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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
---
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended June 30, 1995
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ---------- to ----------
Commission file number 1-9759
IMC GLOBAL INC.
(Formerly IMC Fertilizer Group, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 36-3492467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Sanders Road
Northbrook, Illinois 60062
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708)-272-9200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, par value $1 per share New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant: $1,845,211,984 as of August 31, 1995.
Market value is based on the August 31, 1995, closing price of
Registrant's Common Stock.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS: Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by
Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by
a court. Yes-------. No-------.
APPLICABLE ONLY TO CORPORATE REGISTRANTS: Indicate the number of
shares outstanding of each of the registrant's classes of common stock:
29,628,619 shares, excluding 2,776,420 treasury shares as of August 31,
1995.
DOCUMENTS INCORPORATED BY REFERENCE: Information required by Items 10,
11, 12, and 13 of Part III is incorporated by reference from pages 2
through 6, pages 7 through 16, pages 6 and 7 and page 7, respectively,
of the Registrant's definitive proxy statement for the annual meeting
of stockholders to be held on October 19, 1995.
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1995 FORM 10-K CONTENTS
Item Page
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Part I:
1. Business 1
Introduction 1
Product Line Information 2
International Operations 13
Working Capital 14
Relationship Between the Company and
Mallinckrodt Group Inc. 14
Other Activities 15
2. Properties 17
3. Legal Proceedings 17
4. Submission of Matters to a Vote of Security Holders 18
Executive Officers of the Registrant 19
Part II:
5. Market for the Registrant's Common Stock and Related
Stockholder Matters 20
6. Selected Financial Data 22
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 23
8. Financial Statements and Supplementary Data 30
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 54
Part III:
10. Directors and Executive Officers of the Registrant 54
11. Executive Compensation 54
12. Security Ownership of Certain Beneficial Owners
and Management 54
13. Certain Relationships and Related Transactions 54
Part IV:
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 55
Signatures 66
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PART I.
Item 1. Business.
INTRODUCTION
------------
Company Profile
---------------
IMC Global Inc., formerly IMC Fertilizer Group, Inc., is the parent
corporation of several subsidiaries and joint venture operations which
together comprise one of the world's leading producers of crop
nutrients for the international community. The Company mines and
processes potash in the United States and Canada, and is a joint
venture partner in IMC-Agrico Company, the nation's largest producer,
marketer and distributor of phosphate crop nutrients. The Company
believes that it is one of the lower-cost North American producers of
phosphate rock, potash and concentrated phosphates. The Company also
manufactures high-value crop nutrients which are marketed principally
in the southeastern United States under the Rainbow (Registered
Trademark) brand name. In addition, it produces sulphur and oil at
other joint venture businesses and operates a railcar repair facility
in Georgia.
The Company's business strategy focuses on maintaining its
worldwide position as a leading crop nutrient producer and supplier
through extensive customer service, efficient distribution and
transportation, and to supply crop nutrient products worldwide at
competitive prices by taking advantage of economies of scale and
state-of-the-art technology to reduce costs.
The corporate headquarters of the Company is located at 2100
Sanders Road, Northbrook, Illinois 60062-6146, and the telephone number
is (708) 272-9200.
Unless the context indicates otherwise, the "Company" includes IMC
Global Inc. and its consolidated subsidiaries and joint ventures,
including, subsequent to June 30, 1993, IMC-Agrico Company. Unless
otherwise specified, references herein to years are fiscal years ended
June 30.
Seasonal and Other Factors Affecting the Company's Business
-----------------------------------------------------------
In general, the Company's product lines are not materially affected
by seasonal factors except in the case of its high-value crop nutrients
product line.
The Company's revenues are highly dependent upon conditions in the
domestic agriculture industry, and can be affected by crop failure,
changes in agricultural productivity and agricultural policies, and
weather, all of which are beyond the Company's control.
In addition, the Company's results of operations can also be
affected by other factors beyond its control such as the relative value
of the U.S. dollar and its impact upon costs to the importers of crop
nutrients, the status of domestic and foreign political subsidies of
agriculture, and other factors.
Methods of Competition
----------------------
The Company's products are commodities that are available from
other sources, and the marketplaces in which these products are sold,
both domestic and foreign, are highly competitive. Apart from
competitive pricing, the Company's principal method of competition is
through customer service. Such service includes the maintenance of an
extensive North American transportation system made up of approximately
2,400 railroad cars, both leased and owned, the maintenance of in-
market warehouse networks to meet changing needs within the domestic
marketplace, and the operation of ocean terminals for the storage and
shipment of product to international markets.
PRODUCT LINE INFORMATION
------------------------
The Company's most significant investments in plants and properties
in the United States are in its phosphate operations in Florida and
Louisiana and its potash operations in New Mexico. The Company also
has 25 percent participation interests in joint ventures to mine
sulphur and oil & natural gas deposits offshore Louisiana. The most
significant investment outside the United States is in its potash
operations in the province of Saskatchewan, Canada. In February 1992,
the Company sold its two anhydrous ammonia plants located in
Sterlington, Louisiana.
The amounts and relative proportion of net sales and operating
earnings contributed by various product lines of the Company have
varied from year to year and may continue to do so in the future as a
result of changing business, economic and competitive conditions, and
technical developments.
The table below shows the Company's net sales by product line in
millions of dollars for each of the past five years:
1995 1994 1993 1992 1991
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Phosphate rock $ $ $ $ $
230.8 188.1 167.0 202.0 224.2
Concentrated 1,248.4 876.5 387.1 423.1 447.8
phosphates
Potash 249.4 210.5 221.8 224.1 231.3
High-value crop 115.1 98.4 97.9 103.3 96.6
nutrients
Uranium 10.9 9.2 6.7 63.9 70.9
Ammonia 34.3 52.1
Other 69.4 58.8 16.6 7.8 8.3
Total net sales $1,924. $1,441. $ $1,058. $1,131.
0 5 897.1 5 2
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In 1995, sales of concentrated phosphates and potash to China
accounted for approximately 20 percent of the Company's net sales. No
other single customer or group of related or affiliated customers
accounted for more than 5 percent of the Company's net sales.
IMC-Agrico Company
-------------------
On July 1, 1993, IMC Global Operations Inc. (IMC), formerly IMC
Fertilizer, Inc., and Freeport-McMoRan Resource Partners, Limited
Partnership (FRP) entered into a joint venture partnership in which
both companies contributed their respective phosphate businesses,
including the mining and sale of phosphate rock and the production,
distribution and sale of concentrated phosphates, uranium oxide and
related products to IMC-Agrico Company (IMC-Agrico), a Delaware general
partnership. IMC has a 56.5 percent interest in IMC-Agrico over the
term of the partnership. IMC-Agrico is governed by a Policy Committee
which has equal representation from each company and is operated by
IMC. IMC-Agrico makes cash distributions to IMC and FRP based on
formulas and sharing ratios for Current Interest Cash and Capital
Interest Cash as defined in the partnership agreement. Current
Interest Cash is shared at a ratio of 45.0 percent and 55.0 percent in
1995 to IMC and FRP, respectively, adjusting thereafter until 1998 when
the ratios will be fixed at 59.4 percent to IMC and 40.6 percent to
FRP. Capital Interest Cash is shared at a ratio of 54.9 percent and
45.1 percent in 1995 to IMC and FRP, respectively, adjusting thereafter
until 1998 when the ratios will be fixed at 59.4 percent to IMC and
40.6 percent to FRP.
The formation of IMC-Agrico continues the Company's strategy of
pursuing competitive cost positions in its markets. As a result of
this transaction, IMC-Agrico has realized transportation and
distribution cost savings by reducing unit costs to transport product
between various IMC-Agrico locations, by taking advantage of multiple
shipping locations to reduce the cost to transport product to
customers, and by reducing per unit warehousing costs through
opportunities created by the size of operations of IMC-Agrico as
compared to the operations of the two partners individually.
IMC-Agrico has reduced production costs by eliminating duplicative
plant administrative functions, by applying operational technologies
that have proven successful at each of the partner's respective plant
locations to the other partner's contributed plants and by more
efficiently utilizing in-process product at plants that previously had
underutilized upgrading capacity. IMC's and FRP's selling, general and
administrative expenses have been reduced through reduced headcount
which was achieved by eliminating duplicative headquarters functions
and consolidating the partners' sales forces.
The following discussion describes the Company's operations,
including those of IMC-Agrico. Subsequent to June 30, 1993, all of the
Company's phosphate rock and concentrated phosphate operations have
been conducted through IMC-Agrico.
Phosphate Rock
--------------
IMC-Agrico's phosphate mining operations and production plants,
located in Polk, Hillsborough, Hardee and Manatee counties in central
Florida, produce phosphate rock, with production principally going into
the manufacture of concentrated phosphates. IMC-Agrico sells phosphate
rock to crop nutrient manufacturers in the United States, to foreign
distributors and manufacturers and to animal feed manufacturers for the
production of feed phosphates. IMC-Agrico also uses phosphate rock
internally in the production of concentrated phosphates at its New
Wales, Nichols and South Pierce production facilities located in
central Florida and its Faustina and Uncle Sam production facilities
located in Louisiana. Phosphate rock is generally mixed with sulfuric
acid to produce phosphoric acid from which various concentrated
phosphate products can be produced. About 84 percent of U.S. phosphate
rock is produced in Florida and North Carolina. The Florida/North
Carolina production rate was at 86 percent of capacity for 1995,
including idle and unused facilities.
Production and Reserves
Phosphate deposits were formed 15 million years ago by mineral
precipitation from seawater. Varying in thickness from five to 25
feet, these deposits are covered by a 10 to 50 foot layer of sandy
overburden. The ore is extracted through surface mining after removal
of the overburden and is then processed at one of IMC-Agrico's 10
plants (two of which were temporary idled at June 30, 1995) where it
goes through washing, screening, sizing and flotation procedures
designed to separate it from sands, clays and other foreign materials.
IMC-Agrico's production capacity is approximately 27 million tons
of product per year. However, production has been at less than
capacity because of reduced demand.
In June 1994, the Company purchased two phosphate rock processing
plants which previously had been leased under a long-term contract with
Brewster Phosphates. The annual capacity of these two plants is
approximately five million tons. Currently, both plants are closed
indefinitely subject to improved market conditions.
IMC-Agrico has estimated reserves of 328 million tons of phosphate
rock in central Florida as of June 30, 1995 that are mineable from
existing operations. These reserves are either owned by IMC-Agrico or
controlled by it through long-term lease or royalty agreements.
Reserve grades range from 58 percent to 78 percent bone phosphate of
lime (BPL), with an average grade of 67 percent BPL. (Bone phosphate
of lime is the standard industry term used to grade phosphate rock.)
The phosphate rock mined by the Company in the last three years
averaged 68 percent BPL, which is typical for phosphate rock mined in
Florida during this period.
In March 1994, IMC-Agrico and U.S. Agri-Chemicals (USAC) entered
into an agreement in which IMC-Agrico agreed to mine certain phosphate
rock reserves owned by USAC and process such reserves for its own use.
In return, IMC-Agrico agreed to supply all of USAC's internal phosphate
rock requirements (1.3 million to 2.0 million tons per year) at its
Fort Meade, Florida, concentrated phosphate facility beginning October
1, 1994 at a price based on market plus escalations in IMC-Agrico's
cost of production. This agreement will end on September 30, 2004, at
which time it may be renewed, if agreed to by both parties, for an
additional five years.
IMC-Agrico also owns or controls phosphate rock deposits in
Manatee, DeSoto and Hardee counties, Florida, about 40 miles south of
its current mining operations, which are called the South Florida
deposits. (Reserves are ore bodies which are believed to be
economically recoverable at current costs and prices. Deposits are ore
bodies which require additional economic and mining feasibility studies
before they can be classified as reserves.) These deposits differ in
physical and chemical characteristics from the reserves now being mined
in Polk, Hillsborough and Manatee counties, Florida. The South Florida
deposits contain estimated recoverable phosphate rock of approximately
533 million tons (289 million tons of which are available under option
arrangements) with an average grade of approximately 65 percent BPL.
Some of these deposits are located in what may be classified as
unmineable wetland areas under standards set forth in current state and
federal dredge and fill regulations.
In July 1994, IMC-Agrico entered into an option agreement with
Mississippi Chemical Corporation (MCC) to purchase 9,472 acres of land
in Florida (the Property). The Property, along with 2,508 acres of
land previously purchased from MCC (the Adjacent Property), contains
approximately 87.5 million tons of phosphate rock deposits included in
the South Florida deposits discussed above. The option period began
July 16, 1994 and will end January 16, 1998. During this time,
IMC-Agrico may exercise its option to purchase the Property or it may
continue to make annual payments ranging from $1.0 million to $3.0
million to keep the option in effect. If by the end of the option
period IMC-Agrico exercises its option to purchase the Property, the
purchase price will be financed by MCC over a six-year term at interest
rates approximating IMC-Agrico's borrowing rate. If IMC-Agrico fails
to make an option payment during the option period or fails to exercise
its option by January 16, 1998, MCC has the right to sell the Property
to IMC-Agrico for a specified amount. If the option to purchase the
Property is not exercised by IMC-Agrico and MCC does not exercise its
right to sell the Property to IMC-Agrico, MCC has the right to purchase
the Adjacent Property from IMC-Agrico at an agreed upon price. In
fiscal 1995, IMC-Agrico paid $3.0 million to keep the option in effect.
The Market
IMC-Agrico sells its phosphate rock under long-term contracts and
in the spot market. IMC-Agrico also consumes a significant portion of
its phosphate rock in the production of concentrated phosphates at its
New Wales, Nichols, South Pierce, Faustina and Uncle Sam facilities.
Most of IMC-Agrico's export sales of phosphate rock are made
through the Phosphate Rock Export Association, formed under the Webb-
Pomerene Act by the Company and certain other Florida phosphate rock
producers. Under that Act, members of an industry may form
associations to negotiate prices and other terms for the export sales
of their products in order to compete more effectively in foreign
markets. Export markets for phosphate rock are highly competitive,
with the nationally-controlled mines of Morocco and other countries
being significant factors in terms of supply and price.
IMC-Agrico's phosphate rock shipments in millions of tons for 1995
and 1994 were as follows:
1995 1994
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Tons % Tons %
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Domestic
Major long-term contracts thru 2004 7.9 32% 5.9 28%
Spot market .8 3 .8 4
Export 2.1 8 2.2 10
Captive 14.2 57 12.3 58
Total shipments 25.0 100% 21.2 100%
IMC-Agrico has contractual commitments from customers for the
shipment of phosphate rock amounting to approximately 4.4 million tons
in fiscal 1996.
Overall, phosphate rock prices averaged $21.29 per ton in 1995 vs.
$21.16 per ton in 1994.
Concentrated Phosphates
-----------------------
Once phosphate rock is mined, it can then be processed into
concentrated phosphates. Concentrated phosphate production facilities
are located in Florida and Louisiana. IMC-Agrico's annual concentrated
phosphate production capacity is approximately four million tons of
phosphoric acid (P2O5 equivalent), or approximately 32 percent of total
U.S. concentrated phosphate production capacity, or 11 percent of world
capacity.
Production
The Florida concentrated phosphate facilities consist of three
plants: New Wales, Nichols and South Pierce. The New Wales
concentrated phosphate complex, located near Mulberry, Florida, is the
largest concentrated phosphate plant in the world with an estimate
annual capacity of 1.76 million tons of phosphoric acid (P2O5
equivalent). P2O5 is an industry term indicating a product's phosphate
content measured chemically in units of phosphorous pentoxide. New
Wales primarily manufactures four forms of concentrated phosphates:
diammonium (DAP) and monoammonium (MAP) phosphate, granular triple
superphosphate (GTSP) and merchant grade phosphoric acid. The Nichols
plant, located near Nichols, Florida, manufactures phosphoric acid and
DAP and has an estimated annual capacity of .28 million tons of
phosphoric acid (P2O5 equivalent). This plant was acquired from
Conserv, Inc. in 1992. The South Pierce plant, located near Bartow,
Florida, produces phosphoric acid, GTSP and technical grade DAP and MAP
for industrial use and has an estimated annual capacity of .52 million
tons of phosphoric acid (P2O5 equivalent).
The Louisiana concentrated phosphate facilities consist of three
plants: Uncle Sam, Faustina and Taft. The Uncle Sam plant, located in
Uncle Sam, Louisiana, produces phosphoric acid which is then shipped to
the nearby Faustina and Taft plants where it is used to produce DAP and
MAP. Uncle Sam has an estimated annual capacity of .89 million tons of
phosphoric acid (P2O5 equivalent). The Faustina plant, located near
St. James, Louisiana, manufactures DAP and MAP and has an estimated
annual capacity of .58 million tons of phosphoric acid (P2O5
equivalent). The Taft plant, located near Hahnville, Louisiana, only
manufactures DAP. However, based on market demand, operations at Taft
are routinely suspended to keep IMC-Agrico's output in balance with
customer needs.
Phosphate rock, sulphur and ammonia are the three principal raw
materials used in the production of concentrated phosphates. Phosphate
rock is supplied by IMC-Agrico's mines in Florida. The Company and FRP
both have interests in a joint venture which began mining sulphur
reserves at Main Pass 299 (Main Pass) offshore Louisiana in April 1992.
In the past, sulphur was purchased exclusively from domestic suppliers.
IMC and FRP have an agreement to supply IMC-Agrico's sulphur
requirements. FRP supplies its share of the requirements through its
Sulphur Division and the Company supplies its share of the requirements
through its share of Main Pass production and purchases from FRP and
third parties. Nearly all of the Company's ammonia needs were supplied
by the Company's Sterlington, Louisiana, production facilities until
February 1992, when the operations were sold. Since then, the
Company's needs primarily have been fulfilled by domestic suppliers
under long-term contracts. Subsequent to July 1, 1993, IMC-Agrico's
needs were supplied by its Faustina ammonia production facility and by
domestic suppliers under long-term contracts.
The Market
IMC-Agrico sells its concentrated phosphates in the spot market and
under long-term contracts. Virtually all of IMC-Agrico's export sales
are marketed through the Phosphate Chemicals Export Association
(PhosChem), a Webb-Pomerene Act organization. The table below shows
the Company's 1995 and 1994 shipments in thousands of tons of P2O5
equivalent:
1995 1994
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Tons % Tons %
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Domestic
Spot market 1,319 33% 1,449 42%
Contracts expiring in 1996 165 4 115 4
Mallinckrodt (for animal
feed ingredients) 279 7 279 8
Captive (for high-value
crop nutrients) 60 2 46 1
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1,823 46 1,889 55
Export 2,138 54 1,564 45
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Total shipments 3,961 100% 3,453 100%
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IMC-Agrico has contractual commitments from customers for the
shipment of concentrated phosphates amounting to approximately 1
million tons (P2O5 equivalent) in fiscal 1996.
