouses. In all our facilities, we are
using a variety of best practices to address COVID-19 risks, following the
protocols and procedures recommended by leading health authorities. We continue
to have zero transmissions of the virus in our facilities. We are monitoring the
situation in regions where the pandemic continues to escalate and in such
regions will remain in a remote working environment until it is safe to return
to the workplace. On May 3, 2021 , in response to the challenges India is facing
with significant increases in COVID cases across the country, we announced our
commitment to donate seven pressure swing adsorption oxygen plants to hospitals
across five states in India to help address the rapidly increasing demand for
medical oxygen. This program focuses on rural areas where we are providing
further community support.
We made significant investments in our employees as a result of the COVID-19
pandemic, including through enhanced dependent care pay policies, recognition
bonuses, increased flexibility of work schedules and hours of work to
accommodate remote working arrangements, and investment in IT infrastructure to
promote remote work. Through these efforts we have successfully avoided any
COVID-19 related furloughs or workforce reductions to date.
We will continue to monitor the economic environment related to the pandemic on
an ongoing basis and assess the impacts on our business.
Second Quarter 2021 Highlights
The following items are the more significant developments or financial
highlights in our business during the three months ended June 30, 2021 :
•Revenue of $1,242.0 million for the three months ended June 30, 2021 increased
$86.7 million or approximately 8 percent versus the same period last year. A
more detailed review of revenue is discussed under the section titled "Results
of Operations" . On a regional basis, sales in North America decreased by
approximately 7 percent, sales in Latin America increased approximately 15
percent, sales in Europe , Middle East and Africa increased by approximately 3
percent, and sales in Asia increased approximately 20 percent. The increase was
mostly driven by volume growth, reflecting robust demand for our products around
the world. Excluding foreign currency impacts, revenue increased 4 percent
during the quarter.
•Our gross margin of $531.8 million increased versus the prior year quarter by
$9.1 million driven by higher volumes. Gross margin percent of approximately 43
percent decreased compared to approximately 45 percent in the prior year period.
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•Selling, general and administrative expenses decreased from $171.0 million to
$161.0 million , or approximately 6 percent. Selling, general and administrative
expenses, excluding transaction-related charges, of $161.0 million increased
$3.0 million , or approximately 2 percent, compared to the prior year.
•Research and development expenses of $65.9 million increased $1.6 million or
approximately 2 percent. In the prior year period we phased some research and
development projects differently to allow for lower costs in response to the
pandemic without fundamentally impacting long-term timelines. In the current
year period we have resumed research and development expenses related to these
projects.
•Net income (loss) attributable to FMC stockholders increased from $184.4
million to $202.9 million which represents an increase of $18.5 million , or
approximately 10 percent. Adjusted after-tax earnings from continuing operations
attributable to FMC stockholders of $235.2 million increased compared to the
prior year amount of $224.0 million . See the disclosure of our Adjusted Earnings
Non-GAAP financial measurement below, under the section titled "Results of
Operations" .
2021 Outlook Update
In 2021, we now expect the global crop protection market to be up mid-single
digits, on a U.S. dollar basis, which is slightly higher than our prior
forecast. The change from prior forecast is due to our view that the Latin
American market will now grow in the high-single digits, versus low single
digits previously. Basic crop fundamentals remain strong, especially in that
region. We continue to anticipate mid-single digit growth in the EMEA market,
low- to mid-single digit growth in the Asian market and low-single digit growth
in the North American market.
Our 2021 revenue forecast remains in the range of approximately $4.9 billion to
$5.1 billion , up approximately 8 percent at the midpoint versus 2020. Full year
adjusted EBITDA(1) is now expected to be in the range of $1.29 billion to $1.35
billion , representing 6 percent growth at the midpoint versus 2020 results. 2021
adjusted earnings are now expected to be in the range of $6.54 to $6.94 per
diluted share(1), representing a year over year increase of 9 percent at the
midpoint. This is down 31 cents at the midpoint versus our prior forecast.
Consistent with past practice, we do not factor in any benefit from potential
share repurchases in our EPS guidance. Full-year earnings growth drivers include
significant volume growth, higher pricing, and foreign currency benefits.
Adjusted earnings estimates do not include the benefit of any future share
repurchases. For cash flow outlook, refer to the liquidity and capital resources
section below.
