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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 2005

or

For the transition period from              to             

Commission File Number 1-2376

FMC CORPORATION

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: 215/299-6000

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS    YES  x    NO  ¨

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS DEFINED IN RULE 12b-2 OF THE ACT.)    YES  x    NO  ¨

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER’S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE

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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES

INDEX

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

Supplemental disclosure of cash flow information: Cash paid for interest was $8.7 million and $15.0 million, and cash paid for income taxes, net of refunds, was $6.6 and $6.1 million for the three months ended March 31, 2005 and 2004, respectively. In the first quarter of 2005, we contributed approximately 87,000 shares of treasury stock to our employee benefit plans having a cost of $2.4 million, which is considered a non-cash financing activity.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1: Financial Information and Accounting Policies

In our opinion the condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles applicable to interim period financial statements and reflect all adjustments necessary for a fair statement of results of operations and cash flows for the three months ended March 31, 2005 and 2004, and our financial position as of March 31, 2005. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2005 and 2004 are not necessarily indicative of the results of operations for the full year. The condensed consolidated balance sheet as of March 31, 2005 and the related condensed consolidated statement of operations for the three months ended March 31, 2005 and 2004, and condensed consolidated statements of cash flows for the three months ended March 31, 2005 and 2004, have been reviewed by our independent registered public accountants. The review is described more fully in their report included herein.

Our accounting policies are set forth in detail in Note 1 to the 2004 consolidated financial statements on Form 10-K. Certain prior year amounts have been reclassified to conform to the current period’s presentation.

Note 2: Stockholders’ Equity

Stock Compensation

We have various stock-based compensation plans as described in Note 12 to the 2004 consolidated financial statements on Form 10-K. We account for our stock option plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Accordingly, no compensation expense has been recognized related to our stock option plans. We record compensation expense for the restricted stock awards based on the quoted market price of our stock at the grant date and amortize the expense over the vesting period. The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of SFAS No. 123 to our stock compensation plans.

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Note 3: Recently Issued Accounting Pronouncements and Regulatory Items

New accounting standards

On March 30, 2005, FASB interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations” was issued. This interpretation clarifies FASB Statement No. 143 “Asset Retirement Obligations” in that an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The interpretation states that when an existing law, regulation, or contract requires an entity to perform an asset retirement activity, an unambiguous requirement to perform the retirement activity exists, even if that activity can be deferred indefinitely. The interpretation is effective no later than the end of fiscal years ending after December 15, 2005. We are evaluating the effect that FIN 47 will have on our consolidated financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payments” (“SFAS 123R”). The statement requires that we record stock option expense in our financial statements based on a fair value methodology. In April 2005, the Securities and Exchange Commission (“SEC”) issued Amendment to Rule 4-01(a) of Regulation S-X Regarding the Compliance Date for Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payments. The amendment requires that SFAS 123R be adopted beginning with the first interim or annual reporting period of the first fiscal year beginning on or after December 15, 2005. We are evaluating the effect SFAS 123R will have on our consolidated financial statements.

On November 24, 2004, the FASB issued Statement of Financial Accounting Standards No. 151 “Inventory Costs - An Amendment of ARB No. 43, Chapter 4” (“Statement 151”) to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This statement requires that abnormal inventory items be recognized as current-period changes regardless of whether they meet the “so abnormal” criterion outlined in ARB 43. Statement 151 also introduces the concept of “normal capacity” and requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. Unallocated overheads must be recognized as an expense in the period in which they are incurred. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We are evaluating the effect of the adoption of Statement 151 will have on our consolidated financial statements.

On December 16, 2004, the FASB issued Statement 153, “Exchanges of Nonmonetary Assets”, an amendment of APB Opinion No. 29. This statement was a result of an effort by the FASB and the IASB to improve financial reporting by eliminating certain narrow differences between their existing accounting standards. One such difference was the exception from fair value measurement in APB Opinion No. 29, “Accounting for Nonmonetary Transactions”, for nonmonetary exchanges of similar productive assets. Statement 153 replaces this exception with a general exception from fair value measurement for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This statement will be applied prospectively and is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The impact of the adoption of Statement 153 will depend on the nature and terms of such exchanges that we may enter into in the future.