Animal Feed Ingredients Agreements
IMC has a management agreement with Mallinckrodt Veterinary, Inc.
(Mallinckrodt), a wholly-owned subsidiary of Mallinckrodt Group Inc.,
under which IMC operates certain Mallinckrodt facilities at the New
Wales concentrated phosphate complex, which manufacture animal feed-
grade phosphate products, and supplies utilities for the operation of
such facilities until at least June 30, 1997. There is also a similar
management agreement under which IMC operates a limestone mine for
Mallinckrodt Group Inc. to obtain limestone for use in the animal feed
plant. Under the management agreement, charges for the conversion of
raw materials, described below, into finished products, as well as for
supplying utilities to the plant, are based on IMC's actual cost.
In addition, IMC-Agrico has supply agreements with Mallinckrodt
under which IMC-Agrico will supply Mallinckrodt's requirements of raw
materials for its animal feed plant. Under these agreements,
IMC-Agrico will supply phosphoric acid through at least June 30, 1997.
In addition, IMC-Agrico has an agreement to supply Mallinckrodt 85,000
to 105,000 tons of phosphate rock annually until June 30, 1998. IMC
has also entered into an agreement to supply Mallinckrodt with its
requirements of animal feed-grade potassium products from IMC's
Carlsbad, New Mexico, potash operations. These potassium supply
contracts extend year-to-year unless terminated by either party. IMC
also supplies Mallinckrodt with railcars for transporting its product.
Potash
------
The Company mines potash, the second primary crop nutrient, at
three underground mines and modern refineries in the United States and
Canada. Two of the mines and refineries are located near the town of
Esterhazy in the Canadian province of Saskatchewan. The remaining mine
and refinery is located near Carlsbad, New Mexico. In addition to the
Company, there are 12 North American potash producers -- seven in the
United States and five in Canada. With a combined capacity of over
five million tons per year, the Company is one of the largest private
enterprise potash producers in the world. In 1995, these operations
accounted for approximately 9 percent of world output.
The term potash applies generally to the common salts of potassium.
Since the amount of potassium in these salts varies, the industry has
established a common standard of measurement by defining a product's
potassium content in terms of equivalent percentages of potassium oxide
(K2O). A K2O equivalent of 60 percent is the customary minimum
standard for muriate of potash products.
The North American potash industry's production rate was at 78
percent of capacity for 1995, including idle and unused facilities.
Most of the potash produced by the Company was sold as crop nutrient
materials, while small portions were sold as animal feed ingredients
and to non-agricultural markets.
Saskatchewan Potash Operations
The Company's two interconnected potash mines in Saskatchewan are
owned and operated by a wholly-owned subsidiary, International Minerals
& Chemical (Canada) Global Limited (IMC-Canada). The total annual
production capacity of IMC-Canada's refinery facilities is estimated to
be 4.2 million tons of finished product.
Potash mining takes place under ground at depths of over 3,000 feet
where continuous mining machines cut out the ore face and move jagged
chunks of salt to conveyor belts. The ore is then crushed and moved to
storage bins where it awaits hoisting to refineries above ground. IMC-
Canada produces six different potash products, some through patented
processes. Product grades produced are Standard, Special Standard,
Coarse, Granular and White Muriate, and Refined KCl.
Potash Corporation of Saskatchewan Inc. (PCS) controls several
potash-producing properties in the province. The mining operations
associated with these properties give PCS control of approximately 56
percent of Saskatchewan's potash production capacity.
One of PCS's properties consists of reserves located in the
vicinity of IMC-Canada's potash operations. Under a long-term contract
with PCS, IMC-Canada is obligated to mine and refine these reserves for
a fee plus a pro rata share of production costs. The specified
quantities of potash to be produced for PCS may, at the option of PCS,
amount to an annual maximum of approximately one-fourth of the tons
produced by IMC-Canada, but no more than 1,050,000 tons. The current
contract can be continued in effect until June 30, 1996, and, at the
option of PCS, can be renewed on the same terms for six additional five-
year periods.
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines. As a result, the
Company has suffered losses and has been forced to take substantial
remedial efforts to stop the flooding. The Company's share of
expenditures for ongoing remedial efforts totaled $14 million in 1995
and is expected to total approximately $15 million in 1996.
The Company has significantly reduced the water inflow since the
initial discovery and has been able to meet all sales obligations and
requirements from production at the mines. Despite the relative
success of such measures, there can be no assurance that the amounts
required for remedial efforts in the future will not increase or that
inflows will not increase to a level which would cause the Company to
abandon the mine. There can be no assurance that such action would not
have a material adverse effect on the Company. However, the long-term
outlook of the water inflow has caused the Company to consider
alternatives to its current mining operations and studies are under way
in this regard. Any solution to the water inflow situation at the
mines could result in substantial capital expenditures and/or charges
to operations. The Company does not presently have in place, nor can
it reasonably obtain, any insurance to cover damage to its underground
potash operations.
In 1987, legislation was adopted in the province of Saskatchewan
that authorized the provincial government to control production at
potash mines located in the province. The provincial government stated
that the purpose of such legislation was to deal with an oversupply of
potash in world markets. The legislation was not self-implementing.
It permits the Lieutenant Governor in Council of Saskatchewan to create
a Potash Resources Board to prescribe rates of potash production in the
province and to allocate production among the individual mines.
Increases in production capacity would be subject to provincial
approval. Although such regulations are in place, they have never been
implemented. The Company cannot predict if or when the legislation
will be implemented or the effects of this legislation on the
profitability of its potash operations.
Saskatchewan Potash Reserves
IMC-Canada presently controls the rights to mine 204,926 acres of
potash-bearing land in southeastern Saskatchewan. This land, of which
51,453 acres have already been mined or abandoned, contains over 1.4
billion tons of recoverable ore at an average grade of 24.5 percent K2O
-- enough to support current operations for more than a century. This
ore will yield approximately 498 million tons of finished product with
a K2O content of approximately 61 percent.
IMC-Canada's mineral rights consist of 113,548 acres owned in fee,
70,613 acres leased from the province of Saskatchewan, and 20,765 acres
leased from other parties. All leases are renewable by IMC-Canada for
successive terms of 21 years. Royalties, established by regulation of
the province of Saskatchewan, amounted to $3.9 million (Canadian) in
1995 and $3.7 million (Canadian) in 1994.
Agreement Suspending Potash Dumping Investigation
In January 1988, the U.S. Department of Commerce (Commerce) signed
an agreement with all of the potash producers in Canada, suspending an
investigation by Commerce to determine whether Canadian potash was, or
was likely to be, sold in the United States at less than "fair value."
The agreement stipulated that each such producer's minimum price for
potash sold in the United States, compared with its potash prices in
Canada, would be based upon a formula related to preliminary dumping
margins determined by Commerce for each producer, to assure that there
would be no dumping by that producer in the future. Compliance with
the agreement is being monitored by Commerce. Originally, this
agreement was to remain in effect until 1993 unless it was terminated
by Commerce or by the withdrawal from the agreement by producers having
15 percent or more of the total Canadian capacity, or unless there was
a violation of the terms of the agreement, in any of which events the
investigation could be renewed. In January 1993, this agreement was
extended by Commerce for an indefinite period. The intent of the
agreement is to prevent the sale of Canadian potash into the United
States at less than "fair value."
Saskatchewan Potash Production Costs
In addition to royalties, potash resource tax payments to the
province of Saskatchewan amounted to $9 million in 1995 and $5 million
in 1994. These payments are not deductible in determining Canadian
federal income taxes.
New Brunswick Potash Exploration
In August 1995, IMC-Canada was chosen by the Minister of State for
Mines and Energy for the Canadian province of New Brunswick to explore
potash deposits near the town of Sussex. IMC-Canada has agreed to
enter into a three-year agreement under which it will perform a
geological reassessment of the property and feasibility study to
determine whether to develop the potash deposits. IMC-Canada had
conducted a similar exploration program on property near Sussex in the
mid-1970s.
Carlsbad Potash Operations
The Company's Carlsbad mine, located in New Mexico with workings at
levels 700 to 900 feet under ground, has an annual production capacity
of over one million tons of finished product. The ore mined is of
three types: (1) sylvinite, a mixture of potassium chloride and sodium
chloride, the same as the ore mined in Saskatchewan; (2) langbeinite, a
double sulphate of potassium and magnesium; and (3) a mixed ore,
containing both potassium chloride and langbeinite.
Both continuous and conventional mining methods are utilized for
ore extraction. In the continuous mining sections, drum type mining
machines are used to cut sylvite ore from the face. Mining heights are
as low as four feet. In the conventional areas, a wide ore face is
undercut and holes drilled to accept explosive charges. Ore from both
continuous and conventional sections is loaded onto conveyors and
transported to storage areas where it is hoisted above ground for
further processing at the refinery.
Three types of potash are produced at the refinery: muriate of
potash, which is the primary source of potassium for the crop nutrient
industry; a double sulphate of potash magnesia, marketed under the
brand name Sul-Po-Magr, containing significant amounts of sulphur,
potassium and magnesium, with low levels of chlorine; and sulphate of
potash, supplying sulphur and a high concentration of potassium with
low levels of chlorine. The Company believes it is the larger of the
two U.S. producers of double sulphate of potash magnesia and the
largest of several U.S. producers of sulphate of potash.
Carlsbad Potash Reserves
The Company mines and refines potash from 43,239 acres of reserves
which the Company controls under long-term leases. These reserves
contain an estimated total of 162 million tons of recoverable ore in
four mining beds evaluated at thicknesses ranging from five to 12 feet.
At average refinery rates, these ore reserves are estimated to be
sufficient to yield 11.8 million tons of concentrate from sylvinite
with an average grade of 60 percent K2O and 28.5 million tons of
langbeinite concentrate with an average grade of approximately 22
percent K2O.
At current elevated rates of production, the Company's reserves of
sylvinite and langbeinite are estimated to be sufficient to support
operations for more than 23 years.
The Market
Potash is sold throughout the world, with the Company's largest
markets being in the United States, People's Republic of China, Japan,
Malaysia, Korea, Australia, New Zealand and Latin America. Potash is
also used internally in the manufacture of high-value crop nutrients.
The Company's exports from Canada, except to the United States, are
made through Canpotex Limited, an export association of Saskatchewan
potash producers.
The following table summarizes the Company's shipments of potash in
thousands of tons in 1995 and 1994:
1995 1994
-----------------------------------------------------------------
Tons % Tons %
-----------------------------------------------------------------
Domestic (United States and
Canada) 2,406 60% 2,287 65%
Foreign 1,322 33 963 27
Captive (principally for
crop nutrients) 282 7 280 8
-----------------------------------------------------------------
4,010 100% 3,530 100%
-----------------------------------------------------------------
The average selling price for all Company potash products was $66
per ton in 1995, compared with $64 per ton in 1994.
Rainbow Division
----------------
The Company's Rainbow Division produces high-value crop nutrients
through granulation and bulk-blending. Granulation is a process in
which various dry and liquid raw materials are chemically combined and
then pelletized. Bulk-blending is a simple physical mixing or blending
of suitable crop nutrient materials.
The Rainbow Division operates four large granulation plants which
are located in Americus, Georgia, Florence, Alabama, Hartsville, South
Carolina and Winston-Salem, North Carolina. It also operates 15
smaller facilities, primarily in the southeastern United States, for
bulk-blending and/or warehousing. Most of the potash and phosphate raw
materials used by these operations are supplied by the Company's mines
and plants.
The Products
Shipments of Rainbow (Registered Trademark) and Super Rainbow
(Registered Trademark) (premium, high-value crop nutrient products)
accounted for about 47 percent of the Company's total 1995 high-value
crop nutrient sales. These crop nutrients are formulated for specific
kinds of crops, soils, and soil conditions, and, in addition to the
three major plant nutrients, may contain as many as seven secondary
elements and micronutrients.
The Rainbow Division also sells phosphate rock, concentrated
phosphates, potash and nitrogen products for direct application to the
soil.
The Market
High-value crop nutrients are marketed in the United States and
sold principally to independent dealers, distributors and farmers, with
some sales made directly to other crop nutrient manufacturers. Sales
are largely concentrated in the spring planting season. Weather has
some impact on the timing and length of the planting season and can
have a significant effect on high-value crop nutrient prices. The
Rainbow division experienced its best year ever with record shipments
and operating earnings. High-value crop nutrient shipments in 1995
approximated 798,000 tons vs. 725,000 tons in 1994.
The Company believes its share of the southeastern U.S. market, the
market in which it operates, was about 15 percent in 1995. The
competition consists of many relatively small enterprises and other
large high-value crop nutrient companies.
Uranium Oxide
-------------
Phosphate rock is the source of uranium oxide, with the uranium
content varying from deposit to deposit. When phosphate rock is
converted into phosphoric acid, there is approximately a pound of
uranium oxide in each ton of the acid (P2O5 equivalent).
Uranium oxide production facilities are located in Louisiana and
Florida. In Louisiana, IMC-Agrico owns and operates uranium oxide
recovery and processing facilities which are located adjacent to its
Uncle Sam and Faustina concentrated phosphate plants. In 1995, these
production facilities recovered 1,061,813 pounds of uranium oxide from
phosphoric acid produced at these facilities.
Under a joint venture agreement with Denison Mines Ltd. (Denison),
IMC-Agrico was responsible for the production of uranium oxide at its
Uncle Sam and Faustina facilities, and Denison was responsible for
marketing the uranium oxide under long-term contracts. This agreement
was terminated on December 31, 1994. IMC-Agrico now sells its uranium
oxide production under a sales contract which expires in June 1997.
The contract currently yields prices above spot market prices.
IMC-Agrico also owns uranium oxide recovery and processing
facilities which are located adjacent to its New Wales concentrated
phosphate plant in Florida. Prior to 1992, uranium oxide produced at
the New Wales facilities was sold under long-term contracts which
supplied uranium oxide to nuclear power plants. Since the expiration
of these contracts, the Company has not been able to secure contracts
favorable enough to warrant continued operation of the New Wales
facilities, and production has been suspended. However, the suspension
of production at New Wales is expected to be temporary, and production
will resume when future uranium oxide market prices warrant resumption
of operations.
Another primary recovery unit is located adjacent to a concentrated
phosphate plant owned and operated by a subsidiary of CF Industries
(CF), located in Plant City, Florida. This facility extracted uranium
oxide from CF's phosphoric acid production at that plant. Under
contracts which ran through 1992, the Company extracted and purchased
CF's uranium oxide. After expiration of the contracts, the market
price for uranium oxide was not sufficient to justify continued
operation of the primary recovery unit and production was suspended.
Ammonia
-------
IMC-Agrico produces ammonia at its Faustina plant located at St.
James, Louisiana. Production from the Faustina plant, which has an
estimated annual capacity of 530,000 tons of anhydrous ammonia, is
primarily used internally to produce urea, DAP and MAP.
Until early 1992, the Company produced anhydrous ammonia at two
plants located in Sterlington, Louisiana. In February 1992, this
facility was sold. In connection with the sale of this facility, the
Company entered into contracts to meet its ammonia requirements.
Sulphur and Oil & Natural Gas
-----------------------------
See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a discussion of the status of
the Company's sulphur and oil & natural gas ventures.
INTERNATIONAL OPERATIONS
------------------------
Foreign operations and investments are subject to risks customarily
encountered in such foreign operations and investments, including
fluctuations in foreign currency exchange rates and controls,
expropriation and other economic, political and regulatory policies of
local governments, and laws and policies of the United States affecting
foreign trade and investment.
Internationally, the Company's products are sold primarily through
one Canadian and three U.S. export associations. Due to economic and
political factors, customers can change dramatically from year to year.
In 1995, principal customer countries included the People's Republic of
China, India, Thailand, Japan, Korea, Australia, New Zealand and
several Latin American and European countries. The Company maintains
an international marketing sales force which works with and provides a
variety of agronomic and technical services to foreign customers
including government agencies to help improve economic yields and
agricultural technology. For further information concerning the
Company's foreign operations and business, see the following captions
in Item 1:
Heading Matter
-----------------------------------------------------------------
Phosphate Rock Export sales of phosphate rock
Concentrated Phosphates Export sales of concentrated
phosphates
Potash Potash mining operations
-----------------------------------------------------------------
See also Note 20 - Operations by Geographic Area of Notes to
Consolidated Financial Statements for additional information.
WORKING CAPITAL
---------------
The working capital requirements for inventory and receivables of
the Company are not materially affected by seasonal or other factors
except for its high-value crop nutrient business. Sales of high-value
crop nutrients are largely concentrated in the spring season, requiring
a higher than average level of inventory to meet anticipated customer
demand for the product.
The Company does not extend long-term credit to customers. The
Company believes this non-extension of credit as well as its working
capital requirements are not materially different from the credit
policies and working capital requirements of its competitors.
RELATIONSHIP BETWEEN THE COMPANY AND MALLINCKRODT GROUP INC.
------------------------------------------------------------
The Company was at one time a wholly-owned subsidiary of
Mallinckrodt Group Inc. As a result of a public offering of the
Company's common stock by Mallinckrodt Group Inc. and stock purchases
by the Company, Mallinckrodt Group Inc.'s ownership interest in the
Company was completely eliminated by July 1991.
The Company continues to have contractual relationships with
Mallinckrodt Group Inc., which originated at the time the Company was a
subsidiary of Mallinckrodt Group Inc. These include arrangements under
which the Company operates an animal feed-grade phosphate facility,
that is located at IMC-Agrico's New Wales concentrated phosphate
complex, for Mallinckrodt and supplies utilities and the requirements
of phosphoric acid and phosphate rock for the facility. The Company
also operates for Mallinckrodt Group Inc. a mine to obtain limestone
for use in Mallinckrodt's animal feed plant. Each company has agreed
to indemnify the other against certain liabilities.
See "Product Line Information - Concentrated Phosphates - Animal
Feed Ingredients Agreements" for discussion of various supply
agreements with Mallinckrodt Group Inc.
