UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

          (Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d)

Of the Securities Exchange Act of 1934

For the Quarter Ended September 30, 2003

OR

[ ] Transition Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Commission File Number 001-12217

MISSISSIPPI CHEMICAL CORPORATION

Organized in the State of Mississippi

Tax Identification No. 64-0292638

P. O. Box 388, Yazoo City, Mississippi 39194

Telephone No. 662+746-4131

               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 Exchange Act). Yes [ ] No [X]

               The number of shares outstanding of each of the issuer's classes of common stock, as of October 31, 2003.

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

INDEX

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Continued)

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

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED JUNE 30, 2003

AND THE THREE MONTHS ENDED SEPTEMBER 30, 2003

(Unaudited)

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

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

MISSISSIPPI CHEMICAL CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003

The accompanying consolidated financial statements have been prepared by us without audit, and include Mississippi Chemical Corporation and its subsidiaries. In our opinion, the financial statements reflect all adjustments necessary to present fairly our results of operations for the three-month periods ended September 30, 2003 and 2002, our financial position at September 30, 2003 and June 30, 2003, our consolidated statements of shareholders' equity for the three months ended September 30, 2003 and the year ended June 30, 2003, and our cash flows for the three months ended September 30, 2003 and 2002. In our opinion, these adjustments are of a normal recurring nature which are necessary for a fair presentation of our financial position and results of operations for the interim periods. We have reclassified certain prior-year information to conform with the current year's presentation.

Certain notes and other information have been condensed or omitted in our interim financial statements presented in this quarterly report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our 2003 Annual Report on Form 10-K and our consolidated financial statements and notes thereto included in our June 30, 2003, audited financial statements.

Our business is seasonal; therefore, the results of operations for the period ended September 30, 2003, are not necessarily indicative of the operating results for the full fiscal year.

On May 15, 2003 (the "Petition Date"), Mississippi Chemical Corporation and nine of its direct and indirect subsidiaries (collectively, the "Debtors"), filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Mississippi, Jackson, Mississippi (the "Court"). The cases are being administered jointly in Joint Case Number 03-02984 WEE, collectively ("Case"). As debtors-in-possession, the Debtors are authorized to operate their business but may not engage in transactions outside the ordinary course of business without the approval of the Court. On May 16, 2003, the Court rendered an Interim Order approving the Debtors' request for interim financing, and on October 2, 2003, the Court entered a Final Order approving debtor-in-possession financing with Harris Trust and Savings Bank and a syndicate of six other lenders.

The Debtors sought relief under Chapter 11 of the Bankruptcy Code because of a lack of liquidity. The combination of the depression in the agricultural sector, several waves of low priced imports, and the extreme increase in price level and price volatility of domestic natural gas, the Company's primary raw material, had resulted in substantial financial losses for the Company for the last five years.

On June 6, 2003, the Court appointed the Official Committee of Unsecured Creditors to represent the interests of the unsecured creditors. This committee will monitor our financial condition and restructuring activities. We are required to reimburse certain fees and expenses of the committee, including fees for attorneys and other professionals to the extent allowed by the Court.

As debtors-in-possession, the Debtors, subject to any required Court approval, may elect to assume or reject real estate leases, employment contracts, personal property leases, service contracts, and other unexpired executory pre-petition contracts. We cannot currently determine with certainty the aggregate liability that will result from the filing and settlement of claims related to any rejected contracts.

Pursuant to the provisions of the Bankruptcy Code, the Debtors are currently developing a plan of reorganization. The principal objective of the plan of reorganization will be to restructure the Debtors' obligations to creditors in a manner which will permit us to continue as a viable business organization. The Bankruptcy Code allows the Debtors the exclusive right to file a plan of reorganization during the first 120 days from the Petition Date, or such time as the Court orders. In October 2003, the Court extended the Debtors' exclusivity period to file a plan of reorganization until December 11, 2003, or until such time as the Court issues its final ruling. Although we expect to file a plan of reorganization, there can be no assurance at this time as to whether or when a plan of reorganization will be proposed by the Debtors, how liabilities and equity interests will be treated in the plan, whether the plan will be approved by the various classes of creditors and equity holders, or whether it will b e approved or confirmed by the Court. If the exclusivity period were to be terminated without confirmation of a plan of reorganization, other interested parties, such as creditors, would have the right to propose alternative plans of reorganization. Our plan of reorganization could substantially change the amounts and characterization of liabilities disclosed in the accompanying consolidated financial statements.

