Good morning, and welcome to the Second Quarter 2016 Earnings Release Conference Call for FMC Corporation. Phone lines will be placed in listen-only mode throughout the conference. After the speakers' presentation, there will be a question-and-answer period. As a reminder, today's conference is being recorded. And I will now turn the conference over to Mr. Brian Angeli, Vice President of Investor Relations for FMC Corporation. Mr. Angeli, you may begin.

Thank you and good morning. Welcome to FMC Corporation's second quarter 2016 earnings call. Joining me his today is Pierre Brondeau, President, Chief Executive Officer and Chairman, and Paul Graves, Executive Vice President and Chief Financial Officer. Pierre will begin the call with a review of FMC's second quarter performance and discuss the outlook for Q3 and the full year 2016. Paul will provide an overview of select financial results. The slide presentation that accompanies our results, along with our earnings release and 2016 outlook statement, are currently available on our website, and the prepared remarks from today's discussion will be made available at the conclusion of the call. As with our prior calls, Mark Douglas, President, FMC Agricultural Solutions; Eric Norris, President, FMC Health and Nutrition; and Tom Schneberger, Vice President and Global Business Director, FMC Lithium, will join to address questions. Before we begin, let me remind you that today's discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including but not limited to those factors identified in our earnings release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's information. Actual results may vary based on these risks and uncertainties. Today's discussion will focus on adjusted earnings for all income statement and EPS references, and pro forma revenue and segment earnings for FMC Agricultural Solutions. A reconciliation and definition of these terms, as well as other non-GAAP financial terms to which we may refer during today's conference call, are provided on our website. With that, I will now turn the call over to Pierre. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Thank you Brian, and good morning, everyone. As you can see on the first slide, for…

We'll pause for a moment to compile the Q&A roster. And your first question comes from the line of Christopher Parkinson with Credit Suisse. Please go ahead Christopher S. Parkinson - Credit Suisse Securities (USA) LLC (Broker): Perfect. Thank you very much. Can you just comment a little more on your longer-term expectations for your European business, given your shift, or I'd say rather evolution, of your go-to-market strategy, and then also parse out your views for Northwest Europe versus CIS? And then also you mentioned a product rationalization as well. Just any additional detail will be helpful. Thank you.

Hi, Chris. This is Mark. Well, first of all, for Europe, obviously we now have a very different business model, with the acquisition of Cheminova. I think you can expect us to see, over the long haul, outperformance in the marketplace. Any it kind of fits in with your second question around CIS and Western Europe. We obviously have a bigger exposure in Western Europe with the Cheminova acquisition. But we see a lot of opportunity in the CIS countries, other parts of Eastern Europe in terms of Poland, Hungary, Czechy, Slovakia, as well as the Ukraine. Introduction of new technologies is important for us in Europe. The portfolio is strong. But with our pipeline, we have new products that will benefit both niche crops and especially cereals where Cheminova have exposure that FMC did not have. So, if you think of outperformance versus the market, it's really going to be cereals and the niche crops, especially in the south, and then accelerated growth in the east. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC (Broker): Perfect. Thank you. And then just a quick follow-up. Can you just comment a little bit more about the working capital improvement you saw during the quarter? And then also on a go-forward basis, specifically how do you typically evaluate growth versus credit risk as we head into the third quarter with Brazil? And is it becoming more dependent on crop type, farm size or even region within Brazil? Just any comments on the puts and takes would be helpful. Thank you. Paul W. Graves - Chief Financial Officer & Executive Vice President: Sure. Let me touch on that. The working capital progress we made, really if you look at the cash flow improvement we had over last year and the first half…

Yeah. The only thing I would add, Chris, is you know Brazil very well. Given where the exposure is, I would say the north – the Cerrado regions are where it is probably the most stressed. The south with the co-ops and the distribution channel is in better shape, and then sugarcane as well. Sugar industry has gone through a lot of challenges, but with the price of sugar today, they're in a better shape as they go forward into 2017. But it's definitely the north where the stress is. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC (Broker): Great. Thank you for the detail. Thank you.

