FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File
November 30, 1994 Number 2-67985
FARMLAND INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Kansas 44-0209330
(State of Incorporation) (I.R.S. Employer Identification No.)
3315 North Oak Trafficway, Kansas City, Missouri
(Address of principal executive offices)
64116
(Zip Code)
816-459-6000
(Registrant's telephone number, including area code)
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 { }
FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
November 30 August 31
1994 1994
(Amounts in Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents . . . . . . . $ -0- $ 44,084
Accounts receivable . . . . . . . . . . 380,854 394,906
Inventories (note 2) . . . . . . . . . . 590,826 538,314
Prepaid expenses . . . . . . . . . . . . 10,769 15,159
Other current assets . . . . . . . . . . 95,060 103,980
TOTAL CURRENT ASSETS . . . . . . . . . . . $ 1,077,509 $ 1,096,443
INVESTMENTS AND LONG-TERM RECEIVABLES . . $ 197,094 $ 189,601
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, at cost . $ 1,218,935 $ 1,202,159
Less accumulated depreciation
and amortization 711,943 700,869
NET PROPERTY, PLANT AND EQUIPMENT . . . . . $ 506,992 $ 501,290
OTHER ASSETS . . . . . . . . . . . . . . . $ 138,783 $ 139,297
TOTAL ASSETS . . . . . . . . . . . . . . . $ 1,920,378 $ 1,926,631
<FN>
See Accompanying notes to condensed consolidated financial statements.
</TABLE>
FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITIES
<TABLE>
<CAPTION>
November 30 August 31
1994 1994
(Amounts in Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Accounts and notes payable . . . . . . . $ 442,479 $ 548,476
Current maturities of long-term debt . . 34,943 27,840
Customers' advances on product purchases 74,466 24,438
Other current liabilities . . . . . . . 215,963 204,985
TOTAL CURRENT LIABILITIES . . . . . . . . . $ 767,851 $ 805,739
LONG-TERM DEBT (excluding
current maturities) $ 493,161 $ 517,806
DEFERRED INCOME TAXES (note 1) . . . . . . $ 6,340 $ 6,340
MINORITY OWNERS' EQUITY IN SUBSIDIARIES . . $ 11,453 $ 11,733
INTERIM INCOME BEFORE INCOME TAXES,
PATRONAGE REFUNDS AND APPROPRIATION
FOR EARNED SURPLUS (note 1) $ 56,713 $ -0-
CAPITAL SHARES AND EQUITIES
Common shares, $25 par value -
Authorized 50,000,000 shares .. . . . $ 399,361 $ 363,562
Other equities . . . . . . . . . . . . . 185,499 221,451
TOTAL CAPITAL SHARES AND EQUITIES . . . . . $ 584,860 $ 585,013
TOTAL LIABILITIES AND EQUITIES . . . . . . $ 1,920,378 $ 1,926,631
</TABLE>
FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
hree Months Ended
November 30 November 30
1994 1993
(Amounts in Thousands)
<S> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . $ 1,616,167 $ 1,473,992
Cost of sales . . . . . . . . . . . . . . 1,481,889 1,383,764
Gross income . . . . . . . . . . . . . . . $ 134,278 $ 90,228
Selling, general & administrative expenses $ 75,346 $ 65,905
Other income (deductions):
Interest expense . . . . . . . . . . . . $ (13,443) $ (13,133)
Equity in income (loss) of investees . . 6,370 (4,067)
Other, net . . . . . . . . . . . . . . . 4,642 2,930
Total other income (deductions) . . . . . . $ (2,431) $ (14,270)
Income before income taxes,
minority owners' interest
and patronage refunds (note 1) . . . . . $ 56,501 $ 10,053
Minority owners' interest in net
loss of subsidiaries 212 1,441
Income before income taxes
and patronage refunds (note 1) . $ 56,713 $ 11,494
<FN>
See Accompanying notes to condensed consolidated financial statements.
