<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission File No. 1-12825
MORTON INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Indiana 36-4140798
- ---------------------------------------- ------------------------------------
(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
100 North Riverside Plaza, Chicago, Illinois 60606-1596
- -------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (312) 807-2000
--------------
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Class Outstanding at December 31, 1998
- ------------------------------ --------------------------------
Common Stock, $1.00 par value 120,759,195 shares
<PAGE>
MORTON INTERNATIONAL, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
PAGE
-----
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income and Retained
Earnings - Three months and Six months ended
December 31, 1998 and 1997 3
Consolidated Balance Sheets - December 31, 1998
and June 30, 1998 4
Consolidated Statements of Cash Flows -
Six months ended December 31, 1998 and 1997 5
Notes to Consolidated Financial Statements -
December 31, 1998 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-12
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
2
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
MORTON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
----------------------------- ------------------------------
1998 1997 1998 1997
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 640.6 $ 664.9 $ 1,234.4 $ 1,266.2
Interest, royalties and sundry income 9.4 8.0 15.6 18.1
------------- -------------- -------------- -------------
650.0 672.9 1,250.0 1,284.3
Deductions from income:
Cost of products sold 441.0 451.9 844.6 860.7
Selling, administrative and general expense 106.6 105.5 207.4 200.4
Research and development expense 15.8 15.6 30.7 30.0
Interest expense 7.7 6.0 14.1 11.6
Amortization of goodwill 3.3 3.0 6.6 6.0
------------- ------------- -------------- -------------
574.4 582.0 1,103.4 1,108.7
------------- ------------- -------------- -------------
Income before income taxes 75.6 90.9 146.6 175.6
Income taxes 27.2 32.7 52.8 63.2
------------- ------------- -------------- -------------
Net income 48.4 58.2 93.8 112.4
Retained earnings at beginning of period 1,869.3 1,739.3 1,840.3 1,706.0
Cash dividends: $.13 and $.12 per share for the
three months ended December 31, 1998 and 1997,
respectively; $.26 and $.24 per share for the six months
ended December 31, 1998 and 1997, respectively (15.8) (15.7) (32.1) (32.0)
Exercise of stock options ( .5) (1.4) ( .6) (6.0)
------------- ------------- -------------- -------------
Retained earnings at end of period $ 1,901.4 $ 1,780.4 $ 1,901.4 $ 1,780.4
============= ============= ============== =============
Basic earnings per share $ .40 $ .44 $ .76 $ .84
============= ============= ============== =============
Diluted earnings per share $ .40 $ .44 $ .76 $ .83
============= ============= ============== =============
Shares used in computation (in thousands)
Basic earnings per share 122,929 133,735
============== =============
Diluted earnings per share 123,967 135,816
============== =============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
MORTON INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
December 31 June 30
1998 1998
----------------- ---------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 169.5 $ 138.0
Receivables 494.5 468.6
Inventories 432.5 381.0
Prepaid expenses and other 126.9 125.4
--------------- ---------------
Total current assets 1,223.4 1,113.0
--------------- ---------------
Other assets
Cost in excess of net assets of businesses
acquired, less amortization 372.9 357.4
Investments in affiliates 75.5 73.9
Miscellaneous 133.8 121.9
--------------- ---------------
582.2 553.2
--------------- ---------------
Property, plant and equipment, at cost 1,867.8 1,773.1
Less allowances for depreciation 966.3 891.4
--------------- ---------------
901.5 881.7
--------------- ---------------
$ 2,707.1 $ 2,547.9
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable and current portion of long-term debt $ 215.4 $ 22.6
Accounts payable 238.1 215.6
Accrued salaries, wages and other compensation 50.6 52.1
Other accrued expenses 157.0 159.3
Income taxes 22.7 22.1
--------------- ---------------
Total current liabilities 683.8 471.7
--------------- ---------------
Long-term debt, less current portion 222.3 222.5
Deferred income taxes 73.3 60.9
Accrued postretirement benefits other than pensions 158.6 157.9
Other noncurrent liabilities 107.5 103.8
--------------- ---------------
Total noncurrent liabilities 561.7 545.1
--------------- ---------------
Shareholders' equity
Preferred Stock (par value $1.00 per share)
Authorized - 25.0 shares, none issued
Common Stock (par value $1.00 per share)
Authorized - 500.0 shares
Issued-140.1 shares at December 31 and
June 30, 1998 140.1 140.1
Retained earnings 1,901.4 1,840.3
Accumulated other comprehensive income (5.9) (19.2)
Unamortized restricted stock award ( .6) ( .7)
--------------- ---------------
2,035.0 1,960.5
Less cost of common stock in treasury- 19.4 shares
at December 31, 1998 and 13.3 shares at June 30, 1998 573.4 429.4
--------------- ---------------
Total shareholders' equity 1,461.6 1,531.1
--------------- ---------------
$ 2,707.1 $ 2,547.9
=============== ===============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
MORTON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
<TABLE>
<CAPTION>
Cash Provided (Used)
Six Months Ended
December 31
--------------------------------------
1998 1997
--------------- --------------
<S> <C> <C>
Operating Activities
Net income $ 93.8 $ 112.4
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 69.7 67.1
Deferred income taxes 3.6 .1
Undistributed earnings of affiliates (3.4) (3.9)
Changes in operating assets and liabilities
net of effects of businesses acquired:
Receivables 5.0 (58.2)
Inventories and prepaid expenses (37.2) (43.6)
Accounts payable and accrued expenses (2.7) (34.3)
Accrued income taxes (1.8) (11.3)
Other - net (11.1) 6.0
--------------- --------------
Net cash provided by operating activities 115.9 34.3
--------------- --------------
Investing Activities
Purchase of property, plant and equipment (55.5) (71.3)
Proceeds from property and other asset disposals 1.7 4.9
Cash invested in businesses acquired (30.7) ( .6)
Investment in affiliates ( .8) (3.9)
--------------- --------------
Net cash used for investing activities (85.3) (70.9)
--------------- --------------
Financing Activities
Purchase of common stock for treasury (145.8) (239.2)
Net increase (decrease) of short-term notes payable 188.2 (8.7)
Repayment of long-term debt ( .1) ( .2)
Stock option transactions 1.0 6.5
Dividends paid (32.1) (32.0)
--------------- --------------
Net cash provided (used) by financing activities 11.2 (273.6)
--------------- --------------
Effect of foreign exchange rate changes on cash
and cash equivalents (10.3) 4.0
--------------- --------------
Increase (decrease) in cash and cash equivalents 31.5 (306.2)
Cash and cash equivalents at beginning of year 138.0 430.3
--------------- --------------
Cash and cash equivalents at end of period $ 169.5 $ 124.1
=============== ==============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
MORTON INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Basis of Presentation
- ---------------------
The interim financial statements have been prepared in accordance with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore, do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six months ended
December 31, 1998 are not necessarily indicative of the results to be expected
for the fiscal year ending June 30, 1999. It is suggested that the financial
statements be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report to Shareholders and Annual
Report on Form 10-K for the fiscal year ended June 30, 1998.
Earnings Per Share
- ------------------
The numerators for the earnings per share disclosures on the accompanying
unaudited Consolidated Statements of Income and Retained Earnings are the same
as the income numbers shown on that Statement. Following is the computation of
the denominator for the basic and diluted earnings per share calculations:
Six months ended
December 31
-----------------------
(in thousands)
1998 1997
---- ----
Denominator for basic earnings per share 122,929 133,735
-weighted average shares outstanding
Dilutive effect of employee stock options 1,038 2,081
------- -------
Denominator for diluted earnings per share 123,967 135,816
======= =======
Comprehensive Income
- --------------------
As of July 1, 1998, the Company adopted the Financial Accounting Standards Board
Statement No. 130, "Reporting Comprehensive Income." Statement 130 establishes
new rules for the reporting and display of comprehensive income and its
components; however, the adoption of this Statement had no impact on the
Company's net income. Statement 130 requires unrealized gains or losses on the
Company's foreign currency translation adjustments, which prior to adoption were
reported separately in shareholders' equity, to be included in other
comprehensive income. The June 30, 1998 Consolidated Balance Sheet has been
reclassified to conform to the requirements of Statement 130.
6
<PAGE>
The components of comprehensive income, net of tax, for the three and six month
periods ended December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
------------------ -----------------
1998 1997 1998 1997
---- ---- ---- ----
(in millions)
<S> <C> <C> <C> <C>
Net income $48.4 $58.2 $ 93.8 $112.4
Foreign currency translation adjustments (.2) (2.3) 13.3 (4.1)
------ ------ ------ -------
Comprehensive income $48.2 $55.9 $107.1 $108.3
===== ===== ====== ======
</TABLE>
Accumulated other comprehensive income on the accompanying Consolidated Balance
Sheets is net of deferred income tax benefits of $4.2 million and $16.7 million
at December 31 and June 30, 1998, respectively.
Inventories
- -----------
Inventories are stated at the lower of cost (principally last-in, first-out
method) or market. Components of inventories are as follows:
Dec. 31 June 30
1998 1998
------- -------
Finished products and work-in-process $342.3 $294.6
Materials and supplies 90.2 86.4
------ ------
$432.5 $381.0
Item 2. Management's Discussion and Analysis of Financial Condition
- --------------------------------------------------------------------
and Results of Operations
-------------------------
Results of Operations
- ---------------------
Net income for the second quarter of fiscal 1999 was $48.4 million, down 17
percent from $58.2 million for the second quarter of fiscal 1998. Sales of
$640.6 million for the second quarter of the current fiscal year showed a 4
percent decrease from the second quarter of fiscal 1998. While specialty
chemicals business sales results were somewhat below last year, the major reason
for the sales decline was the lack of ice control salt due to mild weather in
the current year second quarter. Earnings per share were down 9 percent to 40
cents for the quarter on both a basic and diluted basis.
For the six month period ending December 31, 1998, sales were $1.2 billion, 3
percent below the same period in the prior year. Net income for the first six
months of fiscal 1999 was $93.8 million versus $112.4 million for the first six
months of fiscal 1998, a 17 percent decrease. Basic earnings per share were 76
cents for the first six months of fiscal 1999 compared to 84 cents for the same
period of fiscal 1998. Fully diluted earnings per share
7
<PAGE>
decreased 8 percent from 83 cents in the first six months of fiscal 1998 to 76
cents in the same period of fiscal 1999.
In the second quarter of fiscal 1999, specialty chemical sales were down 1
percent to $423.9 million versus $426.6 million in the same period of fiscal
1998. Volume declined by 3 percent in the quarter versus last year's second
quarter, and price was down 2 percent, but positive foreign exchange comparisons
and the results of three recent acquisitions partially offset the declines. Of
Morton's four business groups, only the electronic materials group was down as a
result of both volume and price declines. Second quarter operating earnings for
specialty chemicals were $55.6 million, down 8 percent from the second quarter
of fiscal 1998. Much of the decline was related to weakness in both electronic
materials and industrial coatings. Operating margins for the quarter were 13.1
percent versus 14.2 percent in last year's second quarter.
Product lines which had good sales growth in the second quarter included
packaging adhesives, waterbased polymers, performance chemicals, plastic
additives, automotive coatings and powder coatings. The combined sales of these
product lines contributed 61 percent of the group's total sales and grew 6
percent over the second quarter of fiscal 1998. The sales improvement in
packaging adhesives came from the acquisition of Poliolchimica, S.p.A. in the
first quarter. Product lines with positive earnings comparisons in the quarter
were packaging adhesives, waterbased polymers, plastic additives, automotive
coatings and powder coatings. Earnings for these product lines constituted 63
percent of the group's total earnings and collectively showed a 17 percent
improvement over the second quarter of fiscal 1998.
Specialty chemical sales for the first six months of fiscal 1999 were $850.2
million versus $860.3 million for the first six months of fiscal 1998, a 1
percent decline, with the electronic materials group the only one which showed
negative sales comparisons. Results for the first six months of fiscal 1999 were
favorably impacted by $22.8 million sales from the three acquisitions subsequent
to the second quarter of fiscal 1998. Operating earnings for the specialty
chemicals group for the first six months of fiscal 1999 declined by 10 percent
to $120.0 million from $133.5 million for the first six months of fiscal 1998.
The most significant earnings declines were in electronic materials and
industrial coatings. Chemical operating margins for the first six months were
14.1 percent versus 15.5 percent for the prior year.
Among the product lines that had good sales improvement during the first six
months of fiscal 1999 were packaging adhesives, waterbased polymers, performance
chemicals and powder coatings. Cumulatively, they contributed 45 percent to
chemical group sales and improved 6 percent from the first six months of fiscal
1998. These product lines
8
<PAGE>
contributed 55 percent of total operating earnings and had a 10 percent earnings
improvement from fiscal 1998 to fiscal 1999 in the first six months.
Morton's salt business had sales of $216.7 million in the second quarter of
fiscal 1999, a 9 percent decline compared to sales of $238.3 million in the year
ago second quarter. Salt sales in the United States and Canada came in well
below last year for the quarter reflecting ice control salt weakness, which was
down 39 percent. Several product lines did show growth in the second quarter
including water conditioning and grocery salt. European salt sales were up 8
percent in the quarter, primarily due to stronger ice control sales volumes.
Salt operating earnings in the second quarter were $37.7 million, a 21 percent
decline compared to last year's second quarter of $47.9 million. Overall
operating margins for the same period came in at 17.4 percent against last
year's 20.1 percent. Operating margins in the European salt business were 12.3
percent, an improvement over first quarter fiscal 1999 margins but below margins
of 13.1 percent in the second quarter last year.
For the six month period ending December 31, 1998, salt sales were $384.2
million or 5 percent less than $405.9 million recorded in the prior year. The
sales shortfall was due to North America operations which reflected weakness in
ice control sales. However, improved sales over the prior fiscal year's six
months were reflected in other product lines including water conditioning and
grocery salt. European salt operations gained a 3 percent sales increase in the
first six months of fiscal 1999 versus the same period of the prior year. For
the six months ended December 31, 1998, operating earnings for the salt business
were down 19 percent to $60.5 million from $74.9 million in the prior year.
Operating margins for the first six months in fiscal 1999 in the European salt
business were below the same period last year due in part to the strike in the
first quarter.
Morton's corporate costs for the second quarter of fiscal 1999 were flat
compared to the same period of the prior year. Corporate administrative and
other expenses came in below last year's second quarter, but were offset by
increased net interest expense resulting from the company's stock repurchase
program. For the first six months of fiscal 1999, corporate costs were up 3
percent. The factors noted above were still present with the increase in net
interest cost exceeding the reduction in other costs.
In the fourth quarter of fiscal year 1998, the company announced its plans to
divest two product lines: highway traffic marking and injected colorants for
plastics. In January 1999, letters of intent were signed to sell these product
lines. Based on the terms of the letters of intent, the sales will not have a
material impact on the company's results of operations.
Liquidity and Capital Resources
- -------------------------------
Operating activities were a source of cash in the six month periods ended
December 31, 1998 and 1997, providing $115.9 million and $34.3 million,
respectively.
9
<PAGE>
Net cash provided by operating activities was $115.9 million during the first
six months of fiscal 1999 versus $34.3 million for the same period of fiscal
1998. In the first six months of the current fiscal year, depreciation and
amortization provided $2.6 million more funds than during the same period of the
prior year. Changes in operating assets and liabilities resulted in a use of
$47.8 million in the first six months of fiscal 1999 compared to a $141.4
million use of funds last year. In the first six months of fiscal 1999,
receivables provided funds of $5.0 million versus a $58.2 million use for the
same period of the prior year. This change was caused by a stronger U.S. dollar
and lower receivables in all business groups at December 31, 1998.
Investing activities in the first six months of fiscal 1999 were primarily the
result of capital spending, which used $55.5 million of cash compared to $71.3
million in the same period in fiscal 1998, and $30.7 million cash invested in
businesses acquired in fiscal 1999 compared to $.6 million in fiscal 1998.
Expansion related to certain chemical products as well as basic upkeep of the
salt and chemical manufacturing facilities continue to be the major areas of
capital spending. Cash invested in businesses acquired in the first six months
of fiscal 1999 was for the first quarter acquisition of two Italian chemical
companies.
Financing activities for the six month period ending December 31, 1998 were a
$11.2 million source of funds compared to a $273.6 million use of funds during
the same period in the prior year. Accounting for much of the change was
short-term notes payable, which resulted in a source of funds of $188.2 million
for the first six months of fiscal 1999 versus a use of funds of $8.7 million
for the same period of fiscal 1998. This increase was primarily related to the
short-term financing of the stock repurchases. The common stock repurchase
program resulted in a use of funds of $145.8 million in the first six months of
fiscal 1999 and $239.2 million during the same period of last year. Since the
spinoff in May 1997, Morton has repurchased 20.4 million shares as of December
31, 1998 bringing the shares outstanding to 120.7 million at that date. On
October 22, 1998, the Company's Board of Directors approved the repurchase of an
additional 8.0 million shares of which .4 million shares were repurchased at
December 31, 1998. Dividends paid were $32.1 million and $32.0 million at the
end of the first six months of fiscal 1999 and 1998, respectively.
The Company's current ratio was 1.8 at December 31, 1998, versus a 2.4 ratio at
June 30, 1998. Total debt as a percentage of total capitalization at December
31, 1998 was 22.2 percent compared to 13.3 percent at June 30, 1998.
As of December 31, 1998, the Company had unexpended authorizations for fixed
asset spending of $104.5 million. These authorizations related primarily to
chemical facility expansion, product improvements, and facility upgrades on a
company-wide basis.
Estimated cash flow from operations and current financial resources, including
financing capacity, are expected to be adequate to fund the Company's
anticipated working capital
10
<PAGE>
requirements, fixed asset spending, dividend payments, business acquisitions and
share repurchases in the foreseeable future.
Year 2000 Compliance
- --------------------
In 1997 management initiated a comprehensive study and program to prepare the
Company's computer, manufacturing and facility systems, and the related systems
applications, for the Year 2000. The Company is utilizing both internal and
external resources to identify, correct or reprogram and test the systems for
Year 2000 compliance. The Company expected these efforts to be completed
primarily by December 31, 1998, and most of the target systems are now
compliant. The few remaining systems will be completed on a timely basis. Some
operations are already running successfully on Year 2000 compliant systems that
were purchased and installed more than three years ago.
Maintenance or modification costs will be expensed as incurred, while the costs
of new software will be capitalized and amortized over the software's useful
life. The Company currently does not expect the amounts required to be incurred
to have a material effect on its financial condition, results of operations or
liquidity.
The Company also has communicated with its major suppliers and large customers
to determine the extent and steps they are taking to be Year 2000 compliant. To
date no significant issues have been identified; however, there can be no
guarantee that the systems of other companies on which the Company's businesses
rely will be converted in a timely manner and would not have an adverse effect
on the Company's businesses.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's current best
estimates, which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources, third-party
modification plans and other factors. However, there can be no guarantee that
these estimates will be achieved and actual results could differ materially from
those anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes, the
availability of new software and the ability of our customers and suppliers to
be Year 2000 compliant.