And your next question comes from the line of Joel Jackson with BMO Capital Markets. Please go ahead.

Hi. Good morning. Just staying in Brazil, you commented that you had a good destock of your own FMC product. Can you talk about where you're seeing your competitors for their – in the channel for inventories? I think we've seen commentary before that there has been over a year of products from your competitors? Thanks. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Thank you. No. We can't and we don't want to comment on competitors. It's sometimes quite difficult to understand the overall inventory in the channel. So really what we've been doing, and that's a change we started to make in the fourth quarter, is truly focusing on trimming down our own inventory of product. There is product in the channel, but really to comment specifically about our competitors would not make sense for us to do so.

If I look at your guidance, you seem to be implying a 300 or 400 basis point improvement in Ag Solution margin in the fourth quarter. Can you talk about that, where you see the big margin pickup in Q4 and how it's going to play out? Thanks. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Yes. Certainly, and I think the comments I would make are valid for the entire second half, is we are getting now into a position, if you look, compared to the back end of 2015, where there is multiple area of improvement. First of all, our product mix is getting much stronger than what it was. Our actions to walk away from a low-margin third-party more generic product is working very well. So we are increasing the margins of our product through mix. Second of all, we have been pretty successful over the last three or four quarters in moving the price. So with a situation looking at the importance of Brazil and Latin America in Q3 and Q4, and taking into account the pricing versus FX situation, we are in a stronger position. So a blend of stronger volume we're going to see in the second half of the year, a better mix because we are moving away from third-party product, and the pricing FX situation will lead to, first of all, to more predictable business. We have a much better visibility going into the second half of the year than we had in a long time, and with stronger margins for the business.

And our next question comes from the line of Mike Harrison with Seaport Global Securities. Please go ahead.

Hi, good morning. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Good morning.

Pierre, you mentioned last call that Q2 in the Lithium business was when you were expecting some seasonal production weakness there, yet you were able to deliver well ahead of your guidance. Can you talk about what drove that upside during the quarter and whether there could be some potential upside as we look at your guidance for Q3 and Q4? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Certainly. I think that seasonal weakness is not only in Q2. It's in the back end of Q2 and through Q3. So, we've seen part of it and we're going to keep on seeing it. It's usually due to the fact that it is winter, there is more rainy season right now in Argentina where we're operating. So it's not only a Q2 phenomenon, it's the back of Q2, early Q3. I think the visibility we have today due to production is quite, quite correct at the earnings level. Mainly, there is multiple reasons which are we leading to the improved earnings. First of all, the mix. We are moving more business toward our lithium hydroxide, where we've been able to operate our plants quite well and where there is a healthy demand and pricing situation. Second of all, our plants have been operating also very well for carbonate production and we have been – and we're continuing to do that for the second half, selling more product made within the company than third-party product we would resell. And then there is some volume. So if look at the second half of the year, I think our earnings is quite in line with our expectation. I don't think there is a lot of upside. Most likely, what you will see is we decided not to change the revenue range, because we were a little bit below the middle point of the range initially. Looking at the demand for the back end of the year, it's most likely going to lead us toward the higher end of the range from the revenue standpoint. But I believe the earnings we have forecasted in lithium for Q3, Q4 are correct. Unless – I tell you, the only place where I could see upside, but it is not possible for us to predict that today, is pricing. Pricing is always something, depending upon demand and how capacity come on stream. So that one, we've made some assumption; you never know.