</TABLE>
FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
November 30 November 30
1994 1993
(Amounts in Thousands)
<S> <C> <C>
Cash flows from operating activities:
Income before income taxes and
patronage refunds . . . . $ 56,713 $ 11,494
Adjustments to reconcile
income before income taxes and
patronage refunds to net cash
provided by (used in)
operating activities:
Depreciation and amortization . . . . 16,435 16,625
Equity in (income) loss of investee . (6,370) 4,067
Other, net . . . . . . . . . . . . . (628) (1,616)
Changes in assets and liabilities:
Accounts receivable . . . . . . . 12,724 (15,518)
Inventories . . . . . . . . . . . (52,512) (56,782)
Other assets . . . . . . . . . . . 14,036 (51,809)
Accounts payable . . . . . . . . . (23,860) 29,795
Advances on product purchases . . 50,028 28,461
Accrued interest and other
liabilities (7,912) 8,589
Net cash provided by (used in)
operating activities $ 58,654 $ (26,694)
Cash flows from investing activities:
Proceeds from disposal of investments
and notes receivable $ 6,502 $ 2,829
Acquisition of investments
and notes receivable (9,232) (10,038)
Acquisition of businesses . . . . . . . -0- (2,223)
Capital expenditures . . . . . . . . . . (20,764) (21,407)
Proceeds from sale of fixed assets . . . 1,312 8,504
Net cash used in investing activities . . . $ (22,182) $ (22,335)
Cash flows from financing activities:
Net increase of demand loan
certificates $ 3,768 $ 7,999
Proceeds from bank loans and notes payable 191,610 256,530
Payments on bank loans and notes payable (300,727) (295,803)
Proceeds from issuance of subordinated
debt certificates 9,0921 4,472
Payments for redemption of subordinated
debt certificates (3,433) (3,857)
Increase of checks and drafts outstanding 57,536 40,063
Payments for redemption of equities . . (12,166) (16)
Payments of patronage refunds and dividends (26,236) -0-
Other . . . . . . . . . . . . . . . . . -0- 1,268
Net cash provided by (used in) financing
activities $ (80,556) $ 20,656
Net decrease in cash and cash equivalents . $ (44,084) $ (28,373)
Cash and cash equivalents at
beginning of period 44,084 28,373
Cash and cash equivalents at end of period $ -0- $ -0-
<FN>
See accompanying notes to condensed consolidated financial statements
</TABLE>
FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) INTERIM FINANCIAL STATEMENTS
The information included in these condensed consolidated financial statements
of Farmland and its subsidiaries (the "Company") reflects all adjustments
(consisting only of normal recurring accruals) which, in the opinion of
management, are necessary for a fair statement of the results for the interim
periods presented.
In accordance with the bylaws of Farmland Industries, Inc. ("Farmland") and
its cooperative subsidiaries, patronage refunds are apportioned and
distributed or patronage losses are apportioned at the at the end of each
fiscal year. As this apportionment is determined only at the end of each
fiscal year, and since the provision for income taxes, dividends, and the
resultant amount of net income (loss) transferred to surplus are dependent
upon the determination of the amount of the patronage refund or patronage loss,
the Company has historically, in accordance with cooperative practices, made
no provisions for income taxes or patronage refunds in its interim financial
statements. Therefore, the amount of interim income before income taxes and
patronage refunds has been reflected as a separate item in the accompanying
November 30, 1994 condensed consolidated balance sheet.
(2) INVENTORIES
Major components of inventories at November 30, 1994, and August 31, 1994,
are as follows:
<TABLE>
<CAPTION>
November 30 August 31
1994 1994
(Amounts in Thousands)
<S> <C> <C>
Finished and in-process products $ 313,956 $ 286,381
Materials . . . . . . . . . . . . 46,586 51,428
Supplies . . . . . . . . . . . . 41,602 39,885
Beef . . . . . . . . . . . . . . 25,451 24,267
Grain . . . . . . . . . . . . . . 163,231 136,353
$ 590,826 $ 538,314
</TABLE>
All inventories, other than supplies, grain and certain beef and petroleum
inventories, are valued at the lower of first-in, first-out (FIFO) cost or
market. Supplies are valued at cost. The Company follows a policy of hedging
its grain inventories which are valued at market adjusted for the net unrealized
gains or losses on open grain contracts. Crude oil, refined petroleum products,
beef and beef by-products are valued at the lower of last-in, first-out (LIFO)
cost or market. In applying the lower of cost or market valuation method in the
case of petroleum LIFO inventory, the general practice is modified to conform to
the integral view of interim financial statements. Accordingly, a seasonal
market value decline below cost of LIFO inventories, at an interim date, which
is reasonably expected to be restored by year-end, is not recognized in interim
results of operations since no loss is expected to be incurred in the annual
period. At November 30, 1994, the carrying value of petroleum inventories
stated under the LIFO method was $100,654,000. This exceeded the market value
of such inventory by $18,034,000. However, based on historical prices of energy
products and seasonal market price variations, the market value decline below
cost is expected to be a temporary seasonal price fluctuation.
