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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993 Commission file number: 1-8520
TERRA INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of
incorporation or organization)
52-1145429
(I.R.S. Employer
Identification No.)
Terra Centre
600 Fourth Street
P. O. Box 6000
Sioux City, Iowa
(Address of principal executive offices)
51102-6000
(Zip Code)
Registrant's telephone number, including area code: (712) 277-1340
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Shares, without par value New York Stock Exchange
Toronto Stock Exchange
8- 1/2% Convertible Subordinated New York Stock Exchange
Debentures Due 2012
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. [ ]
The aggregate market value of Registrant's voting stock held by
non-affiliates of Registrant, at January 31, 1994, was approximately
$244,500,000.
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On January 31, 1994, Registrant's outstanding voting stock
consisted of 69,594,773 Common Shares, without par value.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders of Registrant for the fiscal year ended December
31, 1993. Certain information therein is incorporated by reference into Part
I, Part II and Part IV hereof.
Proxy Statement for the Annual Meeting of Stockholders of Registrant to be held
on May 3, 1994. Certain information therein is incorporated by reference into
Part III hereof.
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TABLE OF CONTENTS
PART I
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ITEMS 1 and 2. BUSINESS AND PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EXECUTIVE OFFICERS OF TERRA INDUSTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART II
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ITEM 5. MARKET FOR TERRA INDUSTRIES' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. . . . . . . . . . . . . . . . . . . . . . 10
ITEM 6. SELECTED FINANCIAL DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF TERRA INDUSTRIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
INDEX TO FINANCIAL STATEMENT SCHEDULES, REPORTS AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
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PART I
Items 1 and 2. BUSINESS AND PROPERTIES.
Terra Industries Inc., a Maryland corporation ("Terra Industries"),
conducts its ongoing operations in the United States through its wholly owned
subsidiary, Terra International, Inc., a Delaware corporation ("Terra
International"), and in Canada, through Terra International (Canada) Inc.
("Terra Canada"), an Ontario corporation and a wholly owned subsidiary of Terra
International. The principal corporate office of both Terra Industries and
Terra International is located at Terra Centre, 600 Fourth Street, Sioux City,
Iowa 51102-6000 and their telephone number is 712-277-1340. Unless otherwise
referred to herein or the context otherwise requires, Terra International and
Terra Canada are together referred to as "Terra International."
Terra International is a leading producer of fertilizer, and a leading
marketer of fertilizer and crop protection products. Terra International also
markets seed and provides various agricultural and other related services both
in support of its product sales and on a stand-alone basis.
GENERAL
Terra International, directly in the United States and in Canada, is
engaged in the retail and wholesale marketing and distribution of fertilizers,
crop protection, seed and other crop production products, some of which are
proprietary and marketed under Terra International's own brand names. Terra
International is also engaged in the production of fertilizer and the
formulation of agricultural chemicals. Terra International's distribution
network is comprised of approximately:
o 350 farm service centers in North America;
o 58 fertilizer storage facilities; and
o 770 affiliated dealers serving growers in the 48 contiguous states.
Terra International's production facilities are comprised of:
o 3 nitrogen fertilizer plants located in Oklahoma (the "Woodward
Facility"), Iowa (the "Port Neal Facility") and Ontario (the
"Courtright Facility"),
o 1 crop protection chemical formulation plant located in Arkansas (the
"Blytheville Facility"); and
o 7 additional liquid chemical formulation facilities.
Terra International's Canadian operations were acquired, effective
March 31, 1993, as a result of the acquisition by Terra International from ICI
Canada Inc. ("ICI") of ICI's interest in the Agromarts(R) and the Courtright
Facility. Terra Canada's farm service centers operate under the trademark
"Agromart(R)," two of which are wholly owned by Terra Canada. The others are
operated by corporations in which Terra Canada owns a 50% interest.
On December 31, 1993, Terra International acquired from The Upjohn
Company the business and most of the assets of Asgrow Florida Company
("Asgrow"), a leading distributor of fertilizer, crop protection products and
seed to
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the vegetable, citrus and ornamental markets in Florida. These retail
locations are initially being operated under the name "Terra Asgrow Florida."
Terra International is organized and conducts its operations through
two primary business units: Distribution and Manufactured Fertilizer.
DISTRIBUTION
Terra International's Distribution business, which employed approximately
1,775 people as of December 31, 1993, manages a network of farm
service centers and a distribution system for crop protection products,
fertilizer and other crop production products and services. Through these
operations, Terra International markets a comprehensive line of crop protection
products (herbicides, insecticides, fungicides, adjuvants, plant growth
regulators, defoliants and desiccants), fertilizers (nitrogen, phosphates,
potash and micronutrients), seed and crop production services to farmers and
dealers primarily in the midwestern, southern, southwestern and southeastern
regions of the United States, and eastern regions of Canada. Approximately 60%
of the Distribution business' revenues were attributable to retail sales to
growers in 1993 while approximately 40% were attributable to wholesale sales to
dealers. Terra International operates the largest independently-owned farm
service center network in North America and is the second largest supplier
(based on revenue) of crop production inputs.
In addition to selling products required to grow crops, Terra
International's sales representatives provide services to grower customers
through Terra International's approximately 350 farm service center locations.
These services include soil and plant tissue analysis and crop production
program recommendations; custom blending of fertilizers; custom field
application services for fertilizer and crop protection products; and field
inspections for pest control and crop program performance follow-up.
Terra International markets its products primarily to agricultural
customers, including both dealers and growers. In connection with its product
sales, the Company provides warehousing and delivery services and makes
available to its dealer customers many of the services and training courses
utilized by company-operated locations in support of the sales programs.
Terra International also markets its products through its Professional
Products group to non-farm customers, including turf growers, nurseries, golf
courses, parks and athletic facilities. Terra International offers these
customers herbicides, insecticides, fungicides, fertilizer, adjuvants, plant
growth regulators, seed and agronomic services. Terra International's
Professional Products personnel generally work through existing farm service
center locations using established delivery systems and product lines.
Terra International's Distribution operations are organized into the
Northern and Southern Divisions and 13 regions. Field personnel receive
regular training through Terra University(R), a series of courses designed to
develop skills in agronomy, management, sales, environmental and personal
safety, and field application. The field salespeople are supported by a
full-service soil and plant tissue analysis laboratory, a staff of agronomists
and a research station where the efficacy of various crop protection products
and the performance of numerous seed varieties are tested.
Terra International markets several major seed brands and, in its U.S.
marketing area, is the largest independent seed distributor. Terra
International focuses particular marketing efforts on its proprietary brand of
corn hybrids, soybean and cotton seed varieties, which provide higher margins
and represented approximately 20% of total seed sales in 1993. Terra
International also sells DEKALB brand seed under a unique marketing and
distribution agreement through Terra International's Corn Belt distribution
network.
Although most agricultural chemicals marketed by Terra International
are manufactured by unaffiliated suppliers, Terra International also markets
its own Riverside(R) brand agricultural chemicals. Terra International's
Riverside(R) line includes
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over 100 products, nine of which were added in 1993. The Riverside(R)
product line consists of herbicides, insecticides, fungicides, adjuvants, seed
treatments, plant growth regulators, defoliants and desiccants. Terra
International possesses and processes the registrations required by the United
States Environmental Protection Agency (the "EPA") for its Riverside(R)
pesticide products. Riverside(R) products represented approximately 16% of
total crop protection product sales in 1993. The majority of Riverside(R)
products are formulated and packaged in facilities owned by the Company. The
Riverside(R) line includes several formulations produced exclusively by Terra
International, but does not include proprietary agricultural chemicals.
Riverside(R) products provide higher gross margins than most products
manufactured by unaffiliated suppliers, but the sale of such products also
involves additional indirect costs, including the cost of maintaining and
disposing of excess inventory and potentially greater liability for product
defects.
Terra International offers its customers a complete production program,
consisting of fertilizer, seed and chemicals for major field crops. Terra
International's farm service centers utilize its Ag Analytical Services lab in
Elida, Ohio to analyze nutrient levels of customer soil and plant tissue
samples. The results of these tests are analyzed by Terra International's
proprietary CropMaster(R) program, which provides specific, localized soil
fertility recommendations for specific crops on a field-by-field basis. Crop
input recommendations are provided via computer terminals at most Terra
International locations, which are linked to a mainframe computer located at
Terra International's headquarters in Sioux City, Iowa. Recommendations can be
made for substantially all crops grown in Terra International's marketing
geography. The program also provides "least cost" nutrient blending formula
recommendations, makes seed variety recommendations based on hybrid
characteristics and other factors important to the individual grower, and
maintains crop input records for grower customers.