In May 2004, the FASB issued Staff Position No. 106-2, “Accounting and Disclosure Requirements related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“FSP 106-2”). FSP 106-2 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare, Prescription Drug, Improvement and Modernization Act of 2003 (“Medicare Act”) and requires certain disclosures pending determination as to whether the sponsor’s postretirement health care plan can reasonably expect to qualify for beneficial treatment under the act. The other postretirement benefit obligations and net periodic other postretirement benefit costs noted above do not reflect the effects of the Medicare Act. In September 2004, we elected not to recognize any of the potential accounting effects of the Medicare Act because the actuarial equivalence of our retiree medical plans was undeterminable as of September 30, 2004. We required more information on how actuarial equivalence would be calculated that was not available in existing versions of the regulations in order to determine if our retiree medical plan met the threshold.

On January 21, 2005, the Centers for Medicare & Medicaid Services (CMS) released the final regulations on the Medicare prescription drug benefit. The final regulations provide comprehensive guidance on how the actuarial equivalence of retiree medical plans will be determined. We are continuing to evaluate the final regulations as well as more recent guidance from the CMS to determine the estimated effects of the Medicare Act on our retiree medical plan and the other postretirement benefit liabilities and net annual other postretirement benefit costs reported in our consolidated financial statements.

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New regulatory items

On October 22, 2004, the American Jobs Creation Act (the “AJCA”) was signed into law and the AJCA contains many tax provisions that are expected to affect us over the next several years as those provisions become effective. We are continuing to review these provisions and their application to some of our businesses to evaluate the effect these changes may have on income taxes included in our consolidated financial statements. The AJCA provides for the deduction for U.S. federal income tax purposes of 85% of certain foreign earnings that are repatriated, as defined in the AJCA. We may elect to apply this provision to qualifying earnings repatriations in 2005. We will commence an evaluation of the effects of the repatriation provision in the first half of 2005, but do not expect to complete this evaluation until after the U.S. Treasury Department provides additional clarifying language on key elements of the provision. We expect to complete our evaluation of the effects of the repatriation provision within a reasonable period of time following the publication of the additional clarifying language. The range of possible amounts that we are considering for repatriation under the provision is between zero and $500 million. It is not practical to compute the related potential income tax that may be due upon the repatriation.

Note 4: Goodwill and Intangible Assets

Goodwill at March 31, 2005 and December 31, 2004 was $162.1 million and $169.8 million, respectively. The majority of goodwill is attributed to an acquisition in the Specialty Chemicals segment. There are no other material indefinite life intangibles, other than goodwill related to this acquisition, at March 31, 2005. The change in goodwill from December 31, 2004 to March 31, 2005 was due to the effect of foreign currency translation on the euro.

Our definite life intangibles totaled $12.8 million and $13.3 million at March 31, 2005 and December 31, 2004, respectively. At March 31, 2005, these definite life intangibles were allocated among our business segments as follows: $8.5 million in Agricultural Products, $2.7 million in Specialty Chemicals and $1.6 million in Industrial Chemicals. Definite life intangible assets consist primarily of patents, industry licenses and other intangibles. Amortization was not significant in the periods presented.

Note 5: Financial Instruments and Risk Management

In the first quarter of 2005, we settled certain energy forward contracts for which a portion of the original forecasted underlying energy purchase transactions became no longer probable. We recognized a gain of $2.9 million in our condensed consolidated statement of operations.

The portion of derivative gains or losses excluded from assessments of hedge effectiveness, related to our outstanding cash flow hedges which were recorded to earnings during the three months ended March 31, 2005 and 2004 was immaterial.

At March 31, 2005, the net deferred hedging gain in accumulated other comprehensive gains was $15.7 million compared to a net loss of $3.1 million at December 31, 2004. Approximately $12.9 million of net gains are expected to be recognized in earnings during the twelve months ending March 31, 2006, as the underlying hedged transactions are realized, and net gains of $2.8 million are expected to be recognized at various times subsequent to March 31, 2006 and continuing through December 31, 2006.