Other agreements between Mallinckrodt Group Inc. and the Company
provide for a tax sharing arrangement relating in part to the period
from July 1, 1987 to February 2, 1988 when the Company was included in
Mallinckrodt Group Inc.'s consolidated income tax returns. Also, if a
subsequent adjustment by any taxing authority were to result in an
increase in the tax liability of Mallinckrodt Group Inc. or the Company
or any of their domestic or foreign subsidiaries and result in a
corresponding reduction in the tax liability of the other party, then
an equitable reimbursement by the benefited party will be paid to the
other party.
OTHER ACTIVITIES
----------------
Environmental Matters
---------------------
The Company is subject to various environmental laws and regulations
in the United States and Canada. Although significant capital
expenditures and operating costs have been and will continue to be
incurred based on these requirements, the Company does not believe they
have had a material adverse effect on its business. However, the
impact of future laws and regulations or of future changes to existing
laws and regulations cannot be predicted.
Environmental capital expenditures for the past fiscal year were
primarily related to air emission control, wastewater treatment and
solid waste disposal, and totaled approximately $5.0 million in fiscal
1995. In addition, expenditures for land reclamation activities
totaled $14.5 million. For fiscal 1996, the Company expects
environmental capital expenditures to be approximately $14.0 million
and expenditures for land reclamation activities to be approximately
$18.0 million.
Florida law may require that IMC-Agrico close one or more of its
unlined phosphogypsum stacks and/or associated cooling ponds in 2001,
if any are shown to be negatively impacting groundwater standards. IMC-
Agrico cannot predict at this time whether any of its stacks or ponds
will have to be closed; however, the cost of closing could be
significant.
The 1990 Clean Air Act Amendments require certain sources to control
emissions of hazardous air pollutants and by the year 2000 the
Environmental Protection Agency (U.S. EPA) will have promulgated
standards applicable to certain of the Company's operations. At this
time, the Company cannot estimate the costs of compliance with such
future standards.
In 1994, a large hole (believed to have been caused by a sinkhole)
was discovered during a routine inspection of the top of the north
phosphogypsum stack at IMC-Agrico's New Wales, Florida concentrated
phosphate production facility. The Florida Department of Environmental
Protection (DEP) was notified and IMC-Agrico pumped grout material into
the sinkhole, thereby plugging it and preventing further collapse at a
cost of approximately $6.8 million. DEP required IMC-Agrico to install
additional groundwater monitoring wells and samples from these wells
indicate that only sulfate exceeds Florida secondary drinking water
standards. Furthermore, it appears that the pumping action of the New
Wales production wells has caused impacts from the sinkhole to be
contained on-site to date.
As a result of earlier, unrelated findings of elevated sulfate
levels at the New Wales site, IMC-Agrico had been required by the
Central Florida Regional Planning Council (the Council) before
September 1997 to plug certain former recharge wells, believed to be
the source of elevated sulfate levels, and either to show that the
groundwater sulfate levels had returned to acceptable standards or to
line or relocate the cooling pond associated with the stack.
Monitoring data gathered between July 1993 and June 1994 evidenced a
consistent downward trend in the sulfate levels and the Council was
informed in writing of the success of plugging the recharge wells;
however, when the sinkhole discussed above was discovered, a sharp
increase in sulfate levels was noted. If the sulfate levels continue a
downward trend, as current data suggests, IMC-Agrico will likely meet
the September 1997 deadline. If the levels do not reach acceptable
standards, IMC-Agrico will request an extension of this deadline. If
IMC-Agrico were required to line or relocate the cooling pond, the
estimated cost could be between $35 million and $68 million.
Two earthen dams at IMC-Agrico's phosphate rock mining facilities in
Florida were breached during calendar 1994. The appropriate
governmental agencies were notified and corrective measures were
promptly implemented. Property damage to neighbors has been estimated
to be no more than $1.5 million; IMC-Agrico's insurers, apparently,
will cover some of this amount. The State issued a notice of
violation to IMC-Agrico for each breach, and, based on current
negotiations, potential penalties are not expected to be material.
The United States Comprehensive Environmental Response Compensation
and Liability Act (CERCLA), also known as "Superfund," imposes
liability, without regard to fault or to the legality of a party's
conduct, on certain categories of persons that are considered to have
contributed to the release of "hazardous substances" into the
environment. Currently, the Company is involved or concluding
involvement at between 15 and 20 Superfund sites. With two possible
exceptions, discussed below, at none of these sites is the Company's
liability currently expected to be material. As more information is
obtained regarding the sites and the PRPs (potentially responsible
parties) involved, this expectation may change.
At the Old Marsh Site and the Petroleum Products Site, the lack of
information regarding the Company's level of involvement makes it very
difficult to estimate the Company's share (if any) of investigative and
cleanup costs. In the former case, a corporation has brought a cost
recovery action against certain other PRPs for recovery of the $11.5
million spent to clean up the Old Marsh Site, located in Maricopa
County, Arizona. (Goodyear Farms, Inc. et al. v. Estrella Flying
Services, Inc. et al. (D. Ariz.)). The Company received a vague and
ambiguous summons and third-party complaint in this case. The Company
has requested additional information from counsel for third-party
plaintiffs and is considering how to proceed in this matter.
IMC-Agrico is one of 70 PRPs participating in the investigation of
the Petroleum Products Site and has a known allocation, to date, of
20,774 gallons of waste oil. As of August 1995, IMC-Agrico ranks 27th
out of the 70-member PRP group. Because the investigation of the site
is incomplete and the required remedy has not been determined, a
reliable cleanup cost cannot be estimated. However, estimates as high
as $40 to $50 million have been made. While IMC-Agrico does not
anticipate that the remedy will cost that much or that its share of the
costs will be de minimis, an estimate of IMC-Agrico's total
contribution cannot be made at this time.
Employees
---------
The Company had approximately 6,800 employees at June 30, 1995.
The work force was comprised of 1,900 salaried, 4,850 hourly, and 50
temporary or part-time employees.
Labor Relations
---------------
The Company has 11 collective bargaining agreements with three
international unions or their affiliated local chapters. Four
agreements covering 35 percent of the hourly work force were negotiated
during calendar 1994. Resulting wage and benefit increases were
consistent with competitive industry and community patterns. Four
agreements covering 40 percent of the hourly workers will expire or are
subject to renegotiation in calendar 1995. The Company has not
experienced a significant work stoppage in recent years and considers
its employee relations to be good.
Item 2. Properties.
Information regarding the plant and properties of the Company is
included in Item 1, "Business."
Item 3. Legal Proceedings.
Pursuant to certain agreements between the Company and Mallinckrodt
Group Inc., the Company has agreed to indemnify Mallinckrodt Group Inc.
against any liability or costs attributable to, among other things,
litigation involving the crop nutrient business, whether or not the
events which give rise to the litigation predated July 1, 1987.
In the ordinary course of its business, the Company is and will
from time to time be involved in routine litigation. Except for the
matters discussed below, none of the litigation pending or known to be
threatened at this time is regarded by the Company as potentially
material.
Sterlington Litigation
----------------------
Angus Chemical Company (Angus) and the Company are involved in
various litigation arising out of the Sterlington matter discussed in
Note 4 of Notes to Consolidated Financial Statements. Angus wants the
Company to accept responsibility for approximately 240 lawsuits
currently pending in Louisiana for injuries arising out of the
explosion, and to reimburse Angus for amounts that it has paid for
settled demands in connection with Sterlington. In addition, Angus is
seeking direct payment from the Company's insurers for certain damages.
The Company may have obligations to indemnify certain of the insurers
if Angus is successful in this case. The Company has established a
reserve to cover the estimated cost of resolving the remaining
third-party suits in Louisiana.
The Company continues to vigorously litigate each of the matters
arising out of the Sterlington explosion. A jury trial is scheduled to
commence in November, 1995 in Texas with respect to Angus' and the
Company's claims for contribution and indemnity for the settled
demands. Discovery is still not complete with respect to the lawsuits
scheduled for trial in November, 1995, and all of the other lawsuits
are in very early stages. The Company is also pursuing additional
recoveries from one of its insurance carriers relating to Sterlington.
Given the uncertainties inherent in litigation as well as the early
stages of preparation, the Company is unable to evaluate possible
defenses or make a reliable determination as to potential liability, if
any, with respect to the Sterlington matters.
In addition, Angus, in an action filed in federal court in Monroe,
Louisiana, in February 1995, is seeking compensation from the Company
pursuant to CERCLA for contamination to the environment prior to the
explosion from the storage tank on the grounds of the Sterlington
property. No trial date has been scheduled for this additional claim
by Angus against the Company. Given the early stages of this lawsuit,
the Company is unable to evaluate possible defenses or make a reliable
determination as to potential liability, if any.
Potash Antitrust Litigation
---------------------------
The Company has been named as a defendant, along with other
Canadian and U.S. potash producers, in lawsuits filed in federal court
in Minnesota and state court in California. The plaintiffs are
purchasers of potash who allege a price fixing conspiracy among North
American potash producers beginning in 1987 and continuing until the
filing of the lawsuits in 1994. Discovery has begun in the Minnesota
case, following certification of a class of all U.S. potash purchasers
as plaintiffs. While the Company believes that the allegations in the
complaints are without merit, until discovery is completed it is unable
to evaluate possible defenses or to make a reliable determination as to
the potential liability exposure, if any.
The Company has also received a U.S. grand jury subpoena seeking
information related to the sale of potash in the United States from
1986 to the present. The Company is cooperating with the government
and is assembling the information needed to comply with the subpoena.
As in the civil antitrust matters described above, while the Company
does not believe that violations of the antitrust laws have occurred,
the Company is unable to predict the outcome of the government
investigation or make a reliable determination as to the potential
exposure, if any.
Environmental Proceedings
-------------------------
Information regarding environmental proceedings is included in Item
1, "Business - Other Activities."
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders,
through the solicitation of proxies or otherwise, during the three
months ended June 30, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The ages and five-year employment history of the Company's
executive officers at June 30, 1995, were as follows:
Wendell F. Bueche
-----------------
Age 64. Chairman and Chief Executive Officer of the Company; President
of the Company from 1993 until 1994; joined the Company in 1993;
retired from full time employment from 1989 until 1993; member of the
Board of Directors of the Company since 1991.
James D. Speir
--------------
Age 55. President and Chief Operating Officer of the Company;
Executive Vice President, Operations from 1992 until 1994; Senior Vice
President from 1987 until 1992.
Robert C. Brauneker
-------------------
Age 57. Executive Vice President and Chief Financial Officer of the
Company; Senior Vice President and Chief Financial Officer from 1987
until 1992.
Robert M. Felsenthal
--------------------
Age 43. Senior Vice President, Business Development of the Company;
Vice President, Financial Controls and Planning from 1992 until 1994;
Vice President, Financial Planning and Analysis from 1990 until 1992.
C. Steven Hoffman
-----------------
Age 46. Senior Vice President of the Company; Senior Vice President,
Marketing from 1993 until 1994; Senior Vice President, Sales from 1992
until 1993; Senior Vice President, Wholesale Marketing from 1990 until
1992.
Peter Hong
----------
Age 37. Vice President and Treasurer of the Company; joined the
Company in 1994; Vice President of Citibank, N.A., Chicago from 1988
until 1994.
Allen C. Miller
---------------
Age 49. Senior Vice President, Human Resources of the Company; Vice
President, Human Resources from 1988 until 1994.
Marschall I. Smith
-------------------
Age 50. Senior Vice President, Secretary and General Counsel of the
Company; joined the Company in 1993; Senior Vice President and General
Counsel of American Medical International from 1992 until 1993;
Associate General Counsel of Baxter International from 1980 until 1992.
Brian S. Turner
---------------
Age 43. Vice President, North American Sales of the Company; Vice
President, Rainbow Division in 1994; General Manager, Rainbow Division
from 1991 until 1994; Area Sales Manager, Rainbow Division from 1985
until 1991.
All of the Company's executive officers are elected annually, with
the terms of the officers listed above to expire in October 1995. No
"family relationships," as that term is defined in Item 401(d) of
Regulation S-K, exist among any of the listed officers.
PART II.
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters.
Common Stock Prices and Dividends
---------------------------------
Quarter First Second Third Fourth
-----------------------------------------------------------------
Fiscal 1995
Dividends per common - $ .10 $ .10 $ .10
share
Common stock prices
High $44 5/8 44 3/4 52 1/2 54 5/8
Low 34 1/8 36 1/4 41 1/4 44 1/2
Quarter First Second Third Fourth
-----------------------------------------------------------------
Fiscal 1994
Dividends per common - - - -
share
Common stock prices
High $34 1/4 $47 1/4 $49 1/4 $44 1/4
Low 26 33 38 1/2 30 3/4
The Company's common stock is traded on the New York and Chicago
Stock Exchanges under the symbol IGL. As of August 31, 1995, the
Company had 29,628,619 shares of common stock outstanding, excluding
2,776,420 treasury shares. Common stock prices are from the composite
tape for New York Stock Exchange issues as reported in The Wall Street
Journal.
Pursuant to a Shareholders Rights Plan adopted by the Company in
June 1989, a dividend of one preferred stock purchase right (a Right)
for each outstanding share of common stock of the Company was issued on
July 12, 1989, to shareholders of record on that date. Under certain
conditions, each Right may be exercised to purchase one one-hundredth
of a share of Junior Preferred Stock, Series C, par value $1.00 per
share, at a price of $150. This preferred stock is designed to
participate in dividends and vote on essentially equivalent terms with
a whole share of common stock. The Rights become exercisable apart
from the common stock only if a person or group acquires 20 percent or
more of the common stock or makes a tender offer for 20 percent or more
of the outstanding common stock. However, the Rights do not become
exercisable if a person or group becomes the owner of 20 percent or
more of the common stock as a result of the purchase of common stock by
the Company which reduces the number of shares outstanding and
increases the proportionate number of shares owned by such person or
group to 20 percent or more, unless such person or group subsequently
becomes the owner of any additional shares of the common stock. In
addition, upon the acquisition by a person or group of 20 percent or
more of the common stock, each Right will entitle the holder to
purchase, at the then-current exercise price of the Right, a number of
shares of common stock having a market value at that time of twice the
exercise price. The Rights may be redeemed at a price of $.01 per
Right under certain circumstances prior to their expiration on June 21,
1999. No event during 1995 made the Rights exercisable.
In August 1995, the Company amended the Shareholders Rights Plan.
The amendment effectively reduced the triggering threshold of the
Rights from 20 percent to 15 percent.
As of August 31, 1995, the number of registered holders of common
stock as reported by the Company's registrar was 224. However, an
indeterminable number of shareholders beneficially own shares of the
Company's common stock through investment funds and brokers.
In April 1993, the Company's Board of Directors voted to suspend
cash dividend payments on its common stock as a result of business
conditions at the time. In December 1994, after a period of favorable
operating results, the Company's Board of Directors voted to reinstate
dividend payments. As a result, for the year ended June 30, 1995, the
Company paid $8.8 million of cash dividends. The Company's debt
instruments contain provisions which limit the Company's ability to pay
dividends on its common stock.
Item 6. Selected Financial Data.
Years ended June 30,
-----------------------------------------------------------------------
(In millions except per
share amounts) 1995(1) 1994(1) 1993(1) 1992(2) 1991(3)
------------------------------------------------------------------------
Net sales $1,924.0 $1,441.5 $ 897.1 $1,058.5 $1,131.2
Earnings (loss) before
income taxes, extraordinary
item and cumulative effect
of accounting changes 207.4 7.8 (177.3) 141.4 152.8
Provision (credit) for
income taxes 80.3 11.4 (57.3) 50.5 57.0
-------- -------- -------- ----------------
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes 127.1 (3.6) (120.0) 90.9 95.8
Extraordinary loss -
debt retirement (6.5) (25.2)
Cumulative effect of
accounting changes (5.9) (47.1) (165.5)
-------- -------- -------- ----------------
Net earnings (loss) $ 114.7 $ (28.8)$ (167.1)$ (74.6) $ 95.8
======== ======== ======== ================
Earnings (loss) per share:
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes $ 4.30 $ (.14)$ (5.44) $ 4.12$ 3.85
Extraordinary loss - debt
retirement (.22) (1.00)
Cumulative effect of
accounting changes (.20) (2.13) (7.50)
-------- -------- -------- ----------------
Net earnings (loss) $ 3.88 $ (1.14)$ (7.57) $ (3.38)$ 3.85
======== ======== ======== ================
Dividends per share $ .30 - $ .81 $ 1.08$ 1.08
Book value per share $ 25.84 $ 22.23 $ 19.51 $ 27.91$ 32.24
OTHER DATA
June 30,
-----------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993 1992 1991
-----------------------------------------------------------------------
Total assets $2,693.2 $2,778.3 $2,055.6 $1,838.4 $1,739.3
Working capital 252.4 324.6 195.1 80.2 48.1
Working capital ratio 2.0:1 2.6:1 1.8:1 1.4:1
1.2:1
Long-term debt - less
current maturities $ 515.5 $ 688.1 $ 893.4 $ 630.6 $ 607.7
Total debt 524.3 689.2 926.7 642.8 630.6
Stockholders' equity 762.9 655.0 430.4 615.4 698.6
Total capitalization 1,287.2 1,344.2 1,357.1 1,258.2 1,329.2
Debt/total capitalization 40.7% 51.3% 68.3% 51.1%
47.4%
Cash provided by
operating activities $ 488.6 $ 143.1 $ 26.2 $ 122.4 $ 174.4
Capital expenditures 64.2 40.7 106.1 177.7 168.5
Cash dividends paid 8.8 - 17.8 23.8 28.0
(1) See "Notes to Consolidated Financial Statements" for a description
of non-recurring items and accounting changes. Beginning in 1994,
operating results reflect the consolidation of the joint venture
partnership formed on July 1, 1993 with FRP.
(2) Includes a gain of $34.2 million, $18.2 million after taxes, from
the Company's sale of its Sterlington, Louisiana, ammonia
production facility, a charge of $5.3 million, $3.3 million after
taxes, from the temporary shutdown and mothballing of the Company's
uranium production facilities, and a charge of $165.5 million for
the cumulative effect on prior years of adopting SFAS No. 109,
"Accounting for Income Taxes" on July 1, 1991.
(3) Includes a gain of $17.9 million, $11.2 million after taxes, from
the installment sale of certain potash reserve interests to the
U.S. government.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
1995 vs. 1994
-------------
IMC Global's net earnings for the year ended June 30, 1995 totaled
$114.7 million, or $3.88 per share, up significantly over last year
when the Company reported a net loss of $28.8 million, or $1.14 per
share. Capitalizing on ideal business conditions throughout the year,
IMC Global recorded the highest sales and second best earnings in its
corporate history.
