PART II  NOTE 17 Financial Instruments, Risk Management and Fair Value Measurements Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows: (in Millions Except Share and Per Share Data) Year Ended December 31, 2010 2009 2008 Earnings attributable to FMC stockholders: Income from continuing operations attributable to FMC stockholders $206.1 $246.7 $329.5 Discontinued operations, net of income taxes (33.6) (18.2) (24.9) Net income $172.5 $228.5 $304.6 Less: Distributed and undistributed earnings allocable to restricted award holders (1.0) (1.1) (1.5) Net income allocable to common stockholders $171.5 $227.4 $303.1 Basic earnings per common share attributable to FMC stockholders Continuing operations $2.84 $3.40 $4.44 Discontinued operations (0.46) (0.25) (0.34) Net income $2.38 $3.15 $4.10 Diluted earnings per common share attributable to FMC stockholders Continuing operations $2.82 $3.37 $4.35 Discontinued operations (0.46) (0.25) (0.33) Net income $2.36 $3.12 $4.02 Weighted average number of shares of common stock outstanding-Basic 72,210 72,163 74,006 Weighted average additional shares assuming conversion of potential common shares 870 1,138 1,790 Shares — diluted basis 73,080 73,301 75,796 NOTE 17 Financial Instruments, Risk Management and Fair Value Measurements Our financial instruments include cash and cash equivalents, trade  receivables, other current assets, accounts payable, and amounts  included in investments and accruals meeting the definition of  financial instruments. The carrying value of these fi nancial instruments  approximates their fair value. Our other financial instruments include  the following: The estimated fair value of the financial instruments in the above  chart has been determined using available market information and  appropriate valuation methods. Accordingly, the estimates presented  may not be indicative of the amounts that we would realize in a market  exchange at settlement date and do not represent potential gains or  losses on these agreements. The estimated fair values of foreign exchange  forward contracts and commodity forward and option contracts are  included in the below tables under the “Accounting for Derivative  Instruments and Hedging Activities” section. The estimated fair value  of debt is $648.8 million and $638.4 million and the carrying amount  is $637.9 million and $643.9 million as of December 31, 2010 and  2009, respectively. We formally document all relationships between hedging instruments  and hedged items, as well as the risk management objective and strategy  for undertaking various hedge transactions. This process includes  relating derivatives that are designated as fair value or cash fl ow hedges  to specific assets and liabilities on the balance sheet or to specifi c fi rm  commitments or forecasted transactions. We also formally assess,  both at the inception of the hedge and on an ongoing basis, whether  each derivative is highly effective in offsetting changes in fair values  or cash fl ows of the hedged item. If we determine that a derivative is  not highly effective as a hedge, or if a derivative ceases to be a highly  effective hedge, we discontinue hedge accounting with respect to that  derivative prospectively. We conduct business in many foreign countries, exposing earnings, cash  flows, and our financial position to foreign currency risks. Th  e majority  of these risks arise as a result of foreign currency transactions. Our policy  is to minimize exposure to adverse changes in currency exchange rates.  This is accomplished through a controlled program of risk management  that includes the use of foreign currency debt and forward foreign  exchange contracts. We also use forward foreign exchange contracts  We mitigate certain financial exposures, including currency risk, interest  rate risk, and commodity purchase exposures, through a program of risk  management that includes the use of derivative fi nancial instruments.  We enter into foreign exchange contracts, including forward and  purchased option contracts, to reduce the effects of fl uctuating foreign  currency exchange rates. Use of Derivative Financial Instruments  to Manage Risk Foreign Currency Exchange Risk Management 63 FMC CORPORATION    2010 Form 10K Financial Instrument Valuation Method Foreign Exchange Forward Contracts Estimated amounts that would be received or paid to terminate the contracts  at the reporting date based on current market prices for applicable currencies. Energy Forward and Option Contracts Estimated amounts that would be received or paid to terminate the contracts  at the reporting date based on quoted market prices for applicable commodities. Debt Our estimates and information obtained from independent third parties using market  data, such as bid/ask spreads for the last business day of the reporting period.