(1)Although we provide forecasts for adjusted earnings per share and adjusted
EBITDA (Non-GAAP financial measures), we are not able to forecast the most
directly comparable measures calculated and presented in accordance with U.S.
GAAP. Certain elements of the composition of the U.S. GAAP amounts are not
predictable, making it impractical for us to forecast. Such elements include,
but are not limited to, restructuring, acquisition charges, and discontinued
operations. As a result, no U.S. GAAP outlook is provided.
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RESULTS OF OPERATIONS
Overview
The following charts provide a reconciliation of Adjusted EBITDA, Adjusted
Earnings, and Organic Revenue Growth, all of which are Non-GAAP financial
measures, from the most directly comparable GAAP measure. Adjusted EBITDA and
Organic Revenue are provided to assist the readers of our financial statements
with useful information regarding our operating results. Our operating results
are presented based on how we assess operating performance and internally report
financial information. For management purposes, we report operating performance
based on earnings before interest, income taxes, depreciation and amortization,
discontinued operations, and corporate special charges. Our Adjusted Earnings
measure excludes corporate special charges, net of income taxes, discontinued
operations attributable to FMC stockholders, net of income taxes, and certain
Non-GAAP tax adjustments. These are excluded by us in the measure we use to
evaluate business performance and determine certain performance-based
compensation. Organic Revenue Growth excludes the impacts of foreign currency
changes, which we believe is a meaningful metric to evaluate our revenue
changes. These items are discussed in detail within the "Other Results of
Operations" section that follows. In addition to providing useful information
about our operating results to investors, we also believe that excluding the
effect of corporate special charges, net of income taxes, and certain Non-GAAP
tax adjustments from operating results and discontinued operations allows
management and investors to compare more easily the financial performance of our
underlying business from period to period. These measures should not be
considered as substitutes for net income (loss) or other measures of performance
or liquidity reported in accordance with U.S. GAAP.
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(in Millions) (unaudited) (unaudited)
Revenue $ 1,242.0 $ 1,155.3 $ 2,437.6 $ 2,405.3
Costs of sales and services 710.2 632.6 1,393.4 1,321.1
Gross margin $ 531.8 $
522.7
161.0 171.0 335.5 360.4
Research and development expenses 65.9 64.3 139.9 131.6
Restructuring and other charges (income) 16.3 19.5 19.5 32.9
Total costs and expenses $ 953.4 $ 887.4 $ 1,888.3 $ 1,846.0
Income from continuing operations before
non-operating pension and postretirement charges
(income), interest expense, net and income taxes
(1) $ 288.6 $
267.9
Non-operating pension and postretirement charges (income) 4.8 2.2 9.6 4.4 Interest expense, net 32.6 40.7 65.0 81.5 Income (loss) from continuing operations before income taxes$ 251.2 $
225.0
33.4 29.2 65.6 63.9
Income (loss) from continuing operations
195.8
(14.6) (10.8) (22.7) (18.3)
Net income (loss) (GAAP) $ 203.2 $ 185.0 $ 386.4 $ 391.2
Adjustments to arrive at Adjusted EBITDA:
Corporate special charges (income):
Restructuring and other charges (income) (3) $ 16.3 $
19.5 $ 19.5
4.8 2.2 9.6 4.4
Total transaction-related charges (5) - 13.0 0.4 26.0
Discontinued operations, net of income taxes 14.6 10.8 22.7 18.3
Interest expense, net 32.6 40.7 65.0 81.5
Depreciation and amortization 42.5 40.1 85.1 79.2
Provision (benefit) for income taxes 33.4 29.2 65.6 63.9
Adjusted EBITDA (Non-GAAP) (2) $ 347.4 $
340.5
____________________
(1) Referred to as operating profit.
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(2) Adjusted EBITDA is defined as operating profit excluding corporate special
charges (income) and depreciation and amortization expense.
(3) See Note 10 for details of restructuring and other charges (income).
(4) Our non-operating pension and postretirement charges (income) are defined
as those costs (benefits) related to interest, expected return on plan assets,
amortized actuarial gains and losses and the impacts of any plan curtailments or
settlements. These are excluded from our operating results and are primarily
related to changes in pension plan assets and liabilities which are tied to
financial market performance and we consider these costs to be outside our
operational performance. We continue to include the service cost and
amortization of prior service cost in our operating results noted above. These
elements reflect the current year operating costs to our business for the
employment benefits provided to active employees.