For selected dealer customers, Terra International offers a services
package called MarketMasterTM to enhance Terra International's relationship
with these key dealers and increase sales. The package includes environmental
and safety audits, special training courses, access to Terra International's Ag
Analytical Services lab, use of CropMaster(R) and other services. There were
approximately 475 MarketMasterTM dealer sites at December 31, 1993, and
additional dealer sites are expected in 1994.
PRODUCT FORMULATIONS
Terra International's Blytheville Facility formulates dry flowable
("DF") crop protection products and liquid crop protection chemicals in
separate production lines at the same location. DF formulations are small,
dry, water-dispersible granules that are mixed with water before application.
Because of their dry form, the granules have several benefits compared with
liquid formulations, including: easier package disposal, easier cleanup of
accidental spills, absence of toxic solvents, no fumes, less weight, less space
required for storage, and no product loss from freezing temperatures or
settling. Because of these benefits, Terra International expects more
agricultural chemicals will be offered to growers in DF form in the future.
The Blytheville Facility is one of 13 known DF plants in the U.S. and
formulates eight DF products and six liquid products. Approximately 40% of the
plant's volume in 1993 was attributable to Terra International's own
Riverside(R) brand product line. Terra International has developed several DF
formulations not available from any other producer or formulator. Terra
International has also developed DF formulations for a number of companies that
contract all or portions of their production at the Blytheville Facility.
In 1988, Terra International formulated a fungicide for E. I. du Pont
de Nemours and Company ("DuPont") at the Blytheville Facility. The fungicide
was recalled and claims in excess of $90 million, plus punitive damages, were
filed by third parties alleging damages from product use. Terra International
originally assumed responsibility for the claims and, through its insurers,
paid nearly $60 million in settlements to growers. Terra International later
discovered evidence that it was not responsible for the claims and filed a
lawsuit against DuPont in Iowa state court for reimbursement of prior claim
payments to growers. During the fourth quarter of 1993, Terra International
and DuPont reached a comprehensive settlement pursuant to which DuPont assumed
responsibility for all pending product claims, and all litigation between the
parties was dismissed. In addition, Terra International has resumed
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its role as a wholesale and retail distributor of DuPont agricultural products,
a status that was interrupted during the product liability litigation.
MANUFACTURED FERTILIZER
Terra International's Manufactured Fertilizer business, which employed
521 people as of December 31, 1993, produces, sells and delivers nitrogen
fertilizers and selected animal feed ingredients to wholesale agribusiness
customers and anhydrous ammonia products to industrial customers. Its
principal customers are large independent dealers, national retail chains,
cooperatives and industrial consumers. Its competitors are typically large
national fertilizer distributors or producers of nitrogen fertilizers. Terra
International is North America's fifth largest producer of anhydrous ammonia
(the basic raw material for nitrogen fertilizers) and the fourth largest
nitrogen solutions manufacturer. In 1993, fertilizer and feed ingredients
manufactured by Terra International accounted for approximately 18% of Terra
International's total sales.
Terra International's nitrogen fertilizer manufacturing facilities,
consisting of the Woodward Facility, the Port Neal Facility and the Courtright
Facility (together, the "Manufacturing Facilities"), are integrated facilities
for the production of anhydrous ammonia, urea liquor and nitrogen fertilizer
solutions. In addition, the Port Neal and Courtright Facilities produce solid
urea for both the feed and fertilizer markets.
Each Manufacturing Facility is designed to operate continuously except for
planned biennial shutdowns for maintenance or installation of efficiency
improvements. The average utilization of the Port Neal, Woodward and
Courtright Facilities over the last three years was approximately 92%, 95%, and
91%, respectively. Utilization for the Port Neal Facility during 1992 was
adversely affected by an extended shutdown for capital improvements and planned
maintenance, which took longer to complete than originally scheduled. As a
result of the capital improvements, annual anhydrous ammonia production
capacity increased by approximately 70,000 tons in 1993.
Approximately 90% of Terra International's fertilizer production is
sold to independent dealers, national retail chains, cooperatives and
industrial consumers. The remaining ten percent is sold through Terra
International's farm service centers to retail customers.
During 1993, Terra International began implementation of plans to
co-produce methanol and ammonia at its Woodward Facility. The total project is
expected to be completed in the first half of 1994 and will enable the Company
to convert a portion of that plant's ammonia production to up to 400 tons per
day of methanol, depending on the relative demand of ammonia and methanol. The
project cost is estimated to be $15 million.
The acquisition of the Courtright Facility in the second quarter of
1993 added approximately 450,000 tons of capacity to the Company's production
of anhydrous ammonia, 130,000 tons of urea liquor capacity, 140,000 tons of UAN
capacity and 115,000 tons of ammonium nitrate capacity. The Courtright
Facility's urea liquor and granulation capacity are expected to increase as a
result of a plant upgrade project, announced in February 1994. The project is
expected to be completed in 1995 and will enable Terra Canada to replace 65,000
tons of annual industrial ammonia sales with higher value urea and nitrogen
solution sales. The project cost is estimated to be approximately $20 million
and is expected to be funded through lease financing.
CREDIT
A substantial portion of Terra International's sales to its grower and
dealer customers is made on credit terms customary in the industry. During the
third quarter of 1992, Terra International established a grower financing
program to provide crop input financing to certain grower customers for all
operating requirements on extended payment terms. In 1993 Terra International
provided approximately $25 million in financing to grower customers under this
program and expects to finance about $50 million in 1994.
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SUPPLY
Reliable sources for supply of crop inputs at competitive prices are
critical to Terra International's Distribution business. Terra International
purchases products from various chemical and fertilizer suppliers at prevailing
market prices. Terra International has entered into purchase agreements with
basic chemical and fertilizer manufacturers to help ensure an adequate supply
of products for its grower and dealer customers through 1994. Terra
International also purchases various chemicals and catalysts used in
manufacturing and formulation. Availability of these materials is currently
considered adequate to meet production needs.
The principal raw material used by Terra International in its nitrogen
fertilizer manufacturing operations at its Manufacturing Facilities is natural
gas. Natural gas costs comprised approximately 50% of the total costs and
expenses associated with Terra International's Manufactured Fertilizer
operations during 1993.
Terra International currently purchases natural gas from various
suppliers, principally under 12-month gas supply contracts with a combination
of fixed and market price terms, and engages in the use of other forward
pricing mechanisms to protect against significant unexpected increases in the
price of natural gas. Terra International has minimized the risk of
interruption or curtailment of its natural gas supply during the heating season
of 1993-1994 by securing firm contracts for the majority of the natural gas
requirements for its Manufacturing Facilities. Approximately 40% of Terra
International's 1994 natural gas requirements have been set by forward
pricing mechanisms.
TRANSPORTATION
Terra International uses several modes of transportation to receive and
distribute products to customers and its own locations, including railroad and
tank cars, common carrier trucks, barges, common carrier pipelines and
company-owned or leased vehicles. During 1993, Terra International operated 35
liquid, 21 dry and two anhydrous ammonia fertilizer terminal storage facilities
strategically located in 18 states and Ontario to help ensure efficient
movement and seasonal product availability. Terra International also has
varying amounts of warehouse space at each of its farm service center
locations.
Through Terra Express, Inc. and Terra Express of Oklahoma, Inc., wholly
owned truck transportation subsidiaries of Terra International (together,
"Terra Express"), Terra International provides transportation services to its
own facilities and customers as a contract carrier. Terra Express utilizes
approximately 90 owner-operated units and twenty company-owned units to deliver
fertilizer, crop protection products, seed, feed ingredients and other products
for its customers and Terra International's own locations. At its
Manufacturing Facilities, its Blytheville Facility and liquid fertilizer
storage locations, Terra International utilizes railcars as the major method of
transportation. All of Terra International's approximately 1,100 railcars are
leased.
Purchased gas is transported to the Port Neal Facility via an
interstate pipeline operating as an open access natural gas transporter. Under
a Federal Energy Regulatory Commission order, Terra International maintains
facilities for direct access to its interstate pipeline shipper, avoiding
additional costs of local utility services. Terra International transports
purchased natural gas for its Woodward Facility through an intrastate pipeline
that is not an open access carrier; however, Terra International is able to
transport gas supplies from any in-state source connected to the widespread
pipeline system. The Courtright Facility utilizes local gas storage service
provided by a local utility, and purchased gas is transported from western
Canada through the TransCanada Pipeline under various delivery contracts.
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RESEARCH AND DEVELOPMENT
Terra International operates a 70-acre Agronomy Research Station near
its Port Neal Facility for product and program development and testing, and
routinely conducts product evaluation and testing with growers and
universities. Terra International also develops DF and other chemical
formulations for its Riverside(R) product line and for basic chemical products
at its product development laboratory located in Blytheville, Arkansas.