On October 8, 2003, we signed an agreement with Koch Nitrogen Company ("Koch") to sell our interests in Point Lisas Nitrogen for an estimated cash amount of $92.0 million (the "Stalking Horse Agreement"). On October 10, 2003, we filed motions with the Court seeking to approve the Stalking Horse Agreement and the auction and bid procedures for an auction of our Point Lisas Nitrogen interests. On November 6, 2003, the Court approved our request and set an auction date of December 10, 2003. If Koch is not the successful bidder at the auction, Koch will be entitled to an estimated break-up fee of approximately $3.8 million. At September 30, 2003, our investment in Point Lisas Nitrogen was $104.3 million. The outcome of the Stalking Horse Agreement with Koch is dependent on the bid and auction process and related Court approvals. Due to uncertainties surrounding our recovering the recorded carrying amount of our interests in Point Lisas Nitrogen, we have not recorded our share, approximately $2.4 million , of Point Lisas Nitrogen's earnings for the quarter ended September 30, 2003.

Our ability to continue as a going concern is dependent upon, but not limited to, the development and confirmation of a plan of reorganization, continued access to adequate sources of capital, continued compliance with debt covenants under the debtor-in-possession credit facility, the ability to sustain positive cash flows sufficient to fund operations and repay debt, and retention of key suppliers, customers and employees. No assurance can be given that we will be successful in reorganizing our affairs through the Chapter 11 bankruptcy proceedings. Because of the ongoing nature of the reorganization process, the outcome of which is not determinable until a plan of reorganization is confirmed and implemented, the accompanying consolidated financial statements do not include any adjustments that might result from the resolution of these uncertainties.

DEBTOR-IN-POSSESSION FINANCING FACILITY

On May 16, 2003, the Court entered an Interim Order approving our request, on an interim basis, for a debtor-in-possession financing facility with Harris Trust and Savings Bank and a syndicate of six other lenders (the "DIP Lenders") to provide up to $37.5 million in financing (the "Interim Credit Facility"). The DIP Lenders are also lenders under the Pre-Petition Harris Facility, as defined below under the heading "Standstill Agreement" (the "Pre-Petition Lenders"). On August 13, 2003, the Court denied our request for a Final Order with regard to the Interim Credit Facility, but granted us authority to use our cash collateral (i.e., cash and proceeds of inventory and receivables) for ordinary course operations through October 3, 2003. On October 2, 2003, the Court approved certain amendments to the Interim Credit Facility to permit borrowings up to $32.5 million (the "DIP Credit Facility"). The DIP Credit Facility is a revolving credit facility that terminates upon the earlier to occur of (a) June 30, 2004, (b) the date that a plan of reorganization confirmed by the Court becomes effective, or (c) the date on which the DIP Lenders terminate the DIP Credit Facility in connection with an event of default thereunder. Mississippi Chemical Corporation is the borrower under the DIP Credit Facility and its subsidiaries who are Debtors are guarantors.

Maximum Borrowings. The DIP Credit Facility provides for maximum borrowings (the "DIP Commitment"), at any time, up to the lesser of (a) $32.5 million, or (b) a borrowing base equal to the sum of (i) 85% of eligible accounts receivable plus (ii) 65% of eligible inventory, minus (iii) a scheduled excess collateral availability requirement, minus (iv) an amount equal to twice the amount of all the then accrued and unpaid charges owed to warehousemen and other third parties having inventory in their possession that have not executed and delivered to the lenders a warehouseman's waiver, minus (v) an amount equal to six months' rent for all leased facilities where inventories are kept for which the landlord has not executed and delivered to the lenders a landlord's waiver. The DIP Commitments are subject to certain mandatory reductions described below.

Rates and Fees. The loans under the DIP Credit Facility bear interest at rates equal to the prime commercial rate from time to time in effect plus 4%. Upon entry of the Interim Order, we paid a facility fee of $375,000 to the DIP Lenders and an administrative fee of $75,000 (of this amount, $60,000 was refunded to us during the quarter ended September 30, 2003) to Harris Trust and Savings Bank, as "DIP Agent." Upon entry of the Final Order, we paid an additional facility fee of $375,000 to the DIP Lenders and an additional administrative fee of $75,000 to the DIP agent. The DIP Credit Facility also has a commitment fee equal to 0.5% per annum of the average daily unused amount of the DIP Commitment.