Included in 1995 operating results were a one-time charge of $5.9
million, or $.20 per share, for the cumulative effect on prior years of
a change in accounting for postemployment benefits resulting from the
adoption of Statement of Financial Accounting Standards (SFAS) No. 112
on July 1, 1994 and an extraordinary charge of $6.5 million, or $.22
per share, related to the early extinguishment of debt. In 1994, the
loss included an extraordinary charge of $25.2 million, or $1.00 per
share, related to the early extinguishment of debt; a charge of $20.3
million, $12.4 million after taxes, or $.49 per share, related to the
write-down of the Company's investment in an oil and gas joint venture;
and a charge of $4.1 million, or $.16 per share, for an adjustment to
the Company's net deferred tax liability for the effect of changes in
U.S. corporate tax rates. Partially offsetting these charges was a
gain of $1.9 million, or $.07 per share, resulting from the sale by
IMC-Agrico of its Florida cattle ranch (IMC-Agrico still retains the
rights to phosphate rock reserves located on this property). See Notes
to Consolidated Financial Statements for further discussion of these
non-recurring items.
Net sales for 1995 were $1,924.0 million, a 34 percent increase over
1994 when sales were $1,441.5 million. Sales were higher primarily due
to continued strong concentrated phosphate demand and record purchases
of potash and concentrated phosphates by China. Product line sales
information may be found on page 2 of this annual report.
Gross margins increased $240.9 million, or 116 percent over last
year, primarily due to higher margins for concentrated phosphates, a
$189 million increase; potash, a $30 million increase; high-value crop
nutrients, a $5 million increase, and phosphate rock, a $4 million
increase.
Concentrated phosphate margins increased significantly primarily due
to higher prices ($217 million) and volume ($57 million) as average
diammonium phosphate (DAP) sales realizations increased 25 percent over
the same period a year ago. Domestically, sales volume was marginally
lower, due primarily to abnormally wet weather in the spring which
delayed fieldwork, planting and, therefore, crop nutrient shipments.
However, record purchases by China resulted in a 38 percent increase in
export volume when compared to last year. Partially offsetting the
price and volume increases were higher production costs ($85 million)
primarily due to higher raw material costs and, to a lesser degree,
remediation costs associated with a sinkhole at the IMC-Agrico's New
Wales concentrated phosphate production facility in Florida. See
"Other Matters" below and Note 5 of Notes to Consolidated Financial
Statements for further discussion of the sinkhole.
Potash margins also increased primarily due to higher sales volume
($12 million) as export shipments rose 37 percent, reflecting record
potash purchases by China. In addition, domestic potash shipments rose
5 percent over a year ago. As a result, producer inventory levels were
below normal and resulted in higher prices ($14 million) as demand
increased during the year. Production costs were lower ($4 million)
due primarily to lower water inflow control spending at the Company's
potash mines in Canada.
High-value crop nutrient margins increased primarily due to
increased price ($6 million) and sales volume ($3 million) as the
Company's Rainbow division recorded record shipments (a 13 percent
increase) primarily due to increased plantings of cotton, corn and hay,
all of which use premium, higher-margin crop nutrients. Partially
offsetting these increases were higher production costs ($4 million)
primarily due to higher raw material costs.
Phosphate rock margins increased primarily due to increased sales
volume and price ($12 million), mostly due to the addition of a new
long-term supply contract to 1995 operating results. Partially
offsetting the increase were higher production costs ($8 million) as
excessive rainfalls in Florida early in the first half of fiscal 1995
affected phosphate rock production levels. In addition, costs were
incurred in the startup of IMC-Agrico's previously idled Payne Creek
mine, while repair and cleanup costs associated with earthen dam
breaches at IMC-Agrico's Payne Creek and Hopewell phosphate mining
facilities in Florida also contributed to higher costs.
Selling, general and administrative expenses increased $9.2 million
over the same period a year ago primarily due to higher legal expenses
and charges related to shifting the marketing and administrative
functions of PhosChem to its member companies.
Other operating income and expense in 1995 included a gain of $5.0
million from the sale of land in Florida and $3.0 million from the
amortization of a deferred gain resulting from the exchange of the
Company's phosphate business in 1994 for a 56.5 percent interest in
IMC-Agrico. In 1994, other operating income and expense included $16.0
million (including $12.7 million related to finished goods inventory)
of such amortization.
Interest charges in 1995 were $28.8 million lower than last year as
the Company purchased and retired $165.0 million of its high-cost,
long-term indebtedness throughout the year.
1994 vs. 1993
-------------
IMC Global's results of operations for the year ended June 30, 1994
showed significant improvement over the previous year. In fiscal 1994,
the Company incurred a net loss of $28.8 million, or $1.14 per share.
This compared to a net loss of $167.1 million. or $7.57 per share, a
year ago.
In 1994, the loss included an extraordinary charge of $25.2 million,
or $1.00 per share, related to the early extinguishment of debt; a
charge of $20.3 million, $12.4 million after taxes, or $.49 per share,
for the write-down of an oil and gas investment; and a charge of $4.1
million, or $.16 per share, for an adjustment to the Company's deferred
tax liability for the effect of changes in U.S. corporate tax rates.
Partially offsetting these charges was a gain of $1.9 million, or $.07
per share, resulting from the sale by IMC-Agrico of its Florida cattle
ranch (IMC-Agrico still retains the rights to phosphate rock reserves
located on this property). See Notes to Consolidated Financial
Statements for further discussion of these non-recurring items.
In 1993, the loss included a one-time charge of $47.1 million, or
$2.13 per share, for the cumulative effect on prior years of a change
in accounting for postretirement benefits as a result of the adoption
of SFAS No. 106 as of July 1, 1992; a charge of $109.1 million, or
$4.94 per share, from the settlement of litigation resulting from an
explosion at a Sterlington, Louisiana, nitroparaffins plant managed by
the Company; and a charge of $11.4 million, or $.52 per share, related
to the settlement of an insurance claim receivable resulting from a
water inflow at the Company's potash mines in Canada. See Notes to
Consolidated Financial Statements for further discussion of these non-
recurring items.
Excluding the non-recurring items described above, the Company had
net earnings in 1994 of $11.0 million, or $.44 per share, compared to
1993 earnings of $.5 million, or $.02 per share.
IMC-Agrico, a joint venture partnership between IMC, a subsidiary of
the Company, and FRP, began operations July 1, 1993 and is consolidated
for financial reporting purposes. Comparisons between the years ended
June 30, 1994 and 1993 have been made, where applicable, on a pro forma
basis assuming IMC-Agrico had begun operations on July 1, 1992.
Net sales for 1994 were $1,441.5 million, compared to $897.1 million
in 1993. On a pro forma basis, 1993 sales would have been $1,470.3
million. The sales decline in 1994 as compared to 1993 on a pro forma
basis reflected the Company's decision to reduce production at its
concentrated phosphate production facilities consistent with its policy
to better match production with demand.
Gross margins increased $82.7 million from 1993. On a pro forma
basis, gross margins would have increased $90.1 million, or 77 percent,
primarily due to higher margins for concentrated phosphates.
Concentrated phosphate margins increased primarily due to higher
prices throughout the year. DAP sales realizations were, at year end,
50 percent higher than last year as DAP prices rose from a 20-year low
of $100 per ton. Other related concentrated phosphate products showed
similar price improvements. Several factors contributed to this rise
in prices. Domestic crop nutrient consumption increased 4 percent as
farmers sought to recover from 1993's generally poor harvest due
primarily to flooding in the Midwest. Internationally, China, a major
concentrated phosphate customer, increased crop nutrient imports after
a reduction in exchange rate subsidies resulted in a 50 percent drop in
U.S. DAP imports in 1993. The Former Soviet Union reduced its exports
of crop nutrient products dramatically over 1993 when, in an attempt to
increase foreign exchange and hard currency reserves, it sold
concentrated phosphates at below market price levels. Unit production
costs were lower when compared to last year, in spite of sharply higher
ammonia prices, primarily due to lower raw material costs for sulphur.
Potash margins remained largely unchanged as favorable production
costs ($11 million), primarily from lower water inflow control
spending, were almost totally offset by a 9 percent decrease in prices
($9 million) and lower sales volume ($1 million). Sulphur production
at Main Pass continued to exceed design capacity and averaged 6,250
tons per day by the end of fiscal 1994.
Selling, general and administrative costs increased $5.6 million
primarily resulting from higher legal expenses and increased sales
commissions.
Interest charges were $36.2 million higher than last year as a
result of higher average debt balances and lower capitalized interest
as the Main Pass sulphur mine became operational in 1994.
The Company's effective tax rate of 146.2 percent for 1994 reflected
the impact of foreign earnings (at higher foreign tax rates) and the
inclusion of non-recurring items which impacted domestic operating
results for 1994. If such non-recurring items (described above) were
excluded, the effective tax rate would have been 53.9 percent. See
Note 15 of Notes to Consolidated Financial Statements for further
discussion of income taxes.
CAPITAL RESOURCES AND LIQUIDITY
Working capital at June 30, 1995 was $252 million compared to $325
million at June 30, 1994. The decrease was due primarily to lower
accounts receivable as a result of the sale of $50 million receivable
interests discussed in Note 7 of Notes to Consolidated Financial
Statements. The Company's working capital ratio at June 30, 1995 was
2.0 versus 2.6 at June 30, 1994. Debt to total capitalization improved
to 40.7 percent at June 30, 1995 compared to 51.3 percent a year ago,
which, along with increased earnings, reflected management's efforts to
reduce high-cost, long-term indebtedness. Total long-term debt at June
30, 1995 was $524.3 million, a $164.9 million reduction when compared
to June 30, 1994.
At June 30, 1995, the Company had an unsecured revolving credit
facility (the Working Capital Facility) under which the Company could
borrow up to $100 million for general corporate purposes until June 30,
1996. At June 30, 1995, $29.6 million was drawn down under the Working
Capital Facility in the form of letters of credit principally to
support industrial revenue bonds and other debt and credit risk
guarantees. There were no other borrowings under the Working Capital
Facility at June 30, 1995.
In July 1995, the Company entered into a new unsecured revolving
credit facility (the New Credit Facility) with a group of banks which
extended the length and credit limit of the Working Capital Facility.
Under the terms of the New Credit Facility, the Company may borrow up
to $150 million until July 31, 2000.
IMC-Agrico also has an agreement with a group of banks to provide it
with a $75 million unsecured revolving credit facility (the Partnership
Working Capital Facility) initially until February 1997. At June 30,
1995, $12.5 million was drawn down in the form of letters of credit.
There were no other borrowings under this agreement at June 30, 1995.
The Working Capital Facility and certain note obligations contain
provisions which restrict the Company's ability to make capital
expenditures and dispose of assets, limit the payment of dividends or
other distributions to stockholders, and limit the incurrence of
additional indebtedness. The Working Capital Facility also contains
financial ratios and tests which must be met with respect to interest
and fixed charge coverage, tangible net worth, working capital and debt
to total capitalization. In addition, the Partnership Working Capital
Facility contains financial ratios and tests with respect to fixed
charge coverage, current ratio and minimum net partners' capital
requirements. The Partnership Working Capital Facility also places
limitations on indebtedness of IMC-Agrico and restricts the ability of
IMC-Agrico to make cash distributions in excess of Distributable Cash
(as defined). The Company and IMC-Agrico are currently in compliance
with all of the covenants in the indentures and other agreements
governing their indebtedness.
In October 1994, IMC-Agrico entered into a one-year agreement with a
financial institution to sell, on an ongoing basis, an undivided
percentage interest in a designated pool of receivables in an amount
not to exceed $75 million. At June 30, 1995, IMC-Agrico had sold $50
million of such receivable interests. The Company's portion of the
proceeds from the initial sale of receivable interests ($32.5 million)
was used primarily to retire long-term debt.
The Company estimates that its capital expenditures for 1996 will
total approximately $81 million (including $59 million by IMC-Agrico
and $14 million relating to environmental matters). The Company
expects to finance these expenditures (including its portion of
IMC-Agrico's capital expenditures) from operations. See "Other
Matters" for a discussion of environmental capital expenditures.
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines in Saskatchewan,
Canada. As a result, the Company has suffered losses and has been
forced to undertake substantial remedial efforts to stop the flooding.
The Company's share of expenditures for ongoing remedial efforts
totaled $14 million in 1995 and is expected to total approximately $15
million in 1996.
The Company has significantly reduced the water inflow since the
initial discovery and has been able to meet all sales obligations and
requirements from production at the mines. Despite the relative
success of such measures, there can be no assurance that the amounts
required for remedial efforts in future years will not increase or that
inflows will not increase to a level which would cause the Company to
abandon the mines. There can be no assurance that such action would
not have a material adverse effect on the Company. However, the
long-term outlook of the water inflow has caused the Company to
consider alternatives to its current mining operations and studies are
under way in this regard. Any solution to the water inflow situation
at the mines could result in substantial capital expenditures and/or
charges to operations. The Company does not presently have in place,
nor can it reasonably obtain, any insurance to cover damage to its
underground potash operations.
In July 1994, IMC-Agrico entered into an option agreement with
Mississippi Chemical Corporation (MCC) to purchase 9,472 acres of land
in Florida (the Property). The Property, along with 2,508 acres of
land previously purchased from MCC (the Adjacent Property), contains
approximately 87.5 million tons of phosphate rock reserves. The option
period began July 16, 1994 and will expire January 16, 1998. During
this time, IMC-Agrico may exercise its option to purchase the Property
or it may continue to make annual payments ranging from $1.0 million to
$3.0 million to keep the option in effect. If IMC-Agrico exercises its
option prior to its expiration, the purchase price will be financed by
MCC over a six-year term at interest rates approximating IMC-Agrico's
borrowing rate. If IMC-Agrico fails to make an option payment during
the option period or fails to exercise its option by January 16, 1998,
MCC has the right to sell the Property to IMC-Agrico , and IMC-Agrico
will be obligated to purchase the property for a specified amount. If
the option to purchase the Property is not exercised by IMC-Agrico and
MCC does not exercise its right to sell the Property to IMC-Agrico, MCC
has the right to purchase the Adjacent Property from IMC-Agrico for a
specified amount. In fiscal 1995, IMC-Agrico paid $3.0 million to keep
the option in effect.
During fiscal 1995, the Company utilized $488.6 million of cash from
operations to distribute $228.1 million of cash sharing distributions
to FRP, $165.0 million to purchase and retire portions of the Company's
outstanding Senior Notes and $64.2 million to fund capital
expenditures. Further information on the Company's consolidated cash
flows for the past three years may be found on the Consolidated
Statement of Cash Flows on page 34 of this annual report.
In April 1993, the Company's Board of Directors voted to suspend
cash dividend payments on its common stock as a result of business
conditions at the time. In December 1994, after a period of favorable
operating results, the Company's Board of Directors voted to reinstate
dividend payments. As a result, for the year ended June 30, 1995, the
Company paid $8.8 million of cash dividends. The Company's debt
instruments contain provisions which limit the Company's ability to pay
dividends on its common stock.
The Company does not consider the impact of inflation to be
significant in the business in which it operates.
JOINT VENTURE PARTNERSHIP
On July 1, 1993, IMC and FRP contributed their respective phosphate
businesses, including the mining and sale of phosphate rock and the
production, distribution and sale of concentrated phosphates, uranium
oxide and related products, to a joint venture partnership in return
for a 56.5 percent and 43.5 percent economic interest, respectively, in
IMC-Agrico , over the term of the partnership. IMC-Agrico is governed
by a Policy Committee which has equal representation from each company
and is being operated by an affiliate of the Company. The partnership
agreement contains a cash sharing arrangement under which distributable
cash, as defined in the agreement, was shared at a ratio of 45.0
percent and 55.0 percent in 1995 to IMC and FRP, respectively, and will
be adjusted thereafter until 1998 when the sharing ratio will be fixed
at 59.4 percent and 40.6 percent to IMC and FRP, respectively.
SULPHUR AND OIL & NATURAL GAS VENTURES
The Company has a 25 percent interest in the Main Pass 299 sulphur
mine located in the Gulf of Mexico. In fiscal 1995, FRP, the joint
venture operator, produced sulphur at levels which averaged 6,263 long
tons per day or 2.3 million long tons per year. This production level
exceeded the plant's designed operating rate of 5,500 long tons per
day. Using a hot-water injection process, Main Pass is one of the most
thermally efficient sulphur mines ever operated. The Company's share
of sulphur produced is used to satisfy a portion of the Company's
obligations to supply sulphur to IMC-Agrico for the production of
concentrated phosphates. At June 30, 1995, the underwater sulphur
deposit contained an estimated 69.2 million long tons of recoverable
sulphur, or 17.3 million long tons net to the Company, before
royalties.
Oil and gas reserves which are located in the same immediate area
are also being developed. At June 30, 1995, the field contained proved
and probable reserves of 3.2 million barrels of oil. All gas
production is consumed internally in heating water for extraction of
sulphur.
OTHER MATTERS
The Company is subject to various environmental laws and regulations
in the United States and Canada. Although significant capital
expenditures and operating costs have been and will continue to be
incurred based on these requirements, the Company does not believe they
have had a material adverse effect on its business. However, the
impact of future laws and regulations or of future changes to existing
laws and regulations cannot be predicted.
Environmental capital expenditures for the past fiscal year were
primarily related to air emission control, wastewater treatment and
solid waste disposal, and totaled approximately $5.0 million in fiscal
1995. In addition, expenditures for land reclamation activities
totaled $14.5 million. For fiscal 1996, the Company expects
environmental capital expenditures to be approximately $14.0 million
and expenditures for land reclamation activities to be approximately
$18.0 million.
Florida law may require that IMC-Agrico close one or more of its
unlined phosphogypsum stacks and/or associated cooling ponds in 2001,
if any are shown to be negatively impacting groundwater standards. IMC-
Agrico cannot predict at this time whether any of its stacks or ponds
will have to be closed; however, the cost of closing could be
significant.
The 1990 Clean Air Act Amendments require certain sources to control
emissions of hazardous air pollutants and by the year 2000 the
Environmental Protection Agency (U.S. EPA) will have promulgated
standards applicable to certain of the Company's operations. At this
time, the Company cannot estimate the costs of compliance with such
future standards.