(5) Represents transaction costs, costs for transitional employees, other
acquired employees related costs, and transactional-related costs such as legal
and professional third-party fees. We completed the integration of the DuPont
Crop Protection Business as of June 30, 2020 , except for the completion of
certain in-flight initiatives, primarily associated with the finalization of our
worldwide ERP system. The TSA is now terminated and the last phase of the ERP
system transition went live in November 2020 with a stabilization period that
went into the first quarter of 2021.
Three Months Ended June 30, Six Months Ended June 30,
(in Millions) 2021 2020 2021 2020
DuPont Crop Protection Business Acquisition
Legal and professional fees (1) $ - $ 13.0 $ 0.4 $ 26.0
Total Transaction-related charges $ - $ 13.0 $ 0.4 $ 26.0 ____________________
(1) Represents transaction costs, costs for transitional employees, other
acquired employees related costs, and transactional-related costs such as legal
and professional third-party fees. These charges are recorded as a component of
"Selling, general and administrative expense" on the condensed consolidated
statements of income (loss).
ADJUSTED EARNINGS RECONCILIATION
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(in Millions) (unaudited) (unaudited)
Net income (loss) attributable to FMC
stockholders (GAAP) $ 202.9 $
184.4
Corporate special charges (income), pre-tax (1) 21.1 34.7 29.5 63.3 Income tax expense (benefit) on Corporate special charges (income) (2) (4.7) (5.9) (6.3) (10.8) Corporate special charges (income), net of income taxes $ 16.4$ 28.8 $ 23.2 $ 52.5 Discontinued operations attributable to FMC Stockholders, net of income taxes 14.6 10.8 22.7 18.3 Non-GAAP tax adjustments (3) 1.3 - 3.8 2.2 Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP)$ 235.2 $ 224.0 $ 435.2 $ 463.6 ____________________ (1) Represents restructuring and other charges (income), non-operating pension and postretirement charges (income), and transaction-related charges. (2) The income tax expense (benefit) on corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the corporate special charge (income) occurred and includes both current and deferred income tax expense (benefit) based on the nature of the Non-GAAP performance measure. (3) We exclude the GAAP tax provision, including discrete items, from the Non-GAAP measure of income, and instead include a Non-GAAP tax provision based upon the annual Non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax items including, but not limited to: income tax expenses or benefits that are not related to current year ongoing business operations; tax adjustments associated with fluctuations in foreign currency remeasurement of certain foreign operations; certain changes in estimates of tax matters related to prior fiscal years; certain changes in the realizability of deferred tax assets; and changes in tax law which includes the impact of the Tax Cuts and Jobs Act ("the Act") enacted onDecember 22, 2017 . Management believes excluding these discrete tax items assists investors and securities analysts in understanding the tax provision and the effective tax rate related to ongoing operations thereby providing investors with useful supplemental information about FMC's operational performance. 38 -------------------------------------------------------------------------------- ORGANIC REVENUE GROWTH RECONCILIATION Three Months Ended June 30, 2021
vs. 2020
Total Revenue Change (GAAP) 8 % Less: Foreign Currency Impact 4 % Organic Revenue Change (Non-GAAP) 4 % Results of Operations In the discussion below, all comparisons are between the periods unless otherwise noted. Revenue Three Months EndedJune 30, 2021 vs. 2020 Revenue of$1,242.0 million increased$86.7 million , or approximately 8 percent, versus the prior year period. The increase was driven by volume increases and favorable foreign currencies, which benefited revenue by approximately 4 percent each. Excluding foreign currency impacts, revenue increased approximately 4 percent during the quarter. Six Months EndedJune 30, 2021 vs. 2020 Revenue of$2,437.6 million increased$32.3 million , or approximately 1 percent, versus the prior year period, driven by favorable foreign currencies which contributed an approximate 2 percent increase. Lower volumes impacted revenue by approximately 1 percent. Excluding foreign currency impacts, revenue decreased approximately 1 percent. See below for a discussion of revenue by region. Total Revenue by Region Three Months Ended June 30, Six Months Ended June 30, (in Millions) 2021 2020 2021 2020 North America$ 290.5 $ 311.9 $ 591.5 $ 639.5 Latin America 299.6 261.2 502.8 520.4 Europe, Middle East & Africa (EMEA) 272.9 265.4 672.3 680.7 Asia 379.0 316.8 671.0 564.7 Total Revenue$ 1,242.0 $ 1,155.3 $ 2,437.6 $ 2,405.3 