Overview
We are a diversified chemical company serving agricultural, consumer and industrial markets globally with innovative solutions, applications and market-leading products. We operate in three distinct business segments:
Agricultural Products, Specialty Chemicals and Industrial Chemicals. Our Agricultural Products segment develops, markets and sells all three major classes of crop protection chemicals - insecticides, herbicides and fungicides - with particular strength in insecticides and herbicides. 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 pest control in non-agricultural markets. Specialty Chemicals consists of our BioPolymer and lithium businesses. This segment focuses on food ingredients that are used to enhance texture, color, structure and physical stability, pharmaceutical additives for binding, encapsulation and disintegrant applications, ultrapure biopolymers for medical devices and lithium for energy storage, specialty polymers and pharmaceutical synthesis. Our Industrial Chemicals segment manufactures a wide range of inorganic materials, including soda ash, hydrogen peroxide, specialty peroxygens and silicates. This segment serves a diverse group of markets, from economically-sensitive industrial sectors to technology-intensive specialty markets. The products in this segment are sought by customers for their critical reactivity or specific functionality in markets such as glass, detergents, chemicals and pulp and paper.

2012 Highlights
The following are the more significant developments in our businesses during the year ended December 31, 2012:
• Revenue of $3,748.3 million in 2012 increased $370.4 million or 11 percent versus last year. Revenue increased in all businesses and mostly in all regions. A more detailed review of revenues by segment are included under the section entitled "Results of Operations" . On a regional basis, sales in Asia were up 13 percent, sales in Latin America grew 21 percent and sales in North America were up nine percent, while sales in Europe, Middle East and Africa decreased by three percent.

• Our gross margin of $1,341.2 million increased $173.8 million or approximately 15 percent versus last year. Gross margin percent of approximately 36 percent increased slightly by one percentage point compared to last year, driven by higher selling prices and improved mix partially offset by higher costs.

• Selling, general and administrative expenses, excluding non-operating pension and postretirement charges, of $492.2 million increased $64.2 million or approximately 15 percent, largely due to increased spending on targeted growth initiatives and to meet the growth in our business. The majority of these increases were experienced in our Agricultural Products segment. Non-operating pension and postretirement charges are presented in our Adjusted Earnings Non-GAAP financial measurement below under the section titled "Results of Operations" .

• Research and Development expenses of $117.8 million increased $12.6 million or 12 percent, largely due to increased spending in Agricultural Products associated with various innovation projects.

• Adjusted earnings after-tax from continuing operations attributable to FMC stockholders of approximately $483.3 million increased approximately $54.4 million or 13 percent primarily due to higher operating results in Agricultural

Products. See the disclosure of our Adjusted Earnings Non-GAAP financial measurement below under the section titled "Results of Operations" .
• We made the decision to phase out our zeolite operations in Spain and exit the product line by fourth quarter 2012. The majority of the restructuring charges associated with this announcement were incurred in 2012 totaling approximately $6.4 million.

• We also decided to write-down a substantial portion of our investment to develop potash extraction capability in Argentina. Given the changes in potash market conditions, this project is no longer economically attractive. As such, we are discontinuing all work on Potash in Argentina and will repurpose the assets developed for this project as much as possible for future use in producing Lithium. This decision resulted in a non-cash charge of $13.3 million during the year.

Additionally, in January 2013, we implemented a plan to restructure a portion of the operations in Lithium. The objective of the restructuring was to better align our business and costs to macroeconomic and market realities. The restructuring decision will result in workforce reductions at several of our Lithium facilities, primarily North Carolina and Argentina. We expect to incur charges between $10-15 million, mostly in the first quarter of 2013. These charges will primarily result in cash spending.
• We also completed the following growth initiatives:

?            In June 2012, we acquired Phytone Ltd (Phytone). Phytone is a
             natural colors producer based in the United Kingdom. Phytone's
             natural products and formulations are used by global customers in
             the food, beverage, personal care and nutrition sectors. Phytone has
             been consolidated into our existing BioPolymer division within our
             Specialty Chemicals segment.


