<PAGE>
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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 March 31, 2000
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 March 31, 2000
- --------------------------------------- -----------------------------
Common Stock, par value $0.10 per share 30,355,642
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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
Ended March 31
--------------
2000 1999
------ ------
<S> <C> <C>
Sales $959.0 $974.7
Costs and expenses:
Cost of sales 717.1 718.6
Selling, general and
administrative expenses 138.1 149.7
Research and development 36.7 37.1
------ ------
Total costs and expenses 891.9 905.4
------ ------
Income before minority interests,
interest expense, interest income and
income taxes 67.1 69.3
Minority interests 0.7 0.6
Interest expense 24.8 30.2
Interest income (1.8) (2.3)
------ ------
Income before income taxes 43.4 40.8
Provision for income taxes 10.6 10.5
------ ------
Net income $ 32.8 $ 30.3
====== ======
Basic earnings per common share $ 1.08 $ 0.94
====== ======
Average number of shares used in basic
earnings per share computations 30.4 32.3
====== ======
Diluted earnings per common share $ 1.05 $ 0.92
====== ======
Average number of shares used in diluted
earnings per share computations 31.3 33.0
====== ======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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FMC Corporation and Consolidated Subsidiaries
Consolidated Balance Sheets
(In millions, except share and per share data)
<TABLE>
<CAPTION>
March 31
2000 December 31
(Unaudited) 1999
----------- -----------
<S> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 52.3 $ 64.0
Trade receivables, net of allowances
of $14.7 in 2000 and $14.9 in 1999 621.1 635.4
Inventories 447.4 457.7
Other current assets 213.7 172.6
Deferred income taxes 79.5 86.8
-------- --------
Total current assets 1,414.0 1,416.5
Investments 201.3 206.8
Property, plant and equipment, net (Note 3) 1,690.8 1,691.9
Goodwill and intangible assets 526.1 505.7
Other assets 87.1 88.8
Deferred income taxes 78.8 86.1
-------- --------
Total assets $3,998.1 $3,995.8
======== ========
Liabilities and Stockholders' Equity:
Current liabilities:
Short-term debt (Note 5) $ 484.7 $ 347.5
Accounts payable, trade and other 603.4 665.5
Accrued and other current liabilities 440.4 478.5
Current portion of long-term debt (Note 5) 0.9 0.8
Current portion of accrued pensions
and other postretirement benefits 10.5 10.5
Income taxes payable 65.0 73.2
-------- --------
Total current liabilities 1,604.9 1,576.0
Long-term debt, less current portion (Note 5) 928.0 945.1
Accrued pensions and other postretirement
benefits, less current portion 235.7 237.6
Reserve for discontinued operations and
other liabilities (Note 6) 305.6 319.2
Other liabilities 130.9 128.1
Minority interests in consolidated companies 45.3 46.2
Stockholders' equity:
Preferred stock, no par value, authorized
5,000,000 shares; no shares issued in
2000 or 1999 - -
Common stock, $0.10 par value, authorized
130,000,000 shares; issued 38,340,501
shares in 2000 and 38,331,817 shares in 1999 3.8 3.8
Capital in excess of par value of common
stock 166.3 165.8
Retained earnings 1,321.1 1,288.3
Accumulated other comprehensive loss (231.9) (203.5)
Treasury stock, common, at cost;
7,984,859 shares in 2000 and 7,968,230
shares in 1999 (511.6) (510.8)
-------- --------
Total stockholders' equity 747.7 743.6
-------- --------
Total liabilities and stockholders' equity $3,998.1 $3,995.8
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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FMC Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(In millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------
2000 1999
------- ------
<S> <C> <C>
Cash required by operating activities of
continuing operations:
Net income $ 32.8 $ 30.3
Adjustments to reconcile net income to cash
provided (required) by operating activities
of continuing operations:
Restructuring and other charges 2.7 -
Depreciation and amortization 45.7 43.5
Deferred income taxes 14.5 13.4
Minority interests 0.7 0.7
Other (7.2) (44.5)
Changes in operating assets and liabilities:
Accounts receivable sold 23.0 -
Trade receivables, net 0.9 (29.6)
Inventories 17.5 (16.4)
Other current assets and other assets (24.8) (19.7)
Accounts payable, accrued and other
current liabilities and other liabilities (115.8) 1.4
Income taxes payable (8.2) (2.3)
Restructuring reserve (3.9) (13.1)
Accrued pension and other
postretirement benefits, net (2.6) 10.1
------- ------
Cash required by operating activities of
continuing operations $ (24.7) $(26.2)