Had the lower of first-in, first-out (FIFO) cost or market been used to
value these petroleum products, inventories at November 30, 1994 would have been
lower by $8,689,000.
The carrying value of beef inventories stated under the LIFO method was
$25,451,000 at November 30, 1994. The LIFO method of accounting for beef
inventories had no effect on the carrying value of inventories or on the income
reported for the three months ended November 30, 1994 because market value of
these inventories was lower than LIFO or FIFO cost.
(3) CONTINGENCIES
On July 28, 1983, Farmland sold the stock of Terra Resources, Inc.
("Terra"), a wholly-owned subsidiary engaged in oil and gas exploration and
production operations, and exited its oil and gas exploration and production
activities. The gain from the sale of Terra amounted to $237,200,000 for tax
reporting purposes. During 1983, and prior to the sale of the Terra stock,
Farmland received certain distributions from Terra totaling $24,800,000. For
tax purposes, Farmland claimed intercorporate dividends-received deductions for
the entire amount of such distributions.
On March 24, 1993, the Internal Revenue Service ("IRS") issued a statutory
notice to Farmland asserting deficiencies in federal income taxes (exclusive of
statutory interest thereon) in the aggregate amount of $70,775,000. The
asserted deficiencies relate primarily to the Company's tax treatment of the
sale of the Terra stock and the distributions received from Terra prior to the
sale. The IRS asserts that Farmland incorrectly treated the Terra sale gain as
income against which certain patronage-sourced operating losses could be offset,
and that, as a nonexempt cooperative, Farmland was not entitled to an
intercorporate dividends-received deduction in respect of the 1983 distribution
by Terra. It further asserts that Farmland incorrectly characterized gains for
tax purposes aggregating approximately $14,600,000, and a loss of approximately
$2,300,000, from the disposition of certain other assets. On June 11, 1993,
Farmland filed a petition in the United States Tax Court contesting the asserted
deficiencies in their entirety. Discovery and other pre-trial phases of the
litigation have since been ongoing. The case is scheduled for trial on
March 6, 1995.
If the IRS ultimately prevails on all of the adjustments asserted in the
statutory notice, Farmland would have additional federal and state income tax
liabilities aggregating approximately $85,800,000 plus accumulating statutory
interest thereon through December 31, 1994, of approximately $159,668,000
(before tax benefits of the interest deduction). In addition, such adjustments
would affect the computation of Farmland's taxable income for its 1989 tax year
and, as a result, could increase Farmland's federal and state income taxes for
that year by approximately $5,000,000 plus applicable statutory interest
thereon.
No provision has been made in the consolidated financial statements for
federal or state income taxes (or interest thereon) in respect of the IRS claims
described above. Farmland believes that it has meritorious positions with
respect to all of these claims and will continue to vigorously pursue their
favorable resolution through the pending litigation.
In the opinion of Bryan Cave, Farmland's special tax counsel, it is more
likely than not that the courts will ultimately conclude that (i) Farmland's
treatment of the Terra sale gain was substantially, if not entirely, correct;
and (ii) Farmland properly claimed a dividends-received deduction in respect of
the 1983 distributions which it received from Terra prior to the sale of the
Terra stock. Counsel has further advised, however, that none of the issues
involved in these disputes is free from doubt, and that there can be no
assurance that the courts will ultimately rule in favor of Farmland on any of
these issues.
Should the IRS ultimately prevail on all of its asserted claims, the claimed
federal and state income taxes as well as accrued interest would become
immediately due and payable, and would be charged to current operations. In
such case, the Company would be required to renegotiate its agreements with its
banks to maintain compliance with various provisions of such agreements,
including working capital and funded indebtedness provisions. However, no
assurance can be given that such renegotiation would be successful.
Alternatives could include other financing arrangements or the possible sale of
assets.
The Company has been designated by the Environmental Protection Agency as a
potentially responsible party ("PRP") under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), at various National
Priority List ("NPL") sites. In addition, the Company is aware of possible
obligations associated with environmental matters at other sites, including
sites where no claim or assessment has been made. The Company's probable and
reasonably determinable obligations for resolution of environmental matters at
NPL and other sites are estimated to be $8,562,000 and such amount has been
accrued at November 30, 1994.
The ultimate costs of resolving environmental matters are not quantifiable
because many such matters are in preliminary stages and the timing and extent of
actions which governmental authorities may ultimately require are unknown. It
is possible that the costs of such resolution may be greater than the
liabilities which, in the opinion of management, are probable and reasonably
determinable at November 30, 1994. In the opinion of management, it is
reasonably possible for such costs to approximate up to $37,600,000 and to
extend over 30 years.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The business of Farmland and subsidiaries (the"Company") is conducted in two
areas: On the input side of the agricultural industry, the Company operates as
a farm supply cooperative, and on the output side of the agricultural industry,
the Company operates as a processing and marketing cooperative.
Farm supply operations consist of three product divisions--petroleum, crop
production and feed. Products of the petroleum division are principally refined
fuels, propane, by-products of petroleum refining, lubricants and a complete
line of car, truck and tractor tires and accessories. Principal products of the
crop production division are nitrogen-, phosphate- and potash-based plant
nutrients and a complete line of plant protection products. Feed division
products include swine, dairy, pet, beef, poultry, mineral and specialty feeds,
feed ingredients and supplements, animal health products and livestock
services. The Company distributes farm supply products at wholesale.
Geographically, the Company's markets are mid-western states which comprise the
corn belt and the wheat belt. In fiscal 1994, 65% of consolidated farm supply
product sales were to local farm cooperative associations which are members and
owners of Farmland. These local cooperatives distribute products primarily to
farmers and ranchers who utilize the products in the production of farm crops
and livestock.
Cooperative marketing operations include the storage and marketing of grain,
processing pork and beef, and marketing fresh pork, processed pork, fresh beef
and boxed beef. Hogs and grain are supplied to the Company primarily by
members. Cattle are purchased from producers in the proximity of beef plants at
Liberal and Dodge City, Kansas.
A substantial portion of the Company's farm supply, pork and beef products
are produced in facilities owned by the Company or operated by the Company under
long-term lease arrangements. No material part of the business of any segment
of the Company is dependent on a single customer or a few customers.
The Company's revenues depend to a large extent on conditions in agriculture
and may be volatile due to factors beyond the Company's control, such as
weather, crop failures, federal agricultural programs, production efficiencies,
and direct imports or exports. In addition, global variables which affect
supply, demand and price of crude oil and refined fuels impact the Company's
petroleum operations. Management cannot determine the extent to which future
operations of the Company may be impacted by these factors. The Company's cash
flow and net income may be volatile as conditions affecting agriculture and
markets for the Company's products change.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company maintains two primary sources for debt capital: a continuous
public offering of its debt securities and bank lines of credit.
The Company's debt securities are offered on a best efforts basis by
Farmland Securities Company and American Heartland Investments, Inc. and may be
offered by selected broker-dealers. The types of securities currently offered
include certificates payable on demand and subordinated debt certificates which
mature in five and ten years. The total amount of such debt outstanding and the
flow of funds to, or from, the Company as a result of this public offering are
influenced by the rate of interest which Farmland establishes for each type of
debt certificate offered and by options of Farmland to call for redemption
certain of its outstanding debt certificates. During the three months ended
November 30, 1994, the outstanding balance of demand loan and subordinated debt
certificates increased $9.4 million.
Farmland has a $650.0 million syndicated credit facility provided by eight
domestic and international banking institutions. This agreement provides short-
term credit of up to $450.0 million to finance seasonal operations and
inventory, and revolving term credit of up to $200.0 million. At November 30,
1994, short-term borrowings under this facility were $139.0 million, revolving
term borrowings were $80.0 million and $59.1 million was being utilized to
support letters of credit issued on behalf of Farmland by participating banks.
Farmland pays commitment fees of 1/8 of 1% annually on the unused portion of
the short-term commitment and 1/4 of 1% annually on the unused portion of the
revolving term commitment. In addition, Farmland must maintain consolidated
working capital of not less than $150.0 million, consolidated net worth of not
less than $475.0 million and funded indebtedness and senior funded indebtedness
of not more than 52% and 43% of capitalization, respectively. All computations
are based on consolidated financial data adjusted to exclude nonrecourse
subsidiaries (as defined in the credit agreement). At November 30, 1994,
Farmland was in compliance with all covenants.
The Company maintains other borrowing arrangements with banks and financial
institutions. Under such agreements, at November 30, 1994, $48.3 million was
borrowed and letters of credit issued by banks amounted to $2.2 million.
Financial covenants of these arrangements are not more restrictive than the
Company's syndicated credit facility.
National Beef Packing Company, L.P. ("NBPC"), 58%-owned by Farmland,
maintains borrowing agreements with a bank which provides financing support for
its beef packing operations. Borrowings under this credit agreement are
nonrecourse to Farmland or Farmland's other affiliates. At November 30, 1994,
$82.6 million was available under this agreement of which $59.4 million was
borrowed and $8.5 million was utilized to support letters of credit. All assets
of NBPC (carried at $152.4 million) are pledged to support its borrowings.
Tradigrain, which is comprised of seven international grain trading
subsidiaries of Farmland, has borrowing agreements with various international
banks which provide financing and letters of credit to support current
international grain trading transactions. Obligations of Tradigrain under these
loan agreements are nonrecourse to Farmland or Farmland's other affiliates.
Leveraged leasing has been utilized to finance railcars and a substantial
portion of crop production equipment. Under the most restrictive covenants of
its leases, the Company has agreed to maintain working capital of at least $75
million, consolidated funded indebtedness not greater than 65% of consolidated
capitalization, and consolidated senior funded indebtedness not greater than 50%
of consolidated capitalization.
Major uses of cash during the three months ended November 30, 1994 include
payments of $300.7 million on bank loans and other notes, $26.2 million for
patronage refunds and dividends distributed from income of the 1994 fiscal year,
$20.8 million for capital expenditures, $12.1 million for the redemption of
equities under the Farmland base capital plan and special redemption plan and
$9.2 million for acquisition of investments. Major sources of cash include
$191.6 million from an increase in the net outstanding bank loans and other
notes, $58.7 million from operations, $57.5 million from an increase in the
balance of checks and drafts outstanding and $9.4 million from an increase in
the balance of demand loan and subordinated debt outstanding.
The Internal Revenue Service issued a statutory notice to Farmland
asserting significant deficiencies in federal income taxes and statutory
interest thereon. Farmland filed a petition in the United States Tax Court
contesting the asserted deficiencies in their entirety. See note 3 of the notes
to the condensed consolidated financial statements.
RESULTS OF OPERATIONS
Operating results for any quarter are not necessarily indicative of the
results expected for the full year. The principal businesses of the Company are
highly seasonal. The majority of sales of farm supply products historically
occur in the spring months, revenues in the beef business and in grain marketing
historically are concentrated in the summer months and summer is the lowest
sales period for pork products. In view of the seasonality of the Company's
businesses, it must be emphasized that the results for the three months ended
November 30, 1994 should not be annualized to project a full year's results.
THREE MONTHS ENDED NOVEMBER 30, 1994 COMPARED WITH THREE MONTHS ENDED NOVEMBER
30, 1993
SALES
Sales for the three months ended November 30, 1994 increased $142.2 million
or 9.6% compared with the corresponding period of the prior year. The increase
includes $117.0 million higher sales of agricultural output products, $22.1
million higher sales of farm production input products and $3.1 million higher
sales of other products and services.
Sales of agricultural output products increased principally because grain
sales reported in the three months ended November 30, 1994 (which reflect an
increase of $95.6 million) include operations of a grain trading company
acquired in May 1994 and sales at elevators in Utah and Idaho which Farmland
leased in February 1994. These operations were not included in financial
reports of the Company for the first quarter of the prior year. In addition,
sales of beef and pork increased $15.1 million and $6.3 million, respectively.
This increase resulted from higher unit sales of beef and pork partly offset by
lower unit prices of pork.
