for contributing to higher sales from our growth portfolio. Turning to slide six, we reported second quarter EBITDA of $153 million, which was 2% above the high end over a guidance range, driven by greater than expected cost favorability. This was primarily driven by spend discipline in non-manufacturing areas and a few favorable quarter-specific items. Adjusted earnings per share of 26 cents was 62% lower than prior due to the reduction in EBITDA and higher interest expense. The result was at the high end of a guidance range given by EBITDA. Shifting to a forward guidance, Our updated financial outlooks are on slide seven through nine. Starting with slide seven, full year sales are now expected to be $3.5 billion to $3.7 billion, a decline of 7% at the midpoint. We have updated a full year outlook to reflect the more challenging market conditions we've seen so far this year. We now expect more pricing pressure and less volume growth of core legacy products than our prior forecast. Volume is now expected to be in line with prior year as sales of new active ingredients and increased direct sales to grow in Brazil offset reduced diameter partner orders. Price is expected to decline mid to high single digit consistent with what we observed in the first half. The removal of India is a 2% headwind and FX is expected to be a low single digit tailwind. Adjusted EBITDA is now expected to be between $620 million and $680 million. The 23% decline at the midpoint reflects lower price and FX headwinds partially offset by favorable costs. Adjusted EPS is expected to be between $1.19 and $1.49 with the 55% decline at the midpoint reflecting both lower EBITDA and higher interest expense. Given the uncertainty around the duration of the conflict in Iran and potential US trade actions, we continue to assume that the Iran-related cost pressures and tariff-related benefits largely offset each other. Turning to slide eight, we expect third quarter sales between $840 million and $900 million. We expect the market conditions that we observed in the second quarter to persist in the third quarter. The majority of the 9% midpoint sales decline is due to price, which is expected to be a mid to high single digit headwind. Volume is expected to be lower, mainly driven by North America distributors, managing inventory by shifting orders from Q3 to Q4. In Brazil, we are continuing a strategy to lower our sales to distributors to favor co-ops and direct sales. These decisions negatively impact Q3 sales and favor Q4 sales. It reflects our intent continue to stabilize the performance and predictability of Brazil's sales as we enter Q4 in 2027. We expect overall growth portfolio sales to increase in the quarter, driven by solid performance from new active ingredients. Third quarter EBITDA is expected to be between $120 million and $140 million. This represents a 45% decline at the midpoint, driven mainly by lower price with volume and effects acting as secondary headwinds. Adjusted EPS is expected to be 5 cents and 30 cents, a decline of 90% at the midpoint, driven by lower EBITDA and higher interest. Slide 9 provides our outlook for the fourth quarter, which we expect will represent a return to year-over-year growth. Sales are expected to be between $1.06 billion and $1.2 billion, an increase of 4% at the midpoint. We are not expecting major changes to market conditions and as such we are forecasting a price decrease similar to the first three quarter in the mid to high single digit. We are expecting strong volume growth but is not based on the assumption of sharp improvement in regional markets. About half of the volume growth is expected to come from increased sales in Brazil driven by new products and a more established sales force which has now been in place for over a year. The remaining half of fourth quarter growth is expected to come from new products as well as the shift in order timing by North America distributors from Q3 to Q4. Fourth quarter EBITDA is expected to be between $275 million and $315 million, representing 5% growth at the midpoint. Lower price and FX headwind are expected to be more than offset by favorable cost and higher volume. We are expecting strong cost favorability due to cost mitigation actions, including lower raw materials. Adjusted EPS is expected to be between $1.09 and $1.33. This represents a 1% increase at the midpoint as higher EBITDA model upsets elevated interest expense. I will now turn the call over to Andrew.