======= ======
</TABLE>
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FMC Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows (Unaudited) (Continued)
(In millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31
----------------
2000 1999
------ ------
<S> <C> <C>
Cash required by operating activities
of continuing operations $(24.7) $(26.2)
------ ------
Cash required by discontinued operations (11.9) (8.8)
------ ------
Cash provided (required) by investing
activities:
Acquisitions of businesses (45.4) (16.6)
Capital expenditures (53.3) (43.6)
Disposal of property, plant and
equipment 7.3 8.7
Decrease in investments 5.0 10.4
------ ------
Cash required by investing activities (86.4) (41.1)
------ ------
Cash provided (required) by financing
activities:
Net proceeds from issuance of
(net repayment of) commercial paper 164.3 (41.9)
Net (decrease) increase in other
short-term debt (23.1) 174.6
Proceeds from issuance of long-term debt - 24.9
Repayment of long-term debt (17.2) (15.2)
Net (repayments) borrowings under
credit facilities (8.9) 39.9
Distributions to minority partner (1.5) (2.7)
Repurchases of common stock (0.8) (50.6)
Issuances of common stock 0.5 0.7
------ ------
Cash provided by financing activities 113.3 129.7
------ ------
Effect of exchange rate changes on cash
and cash equivalents (2.0) (0.1)
------ ------
Decrease in cash and cash equivalents (11.7) 53.5
Cash and cash equivalents, beginning
of year 64.0 61.7
------ ------
Cash and cash equivalents, end of period $ 52.3 $115.2
====== ======
</TABLE>
Supplemental disclosure of cash flow information:
Interest payments were $29.6 million and $28.2 million, and cash paid (received)
for income taxes amounted to $1.9 million and $(0.3) million for the three-month
periods ended March 31, 2000 and 1999, respectively.
The accompanying notes are an integral part of the consolidated financial
statements.
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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
March 31, 2000, and the related consolidated statements of income and cash flows
for the interim periods ended March 31, 2000 and 1999 have been reviewed by
FMC's independent accountants. The review is described more fully in their
report included herein. In the opinion of management, these financial statements
have been prepared in conformity with generally accepted accounting principles
and reflect all adjustments necessary for a fair statement of the company's
results of operations and cash flows for the interim periods ended March 31,
2000 and 1999 and of its financial position as of March 31, 2000. All such
adjustments are of a normal recurring nature. The results of operations for the
three-month periods ended March 31, 2000 and 1999 are not necessarily indicative
of the results of operations for the full year.
Certain prior period amounts have been reclassified to conform to the current
period's presentation.
The company's accounting policies are set forth in Note 1 to the company's
consolidated 1999 financial statements, which are incorporated by reference in
the company's 1999 Annual Report on Form 10-K.
Note 2: Recent Accounting Pronouncements
- -----------------------------------------
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities", is effective (as amended) for
financial statements for fiscal years beginning after June 15, 2000, but may be
adopted in earlier periods. The company is evaluating the new standard's
provisions and has not yet determined what the effect of SFAS No. 133 will be on
the earnings and the financial position of the company. The company intends to
adopt the standard on January 1, 2001.
Note 3: Property, Plant and Equipment
- --------------------------------------
Property, plant and equipment comprised the following:
<TABLE>
<CAPTION>
March 31
2000 December 31
(Unaudited) 1999
----------- -----------
<S> <C> <C>
Property, plant and equipment, at cost $3,733.5 $3,724.0
Accumulated depreciation 2,042.7 2,032.1
-------- --------
Net property, plant and equipment $1,690.8 $1,691.9
======== ========
</TABLE>
Note 4: Reserves for Restructuring, Impairment and Other Costs
- ---------------------------------------------------------------
Reserves for restructuring programs announced in 1999 were $7.7 million and
$10.0 million at March 31, 2000 and December 31, 1999, respectively. Spending
during the three months ended March 31, 2000 related primarily to workforce
reductions completed in the Agricultural Products segment and in certain
corporate and chemical shared service support departments. Reserves related to
programs announced prior to 1999 were not significant at March 31, 2000.