Euro Conversion
- ---------------
The euro was introduced on January 1, 1999, at which time the conversion rates
between existing sovereign currencies ("legacy currencies") and the euro were
set for the participating European Monetary Union states. However, the legacy
currencies in those states will continue to be used as legal tender through
January 1, 2002. Thereafter, the
11
<PAGE>
legacy currencies will be canceled and euro bills and coins will be used in the
participating states.
Transition to the euro creates a number of issues for the Company. Business
issues that must be addressed include product pricing policies and ensuring the
continuity of business and financial contracts. Finance and accounting issues
include the conversion of accounting systems, statutory records, tax books and
payroll systems to the euro, as well as conversion of bank accounts and other
treasury and cash management activities.
The Company is addressing these transition issues and currently does not expect
the transition to the euro and the costs to be incurred to have a material
effect on its liquidity, financial condition or results of operations.
Forward Looking-Cautionary Statement
- ------------------------------------
Except for the historical information and discussions contained herein,
statements contained in this Form 10-Q may constitute "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements reflect management's current expectations and involve
a number of risks and uncertainties. Actual results could differ materially
depending on a variety of factors, including the risks and uncertainties
discussed in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on September 21, 1998.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
The 1998 annual meeting of shareholders of the Registrant occurred on October
22, 1998. The following matters were voted upon at the meeting: the election as
a director of the Registrant of each of W. James Farrell, Richard L. Keyser,
Rebecca A. McDonald and Roger W. Stone; and the ratification of the appointment
of Ernst & Young LLP as independent auditors of the Registrant.
12
<PAGE>
The results of the voting were as follows:
Votes Votes Withheld/
Matter Voted For Against* Abstained
Election of
W. James Farrell 105,589,245 976,310
Election of
Richard L. Keyser 105,592,485 973,070
Election of
Rebecca A. McDonald 105,561,879 1,003,676
Election of
Roger W. Stone 105,538,254 1,027,301
Approval of
Ernst & Young LLP 126,183,379 188,842 193,334
*Numbers shown for Director elections are votes withheld. For the ratification
of Ernst & Young LLP as auditors, numbers shown are votes against.
In addition to the directors elected at the meeting, the directors of the
Registrant whose terms of office continued after the meeting are: Ralph M.
Barford, James R. Cantalupo, Dennis C. Fill, William E. Johnston, Edward J.
Mooney and S. Jay Stewart.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(1) Exhibits (numbered in accordance with Item 601 of Regulation S-K).
(27) (a) Financial Data Schedules for the second quarter of fiscal 1999.
(2) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the fiscal quarter ended
December 31, 1998.
13
<PAGE>
*************************************
SIGNATURE
Pursuant to the requirements 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.
MORTON INTERNATIONAL, INC.
----------------------------------
(Registrant)
Date: January 28, 1999 BY: /S/ L. N. Liszt
--------------------------- ----------------------------------
L. N. Liszt
Controller
(Principal Accounting Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 52600
<SECURITIES> 101600
<RECEIVABLES> 508000
<ALLOWANCES> (13500)
<INVENTORY> 432500
<CURRENT-ASSETS> 1223400
<PP&E> 1867800
<DEPRECIATION> (966300)
<TOTAL-ASSETS> 2707100
<CURRENT-LIABILITIES> 683800
<BONDS> 222300
0
0
<COMMON> 140100
<OTHER-SE> 1321500
<TOTAL-LIABILITY-AND-EQUITY> 2707100
<SALES> 1234400
<TOTAL-REVENUES> 1250000
<CGS> 844600
<TOTAL-COSTS> 1082700
<OTHER-EXPENSES> 6600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14100
<INCOME-PRETAX> 146600
<INCOME-TAX> 52800
<INCOME-CONTINUING> 93800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93800
<EPS-PRIMARY> 0.76
<EPS-DILUTED> 0.76
</TABLE>