In the first quarter of 2005, we terminated a $25.0 million notional principal value interest swap at a net cost of $510,000. During the second quarter of 2005, we terminated the remaining $75.0 million notional principal value interest swaps at a net cost of approximately $2 million. These amounts have been deferred as an adjustment to the carrying amount of our 10.25 percent senior secured notes due 2009 and will be amortized as an adjustment to interest expense over the remaining term of the original contract life of the terminated swap agreement.

Note 6: Property, Plant and Equipment

Property, plant and equipment consisted of the following, in millions:

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Note 7: Restructuring and other charges

Three Months Ended March 31, 2005

Restructuring and other charges totaled $3.3 million for the three months ended March 31, 2005 as a result of severance costs that are expected to result in improved cost efficiencies and a charge for the abandonment of an asset in our Agricultural products segment. The severance costs in the first quarter of 2005 totaling $1.1 million were recorded in our Specialty Chemicals segment and relate to approximately 20 people, most of whom separated from us in the 1st quarter of 2005. We committed to the abandonment of certain assets in our Agricultural Products segment before the end of their previously estimated useful life. Therefore, we revised depreciation estimates to reflect the use of these assets over their shortened useful life. As a result, the charge totaled $2.2 million in the first quarter of 2005 and we expect to take an additional charge of $3.0 million in the second quarter of 2005 associated with this accelerated depreciation.

Three Months Ended March 31, 2004

Restructuring and other charges totaled $1.3 million, for the three months ended March 31, 2004 as a result of severance costs that resulted in improved cost efficiencies. Agricultural Products recorded $0.8 million and Specialty Chemicals recorded $0.5 million in severance costs related to a total of approximately 30 people, all of whom separated from FMC in 2004.

Restructuring spending, net of recoveries, during the three months ended March 31, 2005 was primarily for shutdown costs at the Pocatello, Idaho facility and severance payments for previously announced workforce reductions. The following table shows a rollforward of restructuring and other reserves for the first three months of 2005 and the related spending and other changes:

Subsequent Event

On April 26, 2005, we made the decision to close our Copenhagen, Denmark carrageenan plant and a blending facility in Bezons, France. High costs at the Copenhagen plant coupled with reduced demand for the specific extract types manufactured at that site have made it uneconomical for us to continue operation. We will consolidate production and supply carrageenan from other facilities around the world.

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We expect the closures will result in an estimated pre-tax charge to earnings of approximately $30 million over the second and third quarters of 2005. Estimates of the total cost we expect to incur for each major type of cost associated with the closures are: (i) accelerated depreciation of plant and equipment of $23 million, (ii) severance and employee benefits of approximately $3 million, and (iii) $4 million of other costs. Net cash outlays related to the closures are expected to be approximately $5 million.

Note 8: Debt

Debt maturing within one year:

Debt maturing within one year consists of the following:

Short-term debt consisted primarily of foreign credit lines at March 31, 2005 and December 31, 2004. We provide parent-company guarantees to lending institutions providing credit to our foreign subsidiaries.

Restricted cash shown on the condensed consolidated balance sheets at December 31, 2004 provided collateral assuring the payment of certain environmental remediation activities. By March 31, 2005, the restricted cash collateral was released in exchange for letters of credit issued under the October 29, 2004 Credit Agreement. There were no restricted cash balances at March 31, 2005. At December 31, 2004, restricted cash balances were $9.7 million.

Long-term debt:

Long-term debt consists of the following:

At March 31, 2005 and December 31, 2004, we had term loan facility borrowings of $97.5 million and $100.0 million, respectively. Revolving credit availability was $353.1 million at March 31, 2005 compared to $352.1 million at December 31, 2004 under our $400.0 million revolving credit facility. There were no outstanding borrowings under this facility at March 31, 2005 and December 31, 2004. Letters of credit outstanding under the revolving credit facility totaled $46.9 million and $47.9 million at March 31, 2005 and December 31, 2005, respectively. Outstanding letters of credit under the $100.0 million stand-alone letter of credit facility were $98.8 million at March 31, 2005 and December 31, 2004.