?            In July 2012, we made the decision to invest more than $100 million
             in a new world class microcrystalline cellulose (MCC) manufacturing
             facility in Rayong, Thailand. The new plant will ensure our
             long-term ability to supply the growing Asia market with our
             industry leading Avicel colloidal MCC which is part of our
             BioPolymer division within our Specialty Chemicals segment.


?            In August 2012, we acquired the assets of Pectine Italia S.p.A.
             (PI). PI produces pectin, a stabilizer and thickening agent used
             widely in many foods and derived predominately from lemon peels.
             This acquisition will enable us to enter the pectin market which
             complements our portfolio of texturant product lines which is part
             of our BioPolymer division within our Specialty Chemicals segment.


?            In September 2012, our Agricultural Products segment entered into a
             collaboration and license agreement with a third-party company for
             the purpose of obtaining certain technology and intellectual
             property rights relating to a new fungicide compound still under
             development. This new carboximide-class broad spectrum fungicide
             will expand our current fungicide portfolio.


?            In December 2012, we signed a perpetual, global licensing agreement,
             along with distribution and services agreements with GAT
             Microencapsulation AG covering a range of advanced crop protection
             products and proprietary formulation technologies.

2013 Outlook
In 2013, we expect another year of record performance. We expect higher revenues in all three of our segments. Increased volumes in all regions due to strong market conditions, growth from new or recently introduced products as well as direct market access initiatives will drive higher revenues in Agricultural Products. Higher volumes in BioPolymer will drive increased Special Chemicals revenue and higher prices in soda ash, projected in the second half of 2013, are anticipated to drive higher Industrial Chemicals sales.

We expect an increase in earnings, mostly driven by higher sales as discussed above. Our projected increase in earnings is expected to be partially offset by higher spending on growth initiatives. We expect cash flow from our business segments to remain strong.

Results of Operations-2012, 2011 and 2010
Overview
The following presents a reconciliation of our segment results to net income
attributable to FMC stockholders as seen through the eyes of management.
                                SEGMENT RESULTS RECONCILIATION
                                                               Year Ended December 31,
(in Millions)                                             2012          2011          2010
Revenue
Agricultural Products                                  $ 1,763.8     $ 1,464.5     $ 1,241.8
Specialty Chemicals                                        913.8         879.1         824.5
Industrial Chemicals                                     1,076.1       1,038.5       1,054.8
Eliminations                                                (5.4 )        (4.2 )        (4.8 )
Total                                                  $ 3,748.3     $ 3,377.9     $ 3,116.3
Income (loss) from continuing operations before income
taxes
Agricultural Products                                  $   450.7     $   348.3     $   309.5
Specialty Chemicals                                        189.5         199.8         185.0
Industrial Chemicals                                       165.4         154.5         122.9
Eliminations                                                 0.1          (0.1 )         0.2
Segment operating profit                               $   805.7     $   702.5     $   617.6
Corporate expense                                          (63.6 )       (62.5 )       (63.0 )
Other income (expense), net (1)                            (23.5 )       (18.7 )        (5.4 )
Operating profit before the items listed below (2)         718.6         621.3         549.2

Interest expense, net                                      (45.3 )       (39.4 )       (39.3 )
Corporate special (charges) income:
Restructuring and other (charges) income                   (38.1 )       (32.4 )      (151.9 )
Non-operating pension and postretirement charges (3)       (34.9 )       (14.5 )       (19.9 )
Acquisition-related charges (4)                             (7.2 )        (0.8 )           -
Provision for income taxes                                (146.7 )      (136.5 )      (132.0 )
Discontinued operations, net of income taxes               (30.2 )       (31.8 )       (33.6 )
Net income attributable to FMC stockholders            $   416.2     $   365.9     $   172.5


____________________

(2) Results for all segments including corporate expense and other income (expense) are net of noncontrolling interests of $19.5 million, $16.3 million and $12.4 million for the years ended December 31, 2012, 2011 and 2010, respectively. The majority of these noncontrolling interests pertain to our Industrial Chemicals segment.

(3) Our non-operating pension and postretirement costs are defined as those costs related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These costs 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 exclude these non-operating pension and postretirement costs as we believe that removing them provides a better understanding of the underlying profitability of our businesses, provides increased transparency and clarity in the performance of our retirement plans and enhances period-over-period comparability. We continue to include the service cost and amortization of prior service cost in our operating segments noted above. We believe these elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees.

(4) These charges were related to the expensing of the inventory fair value step-up resulting from the application of purchase accounting. The charges for the year ended December 31, 2012 and 2011 primary relate to a number of acquisitions completed in 2011. On the consolidated statements of income, the charges presented are included in "Costs of sales and services". No such charges occurred for the year ended December 31, 2010.

The following chart, which is provided to assist the readers of our financial statements, depicts certain after-tax charges (gains). These items are excluded by us in the measures we use to evaluate business performance and determine certain performance-based compensation. These after-tax items are discussed in detail within the "Other results of operations" section that follows. Additionally, the chart below discloses our Non-GAAP financial measure "Adjusted after-tax earnings from continuing operations attributable to FMC stockholders" reconciled from the GAAP financial measure "Net income attributable to FMC stockholders". We believe that this measure provides useful information about our operating results to investors and securities analysts. We also believe that excluding the effect of restructuring and other income and charges, non-operating pension and postretirement charges and certain tax adjustments from operating results allows management and investors to compare more easily the financial performance of our underlying businesses from period to period. This measure should not be considered as a substitute for net income (loss) or other measures of performance or liquidity reported in accordance with GAAP.

                              ADJUSTED EARNINGS RECONCILIATION
                                                             Years Ended December 31,
(in Millions)                                             2012          2011         2010
Net income attributable to FMC stockholders (GAAP)     $   416.2     $  365.9     $  172.5
Corporate special charges (income), pre-tax                 80.2         47.7        171.8
Income tax expense (benefit) on Corporate special
charges (income)                                           (26.5 )      (15.6 )      (55.2 )
Corporate special charges (income), net of income
taxes                                                       53.7         32.1        116.6
Discontinued operations, net of income taxes                30.2         31.8         33.6
Tax adjustments                                            (16.8 )       (0.9 )       38.7
Adjusted after-tax earnings from continuing operations
attributable to FMC stockholders (Non-GAAP)            $   483.3     $  428.9     $  361.4

In the discussion below, please refer to our chart titled "Segment Results Reconciliation" within the Results of Operations section. All comparisons are between the periods unless otherwise noted. Segment Results
For management purposes, segment operating profit is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales and services, selling, general and administrative expenses and research and development expenses). We have excluded the following items from segment operating profit: corporate staff expense, interest income and expense associated with corporate debt facilities and investments, income taxes, gains (or losses) on divestitures of businesses, restructuring and other charges (income), non-operating pension and postretirement charges, investment gains and losses, loss on extinguishment of debt, asset impairments, Last-in, First-out ("LIFO") inventory adjustments, acquisition related charges and other income and expense items.
Information about how each of these items relates to our businesses at the segment level and results by segment are discussed below and in Note 19 to our consolidated financial statements included in this Form 10-K.

Effective in fiscal year 2013, our segment presentations including allocation of certain corporate expenses were updated to reflect how we currently make financial decisions and allocate resources. The presentation change is also being made since we believe the changes provide a better understanding of the underlying profitability of each individual business segment. The changes were the following:

• Allocation of certain long-term incentives, primarily stock-based compensation, from the category other income (expense), net to each business segment.

• Allocation of the depreciation on capitalized interest associated with completed construction projects from the category other income (expense), net to each business segment.

• The presentation of the impact of noncontrolling interest as its own line item. Noncontrolling interest impacts were previously netted within each individual segment. The majority of the noncontrolling interest pertains to our Industrial Chemicals segment.

• We have combined other income (expense), net and corporate expense into one line item renamed "Corporate and other".

This segment presentation change, effective January 1, 2013, is not incorporated into the Segment Results as discussed below. However, the 2013 outlook discussions for each segment below include revenue growth and operating profit projections which reflect this new segment presentation on a comparable basis.

Agricultural Products

                       Year Ended December 31,
(in Millions)       2012         2011         2010
Revenue          $ 1,763.8    $ 1,464.5    $ 1,241.8
Operating Profit     450.7        348.3        309.5

2012 vs. 2011
Revenue of $1,763.8 million increased approximately 20 percent versus the prior year period due to strong sales across all regions. The increase in revenue for the year ended December 31, 2012 was also attributable to acquisitions that closed in the second half of 2011 of approximately $60 million. Sales in North America improved by 30 percent to $368.5 million reflecting favorable market conditions, strong demand for our proprietary herbicides and insecticides and growth from new or recently introduced products. Latin America revenue of $960.5 million increased 23 percent reflecting strong market conditions in Brazil driven by key crops such as sugarcane and soybeans, increased planted acres and sales from our new market access joint venture, Ruralco, in Argentina. Revenue in Asia of $275.7 million increased 12 percent as a result of growth in recently launched and acquired products, coupled with growth in China, Indonesia and the Philippines. EMEA revenues of $159.1 million increased five percent driven by higher herbicide sales in Europe and insecticide volume gains in Africa.
Agricultural Products' operating profit of $450.7 million increased approximately 29 percent compared to the prior year, reflecting the broad-based sales growth and targeted price increases. This increase was partially offset by a $51.7 million increase in selling, general and administrative costs mainly for focused growth initiatives and increased people-related costs to support the higher sales. Segment earnings were also impacted by higher research and development costs of $11.1 million due to increased spending associated with various innovation projects.
In 2013, we expect full-year revenue growth in the high teens percent reflecting increased volumes in all regions due to strong market conditions and growth from new and recently introduced products including new fungicide products as well as our direct market access initiatives in Asia and Latin America. We expect full-year segment operating profit growth in the mid-teens percent driven by the sales gains partially offset by higher spending on targeted growth initiatives.

Certain Regulatory Issues

In 2009, our bifenthrin product was excluded from the European Commission's official list of approved pesticides. We submitted for reconsideration of that decision and in 2012 bifenthrin was re-approved for use in the European Union. FMC is now in the process of re-submitting for registrations in EU Member States. We can resume selling bifenthrin in the European market once the registrations are approved by the Member States. With the exception of France, we expect that most registrations will be approved over the next 24 months; due to the continued inclusion of bifenthrin on the French "Grenelle" list of pesticides we cannot predict when we may regain a French registration. We believe that the Grenelle listing was unwarranted and contrary to French administrative law, and we are challenging the decision. During 2013, we will not sell any bifenthrin for agricultural use into the EU, similar to the prior year, and the absence of such sales will not have a material effect on the Company's financial condition or results of operations.

We intend to defend vigorously all our products in the U.S., EU and other countries as our pesticide products are reviewed in the ordinary course of regulatory programs during 2013 as part of the ongoing cycle of re-registration of our pesticide products around the world. In 2008, the Brazilian health surveillance agency informed us that they intend to review carbofuran along with 13 other major pesticides, but has yet to issue any required formal announcement that identifies their specific concerns or preliminary position on re-registration. We are cooperating and defending our product in this process. Under the Brazilian regulatory process, any recommendation would require public notice and comment as well as concurrence from the Brazilian environmental and agricultural ministries before any regulatory change is effective. Thus, we do not expect any material sales impact due to regulatory reviews in Brazil during 2013.