Thanks, Pierre. I'll start this morning with free cash flow in slide 10. Free cash flow in the second quarter was $357 million, $318 million higher than the prior year period. Included in free cash flow this quarter is the $200 million prepayment from Corteva as part of the licensing agreement from Rimasoxifan that was finalized in June. This payment is reflected in the change in other operating assets and liabilities net line on our cash flow statement and as a long-term advanced payment liability on our balance sheet. As a result, it does not impact working capital. While the specific structure of the Rimasoxin Licensing Agreement may not recur, we expect licensing and collaboration agreements to remain a part of our business model and an important contributor to operating cash flow over time. We intend to pursue additional opportunities to license molecules from our portfolio and to enter collaborations that allow us to share the cost of developing earlier stage active ingredients. The reality is that our pipeline contains more high quality active ingredients than we can fund and develop in a timely manner on our own. As a result, partnerships such as our licensing agreements with Corteva for Rimasoxapine and Fluendipir and with Bayer for Isoflex Active, as well as future co-development arrangements, are becoming an increasingly important part of our operating model. These collaborations help accelerate the development and commercialization of new technologies, while also providing a meaningful source of operating cash generation. Beyond the free payment from Corteva, free cash flow in the second quarter also benefited from lower receivables overall, with strong collections in Asia, including India, and in EMEA, as well as lower cash taxes. We are updating our 2026 free cash flow outlook to reflect both the updated EBITDA outlook and the Corteva prepayment. We now expect free cash flow to be in the range of $75 to $225 million, or $150 million at the midpoint. Our free cash flow guidance also includes approximately $170 million in expected cash spending on restructuring, driven largely by the significant reshaping of our manufacturing and supply network that is underway. Free cash flow excluding restructuring would be approximately $320 million in 2026 at the guidance midpoint. While we do expect to have meaningful continued cash spending on restructuring in 2027, this should dramatically reduce in 2028 and beyond, greatly improving our free cash flow generation. Moving next to the balance sheet and leverage. The second quarter was a particularly active quarter on the financing front. In mid-April, we amended our existing revolving credit facility. In May, we completed a $1.2 billion senior secured bond offering. We were pleased with the strong demand for the offering. Significant oversubscription allowed us to meaningfully increase the size and reduce the rate of the offering from launch. Proceeds from the bond offering were used to redeem the $500 million in senior notes that were due to mature in October, as well as to reduce borrowings under our revolver. We ended the second quarter with gross debt of approximately $4.3 billion, down $250 million from the prior quarter end. Cash on hand increased $86 million to $477 million, resulting in net debt of approximately $3.8 billion, down $339 million from the prior quarter end. Net debt to trailing 12-month EBITDA was 5.1 times. As we described on the April call, the most recent amendment to our revolving credit agreement included changes to our coverage leverage metrics. The maximum total leverage ratio is not measured formally for the second or third quarters under the terms of the amendment, but would have been approximately 5.6 times. The maximum total leverage covenant will be reinstated in the fourth quarter at 6.75 times through December 31st, 2027. Secured debt to trailing 12-month EBITDA was 1.66 times, as compared to a covenant limit of 3.5 times. Minimum interest coverage ratio was 2.78 times as compared to a covenant minimum of 2.0 times. Looking now at year-end debt levels. Based on our free cash flow guidance, together with proceeds from the India sale, Delaware site sale leaseback, and the Ticindrilo equity investment, and after reflecting dividends, financing fees, and transaction costs, We expect to end 2026 with net debt of approximately $2.6 billion. At the midpoint of our EBITDA guidance, this would suggest year-end 2026 net debt to trailing 12-month EBITDA of roughly four times. While this is still meaningfully higher than where we would like to be long-term, we believe FMC will be well positioned to further improve leverage metrics as we return to EBITDA growth in 2027 and maintain a relentless focus on driving free cash flow for the business. As a result of the financing actions completed in the quarter, we have substantial available liquidity. Borrowings under our revolving credit facility were $250.5 million at June 30th. With letters of credit backed by the revolver of $188.6 million, we had more than $1.56 billion of borrowing capacity available under our revolver at quarter end. We are comfortably in compliance with our covenant metrics. Our next bond maturity is three years away. with $500 million in notes due in October 2029. We feel confident that all of the financing and strategic actions we are taking this year are greatly strengthening the financial foundation of the company. Lastly, moving to the income statement. Second quarter sales benefited from a 2% currency tailwind, primarily coming from strengthening of the Brazilian REI. Looking ahead, we expect FX to move from being a tailwind in the first half to being relatively neutral in the second half. resulting in a low single-digit FX impact on revenue for the full year. Second quarter interest expense of $71.3 million was up $10 million with the impact of financing activity in the quarter partially offset by interest income and lower foreign interest expense. We now expect full year 2026 interest expense to be in the range of $275 to $285 million, up approximately $40 million versus the prior year at the midpoint. due to the impacts of the recent financing activity partially offset by lower foreign interest expense. We continue to expect depreciation and amortization for full year 2026 to be between $160 and $170 million. The effective tax rate on adjusted earnings in the second quarter was 17% in line with our expected full year effective tax rate of 16 to 18%. And with that, I'll hand the call back to Pierre.