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Among other restrictions, the 2004 Credit Agreement contains financial covenants related to leverage (measured as the ratio of debt to adjusted earnings) and interest coverage (measured as the ratio of adjusted earnings to interest expense). We were in compliance with all covenants at March 31, 2005 and December 31, 2004. Additional covenants in the 2004 Credit Agreement include, among others, restrictions on creation of liens, limitations on acquisitions, joint ventures and other investment, limitations on restricted payments, including a prohibition on the payment of dividends by FMC, and restrictions on mergers, sales of assets and other fundamental changes.

Note 9: Discontinued Operations

Our results of discontinued operations comprised the following:

On February 17, 2005, we completed the sale to the city of San Jose, California of approximately 52 acres of land used by our former Defense Systems operations, which we divested in 1997. Proceeds from the sale were $56.1 million. In conjunction with the sale, we recorded a $6.0 million ($3.7 million after tax) contingent liability associated with land improvements on these properties. This liability is contractual and is for land improvements necessary to improve traffic flow in the area. We have an agreement with the city of San Jose for the sale of the remaining approximately 23 acres we own there. The city’s obligation to purchase the remaining land is subject to the satisfaction of certain conditions, including a review by the California Department of Toxic Substances Control.

Additionally, in the first three months of 2005, we recorded a $0.3 million ($0.2 million after tax) charge to discontinued operations related to environmental issues and legal reserves. Environmental charges of $2.9 million ($1.8 million after tax) were taken to increase our reserves in recognition of our share of the liability related to an anticipated consent order between the EPA and the primary responsible parties at the Anniston site and legal reserve charges in the amount of $1.0 million ($0.6 million after tax) were taken as well. Offsetting these amounts was $3.6 million ($2.2 million after tax) related to recognition of third-party environmental recoveries primarily at our Front Royal, Virginia site. (See a rollforward of our environmental reserves in Note 10.)

In the first three months of 2004, we recorded a $3.0 million ($1.8 million after tax) charge to discontinued operations. A charge of $2.2 million ($1.3 million after-tax) was taken to increase our reserves for environmental issues at our Middleport, New York site to recognize specific obligations incurred at the end of the first quarter of 2004. Additionally, we charged discontinued operations for legal costs related to previously discontinued businesses of $0.8 million ($0.5 million after-tax).

At March 31, 2005, substantially all other discontinued operations reserves recorded on our condensed consolidated balance sheets were related to other post-retirement benefit liabilities, self-insurance and other long-term obligations associated with operations discontinued between 1976 and 2001.

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Note 10: Environmental Obligations

We have provided reserves for potential environmental obligations, which management considers probable and for which a reasonable estimate of the obligation could be made. Accordingly, reserves of $187.1 million and $192.3 million, excluding recoveries, have been provided at March 31, 2005 and December 31, 2004, respectively.

At March 31, 2005 and December 31, 2004, expected recoveries were $15.2 million and $12.1 million, respectively, with the majority at each date relating to existing contractual arrangements with U.S. government agencies and insurance carriers. Cash recoveries recorded, as realized claims against third parties were $0.5 million in the first three months of 2005. Total cash recoveries recorded for the year ended December 31, 2004 were $6.1 million.

The long-term portions of environmental reserves, net of recoveries, totaling $158.4 million and $165.5 million at March 31, 2005 and December 31, 2004, respectively, are included in environmental liabilities, continuing and discontinued. The short-term portion of continuing obligations is recorded as accrued and other liabilities.

We have estimated that reasonably possible contingent environmental losses may exceed amounts accrued by as much as $75 million at March 31, 2005 and may be satisfied over the next twenty years or longer. Obligations that have not been reserved for may be material to any one quarter’s or year’s results of operations in the future. We believe the liability arising from these potential environmental obligations is not likely to have a materially adverse effect on our liquidity or financial condition.