Collateral Security and Guarantees. Pursuant to the Final Order, the DIP Lenders have been granted superpriority claim status in the Case that is collateralized by first liens on substantially all of our assets and the assets of the other subsidiaries included in the Case (including all of the proceeds of inventory and accounts receivable and cash collateral). Our use of proceeds of inventories and accounts receivable and all cash collateral generated in the ordinary course of business is limited to the payment of certain expenses and application to the DIP Credit Facility prior to its termination and, following such termination, to the Pre-Petition Harris Facility. All of our subsidiaries that are included in the Case have guaranteed the DIP Credit Facility (the "DIP Guarantors"). As adequate protection for the use of pre-petition cash collateral, the Pre-Petition Lenders have been granted a replacement lien on substantially all of our assets and the assets of the DIP Guarantors, subject only to the lien of the DIP Lenders and certain liens permitted under the DIP Credit Facility.

Covenants. The DIP Credit Facility (a) restricts our ability to incur debt, (b) requires us to generate certain minimum levels of EBITDA, as defined in the agreement, for so long as the amount of obligations under the Pre-Petition Harris Facility exceeds $67.5 million, (c) limits our expenditures to the types set forth in a budget, subject to permitted deviations, (d) provides for mandatory prepayments and commitment reductions from all or part of the net proceeds of certain liquidity events such as asset dispositions outside the ordinary course of business, (e) permits the voluntary prepayment of loans under the DIP Credit Facility without penalty, (f) requires that the obligations under the Pre-Petition Harris Facility be reduced according to a schedule, and (g) contains representations, warranties, other affirmative and negative covenants, and events of default that are customary for debtor-in-possession revolving credit facilities.

Asset Dispositions. The DIP Credit Facility requires us to market and dispose of specified assets in order to reduce our debt under the DIP Credit Facility and the Pre-Petition Harris Facility. Other than any disposition of our interest in Point Lisas Nitrogen, all net cash proceeds of asset dispositions outside the ordinary course in excess of $1.0 million shall be applied to the Pre-Petition Harris Facility and the DIP Credit Facility on an equal basis, provided that if the obligations under the DIP Credit Facility are otherwise satisfied as described in the DIP Credit Facility, the balance of any such proceeds shall be applied to the Pre-Petition Harris Facility. In the event of a disposition of the Company's interest in Point Lisas Nitrogen, all net cash proceeds must be applied to the Pre-Petition Harris Facility.

Standstill Agreement. As of the Petition Date, we had a secured revolving credit facility with Harris Trust and Savings Bank and a syndicate of twelve other commercial banks totaling $158.4 million (the "Pre-Petition Harris Facility"). The Pre-Petition Harris Facility bears interest at rates related to the Prime Rate. Our weighted average interest rate was 9.65% at September 30, 2003. The bankruptcy filing was an event of default under the Pre-Petition Harris Facility and, as a result, we can no longer borrow under the Facility. In connection with entering into the DIP Credit Facility, we entered into an agreement with the Pre-Petition Lenders pursuant to which such lenders agreed not to take any action to enforce their rights under the MCHI guaranty (see Note 9) of our obligations under the Pre-Petition Harris Facility. Upon the termination of the DIP Credit Facility or under certain defaults, the Pre-Petition Lenders may enforce the MCHI guaranty. In the event that MCHI receives proceeds f rom a refinancing or a disposition event with respect to Point Lisas Nitrogen, MCHI has agreed to apply such proceeds to the Pre-Petition Harris Facility.

THE INDUSTRIAL REVENUE BONDS

In August 1997, we issued $14.5 million in industrial revenue bonds, a portion of which were tax-exempt, to finance the development of our east phosphogypsum disposal facility at our Pascagoula, Mississippi, DAP manufacturing plant. On April 1, 1998, we issued $14.5 million in tax-exempt industrial revenue bonds (the "1998 IRBs"), the proceeds of which were used to redeem the initial industrial revenue bonds issued in August 1997. The 1998 IRBs issued on April 1, 1998, mature on March 1, 2022, and carry a 5.8% fixed rate. The 1998 IRBs may be redeemed at our option at a premium from March 1, 2008, to February 28, 2010, and may be redeemed at face value at any time after February 28, 2010, through the maturity date. The 1998 IRBs are the obligation of our subsidiary, Mississippi Phosphates Corporation, but are guaranteed by Mississippi Chemical Corporation. The bankruptcy filing was an event of default under the industrial revenue bonds. At September 30, 2003 and June 30, 2003, the industrial revenue bonds are reflected as a component of liabilities subject to compromise on our consolidated balance sheets.