CAPITAL EXPENDITURES
Terra International made capital expenditures of approximately $21.6
million in 1993, of which approximately $6.9 million was used to modify the
Woodward Facility to permit the co-production of methanol (the "Methanol
Project"), and the balance for routine replacements of property, plant and
equipment, and farm service center expansion. In 1994, Terra International
expects to make capital expenditures of approximately $27 million, consisting
of approximately $8 million to complete the Methanol Project, and the balance
for routine replacements of property, plant and equipment, energy efficiency
improvements to each of the Manufacturing Facilities, and for the expansion of
farm service centers. Capital expenditures in 1993 exclude capital costs
associated with the acquisition by Terra International of its Canadian
operations from ICI and the acquisition of certain assets from Asgrow, and the
acquisition of additional farm service centers. Expected 1994 capital
expenditures exclude capital costs associated with significant acquisitions
that may be made in 1994.
PROPERTIES
Terra Industries and Terra International maintain their headquarters in
Sioux City, Iowa, in an office building owned by Terra Real Estate Corporation,
a wholly owned subsidiary of Terra International. Terra International owns the
Port Neal and Woodward Facilities, and Terra Canada leases the Courtright
Facility. The Courtright Facility lease is for a four-year term expiring in
April 1997, and provides Terra Canada with an option to purchase the facility
during the term of the lease and upon expiration thereof. If at the end of the
lease-term Terra Canada elects not to exercise its purchase option, Terra
International must pay to the lessor approximately $40 million (Canadian)
subject to reimbursement based on the proceeds realized on the sale of the
Courtright Facility by the lessor.
The Blytheville Facility was purchased from the City of Blytheville,
Arkansas at the expiration of the lease term in December 1993, for a nominal
amount.
Terra International's farm service centers are located on a combination
of owned and leased property. The leases have varying expiration dates through
2007. All but two of the Agromarts acquired by Terra Canada during the second
quarter of 1993 are owned by corporations in which Terra Canada owns a 50%
interest, and are owned in fee by such corporations.
Terra International leases space at 40 liquid and dry fertilizer
storage locations with an average remaining lease life of 12 months from
December 31, 1993. Each location may have several leases respecting different
products distributed by Terra International. Terra International owns six
fertilizer solution storage facilities. In addition, Terra International
maintains certain contractual relationships with terminal facilities respecting
the distribution of dry bulk product, anhydrous ammonia and other manufactured
and distributed products.
EMPLOYEES
Terra International had approximately 2,390 full-time employees at
December 31, 1993, none of whom were covered by a collective bargaining
agreement. In addition, Terra International, which annually hires temporary
employees on a seasonal basis, hired approximately 1,500 temporary employees
during its spring selling season in 1993.
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SEASONALITY
The agricultural products business is seasonal, based upon the planting,
growing and harvesting cycles. As a result, inventories must be accumulated in
the first few months of the calendar year to be available for seasonal sales,
requiring significant storage capacity. Inventory accumulations are financed
by suppliers or short-term borrowings, which are retired with the proceeds of
the sales of such inventory. In times of lower demand, Terra International can
reduce purchases, thereby decreasing inventory carrying costs.
COMPETITIVE POSITION
The market for fertilizer, crop protection products, seed and services
for agriculture is highly competitive. Nationally, sales attributable to Terra
International's farm service centers accounted for less than 10% of total crop
production products. However, within the specific market areas served by its
farm service centers, Terra International's share of the market was
substantially higher. Terra Internatonal's competitors include cooperatives,
divisions of diversified agribusiness companies, regional distributors and
independent dealers. Terra International competes primarily by providing a
comprehensive line of product offerings and by providing value-added services
to growers and dealers.
Terra International competes with other manufacturers of nitrogen fertilizer
principally on the basis of price, delivery terms and availability of products.
ENVIRONMENTAL PROTECTION AND OTHER REGULATORY MATTERS
Terra International's operations are subject to various federal, state
and local environmental protection regulations, including EPA guidelines for
effluent limitations on the waste water discharged by processing units and the
emissions control requirements of the Clean Air Act. Terra Canada's operations
are subject to various federal and provincial regulations, including the
Canadian Environmental Protection Act administered by Environment Canada, and
the Ontario Environmental Protection Act. Terra International and Terra Canada
are also involved in the manufacture, handling, transportation and storage of
materials that are classified as hazardous or toxic by federal, provincial or
other regulatory agencies. Precautions are taken to reduce the likelihood of
accidents involving these materials.
Terra International has been notified by the EPA that it is a
potentially responsible party ("PRP") under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") in the Matter of
Valley Chemical Site, Greenville, Mississippi. Other companies have been named
PRPs. Under CERCLA, all PRPs may be held jointly and severally liable for the
costs of investigation and remediation of an environmentally damaged site. The
EPA has requested that the PRPs remove and dispose of contaminated soils and
other materials at the site but has not at this time required the PRPs to
develop and implement a permanent remediation plan. Terra International leased
a portion of this site for part of 1986 and 1987, and information obtained by
Terra International indicates the soil contamination occurred prior to the
commencement of such lease. Current estimates of the cost to remove and dispose
of the contaminated materials and the portion, if any, of which Terra
International may be liable are not deemed by management to be material.
Terra International has also been designated as PRPs under CERCLA or
its analogues under similar state and other legislation and regulations in
connection with its respective ownership of other sites. After consideration
of such factors as the number and levels of financial responsibility of other
PRPs, the existence of contractual indemnities, the availability of defenses
and the speculative nature of the costs involved, Terra International's
management believes that its liability with respect to these matters will not
be material.
Certain state regulatory agencies have enacted requirements to provide
secondary containment for bulk agricultural chemical storage facilities present
at Terra International's farm service centers. The remaining states are
expected to adopt similar requirements pursuant to federal mandate. Terra
International has commenced
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construction of these facilities at its farm service centers and estimates that
the future cost of complying with these regulations will be approximately $5
million.
Terra International endeavors to comply in all material respects with
applicable environmental, safety and health regulations. Terra International
does not expect its continued operation in compliance with such regulations to
have a material adverse effect on its earnings or competitive position.
DISCONTINUED OPERATIONS
During 1993 Terra Industries disposed of its leasing and substantially
all of its construction materials businesses for approximately $24.4 million,
and substantially completed the liquidation of its remaining non-agribusiness
properties. A discussion of each of Terra Industries' remaining discontinued
businesses follows.
CONSTRUCTION MATERIALS
In September 1993 Terra Industries sold its interest in LTM,
Incorporated, Rogue Aggregates, Inc. and W.B.R., Inc., which did business under
the name "Concrete, Inc.", for approximately $18.5 million. Terra Industries'
remaining construction materials business, El Rancho Rock & Sand, Inc. ("El
Rancho") is currently being liquidated and reclaimed as required under its
reclamation plan with San Joaquin County, California. Terra Industries'
management does not expect the net proceeds, if any, from the liquidation of El
Rancho to be material.
METALS MINING
Beryllium. During the third quarter of 1993, Terra Industries acquired
the remaining 50% interest in Alloy Research, Inc. ("ARI") not already owned
by Terra Industries. ARI, directly and indirectly, through its wholly owned
subsidiary Specialloy, Inc. ("Specialloy"), produces metal alloys, including
beryllium copper alloys. The original 50% interest in ARI was acquired
by Terra Industries in 1990. Terra Industries is currently attempting to sell
its interest in ARI and Specialloy.
Gold. Subsidiaries of Terra Industries and Minorco (U.S.A.) Inc., a
majority shareholder of Terra Industries, are partners of Western Gold
Exploration and Mining Company, Limited Partnership ("WestGold"), a limited
partnership. In 1990, WestGold commenced the liquidation of its operations,
which is now substantially complete. Terra Industries' management does not
expect the net proceeds, if any, from the liquidation of WestGold to be
material.
ITEM 3. LEGAL PROCEEDINGS.
Various legal proceedings are pending against Terra Industries and its
subsidiaries. Management of Terra Industries considers that the aggregate
liability, if any, resulting from these proceedings will not be material to
Terra Industries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No items were submitted to a vote of security holders of Terra Industries
during the fourth quarter of the 1993 fiscal year.
8
13
EXECUTIVE OFFICERS OF TERRA INDUSTRIES
The following paragraphs set forth the name, age and offices with
Terra Industries of each present executive officer of Terra Industries, the
period during which each executive officer has served as such and each
executive officer's business experience during the past five years:
Present positions and offices with Terra Industries
Name and age and principal occupations during the past five years
------------ ----------------------------------------------------
John S. Burchfield (53) Vice President - Human Resources of Terra Industries since April,
1992; Vice President - Human Resources of Aon Corporation from
January 1989 to August 1991; Vice President - Human Resources of
Denny's International prior thereto.
Gregory J. Duerksen (36) Vice President - Business Development of Terra International since
November, 1993; Vice President - Marketing & Development thereof
from February 1988 to November 1993.