During the three months ended March 31, 2000, the company established new
reserves of $5.0 million related to the consolidation of its combined workforce
at its alkali chemical facilities in Wyoming, including the cost of separation
programs for approximately 80 people. Of the
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amounts reserved, $2.7 million was charged to expense and $2.3 million was
recorded as a liability in the acquisition accounting for Tg Soda Ash, Inc.
("TgSA") and did not impact earnings in the three months ended March 31, 2000.
During the three months ended March 31, 2000, the company spent $0.5 million
related to this program, and the remainder is expected to be expended during
2000.
Note 5: Debt
- -------------
In December 1996, the company entered into a $450.0 million, five-year non-
amortizing revolving credit agreement due December 2001. In July 1999, the
company renewed a $350.0 million, 364-day non-amortizing revolving credit
agreement due July 2000. These agreements provide the company with $800.0
million in committed credit facilities. No amounts were outstanding under these
credit facilities as of March 31, 2000 or December 31, 1999. Among other
restrictions, the credit agreements contain covenants relating to liens,
consolidated net worth and cash flow coverage (as defined in the agreements).
The company is in compliance with all debt covenants.
On August 3, 1998, a universal shelf registration statement became effective,
under which $500.0 million of debt and/or equity securities may be offered.
Unused capacity of $345.0 million remains available under the 1998 shelf
registration at March 31, 2000.
During the first quarter of 1999, the company issued $25.0 million of medium-
term notes at 6.53 percent. The net proceeds of $24.9 million were used to
retire other borrowings and repurchase FMC common stock.
Exchangeable senior subordinated debentures bearing interest at 6.75 percent and
maturing in 2005 are exchangeable at any time into Meridian Gold Inc. common
stock at an exchange price of $15.125 per share, subject to adjustment. The
company may, at its option, pay an amount equal to the market price of Meridian
Gold Inc. common stock in lieu of delivery of the shares. The debentures are
subordinated in right of payment to all existing and future senior indebtedness
of the company. The debentures are redeemable at the option of FMC at prices
decreasing from 103.375 percent of the face amount on January 16, 1995, to par
on January 16, 2000. The company redeemed $15.7 million of these debentures in
1999.
In February 2000, the company retired $17.0 million in senior long-term bonds
due in 2011, bearing interest at 7.75 percent.
Short-term debt consists of commercial paper, borrowings under uncommitted
credit facilities and foreign borrowings at March 31, 2000 and December 31,
1999.
In November 1995, the company commenced a short-term commercial paper program,
supported by committed credit facilities, providing for the issuance of up to
$500.0 million in aggregate maturity value of commercial paper at any given
time. Three-day commercial paper of $360.0 and $190.8 million was outstanding at
March 31, 2000 and December 31, 1999, respectively.
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Advances under uncommitted credit facilities were $80.9 and $89.8 million at
March 31, 2000 and December 31, 1999, respectively.
Note 6: Reserves for Discontinued Operations and Other Liabilities
- -------------------------------------------------------------------
Reserves for discontinued operations and other liabilities at March 31, 2000 and
December 31, 1999 were $305.6 million and $319.2 million, respectively. At March
31, 2000, substantially all reserves related to environmental, post-employment
benefit, self-insurance and other long-term obligations associated with
operations discontinued between 1976 and 1997 and to environmental obligations
related to the company's operating facilities. See Note 3 to the company's
December 31, 1999 consolidated financial statements and Note 7 below.
Note 7: Environmental Obligations
- ----------------------------------
The company has provided reserves for potential environmental obligations which
management considers probable and for which a reasonable estimate of the
obligation could be made. Accordingly, reserves of $256.6 million and $266.8
million, excluding recoveries, have been provided at March 31, 2000 and December
31, 1999, respectively. The long-term portions of these reserves, totaling
$233.3 million and $244.0 million, are included in the reserve for discontinued
operations and other liabilities at March 31, 2000 and December 31, 1999,
respectively, and the short-term portions are recorded as other current
liabilities.