THE SENIOR NOTES

On November 15, 1997, we issued $200.0 million of 7.25% Senior Notes (the "Senior Notes") due November 15, 2017, pursuant to a shelf registration statement filed with the Securities and Exchange Commission. Semi-annual interest payments of approximately $7.3 million are due on each May 15 and November 15. The holders may elect to have the Senior Notes repaid on November 15, 2007. The Senior Notes do not contain any financial covenants, but do contain certain cross-default provisions with the Pre-Petition Harris Facility. As a result of our bankruptcy filing, we did not make the semi-annual interest payment due on May 15, 2003, and were in default under the Senior Notes. At September 30, 2003 and June 30, 2003, the Senior Notes, net of unamortized discounts of $239,000, are reflected as a component of liabilities subject to compromise on our consolidated balance sheets.

As a result of our Chapter 11 filing, substantially all of our unsecured pre-petition indebtedness is subject to compromise. Generally, actions to enforce or otherwise effect payment of pre-Chapter 11 liabilities are stayed. These claims are reflected in the September 30, 2003 and June 30, 2003 consolidated balance sheets as liabilities subject to compromise. Pre-petition claims secured by our assets are also stayed, although the holders of such claims have the right to move the Court for relief from the stay. Pre-petition secured claims (primarily representing amounts borrowed under our pre-petition revolving credit facility) are secured by substantially all of our accounts receivable, inventories, and property, plant and equipment. These secured claims are reflected as long-term debt due within one year on our consolidated balance sheets. Although pre-petition claims are generally stayed as part of the first day orders and subsequent motions granted by the Court, the Court approved our motions to pay certain pre-petition obligations essential for the ongoing operation of our business. We have been paying and intend to continue to pay all undisputed post-petition claims of all vendors and suppliers in the ordinary course of business.

As of September 30, 2003 and June 30, 2003, we had liabilities subject to compromise of approximately $247.1 million and $249.1 million, respectively, which included the following;

Below are condensed consolidated financial statements for the Company.

CONDENSED CONSOLIDATED BALANCE SHEET

September 30, 2003

Below are condensed consolidated financial statements for the Company.

CONDENSED CONSOLIDATED BALANCE SHEET

June 30, 2003

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended September 30, 2003

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended September 30, 2003

In connection with our contemplated bankruptcy reorganization, our board of directors authorized our management to actively market for sale the long-lived assets of Mississippi Potash, Inc. and its subsidiary (the "Potash Assets"). Accordingly, the Potash Assets have been classified as assets held for sale in the consolidated balance sheet at September 30, 2003. Depreciation expense related to the Potash Assets will not be recorded while these assets are classified as held for sale. We are currently evaluating various alternatives, including a potential sale of the Potash Assets and business scenarios in which we could have continued significant involvement. At September 30, 2003, no definitive agreement had been reached regarding a potential sale of these assets. All proceeds received from a sale transaction or other liquidity event of our Potash Assets will be used to reduce debt under our Pre-Petition Harris Facility and DIP Credit Facility on an equal basis.

As required by SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," we tested the Potash Assets for impairment at September 30, 2003. This test resulted in an impairment charge of approximately $34.0 million, which is reflected as a component of reorganization expense in the consolidated statement of operations for the three months ended September 30, 2003. Significant judgments and estimates were used in performing the impairment test in accordance with SFAS No. 144. Future events and circumstances affecting these judgments and estimates could result in additional adjustments to the carrying amount of the Potash Assets. At September 30, 2003, we are still actively engaged in the day-to-day operations and management of the Potash Assets, and are of the opinion that the accounting for such a potential transaction does not qualify as discontinued operations because we could have continued significant involvement in future operations. Accounting for the disposition of the Pot ash Assets as discontinued operations will occur when the requirements of SFAS No. 144 for reporting discontinued operations are definitively met.

The number of weighted average common shares outstanding, net of treasury shares, used in our diluted loss per share computations for the three months ended September 30, 2003 and 2002 were 25,439,000 and 26,168,000, respectively. Options outstanding at September 30, 2003 and 2002, were not included in our computations of diluted loss per share as a result of incurring a net loss in each of the three-month periods, which renders the options anti-dilutive.