The table below is a rollforward of our environmental reserves, continuing and discontinued, from December 31, 2004 to March 31, 2005.

A more complete description of our environmental contingencies and the nature of our potential obligations are included in Notes 1 and 10 to our 2004 consolidated financial statements on our 2004 Form 10-K.

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Note 11: Earnings Per Share

Earnings per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis.

Our potentially dilutive securities include potential common shares related to our stock options and restricted stock. Diluted earnings per share (“Diluted EPS”) consider the impact of potentially dilutive securites except in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period.

There were no excluded potential common shares from Diluted EPS for the three months ended March 31, 2005. Diluted EPS for the three months ended March 31, 2004 excludes approximately 1.6 million potential common shares related to our stock option plans because the option exercise price was greater than the average market price of our common stock.

Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows:

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Note 12: Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in stockholders’ equity during the period except those resulting from investments by owners and distributions to owners. Our comprehensive income (loss) for the quarter ended March 31, 2005 and 2004 consisted of the following:

Note 13: Pensions and Other Postretirement Benefits

The following table summarizes the components of net annual benefit cost (income) for the three months ended March 31, 2005 and 2004:

We made voluntary cash contributions to our U.S. defined benefit pension plan of $5.0 million and $2.7 million in the three months ended March 31, 2005 and 2004, respectively. We expect that our total voluntary cash contributions to the plan for 2005 will be approximately $15 million.

Note 14: Joint Venture

Our investment in Astaris is our most significant joint venture investment. Astaris is owned equally by Solutia, Inc. (“Solutia”) and us. At March 31, 2005 our investment in Astaris was $10.0 million compared to $6.2 million at December 31, 2004. As part of financial support we provided to Astaris during its restructuring announced in December 2003, we agreed to defer certain payments anticipated from Astaris. These deferrals included scheduled reimbursement to us for shutdown of the joint venture’s elemental phosphorus plant in Pocatello, Idaho, amounts owed for the shutdown of the Green River, Wyoming sodium tripolyphosphate plant and amounts owed for certain raw materials supplied by us. In February 2005, all of these deferrals totaling approximately $16.0 million were repaid.

The formation of the Astaris joint venture and several key changes in the operating processes of the joint venture have from time to time resulted in the recording of assets and liabilities exclusive of our initial equity investment in Astaris. Other assets related to Astaris at March 31, 2005 include a receivable of $14.9 million due to Astaris’ agreement to fund an equal portion of FMC’s and Solutia’s future other postretirement benefit obligations to former employees of the companies’ phosphorus chemicals businesses and a receivable for $16.0 million for its contribution to the shutdown costs related to the closure of the Pocatello, Idaho plant.

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Note 15: Guarantees, Commitments, and Contingencies

We continue to monitor the conditions that are subject to guarantees and indemnifications to identify whether a liability must be recognized in our financial statements.

Guarantees

The following table provides the estimated undiscounted amount of potential future payments for each major group of guarantees at March 31, 2005:

Other Commitments

In February 2005, Astaris refinanced its credit agreement and entered into a new $75 million revolving credit agreement with a group of lenders. In connection with this refinancing, all amounts due to FMC and Solutia that had previously been deferred (approximately $16 million each) were repaid, our obligation to make keepwell payments terminated, and our letters of credit in the amount of $10 million previously delivered in support of this obligation were cancelled.

We guarantee the performance by FMC Technologies, Inc. of a debt instrument that totaled $4.0 million as of March 31, 2005 and December 31, 2004.

We also guarantee repayment of some of the borrowings of certain foreign affiliates accounted for using the equity method investments. The other equity investors provide parallel agreements. As of March 31, 2005, these guarantees had maximum potential payments of $6.1 million compared to $6.4 million at December 31, 2004.

We provide guarantees to financial institutions on behalf of certain Agricultural Products customers, principally in Brazil, for their seasonal borrowing. The total of these guarantees was $75.6 and $70.1 million at March 31, 2005 and December 31, 2004, respectively, and are recorded on the consolidated balance sheets for each date as guarantees of vendor financing.