Burton M. Joyce (52) President and Chief Executive Officer of Terra Industries since May
1991; Executive Vice President and Chief Operating Officer thereof
from February 1988 to May 1991.
Francis G. Meyer (42) Vice President - Chief Financial Officer and Treasurer of Terra
Industries since November 1993; Controller thereof from August 1991
to November 1993; Vice President - Controller of Terra International
from June 1986 to August 1991.
Reuben F. Richards (64) Chairman of the Board of Terra Industries since December 1982; Chief
Executive Officer thereof from December 1982 to May 1991; President
thereof from July 1983 to May 1991.
W. Mark Rosenbury (46) Executive Vice President and Chief Operating Officer of Terra
Industries since November 1993; Vice President, Chief Financial
Officer and Treasurer thereof since August 1991; Vice President and
Corporate Controller thereof from January 1987 to August 1991.
George H. Valentine (45) Vice President, General Counsel and Corporate Secretary of Terra
Industries since November 1993; Assistant General Counsel of
Household International, Inc. from February 1986 to November 1993.
There are no family relationships among the executive officers and
directors of Terra Industries or arrangements or understandings between any
executive officer and any other person pursuant to which any executive officer
was selected as such. Officers of Terra Industries are elected annually to
serve until their respective successors are elected and qualified.
9
14
PART II
ITEM 5. MARKET FOR TERRA INDUSTRIES' COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Information with respect to the market for Terra Industries' common
equity and related stockholder matters contained in Terra Industries' 1993
Annual Report to Stockholders under the caption "Quarterly Financial and Stock
Market Data (Unaudited)" is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Information with respect to selected financial data contained in Terra
Industries' 1993 Annual Report to Stockholders under the caption "Financial
Summary" is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Information with respect to management's discussion and analysis of
financial condition and results of operations contained in Terra Industries'
1993 Annual Report to Stockholders under the caption "Financial Review" is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements, together with the report of
independent accountants thereon, the information contained under the caption
"Quarterly Financial and Stock Market Data (Unaudited)" contained in Terra
Industries' 1993 Annual Report to Stockholders are incorporated herein by
reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF TERRA INDUSTRIES.
Information with respect to directors of Terra Industries under
the caption "Election of Directors" in the Proxy Statement for the Annual
Meeting of Stockholders of Terra Industries to be held on May 3, 1994, is
incorporated herein by reference. Information with respect to executive
officers who are not also directors of Terra Industries appears under the
caption "Executive Officers of Terra Industries" in Part I hereof and is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information with respect to executive compensation under the
caption "EXECUTIVE COMPENSATION AND OTHER INFORMATION" in the Proxy Statement
for the Annual Meeting of Stockholders of Terra Industries to be held on May 3,
1994, is incorporated herein by reference.
10
15
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information with respect to security ownership of certain
beneficial owners and management under the caption "Equity Security Ownership"
in the Proxy Statement for the Annual Meeting of Stockholders of Terra
Industries to be held on May 3, 1994, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information with respect to certain relationships and related
transactions under the caption "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"
in the Proxy Statement for the Annual Meeting of Stockholders of Terra
Industries to be held on May 3, 1994, is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
1. Consolidated Financial Statements of Terra Industries and its
subsidiaries (incorporated herein by reference to Terra
Industries' 1993 Annual Report to Stockholders).
Consolidated Statements of Financial Position at December 31,
1993 and 1992.
Consolidated Statements of Income for the years ended December
31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1992 and 1991.
Consolidated Statements of Changes in Stockholders' Equity for
the years ended December 31, 1993, 1992 and 1991.
Notes to the Consolidated Financial Statements.
Independent Auditors' Report.
Quarterly Production Data (Unaudited).
Quarterly Financial and Stock Market Data (Unaudited).
Stockholders and Dividends.
Financial Summary.
2. Index to Financial Statement Schedules
See Index to Financial Statement Schedules of Terra Industries
and its subsidiaries at page S-1.
11
16
3. Other Financial Statements
Individual financial statements of Terra Industries'
subsidiaries are omitted because all such subsidiaries are
included in the consolidated financial statements being filed.
Individual financial statements of 50% or less owned persons
accounted for on the equity method have been omitted because
such 50% or less owned persons considered in the aggregate, as
a single subsidiary, would not constitute a significant
subsidiary.
(b) EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
1. Amended and Restated Deferred Compensation Agreement made as of
May 1, 1991, by and between Terra Industries and R. F. Richards
filed as Exhibit 10 to Terra Industries' Form 8-K dated September
30, 1991.
2. Resolution adopted by the Personnel Committee of the Board of
Directors of Terra Industries with respect to supplemental
retirement benefits for certain senior executive officers of Terra
Industries, filed as Exhibit 10.4.2 to Terra Industries' Form 10-Q
for the fiscal quarter ended March 31, 1991.
3. 1992 Executive Incentive Plan of Terra Industries filed as Exhibit
10.1.12 to Terra Industries' Form 10-K for the year ended December
31, 1991.
4. 1992 Stock Incentive Plan of Terra Industries filed as Exhibit
10.1.6 to Terra Industries' Form 10-K for the year ended December
31, 1992.
5. Form of Restricted Stock Agreement of Terra Industries under its
1992 Stock Incentive Plan filed as Exhibit 10.1.7 to Terra
Industries' Form 10-K for the year ended December 31, 1992.
6. Form of Incentive Stock Option Agreement of Terra Industries under
its 1992 Stock Incentive Plan filed as Exhibit 10.1.8 to Terra
Industries' Form 10-K for the year ended December 31, 1992.
7. Form of Nonqualified Stock Incentive Agreement of Terra Industries
under its 1992 Stock Incentive Plan filed as Exhibit 10.1.9 to
Terra Industries' Form 10-K for the year ended December 31, 1992.
8. 1993 Incentive Award Program for Officers and Key Executives of
Terra Industries filed as Exhibit 10.1.10 to Terra Industries'
Form 10-K for the year ended December 31, 1992.
9. Excess Benefit Plan of Terra Industries as amended effective as of
January 1, 1992, filed as Exhibit 10.1.13 to Terra Industries'
Form 10-K for the year ended December 31, 1992.
10. Restricted Stock Agreement of Burton M. Joyce dated May 1, 1991,
filed as Exhibit 10.1.14 to Terra Industries' Form 10-K for the
year ended December 31, 1992.
11. Terra Industries Inc. Supplemental Deferred Compensation Plan
effective as of December 20, 1993, filed as Exhibit 10.1.9 to Terra
Industries' Form 10-K for the year ended December 31, 1993.
12. Retirement/Consulting Agreement, dated as of May 13, 1993 by and
between Paul D. Foster and Terra International, filed as Exhibit
10.1.2 to Terra Industries' Form 10-K for the year ended December
31, 1993.
12
17
13. Consulting Agreement dated as of December 30, 1993, by and between
Paul D. Foster and Terra International, filed as Exhibit 10.1.13 to
Terra Industries' Form 10-K for the year ended December 31, 1993.
14. 1994 Incentive Award Program for Officers and Key Executives of
Terra Industries filed as Exhibit 10.1.14 to Terra Industries' Form
10-K for the year ended December 31, 1993.
(c) REPORTS ON FORM 8-K
The following report on Form 8-K was filed during the fourth quarter of
1993:
Form 8-K dated October 26, 1993, Item 5.
(d) Exhibits
3.1.1 Articles of Restatement of Terra Industries filed with the State
of Maryland on September 11, 1990, filed as Exhibit 3.1 to Terra
Industries' Form 10-K for the year ended December 31, 1990, is
incorporated herein by reference. [8 pages].
3.1.2 Articles of Amendment of Terra Industries filed with the State of
Maryland on May 6, 1992, filed as Exhibit 3.1.2 to Terra
Industries' Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference. [2 pages].
3.2 By-Laws of Terra Industries, as amended through August 7, 1991,
filed as Exhibit 3 to Terra Industries' Form 8-K dated September
30, 1991, is incorporated herein by reference. [12 pages].
4.1.1 Indenture dated as of May 31, 1987, from Terra Industries to
Mellon Bank, N.A., as Trustee, including form of Debenture, filed
as Exhibit 4 to Amendment No. 2 to the Registration Statement on
Form S-3 (Registration No. 33-14171) filed by Terra Industries on
June 11, 1987, is incorporated herein by reference. [105 pages].
4.1.2 Revolving Credit Agreement dated as of November 24, 1992, among
Terra International, Inc., CitiCorp USA, Inc., Mellon Bank, N.A.,
Continental Bank N.A., First Bank National Association,
NationsBank of Texas, N.A. and Rabobank Nederland, filed as
Exhibit 4.1.2 to Terra Industries' Form 10-K for the year ended
December 31, 1992, is incorporated herein by reference.
4.1.3 First Amendment Agreement, dated as of March 26, 1993, by and
between Terra International, Inc., the Lenders listed on the
signature page thereto, and CitiCorp USA, Inc., as agent to
Lenders. [17 pages].
4.1.4 Second Amendment Agreement, dated as of December 30, 1993, by and
between Terra International, Inc., the Lenders listed on the
signature page thereto, and CitiCorp USA, Inc., as agent for the
Lenders. [13 pages].
Other instruments defining the rights of holders of long-term debt
of Terra Industries and its subsidiaries are not being filed
because the total amount of securities authorized under any such
instrument does not exceed 10 percent of the total assets of Terra
Industries and its subsidiaries on a consolidated basis. Terra
Industries agrees to furnish a copy of any instrument to the
Securities and Exchange Commission upon request.
13
18
10.1.1 Amended and Restated Deferred Compensation Agreement made as of
May 1, 1991, by and between Terra Industries and R. F. Richards
filed as Exhibit 10 to Terra Industries' Form 8-K dated September
30, 1991, is incorporated herein by reference. [4 pages].
10.1.2 Resolution adopted by the Personnel Committee of the Board of
Directors of Terra Industries with respect to supplemental
retirement benefits for certain senior executive officers of Terra
Industries, filed as Exhibit 10.4.2 to Terra Industries' Form 10-Q
for the fiscal quarter ended March 31, 1991, is incorporated
herein by reference. [1 page]
10.1.3 1992 Executive Incentive Plan of Terra Industries filed as Exhibit
10.1.12 to Terra Industries' Form 10-K for the year ended December
31, 1991, is incorporated herein by reference. [3 pages].
10.1.4 1992 Stock Incentive Plan of Terra Industries filed as Exhibit
10.1.6 to Terra Industries' Form 10-K for the year ended December
31, 1992, is incorporated herein by reference. [8 pages].
10.1.5 Form of Restricted Stock Agreement of Terra Industries under its
1992 Stock Incentive Plan filed as Exhibit 10.1.7 to Terra
Industries' Form 10-K for the year ended December 31, 1992, is
incorporated. herein by reference. [4 pages].
10.1.6 Form of Incentive Stock Option Agreement of Terra Industries under
its 1992 Stock Incentive Plan, filed as Exhibit 10.1.8 to Terra
Industries' Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference. [4 pages].
10.1.7 Form of Nonqualified Stock Incentive Agreement of Terra Industries
under its 1992 Stock Incentive Plan, filed as Exhibit 10.1.9 to
Terra Industries' Form 10-K for the year ended December 31, 1992,
is incorporated herein by reference. [4 pages].
10.1.8 1993 Incentive Award Program for Officers and Key Executives of
Terra Industries, filed as Exhibit 10.1.10 to Terra Industries'
Form 10-K for the year ended December 31, 1992, is incorporated
herein by reference. [3 pages].
10.1.9 Terra Industries Inc. Supplemental Deferred Compensation Plan
effective as of December 20, 1993. [19 pages.]
10.1.10 Excess Benefit Plan of Terra Industries as amended effective as of
January 1, 1992, filed as Exhibit 10.1.13 to Terra Industries'
Form 10-K for the year ended December 31, 1992, is incorporated
herein by reference. [2 pages].
10.1.11 Restricted Stock Agreement of Burton M. Joyce dated May 1, 1991,
filed as Exhibit 10.1.14 to Terra Industries' Form 10-K for the
year ended December 31, 1992, is incorporated herein by reference.
[2 pages].
10.1.12 Retirement/Consultant Agreement, dated as of May 13, 1993, by and
between Paul D. Foster and Terra International. [4 pages].
10.1.13 Consulting Agreement, dated as of December 30, 1993, by and
between Paul D. Foster and Terra International. [2 pages].
10.1.14 1994 Incentive Award Program for Officers and Key Executives of
Terra Industries. [3 pages].
14
19
10.2 Asset Sale and Purchase Agreement among Inspiration Consolidated
Copper Company and Cyprus Miami Mining Corporation and Cyprus
Christmas Mine Corporation dated as of June 30, 1989, filed as
Exhibit 10.19 to Terra Industries' Form 10-Q for the quarter ended
September 30, 1989, is incorporated herein by reference. [83
pages].
10.3.1 Stock Purchase Agreement, dated as of June 14, 1991, among
Minorco, Kirkdale Investments Limited, Terra Industries and Hudson
Holdings Corporation, filed as Exhibit 2 to Terra Industries' Form
8-K dated June 14, 1991, is incorporated herein by reference. [55
pages].
10.3.2 Amended and Restated Stock Purchase Agreement, dated as of July
31, 1991, among Minorco, Kirkdale Investments Limited, Terra
Industries and Hudson Holdings Corporation, filed as Exhibit 1 to
Terra Industries' Form 8-K dated July 31, 1991, is incorporated
herein by reference. [62 pages].
10.3.3 Option Agreement, dated as of June 14, 1991, among Kirkdale
Investments Limited and Terra Industries, filed as Exhibit 3 to
Terra Industries' Form 8-K dated June 14, 1991, is incorporated
herein by reference. [16 pages].
10.3.4 Amendment to Stock Option Agreement, dated July 31, 1991, among
Minorco, Kirkdale Investments Limited and Terra Industries, filed
as Exhibit 2 to Terra Industries' Form 8-K dated July 31, 1991, is
incorporated herein by reference. [3 pages].
10.4 Asset and Sale Purchase Agreement, dated as of April 8, 1993, by
and between Terra International, Inc., Terra International
(Canada) Inc. and ICI Canada Inc., filed as Exhibit A to Terra
Industries' Form 8-K dated April 8, 1993, is incorporated herein
by reference. [95 pages].
10.5 Asset Purchase Agreement, dated as of December 30, 1993, by and
between Terra International, Inc., The Upjohn Company and Asgrow
Florida Company, filed as Exhibit A to Terra Industries' Form 8-K
dated December 31, 1993, is incorporated herein by reference. [71
pages].
10.6 Lease, dated as of April 8, 1993, between W. Patrick Moroney and
Terra International (Canada) Inc. [42 pages].
13 Financial Review and Consolidated Financial Statements as
Contained in the Annual Report to Stockholders of Terra Industries
for the fiscal year ended December 31, 1993. [32 pages].
21 Subsidiaries of Terra Industries. [3 pages].
24 Powers of Attorney [8 pages].
15
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Terra Industries has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
TERRA INDUSTRIES INC.
By: /s/ George H. Valentine
-------------------------
George H. Valentine
Vice President, General Counsel and
Corporate Secretary
Date: March 3, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
Terra Industries and in the capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
* Chairman of the Board March 3, 1994
- -------------------------------
Reuben F. Richards
* Chief Executive Officer, President March 3, 1994
- ------------------------------- and Director
Burton M. Joyce (Principal Executive Officer)
* Vice President, Chief Financial March 3, 1994
- ------------------------------- Officer
Francis G. Meyer (Principal Financial Officer and
Principal Accounting Officer)
* Director March 3, 1994
- -------------------------------
Carol L. Brookins
* Director March 3, 1994
- -------------------------------
Edward M. Carson
* Director March 3, 1994
- -------------------------------
David E. Fisher
* Director March 3, 1994
- -------------------------------
Basil T.A. Hone
* Director March 3, 1994
- -------------------------------
John R. Norton III
* Director March 3, 1994
- -------------------------------
Henry R. Slack
*By: /s/ Francis G. Meyer
----------------------------------------
Francis G. Meyer
Attorney-in-Fact
16
21
INDEX TO FINANCIAL STATEMENT SCHEDULES, REPORTS AND CONSENTS
Page
----
Report of Deloitte & Touche on Financial Statement Schedules . . . . . . . . . . . . . . . . . . S-2
Consent of Deloitte & Touche . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Report of Price Waterhouse on Financial Statements for Fiscal Year Ended
December 31, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Consent of Price Waterhouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
Schedule No.
- ------------
II Amounts Receivable from Related Parties and Employees, Underwriters
Promoters, Employees Other than Related Parties:
Years Ended December 31, 1993, 1992 and 1991 . . . . . . . . . . . . . . . . . S-5
III Condensed Financial Information of Registrant . . . . . . . . . . . . . . . . . S-6
V Property, Plant & Equipment:
Years Ended December 31, 1993, 1992 and 1991. . . . . . . . . . . . . . . . . . S-10
VI Accumulated Depreciation, Depletion and Amortization of
Property, Plant and Equipment:
Years Ended December 31, 1993, 1992 and 1991. . . . . . . . . . . . . . . . . . S-11
VIII Valuation and Qualifying Accounts:
Years Ended December 31, 1993, 1992 and 1991. . . . . . . . . . . . . . . . . . S-12
IX Short-Term Borrowings:
Years Ended December 31, 1993, 1992 and 1991. . . . . . . . . . . . . . . . . . S-13
X Supplementary Income Statement Information:
Years Ended December 31, 1993, 1992 and 1991 . . . . . . . . . . . . . . . . . S-14
Financial statement schedules not included in this report have been omitted
because they are not applicable or the required information is shown in the
consolidated financial statements or the notes thereto.
S-1
22
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENT SCHEDULES
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF TERRA INDUSTRIES INC.:
We have audited the consolidated financial statements of Terra Industries
Inc. as of December 31, 1993 and 1992, and for each of the two years then
ended, and have issued our report thereon dated February 1, 1994; such
financial statements and report are included in the 1993 Annual Report to
Stockholders of Terra Industries Inc. and are incorporated herein by reference.
Our audits also included the Financial Statement Schedules of Terra Industries
Inc. listed in Item 14(a) of this Form 10-K. These Financial Statement
Schedules are the responsibility of the management of Terra Industries Inc.
Our responsibility is to express an opinion based on our audits. In our
opinion, such Financial Statement Schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE
Omaha, Nebraska
February 1, 1994
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Prospectuses constituting
part of the Registration Statements on Form S-8 (Registration Nos. 33-46735,
33-46734, 33-30058 and 33-4939) and Registration Statements on Form S-3
(Registration Nos. 2-90808, 2-84876 and 2-84669) of Terra Industries Inc. of
our report dated February 1, 1994, included in the 1993 Annual Report to
Stockholders of Terra Industries Inc. which is incorporated by reference in
this Form 10-K. We also consent to the incorporation by reference in such
Prospectuses of our report on the Financial Statement Schedules, appearing
above.
DELOITTE & TOUCHE
Omaha, Nebraska
February 28, 1994
S-2
23
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of
Terra Industries Inc.
In our opinion, the consolidated financial statements listed in the index under
Item 14(a)(1) and (2) on page 11 of the 1993 Annual Report on Form 10-K present
fairly, in all material respects, the results of operations, cash flows and
changes in stockholders' equity of Terra Industries Inc. and its subsidiaries
for the year ended December 31, 1991, in conformity with generally accepted
accounting principles. 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 audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above. We have not audited the
consolidated financial statements of Terra Industries Inc. for any period
subsequent to December 31,1991.
PRICE WATERHOUSE
February 13, 1992
New York, New York
S-3
24
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (Registration Nos.
2-90808, 2-84876 and 2-84669) and Form S-8 (Registration Nos. 33-30058,
33-4939, 33-46734 and 33-46735) of Terra Industries Inc. of our report dated
February 13, 1992 appearing on page S-3 of this Annual Report on Form 10-K.
PRICE WATERHOUSE
New York, New York
March 1, 1994
S-4
25
SCHEDULE II
TERRA INDUSTRIES INC.
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
Years Ended December 31, 1993, 1992, and 1991
---------------------------------------------
(in thousands)
Ending Balance
----------------------
Beginning Non-
Name of Debtor Balance Additions Deductions Current Current
- -----------------------------------------------------------------------------------------------------------
Year ended December 31, 1993:
- -----------------------------
Not applicable
Year ended December 31, 1992:
- -----------------------------
Alloy Research, Inc. $ 5,000 $ 1,500 $ (6,500) (a) $ - $ -
Employees as a group 12 - (12) - -
------- ------- -------- ------- -------
TOTAL $ 5,012 $ 1,500 $ (6,512) $ - $ -
------- ------- -------- ------- -------
------- ------- -------- ------- -------
Year ended December 31, 1991:
- -----------------------------
Alloy Research, Inc. $ - $ 5,000 $ - $ 5,000 $ -
Employees as a group 29 - (17) (b) 12 -
------- ------- -------- ------- -------
Total U.S. Subsidiaries 29 5,000 (17) 5,012 -
------- ------- -------- ------- -------
NON-UNITED STATES
Officers/Directors
S. R. Horne 128 - (128) (b) - -
Employees as a group 1,065 - (1,065) (b) - -
------- ------- -------- ------- -------
Total Non-U.S. Subsidiaries 1,193 - (1,193) - -
------- ------- -------- ------- -------
TOTAL $ 1,222 $ 5,000 $ (1,210) $ 5,012 $ -
------- ------- -------- ------- -------
------- ------- -------- ------- -------
(a) For 1992 the Corporation reclassified the accounts receivable of
Alloy Research, Inc. to Net Assets of Discontinued Operations.
(b) Represents amounts collected.
S-5
26
TERRA INDUSTRIES INC.
(Parent Company)
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF FINANCIAL POSITION
(in thousands) December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and short-term investments $ 24,249 $ 84,495
Accounts receivable, net 1,016 323
Deferred tax asset - current 26,011 22,660
Other current assets 4,337 226
- ------------------------------------------------------------------------------------------------------------------------------------
Total current assets 55,613 107,704
- ------------------------------------------------------------------------------------------------------------------------------------
Investment in and advances to Terra International, Inc. 259,961 153,269
Deferred tax asset - non-current 24,742 23,599
Investment in and advances to discontinued subsidiaries 3,488 43,693
Other assets 9,226 2,057
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 353,030 $ 330,322
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Income taxes payable $ 12,912 $ 10,656
Accrued and other liabilities 8,466 9,980
- ------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 21,378 20,636
- ------------------------------------------------------------------------------------------------------------------------------------
Long-term debt 72,057 72,057
Other liabilities 16,127 16,153
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 109,562 108,846
- ------------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Capital stock 122,257 106,243
Paid-in capital 516,128 531,609
Accumulated deficit (394,917) (416,376)
- ------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 243,468 221,476
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 353,030 $ 330,322
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying Notes to the Condensed Financial Statements.
S-6
27
TERRA INDUSTRIES INC.
(Parent Company)
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(in thousands, except per-share amounts) For the Year Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME
Equity in earnings of Terra International, Inc. $ 26,691 $ 10,029 $ 17,749
Interest and other income 140 2,808 950
- ------------------------------------------------------------------------------------------------------------------------------------
Total income 26,831 12,837 18,699
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Selling, general and administrative expense 5,929 4,813 8,480
Depreciation and amortization --- --- 99
Interest expense 5,853 5,760 8,040
Income tax benefit (7,796) (2,430) (9,953)
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 3,986 8,143 6,666
- ------------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 22,845 4,694 12,033
Discontinued operations:
Equity in operations of discontinued
subsidiaries, net of taxes --- (4,025) 1,192
Gain (loss) on disposition, net of taxes --- 2,360 (170,000)
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary items and
cumulative effect of accounting changes 22,845 3,029 (156,775)
Extraordinary gain on early retirement of debt --- --- 5,115
Cumulative effect of accounting changes --- 28,000 ---
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 22,845 31,029 (151,660)
Cash dividends paid to common stockholders (1,386) --- ---
Accumulated deficit - beginning of year (416,376) (447,405) (295,745)
- ------------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED DEFICIT - END OF YEAR $ (394,917) $ (416,376) $ (447,405)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) PER COMMON SHARE:
Continuing operations $ 0.33 $ 0.06 $ 0.18
Discontinued operations --- (0.02) (2.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary items 0.33 0.04 (2.33)
Extraordinary gain on early retirement of debt --- --- 0.07
Cumulative effect of accounting changes --- 0.41 ---
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 0.33 $ 0.45 $ (2.26)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying Notes to the Condensed Financial Statements.
S-7
28
TERRA INDUSTRIES INC.
(Parent Company)
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
(in thousands) For the Year Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) $ 22,845 $ 31,029 $ (151,660)
Adjustments to reconcile net income to
net cash used by operations:
Equity in earnings of subsidiaries (26,691) (10,029) (17,749)
Loss from discontinued operations --- 1,665 168,808
Gain on early retirement of debentures --- --- (5,115)
Cumulative effect of accounting change --- (28,000) ---
Deferred income taxes (4,494) (19,643) (300)
Other non-cash items 81 81 200
Change in working capital components (4,062) 7,995 (385)
Other (7,256) 1,164 (2,459)
- ------------------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY OPERATIONS (19,577) (15,738) (8,660)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Proceeds from asset sales and
discontinued operations 40,205 30,425 99,582
Capital contributions to subsidiaries (30,000) --- ---
Dividends from unconsolidated subsidiaries --- 30 4,092
- ------------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 10,205 30,455 103,674
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net short-term debt decrease --- --- (600)
Retirement of convertible debentures --- --- (14,430)
Dividend paid to common stockholders (1,386) --- ---
Stock issuance/repurchase - net 513 --- ---
Advances (to) from subsidiaries - net (50,001) 4,207 (14,447)
- ------------------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (50,874) 4,207 (29,477)
- ------------------------------------------------------------------------------------------------------------------------------------
(DECREASE) INCREASE IN CASH (60,246) 18,924 65,537
CASH AND INVESTMENTS AT BEGINNING OF YEAR 84,495 65,571 34
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND INVESTMENTS AT END OF YEAR $ 24,249 $ 84,495 $ 65,571
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST PAID $ 6,229 $ 6,208 $ 8,595
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TAXES PAID $ 3,320 $ 4,208 $ 9
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying Notes to the Condensed Financial Statements.
S-8
29
TERRA INDUSTRIES INC.
(Parent Company)
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The Condensed Financial Statements include the Registrant only and reflect the
equity method of accounting for its wholly owned subsidiary, Terra
International, Inc. (International). Equity in International's 1992 earnings
includes the deduction of $5.7 million for the cumulative effect of accounting
changes to recognize the prior service cost of providing post-retirement
medical benefits to International's employee's.
Equity in the financial results of the base metals, coal, leasing and other
discontinued businesses have been included in discontinued operations.
2. LONG-TERM DEBT
Long-term debt at December 31, 1993 and 1992 consists of 8.5% Convertible
Subordinated Debentures (Debentures) of $72,057,000 that is due 2012. Sinking
fund payments of $5,175,000 per year begin in 1998. The fair value, based upon
redemption provisions, at December 31, 1993 is $74.4 million and at December
31, 1992 was $75.3 million.
The Debentures are convertible into Common Shares any time prior to maturity,
unless previously redeemed, at a conversion price of $8.083 per share. The
Debentures are subject to redemption, upon not less than 20 days notice by
mail, at any time, as a whole or in part, at the election of the Registrant.
The redemption price, expressed as a percent of the principal amount of the
Debentures to be redeemed, is 103.40% until May 31, 1994, 102.55% until May 31,
1995 and decreasing yearly thereafter to 100% at June 1, 1997.
3. COMMITMENTS AND CONTINGENCIES
The Registrant is committed to a non-cancelable office lease expiring in 1998.
Total minimum rental payments, are: 1994, $3.1 million; 1995, $3.1 million;
1996, $3.2 million; 1997, $3.3 million and 1998, $1.7 million. These amounts
are not reduced by sublease rentals, which in 1993 were $2.0 million.
The Registrant is contingently liable for retiree medical benefits of employees
of coal mining operations sold on January 12, 1993. Under the purchase
agreement, the purchaser agreed to indemnify the Registrant against its
obligations under certain employee benefit plans. Due to the Coal Industry
Retiree Health Benefit Act of 1992, certain retiree medical benefits of union
coal miners have become statutorily mandated, and all companies owning 50
percent or more of any company liable for such benefits as of certain specified
dates becomes liable for such benefits if the company directly liable is unable
to pay them. As a result, if the purchaser becomes unable to pay its retiree
medical obligations assumed pursuant to the sale, the Registrant may have to
pay such amount. The Registrant has estimated that the present value of
liabilities for which it retains contingent responsibility approximates $12
million at December 31, 1993. In the event the Registrant would be required to
assume this liability, mineral reserves associated with the sold coal
subsidiary would revert to the Registrant.
The Registrant had letters of credit outstanding totaling $13.0 million at
December 31, 1993 and $14.1 million at December 31, 1992, guaranteeing various
insurance and financing activities. Short-term investments of $13.0 million at
December 31, 1993 and 1992 are restricted to collateralize certain of the
letters of credit.
4. INCOME TAXES
The Registrant files a consolidated U.S. federal tax return. The principal
operating subsidiaries provide for federal income taxes according to tax
sharing agreements which allocate the benefits of operating losses and
differences between financial reporting and income tax basis results to the
Registrant.
S-9
30
SCHEDULE V
TERRA INDUSTRIES INC.
PROPERTY, PLANT & EQUIPMENT
Years Ended December 31, 1993, 1992, and 1991
----------------------------------------------
(in thousands)
Balance at Balance at
Beginning Additions Discontinued End of
Classification of Period at Cost Retirements Other Operations Period
- -------------------------------------------------------------------------------------------------------------------------------
(a)
Year Ended December 31, 1993:
- -----------------------------
Land and buildings $ 59,589 $ 6,960 $ (206) $ - $ - $ 66,343
Plant and equipment 152,766 28,694 (b) (2,365) - - 179,095
Mine developement - - - - - -
-------- -------- --------- ------- ---------- ----------
Total $ 212,355 $ 35,654 $ (2,571) $ - $ - $ 245,438
-------- -------- --------- ------- ---------- ----------
-------- -------- --------- ------- ---------- ----------
Year Ended December 31, 1992:
- -----------------------------
Land and buildings $ 58,688 $ 4,751 $ (382) $ (296) $ (3,172) $ 59,589
Plant and equipment 162,303 13,093 (2,360) 274 (20,544) 152,766
Mine development 4,565 - - - (4,565) -
-------- -------- --------- ------- ---------- ----------
Total $ 225,556 $ 17,844 $ (2,742) $ (22) $ (28,281) $ 212,355
-------- -------- --------- ------- ---------- ----------
-------- -------- --------- ------- ---------- ----------
Year Ended December 31, 1991:
- -----------------------------
Land and buildings $ 56,249 $ 2,615 $ (176) $ - $ - $ 58,688
Plant and equipment 427,611 13,182 (2,749) - (275,741) 162,303
Mine developement 140,314 522 - - (136,271) 4,565
-------- -------- --------- ------- ---------- ----------
Total $ 624,174 $ 16,319 $ (2,925) $ - $(412,012) $ 225,556
-------- -------- --------- ------- ---------- ----------
-------- -------- --------- ------- ---------- ----------
(a) Discontinued operations include the Leasing and Construction
Materials segments in 1992 and the Base Metals segment in 1991.
(b) Amounts included in related to acquisitions during 1993 are $12,301.
S-10
31
SCHEDULE VI
TERRA INDUSTRIES INC.
ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
Years Ended December 31, 1993, 1992, and 1991
(in thousands)
Additions
Balance at Charged to Balance at
Beginning Costs and Discontinued End of
Classification of Period Expenses Retirements Other Operations Period
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993:
- -----------------------------
Land and buildings $ 24,201 $ 2,546 $ (77) $ - $ - $ 26,670
Plant and equipment 96,185 14,360 (2,447) - - 108,098
Mine development - - - - - -
-------- ------- -------- ------- ------- ------
Total $ 120,386 $ 16,906 $ (2,524) $ - $ - $ 134,768
-------- ------- -------- ------- ------- ------
-------- ------- -------- ------- ------- ------
Year Ended December 31, 1992:
- -----------------------------
Land and buildings $ 22,397 $ 2,556 $ (193) $ - $ (559) $ 24,201
Plant and equipment 90,964 12,438 (2,223) - (4,994) 96,185
Mine development - - - - - -
-------- ------- -------- ------- ------- ------
Total $ 113,361 $ 14,994 $ (2,416) $ - $ (5,553) $ 120,386
-------- ------- -------- ------- ------- ------
-------- ------- -------- ------- ------- ------
Year Ended December 31, 1991:
- -----------------------------
Land and buildings $ 19,295 $ 2,720 $ (72) $ 454 (a) $ - $ 22,397
Plant and equipment 209,454 13,547 (2,449) - (129,588) 90,964
Mine development 68,206 - - - (68,206) -
-------- ------- -------- ------- ------- ------
Total $ 296,955 $ 16,267 $ (2,521) $ 454 $(197,794) $ 113,361
-------- ------- -------- ------- ------- ------
-------- ------- -------- ------- ------- ------
(a) Discontinued operations included the Leasing and Construction
Materials segments in 1992 and the Base Metals segment in 1991.
S-11
32
SCHEDULE VIII
TERRA INDUSTRIES INC.
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1993, 1992, and 1991
---------------------------------------------
(in thousands)
Additions
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Deductions of Period
- -----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993:
- -----------------------------
Allowance for Doubtful Accounts $ 6,427 $ 1,758 $ (2,397) (a) $ 5,788
Year Ended December 31, 1992:
- -----------------------------
Allowance for Doubtful Accounts $ 6,296 $ 4,026 $ (3,895) (a) $ 6,427
Year Ended December 31, 1991:
- -----------------------------
Allowance for Doubtful Accounts $ 4,557 $ 5,108 $ (3,369) (a) $ 6,296
(a) Write-offs, net of recoveries.
S-12
33
SCHEDULE IX
TERRA INDUSTRIES INC.
SHORT-TERM BORROWINGS
Years Ended December 31, 1993, 1992, and 1991
---------------------------------------------
(in thousands)
Average
Maximum Daily Weighted
Weighted Amount Amount Average
Balance Average Outstanding Outstanding Interest Rate
Category of Aggregate at End Interest During the During the During the
Short-term Borrowings of Period Rate Period Period (a) Period (a)
- -------------------------------------------------------------------------------------------------------------------------------
1993 Bank and Other Borrowings $ 7,313 4.65% $ 79,660 $ 23,163 4.5%
1992 Bank and Other Borrowings $ - - $ 36,000 $ 8,324 5.0%
1991 Bank and Other Borrowings $ 200 6.5% $ 51,030 $ 11,680 8.0%
(a) Based on number of days during the year.