Recoveries of $60.0 million have been recorded as probable realization of claims
against third parties at March 31, 2000. Total recoveries recorded at December
31, 1999 were $60.2 million. The assets, the majority of which relate to
existing contractual arrangements with U.S. government agencies and insurance
carriers, are recorded as an offset to the reserve for discontinued operations
and other liabilities.
The company has estimated that reasonably possible contingent environmental
losses may exceed amounts accrued by as much as $80 million at March 31, 2000.
Obligations that have not been reserved for may be material to any one quarter's
or year's results of operations in the future. Management, however, believes the
liability arising from the potential environmental obligations is not likely to
have a materially adverse effect on the company's liquidity or financial
condition and may be satisfied over the next twenty years or longer.
A more complete description of the company's environmental contingencies and the
nature of its potential obligations is included in Notes 1 and 14 to FMC's
December 31, 1999 consolidated financial statements.
Note 8: Capital Stock
- ----------------------
On August 28, 1997, the Board of Directors authorized a $500 million open-market
stock repurchase program for FMC common stock through the end of 1999. During
this period, the company repurchased a total of 7.6 million of its common shares
at a cost of $494.9 million. Also during this period, 128 thousand shares were
purchased by the company for an employee benefit trust at a net cost of $7.2
million.
During the three months ended March 31, 2000, the company repurchased
approximately 17 thousand of its common shares for an employee benefit trust at
a cost of $0.8 million. During the three months ended March 31, 1999, the
company repurchased approximately 1.0 million common shares under the stock
repurchase program at a cost of $50.6 million.
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On August 27, 1999, the Board of Directors authorized an additional $50 million
of open market repurchases of FMC common stock, which the company has not
commenced as of March 31, 2000. Depending on market conditions, the company may,
from time to time, purchase additional shares of its common stock on the open
market.
At March 31, 2000, the company had 30.3 million shares outstanding and 1.2
million additional shares assuming conversion of stock options and other
dilutive potential common shares (calculated under the treasury stock method).
Note 9: Comprehensive Earnings (Loss)
- --------------------------------------
Comprehensive earnings or loss includes all changes in stockholders' equity
during the period except those resulting from investments by owners and
distributions to owners. The company's comprehensive earnings (loss) for the
three-month periods ended March 31, 2000 and 1999 consisted of the following:
<TABLE>
<S> <C> <C>
2000 1999
------ ------
Net income $ 32.8 $ 30.3
Other comprehensive loss:
Foreign currency translation adjustment (28.4) (43.3)
------ ------
Comprehensive earnings (loss) $ 4.4 $(13.0)
====== ======
</TABLE>
Note 10: Divestitures
- ----------------------
On July 9, 1999, the company completed the sale of its bioproducts business to
Cambrex Corporation. The bioproducts business was included in the Specialty
Chemicals segment and had sales of approximately $6 million for the three months
ended March 31, 1999.
On July 31, 1999, FMC completed the sale of its process additives business to
Great Lakes Chemical Corporation. The process additives business was included in
the Specialty Chemicals segment and had sales of approximately $42 million for
the three months ended March 31, 1999.
Note 11: Business Combinations
- -------------------------------
Effective April 1, 2000, FMC and Solutia Inc. ("Solutia") formed a joint
venture, which includes the North American and Brazilian phosphorus chemical
operations of both companies. The joint venture, Astaris LLC ("Astaris"), is a
limited liability company equally owned by FMC and Solutia.
Astaris is expected to have annual sales of approximately $600 million and will
be headquartered in St. Louis, Missouri. The Federal Trade Commission's
("FTC"'s) approval of the transaction, which was received on April 10, 2000, is
subject to final approval after the standard 30-day public comment period.
As a new company, Astaris will include the FMC manufacturing sites located in
Carteret, NJ; Lawrence, KS (phosphoric acid and phosphates); Green River, WY
(phosphate plant only); Kemmerer, WY; Pocatello and Dry Valley, ID. Astaris also
will include the Solutia manufacturing sites in Carondelet
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PAGE 10
(St Louis), MO; Ontario, CA; Augusta, GA; and the units dedicated to phosphorus
chemicals at Trenton, MI; Sauget, IL; and Sao Jose dos Campos, Brazil. Solutia's
equity interest in the Fosbrasil joint venture producing purified phosphoric
acid also will be transferred and become part of the joint venture. The
phosphate operations of FMC Foret are not included in the joint venture.