The increased sales of farm production input products includes $52.9 million
higher sales of crop production products, $17.2 million in lower sales of
petroleum products and $13.6 million lower feed sales. Sales of crop production
products increased because unit prices of plant nutrients increased
approximately 19% and unit sales of these products increased approximately 4%.
Sales of petroleum products decreased because of lower refined fuel and propane
prices and lower propane unit sales. Feed sales decreased because of lower
formula feed unit sales and because of lower prices of formula feed and feed
ingredients.
INCOME BEFORE INCOME TAXES AND PATRONAGE REFUNDS
Income before income taxes and patronage refunds of $56.7 million (see note
1) for the three months ended November 30, 1994 increased $45.2 million compared
with the corresponding period of the prior year. Operating profit in the
Company's crop production and food marketing businesses increased $33.2 million
and $23.1 million, respectively. In addition, the Company's share of net income
from joint ventures engaged in crop production and beef packing operations
increased $5.5 million and $4.5 million, respectively. These increases were
partially offset by decreased operating profits of $13.8 million in petroleum
and by $2.8 million higher general corporate expenses.
Operating profit of the crop production business increased in the three
months ended November 30, 1994 as a result of higher prices of nitrogen-based
products coupled with decreased per unit costs of natural gas (the principal raw
material used in production of nitrogen-based plant nutrients).
Operating profit of the food marketing business increased in the three
months ended November 30, 1994 compared with the corresponding period of the
prior year with improved results in pork and beef. Pork processing and
marketing operating profit increased $19.0 million primarily due to increased
margins on fresh pork products partially offset by slightly higher promotional
expenses. Operating profits in the beef business were $2.0 million in the three
months ended November 30, 1994 compared with a loss of $2.1 million in the
corresponding period of the prior year. This increase is attributable to higher
market prices for beef and the availability of cattle at more favorable cost
levels.
Results from petroleum operations decreased due to lower unit sales of
refined fuels and propane coupled with lower prices for refined fuels.
Selling, general and administrative expenses increased $9.4 million in the
three months ended November 30, 1994 compared with the corresponding period the
prior year. Approximately $6.6 million of the increase was directly connected
to business segments, primarily the output businesses (grain, beef and pork) and
related to increased sales. Corporate general expenses, not identified to
business segments, increased $2.8 million ensuing primarily from higher cost of
variable compensation plans and employee pension expenses.
RECENT ACCOUNTING PRONOUNCEMENTS
In the first quarter of fiscal year 1995, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 112, "Employer's Accounting
for Postemployment Benefits." Statement 112 establishes standards of accounting
and reporting for the estimated cost of benefits provided to former employees.
The effect of implementation of Statement 112 at September 1, 1994 was
insignificant.
In the first quarter of fiscal year 1995, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Statement 115 expands the use of
fair value accounting and the reporting for investments in equity securities
that have readily determinable fair values and for all investments in debt
securities. The effect of implementation of Statement 115 at September 1, 1994
was insignificant.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
The exhibits listed below are filed as part of Form 10-Q for quarter ended
November 30, 1994.
None
(b) No reports on Form 8-K were filed during the quarter ended November 30,
1994.
SIGNATURES
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 hereunto duly authorized.
FARMLAND INDUSTRIES, INC.
(Registrant)
By: /s/ JOHN F. BERARDI
John F. Berardi
Executive Vice President
and Chief Financial Officer
Date: January 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Art 5 FDS for 1st quarter 10-Q
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> NOV-30-1994
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 380,854
<ALLOWANCES> 0
<INVENTORY> 590,826
<CURRENT-ASSETS> 1,077,509
<PP&E> 1,218,935
<DEPRECIATION> 711,943
<TOTAL-ASSETS> 1,920,378
<CURRENT-LIABILITIES> 774,779
<BONDS> 493,161
<COMMON> 399,361
0
3,701
<OTHER-SE> 181,799
<TOTAL-LIABILITY-AND-EQUITY> 1,920,378
<SALES> 1,592,037
<TOTAL-REVENUES> 1,616,167
<CGS> 1,469,098
<TOTAL-COSTS> 1,481,889
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,443
<INCOME-PRETAX> 56,501
<INCOME-TAX> 10,649
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</TABLE>