All right. Thank you. And then a question just on the product rationalization that you did in Ag Solutions. Is that mostly legacy FMC products or are they some Cheminova products? And is there any more to come? Just trying to get a sense of whether we could see some additional pressure there. And at some point, do you hit a point where you could see some negative leverage as a result of scaling back on the number of products you're selling? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: I think the product rationalization is very well advanced today. I think it's a mix. It's as much from Cheminova legacy products as it is from FMC product. Both company used to resell third-party products as a service to customers. And the things you can afford to do at a given time with a very healthy market, you cannot do when the market is more tense. So it was a normal thing for us to move the way we had, very precisely define what those products could be. I'm very pleased with the speed at which the organization responded to it. I think more than half of the shortfall in our sales today in the second quarter is coming from product rationalization. But that's pretty much where it is. So you will not see numbers going beyond what we've talked about, which was a total run rate at the end of this year of $350 million, which is $100 million more than we did last year, we did $250 million last year, and this is it. There will be no further, as far as we can see, actions to be taken.

Thank you very much. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Thank you.

And your next question comes from the line of Frank Mitsch with Wells Fargo. Please go ahead.

Good morning, gentlemen, and appreciate all the details and color. Hey, Pierre, I was struck by the comment that the inventory levels of insecticides are rather high in Brazil, and I guess I was thinking about Zika there. Does that offer any opportunity for you in that marketplace?

Yeah. Frank, this is Mark. Yeah, we have seen increased sales of specific insecticides that we're providing to that vector control market. It's not huge though. Let's put it in perspective. It's not going to move the Ag business. It's a nice business to have. We have a leading position in Brazil, and we've seen that business grow over the last 18 months, and we expect it to continue with the way Zika is progressing through the region. But it's not going to be significant enough to really move the needle.

Interesting. I mean, as the geography of concern spreads, one would think that that would be an opportunity, I guess, just simplistically. How would you describe your market share in that application?

It's pretty good. Why don't we just put it in perspective? The global public health market is about $700 million, and that's within the total ag space, crop protection chemicals, of over $51 billion. So really, for mosquito control, the market worldwide is about $325 million to $340 million, and the U.S. is about $90 million of that. So you can get a sense of the scale of that business. In particular applications we have a very good market share, not only with our pyrethroids, but with a product call malathion that we brought from Cheminova. So just keep it in perspective. I mean, people talk about it a lot, but the U.S. market is only $90 million out of that $700 million.

Mark, I appreciate you throwing a wet blanket on that thesis. And then, hey, lastly, Paul, you sounded more sanguine with respect to the FX impact for 2016. Do you have a size as to what you think the negative effect will be when all is said and done on the year? Paul W. Graves - Chief Financial Officer & Executive Vice President: I wish I could predict FX markets that well, Frank. I mean, I wouldn't be in this job, I'm pretty confident around that. I think the key is that we seem to have more predictability around rates. We've seen the peso has been a surprising area for us. We didn't – I mean, we never see them coming. And Brazil has been – the reais has been kind of a bright spot, not because of the absolute rate, but as I mentioned, about the stability around the rates. And I think that's sort of the key for us, as we look forward, that stability of the rates and then the lack of surprises is more important to us on most of our business than the actual movements in the exchange rates.

Thank you so much.

And our next question comes from the line of Daniel Jester with Citibank. Please go ahead.

Good morning, everyone. What kind of visibility do you have in Health and Nutrition in the second half of this year? Your guidance seems to imply an acceleration in process, which seems seasonally maybe a little bit different than the past few years. So given sort of the comments that you called out about Omega 3, can you just walk us through some of the key drivers for the second half? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Certainly. You know, I think we do have a pretty good visibility on our three segments today, from a demand standpoint. But it is important to understand that the earnings growth, especially in the fourth quarter, is maybe more predictable because it is due to a cost situation. You know, we always work our cost and decrease our cost. But the way cost flows into operations depend upon the speed that you turn your product, and I think we call that capitalized variance. But the main reason for the bump in earnings in the back end of the year is due to the fact that we will be operating at a lower cost than we've been operating the other quarters and previous years. That is why you will see such a jump. So it is not due to a major turn in demand for any of our product, but much more the benefit of prior activity we've done on operational cost and manufacturing excellence.