Astaris will assume all FMC/NuWest agreements relating to a purified phosphoric
acid ("PPA") facility being built near Soda Springs, ID and will purchase all
the PPA output from that facility as part of those agreements.
Shortly following its formation and as part of the FTC approval process, Astaris
expects to sell certain operations at Lawrence, KS, to Peak Investments (Kansas
City, MO). In addition, effective on October 1, 2000, Astaris expects to sell
its Augusta, GA plant assets to Societe Chimique Prayon-Rupel S.A. (Belgium).
FMC's share of Astaris' earnings will be included in the Industrial Chemicals
segment. Sales of FMC's phosphorus chemical division were approximately $304
million and $73 million for the year ended December 31, 1999 and the three
months ended March 31, 2000, respectively.
On February 16, 2000, FMC acquired York International's Northfield Freezing
Systems Group ("Northfield") for $42.4 million in cash. Northfield,
headquartered in Northfield, MN, is a manufacturer of freezing systems for
industrial food processing. Northfield's key products include freezers, coolers,
proofers and dehydrators for the food processing industry.
The Northfield 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 values of such
assets and liabilities at the date of acquisition. Due to the timing of the
transaction, however, FMC's consolidated balance sheet at March 31, 2000
includes the historical accounts of Northfield as of the acquisition date,
adjusted only for post-acquisition activity and certain known elements of
purchase accounting. The remaining excess purchase price at March 31, 2000 is
classified in goodwill and intangible assets on the company's consolidated
balance sheet and will be allocated to the assets acquired (which will include
goodwill 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. Results of the acquired business are included in the Food
and Transportation Systems segment from the date of acquisition.
On June 30, 1999, FMC acquired the assets of TgSA from Elf Atochem North
America, Inc. for approximately $51 million in cash and a contingent payment due
at year-end 2003. The contingent payment amount, which will be based on the
financial performance of the combined soda ash operations between 2001 and 2003,
cannot currently be determined but could be as much as $100 million. No goodwill
was recorded as a result of this transaction. TgSA's operations are included in
the Industrial Chemicals segment.
Also on June 30, 1999, the company completed the acquisition of the assets of
Pronova Biopolymer AS from a wholly owned subsidiary of Norsk Hydro for
approximately $184 million in cash. The company made an additional payment of
$3.3 million in January 2000 as final settlement of the transaction.
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PAGE 11
The acquired entity, which was combined with certain FMC alginate-based
businesses and renamed FMC BioPolymer AS ("BioPolymer"), is headquartered in
Drammen, Norway and is a leading producer of alginates used in the
pharmaceutical, food and industrial markets. The company has recorded goodwill
(to be amortized over 30 years) and other intangible assets totaling
approximately $135.0 million related to the acquisition. BioPolymer's operations
are included in the Specialty Chemicals segment.
The company completed several smaller acquisitions and joint ventures during the
three-month periods ended March 31, 2000 and 1999.
Note 12: Legal Contingency
- ---------------------------
On April 14, 1998, a jury returned a verdict against the company in the amount
of $125.0 million in conjunction with a federal False Claims Act action, in
which Mr. Henry Boisvert filed and ultimately took to trial allegations that the
company had filed false claims for payment in connection with its contract to
provide Bradley Fighting Vehicles to the U.S. Army between 1981 and 1996. Under
law, portions of the jury verdict were subject to doubling or trebling. On
December 24, 1998, the U.S. District Court for the Northern District of
California entered judgment for Mr. Boisvert in the amount of approximately $87
million. This was approximately $300 million less than the maximum judgment
possible under the jury verdict. The reduction resulted from several rulings by
the District Court in favor of the company in the post-trial motions. Briefing
on cross-appeals by both parties to the U.S. Court of Appeals for the Ninth
Circuit has been completed, and it is possible that oral arguments will be heard
during 2000. Both sides are asserting arguments on appeal, and a number of the
company's arguments, if successful, would alter or eliminate the amount of the
existing judgment. Any legal proceeding is subject to inherent uncertainty, and
it is not possible to predict how the appellate court will rule. Therefore, the
company's management believes based on a review, including a review by outside
counsel, that it is not possible to estimate the amount of a probable loss, if
any, to the company that might result from some adverse aspects of the judgment
ultimately standing against the company. Accordingly, no provision for this
matter has been made in the company's consolidated financial statements.