In 1994, a large hole (believed to have been caused by a sinkhole)
was discovered during a routine inspection of the top of the north
phosphogypsum stack at IMC-Agrico's New Wales, Florida concentrated
phosphate production facility. The Florida Department of Environmental
Protection (DEP) was notified and IMC-Agrico pumped grout material into
the sinkhole, thereby plugging it and preventing further collapse at a
cost of approximately $6.8 million. DEP required IMC-Agrico to install
additional groundwater monitoring wells and samples from these wells
indicate that only sulfate exceeds Florida secondary drinking water
standards. Furthermore, it appears that the pumping action of the New
Wales production wells has caused impacts from the sinkhole to be
contained on-site to date.
As a result of earlier, unrelated findings of elevated sulfate
levels at the New Wales site, IMC-Agrico had been required by the
Central Florida Regional Planning Council (the Council) before
September 1997 to plug certain former recharge wells, believed to be
the source of elevated sulfate levels, and either to show that the
groundwater sulfate levels had returned to acceptable standards or to
line or relocate the cooling pond associated with the stack.
Monitoring data gathered between July 1993 and June 1994 evidenced a
consistent downward trend in the sulfate levels and the Council was
informed in writing of the success of plugging the recharge wells;
however, when the sinkhole discussed above was discovered, a sharp
increase in sulfate levels was noted. If the sulfate levels continue a
downward trend, as current data suggests, IMC-Agrico will likely meet
the September 1997 deadline. If the levels do not reach acceptable
standards, IMC-Agrico will request an extension of this deadline. If
IMC-Agrico were required to line or relocate the cooling pond, the
estimated cost could be between $35 million and $68 million.
Two earthen dams at IMC-Agrico's phosphate rock mining facilities in
Florida were breached during calendar 1994. The appropriate
governmental agencies were notified and corrective measures were
promptly implemented. Property damage to neighbors has been estimated
to be no more than $1.5 million; IMC-Agrico's insurers, apparently,
will cover some of this amount. The State issued a notice of
violation to IMC-Agrico for each breach, and, based on current
negotiations, potential penalties are not expected to be material.
CERCLA, also known as "Superfund," imposes liability, without regard
to fault or to the legality of a party's conduct, on certain categories
of persons that are considered to have contributed to the release of
"hazardous substances" into the environment. Currently, the Company is
involved or concluding involvement at between 15 and 20 Superfund
sites. With two possible exceptions, discussed below, at none of these
sites is the Company's liability currently expected to be material. As
more information is obtained regarding the sites and the PRPs
(potentially responsible parties) involved, this expectation may
change.
At the Old Marsh Site and the Petroleum Products Site, the lack of
information regarding the Company's level of involvement makes it very
difficult to estimate the Company's share (if any) of investigative and
cleanup costs. In the former case, a corporation has brought a cost
recovery action against certain other PRPs for recovery of the $11.5
million spent to clean up the Old Marsh Site, located in Maricopa
County, Arizona. (Goodyear Farms, Inc. et al. v. Estrella Flying
Services, Inc. et al. (D. Ariz.)). The Company received a vague and
ambiguous summons and third-party complaint in this case. The Company
has requested additional information from counsel for third-party
plaintiffs and is considering how to proceed in this matter.
IMC-Agrico is one of 70 PRPs participating in the investigation of
the Petroleum Products Site and has a known allocation, to date, of
20,774 gallons of waste oil. As of August 1995, IMC-Agrico ranks 27th
out of the 70-member PRP group. Because the investigation of the site
is incomplete and the required remedy has not been determined, a
reliable cleanup cost cannot be estimated. However, estimates as high
as $40 to $50 million have been made. While IMC-Agrico does not
anticipate that the remedy will cost that much or that its share of the
costs will be de minimis, an estimate of IMC-Agrico's total
contribution cannot be made at this time.
Item 8. Financial Statements and
Supplementary Data.
Page
----
Report of Independent Auditors 31
Consolidated Statement of Operations 32
Consolidated Balance Sheet 33
Consolidated Statement of Cash Flows 34
Consolidated Statement of Changes in Stockholders' Equity 35
Notes to Consolidated Financial Statements 36-51
Supplementary Financial Information - Quarterly
Results (Unaudited) 52-53
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of IMC Global Inc.
We have audited the accompanying consolidated balance sheet of IMC
Global Inc. (formerly IMC Fertilizer Group, Inc.) as of June 30, 1995
and 1994, and the related consolidated statements of operations, cash
flows, and changes in stockholders' equity for each of the three years
in the period ended June 30, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of IMC Global Inc. at June 30, 1995 and 1994, and the consolidated
results of its operations and its cash flows for each of the three
years in the period ended June 30, 1995, in conformity with generally
accepted accounting principles.
As discussed in the Notes to Consolidated Financial Statements, the
Company changed its method of accounting for postemployment benefits in
1995.
Ernst & Young LLP
Chicago, Illinois
July 26, 1995
IMC GLOBAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In millions except per share amounts)
Years ended June 30,
1995 1994 1993
-----------------------------------------------------------------------
Net sales $1,924.0 $1,441.5 $ 897.1
Cost of goods sold 1,475.5 1,233.9 772.2
-------- -------- --------
Gross margins 448.5 207.6 124.9
Selling, general and administrative expenses 75.2 66.0 60.4
Sterlington litigation settlement, net 169.1
Other operating (income) and expense, net (8.5) (25.7) 25.1
-------- -------- --------
Operating earnings (loss) 381.8 167.3 (129.7)
Equity in (earnings) loss of oil and gas
joint venture (3.1) 20.0 (3.3)
Interest earned and other non-operating
(income) and expense, net (3.1) 3.4 6.1
Interest charges 52.2 81.0 44.8
-------- -------- --------
Earnings (loss) before minority
interest and items noted below 335.8 62.9 (177.3)
Minority interest in earnings of
consolidated joint venture 128.4 55.1
-------- -------- --------
Earnings (loss) before items noted below 207.4 7.8 (177.3)
Provision (credit) for income taxes 80.3 11.4 (57.3)
-------- -------- --------
Earnings (loss) before extraordinary
item and cumulative effect of
accounting changes 127.1 (3.6) (120.0)
Extraordinary loss - debt retirement (6.5) (25.2)
Cumulative effect on prior years of
changes in accounting for post-
employment benefits in 1995 and
postretirement benefits other than
pensions in 1993 (5.9) (47.1)
-------- -------- --------
Net earnings (loss) $ 114.7 $ (28.8) $(167.1)
======== ======== ========
Earnings (loss) per share:
Earnings (loss) before extraordinary
item and cumulative effect of
accounting changes $ 4.30 $ (.14) $ (5.44)
Extraordinary loss - debt retirement (.22) (1.00)
Cumulative effect of accounting
changes (.20) (2.13)
-------- -------- --------
Net earnings (loss) $ 3.88 $ (1.14) $ (7.57)
======== ======== ========
(See Notes to Consolidated Financial Statements)
IMC GLOBAL INC.
CONSOLIDATED BALANCE SHEET
(Dollars in millions except per share amounts)
At June 30,
Assets 1995 1994
-----------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 196.1 $ 169.0
Receivables, net 48.6 109.1
Inventories
Products (principally finished) 185.6 185.5
Operating materials and supplies 68.8 67.6
-------- --------
254.4 253.1
Prepaid expenses 5.3 2.8
-------- --------
Total current assets 504.4 534.0
Investment in oil and gas joint venture 16.0 19.0
Property, plant and equipment 3,455.2 3,394.1
Accumulated depreciation and depletion (1,587.0) (1,466.7)
-------- --------
Net property, plant and equipment 1,868.2 1,927.4
Deferred income taxes 241.2 223.6
Other assets 63.4 74.3
-------- --------
Total assets $2,693.2 $2,778.3
======== ========
Liabilities and Stockholders' Equity
-----------------------------------------------------------------
Current liabilities:
Accounts payable $ 106.0 $ 110.3
Accrued liabilities 137.2 98.0
Current maturities of long-term debt 8.8 1.1
-------- --------
Total current liabilities 252.0 209.4
Long-term debt, less current maturities 515.5 688.1
Deferred income taxes 399.2 372.6
Other noncurrent liabilities 283.7 275.1
Minority interest in consolidated
joint venture 479.9 578.1
Stockholders' equity:
Common stock, $1 par value,
authorized 50,000,000 shares;
issued 32,302,029 and 32,232,865
shares in 1995 and 1994, respectively 32.3 32.2
Capital in excess of par value 738.4 736.2
Retained earnings (deficit) 99.6 (6.3)
Treasury stock, at cost, 2,776,420
and 2,770,259 shares in 1995 and 1994,
respectively (107.4) (107.1)
-------- --------
Total stockholders' equity 762.9 655.0
-------- --------
Total liabilities and stockholders' equity$2,693.2 $2,778.3
======== ========
(See Notes to Consolidated Financial Statements)
IMC GLOBAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
Years ended June 30,
1995 1994 1993
-----------------------------------------------------------------------
Cash Flows from Operating Activities
------------------------------------
Net earnings (loss) $ 114.7 $ (28.8) $(167.1)
Adjustments to reconcile net earnings
(loss) to net cash provided by operating
activities:
Depreciation, depletion and amortization 134.4 122.4 61.5
Minority interest in earnings of
consolidated joint venture 128.4 55.1
Postemployment employee benefits 9.5
Deferred income taxes 9.0 1.6 (78.4)
Cash distributions in excess of equity
in operating results of oil and gas
joint venture (including a $20.3 write-
down in 1994) 4.7 36.1 18.6
Postretirement employee benefits 8.4 82.8
Sterlington litigation settlement (80.0) 80.0
Loss on insurance claim settlement 11.4
Other charges and credits, net (6.3) (42.9) 8.0
Changes in:
Receivables, net 60.5 81.2 22.3
Inventories (1.3) 46.6 3.5
Prepaid expenses (2.5) 9.5 (2.3)
Accounts payable (1.7) (32.3) (18.9)
Accrued liabilities 39.2 (33.8) 4.8
------- ------- -------
Net cash provided by operating
activities 488.6 143.1 26.2
------- ------- -------
Cash Flows from Investing Activities
------------------------------------
Capital expenditures (64.2) (40.7) (106.1)
Sales of property, plant and equipment 6.2 19.9 .5
Investment in oil and gas joint venture (1.7) (3.3)
------- ------- -------
Net cash used in investing activities (59.7) (20.8) (108.9)
------- ------- -------
Net cash provided (used) before
financing activities 428.9 122.3 (82.7)
------- ------- -------
Cash Flows from Financing Activities
------------------------------------
Joint venture cash distributions to FRP (228.1) (146.8)
Payments of long-term debt (166.0) (349.0) (66.9)
Proceeds from issuance of long-term
debt, net 1.1 175.4 246.4
Cash dividends paid (8.8) (17.8)
Issuances of common stock from treasury 255.5
------- ------- -------
Net cash (used in) provided by
financing activities (401.8) (64.9) 161.7
------- ------- -------
Net increase in cash and cash equivalents 27.1 57.4 79.0
Cash and cash equivalents-beginning of year 169.0 111.6 32.6
------- ------- -------
Cash and cash equivalents-end of year $ 196.1 $ 169.0 $ 111.6
======= ======= =======
Supplemental cash flow disclosures:
Interest paid $ 53.8 $ 78.0 $ 73.0
Income taxes paid (refunded) $ 44.5 $ (4.8) $ 8.8
(See Notes to Consolidated Financial Statements)
IMC GLOBAL INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In millions except per share amounts)
Capital Retained
Common in Excess Earnings Treasury
Stock of Par Value (Deficit) Stock
-----------------------------------------------------------------------
Balance at June 30, 1992 $ 32.1 $ 768.0 $ 207.4 $(392.1)
Net loss (167.1)
Dividends ($.81 per share) (17.8)
Restricted stock awards .1 .3 (.6)
Stock options exercised .1
------- ------- ------- -------
Balance at June 30, 1993 32.2 768.4 22.5 (392.7)
Net loss (28.8)
Sale of common stock (34.1) 289.7
Restricted stock awards 1.7 (4.1)
Stock options exercised .2
------- ------- ------- -------
Balance at June 30, 1994 32.2 736.2 (6.3) (107.1)
Net earnings 114.7
Dividends ($.30 per share) (8.8)
Restricted stock awards .3
Stock options exercised .1 1.9 (.3)
------- ------- ------- -------
Balance at June 30, 1995 $ 32.3 $ 738.4 $ 99.6 $(107.4)
======= ======= ======= =======
(See Notes to Consolidated Financial Statements)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions except as otherwise indicated)
1. Business of the Company
-----------------------
IMC Global Inc. (the Company), formerly IMC Fertilizer Group, Inc.,
which operates in a single industry segment, is the parent corporation
of several subsidiaries and joint venture operations which together
comprise one of the world's leading producers of crop nutrients for the
international agricultural community. The Company mines and processes
potash in the United States and Canada, and is a joint-venture partner
in IMC-Agrico Company, the nation's largest producer, marketer and
distributor of phosphate crop nutrients. The Company also manufactures
and markets specialized, high-value crop nutrients through its Rainbow
division and through interests in other joint ventures, produces
sulphur and oil & natural gas.
2. Accounting Policies
-------------------
Basis of Presentation
---------------------
The consolidated financial statements include the accounts of IMC
Global Inc. and all subsidiaries which are more than 50 percent owned
and controlled. The Consolidated Financial Statements also include the
accounts of IMC-Agrico, a joint venture partnership with FRP formed on
July 1, 1993. The Company also consolidates its proportionate share of
the assets and liabilities of the Company's sulphur venture, while its
25 percent investment in its oil and natural gas venture is accounted
for using the equity method. All significant intercompany accounts and
transactions are eliminated in consolidation. Certain amounts in the
consolidated financial statements for periods prior to June 30, 1995
have been reclassified to conform to the current presentation. The
Company's fiscal year ends June 30.
Cash Equivalents
----------------
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents which
are reflected at their approximate fair value. The effect of foreign
currency exchange rate fluctuations on the total cash and cash
equivalents balance was not significant.
Inventories
-----------
Inventories are valued at the lower of cost or market (net
realizable value). Cost for substantially all inventories is
determined on a cumulative annual average basis.
Property, Plant and Equipment
-----------------------------
Property, plant and equipment are carried at cost. Cost of
significant assets includes capitalized interest incurred during the
construction and development period. Expenditures for replacements and
improvements are capitalized; maintenance and repair expenditures are
charged to operations when incurred.
Depreciation and depletion expenses for mining and production
operations, including mineral interests, are determined using the unit-
of-production method based on estimates of recoverable reserves. Other
asset classes or groups are depreciated or amortized on a straight-line
basis over their estimated useful lives as follows: buildings, 17 to
50 years; machinery and equipment, five to 25 years.
Postemployment Benefits
-----------------------
The Company provides benefits such as workers' compensation and
disabled employee medical care to former or inactive employees after
employment but before retirement. Effective July 1, 1994, the Company
adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," which requires the Company to accrue the cost of providing
such postemployment benefits when the event occurs giving rise to the
obligation.
Accrued Reclamation Costs
-------------------------
The Company is subject to various laws and regulations which
require the reclamation of certain mineral and related properties. The
cost of restoring lands disturbed by mining and concentrated phosphate
production activities includes earthmoving, dewatering and revegetation
activities. The Company accrues for reclamation costs in accordance
with approved reclamation plans using estimates of future expenditures
based on an inflation rate of 3 percent and discount rates
approximating 7 percent at June 30, 1995. As reclamation laws and
regulations change, revisions to current estimates are made.
Derivatives
-----------
The Company periodically enters into futures contracts to manage
its exposure to price fluctuations on one of its major products. Net
hedging gains and losses are recognized as a part of the transactions
hedged and were not significant in 1995. The Company monitors its
market risk on an ongoing basis and considers its risk to be minimal.
Earnings Per Share
------------------
Earnings per share are based on the weighted average number of
shares and equivalent shares outstanding. Shares used in the
calculations were 29,595,071, 25,256,999 and 22,082,053 shares for the
years ended June 30, 1995, 1994 and 1993, respectively. Fully diluted
earnings per share are not significantly different from primary
earnings per share and, accordingly, are not presented.
3. Joint Venture Partnership
-------------------------
On July 1, 1993, IMC and FRP entered into a joint venture
partnership in which both companies contributed their respective
phosphate businesses to create IMC-Agrico, a Delaware general
partnership, in return for a 56.5 percent and a 43.5 percent economic
interest, respectively, in IMC-Agrico. The activities of IMC-Agrico,
which is operated by the Company, include the mining and sale of
phosphate rock, and the production, distribution and sale of
concentrated phosphates, uranium oxide and related products.
For financial reporting purposes, the acquisition of 56.5 percent
of FRP's phosphate business net assets is being accounted for as a
purchase and resulted in a deferred gain which is recognized in the
Consolidated Statement of Operations as the related FRP assets are
being used in operations, generally over 20 years. Other operating
income and expense, net included $3.0 million from the amortization of
such gain for the year ended June 30, 1995 versus $16.0 million
(including $12.7 million related to finished goods inventory) in 1994.
FRP's 43.5 percent interest in IMC-Agrico has been reported as minority
interest in consolidated joint venture on the Company's Consolidated
Balance Sheet; and the earnings therefrom have been reported as
minority interest in earnings of consolidated joint venture on the
Company's Consolidated Statement of Operations.
IMC-Agrico makes cash distributions to each partner based on
formulas and sharing ratios as defined in the partnership agreement.
For the year ended June 30, 1995, distributable cash generated by IMC-
Agrico totaled $467.4 million, of which $254.9 million was distributed
to FRP, including $49.0 million to be distributed in August 1995.
4. Sterlington Litigation
----------------------
Operating earnings for the year ended June 30, 1993 included a
charge of $169.1 million, net of insurance recoveries and legal fees,
which reflected settlement of a lawsuit for damages arising out of an
explosion at a nitroparaffins plant in Sterlington, Louisiana. The
Company is defending other lawsuits for property damage and personal
injury arising out of this explosion and has established a reserve to
cover the estimated cost of resolving the remaining lawsuits. See Note
19 for further discussion of this litigation.
5. Other Non-Recurring Operating Items
-----------------------------------
In addition to the amortization of the deferred gain discussed in
Note 3, other operating income and expense, net, in 1995, included
provisions totaling $10.3 million ($5.8 million net of minority
interest) for remediation costs associated with a sinkhole beneath a
phosphogypsum storage stack at IMC-Agrico's concentrated phosphate
production facility in Florida and repair and cleanup costs related to
earthen dam breaches at IMC-Agrico's Payne Creek and Hopewell phosphate
mining facilities in Florida. These charges were partially offset by a
gain of $5.0 million from the sale of land in Florida. In 1994, other
operating income and expense, net included a gain of $5.5 million ($3.1
million net of minority interest) from IMC-Agrico's sale of its Florida
cattle ranch. In 1993, other operating income and expense, net
included charges of $32.4 million from the settlement of a claim
relating to losses arising out of a water inflow at one of the
Company's potash mines in Canada and $3.0 million from the settlement
of an environmental issue. 1993 also included a gain of $8.1 million
from the resolution of a contract dispute with a major uranium
customer.
6. Write-Down of Investment in Oil and Gas Joint Venture
-----------------------------------------------------
The Company's investment in its oil and gas joint venture is
subject to a quarterly ceiling limitation test based on a computed
value of the Company's share of future net revenues from proved
reserves using current prices. Due to the low price of crude oil at
December 31, 1993, the Company was required to reduce the carrying
value of its investment in its oil and gas joint venture. As a result,
the Company recorded a charge of $20.3 million in fiscal 1994 to
reflect this reduction.
7. Receivables, Net
----------------
Accounts receivable at June 30 were as follows:
1995 1994
-------- --------
Trade accounts $ 83.3 $ 94.5
Non-trade receivables 18.0 16.8
------ ------
101.3 111.3
Less:
Allowances 2.7 2.2
Receivable interests sold 50.0
------ ------
$ 48.6 $109.1
====== ======
In October 1994, IMC-Agrico entered into a one-year agreement with
a financial institution to sell, on an ongoing basis, an undivided
percentage interest in a designated pool of receivables, subject to
limited recourse provisions, in an amount not to exceed $75 million.
Related costs, charged to interest earned and other non-operating
income and expense totaled $2.5 million in 1995. The Company's portion
of the proceeds from the initial sale of receivable interests ($32.5
million) was used primarily to retire long-term debt.
8. Property, Plant and Equipment
-----------------------------
The Company's investment in property, plant and equipment (at cost)
at June 30 is summarized as follows:
1995 1994
---------- ----------
Land $ 79.2 $ 79.8
Mineral properties and rights 497.4 488.4
Buildings and leasehold improvements 409.0 406.0
Machinery and equipment 2,416.6 2,383.9
Construction in progress 53.0 36.0
-------- --------
3,455.2 3,394.1
Accumulated depreciation 1,427.1 1,325.3
Accumulated depletion 159.9 141.4
-------- --------
1,587.0 1,466.7
-------- --------
Net property, plant and equipment $1,868.2 $1,927.4
======== ========
9. Accrued Liabilities
-------------------
Accrued liabilities at June 30 were as follows:
1995 1994
------ ------
Salaries, wages and bonuses $ 26.3 $ 19.2
Taxes other than income taxes 25.0 16.2
Income taxes 23.4 4.4
Land reclamation 15.5 13.5
Interest 6.7 8.0
Other 40.3 36.7
------ ------
$137.2 $ 98.0
------ ------
10. Long-Term Debt
--------------
Long-term debt at June 30 consisted of the following:
1995 1994
------ -------
9.25% Senior notes, due 2000 $ 61.6 $111.2
10.125% Senior notes, due 2001 60.4 116.5
10.75% Senior notes, due 2003 54.3 113.6
6.25% Convertible subordinated notes,
due 2001 115.0 115.0
9.45% Senior debentures, due 2011 100.0 100.0
7.525% Industrial revenue bonds, due 2015 75.0 75.0
7.7% Industrial revenue bonds, due 2022 26.8 25.6
Other debt 31.2 32.3
------ ------
524.3 689.2
Less current maturities 8.8 1.1
------ ------
$515.5 $688.1
====== ======
On June 30, 1995, the estimated fair value of long-term debt
described above was approximately the same as the carrying amount of
such debt on the Consolidated Balance Sheet. The fair value was
calculated in accordance with the requirements of SFAS No. 107,
"Disclosures About the Fair Value of Financial Instruments," and was
estimated by discounting the future cash flows using rates currently
available to the Company for debt instruments with similar terms and
remaining maturities.
In 1995, the Company purchased $165.0 million principal amount of
its Senior Notes prior to maturity. As a result, the Company recorded
an extraordinary loss of $6.5 million, net of taxes, for redemption
premium incurred and write-off of previously deferred finance charges
in connection with the purchase of such Notes. In 1994, the Company
recorded an extraordinary loss of $25.2 million, net of taxes, in
connection with the purchase of $220.0 million principal amount of its
11.25 percent Notes and $78.6 million of its Senior Notes.
Under the Company's Working Capital Facility, the Company may borrow
up to $100 million for general corporate purposes until June 30, 1996.
Borrowings under the Working Capital Facility are limited to $40
million during a specified period in any year and bear interest at
rates based on a base rate, a three-month certificate of deposit rate
or an adjusted Eurodollar rate. There is a commitment fee ranging from
1/4 to 1/2 percent (depending on the Company's leverage ratio) on the
unused portion of the credit line. At June 30, 1995, $29.6 million was
drawn down in the form of standby letters of credit principally to
support the industrial revenue bonds and other debt and credit risk
guarantees. There were no other borrowings under the Working Capital
Facility at June 30, 1995.
The Working Capital Facility and the Company's Senior Notes contain
provisions which
(i) restrict the Company's ability to make capital expenditures and
dispose of assets, (ii) limit the payment of dividends or other
distributions to stockholders, and (iii) limit the incurrence of
additional indebtedness. The Working Capital Facility also contains
financial ratios and tests which must be met with respect to interest
and fixed charge coverage, tangible net worth, working capital and debt
to total capitalization. The Company is currently in compliance with
all of the covenants in the indentures and other agreements governing
its indebtedness.
IMC-Agrico has an agreement with a group of banks to provide it with
a $75 million Partnership Working Capital Facility. The Partnership
Working Capital Facility, which has a letter of credit subfacility for
up to $25 million, expires on February 9, 1997. Borrowings under the
Partnership Working Capital Facility are unsecured with a negative
pledge on substantially all of IMC-Agrico's assets. Borrowings under
the Partnership Working Capital Facility bear interest at rates based
on a base rate or an adjusted Eurodollar rate. The Partnership Working
Capital Facility has minimum net Partners' capital, fixed charge and
current ratio requirements, and places limitations on indebtedness of
IMC-Agrico and restricts the ability of IMC-Agrico to make cash
distributions in excess of Distributable Cash (as defined). At June
30, 1995, IMC-Agrico was in compliance with all of the covenants
governing this agreement. There is a 1/4 percent commitment fee on the
unused portion of the credit line. At June 30, 1995, IMC-Agrico had
drawn down $12.5 million under the letter of credit subfacility and had
no borrowings under the remainder of the Partnership Working Capital
Facility.
The Convertible Subordinated Notes are exchangeable for
approximately 1.8 million shares of the Company's common stock at
$63.50 per share.
Scheduled maturities of long-term debt for the next five years are
as follows:
1996 $ 8.8
1997 1.7
1998 1.8
1999 2.0
2000 10.1
11. Interest Charges
----------------
The Company capitalizes interest costs relating to the financing of
major projects under development. All other interest is expensed as
incurred.
1995 1994 1993
----- ----- -----
Amount charged to expense $52.2 $81.0 $44.8
Amount capitalized .2 .7 19.4
----- ----- -----
$52.4 $81.7 $64.2
===== ===== =====
12. Other Noncurrent Liabilities
----------------------------
Other noncurrent liabilities at June 30 were as follows:
1995 1994
------- -------
Postretirement employee benefits $ 93.8 $ 91.2
Land reclamation 81.2 85.2
Deferred gain 43.7 46.7
Postemployment employee benefits 15.9
Other 49.1 52.0
------ ------
------ ------
$283.7 $275.1
====== ======
13. Pension Plans
-------------
The Company has non-contributory pension plans that cover
substantially all of its employees. Benefits are based on a
combination of years of service and compensation levels, depending on
the plan. Generally, contributions to the U.S. plans are made to meet
minimum funding requirements of the Employee Retirement Income Security
Act of 1974 (ERISA), while contributions to Canadian plans are made in
accordance with Pension Benefits Acts, instituted by the provinces of
Saskatchewan and Ontario.
Employees in the United States and Canada whose pension benefits
exceed Internal Revenue Code and Revenue Canada limitations,
respectively, are covered by supplementary non-qualified, unfunded
pension plans which are provided for by charges to earnings sufficient
to meet projected benefit obligations.
The components of net pension expense, computed actuarially, were
as follows:
1995 1994 1993
------ ------ ------
Service cost for benefits earned
during the year $ 9.0 $ 8.9 $ 6.5
Interest cost on projected benefit
obligation 14.7 13.1 13.4
Return on plan assets (11.8) (7.3) (14.8)
Net amortization and deferral (.1) (4.4) 5.3
----- ----- -----
Net pension expense $11.8 $10.3 $10.4
====== ===== =====
Net pension expense in 1993 included $1.6 million related to the
settlement of certain pension obligations.
The plans' assets consist mainly of corporate equity and U.S.
government and corporate debt securities, and units of participation in
a collective short-term investment fund.
In a number of these plans, the plan assets exceed the accumulated
benefit obligations (overfunded plans) and in the remainder of the
plans, the accumulated benefit obligations exceed the plan assets
(underfunded plans).
The funded status of the Company's pension plans and amounts
recognized in the Consolidated Balance Sheet were as follows:
Overfunded Underfunded
Plans Plans
------------- ----------
----
1995 1994 1995 1994
------ ------ ------ ------
Plans' assets at fair value $133.0 $119.0 $ 26.2$ 26.4
Actuarial present value of
projected benefit obligations:
Vested benefits 111.5 95.0 31.4 33.2
Non-vested benefits .8 .6 .4 .2
------ ------ ------ ------
Accumulated benefit obligations 112.3 95.6 31.8 33.4
Projected future salary increases 37.3 33.7 11.9 9.2
------ ------ ------ ------
Total projected benefit obligations 149.6 129.3 43.7 42.6
------ ------ ------ ------
Plans' assets less than projected
benefit obligations (16.6) (10.3) (17.5) (16.2)
Items not yet recognized in earnings:
Unrecognized net loss (gain) 8.2 .1 1.3 (2.9)
Unrecognized transition (asset)
liability (.9) (.8) .2 (.1)
Unrecognized prior service cost 7.0 7.2 12.3 13.5
Additional minimum liability (7.4) (8.4)
------ ------ ------ ------
Accrued pension liability $ (2.3)$ (3.8) $(11.1)$(14.1)
====== ====== ====== ======
Significant actuarial assumptions were as follows:
1995 1994 1993
---- ---- ----
Discount rate 8.2% 8.4% 8.6%
Long-term rate of return on assets:
U.S. plans 7.5% 7.5% 9.0%
Canadian plans 9.0% 9.5% 10.0%
---- ---- ----
.8% 7.9% 9.2%
==== ==== ====
Rate of increase in compensation levels 5.2% 5.3% 5.3%
14. Postretirement and Postemployment Benefit Plans
-----------------------------------------------
The Company provides certain health care benefit plans for retired
employees. The plans may be either contributory or non-contributory
and contain certain other cost sharing features such as deductibles and
coinsurance. The plans are unfunded. Employees are not vested and
such benefits are subject to change. Health care benefits of those
employees who retired prior to February 1, 1988 are paid by
Mallinckrodt Group Inc.; the Company is charged for one-half of such
costs, not exceeding $.8 million in any fiscal year.
The Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," effective July 1, 1992.
This statement requires that the cost of providing other postretirement
benefits (OPEBS) be accrued during the active service period of the
employees. The Company recorded an after-tax charge of $47.1 million
for the cumulative effect of this accounting change.
The components of OPEBS expense for years ending June 30 were as
follows:
1995 1994 1993
---- ---- ----
Service cost $1.5 $1.5 $2.3
Interest cost 5.3 5.2 6.3
Net amortization and deferral (1.5) (1.6)
---- ---- ----
$5.3 $5.1 $8.6
==== ==== ====
On July 1, 1993, the Company amended its postretirement plans in an
effort to control cash outlays while protecting the interests of those
employees who have retired or will retire in the near future. This
plan amendment had the effect of reducing the accumulated
postretirement benefit liability on July 1, 1993 by $15.9 million. As
a result, OPEBS expense was reduced by $1.1 million in 1995 and 1994 to
reflect the amortization of this plan change over 13.8 years.
The significant assumptions used in determining postretirement
benefit costs were as follows:
1995 1994 1993
---- ---- ----
Discount rate 8.2% 8.4% 8.5%
Health care trend rate:
Under age 65 9.8% (1) 10.4% (1) 15.0% (1)
Over age 65 6.3% (2) 7.0% (2) 8.2% (2)
(1) Decreasing gradually to 5.5% in 2003 and thereafter.
(2) Decreasing gradually to 5.5% in 1999 and thereafter.
If the health care trend rate assumptions were increased by 1.0
percent, the accumulated postretirement benefit obligation would
increase by 6.3 percent as of June 30, 1995. This would have the
effect of an 8.7 percent increase on OPEBS expense in 1995.
The components of the Company's postretirement benefit liability at
June 30 were as follows:
1995 1994
----- -----
Retirees $33.1 $29.3
Actives:
Fully eligible 12.0 11.6
Not-fully eligible 24.3 23.3
----- -----
Total 69.4 64.2
Items not yet recognized in earnings:
Unrecognized prior service cost 13.2 14.3
Unrecognized net gain 11.6 12.7
----- -----
Accrued postretirement benefits liability $94.2 $91.2
===== =====
The Company also provides benefits such as workers' compensation
and disability to former or inactive employees after employment but
before retirement. The plans are unfunded. Employees are not vested
and plan benefits are subject to change.
Effective July 1, 1994, the Company adopted SFAS No. 112,
"Employers' Accounting for Postemployment Benefits," to account for
disability benefits. Prior to July 1, 1994, the Company recognized the
cost of providing certain of these benefits on a cash basis. SFAS No.
112 requires the cost of providing these benefits be recognized when it
becomes probable that such benefits will be paid and when sufficient
information exists to make reasonable estimates of the amounts to be
paid. Consequently, the Company recognized a $13.3 million liability
for postemployment benefits as of July 1, 1994 and recorded a charge of
$5.9 million, net of taxes, for the cumulative effect of the Company's
unfunded obligation prior to July 1, 1994. The effect of the adoption
of SFAS No. 112 on 1995 earnings before the cumulative effect of the
accounting change was not material. As permitted by SFAS No. 112,
prior year financial statements have not been restated to reflect the
change in accounting method.
15. Income Taxes
------------
Deferred income taxes reflect the net tax effects of temporary
differences between the amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities
and assets at June 30 were as follows:
1995 1994
------ ------
Deferred tax liabilities:
Tax over book depreciation $333.1 $315.2
Taxes on undistributed foreign earnings 28.6 29.8
Other liabilities 37.5 27.6
------ ------
Total deferred tax liabilities 99.2 372.6
------ ------
Deferred tax assets:
Net operating loss carryforwards 78.2 105.6
Postretirement benefit reserves 35.7 33.4
Sterlington litigation settlement 31.5 29.9
Reclamation and decommissioning reserves 26.2 25.8
Alternative minimum tax credit carryforward 34.0 9.3
Other assets 35.6 19.6
------ ------
Total deferred tax assets 241.2 223.6
------ ------
Net deferred tax liabilities $158.0 $149.0
====== ======
At June 30, 1995, the Company had net operating loss carryforwards
for U.S. federal tax purposes of $196.7 million. If not utilized
against taxable income, the federal tax loss carryforwards will expire
in 2009. The tax benefit of these loss carryforwards has been provided
in the 1995 and 1994 Consolidated Balance Sheet as deferred tax assets.
The provision (credit) for income taxes consisted of the following:
1995 1994 1993
------ ------ ------
Current
Federal $ 28.5 $(24.0) $(15.2)
State and local 7.5 1.2 1.4
Foreign 30.2 13.8 10.0
------ ------ ------
66.2 (9.0) (3.8)
Deferred
Federal 11.1 16.9 (34.3)
State and local (.9) (3.8) (13.1)
Foreign 3.9 7.3 (6.1)
------ ------ ------
14.1 20.4 (53.5)
------ ------ ------
$ 80.3 $ 11.4 $(57.3)
====== ====== ======
The components of earnings (loss) before income taxes, extraordinary
loss and cumulative effect of accounting changes, and the effects of
significant adjustments to tax computed at the federal statutory rate
were as follows:
1995 1994 1993
------- ------- ------
Domestic $ 146.1 $ (23.0) $(175.5)
Foreign 61.3 30.8 (1.8)
------- ------- -------
Earnings (loss) before income
taxes, extraordinary loss and
cumulative effect of accounting
changes $ 207.4 $ 7.8 $(177.3)
======= ======= =======
Computed tax at the federal statutory
rate of 35% (34% in 1993) $ 72.6 $ 2.7 $ (60.3)
Foreign income and withholding taxes 12.7 10.3 4.5
Percentage depletion (9.7) (7.4) (9.4)
Deferred tax adjustment for the effect of
changes in U.S. corporate tax rates 4.1
Federal taxes on undistributed
foreign earnings 4.4 2.9 5.6
State income taxes, net of federal
income tax benefit 4.3 (1.7) (7.7)
Sterlington litigation settlement 3.3
Other items (none in excess of 5%
of computed tax) (4.0) .5 6.7
------- ------- -------
Provision (credit) for income taxes $ 80.3 $ 11.4 $ (57.3)
======= ======= =======
Effective tax rate 38.7% 146.2% 32.3%
======= ======= =======
The effective tax rate for 1994 reflected the write-down of an
investment in an oil and gas venture (see Note 6) and a deferred tax
adjustment resulting from an increase in U.S. corporate income tax
rates. If these items were excluded, the Company's effective tax rate
would have been 53.9 percent.
U.S. income and foreign withholding taxes are provided on the
earnings of foreign subsidiaries that are expected to be remitted to
the extent that taxes on the distribution of such earnings would not be
offset by foreign tax credits. The Company has no present intention of
remitting undistributed earnings of foreign subsidiaries aggregating
$105.9 million at June 30, 1995 and, accordingly, no deferred tax
liability has been established relative to these earnings.
The Internal Revenue Service (IRS) has conducted examinations of
the Company's U.S. federal income tax returns for the years 1988
through 1990 and has proposed various adjustments to increase taxable
income. Revenue Canada is currently examining the Canadian federal
income tax returns of the Company's wholly-owned Canadian subsidiary
for the years 1991 through 1993 and no adjustments have been proposed.
Management does not believe that resolution of these matters will have
a material impact on the Company.