Okay. That's helpful. Thank you. And then, of the $60 million to $70 million of full-year cost synergies from Cheminova, can you quantify how much of that you realized in the first half? And then maybe just holistically, beyond just cost synergies, where do you see the integration process for Cheminova today? Thanks. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Yeah. Thanks. I think, at a run rate basis, we're going to close the half year, on the run-rate basis, in the $30 million to $40 million range for the first half of the year on the Cheminova.

Okay. Thank you. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: You want – Mark?

Do you want me to talk a little bit about the integration side? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Yes.

From an integration perspective, we're very much done on the commercial side. That's all in place. A lot of the functional groups are also fully integrated and operating. We have some systems that we're still working through, SAP in Europe is an example, which will be completed early in the fourth quarter. And then the long-lead-time item is how we bring together the different manufacturing units, the tall manufacturing units and the formulating units. We are well progressed with that. We still have some to go, but that will occur over time. And the basic need there is to make sure that we have registrations as we move products around the world. So that's the rate-limiting step, but everything else is pretty much done by now. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: I think from a Cheminova integration, we're going to stop reporting. I mean, we'll answer any question you guys might have. But we can almost declare success. Everything is in place to which, as we discussed, by the middle next year the $140 million to $160 million run rate, the 800 to 900 positions being eliminated. So we are very much more than on track, ahead of initial schedule. And I think the – lots of the remaining activities are more under in Paul's shop around IT, SAP, finance integration, so much more back office integration than anything dealing with the front end of the business.

And we do have a question from the line of Rosemarie Morbelli with Gabelli & Company. Please go ahead. Rosemarie Jeanne Morbelli - Gabelli & Company: Thank you, and good morning everyone. I was wondering if you could talk about the expected lithium capacity – lithium carbonate capacity increase in 2017. Based on what you see in here in the marketplace, is that coming onstream a lot of it in the first half of 2017, and therefore would have a negative impact on pricing? Thomas Schneberger - VP & Global Business Director-Lithium Division: Thank you, Rosemarie. Yes. We're starting to see some exchange of volumes coming on even in the back half of 2016, mostly out of the new spodumene capacity that's coming online in Australia. As you know, there's also some capacity in Chile and there's been capacity ramping up in Argentina, targeting back end of 2016 and early 2017. So these are the volumes that we're watching, and I characterize it, could be anywhere between 50,000 tons to 75,000 tons by early 2017. So, as Pierre has commented earlier, this is where we make a pricing assumption, and we're monitoring the conditions as we interact with customers, in terms of pricing expectations. Rosemarie Jeanne Morbelli - Gabelli & Company: And that particular capacity addition is going to be smaller than the demand increase, isn't it? And therefore, pricing is going to come down across the board, including lithium hydroxide, or you don't think so? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: First, yes, there will be – we are expecting, as time goes, turning in 2017 and into 2018, we're expecting carbonate pricing to go more toward normal pricing, which mean a lower pricing we are currently seeing, when they will be more of a…

And our next question comes from the line of Mark Connelly with CLSA. Please go ahead.

Thank you. Two things. Paul, you talked about the longer time line for rationalization of the manufacturing in Europe. Is that sort of a 2020 time goal in your mind, or is there a specific target in your mind? And then the second question, to Latin America again. As we think about the working capital cycles in cotton and sugarcane, is your penetration in that market permanently shifting your working capital cycle in a material way? My understanding is Cheminova managed working capital much differently than you did, using more receivables, for example. I'm curious whether that has all shifted over to your way of doing things? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Let me address first the question on the manufacturing rationalization. Right now, we are at a place where we have a stable manufacturing network for Ag business. We are always looking at improving, but any improvement, any decision today is always a mid- to long-term decisions because there is some product registrations which are changing when you do a change of manufacturing. So I have to say that right now, as any company would do, we are keeping our options open. But we are in what I would call a stable manufacturing network. And we will see, as time goes what are the best decisions to be taken for our business in terms of network. But today we are not penalized by the structure we have, and it's a matter of dong continuous improvement and being able to supply what will be requested by the market at the time when the market turns around.