Three Months EndedJune 30, 2021 vs. 2020North America : Revenue decreased approximately 7 percent versus the prior year period, or 8 percent excluding foreign currency. Similar to prior quarter, the decrease was driven by the shift of diamide partner sales fromNorth America to other regions. Excluding revenue from our global diamide partnerships, ourU.S. andCanada crop business grew more than 20 percent, driven by an approximate$25 million contribution from new product launches Xyway™ fungicide and Vantacor™ insect control.Latin America : Revenue increased approximately 15 percent versus the prior year period, or approximately 12 percent excluding foreign currency. Double-digit growth inMexico andColombia was driven by the strength of our products on specialty crops. We also had a shift of diamide partner sales toLatin America fromNorth America , which boosted the year-over-year growth rate. EMEA: Revenue increased approximately 3 percent versus the prior year period, or decreased approximately 3 percent excluding foreign currency. Diamide growth and strong sales of herbicides for cereals and sugar beets were more than offset by a delayed start of Spring, which resulted in lost applications, as well as discontinued product registrations.Asia : Revenue increased approximately 20 percent versus the prior year period, or approximately 13 percent excluding foreign currency, driven by double-digit growth inIndia ,Australia ,Indonesia , andPakistan . Growth was primarily driven by insecticides, but herbicide sales were also strong, particularly inIndia for soybean and sugarcane applications. Six Months EndedJune 30, 2021 vs. 2020North America : Revenue decreased approximately 8 percent versus the prior year period driven by a shift of diamide partner 39 -------------------------------------------------------------------------------- sales fromNorth America to other regions. The decrease was partially offset by sales growth for herbicides and strong product launches of Xyway™ fungicide and Vantacor™ insect control.Latin America : Revenue decreased approximately 3 percent versus the prior year period, or approximately 1 percent excluding foreign currency headwinds. In the first quarter of 2021, we proactively reduced channel inventory of FMC products as planned, improving our inventory situation inBrazil . Additionally,Brazil's cotton business was very strong for us in the three months endedMarch 31, 2020 , which did not repeat in 2021. These were partially offset by a return to growth inBrazil and strong contributions fromMexico and the Andean subregion in the second quarter of 2021. EMEA: Revenue decreased approximately 1 percent versus the prior year period, or approximately 6 percent excluding foreign currency, primarily due to discontinued registrations and a delayed start to Spring which resulted in lost applications. These more than offset strong sales of diamides and other insecticides and fungicides.Asia : Revenue increased approximately 19 percent versus the prior year period, or approximately 13 percent excluding foreign currency headwinds, driven by growth inAustralia andIndia . We had strong sales for our new Overwatch® herbicide and sales of our diamides were robust across the region. For 2021, full-year revenue is expected to be in the range of approximately$4.9 billion to$5.1 billion , which represents approximately 8 percent growth at the midpoint versus 2020. Gross margin Three Months EndedJune 30, 2021 vs. 2020 Gross margin of$531.8 million increased$9.1 million , or approximately 2 percent versus the prior year period. The increase was primarily due to higher revenues driven by increased volumes. Gross margin percent of approximately 43 percent decreased 2 percent compared to approximately 45 percent in the prior year period primarily due to accelerating raw material and logistic costs. Six Months EndedJune 30, 2021 vs 2020 Gross margin of$1,044.2 million decreased$40.0 million , or approximately 4 percent versus the prior year period. Gross margin percent of approximately 43 percent decreased slightly from approximately 45 percent in the prior year period primarily due to accelerating raw material and logistic costs. Selling, general and administrative expenses Three Months EndedJune 30, 2021 vs. 2020 Selling, general and administrative expenses of$161.0 million decreased$10.0 million , or 6 percent, versus the prior year period. A large portion of the decrease was related to the fact that we did not incur any transaction-related expenses after the first quarter of 2021. Selling, general and administrative expenses, excluding transaction-related charges, increased$3.0 million , or approximately 2 percent, versus the prior year period. Six Months EndedJune 30, 2021 vs. 2020 Selling, general and administrative expenses of$335.5 million decreased$24.9 