16. Capital Stock
-------------
Changes in the number of shares of common stock issued and in
treasury were as follows:
1995 1994 1993
---------- ---------- ----------
Common stock issued
Balance, beginning of year 32,232,865 32,156,920 32,130,080
Stock options exercised 59,324 5,565 8,675
Award of restricted shares 9,840 70,380 18,165
---------- ---------- ----------
Balance, end of year 32,302,029 32,232,865 32,156,920
---------- ---------- ----------
Treasury common stock
Balance, beginning of year 2,770,259 10,097,808 10,082,779
Common stock issued (7,450,000)
Purchases 6,161 122,451 15,029
---------- ---------- ----------
Balance, end of year 2,776,420 2,770,259 10,097,808
---------- ---------- ----------
Common stock outstanding,
end of year 29,525,609 29,462,606 22,059,112
========== ========== ==========
On October 5, 1993 and May 5, 1994, the Company completed public
offerings of 3,450,000 shares and 4,000,000 shares of common stock at
$34.50 and $37.00 per share, respectively. Net proceeds of these
offerings, net of issuance costs and expenses, were used to reduce
long-term indebtedness.
Pursuant to a Shareholders Rights Plan adopted by the Company in
June 1989, a dividend of one preferred stock purchase right (a Right)
for each outstanding share of common stock of the Company was issued on
July 12, 1989 to shareholders of record on that date. Under certain
conditions, each Right may be exercised to purchase one one-hundredth
of a share of Junior Preferred Stock, Series C, par value $1.00 per
share, at a price of $150. This preferred stock is designed to
participate in dividends and vote on essentially equivalent terms with
a whole share of common stock. The Rights become exercisable apart
from the common stock only if a person or group acquires 20 percent or
more of the common stock or makes a tender offer for 20 percent or more
of the outstanding common stock. However, the Rights do not become
exercisable if a person or group becomes the owner of 20 percent or
more of the common stock as a result of the purchase of common stock by
the Company to reduce the number of shares outstanding and increase the
proportionate number of shares owned by such person or group to 20
percent or more, unless such person or group subsequently becomes the
owner of any additional shares of the common stock. In addition, upon
the acquisition by a person or group of 20 percent or more of the
common stock, each Right will entitle the holder to purchase, at the
then-current exercise price of the Right, a number of shares of common
stock having a market value at that time of twice the exercise price.
The Rights may be redeemed at a price of $.01 per Right under certain
circumstances prior to their expiration on June 21, 1999. No event
during 1995 made the Rights exercisable.
17. Stock Plans
-----------
In 1988, the Company adopted the 1988 Stock Option Plan (the Plan)
under which the Company may grant non-qualified stock options, stock
appreciation rights (SARs) and restricted stock to officers and key
managers of the Company. The Plan, as amended, provides for the
issuance of a maximum of two million shares of common stock of the
Company which may be authorized but unissued shares or treasury shares.
Under the terms of the Plan, the option price per share may not be
less than 100 percent of the fair market value on the date of the
grant. Stock options and SARs granted under the Plan extend for 10
years and generally become exercisable 50 percent one year after the
date of the grant and 100 percent two years after the date of the
grant. Certain stock options granted in fiscal 1995 become exercisable
in one-third increments; one-third one year after the date of the
grant, two-thirds two years after the date of the grant, and 100
percent three years after the date of the grant. At June 30, 1995, no
SARs had been granted under the Plan.
The Company also adopted a long-term incentive plan in fiscal 1994
under which officers and key managers were awarded shares of restricted
common stock of the Company along with contingent stock units. Based
on performance objectives, these shares and units will vest in whole or
in part during and at the end of a three-year performance period ending
June 30, 1997. Restricted stock is valued on the issuance date, and
the related expense is amortized over the vesting period.
The Company had a similar long-term incentive plan in 1991 which
expired June 30, 1994. Out of a total of 171,736 shares (net of
cancellations) granted under this plan, 115,251 shares were cancelled
on June 30, 1994 due to non-attainment of performance objectives.
Stock options and restricted stock activities are as follows:
Stock Stock Restricted Available
Options Options Stock for
Outstanding Exercisable Outstanding Grant
----------- ----------- ----------- ---------
Balance at June 30, 1992 476,285 165,185 175,800 716,201
Granted 18,165 (18,165)
Vested 155,550
Exercised (8,675) (8,675) (17,595)
Cancelled (25,180) (12,630) (15,029) 40,209
------- ------- ------- -------
Balance at June 30, 1993 442,430 299,430 161,341 738,245
Granted 428,650 70,380 (499,030)
Vested 143,000
Exercised (5,565) (5,565) (20,525)
Cancelled (7,360) (5,060) (122,451) 129,811
------- ------- ------- -------
Balance at June 30, 1994 858,155 431,805 88,745 369,026
Granted 138,525 9,840 (148,365)
Vested 157,125
Exercised (57,080) (57,080) (21,884)
Cancelled (27,222) (8,944) (5,961) 33,183
------- ------- ------- -------
Balance at June 30, 1995 912,378 522,906 70,740 253,844
======= ======= ======= =======
Market prices for stock options granted ranged from $38.125 to
$48.3125 per share in fiscal 1995 and from $34.1875 to $40.875 per
share in fiscal 1994. Market prices for stock options exercised ranged
from $22 to $51.125 per share in fiscal 1995 and from $22 to $32 per
share in fiscal 1994 and 1993. The average purchase price of
outstanding stock options at June 30, 1995 was $41.09 per share, based
on an aggregate purchase price of $37.5 million. Outstanding stock
options will expire over a period of time ending no later than June 15,
2005.
Another stock option plan provides for the granting of awards of up
to 100,000 shares of common stock to directors of the Company who are
not also employees of the Company. Options may be exercised at any
time the director holding the option remains a director of the Company
and within two years after the director ceases to be a director of the
Company. Under the terms of the plan, options granted are exercisable
over 10 years beginning with the grant date of the option. In fiscal
1995, options were granted to purchase 7,000 shares of common stock at
an option price of $38.125 per share. A total of 2,244 shares were
exercised during the year.
18. Commitments
-----------
The Company leases various types of properties, including
buildings, railcars, data processing equipment, and machinery and
equipment through operating leases.
Summarized below is a schedule of future minimum lease payments
under non-cancellable operating leases as of June 30, 1995:
1996 $16.0
1997 12.2
1998 10.4
1999 9.2
2000 6.1
Subsequent years 15.3
-----
Future minimum lease payments $69.2
=====
Rental expense for 1995, 1994 and 1993 amounted to $23.5 million,
$21.9 million and $18.3 million, respectively.
The Company's Canadian subsidiary is committed under a service
agreement with Potash Corporation of Saskatchewan Inc. (PCS) to produce
annually from mineral reserves specified quantities of potash for a
fixed fee plus a pro rata share of production and capital costs. The
agreement extends through June 30, 1996 and is renewable at the option
of PCS for six additional five-year periods. Potash produced for PCS
may, at PCS's option, amount to an annual maximum of approximately one-
fourth of the Canadian subsidiary's production capacity. During 1995,
production of potash for PCS amounted to 500,000 tons, or 15 percent of
tons produced.
19. Contingencies
-------------
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines in Saskatchewan,
Canada. In recent years, the trend of the water inflow has stabilized
and the Company has successfully reduced the per ton spending required
to contain the inflow. However, the long-term outlook of the water
inflow has caused the Company to consider alternatives to its current
mining operations and studies are under way in this regard. Any
solution to the water inflow situation at the mines could result in
substantial capital expenditures and/or charges to operations.
Angus and the Company are involved in various litigation arising
out of the Sterlington matter discussed in Note 4 of Notes to
Consolidated Financial Statements. Angus wants the Company to accept
responsibility for approximately 240 lawsuits currently pending in
Louisiana for injuries arising out of the explosion, and to reimburse
Angus for amounts that it has paid for settled demands in connection
with Sterlington. In addition, Angus is seeking direct payment from
the Company's insurers for certain damages. The Company may have
obligations to indemnify certain of the insurers if Angus is successful
in this case. The Company has established a reserve to cover the
estimated cost of resolving the remaining third-party suits in
Louisiana.
The Company continues to vigorously litigate each of the matters
arising out of the Sterlington explosion. A jury trial is scheduled to
commence in November, 1995 in Texas with respect to Angus' and the
Company's claims for contribution and indemnity for the settled
demands. Discovery is still not complete with respect to the lawsuits
scheduled for trial in November 1995, and all of the other lawsuits are
in very early stages. The Company is also pursuing additional
recoveries from one of its insurance carriers relating to Sterlington.
Given the uncertainties inherent in litigation as well as the early
stages of preparation, the Company is unable to evaluate possible
defenses or make a reliable determination as to potential liability, if
any, with respect to the Sterlington matters.
In addition, Angus, in an action filed in federal court in Monroe,
Louisiana, in February 1995, is seeking compensation from the Company
pursuant to CERCLA for contamination to the environment prior to the
explosion from the storage tank on the grounds of the Sterlington
property. No trial date has been scheduled for this additional claim
by Angus against the Company. Given the early stages of this lawsuit,
the Company is unable to evaluate possible defenses or make a reliable
determination as to potential liability, if any.
The Company has been named as a defendant, along with other
Canadian and U.S. potash producers, in lawsuits filed in federal court
in Minnesota and state court in California. The plaintiffs are
purchasers of potash who allege a price fixing conspiracy among North
American potash producers beginning in 1987 and continuing until the
filing of the lawsuits in 1994. Discovery has begun in the Minnesota
case, following certification of a class of all U.S. potash purchasers
as plaintiffs. While the Company believes that the allegations in the
complaints are without merit, until discovery is completed it is unable
to evaluate possible defenses or to make a reliable determination as to
the potential liability exposure, if any.
The Company has also received a U.S. grand jury subpoena seeking
information related to the sale of potash in the United States from
1986 to the present. The Company is cooperating with the government
and is assembling the information needed to comply with the subpoena.
As in the civil antitrust matters described above, while the Company
does not believe that violations of the antitrust laws have occurred,
the Company is unable to predict the outcome of the government
investigation or make a reliable determination as to the potential
exposure, if any.
The Company also has certain other contingent liabilities with
respect to litigation, claims and guarantees of debt obligations to
third parties arising in the ordinary course of business. The Company
does not believe that any of these contingent liabilities will have a
material adverse impact on the Company's financial position.
20. Operations by Geographic Area
-----------------------------
Net operating results of consolidated foreign subsidiaries, before
consolidation eliminations, amounted to earnings of $40.0 million in
1995, $10.0 million in 1994 and a loss of $6.0 million in 1993. Net
assets of such subsidiaries were $204.2 million and $173.0 million at
June 30, 1995 and 1994, respectively.
Financial information relating to the Company's operations in
various geographic areas was as follows:
Net Sales
--------------------------------
1995 1994 1993
-------- -------- -------
United States $1,854.1 $1,405.2 $ 856.8
Canada 184.1 137.5 138.0
Other 11.7 1.3 4.2
Transfers between geographic areas
(principally from Canada) (125.9) (102.5) (101.9)
-------- -------- --------
Consolidated $1,924.0 $1,441.5 $ 897.1
======== ======== ========
Earnings (Loss)
Before Income Taxes,
Extraordinary Loss and
Accounting Changes Identifiable Assets
------------------------- ---------------------------
1995 1994 1993 1995 1994 1993
-------- -------- -------- -------- -------- -------
C>
United States $ 326.4$ 136.5$ (130.5)$2,531.4$2,565.1 $1,763.9
Canada 55.6 30.8 (1.9) 246.3 223.0 281.4
Other 10.2 (.4) 2.0 8.2 8.1 12.5
Eliminations (10.4) .4 .7 (92.7) (17.9) (2.2)
-------- -------- --------
Operating earnings (loss)381.8 167.3 (129.7)
Interest earned and other
non-operating (income) and
expense, net (6.2) 23.4 2.8
Interest charges 52.2 81.0 44.8
Minority interest 128.4 55.1
-------- -------- -------- -------- -------- --------
Consolidated $ 207.4$ 7.8$ (177.3)$2,693.2$2,778.3$2,055.6
======== ======== ======== ======== ======== ========
Transfers of product between geographic areas were at prices
approximating those charged to unaffiliated customers.
Sales from the United States, as shown in the preceding table,
included sales to unaffiliated customers in other geographic areas as
follows:
1995 1994 1993
------ ------ ------
Far East $643.9 $377.1 $190.7
Latin America 121.7 113.0 25.9
Europe 27.1 6.6 22.6
------ ------ ------
$792.7 $496.7 $239.2
====== ====== ======
QUARTERLY RESULTS (UNAUDITED)
(In millions except per share amounts)
Quarter
--------------------------------
First Second Third Fourth Year
-----------------------------------------------------------------------
Fiscal 1995
Net sales $ 420.8 $ 451.8 $ 550.0 $ 501.4$1,924.0
Gross margins 76.7 113.9 150.0 107.9 448.5
Earnings before income
taxes, extraordinary item
and cumulative effect of
accounting change 34.7 45.5 75.2 52.0 207.4
Earnings before extraordinary
item and cumulative effect
of accounting change 21.8 27.9 45.7 31.7 127.1
Extraordinary loss -
debt retirement (1.2) (1.8) (.7) (2.8) (6.5)
Cumulative effect of
accounting change (5.9) (5.9)
-------- -------- -------- ------
-- -------
Net earnings $ 14.7 $ 26.1$ 45.0 $ 28.9$ 114.7
======== ======== ========
======== =======
Earnings (loss) per share:
Earnings before extra-
ordinary item and
cumulative effect of
accounting change $ .74$ .94 $ 1.54 $ 1.07$ 4.30
Extraordinary loss -
debt retirement (.04) (.06) (.02) (.09) (.22)
Cumulative effect of
accounting change (.20) (.20)
-------- -------- -------- ------
-- -------
Net earnings $ .50$ .88 $ 1.52 $ .98$ 3.88
======== ======== ========
======== =======
-----------------------------------------------------------------------
Fiscal 1994
Net sales $ 266.4 $ 329.0 $ 410.5 $ 435.6$1,441.5
Gross margins 7.4 33.8 77.7 88.7 207.6
Earnings (loss) before
income taxes and extra-
ordinary item (24.3) (26.3) 21.7 36.7 7.8
Earnings (loss) before
extraordinary item (22.5) (3.6) 5.4 17.1 (3.6)
Extraordinary loss -
debt retirement (23.8) (1.4) (25.2)
-------- -------- -------- ------
-- -------
Net earnings (loss) $ (46.3)$ (3.6)$ 5.4 $ 15.7 $ (28.8)
======== ======== ========
======== =======
Earnings (loss) per share:
Earnings (loss) before
extraordinary item $ (1.02)$ (.14)$ .21 $ .61 $ (.14)
Extraordinary loss -
debt retirement (1.08) (.05) (1.00)
-------- -------- -------- ------
-- -------
Net earnings (loss) $ (2.10)$ (.14) .21 $ .56 $ (1.14)
======== ======== ========
======== =======
-----------------------------------------------------------------------
Fiscal 1995
First quarter earnings included after-tax provisions of $1.7
million, or $.06 per share, for additional remediation costs
associated with a sinkhole at IMC-Agrico's New Wales concentrated
phosphate production facility in Florida and $.9 million, or $.03
per share, for anticipated repair and cleanup costs related to an
earthen dam breach at IMC-Agrico's Payne Creek phosphate rock
mining facility in Florida. First quarter earnings also included
an after-tax gain of $3.1 million, or $.10 per share, from the sale
of land in Florida.
Second quarter earnings included after-tax provisions of $.5
million, or $.01 per share, for additional repair and cleanup costs
related to earthen dam breaches at IMC-Agrico's Payne Creek and
Hopewell phosphate mining facilities in Florida and $2.5 million,
or $.08 per share, for restructuring charges which shifted the
marketing and administrative functions of PhosChem to its member
companies.
Fourth quarter earnings included after-tax provisions of $.4
million, or $.02 per share, for additional repair and cleanup costs
related to earthen dam breaches at IMC-Agrico's Payne Creek and
Hopewell phosphate mining facilities in Florida.
-----------------------------------------------------------------------
Fiscal 1994
Second quarter results included an after-tax charge of $12.4
million, or $.49 per share, from the write-down of the Company's
investment in an oil and gas joint venture due to the low price of
crude oil.
Fourth quarter results included an after-tax gain of $1.9 million,
or $.07 per share, from IMC-Agrico's sale of its Florida cattle
ranch.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial
Disclosure.
Not applicable.
PART III.
Item 10. Directors and Executive
Officers of the Registrant.
For information concerning directors of the Registrant, see pages 2
through 6, incorporated herein by reference, of IMC Global's definitive
Proxy Statement for the Annual Meeting of Stockholders to be held on
October 19, 1995. Information concerning executive officers of the
Registrant is included in Part I of this report.
Item 11. Executive Compensation.
For information concerning executive compensation, see pages 7
through 16 (excluding the sections therein entitled "Compensation
Committee Report on Executive Compensation" and "Company Stock
Performance"), incorporated herein by reference, of IMC Global's
definitive Proxy Statement for the Annual Meeting of Stockholders to be
held on October 19, 1995.
Item 12. Security Ownership of
Certain Beneficial Owners and Management.
For information concerning security ownership of certain beneficial
owners and management, see pages 6 and 7, incorporated herein by
reference, of IMC Global's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on October 19, 1995.
Item 13. Certain Relationships and
Related Transactions.
For information concerning certain relationships and related
transactions, see page 7, incorporated herein by reference, of IMC
Global's definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on October 19, 1995.
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
(a) FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
(1) Financial Statements:
Consolidated financial statements filed as part of this report
are listed under Part II,
Item 8 of this Form 10-K.
(2) Financial Statement Schedules:
No additional schedules are required because either the required
information is not
present or is not present in amounts sufficient to require
submission of the schedule, or
because the information required is included in the consolidated
financial statements or
the notes thereto.
(3) Exhibits:
The exhibits listed in the accompanying index are filed as part
of this report.
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
-------------------------------------------------------------------
3.1 Restated Certificate of Company's Report on
Incorporation, as amended Form 8-K dated
November 1, 1994
3.2 Bylaws, amended as of July Company's Report on
2, 1991, and as currently in Form 8-K dated July
effect 2, 1991
3.3 Rights Agreement dated June Company's Report on
21, 1989, amended as of Form 8-A/A dated
August 17, 1995, with The September 7, 1995.
First National Bank of
Chicago (including the
Shareholder Rights Plan).