So, you're comfortable then not being quite as asset-light as you had been, sort of in the medium term? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: We are asset-light. I think if you think about FMC prior to the acquisition of Cheminova, our manufacturing cost was 95%, asset-light. I would say today maybe we're at 90%. We should not believe that the fact that we have a plant in India, in Panoli and the plant we have in are fundamentally changing the mix of products which are made at all manufacturers, versus what is being made today. Those are big plants. But in the big scheme of things, their production capacity versus what we do with our total network is fairly small. So, it is not a fundamental departure to what we used to be in the past. Paul W. Graves - Chief Financial Officer & Executive Vice President: Let me just on the working capital question down there in Brazil, sugarcane and cotton can have very, very different terms. Cotton tends to be longer term. Sugarcane tends to be much shorter term, although that does vary, depending on the nature of the planting cycles and on the financial health of the sugarcane guys. But as a rule, as we shift it away from cotton, we'll expect to see our working capital terms come in, and towards sugarcane also does the same thing. I would not, though, expect that you're going to have to track that through our working capital balances, as you look at it. It's definitely a factor that helps, but it's not so large that you're going to really see a major movement in our numbers. In terms of how Cheminova approached it, Cheminova – let's just separate the two important differences. Cheminova did not have a different approach to working capital than anybody else in the industry. They did have a different approach to how they financed that working capital. And to be blunt, as a weak-balance-sheet company with very unsophisticated treasury operations, there used to be some very, very expensive local financing in Brazil, which can give the impression that they're reducing their working capital. It was appropriate for a non-U.S.-GAAP reporter. It was appropriate for a sub-investment grade company. It was incredibly expensive, and will certainly factor into why their overall profitability was so low, and it's certainly not something we intend to do.

Very helpful. Thank you.

And we do have a question from the line of Aleksey Yefremov with Nomura Securities. Please go ahead.

Good morning. Thank you. What is the current competitive environment in Latin America and North America? Do you see your competitors generally being more disciplined on crop protection prices?

Well, obviously, I'm not going to talk about what the competition is doing on price. I'll tell you where we are. As Pierre said earlier, we're doing everything we can to make sure we manage price and terms across North America, and certainly in Brazil where we have reduced our exposure to the Brazilian market by taking out, through product rationalization, a significant amount of volume and revenue. But we're very focused on making sure that we maximize price, not only in terms of pricing but across the portfolio of what we're selling. I think you're going to see all sorts of different activities as we go through the next year. But for us, it's very much around protecting the margins, protecting the value of the business, and certainly looking after working capital. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: I think in term of pricing, just to get back to one of the comments Paul made around the balance of FX and pricing, as you know, we tend to have a rule in Brazil where we index price on currency. Last year, we were, with our pricing, running after the currency and trying to move up our price. This year, the same process of adjusting pricing to currency is going the other way, which means this is not any longer us asking the customers to take higher price, but the customer asking us to lower the price more to other currency. So, needless to say that for all of us, regardless of what behavior individual companies would take, it is an easier conversation from the predictability of the pricing. I think this FX situation give us a much better position to talk about pricing, more control in term of understanding pricing in the next two quarters. And I think it's got to apply to every company. It is just an FX price situation.

Thank you. Very helpful. And turning to Europe and crop protection, you have some revenue declines there. How much of that was your move to direct market? And was it a one-time impact, or is there any way to improve that next year? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Yeah. The direct market situation is a one-time impact. It is just a couple of situations which happen all the time when you do this kind of a transfer. First of all, you work with your distribution network, which you're moving away from. Those guys have inventory, they have stock, they are filling it while you're replenishing your own, now, warehouses to sell. So there is a period of time where you have two networks which have to overlap for a little while, and you have to give the time to your distributors to sell the product they were supposed to sell in the past by contract. Second of all, you are at a stage also so where your distributors are not replenishing their inventory in advance. So, by the time we get into – this is happening as a transition now. Our belief is by the time we get into European season, Q1, Q2 next year, we should be in a very normalized situation and it will be stable for the future.