Thank you, Andrew. To close, the 2026 market environment will continue to be challenging. We are using these challenging conditions to improve the performance of some critical countries by repositioning their business. We are strengthening FMC's financial foundation, advancing the actions tied to operational peers, and maintaining a clear focus on execution. The work underway will allow a core business to become competitive again, while a new technology portfolio becomes a larger part of the company. The work underway in 2026 will position FMC to return to growth as early as 2027 and beyond. With that, we are happy to take your questions.

We will now begin the question and answer session. Please limit yourself to one question. Should you have additional questions, you can re-enter the queue. To ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Duffy Fisher with Goldman Sachs. Duffy, your line is open. Please go ahead.

Good morning, guys. First question is just around the ramp from your Q3 midpoint to your Q4 midpoint, you know, kind of $165 million of improvement. Can you walk through sequentially What those buckets are, what are the big drivers? Because again, margin goes from like 15% in Q3 to over 25% in Q4. And give some qualitative indication, just how certain are you of those buckets? Do you have orders in hand? Is it based on just kind of historic norm repeating itself? Just try to help us get comfortable with that big ramp up from Q3 to Q4.

Yeah, thanks, Stacey. Let me try to go from Q3 to Q4. Three big drivers on the positive front. First, the non-diamide core. And that includes the growth, of course, in direct sales in Brazil. We're expecting this to be about... about 150 million dollars. The new active ingredients we believe with the number we still are forecasting it's going to be from Q3 to Q4 about 70 million dollars and then You have others, including Brandon Relaxapierre, special in Latin America in the range of 40 million dollars. So when you go from Q3 to Q4, those three buckets less technical sales, as you know, we have less buy from partners for for diamides. We get to a number which is an increase in the range of $260 million. Now, the non-diamide core I talk about, it's largely driven by the normal seasonality. Historically, you see an increase from Q3 to Q4 of about 15%. And that is, in addition, it's a bit higher this time because we do are increasing our sales, direct sales in Brazil. And as you've heard in the script, we have a shift in North America of sales from Q3 to Q4. The second largest driver is the new active ingredients. and that is going to be mostly fluent up here in North America and isoflakes in Australia and they imagine plant health are the rest. So that's roughly the bridge from Q3 to Q4, which go from seasonality to specific actions we are taking like direct sales or new active ingredients.

Your next question comes from the line of Edlin Rodriguez with Mizuho Securities. Please go ahead.

Thank you. Good morning, everyone. Pierre, I kind of wanted to ask you something about more medium and longer term. Clearly, 2026 is a transition year. As you navigate the changes in action you are undertaking to improve the portfolio, it seems like it's a process where things can get worse. Thank you very much.

I believe at this stage, and that's a discussion we're having here often and often, as we look at it, we have all the reasons in the world to believe that 2026 is the truth. We believe the worst is behind us with the loss of IP protection on Renex Appear, and for Renex Appear, all signs are pointing to us being able to protect Renexapier earnings in 27. Now, so if you assume that, I'm looking at four critical things which will be starting to make 2027 the first growth year. First, let's talk about our biggest issue in 2026. This is a $2.1 billion non-diamide core business, and that business is down this year or should be down when we close the year by about 5%. With all the work we are doing on a global manufacturing footprint, we should be competitive again and back to growth as soon as next year. If we only assume to get back to an annual growth of 1 or 2%, which should be below market, so it's fairly modest, if you compare to being down 5% this year, this is an incremental sales of about $120 million to $150 million. So that's the first bucket, just linked to the work we do on a manufacturing footprint. On bucket number two is our new active ingredients. The growth should be accelerating to a minimum of 50 to 70% as we are gaining more and more registration. If you look at the expected size of our new active ingredients, that would be in 27 versus 26, an additional 150 to $200 million. Branded sales appear. Steady as she goes. Should continue its mid-single-digit growth. It's an additional $20 million. Last point, and this one I have not qualified. You know we keep on shifting more and more of our sales business in Brazil toward co-ops and direct sales. This also should represent a growth, but we are not quantifying it yet because, as you know, we are controlling ourselves toward the more traditional distribution network. So we need to balance the growth in co-ops and direct sales versus the decrease in the more traditional network. That's more of a budget exercise, not yet capable of controlling that. On the negative front, we'll still have some negative impact of diameter sales to partners, but money will be getting smaller and smaller and this segment is getting smaller and most of the cost decrease for Renexapier has taken place. So if you look at that without quantifying the last bucket around Brazil, This is natural growth of 300 to 350 million barriers in 27 versus 2026. And that should keep on improving as we grow as the new active ingredients will be getting more and more traction. So as you say, the patient should get better quickly. We believe 27 are all indications are pointing toward a return to growth next year.