2011 vs. 2010
Revenue of $1,464.5 million increased approximately 18 percent versus the prior year period due to strong sales in North America, Latin America and Asia slightly offset by the expected decline in Europe, Middle East and Africa (EMEA). North America revenue of $284.4 million increased 12 percent due to increased volumes as a result of strong market demand for our pre-emergent herbicides partially offset by unfavorable weather conditions experienced in the second quarter of 2011. Latin America revenue of $782.5 million increased 25 percent driven by favorable market conditions, particularly in Brazil's sugarcane, cotton and soybean markets, and growth in planted acres for key crops. Revenue in Asia of $246.0 million increased 21 percent reflecting continued strong market conditions, particularly in Australia, China, Indonesia, Thailand, Pakistan and India. As expected, these increases were partially offset by a decline in EMEA revenues of four percent to $151.6 million. The decline was primarily driven by the absence of sales of our bifenthrin product in Europe due to the product, at the time, not being included on the European Union official list of approved pesticides for sale.
Agricultural Products' operating profit of 348.3 million increased approximately 13 percent compared to prior year, reflecting the strong sales growth partially offset by increased raw material costs and a $24.5 million or 13 percent increase in selling and administrative expenses for focused growth initiatives, higher people-related costs and unfavorable exchange impacts. Specialty Chemicals

Year Ended December 31,

(in Millions)        2012          2011       2010
Revenue          $   913.8       $ 879.1    $ 824.5
Operating Profit     189.5         199.8      185.0

2012 vs. 2011
Revenue in Specialty Chemicals was $913.8 million, an increase of approximately four percent versus the prior year. The increase was driven primarily by higher selling prices across the segment, particularly in food, pharmaceuticals and lithium primaries markets slightly offset by unfavorable currency impacts. Revenue for the year ended December 31, 2012 included approximately $14.3 million associated with recently completed acquisitions.
BioPolymer revenue of $680.8 million increased approximately four percent from the prior year. This increase was due to favorable pricing which impacted sales by six percent and revenue from acquisitions which increased sales by two percent. These increases were partially offset by decreased volumes of two percent and unfavorable currency impacts of two percent.
Lithium revenue of $233.0 million increased approximately four percent compared to the prior year. This increase was due to higher pricing which impacted sales by six percent partially offset by decreased volumes which decreased sales by two percent. Lithium sales growth was led by higher selling prices in lithium primaries. Lower volumes also resulted from production downtime in the first quarter of 2012 associated with our capacity expansion in Argentina, as well as the effect of related operational issues which primarily impacted the first half of 2012 and the extended planned outage in Lithium's Argentina facility in third quarter 2012.
Segment operating profit of 189.5 million decreased five percent versus the prior year. Higher revenues in both BioPolymer and Lithium were negatively impacted by increased manufacturing costs primarily in Lithium and higher raw material costs throughout the segment. Selling, general and administrative expenses also increased by $9.0 million to support growth initiatives, primarily in BioPolymer.
In 2013, we expect full-year revenue growth in the high single digits percent driven by higher volumes in BioPolymer. Full-year operating profit growth is expected to be in the high single digit percent reflecting sales gains complemented by improving Lithium operating performance, partially offset by spending on targeted growth initiatives in BioPolymer.

2011 vs. 2010
Revenue in Specialty Chemicals was $879.1 million, an increase of approximately seven percent versus the prior year. The increase was driven primarily by volume increases and higher pricing in BioPolymer and favorable pricing in lithium specialties and favorable currency impacts.
BioPolymer revenue of $654.3 million increased approximately seven percent from the prior year. This increase was due to higher volumes which increased revenue by three percent, favorable pricing which impacted sales by two percent and the impact of a stronger euro which accounted for the remaining two percent. The volume gains and higher pricing were realized in both the food ingredients and pharmaceutical markets.

Lithium revenue of $224.8 million increased approximately six percent compared to the prior year. Currency impacts resulted in a one percent increase in revenue while pricing was up four percent and volumes were flat as compared to prior year.
Segment operating profit of $199.8 million increased eight percent versus the prior year. The increase was primarily driven by the volume gains, higher pricing and favorable mix in BioPolymer and favorable pricing in Lithium offset by adverse weather conditions in Argentina which impacted mining operations. Selling, general and administrative expenses increased by 14 percent or $9.8 million to support growth initiatives. . . .