Thank you very much. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Thank you.

And we do have a question from the line of Mike Sison with KeyBanc. Please go ahead.

Hey, guys. Just curious, you maintained your outlook for the crop protection markets this year, down mid- to high-single-digit. What was it down in the first half, and just trying to gauge what the expectation is for the second half in terms of demand? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: So I think in the first half, the way I would look at it, Mike, is when we give a range, we say mid-single-digit to high-single-digit, maybe we were thinking about more toward, when we started this process, the lower end of the range, maybe 5%, 6%, 7%. We are more today on a 7%, 8%, more toward the higher end of the range. And that is maybe less due to channel inventory than it was to specific reasons in Asia and Europe, mostly driven by weather. So for us, when you look at the market, if you remember, we were thinking about North America and Latin America in the higher end of the range, and this being helped by a flattish to slightly down market in Europe and Asia. We don't see that any longer. I mean, we still see North America and Latin America on the high end of the range, but we see Asia and Europe being down in the 5%, 6% for this year. That is why, today, we are looking at maybe more the higher end of our range. For us, what we've been doing is we've been able, no matter what, to protect earnings by being even more drastic on pricing, more drastic on product rationalization. So we'll be slightly lower on sales, but we believe we're going to be – we're going to have very solid performance in the second half, and predictability on the earnings side.

Great. And then for the fourth quarter for Ag Solutions, you talked about better visibility than in the past. But just curious, what sort of gets you to the high end of the range? I mean, it's pretty wide in terms of the top end, given your guidance for Ag Solutions in the third quarter, and the low end. What sort of gets you to the top? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: I would say always the same answer. When we give a middle of the range, it is under normal circumstances from a demand and weather standpoint. In those, there is always a range. You just need an infestation, you just need very strong insect pressure or other pressure, and you will drive that either to the lower or either to the higher end. Today, we believe we are very comfortable with the middle of the range. To see anything going up or down would be due to external events, not linked to channel inventory or anything of that kind, but much more to specific agricultural seasonal situations.

Great. Thank you. Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Mostly weather.

And our last question comes from the line of Peter Butler with Glen Hill Investment. Please go ahead.

Hey, good morning. Pierre, early on regarding lithium, you folks had a conservative outlook on shorter term lithium growth, but you saw good possibilities longer term, and this outlook has been proven correct. What do you see now for the longer term growth of lithium? And how do – how does your research pipeline on lithium derivatives look compared to what you're seeing from competitors, and how does this change your future position on earnings and cash flow growth, et cetera? Pierre R. Brondeau - Chairman, President & Chief Executive Officer: Thank you, Peter. Yes. So lithium, I have to say we do have increased confidence in the future today. We believe this market is getting more and more solid. I have to say that we are still prudent. But the big breakthrough for us is technology we're able to develop from a manufacturing standpoint, allowing us to, at a very low capital spend and efficient cost of operations, ability to create 4,000 tons to 8,000 tons modules for lithium hydroxide instead of having to build, in one shot, a 20,000 tons or 30,000 tons. So today we do have an improved view and more certain view of what lithium hydroxide is doing, but all the work we've done over the last two years was to develop a manufacturing process allowing us to follow the demand growth, which means that if the growth is not as we're expecting, we can stop one or two of these modules manufacturing and slow down the capacity increase we have planned. If the demand becomes more aggressive, very easy for us to speed up the building of those modules. So first to your question, yes, we have increased confidence. Our strategy is very highly focused on the downstream product where we have the highest…

Thank you, Pierre. As always, appreciate the time and the questions. I'll be available following the call to address any further questions that you may have. So with that, thank you and have a good day.

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