million , or approximately 7 percent versus the prior year period due to the cessation of transaction-related expenses, as mentioned above. Selling, general and administrative expenses, excluding transaction-related charges, increased$0.7 million , versus the prior year period. Research and development expenses Three Months EndedJune 30, 2021 vs. 2020 Research and development expenses of$65.9 million increased$1.6 million , or approximately 2 percent versus the prior year period. In the current year period we returned to spending on some research and development projects that were paused last year for cost control measures. In the full year 2020 we eliminated or delayed certain non-essential expenditures to offset effects of the COVID-19 pandemic and phased some projects differently to allow lower costs in response to the pandemic without fundamentally impacting long-term timelines. Six Months EndedJune 30, 2021 vs. 2020 Research and development expenses of$139.9 million increased$8.3 million , or approximately 6 percent versus the prior year period. As noted above, the increase in research and development expenditures is related to cost-saving measures taken in the prior year in response to the COVID-19 pandemic. 40 -------------------------------------------------------------------------------- Adjusted EBITDA (Non-GAAP) Three Months EndedJune 30, 2021 vs. 2020 Adjusted EBITDA of$347.4 million increased$6.9 million , or approximately 2 percent versus the prior year period. The increase was mainly driven by volume growth, which benefited Adjusted EBITDA by approximately 12 percent. This was largely offset by cost increases in raw materials, packaging, and logistics costs, and to a lesser extent the reversal of some temporary cost savings in the prior year, which had an unfavorable impact of approximately 10 percent on Adjusted EBITDA. Six Months EndedJune 30, 2021 vs. 2020 Adjusted EBITDA of$654.3 million decreased$43.1 million , or approximately 6 percent versus the prior year period. The decrease was driven by higher cost, primarily increases in raw materials, packaging, and logistics, as well as price, which had unfavorable impacts of approximately 8 percent and 1 percent, respectively. Unfavorable foreign currency fluctuations impacted the change in Adjusted EBITDA by approximately 1 percent. These factors more than offset volume growth which contributed an approximate 4 percent increase. For 2021, full-year Adjusted EBITDA is expected to be in the range of$1.29 billion to$1.35 billion , which represents approximately 6 percent growth at the midpoint versus 2020. Although we provide a forecast for Adjusted EBITDA, a Non-GAAP financial measure, we are not able to forecast the most directly comparable measure calculated and presented in accordance withU.S. GAAP. See Note 1 to our 2021 Outlook Update within this section of the Form 10-Q. Other Results of Operations Depreciation and amortization Three Months EndedJune 30, 2021 vs. 2020 Depreciation and amortization of$42.5 million increased$2.4 million , or approximately 6 percent, as compared to the prior year period of$40.1 million . The increase was mostly driven by the impacts of the amortization effects of the completion of various phases of our ERP implementation. Six Months EndedJune 30, 2021 vs. 2020 Depreciation and amortization of$85.1 million increased$5.9 million , or approximately 7 percent, as compared to the prior year period of$79.2 million . The increase was mostly driven by the impacts of the amortization effects of the completion of various phases of our ERP implementation. Interest expense, net Three Months EndedJune 30, 2021 vs. 2020 Interest expense, net of$32.6 million decreased compared to the prior year period of$40.7 million . The decrease was driven by the benefit of lower LIBOR rates as well as lower foreign debt balances partially offset by higher average commercial paper balances. Six Months EndedJune 30, 2021 vs. 2020 Interest expense, net of$65.0 million decreased compared to the prior year period of$81.5 million . The decrease was driven by the benefit of lower LIBOR rates as well as lower foreign debt balances partially offset by higher average commercial paper balances. Corporate special charges (income) Restructuring and other charges (income) Three Months Ended June 30, Six Months Ended June 30, (in Millions) 2021 2020 2021 2020 Restructuring charges $ 10.5
5.8 3.3 2.7 10.1
Total restructuring and other charges (income) $ 16.3
$ 19.5 $ 19.5$ 32.9 41
-------------------------------------------------------------------------------- Three Months EndedJune 30, 2021 vs. 2020 Restructuring charges in 2021 of$10.5 million consist of$7.2 million of charges related to regional realignment activities, including severance and employee relocation costs, and$1.7 million associated with the integration of the DuPont Crop Protection Business which was completed during the second quarter of 2020 except for certain in-flight initiatives, including severance, accelerated depreciation on certain fixed assets, and other costs (benefits). Additionally, there were other miscellaneous restructuring charges of$1.6 million . Restructuring charges in 2020 of$16.2 million represent charges associated with the integration of the DuPont Crop Protection Business which was completed during the second quarter of 2020 except for certain in-flight initiatives. These charges include severance, accelerated depreciation on certain fixed assets, and other costs (benefits). Other charges, net in 2021 of$5.8 million primarily consists of charges related to environmental sites. Other charges, net in 2020 of$3.3 million primarily consists of charges related to environmental sites. Six Months EndedJune 30, 2021 vs. 2020 Restructuring charges in 2021 of$16.8 million consist of$7.9 million of charges associated with regional realignment activities, including severance and employee relocation costs, and$5.0 million related to the integration of the DuPont Crop Protection Business which was completed during the second quarter of 2020 except for certain in-flight initiatives. Additionally, there were other miscellaneous restructuring charges of$3.9 million . Restructuring charges in 2020 of$22.8 million primarily comprised of charges associated with the integration of the DuPont Crop Protection Business which was completed during the second quarter of 2020 except for certain in-flight initiatives. These charges include severance, accelerated depreciation on certain fixed assets, and other costs (benefits) of$23.2 million as well as other miscellaneous restructuring benefits of$0.4 million . Other charges, net in 2021 of$2.7 million primarily consists of in-process research and development charges. Other charges, net in 2020 of$10.1 million primarily consists of charges related to environmental sites of$9.7 million . Non-operating pension and postretirement charges (income) Charges for the three months endedJune 30, 2021 were$4.8 million compared to charges of$2.2 million for the three months endedJune 30, 2020 . The increase in non-operating pension and post retirement charges (income) is attributable to a lower expected return on plan assets, with rates changing from 4.25 percent to 3 percent, and a higher amortization of net loss. Partially offsetting these increases was a decrease in interest cost due to falling discount rates. Charges for the six months endedJune 30, 2021 were$9.6 million compared to charges of$4.4 million for the six months endedJune 30, 2020 . The increase in non-operating pension and post retirement charges (income) is attributable to a lower expected return on plan assets, with rates changing from 4.25 percent to 3 percent, and a higher amortization of net loss. Partially offsetting these increases was a decrease in interest cost due to falling discount rates. Transaction-related charges A detailed description of the transaction-related charges is included in Note 5 to the condensed consolidated financial statements included within this Form 10-Q. Provision for income taxes Three Months EndedJune 30, 2021 vs. 2020 Provision for income taxes for the three months endedJune 30, 2021 was$33.4 million resulting in an effective tax rate of 13.3 percent. Provision for income taxes for the three months endedJune 30, 2020 was$29.2 million resulting in an effective tax rate of 13.0 percent. The primary drivers for the increase in the effective tax rate for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 are shown in the table below. Three Months Ended June 30, 2021 2020 Income Tax Provision Effective Tax Income Tax Provision (in Millions) (Expense) (Benefit) Rate (Expense) (Benefit) Effective Tax Rate GAAP - Continuing operations$ 251.2 $ 33.4 13.3 %$ 225.0 $ 29.2 13.0 % Corporate special charges (income) 21.1 4.7 34.7 5.9 Tax adjustments (1) (1.3) - Non-GAAP - Continuing operations$ 272.3 $ 36.8 13.5 %$ 259.7 $ 35.1 13.5 % 42 --------------------------------------------------------------------------------
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(1) Refer to Note 3 of the Adjusted Earnings Reconciliation table within this section of this Form 10-Q for an explanation of tax adjustments. Six Months EndedJune 30, 2021 vs. 2020 Provision for income taxes for the six months endedJune 30, 2021 was$65.6 million resulting in an effective tax rate of 13.8 percent. Provision for income taxes for the six months endedJune 30, 2020 was$63.9 million resulting in an effective tax rate of 13.5 percent. The primary drivers for the increase in the effective tax rate for the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 are shown in the table below. Six Months Ended June 30, 2021 2020 Income Tax Provision Effective Tax Income Tax Provision (in Millions) (Expense) (Benefit) Rate (Expense) (Benefit) Effective Tax Rate GAAP - Continuing operations$ 474.7 $ 65.6 13.8 %$ 473.4 $ 63.9 13.5 % Corporate special charges (income) 29.5 6.3 63.3 10.8 Tax adjustments (1) (3.8) (2.2) Non-GAAP - Continuing operations$ 504.2 $ 68.1 13.5 %$ 536.7 $ 72.5 13.5 %