4.1 Indenture dated as of Exhibit 4.4 to the
December 1, 1991 between the Company's Form SE
Registrant and The Bank of filed on December
New York, as Trustee, 3, 1991
relating to $100,000,000
aggregate principal amount
of 9.45% Senior Debentures
due 2011
4.2 Form of Senior Debentures Exhibit 4.5 to the
due 2011 Company's Form SE
filed on December
3, 1991
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
4.3 Indenture dated as of Exhibit 4.6 to the
December 1, 1991 between the Company's Form SE
Registrant and The Bank of filed on December
New York, as Trustee, 3, 1991
relating to $115,000,000
aggregate principal amount
of 6 1/4% Convertible
Subordinated Notes due 2001
4.4 Form of Convertible Exhibit 4.7 to the
Subordinated Notes due 2001 Company's Form SE
filed on December
3, 1991
4.5 Supplemental Indenture, Exhibit 4.5 to the
dated as of June 29, 1993, Company's
between the Registrant and Registration
The Bank of New York, as Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Senior Debentures
4.6 Supplemental Indenture, Exhibit 4.6 to the
dated as of June 29, 1993, Company's
between the Registrant and Registration
The Bank of New York, as Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Convertible Subordinated
Notes
4.7 Indenture, dated as of June Exhibit 4.7 to the
15, 1993, between IMC Global Company's
Inc. and NationsBank of Registration
Georgia, National Statement on Form S-
Association, as Trustee 4, (No. 33-49795)
4.8 First Supplemental Exhibit 4.1 to the
Indenture, dated as of Company's Report on
October 13, 1993, between Form 8-K dated
IMC Global Inc. and October 12, 1993
NationsBank of Georgia,
National Association, as
Trustee
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.1 Intercorporate Agreement Exhibit 10.1 to the
dated as of July 1, 1987, by Company's
and between Mallinckrodt and Registration
IMC Global Operations Inc. Statement on Form S-
with Exhibits, including the 1, (Amendment No.
Restated Certificate of 2)
Incorporation of IMC Global (No. 33-17091)
Inc., as amended; Bylaws of
IMC Global Inc.; Preliminary
Agreement for K-2 Advances;
Registration Rights
Agreement; Services
Agreement; Management
Services Agreement;
Agreement regarding
Pollution Control and
Industrial Revenue Bonds;
License Agreement; office
lease and sublease;
management agreements;
supply agreements; and
transportation service
agreements
10.2 Supply agreements (Included Exhibit 10.1 to the
in Exhibit 10.1) Company's
Registration
Statement on Form S-
1, (No. 33-17091)
10.3 Agreement dated June 27, Exhibit 10.6 to the
1985, supplementing, Company's
amending and continuing Registration
Potash Resource Payment Statement on Form S-
Agreement dated October 15, 1, (Amendment No.
1979, between Mallinckrodt 2)
and the Province of (No. 33-22914)
Saskatchewan
10.4 Mining and Processing Exhibit 10.7 to the
Agreement dated January 31, Company's
1978, between Potash Registration
Corporation of Saskatchewan Statement on Form S-
Inc. and International 1, (No. 33-17091)
Minerals & Chemical (Canada)
Global Limited
10.5 * Management Incentive
Compensation Program, as
amended through July 1, X
1995, and as currently in
effect
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.6 * 1991 Long-Term Performance Exhibit 10.7 to the
Incentive Plan, as amended Company's
through July 2, 1991, and as Registration
currently in effect Statement on Form S-
1
(No. 33-17091)
10.7 * 1988 Stock Option & Award Exhibit 10.7 to the
Plan, as amended through Company's
July 2, 1991, and as Registration
currently in effect Statement on Form S-
1
(No. 33-17091)
10.8 * 1994 Stock Option Plan for Exhibit 4(a) to the
Non-Employee Directors Company's
Registration
Statement on Form S-
8
(No. 33-56911)
10.9 * Retirement Plan for Salaried
Employees, as amended
through November 1, 1994, X
and as currently in effect
10.10* Supplemental Benefit Plan Exhibit 10.12 to
the Company's
Registration
Statement on Form S-
1
(No. 33-17091)
10.11* Supplemental Executive Exhibit 10.7 to the
Retirement Plan, as amended Company's
through June 30, 1992, and Registration
as currently in effect Statement on Form S-
1
(No. 33-17091)
10.12* Investment Plan for Salaried
Employees, as amended
through July 1, 1994, and as X
currently in effect
10.13 Suspension Agreement Exhibit 10.17 to
concerning Potassium the Company's
Chloride from Canada among Registration
the U.S. Department of Statement on Form S-
Commerce and the signatory 1
purchasers/exporters of (No. 33-17091)
potassium chloride from
Canada dated January 7, 1988
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.14 Settlement Agreement dated Exhibit 10.18 to
as of November 3, 1987, by the Company's
and among the Board of Registration
Trustees of the Internal Statement on Form S-
Improvement Trust Fund of 1
the State of Florida, the (No. 33-17091)
Department of Natural
Resources of the State of
Florida and Mallinckrodt
10.15* Management Compensation and Exhibit 10.17 to
Benefit Assurance Program, the Company's
as amended through June 30, Registration
1992, and as currently in Statement on Form S-
effect 1
(No. 33-17091)
10.16* Corporate Staff Employee Exhibit 10.32 to
Severance & Benefit 1989 10-K
Assurance Policy
10.17 Form of Trust Agreement with Exhibit 10.33 to
Wachovia Bank & Trust Co., 1992 10-K
N.A., as amended through
August 15, 1991
10.18* Form of Contingent
Employment Agreement dated
September 1, 1995, with X
Officers of Corporation
10.19* Directors Retirement Service Exhibit 10.36 to
Plan 1989 10-K
10.20* Form of "Gross Up" Agreement Exhibit 10.37 to
dated September 1, 1995, 1990 10-K
with Officers of Corporation X
10.21 Sulphur Joint Operating Exhibit 10.40 to
Agreement dated as of May 1, 1990 10-K
1988, among Freeport-McMoRan
Resource Partners, IMC
Global Operations Inc. and
Felmont Oil Corporation
10.22 Oil/Gas Operating Agreement Exhibit 10.41 to
dated as of June 5, 1990, 1990 10-K
among Freeport-McMoRan
Resource Partners, IMC
Global Operations Inc. and
Felmont Oil Corporation
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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10.23 Agreement in Principle dated Exhibit 10.43 to
September 7, 1990, with 1990 10-K
Mallinckrodt
10.24 Agreement dated as of Exhibit 10.44 to
September 12, 1990, with 1990 10-K
Mallinckrodt
10.25 Memorandum of Agreement as Exhibit 10.51 to
of December 21, 1990, 1991 10-K
amending Mining and
Processing Agreement of
January 31, 1978, between
Potash Corporation of
Saskatchewan Inc. and
International Minerals &
Chemical (Canada) Global
Limited
10.26 Division of Proceeds Exhibit 10.52 to
Agreement dated December 21, 1991 10-K
1990, between Potash
Corporation of Saskatchewan
Inc. and International
Minerals & Chemical (Canada)
Global Limited
10.27 Directors' Retirement Exhibit 10.54 to
Services Plan Effective July 1992 10-K
1, 1989
10.28 Contribution Agreement dated Exhibit 10.55 to
April 5, 1993 between the Company's March
Freeport-McMoRan Resource 31, 1993 Form 10-
Partners, Limited Q/A (Amendment No.
Partnership and IMC Global 1) filed on May 19,
Operations Inc. 1993
10.29 Form of Partnership
Agreement, dated as of July
1, 1993, as further amended
and restated as of May 26,
1995, between IMC-Agrico GP
Company, Agrico L.P. and IMC- X
Agrico MP Inc., including
definitions
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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10.30 Form of Parent Agreement,
dated as of July 1, 1993, as
further amended and restated
as of May 26, 1995, between
IMC Global Operations Inc.,
Freeport-McMoRan Resource
partners, Limited X
Partnership, Freeport-
McMoRan Inc. and IMC-Agrico
Company
10.31 Amendment, Waiver and
Consent, dated May 26, 1995,
among IMC Global Inc., IMC
Global Operations Inc., IMC-
Agrico GP Company, IMC-
Agrico MP, Inc., IMC-Agrico
Company, Freeport-McMoRan
Inc., Freeport-McMoRan X
Resource Partners, Limited
Partnership, and Agrico,
Limited Partnership
10.32 Agreement and Plan of
Complete Liquidation and
Dissolution, dated May 26,
1995, among IMC Global
Operations Inc., IMC-Agrico X
GP Company, and IMC-Agrico
MP, Inc.
10.33 Sterlington Settlement Exhibit 10.58 to
Agreement between IMC Global the Company's March
Inc., Angus Chemical Company 31, 1993 Form 10-
and Industrial Risk Insurers Q/A (Amendment No.
dated April 1, 1993 1) filed on May 19,
1993
10.34 First Amendment to Exhibit 10.59 to
Contribution Agreement, the Company's
dated as of July 1, 1993, Report on Form 8-K
between Freeport-McMoRan dated July 16, 1993
Resource Partners, Limited
Partnership and IMC Global
Operations Inc.
10.35 Credit Agreement, dated as Exhibit 10.63 to
of June 29, 1993, between the Company's
IMC Global Operations Inc., Registration
IMC Global Inc. and the Statement on Form S-
Banks Listed Therein 4, (No. 33-49795)
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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10.36 Loan Agreement, dated as of Exhibit 10.64 to
December 1, 1991, between the Company's
IMC Global Operations Inc. Registration
and the Polk County Statement on Form S-
Industrial Development 4, (No. 33-49795)
Authority (Florida)
10.37 Amended and Restated Exhibit 10.65 to
Unconditional Guaranty, the Company's
dated as of December 1, 1991 Registration
of IMC Global Inc. with Statement on Form S-
respect to Polk County 4, (No. 33-49795)
Industrial Development
Authority (Florida)
Industrial Development
Revenue Bonds (IMC Global
Operations Inc. Project)
1991 Tax-Exempt Series A and
1992 Tax-Exempt Series A
10.38 Supplemental Loan Agreement, Exhibit 10.66 to
dated as of January 1, 1992, the Company's
between IMC Global Registration
Operations Inc. and the Polk Statement on Form S-
County Industrial 4, (No. 33-49795)
Development Authority
(Florida)
10.39 Second Supplemental Loan Exhibit 10.67 to
Agreement, dated as of June the Company's
30, 1993, between IMC Global Registration
Operations Inc. and the Polk Statement on Form S-
County Industrial 4, (No. 33-49795)
Development Authority
(Florida)
10.40 Amendment to Guaranty, dated Exhibit 10.68 to
June 30, 1993, with respect the Company's
to Polk County Industrial Registration
Development Authority Statement on Form S-
(Florida) Industrial 4, (No. 33-49795)
Development Revenue Bonds
(IMC Global Operations Inc.
Project) 1991 Tax-Exempt
Series A and 1992 Tax-Exempt
Series A
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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10.41 Indenture of Trust, dated as Exhibit 10.69 to
of December 1, 1991, between the Company's
Polk County Industrial Registration
Development Authority (the Statement on Form S-
"Authority") and The Bank of 4, (No. 33-49795)
New York, as Trustee (the
"IRB Trustee") relating to
the Industrial Development
Revenue Bonds (IMC Global
Operations Inc. Project)
1991 Tax-Exempt Series A
(the "Series 1991 Bonds")
10.42 Supplemental Indenture of Exhibit 10.70 to
Trust, dated as of January the Company's
1, 1992, between the Registration
Authority and the IRB Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Industrial Development
Revenue Bonds (IMC Global
Operations Inc. Project)
1992 Tax-Exempt Series A
(the "Series 1992 Bonds")
10.43 Second Supplemental Exhibit 10.71 to
Indenture of Trust, dated as the Company's
of June 30, 1993, between Registration
the Authority and the IRB Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Series 1991 Bonds and the
Series 1992 Bonds
10.44 Amendment Number 2 to Exhibit 10.44 to
Investment Plan for Salaried the Company's
Employees effective March 1, Registration
1988 and restated effective Statement on Form S-
January 1, 1992 4, (No. 33-49795)
10.45* First Amendment, dated July Exhibit 10.45 to
2, 1991, to form of the Company's
Contingent Employment Registration
Agreement with Officers of Statement on Form S-
Corporation 4, (No. 33-49795)
10.46* Amendment, dated July 2, Exhibit 10.46 to
1991, to Form of "Gross Up" the Company's
Agreement with Officers of Registration
Corporation Statement on Form S-
4, (No. 33-49795)
10.47* Employment Agreement, dated Exhibit 10.47 to
April 15, 1993, between The Company's
Wendell F. Bueche and IMC Registration
Global Inc. Statement on Form S-
4, (No. 33-49795)
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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10.48* Consulting Agreement, dated Exhibit 10.48 to
July 19, 1993, between the Company's
Wendell F. Bueche and IMC Registration
Global Inc. Statement on Form S-
4, (No. 33-49795)
10.49* Amendment and Extension
Agreement, dated as of June
15, 1995, to Employment
Agreement dated as of April
15, 1993 and Consulting
Agreement dated as of July X
19, 1993, between Wendell F.
Bueche and IMC Global Inc.
10.50* Consulting Agreement, dated Exhibit 10.49 to
March 1, 1993, between the Company's
Billie B. Turner and IMC Registration
Global Inc. Statement on Form S-
4, (No. 33-49795)
10.51 Amendment No. 1 and Waiver Exhibit 10.51 to
No. 1, dated as of June 30, 1993 10-K
1993, to Credit Agreement
dated as of June 29, 1993
among IMC Global Operations
Inc., IMC Global Inc. and
the Banks Listed Therein
10.52 Amendment No. 2, Waiver No. Exhibit 10.52 to
2 and Consent No. 1, dated 1993 10-K
as of September 3, 1993, to
Credit Agreement dated as of
June 29, 1993 among IMC
Global Operations Inc., IMC
Global Inc. and the Banks
Listed Therein
10.53 Amendment No. 1, dated as of
June 24, 1994 to Credit
Agreement, dated as of
February 9, 1994 between IMC-
Agrico Company, NationsBank X
of Georgia and the Banks
Listed Therein
10.54 Amendment No. 2, dated as of
February 24, 1995 to Credit
Agreement, dated as of
February 9, 1994 between IMC-
Agrico Company, NationsBank X
of Georgia and the Banks
Listed Therein
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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10.55 Credit Agreement, dated as Exhibit 99.1 to the
of February 9, 1994, between Company's
IMC-Agrico Company, Registration
NationsBank of Georgia, and Statement on Form S-
the Banks Listed Therein 3, (Amendment No.
1) (No. 33-52377)
10.56 Amendment No. 3, dated as of Exhibit 10.52 to
December 30, 1993, to Credit 1994 10-K
Agreement dated as of June
29, 1993 among IMC Global
Operations Inc., IMC Global
Inc. and the Banks Listed
Therein
10.57 Amendment No. 4, dated as of Exhibit 10.53 to
March 10, 1994, to Credit 1994 10-K
Agreement dated as of June
29, 1993 among IMC Global
Operations Inc., IMC Global
Inc. and the Banks Listed
Therein
10.58 Amendment No. 5, dated as of Exhibit 10.54 to
June 30, 1994, to Credit 1994 10-K
Agreement dated as of June
29, 1993 among IMC Global
Operations Inc., IMC Global
Inc. and the Banks Listed
Therein
10.59 Amendment No. 6, dated as of Exhibit 10.55 to
November 30, 1994, to Credit the Company's
Agreement dated as of June December 31, 1994
29, 1993 among IMC Global Form 10-Q filed
Operations Inc., IMC Global February 13, 1995
Inc. and the Banks Listed
Therein
10.60 Transfer and Administration
Agreement, dated as of
October 31, 1994, between
Enterprise Funding X
Corporation and IMC-Agrico
Company
10.61 Amended and Restated Credit
Agreement, dated as of July
31, 1995, between IMC Global
Operations Inc., IMC Global X
Inc. and the Banks Listed
Therein
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
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11.1 Fully diluted earnings
(loss) per share for the
years ended June 30, 1995, X
1994 and 1993
21.1 Subsidiaries of the X
Registrant
23.1 Consent of Ernst & Young LLP X
27.1 Financial Data Schedule X
99.1 Registrant's Definitive Registrant's Proxy
Proxy Statement for Annual Statement filed
Meeting on October 19, 1995 September 11, 1995
* Denotes management contract or compensatory plan.
(b) REPORTS ON FORM 8-K
During the fourth quarter and through the date of this filing, the
following reports were filed:
1 A report under Item 5 Dated June 15, 1995
2 A report under Item 5 Dated August 17, 1995
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY DATA
AND FINANCIAL STATEMENT SCHEDULES
Page References
---------------
Consolidated balance sheet at June 30, 1995 and 1994 33
For the years ended June 30, 1995, 1994, and 1993:
Consolidated statement of operations 32
Consolidated statement of cash flows 34
Consolidated statement of changes in
stockholders' equity 35
Notes to consolidated financial statements 36-51
Supplementary financial information - quarterly results (unaudited) 52-53
-------------------------
Financial statements and schedules and summarized financial
information of 50 percent or less owned persons are omitted as none of
such persons are individually or in the aggregate significant under the
tests specified in Regulation S-X under Article 3.09 of general
instructions to the financial statements.
SIGNATURES
Pursuant to the requirements of 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
IMC GLOBAL INC.
-------------------
(Registrant)
Robert C. Brauneker
-------------------------------------
Robert C. Brauneker
Executive Vice President
and Chief Financial Officer
Date: September 21, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
Signature Title Date
-------------------------------------------------------------
Wendell F. Bueche
-----------------
Wendell F. Bueche Chairman September 21, 1995
(Chief Executive Officer)
James D. Speir
--------------
James D. Speir President September 21, 1995
(Chief Operating Officer)
Robert C. Brauneker
-------------------
Robert C. Brauneker Executive Vice President September 21, 1995
(Chief Financial Officer)
(Principal Accounting Officer)
Raymond F. Bentele
------------------
Raymond F. Bentele Director September 21, 1995
Frank W. Considine
------------------
Frank W. Considine Director September 21, 1995
Dr. James M. Davidson
---------------------
Dr. James M. Davidson Director September 21, 1995
Richard A. Lenon
----------------
Richard A. Lenon Director September 21, 1995
David B. Mathis
---------------
David B. Mathis Director September 21, 1995
Thomas H. Roberts, Jr.
----------------------
Thomas H. Roberts, Jr. Director September 21, 1995
Billie B. Turner
----------------
Billie B. Turner Director September 21, 1995