Contingencies

On June 30, 1999, we acquired the assets of Tg Soda Ash, Inc. from Arkema Inc. (formerly known as Elf Atochem North America, Inc.) for approximately $51.0 million in cash and a contingent payment due at year-end 2003 based on the financial performance of the combined soda ash operations between 2001 and 2003. On December 31, 2003, we made the required estimated payment in the amount of $32.4 million based upon contract requirements. This payment is subject to final adjustments based upon the audited financial statements of the business. We do not expect this adjustment to result in any additional material payments.

During the second quarter of 2004, we reached agreement in principle with the EPA and the U. S. Department of Justice to settle certain liabilities at two environmental remediation sites in New Jersey. These agreements will be final upon negotiation and entry of a final consent decree.

On October 14, 2003, Solutia, our joint venture partner in Astaris, filed a lawsuit against us with the Circuit Court of St. Louis County, Missouri claiming that, among other things, we had breached our joint venture agreement due to the alleged failure of the PPA technology we contributed to Astaris and also failed to disclose the information we had about the PPA technology. Solutia dismissed this Missouri lawsuit in February 2004, after it had filed a virtually identical lawsuit in the U.S. Bankruptcy Court in the Southern District of New York. Solutia had filed for Chapter 11 bankruptcy protection in that same court on December 17, 2003. Our motion to remove the lawsuit from Bankruptcy Court was granted on June 18, 2004, and the matter is now pending in U.S. District Court for the Southern District of New York. On March 29, 2005, the court dismissed certain of the claims relating to the alleged failure of the PPA technology for lack of standing on the part of Solutia.

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On January 28, 2005 we and our wholly owned subsidiary Foret received a Statement of Objections from the European Commission concerning alleged violations of competition law in the hydrogen peroxide business in Europe during the period 1994 to 2001. All of the significant European hydrogen peroxide producers also received the Statement of Objections. We and Foret responded to the Statement of Objections in April 2005 and a hearing on the matter is scheduled for the end of May 2005. We also received a subpoena for documents from a grand jury sitting in the Northern District of California, which is investigating anticompetitive conduct in the hydrogen peroxide business in the United States during the period 1994 through 2003. At this time, we do not believe the investigations are related. In connection with these two matters, in February 2005 putative class action complaints were filed against all of the US hydrogen peroxide producers in various federal courts alleging violations of antitrust laws. Related cases were also filed in various state courts.

We are also party to another antitrust class action pending in Federal Court in the Eastern District of Pennsylvania, as well as various related state court cases alleging violations of antitrust laws involving our microcrystalline cellulose product.

We have certain other contingent liabilities arising from litigation, claims, performance guarantees and other commitments incident to the ordinary course of business. In our opinion, the ultimate resolution of our known contingencies is not expected to materially affect our consolidated financial position, results of operations or cash flows.

Note 16: Segment Information

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Note 17: Guarantors

Wholly-owned direct and indirect domestic subsidiaries of FMC Corporation (“Guarantors”), fully and unconditionally guarantee the obligations for our 10.25% Senior Secured Notes due 2009 and our 2004 Credit Agreement on a joint and several basis. The following consolidating condensed financial statements present, in separate columns, financial information for: FMC Corporation on a parent-only basis carrying its investment in subsidiaries under the equity method; Guarantors on a combined, or where appropriate, consolidated basis, carrying investments in subsidiaries which do not guarantee the debt (the “Non-Guarantors”) under the equity method; Non-Guarantors on a combined, or where appropriate, consolidated basis; eliminating adjustments; and consolidated totals as of March 31, 2005 and December 31, 2004, and for each of the periods ended March 31, 2005 and 2004. The eliminating adjustments primarily reflect inter-company transactions, such as interest income and expense, accounts receivable and payable, advances, short- and long-term debt, royalties and profit in inventory eliminations. We have not presented separate notes and other disclosures concerning the Guarantors as we have determined that such material information is available in the notes to FMC’s consolidated financial statements.

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FMC Corporation

CONDENSED CONSOLIDATING STATEMENT OF INCOME (unaudited)

Three months ended March 31, 2005