S-13
34
SCHEDULE X
TERRA INDUSTRIES INC.
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years Ended December 31, 1993, 1992, and 1991
---------------------------------------------
(in thousands)
Charged to Cost and Expenses
-------------------------------------------------------------------
Item 1993 1992 1991 (b)
- ---- ---- ---- --------
1. Maintenance and repairs (a) (a) (a)
2. Amortization of intangible assets,
preoperating costs and similar deferrals $ 13,618 $ 13,142 $ 12,899
3. Taxes, other than payroll and income taxes (a) (a) (a)
4. Royalties (a) (a) (a)
5. Advertising (a) (a) (a)
(a) Less than one percent of total revenues.
(b) Amounts have been restated to reflect discontinued operations.
S-14
35
EXHIBIT INDEX
3.1.1 Articles of Restatement of Terra Industries filed with the State
of Maryland on September 11, 1990, filed as Exhibit 3.1 to Terra
Industries' Form 10-K for the year ended December 31, 1990, is
incorporated herein by reference. [8 pages].
3.1.2 Articles of Amendment of Terra Industries filed with the State of
Maryland on May 6, 1992, filed as Exhibit 3.1.2 to Terra
Industries' Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference. [2 pages].
3.2 By-Laws of Terra Industries, as amended through August 7, 1991,
filed as Exhibit 3 to Terra Industries' Form 8-K dated September
30, 1991, is incorporated herein by reference. [12 pages].
4.1.1 Indenture dated as of May 31, 1987, from Terra Industries to
Mellon Bank, N.A., as Trustee, including form of Debenture, filed
as Exhibit 4 to Amendment No. 2 to the Registration Statement on
Form S-3 (Registration No. 33-14171) filed by Terra Industries on
June 11, 1987, is incorporated herein by reference. [105 pages].
4.1.2 Revolving Credit Agreement dated as of November 24, 1992, among
Terra International, Inc., CitiCorp USA, Inc., Mellon Bank, N.A.,
Continental Bank N.A., First Bank National Association,
NationsBank of Texas, N.A. and Rabobank Nederland, filed as
Exhibit 4.1.2 to Terra Industries' Form 10-K for the year ended
December 31, 1992, is incorporated herein by reference.
4.1.3 First Amendment Agreement, dated as of March 26, 1993, by and
between Terra International, Inc., the Lenders listed on the
signature page thereto, and CitiCorp USA, Inc., as agent to
Lenders. [17 pages].
4.1.4 Second Amendment Agreement, dated as of December 30, 1993, by and
between Terra International, Inc., the Lenders listed on the
signature page thereto, and CitiCorp USA, Inc., as agent for the
Lenders. [13 pages].
Other instruments defining the rights of holders of long-term debt
of Terra Industries and its subsidiaries are not being filed
because the total amount of securities authorized under any such
instrument does not exceed 10 percent of the total assets of Terra
Industries and its subsidiaries on a consolidated basis. Terra
Industries agrees to furnish a copy of any instrument to the
Securities and Exchange Commission upon request.
10.1.1 Amended and Restated Deferred Compensation Agreement made as of
May 1, 1991, by and between Terra Industries and R. F. Richards
filed as Exhibit 10 to Terra Industries' Form 8-K dated September
30, 1991, is incorporated herein by reference. [4 pages].
10.1.2 Resolution adopted by the Personnel Committee of the Board of
Directors of Terra Industries with respect to supplemental
retirement benefits for certain senior executive officers of Terra
Industries, filed as Exhibit 10.4.2 to Terra Industries' Form 10-Q
for the fiscal quarter ended March 31, 1991, is incorporated
herein by reference. [1 page]
10.1.3 1992 Executive Incentive Plan of Terra Industries filed as Exhibit
10.1.12 to Terra Industries' Form 10-K for the year ended December
31, 1991, is incorporated herein by reference. [3 pages].
10.1.4 1992 Stock Incentive Plan of Terra Industries filed as Exhibit
10.1.6 to Terra Industries' Form 10-K for the year ended December
31, 1992, is incorporated herein by reference. [8 pages].
36
10.1.5 Form of Restricted Stock Agreement of Terra Industries under its
1992 Stock Incentive Plan filed as Exhibit 10.1.7 to Terra
Industries' Form 10-K for the year ended December 31, 1992, is
incorporated. herein by reference. [4 pages].
10.1.6 Form of Incentive Stock Option Agreement of Terra Industries under
its 1992 Stock Incentive Plan, filed as Exhibit 10.1.8 to Terra
Industries' Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference. [4 pages].
10.1.7 Form of Nonqualified Stock Incentive Agreement of Terra Industries
under its 1992 Stock Incentive Plan, filed as Exhibit 10.1.9 to
Terra Industries' Form 10-K for the year ended December 31, 1992,
is incorporated herein by reference. [4 pages].
10.1.8 1993 Incentive Award Program for Officers and Key Executives of
Terra Industries, filed as Exhibit 10.1.10 to Terra Industries'
Form 10-K for the year ended December 31, 1992, is incorporated
herein by reference. [3 pages].
10.1.9 Terra Industries Inc. Supplemental Deferred Compensation Plan
effective as of December 20, 1993. [19 pages.]
10.1.10 Excess Benefit Plan of Terra Industries as amended effective as of
January 1, 1992, filed as Exhibit 10.1.13 to Terra Industries'
Form 10-K for the year ended December 31, 1992, is incorporated
herein by reference. [2 pages].
10.1.11 Restricted Stock Agreement of Burton M. Joyce dated May 1, 1991,
filed as Exhibit 10.1.14 to Terra Industries' Form 10-K for the
year ended December 31, 1992, is incorporated herein by reference.
[2 pages].
10.1.12 Retirement/Consultant Agreement, dated as of May 13, 1993, by and
between Paul D. Foster and Terra International. [4 pages].
10.1.13 Consulting Agreement, dated as of December 30, 1993, by and
between Paul D. Foster and Terra International. [2 pages].
10.1.14 1994 Incentive Award Program for Officers and Key Executives of
Terra Industries. [3 pages].
10.2 Asset Sale and Purchase Agreement among Inspiration Consolidated
Copper Company and Cyprus Miami Mining Corporation and Cyprus
Christmas Mine Corporation dated as of June 30, 1989, filed as
Exhibit 10.19 to Terra Industries' Form 10-Q for the quarter ended
September 30, 1989, is incorporated herein by reference. [83
pages].
10.3.1 Stock Purchase Agreement, dated as of June 14, 1991, among
Minorco, Kirkdale Investments Limited, Terra Industries and Hudson
Holdings Corporation, filed as Exhibit 2 to Terra Industries' Form
8-K dated June 14, 1991, is incorporated herein by reference. [55
pages].
10.3.2 Amended and Restated Stock Purchase Agreement, dated as of July
31, 1991, among Minorco, Kirkdale Investments Limited, Terra
Industries and Hudson Holdings Corporation, filed as Exhibit 1 to
Terra Industries' Form 8-K dated July 31, 1991, is incorporated
herein by reference. [62 pages].
10.3.3 Option Agreement, dated as of June 14, 1991, among Kirkdale
Investments Limited and Terra Industries, filed as Exhibit 3 to
Terra Industries' Form 8-K dated June 14, 1991, is incorporated
herein by reference. [16 pages].
37
10.3.4 Amendment to Stock Option Agreement, dated July 31, 1991, among
Minorco, Kirkdale Investments Limited and Terra Industries, filed
as Exhibit 2 to Terra Industries' Form 8-K dated July 31, 1991, is
incorporated herein by reference. [3 pages].
10.4 Asset and Sale Purchase Agreement, dated as of April 8, 1993, by
and between Terra International, Inc., Terra International
(Canada) Inc. and ICI Canada Inc., filed as Exhibit A to Terra
Industries' Form 8-K dated April 8, 1993, is incorporated herein
by reference. [95 pages].
10.5 Asset Purchase Agreement, dated as of December 30, 1993, by and
between Terra International, Inc., The Upjohn Company and Asgrow
Florida Company, filed as Exhibit A to Terra Industries' Form 8-K
dated December 31, 1993, is incorporated herein by reference. [71
pages].
10.6 Lease, dated as of April 8, 1993, between W. Patrick Moroney and
Terra International (Canada) Inc. [42 pages].
13 Financial Review and Consolidated Financial Statements as
Contained in the Annual Report to Stockholders of Terra Industries
for the fiscal year ended December 31, 1993. [32 pages].
21 Subsidiaries of Terra Industries. [3 pages].
24 Powers of Attorney [8 pages].