Your next question comes from the line of Frank Mitch with Fermium Research. Frank, your line is open. Please go ahead.

Thank you and good morning. Hey Pierre, I wanted to drill on slide five of the breakdown by the regions. North America came down fairly significantly and you mentioned a competitive market in North America. I was wondering if you could expand upon that, where specifically and how sustainable is that competitive market and how we should think about that in the future. Thank you.

Yeah, thanks, Frank. You're absolutely right. North America was down. It's... It is the negative news of the quarter for us and there is multiple drivers. They all went the wrong way. First and above all, it's a volume story. As you know, in North America, we are very strong in specialty crops with our insecticide business. Rice production was at the lowest level since 1987. That's a big market for us. Very low insect pressure. So we lost a lot of sales in specialty crops. Raw crops is less of a market for us, but still important. And it is absolutely certain that low margin at the growers level Hi, Uncertainty. This is translating into growers managing their cost as much as possible. You see some trading from more branded products to generic product, and in some cases, keeping applications. So yes, Q2 was, from a volume standpoint, A negative, a very negative quarter. There is something to a less extent, but we have a license on a product, Nerviside, which is called Pyroxia Sulfone, and the company which own this license, it's only a license we have for North America, lost their IP protection. So that product became more of a generic product and we lost and we lost sales in that, not sales, but we lost on pricing a lot and also on volume on this product. So I would say by far the number one driver in North America, in addition to some pricing, but the number one driver for the reason I just listed our volume.

Your next question comes from the line of Chris Parkinson with Wolf Research. Chris, your line is open. Please go ahead.

Great. Thank you so much. Pierre, we take a step back and we look at the intermediate to longer-term growth in diamides. Perhaps could you just update us on, you know, what you think the overall growth rate is, including all new entrants in terms of, like, the transitory period that we're currently in? which other insecticide classifications we're stealing share from. Is it organophosphates, carbamates, neonics? And just how you think about the overall TAM there, because it seems like the market trajectory is still growth and that there's just basically competitive behaviors in the beginning of that process. So if you could just hit on the highlights there from your own perspective, it would be greatly appreciated. Thank you.

Thanks, Chris. Yes, I'm going to speak carefully here because we have a strategy in place for next year. And as I said before, the big test will be in Q3, Q4 when we're going to have the major market with the entrance of new generics In Latin America and North America. So we're not yet there. And I'm talking about Q1 and Q2 indicators on much lower market. I would say that the number one sign of success we are looking in a strategy is the mix of a portfolio as we were expecting is shifting toward the high-end product. We are growing very fast on the new mixtures we have, especially the Bifenthrin and Renexapyr mixture, as well as the high concentration products. So 35% growth in that sector. That's what we're expecting. We command a premium For those products, that's a first positive. We are seeing some sign that the market is growing and we've seen that in Brazil where we are gaining toward lower end insecticide, but that is at the very beginning of the process. I think the big test is going to take place in the In the second half of the year, but we do have some signal we've seen in Brazil. Product on the ground against some of those insecticides has been strong in the first half of the year. But again, on small volume. So indicators are good that the strategy with the lower cost we have reached and the strategy to move to our higher hand Certainly, we are not expecting at the earnings level Renexapier in the long term to be a contributor to earnings growth for the company. But I would say that all indicators are pointing between the next change and what we see at this stage of volume gain on the lower end sector side towards stabilizing earnings certainly in 2027. That's all I can say today in terms of what we're able to verify on the market.