Our reportable operating segments, nitrogen, phosphate, potash and melamine, are strategic business units that offer different products. They are managed separately because each business unit requires different technology and marketing strategies. Our nitrogen segment produces anhydrous ammonia, ammonium nitrate, urea melt, nitrogen solutions and nitric acid. We distribute these products to fertilizer dealers, distributors, and industrial users. Our phosphate segment produces diammonium phosphate fertilizer (commonly referred to as "DAP"). Approximately half of our DAP is marketed to agricultural users in international markets through a separate export association. Our potash segment mines and produces agricultural and industrial potash products that are sold to farmers, fertilizer dealers, distributors, and industrial accounts, primarily for use in the southern and western regions of the United States, and into export markets. During fiscal 2003, we purchased a melamine crystal production facility . Melamine crystal is a raw material for manufacturers in the construction/remodeling and automotive industries.

Below is our segment information for the three-month periods ended September 30, 2003 and 2002. The Other caption includes corporate and consolidating eliminations.

For the three-month period ended September 30, 2003, our income tax benefit was $20.0 million, as compared to income tax expense of $6.4 million for the three-month period ended September 30, 2002. The income tax benefit is primarily the result of our net losses; whereas, the income tax expense is primarily the result of U.S. tax expense on cumulative foreign earnings triggered by the guarantee of our debt by one of our foreign subsidiaries under the Pre-Petition Harris Facility, partially offset by tax benefits resulting from our net losses.

Under the Pre-Petition Harris Facility, our wholly owned subsidiary, Mississippi Chemical Holdings, Inc. ("MCHI"), provided a guarantee of the debt. MCHI indirectly owns our 50% joint venture interest in Point Lisas Nitrogen Limited ("Point Lisas Nitrogen"), which operates an anhydrous ammonia facility in Point Lisas, Trinidad. Under U.S. tax laws, this guarantee resulted in a deemed non-cash distribution to us of earnings from MCHI (and effectively our portion of the earnings from Point Lisas Nitrogen). As of September 30, 2003, these cumulative earnings approximated $38.6 million. No U.S. taxes are currently payable on these earnings due to significant book and tax accounting differences, primarily with respect to depreciation. We have recorded non-current deferred tax liabilities on these earnings of approximately $14.5 million. While the guarantee remains in place, we expect to record U.S. tax expenses on future earnings from MCHI and Point Lisas Nitrogen.

In addition to the U.S. tax expense resulting from the MCHI guarantee, we are providing tax benefits based on an estimated annual effective tax rate of approximately 34%. This rate reflects our anticipation of establishing valuation allowances for all deferred state tax assets generated during the year.

Our 50-50 joint venture, Point Lisas Nitrogen, owns and operates a 2,040 short-ton-per-day anhydrous ammonia plant located near Point Lisas, The Republic of Trinidad and Tobago. Point Lisas Nitrogen's financial statements are summarized as follows:

Summarized balance sheet information:

Summarized statements of operations information:

On October 8, 2003, we signed a Stalking Horse Agreement with Koch Nitrogen Company ("Koch") to sell our interests in Point Lisas Nitrogen for an estimated cash amount of $92.0 million. On October 10, 2003, we filed motions with the Court seeking to approve the Stalking Horse Agreement and the auction and bid procedures for an auction of our Point Lisas Nitrogen interests. On November 6, 2003, the Court approved our request and set the auction date for December 10, 2003. If Koch is not the successful bidder at the auction, Koch will be entitled to an estimated break-up fee of approximately $3.8 million. At September 30, 2003, our investment in Point Lisas Nitrogen was $104.3 million. The outcome of the Stalking Horse Agreement with Koch is dependent on the bid and auction process and related Court approvals. Due to uncertainties surrounding our recovering the recorded carrying amount of our interest in Point Lisas Nitrogen, we have not recorded our share, approximately $2.4 million, of Point Lisas N itrogen's earnings for the quarter ended September 30, 2003.

Payment obligations under our 7.25% Senior Notes, due November 15, 2017, issued pursuant to that certain indenture, dated as of November 25, 1997, are fully and unconditionally guaranteed on a joint and several basis by Mississippi Nitrogen, Inc., and MissChem Nitrogen, L.L.C. (the "Guarantor Subsidiaries"), our wholly owned direct subsidiary and our wholly owned indirect subsidiary, respectively. Condensed consolidating financial information regarding the parent company, Guarantor Subsidiaries and non-guarantor subsidiaries for September 30, 2003 and 2002 is presented below for purposes of complying with the reporting requirements of the Guarantor Subsidiaries.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS