<PAGE>
PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
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 Number 1-2376
FMC Corporation
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-0479804
-------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
-----------------------------------------------------
(312) 861-6000
------------------------------------
(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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at September 30, 1996
- --------------------------------------- ---------------------------------
Common Stock, par value $0.10 per share 37,148,057
<PAGE>
PAGE 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ----------------------------
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Income (Unaudited)
- ---------------------------------------------
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
------------------- -------------------
1996 1995 1996 1995
------------------- --------------------
<S> <C> <C> <C> <C>
Revenue:
Sales $1,261.6 $1,141.2 $3,606.6 $3,266.4
Other revenue 11.5 17.6 66.4 39.8
-------- -------- -------- --------
Total revenue 1,273.1 1,158.8 3,673.0 3,306.2
-------- -------- -------- --------
Costs and expenses:
Cost of sales 934.9 836.9 2,679.7 2,359.0
Selling, general and
administrative expenses 169.2 163.8 494.9 456.4
Research and development 48.2 57.4 137.5 138.6
Restructuring and other
charges - 134.5 - 134.5
-------- -------- -------- --------
Total costs and expenses 1,152.3 1,192.6 3,312.1 3,088.5
-------- -------- -------- --------
Income (loss) from continuing
operations before net interest
expense, gain on sale of FMC
Wyoming stock, minority
interests and income taxes 120.8 (33.8) 360.9 217.7
Interest income 1.2 1.5 4.1 7.6
Interest expense 26.8 23.7 75.0 64.5
Gain on sale of FMC
Wyoming stock - 99.7 - 99.7
Minority interests 12.5 17.2 48.0 42.5
-------- -------- -------- --------
Income from continuing operations
before income taxes 82.7 26.5 242.0 218.0
Provision (benefit) for
income taxes 23.4 (31.1) 68.5 25.6
-------- -------- -------- --------
Income from continuing operations 59.3 57.6 173.5 192.4
Discontinued operations, net of
income taxes (Note 3) (4.7) (0.5) (7.4) (5.2)
-------- -------- -------- --------
Net income $ 54.6 $ 57.1 $ 166.1 $ 187.2
======== ======== ======== ========
Average number of shares 38.1 37.8 38.0 37.7
======== ======== ======== ========
Earnings (loss) per common share:
Continuing operations $ 1.56 $ 1.52 $ 4.56 $ 5.11
Discontinued operations (0.12) (0.01) (0.19) (0.14)
-------- -------- -------- --------
Net income per common share $ 1.44 $ 1.51 $ 4.37 $ 4.97
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Balance Sheets
- ---------------------------
(In millions, except share data) September 30
1996 December 31
Assets: (Unaudited) 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 116.6 $ 70.9
Trade receivables, net of allowance
for doubtful accounts of $8.1 in
1996 and $11.3 in 1995 873.3 832.9
Inventories 826.1 600.2
Other current assets 190.6 178.3
Deferred income taxes 74.1 98.5
-------- --------
Total current assets 2,080.7 1,780.8
Investments 99.4 98.4
Net assets of discontinued operation - 86.0
Property, plant and equipment at cost 4,192.8 3,935.1
Less -- accumulated depreciation 2,315.4 2,229.4
-------- --------
Net property, plant and equipment 1,877.4 1,705.7
Goodwill and intangible assets 361.1 345.6
Other assets 178.3 144.9
Unallocated purchase price of
Frigoscandia Equipment Holding AB 142.0 -
Deferred income taxes 113.5 71.1
-------- --------
Total assets $4,852.4 $4,232.5
======== ========
Liabilities and Stockholders' Equity:
Current liabilities:
Short-term debt $ 700.9 $ 420.8
Accounts payable, trade and other 810.4 835.6
Accrued and other current liabilities 500.5 411.7
Current portion of long-term debt 15.9 29.8
Current portion of accrued pension
and other postretirement benefits 17.2 36.5
Income taxes payable 46.4 37.7
-------- --------
Total current liabilities 2,091.3 1,772.1
Long-term debt, less current portion 1,056.5 974.4
Accrued pension and other postretirement
benefits, less current portion 286.1 284.6
Reserve for discontinued operations 199.9 168.3
Other liabilities 251.8 261.3
Minority interests in consolidated companies 141.4 118.4
Stockholders' equity:
Preferred stock, no par value, authorized
5,000,000 shares; no shares issued in
1996 or 1995 - -
Common stock, $0.10 par value, authorized
60,000,000 shares; issued 37,448,484
shares in 1996 and 37,024,187 shares in 1995 3.7 3.7
Capital in excess of par value of capital stock 118.4 99.7
Retained earnings 762.2 596.1
Foreign currency translation adjustment (49.6) (36.9)
Treasury stock, common, at cost; 300,427
shares in 1996 and 300,447 shares in 1995 (9.3) (9.2)
-------- --------
Total stockholders' equity 825.4 653.4
-------- --------
Total liabilities and stockholders' equity $4,852.4 $4,232.5
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 4
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
- -------------------------------------------------
(In millions)
<TABLE>
<CAPTION>
Nine Months
Ended September 30
------------------
1996 1995
------- --------
<S> <C> <C>
Reconciliation from income from continuing
operations to cash used in operating activities of
continuing operations:
Income from continuing operations $ 173.5 $ 192.4
Adjustments for non-cash components of
income from continuing operations:
Depreciation and amortization 186.7 169.4
Restructuring and other charges - 134.5
Gain on sale of FMC Wyoming stock - (99.7)
Deferred income taxes (19.3) (13.6)
Equity in net earnings of affiliates (8.4) (3.5)
Minority interests 48.0 42.5
Other 3.9 12.3
(Increase) in assets:
Trade receivables (40.4) (121.8)
Inventories (225.9) (157.0)
Other current assets, intangible and other assets (216.3) (362.4)
(Decrease) increase in liabilities:
Accounts payable, accrued and other
current liabilities and other liabilities 61.3 148.2
Income taxes payable 8.7 11.7
Restructuring reserve (7.0) (37.3)
Accrued pension and other
postretirement benefits, net (18.9) (2.7)
------- -------
Cash used in operating activities
of continuing operations $ (54.1) $ (87.0)
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 5
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
- -------------------------------------------------
(In millions)
<TABLE>
<CAPTION>
Nine Months
Ended September 30
------------------
1996 1995
-------- --------
<S> <C> <C>
Cash used in operating activities
of continuing operations $ (54.1) $ (87.0)
Cash provided (required) by discontinued operations 111.7 (63.6)
Cash provided (required) by investing
activities:
Capital spending (386.7) (394.2)
Disposal of property, plant and
equipment 50.9 27.4
Decrease in investments 7.5 33.0
------- -------
(328.3) (333.8)
------- -------
Cash provided (required) by financing
activities:
Net reduction of commercial paper
borrowings (159.7) -
Increase in other short-term debt 424.5 263.8
Net borrowings under credit facilities - 89.0
Proceeds from sale of FMC Wyoming stock - 171.8
Repayment of long-term debt (30.2) (19.7)
Net proceeds from issuance of long-term debt 98.2 -
Distributions to limited partners (34.1) (27.2)
Issuance of capital stock, net 18.6 7.8
------- -------
317.3 485.5
------- -------
Effect of exchange rate changes on cash
and cash equivalents (0.9) 1.5
------- -------
Increase in cash and cash equivalents 45.7 2.6
Cash and cash equivalents, beginning
of period 70.9 98.2
------- -------
Cash and cash equivalents, end of period $ 116.6 $ 100.8
======= =======
</TABLE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest, net of amounts capitalized, was
$68.5 million and $63.5 million, and cash paid for
income taxes, net of refunds, was $35.3 million and $21.7
million for the nine-month periods ended September 30, 1996
and 1995, respectively.
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 6
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------
Note 1: Financial Information and Accounting Policies
- ------------------------------------------------------
The consolidated balance sheet of FMC Corporation ("FMC" or "the company") as of
September 30, 1996, and the related consolidated statements of income and of
cash flows for the interim periods ended September 30, 1996 and 1995 have been
reviewed by FMC's independent auditors. The review is discussed more fully in
their report included herein. In the opinion of management, such financial
statements have been prepared in conformity with generally accepted accounting
principles and reflect all adjustments necessary for a fair statement of the
results of operations for the interim periods. All such adjustments are of a
normal recurring nature. The results of operations for the three-month and nine-
month periods ended September 30, 1996 and 1995 are not necessarily indicative
of the results of operations for the full year.
Prior period balances have been reclassified to conform with the current
period's presentation, including the reclassification of operations constituting
the Precious Metals segment as a discontinued operation (Note 3).
The company's accounting policies are set forth in Note 1 to the company's 1995
financial statements which are incorporated by reference in the company's 1995
Annual Report on Form 10-K.
Note 2: Debt
- -------------
The company has $500 million in committed credit facilities consisting of a $250
million, 364-day non-amortizing revolving credit agreement due in December 1996
and a $250 million, five-year non-amortizing revolving credit agreement due in
December 1999. As of September 30, 1996, the company had advances under the
five-year revolving credit agreement of $80 million.
In November 1995, the company commenced a short-term commercial paper program
supported by the committed facilities. Committed credit available under the
revolving credit facilities provides management with the ability to refinance a
portion of the company's debt on a long-term basis and, as it is management's
intent to do so, $170 million of the $235 million in outstanding commercial
paper has been classified as long-term debt at September 30, 1996.
Short-term debt at September 30, 1996 includes $387 million of advances under
uncommitted U.S. credit facilities and $65 million of commercial paper. The
remaining amounts of short-term debt represent borrowings by FMC's foreign
subsidiaries.
In July 1996, the company issued $100 million of 7.75% Senior Debentures due
2011 pursuant to a $500 million universal shelf registration filed in 1995. The
net proceeds from such issuance totaled $98.2 million and were used to reduce
variable rate short-term debt.
Note 3: Discontinued Operations
- --------------------------------
On July 15, 1996, FMC's management approved a plan to dispose of shares of FMC
Gold Company through a secondary offering of substantially all of FMC's interest
following a reincorporation of FMC Gold Company in Canada. In connection with
the approval of the plan of disposal, beginning in the second quarter of 1996,
the operations constituting the Precious Metals segment have been accounted for
as a discontinued operation. Prior period consolidated financial statements
presented herein have been restated for comparative purposes.
The reincorporation and an offering of a 72% interest in FMC Gold Company, which
was held by FMC, were completed on July 31, 1996. An option on the part of the
underwriters to purchase the remaining 8% interest held by FMC was executed on
August 9, 1996. A small number of shares not covered by the underwriting
agreement were also sold at the market. FMC received gross cash proceeds,
including a dividend of $0.02 per share, of $108.4 million, plus rights to
receive the second installment under installment receipts totaling $107.5
million due July 31, 1997. During August 1996, FMC collected $3.4 million of
those rights and sold the balance of $104.1 million to Bank of Nova Scotia for
$98.9 million in cash.
<PAGE>
PAGE 7
The sale is subject to recourse (not to exceed Cdn$42.7 million) to the extent
the second installment payments are not collected and Bank of Nova Scotia is not
able to recover at least Cdn$2.50 per share of Meridian Gold Inc. stock, which
is held as collateral.
Cash proceeds were used to repay intercompany loans, accrued interest and other
amounts owing to FMC Gold Company totaling $79.2 million at July 31, 1996.
Transaction and other related costs aggregating $23.3 million, including certain
taxes on behalf of FMC Gold Company's minority shareholders, were paid from
proceeds or accrued pending payment.
After deducting transaction costs and FMC's investment in FMC Gold Company and
establishing reserves for sale-related liabilities, FMC recorded a pretax gain
of $9.4 million on the disposal of FMC Gold Company. A net tax benefit of $10.3
million on the gain includes the reversal of previously recorded valuation
reserves, which are no longer required, related to certain deferred tax assets
arising from the Precious Metals business.
Sales and net losses of the Precious Metals segment for the one-month and seven-
month periods ended July 31, 1996 were as follows:
<TABLE>
<CAPTION>
One Month Seven Months
Ended July 31, 1996 Ended July 31, 1996
------------------- -------------------
<S> <C> <C>
Sales $ 5.2 $41.3
Net loss $(1.0) $(3.7)
</TABLE>
Precious Metals' net loss for the period from July 15, 1996 (measurement date)
through July 31, 1996 was not significant.
Included in the company's results of discontinued operations for the quarter
ended September 30, 1996 is a charge of $39.0 million ($23.4 million after tax)
to increase reserves related to operations discontinued by the company between
1976 and 1984. These additional reserves resulted primarily from an increase in
the company's most recent actuarially-determined estimate of product liability
and in other potential claims principally related to the discontinued
Construction Equipment and Chlor-Alkali businesses. Reserves for discontinued
operations at September 30, 1996 and December 31, 1995, respectively, were
$199.9 million and $168.3 million. At September 30, 1996, $7.2 million of the
reserves related to liabilities associated with the sale of FMC Gold Company,
and the remainder related to operations discontinued between 1976 and 1984. See
Note 3 to the company's 1995 consolidated financial statements and Note 5 below.
The company's results of discontinued operations for the nine months ended
September 30, 1996 are comprised of the following, in millions:
<TABLE>
<CAPTION>
<S> <C>
(Loss) from operations of Precious Metals
segment through July 31, 1996 (less income
tax benefit of $1.8) $ (3.7)
Gain on disposal of FMC Gold Company,
(including income tax benefit of $10.3) 19.7
Provision for liabilities related to
previously discontinued operations (net of
income tax benefit of $15.6) (23.4)
------
Discontinued operations, net of income taxes $ (7.4)
======
</TABLE>
<PAGE>
PAGE 8
Note 4: Business Combinations and Divestitures
- -----------------------------------------------
Frigoscandia Equipment Holding AB. In June 1996, FMC acquired Frigoscandia
Equipment Holding AB ("Frigoscandia") from ASG AB for approximately $165 million
plus transaction costs and the assumption of Frigoscandia's debt. Frigoscandia,
headquartered in Helsingborg, Sweden, is the global leader in equipment for
industrial in-line freezing and also manufactures food processing equipment such
as fryers, ovens and portioners.
The acquisition will be accounted for under the purchase method of accounting
and, accordingly, the purchase price will be allocated to the assets acquired
and liabilities assumed based on the estimated fair value of such assets and
liabilities at the date of acquisition. Due to the timing of the transaction,
however, FMC's consolidated balance sheet at September 30, 1996 includes the
accounts of Frigoscandia adjusted only for certain known elements of purchase
accounting. The remaining excess purchase price at September 30, 1996 is
classified as "Unallocated Purchase Price of Frigoscandia Equipment Holding AB"
on the company's consolidated balance sheet and will be allocated to the assets
acquired (which will include goodwill and other intangible assets to be
amortized over periods not exceeding 40 years) and liabilities assumed based on
the results of appraisals and other analyses which are currently in process.
Moorco International Inc. In June 1995, FMC acquired all of the common shares of
Moorco International Inc. ("Moorco") for $28 per share, or approximately $350
million (including acquisition costs and debt assumed). Moorco is the leading
worldwide manufacturer of meters for the petroleum industry and a leading
manufacturer of valves for the process and power generation industries.
In conjunction with the acquisition of Moorco, goodwill and other intangible
assets of $218.4 million were recorded (which are being amortized over 15 to 40
years), and $15.5 million of acquired in-process research and development was
charged to research and development expense in the third quarter of 1995.
The company also completed other smaller acquisitions during 1995 and 1996. The
purchase prices for Moorco, Frigoscandia and the other acquisitions were
satisfied from cash flow from operations and short-term and long-term financing.
The company's 1996 acquisitions did not have a material pro forma effect on the
company's consolidated results of operations.
Results of operations of the acquired companies have been included in the
company's consolidated statements of income from the respective dates of
acquisition.
Sale of Automotive Service Equipment Division. In March 1996, FMC sold its
Automotive Service Equipment Division to Snap-On Incorporated, resulting in an
immaterial pre-tax gain.
Joint venture. In July 1995, FMC completed a joint venture agreement involving
the sale of 20 percent of its soda ash business, FMC Wyoming Corporation, to
Sumitomo Corporation and Nippon Sheet Glass Company, Ltd., for $150 million,
resulting in a nontaxable gain of $99.7 million. The company's results
subsequent to the date of the joint venture are net of minority interest
attributable to the joint venture partners.
<PAGE>
PAGE 9
Note 5: Environmental
- ----------------------
FMC is subject to various federal, state and local environmental laws and
regulations that govern emissions of air pollutants, discharges of water
pollutants, and the manufacture, storage, handling and disposal of hazardous
substances, hazardous wastes and other toxic materials. The most significant
environmental liabilities of the company primarily consist of obligations
relating to the remediation and/or study of sites at which the company is
alleged to have disposed of hazardous substances. In particular, the company is
subject to liabilities arising under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") and similar state laws that impose
responsibility on persons who arranged for the disposal of hazardous substances
and on current and previous owners and operators of a facility for the clean up
of hazardous substances released from the facility into the environment. In
addition, the company is subject to liabilities under the corrective action
provisions of the Resource Conservation and Recovery Act ("RCRA") and analogous
state laws that require owners and operators of facilities that treat, store or
dispose of hazardous waste to clean up releases of hazardous waste constituents
into the environment associated with past or present practices.
At September 30, 1996, reserves were provided for potential environmental
obligations which management considers probable and for which a reasonable
estimate of the obligation could be made. Reserves of $286 million and $302
million, before recoveries, have been provided at September 30, 1996 and
December 31, 1995, respectively, of which $121 million and $132 million are
included in the reserve for discontinued operations at September 30, 1996 and
December 31, 1995, respectively. The company's total environmental reserves
include approximately $261 million and $270 million for remediation activities
and $25 million and $32 million for remedial investigation/feasibility study
costs at September 30, 1996 and December 31, 1995, respectively. In addition,
the company has estimated that reasonably possible environmental loss
contingencies may exceed amounts accrued by as much as $150 million at September
30, 1996.
Although potential environmental remediation expenditures in excess of the
current reserves and estimated loss contingencies could be significant, the
impact on the company's future financial results is not subject to reasonable
estimation due to numerous uncertainties concerning the nature and scope of
contamination at many sites, identification of remediation alternatives under
constantly changing requirements, selection of new and diverse clean-up
technologies to meet compliance standards, the timing of potential expenditures,
and the allocation of costs among Potentially Responsible Parties ("PRPs") as
well as other third parties.
The liabilities arising from potential environmental obligations that have not
been reserved for at this time may be material to any one quarter's or year's
results of operations in the future. Management, however, believes the aggregate
liability arising from the potential environmental obligations is not likely to
have a material adverse effect on the company's liquidity or financial condition
and may be satisfied over the next 20 years or longer.
To ensure FMC is held responsible only for its equitable share of site
remediation costs, FMC has initiated, and will continue to initiate, legal
proceedings for contributions from other PRPs, and for a determination of
coverage against its comprehensive general liability insurance carriers.
Approximately $128 million of recoveries ($56 million as other assets and $72
million as an offset to the reserve for discontinued operations) and
approximately $140 million of recoveries ($56 million as other assets and $84
million as an offset to the reserve for discontinued operations), have been
recorded as probable realization on claims against insurance companies and other
third parties at September 30, 1996 and December 31, 1995, respectively. The
majority of recorded assets related to recoveries from third parties are
associated with existing contractual arrangements with U.S. government agencies.
<PAGE>
PAGE 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------ ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
LIQUIDITY AND FINANCIAL CONDITION
---------------------------------
Total cash and cash equivalents at September 30, 1996 and December 31, 1995 were
$116.6 million and $70.9 million, respectively. As of September 30, 1996, the
company had total borrowings of $1.8 billion, up from $1.4 billion at December
31, 1995. The increase in debt reflects higher capital expenditures, working
capital requirements and acquisitions. Advances under uncommitted facilities of
$387 million at September 30, 1996, up from $201 million at December 31, 1995,
represented the primary source of the additional borrowings. The company also
has $500 million in committed credit facilities consisting of a $250 million,
364-day non-amortizing revolving credit agreement due in December 1996 and a
$250 million, five-year non-amortizing revolving credit agreement due in
December 1999. As of September 30, 1996, the company had advances under the
five-year revolving credit agreement of $80 million and commercial paper
borrowings (supported by committed credit facilities) of $235 million.
Capital and acquisition spending of $549 million for the nine months ended
September 30, 1996 decreased $105 million versus the first nine months of 1995.
The decrease is primarily driven by lower acquisition spending, partially offset
by spending related to the development of a lithium resource in Argentina and
the expansion of hydrogen peroxide production capacity at Bayport, Texas. The
company continues to evaluate potential acquisitions on an ongoing basis.
Expected cash requirements for the remainder of 1996 include approximately $100
million to $120 million for planned capital expenditures (excluding potential
acquisitions) and net after-tax interest payments of approximately $15 million
based on current debt levels and interest rates. Cash to meet these requirements
will be provided primarily by the company's operations and, if necessary, by
existing cash balances and available short- or long-term credit facilities. As
discussed in Note 2 to the company's September 30, 1996 consolidated financial
statements, the company commenced a short-term commercial paper program in the
fourth quarter of 1995 to further expand its short-term financing options.
In 1995, the company filed a universal shelf registration under which $500
million of debt and/or equity securities may be publicly offered. As discussed
in Note 2 to the company's September 30, 1996 consolidated financial statements,
in July 1996, the company issued $100 million of Senior Debentures for net
proceeds of $98.2 million. The debentures carry an interest rate of 7.75% with
interest payable semi-annually through maturity on July 1, 2011. The net
proceeds were used to reduce variable rate short-term debt.
The company's ratios of earnings to fixed charges were 3.9x for the nine months
ended September 30, 1996 and 1995.
EFFECT OF ACQUISITION OF FRIGOSCANDIA EQUIPMENT HOLDING AB
----------------------------------------------------------
In June 1996, FMC acquired Frigoscandia Equipment Holding AB -- the global
leader in equipment for industrial in-line freezing - for approximately $165
million plus transaction costs and the assumption of Frigoscandia's debt. The
company anticipates that a portion of the unallocated purchase price at
September 30, 1996 will be allocated to goodwill and other intangible assets.
Portions of the purchase price will also be allocated to inventory and to
property, plant and equipment. In addition, the acquisition financing will
result in additional interest expense. Appraisals and other efforts necessary to
complete the purchase accounting for Frigoscandia are in process.
<PAGE>
PAGE 11
DISCONTINUED OPERATION
----------------------
Between July 31, 1996 and August 9, 1996 FMC sold all of its 80% interest in FMC
Gold Company through a secondary offering. Cash proceeds of the sale were used
to repay intercompany loans, accrued interest and other amounts owing to FMC
Gold Company at July 31, 1996. Additional transaction and other related costs
were paid from proceeds or accrued pending payment. The company recorded a gain
on the disposal of FMC Gold Company of $9.4 million ($19.7 million after tax)
during the quarter ended September 30, 1996. The Precious Metals segment is
classified as a discontinued operation in the company's September 30, 1996
consolidated financial statements. See Note 3 to the company's September 30,
1996 consolidated financial statements.
<PAGE>
PAGE 12
RESULTS OF CONTINUING OPERATIONS
--------------------------------
Third Quarter 1996 Compared With Third Quarter 1995
---------------------------------------------------
Industry Segment Data (Unaudited)
---------------------------------
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
September 30
---------------------
1996 1995
-------- --------
<S> <C> <C>
Sales
- -----
Performance Chemicals $ 332.6 $ 317.3
Industrial Chemicals 262.6 245.9
Machinery and Equipment 434.2 359.2
Defense Systems 237.8 225.2
Eliminations (5.6) (6.4)
-------- --------
$1,261.6 $1,141.2
======== ========
Income from continuing operations
- ---------------------------------
before income taxes (1)
-----------------------
Performance Chemicals $ 46.7 $ 53.1
Industrial Chemicals 45.4 43.5
Machinery and Equipment 22.6 7.8
Defense Systems 18.8 20.1
-------- --------
Operating profit from continuing
operations 133.5 124.5
Restructuring and other charges (2) - (150.0)
Gain on sale of FMC Wyoming stock (3) - 99.7
Corporate (21.7) (24.1)
Net interest expense (25.6) (22.2)
Other income and (expense), net (3.5) (1.4)
-------- --------
$ 82.7 $ 26.5
======== ========
</TABLE>
FMC has modified its presentation of segment results, effective first quarter
1996, to better align presentation with management's evaluation of segment
performance. Accordingly, business segment results are presented net of
minority interest, reflecting only FMC's share of earnings. The corporate line
primarily includes staff expenses, and other income and expense consists of all
other corporate items, including certain relatively minor amounts previously
allocated to business segments. Segment results for 1995 have been restated to
be consistent with the current period's presentation.
As described in Note 3 to the company's September 30, 1996 consolidated
financial statements, the operations constituting FMC's Precious Metals segment
have been reclassified as a discontinued operation and results of prior periods
have been restated for comparative purposes.
(1) Results for all segments are net of minority interests in 1996 and 1995 of
$(12.5) million and $(17.2) million, respectively, the majority of which,
$(8.8) million and $(13.8) million, pertains to Defense Systems.
(2) In 1995, pretax restructuring and other charges consisted of increased
environmental reserves of $82.5 million, ($68.5 million related to
Industrial Chemicals, $12 million related to Defense Systems and $2 million
related to Performance Chemicals), charges related to the shift of lithium-
based production to Argentina and other restructuring charges of $52 million
($43 million related to Performance Chemicals and $9 million related to
Industrial Chemicals) and the write-off of acquired in-process research and
development related to the Moorco International Inc. acquisition of $15.5
million (related to Machinery and Equipment).
(3) The 1995 nontaxable gain on sale of FMC Wyoming stock is attributable to the
Industrial Chemicals segment.
<PAGE>
PAGE 13
General
- -------
Sales of $1.3 billion in the quarter ended September 30, 1996 increased 11
percent from sales of $1.1 billion in the 1995 quarter, reflecting increases in
all segments. Before special income and expense items, income from continuing
operations of $59 million increased 10 percent compared with $54 million from
last year's period. Net income, including discontinued operations, was $55
million compared with $57 million last year. Last year's results included the
impact of the non-recurring nontaxable gain of $99.7 million from the sale of a
20 percent equity interest in FMC's soda ash business, partially offset by
increased environmental and other reserves totaling $96.2 million after tax.
Performance Chemicals
- ---------------------
Performance Chemicals sales of $333 million increased 5 percent from $317
million in last year's period, but earnings of $47 million were below the 1995
third quarter of $53 million. The earnings decline was due to the agricultural
products businesses, reflecting plant start-up costs and increased marketing
expenses associated with the launch of FMC's new Authority herbicide. Increased
international sales, especially in Asia, and a strong corn rescue market offset
a cotton pyrethroid market that was weaker due to low pest pressures.
Results from the specialty chemicals businesses showed strong gains from the
prior-year quarter. Both the food ingredients and the pharmaceutical businesses
are beginning to see declines in previously high raw material costs, with
further moderation expected in the fourth quarter. Lithium sales rose, due
primarily to increases in sales to the pharmaceutical industry. The new lithium
operation in Argentina will start up in early 1997. Process additives earnings
increased as production efficiencies improved.
Industrial Chemicals
- --------------------
Industrial Chemicals sales of $263 million increased 7 percent from $246 million
in the third quarter of last year, and earnings increased 4 percent to $45
million from $44 million last year, reflecting increased volumes and prices in
most businesses.
Sales and earnings of alkali products increased over third quarter 1995. In the
1996 quarter, soda ash prices and volumes were up from last year, reflecting
stronger domestic and international demand.
Phosphorus sales increased in the third quarter of 1996, reflecting higher
volumes partially attributable to the Rhone-Poulenc supply contract which began
in late 1995. Profits decreased slightly as the 1995 quarter included certain
favorable non-recurring items.
Peroxygen sales increased from the second quarter of 1996, reflecting higher
domestic hydrogen peroxide shipments as demand improved from the pulp and paper
industry. Compared with the third quarter of 1995, hydrogen peroxide prices
were higher but volumes were lower, causing overall hydrogen peroxide earnings
to be slightly down from last year's quarter.
FMC Foret sales increased in the third quarter of 1996, while profits remained
relatively even with last year's quarter.
Machinery and Equipment
- -----------------------
Machinery and Equipment sales of $434 million increased 21 percent from $359
million in 1995, and profits of $23 million increased significantly from $8
million in the prior-year period. Segment results improved due to stronger
performance of the base businesses, as well as the impact of acquisitions.
Petroleum equipment sales increased compared with 1995 primarily due to higher
western region subsea sales and increased sales to Statoil. Earnings increased
as well, reflecting the higher sales and improving markets.
Airport products sales increased in the third quarter of 1996 due to increased
sales of loaders, deicers and passenger boarding bridges. Earnings increased as
well, primarily reflecting the higher sales volumes.
<PAGE>
PAGE 14
Material handling sales and earnings are higher in 1996, reflecting increased
volumes and improving profit margins of idlers and water treatment equipment.
Sales and earnings of energy and transportation measurement equipment increased
in third quarter 1996 primarily related to the Smith Meter business and cost
reduction efforts in all businesses.
Sales and earnings of food processing systems improved in 1996 due largely to
the acquisition of FranRica late in the third quarter of 1995.
Defense Systems
- ---------------
Defense Systems sales of $238 million increased 6 percent from $225 million in
the prior-year period. Profits of $19 million, net of minority interest, were
slightly below the $20 million of profits in the 1995 quarter, primarily due to
the timing of the third quarter 1995 dividend from the company's joint venture
in Turkey.
Ground systems sales decreased in the third quarter 1996 compared with 1995 due
to lower production volumes. Earnings increased, however, as an unfavorable
pension adjustment in 1995 more than offset 1996's lower volumes.
Armament systems sales and earnings increased on the continued strength of the
Crusader program, higher shipments of vertical launching systems to the Navy and
higher aftermarket revenues.
The Paladin production operation produced increased sales and earnings in the
third quarter of 1996 as a result of higher Howitzer vehicle deliveries.
Corporate
- ---------
Corporate expenses declined $2 million from last year's quarter due to savings
related to reduced staffing levels.
Net Interest Expense
- --------------------
Net interest expense in the quarter increased to $26 million from $22 million in
last year's third quarter, reflecting higher debt levels associated with
acquisitions, increased capital spending and working capital associated with
increased sales.
Other Income and Expense
- ------------------------
Other income and expense, net, for the three-month period ended September 30,
1996 increased from the 1995 period primarily related to increased LIFO expense
in 1996.
Effective Tax Rates
- -------------------
The effective tax rates for the quarters ended September 30, 1996 and 1995 were
28 percent and (117) percent, respectively. Excluding the effects of the
special income and expense items, the effective tax rate for the 1995 third
quarter was 30 percent. The decrease from last year primarily reflects a change
in business mix.
Order Backlog
- -------------
FMC's backlog of unfilled orders as of September 30, 1996 was $2.8 billion
versus $2.0 billion at December 31, 1995. Machinery and Equipment backlog of
$1.1 billion increased from $545 million at the end of 1995. The increase in
backlog reflects the recognition of a significant portion of the previously
announced subsea order from Statoil, Norway's state-owned oil company, as well
as the impact of acquisitions including Frigoscandia. Defense backlog was $1.7
billion at the end of the quarter, up from $1.5 billion at December 31, 1995.
Backlogs are not reported for Industrial Chemicals or Performance Chemicals due
to the nature of these businesses.
<PAGE>
PAGE 15
RESULTS OF CONTINUING OPERATIONS
--------------------------------
Nine Months 1996 Compared With Nine Months 1995
-----------------------------------------------
Industry Segment Data (Unaudited)
---------------------------------
(In millions)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
----------------------------
1996 1995
---- ----
<S> <C> <C>
Sales
- -----
Performance Chemicals $ 982.0 $ 926.5
Industrial Chemicals 768.8 717.0
Machinery and Equipment 1,128.5 936.9
Defense Systems 747.8 702.9
Eliminations (20.5) (16.9)
-------- --------
$3,606.6 $3,266.4
======== ========
Income from continuing operations
- ---------------------------------
before income taxes (1)
- --------------------
Performance Chemicals $ 146.8 $ 157.8
Industrial Chemicals 116.4 128.1
Machinery and Equipment 54.4 32.0
Defense Systems 74.0 81.0
-------- --------
Operating profit from continuing
operations 391.6 398.9
Restructuring and other charges (2) - (150.0)
Gain on sale of FMC Wyoming stock (3) - 99.7
Corporate (68.0) (72.1)
Net interest expense (70.9) (56.9)
Other income and (expense), net (10.7) (1.6)
-------- --------
$ 242.0 $ 218.0
======== ========
</TABLE>
FMC has modified its presentation of segment results, effective first quarter
1996, to better align presentation with management's evaluation of segment
performance. Accordingly, business segment results are presented net of minority
interest, reflecting only FMC's share of earnings. The corporate line primarily
includes staff expenses, and other income and expense consists of all other
corporate items, including certain immaterial amounts previously allocated to
business segments. Segment results for 1995 have been restated to be consistent
with the current period's presentation.
As described in Note 3 to the company's September 30, 1996 consolidated
financial statements, the operations constituting FMC's Precious Metals segment
have been reclassified as a discontinued operation and results of prior periods
have been restated for comparative purposes.
(1) Results for all segments are net of minority interests in 1996 and 1995 of
$(48.0) million and $(42.5) million, respectively, the majority of which,
$(40.1) million and $(38.7) million, pertains to Defense Systems.
(2) In 1995, pretax restructuring and other charges consisted of increased
environmental reserves of $82.5 million, ($68.5 million related to
Industrial Chemicals, $12 million related to Defense Systems and $2 million
related to Performance Chemicals), charges related to the shift of lithium-
based production to Argentina and other restructuring charges of $52
million ($43 million related to Performance Chemicals and $9 million
related to Industrial Chemicals) and the write-off of acquired in-process
research and development related to the Moorco International Inc.
acquisition of $15.5 million (related to Machinery and Equipment).
(3) The 1995 nontaxable gain on sale of FMC Wyoming stock is attributable to
the Industrial Chemicals segment.
<PAGE>
PAGE 16
Presented below is a reconciliation of FMC's income from continuing operations
to income from continuing operations excluding special income and expense items,
as well as the related earnings per share ("EPS") for the nine months ended
September 30, 1995 and the year ended December 31, 1995:
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30,1995 December 31, 1995
------------------ -------------------
Income EPS Income EPS
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Income from continuing operations $192.4 $ 5.11 $217.5 $ 5.77
Add restructuring and other
charges (net of tax) 96.2 2.55 96.2 2.55
Deduct gain on sale of FMC
Wyoming stock (99.7) (2.64) (99.7) (2.64)
------- ------ ------- ------
Income from continuing operations
(excluding special income and
expense items) (1) $188.9 $ 5.02 $214.0 $ 5.68
====== ====== ====== ======
</TABLE>
(1) This supplemental information is presented solely for comparative analysis
and should not be considered in isolation nor as an alternative for income
from continuing operations.
Sales of $3.6 billion in the first nine months of 1996 increased 10 percent from
the corresponding 1995 period reflecting improvements across all segments,
including the benefits of acquisitions. Income from continuing operations of
$174 million declined from $189 million, before special income and expense
items, in the prior period. Net income decreased to $166 million in 1996 from
$187 million in 1995, including discontinued operations and the special income
and expense items. The income decline resulted from a weak first half of the
year, especially in demand for hydrogen perioxide due to a downturn in the pulp
and paper industry, and higher raw material costs in the food ingredients and
pharmaceutical businesses. Corporate expenses declined $4 million to $68 million
in 1996, reflecting lower staff expenses. Other expense increased in the first
nine months of 1996 primarily due to higher LIFO expense and the absence of one-
time pension benefits in 1995. Net interest expense increased to $71 million
from $57 million in 1995, reflecting higher debt levels associated with
acquisitions, increased capital spending and working capital associated with
increased sales.
Performance Chemicals sales of $982 million rose 6 percent compared with $927
million in last year's period; however, profits of $147 million decreased 7
percent compared with $158 million in last year's period. Sales benefited from
higher agricultural products volumes, but earnings declined due to higher raw
material prices in the specialty chemicals businesses.
Industrial Chemicals sales increased 7 percent to $769 million but profits
decreased 9 percent to $116 million versus the first nine months of 1995. Soda
ash volumes and prices increased during the first nine months of the year;
however, income declined due to lower hydrogen peroxide demand from a downturn
in the pulp and paper industry. In addition, the 1995 period included the
favorable impact of reversals of certain previously accrued expenses.
Machinery and Equipment sales of $1.1 billion rose 20 percent from $937 million,
and profits increased to $54 million from $32 million. Sales of energy and
transportation equipment benefited primarily from higher sales and profits in
the airport products markets as well as strong nine-month results at Kongsberg
Offshore, and growth in other energy and transportation equipment product lines.
Defense Systems sales were $748 million for the first nine months of 1996
compared with $703 million for the same period last year. Profits (net of
minority interest) totaled $74 million in the first nine months of 1996 compared
with profits of $81 million for the same period in 1995. Earnings declined in
1996 as a favorable legal judgment in the 1995 period more than offset the
impact of increased sales.
As the company previously reported, FMC was notified during the quarter ended
June 30, 1996 that the Armored Gun System, a development program FMC had worked
on since 1984, was cancelled by the U.S. government. Cancellation of the program
is not expected to have a material impact on FMC's financial position, results
of operations or cash flows.
<PAGE>
PAGE 17
The effective tax rates for the nine-month periods ended September 30, 1996 and
1995 were 28 percent and 12 percent, respectively. Excluding the effects of the
special 1995 income and expense items, the effective tax rate for the first nine
months of 1995 was 30 percent. The decline from 30 percent for the same period
last year is primarily a result of a change in business mix.
<PAGE>
PAGE 18
INDEPENDENT ACCOUNTANTS' REPORTS
--------------------------------
A report by KPMG Peat Marwick LLP, FMC's independent accountants, on the
financial statements included in Form 10-Q for the quarter ended September 30,
1996 is included on page 19.
A report by Ernst and Young LLP, United Defense Limited Partnership's
independent accountants, on the financial statements referred to by KPMG Peat
Marwick LLP in its report noted above is included on page 20.
<PAGE>
PAGE 19
SIGNATURE
Independent Accountants' Review Report
--------------------------------------
The Board of Directors
FMC Corporation:
We have reviewed the accompanying consolidated balance sheet of FMC Corporation
and consolidated subsidiaries as of September 30, 1996, and the related
consolidated statements of income for the three-month and nine-month periods
ended September 30, 1996 and 1995, and the consolidated statements of cash flows
for the nine-month periods ended September 30, 1996 and 1995. These consolidated
financial statements are the responsibility of the company's management.
We were furnished with the report of other accountants on their reviews of the
interim financial information of United Defense, L.P., whose total assets as of
September 30, 1996, and whose revenues for the three-month and nine-month
periods then ended constituted 12 percent, 19 percent and 21 percent,
respectively, of the related consolidated totals.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews and the report of other accountants, we are not aware of
any material modifications that should be made to the consolidated financial
statements referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of FMC Corporation and consolidated
subsidiaries as of December 31, 1995 and the related consolidated statements of
income, cash flows and changes in stockholders' equity for the year then ended
(not presented herein); and in our report dated January 17, 1996, we expressed
an unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of December 31, 1995 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
KPMG Peat Marwick LLP
Chicago, Illinois
October 15, 1996
<PAGE>
PAGE 20
SIGNATURE
Independent Accountants' Review Report
--------------------------------------
Partners
United Defense, L.P.
Arlington, Virginia
We have reviewed the balance sheet of United Defense, L.P. as of September 30,
1996, and the related statements of income for the three-month and nine-month
periods ended September 30, 1996 and 1995, the statements of cash flows for the
nine month periods ended September 30, 1996 and 1995,and the statement of
partners' equity for the nine-month period ended September 30, 1996. These
financial statements (not presented separately in the FMC Corporation Form 10-Q
for the quarter ended September 30, 1996) are the responsibility of the
Partnership's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the Partnership's financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
Ernst and Young LLP
Washington, D.C.
October 14, 1996
<PAGE>
PAGE 21
Part II - Other Information
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- ------ -----------------
Environmental Proceeding
- ------------------------
There have been no significant changes in the status of the environmental
inspection and notice of alleged violation at FMC's Phosphorus Chemicals
Division plant from the information reported in the company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996. However, by letter dated
October 17, 1996, the U.S. Environmental Protection Agency, Region 10, advised
the Company to cease all dredging or other waste management activities at Pond
9E at the plant, directed that no further materials be added to it and ordered
FMC to submit a plan for final closure of the Pond.
Beartrack Proceedings
- ---------------------
The company divested its Precious Metals operation as reported in Note 3 to the
company's September 30, 1996 consolidated financial statements. Therefore the
company is no longer involved in the Beartrack proceedings reported in the
company's December 31, 1995 Annual Report on Form 10-K.
<PAGE>
PAGE 22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits
Number in
Exhibit Table Description
------------- -----------
11 Statement re: computation of per share earnings
assuming full dilution
12 Statement re: computation of ratios of earnings
to fixed charges
15 Letters re: unaudited interim financial
information
27 Financial data schedule
(b) Reports on Form 8-K
-------------------
Form 8-K dated July 2, 1996 to file conformed copies of an Underwriting
Agreement executed in connection with a proposed offering of 7 3/4%
Senior Debentures.
Form 8-K dated July 24, 1996 describing FMC Gold Company's announcement
of the results of a Special Stockholder Meeting and FMC's announcement
of the pricing of a secondary offering of FMC Gold Company (Meridian
Gold Inc.) common stock.
<PAGE>
PAGE 23
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 thereunto duly authorized.
FMC CORPORATION
---------------
(Registrant)
Date: November 8, 1996 Ronald D. Mambu
---------------- _______________
Vice President and Controller and
duly authorized officer
<PAGE>
PAGE 1
EXHIBIT INDEX
-------------
Number in
Exhibit Table Description
- ------------- -----------
11 Statement re: computation of per share earnings
assuming full dilution
12 Statement re: computation of ratios of earnings
to fixed charges
15 Letters re: unaudited interim financial
information
27 Financial data schedule
<PAGE>
PAGE 1
FMC Corporation
Quarterly Report
on Form 10-Q for
September 30, 1996
Exhibit 11 Statement re:
-------------
Computation of Per Share Earnings Assuming
------------------------------------------
Full Dilution (Unaudited)
-------------------------
(In thousands, except per share data)
-------------------------------------
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
------------------ ------------------
1996 1995 1996 1995
------- ------- -------- --------
<S> <C> <C> <C> <C>
Earnings:
Net income $54,581 $57,049 $166,102 $187,197
Shares:
Average number of shares of
common stock and common
stock equivalents
outstanding 38,053 37,848 38,028 37,685
Additional shares assuming
conversion of
stock options 1 195 37 116
------- ------- -------- --------
Pro forma shares 38,054 38,043 38,065 37,801
======= ======= ======== ========
Earnings per common share
assuming full dilution $ 1.44 $ 1.50 $ 4.36 $ 4.95
======= ======= ======== ========
</TABLE>
<PAGE>
PAGE 2
FMC Corporation
Quarterly Report
on Form 10-Q for
September 30, 1996
Exhibit 12 Computation of Ratios of Earnings to Fixed Charges
--------------------------------------------------
(In millions, except ratio data)
--------------------------------
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1996 1995
------ ------
<S> <C> <C>
Earnings:
Income from continuing operations $242.0 $218.0
before income taxes
Minority interests 48.0 42.5
Undistributed (earnings) losses of
affiliates (7.1) 0.4
Interest expense and amortization
of debt discount, fees and expenses 75.0 64.5
Amortization of capitalized interest 6.2 6.0
Interest included in rental expense 10.9 16.0
------ ------
Total earnings $375.0 $347.4
------ ------
Fixed charges:
Interest expense and amortization
of debt discount, fees and expenses $ 75.0 $ 64.5
Interest capitalized as part of
fixed assets 11.1 7.9
Interest included in rental expense 10.9 16.0
------ ------
Total fixed charges $ 97.0 $ 88.4
------ ------
Ratio of earnings to fixed charges 3.9x 3.9x
====== ======
(A)
</TABLE>
(A) The ratio of earnings to fixed charges for the nine months ended September
30, 1995 before the gain on sale of FMC Wyoming stock, restructuring and
other charges and write-off of acquired in-process research and development
was 4.5x.
<PAGE>
PAGE 3
FMC Corporation
SIGNATURE Quarterly Report
on Form 10-Q for
September 30, 1996
Exhibit 15 Letter re: Unaudited Interim Financial Information
--------------------------------------------------
FMC Corporation
Chicago, Illinois
Gentlemen:
Re: Registration Statements No. 33-10661 and No. 33-7749 on Form S-8 and
Registration Statements No. 33-45648 and 33-62415 on Form S-3.
With respect to the subject registration statements, we acknowledge our
awareness of the incorporation by reference of our report dated October 15, 1996
related to our reviews of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
Very truly yours,
KPMG Peat Marwick LLP
Chicago, Illinois
November 8, 1996
<PAGE>
PAGE 4
FMC Corporation
SIGNATURE Quarterly Report
on Form 10-Q for
September 30, 1996
Exhibit 15 Letter re: Unaudited Interim Financial Information
--------------------------------------------------
October 14, 1996
Securities and Exchange Commission
Washington, D.C. 20549
We are aware of the incorporation by reference in the Registration Statements
(Form S-3 No. 33-62415, Form S-3 No. 33-45648, Form S-8 No. 33-10661 and Form S-
8 No. 33-7749) of FMC Corporation for the registration of its common stock of
our report dated October 14, 1996 relating to the unaudited interim financial
statements of United Defense, L.P. which is included in the Form 10-Q of FMC
Corporation for the quarter ended September 30, 1996.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the registration statements prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
FMC Corporation Form 10Q for the Quarter Period Ended September 30, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 116
<SECURITIES> 0
<RECEIVABLES> 881
<ALLOWANCES> 8
<INVENTORY> 826
<CURRENT-ASSETS> 2,080
<PP&E> 4,192
<DEPRECIATION> 2,315
<TOTAL-ASSETS> 4,852
<CURRENT-LIABILITIES> 2,091
<BONDS> 1,056
<COMMON> 3
0
0
<OTHER-SE> 821
<TOTAL-LIABILITY-AND-EQUITY> 4,852
<SALES> 3,606
<TOTAL-REVENUES> 3,673
<CGS> 2,679
<TOTAL-COSTS> 2,679
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 75
<INCOME-PRETAX> 242<F1>
<INCOME-TAX> 68
<INCOME-CONTINUING> 173
<DISCONTINUED> (7)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 166
<EPS-PRIMARY> 4.37
<EPS-DILUTED> 4.36
<FN>
<F1> Income before taxes and other items includes minority interest expense of
$48.0 million. Minority interest expense is primarily limited partner's
share of partnership profits for which tax has not been provided.
</FN>
</TABLE>