Your next question comes from the line of Joel Jackson with BMO Capital Markets. Joel, your line is open. Please go ahead.

Good morning, Pierre and team. Pierre, when you did all the actions over the last bunch of months, you were aggressive, you did a lot of things. You know, it seemed like, you know, you thought you could do kind of hold earnings around 700 million EBITDA with the free cash flow around that. You've come down a little bit lower this year, leveraged a little bit higher than maybe what you would have thought. What other actions do you do? Do you feel that you should wait for 2027 to get the rebound you've been talking about earlier in this call or are there other things you want to do? Might you consider cutting the dividends, doing things to protect the balance sheet some more in this 2026 being a bit lower than thought?

I'm going to let Andrew talk about cash flow and what we do in terms of additional actions we are planning for next year. I'm only going to answer the last point you've made around dividend. As you know, our dividends are small. It is certainly a topic we will have with the board and continue to have with the board. It's a $50 million cost annually. But no decision, absolutely no decision has been taken at this stage in terms of the dividend. But Andrew, if you want to add anything?

Sure. I think, look, Joel, on the free cash flow side, obviously we updated the free cash flow guidance with the change in EBITDA guidance and with the Rheumatoxib and licensing deal. There are more moving parts than that, and just to touch on that briefly is to address your question. From a cash from operations perspective, net-net, we moved the guidance midpoint up $85 million. That's about $200 million from the Remy Soxman deal, so obviously some headwinds hitting against that, certainly the biggest being the lowered EBITDA expectation. We also have some higher restructuring spending as we're accelerating some of our actions to improve our manufacturing network. We do see a little less improvement in working capital this year because of the sales shift from Q3 to Q4. And there's a few other minor drags as well. From a CapEx perspective, with accelerating some of those movements on our manufacturing footprint, we were able to reduce the expected CapEx for the year by about $40 million. Our outlook for discontinued operations is unchanged. We did highlight we'll be pulling out certain charges that are related to transactions that flow through the restructuring line. We'll pull that out from free cash flow under divestiture expenses. And the net of those changes is really just on a like-for-like basis, a $50 million reduction in the free cash flow for the year. I do think, again, from a working capital perspective, back to part of your question here, we do expect a release from working capital this year, in part from liquidation of receivables in our India business, but in part from the rest of our businesses. But we have more work to do on improving working capital as we continue to get into a better rhythm with our production cadence, as we continue to drive a more aggressive collection of receivables and improving overall credit quality of the portfolio. So I think you'll see this year some good improvement in inventory reduction as we get through the year, more work to do on receivables and payables as we go into 2027.

I think, Joel, let me build a little bit on what Andrew just said, because it's one of the very critical parts of our balance sheet. You will see this year, it's something we fully control its inventory, and we do have strong expectation that we're going to make some very significant progress on the inventory situation. We are monitoring that very closely and all indicators are pointing towards strong progress. The place where we have work to do, we are starting it this year, it's going to be very important next year, is on receivable. And it's very much part of the strategy we have in Brazil and we've talked about the move toward Thank you very much. Maybe not as much progress this year as we would like, but certainly we are making that a very high priority. We should see very strong improvement as we are changing a mix of customers, especially in Latin America and Brazil next year.

Your next question comes from the line of Patrick Cunningham with Citi. Patrick, please go ahead.

Hi, good morning. Just a couple of questions on the cost side. I think you mentioned at the top of the call some quarter-specific items that benefit the cost. I guess first, you know, what were those? Were those some classes pulled forward? And then can you sort of quantify, you know, what the headwinds, you know, tailwinds might be for the second half?