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(1) Refer to Note 3 of the Adjusted Earnings Reconciliation table within this section of this Form 10-Q for an explanation of tax adjustments
Discontinued operations, net of income taxes Our discontinued operations include provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities. Three Months EndedJune 30, 2021 vs. 2020 Discontinued operations, net of income taxes represented a loss of$14.6 million for the three months endedJune 30, 2021 compared to a loss of$10.8 million for the three months endedJune 30, 2020 . The loss during both the second quarter of 2021 and 2020 was primarily related to adjustments related to the retained liabilities from our previously discontinued operations. Six Months EndedJune 30, 2021 vs. 2020 Discontinued operations, net of income taxes represented a loss of$22.7 million for the six months endedJune 30, 2021 compared to a loss of$18.3 million for the six months endedJune 30, 2020 . The loss during both the six months ended 2021 and 2020 was primarily related to adjustments related to the retained liabilities from our previously discontinued operations. Net income (loss) attributable to FMC stockholders Three Months EndedJune 30, 2021 vs. 2020 Net income (loss) increased to$202.9 million from income of$184.4 million in the prior year period. The higher results were primarily driven by an increase in gross margin of approximately$9 million driven by higher volume, and lower selling, general and administrative costs of approximately$10 million , driven by the lack of transaction costs compared to the prior year. Six Months EndedJune 30, 2021 vs. 2020 Net income (loss) decreased to$385.5 million from income of$390.6 million in the prior year period. The lower results were primarily driven by a decrease in gross margin of approximately$40 million , primarily due to higher costs, and an increase of approximately$8 million in research and development expenses compared to the prior year, partially offset by lower selling, general and administrative costs of approximately$25 million and lower restructuring and other charges (income) of approximately$13 million compared to the prior year. 43 -------------------------------------------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents atJune 30, 2021 andDecember 31, 2020 , were$728.5 million and$568.9 million , respectively. Of the cash and cash equivalents balance atJune 30, 2021 ,$705.8 million were held by our foreign subsidiaries. The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operating activities and future foreign investments. We have not provided income taxes for other additional outside basis differences inherent in our investments in subsidiaries because the investments are essentially permanent in duration or we have concluded that no additional tax liability will arise upon disposal or remittance. AtJune 30, 2021 , we had total debt of$3,816.6 million as compared to$3,267.8 million atDecember 31, 2020 . Total debt included$2,630.8 million and$2,929.5 million of long-term debt (excluding current portions of$393.6 million and$93.6 million ) atJune 30, 2021 andDecember 31, 2020 , respectively. AtJune 30, 2021 , our remaining borrowing capacity under our credit facility was$598.0 million . See Note 11 in the condensed consolidated financial statements included in this Form 10-Q for discussion of the amendments to the Revolving Credit Facility Agreement and Term Loan Agreement undertaken this quarter. As ofJune 30, 2021 , we were in compliance with all of our debt covenants. See Note 11 in the condensed consolidated financial statements included in this Form 10-Q for further details. We remain committed to solid investment grade credit metrics, and expect full-year average leverage to be in line with this commitment in 2021. Short-term debt, which consists of short-term foreign borrowings and commercial paper borrowings, increased from$338.3 million atDecember 31, 2020 to$1,185.8 million atJune 30, 2021 . We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries. Our commercial paper program allows us to borrow at rates generally more favorable than those available under our credit facility. AtJune 30, 2021 , we had$689.1 million commercial paper borrowings under the commercial paper program. AtJune 30, 2021 , the average effective interest rate on the borrowings was 0.53% percent. 44
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