Sure, Patrick, it's Andrew. I'll take this one. Comment we made relative to guidance, we had, you know, some approved cost favorability and non-manufacturing items. Some of that's SG&A and R&D. And some of it, quite honestly, is just some smaller items that, you know, generally we wouldn't talk about. But, you know, we had a couple things that were positive in the quarter and that did contribute. And I'll give you a simple example. We annually review our achievement reserve, which is, you know, essentially think of uncashed checks and other kind of liabilities. And we found that we were over-recruited. based on what was actually doing outstanding. So there are a few minor little favorable things like that, but when they add up, they were an ad versus guidance in terms of our cost position. I think when we look at costs for the remainder of the year, we do have a bit of two different stories with the quarters. In the third quarter, we really don't have much of a cost tailwind. You'll remember that that's a really tough quarter comp versus the prior year. We had a very strong cost tailwind in the prior year period in Q3, much of which was one-time favorability from increased cost volume absorption in Q3 of 25. So Q3 is the flattest cost quarter, whereas we have pretty significant cost favorability in Q4. And that really is driven by lower purchase price of raw materials year on year. So it is a little bit of a split pattern between the two quarters. It does amplify with the weaker sales in Q3, the headwinds in Q3, and helps amplify the strengths in Q4. So I think, again, everybody should expect Q3, flattest costs, Q4, pretty strong tailwind for costs.

Your next question comes from the line of Arun Vishwanathan with RBC Capital Markets. Your line is open. Please go ahead. Arun, a reminder to unmute yourself locally.

Thanks, thanks. Yeah, so I guess my question is just as you look forward, maybe you can just provide an update on where you stand in the restructuring efforts. So obviously, you know, you talked about the new products growth, but maybe on the diamides and siazapir, do you think the pressure has stopped there? And are you guys holding gross margin And then as you look into fiscal 27, do you expect to, you know, continue growth on that front? What could you provide as far as kind of where you are in some of these restructuring efforts? Thanks.

I think for, I mean, we really have to separate when we talk about dynamite, Ronexapyr and Sayosapyr. is data protected. There is no generic in the major countries today. It's a difficult product to make. We are anticipating the 28-29 period when we will lose data protection to avoid to be taken by surprise like we did in the next year with preparing in advance formulation and having a defense strategy. So that is a 28-29 29 problems. For Ronexapir, we continue the strategy as we have defined so far. So far, it is proving to work. I would say the positive or good surprise for me is that we keep on finding ways to lower our manufacturing cost, which is giving us a couple of things. It's protecting our growth margin. and it's positioning the product better to gain market share over the lower and insecticide. So a total focus between the volume and the cost is when we get into 27 and beyond for Ronaxapir to protect the earnings contribution of the product to the P&L of the company. and I would say that right now all indicators are going that way. As I said, it will not be viewed as a growth product. The cost restructuring keeps on going positively. It's going to position us very competitively versus the quality generics, giving us a lot of flexibility to act and giving us a premium on the high-end product, which we are growing very fast. Thaisa Peer is a different story. It is still a very profitable product which is growing in the mid single digits and for which we are preparing the 28 post data protection situation.

Your next question comes from the line of Ben Tyer with Barclays. Your line is open. Please go ahead.

Yeah, good morning and thanks for taking my question. A lot being touched upon already, but I just wanted to kind of like maybe go back and understand a little bit what your expectation is in terms of like just profit improvement as we move into 27, 28, the ramp with the new active ingredients and still some of the headwinds you've alluded to, Pierre, earlier. as it relates to the form of diamides, et cetera. So how should we think about that? I remember earlier in the year, you've talked about something like mid-teens hepatogrowth into 27, 28. Do you think that can still hold based on also the fact that we have a lower starting base or how should we think about the growth algorithm as we move into 27, 28? Thank you. I think 27 diamide.

I'm going to talk about Ronex Appear because, as I said again, sales appear in 2017. We are expecting revenues and earnings growth in 2027. Ronex Appear, I believe, will be at least the earnings contribution of 2026. Number one driver, and this one is very important, and that's the one I'm the most confident in because it is really happening right now, is the contribution of the high-end diamide mix and product. A portfolio mix is changing very much toward those products. We actually have and are expecting Very soon a registration which will impact 27, it's going to impact 26 in Brazil, which is a blend of Ronexapir and Doxycarb, which is a very important product to address resistance. That's going to be a source of growth significant for us next year. What is to be proven? I have to be... To be clear on this one, it's a Q3, Q4 story for us to be checked is how fast and how much we can penetrate the lower end market of the Ronex set using a low manufacturing cost with a single. Indications are good, but I don't want to declare victory yet until I've seen it in Q3, Q4 in North America and Brazil. So really, I am not... This concludes the FMC Corporation earnings call. Thank you for attending. You may now disconnect.