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PAGE 12
Note 13: Segment Information (Unaudited)
- -----------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------
(In millions)
2000 1999
---- ----
<S> <C> <C>
Sales
- -----
Energy Systems $256.4 $290.2
Food and Transportation Systems 185.2 181.5
Agricultural Products 165.8 146.6
Specialty Chemicals 124.9 148.5
Industrial Chemicals 229.2 213.4
Eliminations (2.5) (5.5)
------ ------
$959.0 $974.7
====== ======
Income before income taxes
- --------------------------
Energy Systems $ 11.0 $ 16.8
Food and Transportation Systems 12.0 10.5
Agricultural Products 13.9 14.7
Specialty Chemicals 19.5 18.8
Industrial Chemicals 34.5 34.5
------ ------
Operating profit 90.9 95.3
Corporate (17.4) (20.1)
Other income and (expense), net (7.1) (6.5)
Net interest expense (23.0) (27.9)
------ ------
$ 43.4 $ 40.8
====== ======
</TABLE>
A description of the company's segment determination, composition and
presentation is included in Note 1 to the company's December 31, 1999
consolidated financial statements.
Business segment results are presented net of minority interests, reflecting
only FMC's share of earnings. Minority interests for the periods ended March 31,
2000 and 1999 were not significant. The corporate line primarily includes staff
expenses, and other income and expense consists of all other corporate items,
including LIFO inventory adjustments and certain components of employee benefit
plan (cost) benefit.
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PAGE 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS - SAFE HARBOR PROVISIONS
---------------------------------------------------
Item 2 of this report contains certain forward-looking statements that are based
on management's current views and assumptions regarding future events, future
business conditions and the outlook for the company based on currently available
information.
Whenever possible, the company has identified these forward-looking statements
by such words or phrases as "will likely result", "is confident that",
"expected", "should", "could", "will continue to", "believes", "anticipates",
"predicts", "forecasts", "estimates", "projects" or similar expressions
identifying "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based on management's current views and assumptions regarding future events,
future business conditions and the outlook for the company based on currently
available information. The forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those expressed in, or implied by, these statements. These statements are
qualified by reference to the section "Forward-Looking Statements - Safe Harbor
Provisions" in Item 1 of the company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999. The company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made.
The company cautions that the referenced list of factors may not be all-
inclusive, and the company specifically declines to undertake any obligation to
publicly revise any forward-looking statements that have been made to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Cash and cash equivalents at March 31, 2000 and December 31, 1999 were $52.3
million and $64.0 million, respectively. The company had total borrowings of
$1.4 billion and $1.3 billion, as of March 31, 2000 and December 31, 1999,
respectively.
Cash required by operating activities of $24.7 million for the quarter ended
March 31, 2000 decreased slightly when compared with $26.2 million in first
quarter 1999. Cash provided through sales of receivables, initiated in the
fourth quarter of 1999, provided $23 million during the first quarter of 2000.
Cash required by investing activities of $86.4 million in the first quarter of
2000 increased from the 1999 requirement of $41.1 million, reflecting the higher
costs of business acquisitions arising from the Northfield acquisition in the
first quarter of 2000, and increased capital expenditures related to
environmental compliance at current operating sites.
During April 2000, FMC and Solutia Inc received the approval of the Federal
Trade Commission to form Astaris LLC, a joint venture. Following the formation
of Astaris LLC in the second quarter of 2000, FMC expects to receive an initial
dividend that could be in excess of $100 million.
<PAGE>
PAGE 14
In addition to the Northfield acquisition, the company had other less
significant acquisition expenditures in the first quarter of 2000 and 1999 and
continues to evaluate potential acquisitions, divestitures and joint ventures on
an ongoing basis.
Cash provided by financing activities in 2000 of $113.3 million decreased when
compared with cash provided of $129.7 million in the first quarter of 1999. For
the three-month period ended March 31, 2000, the company increased its
commercial paper borrowings by $164.3 million with the proceeds being used to
fund operating capital requirements and business acquisitions. Partially
offsetting this increase were reductions in other short-term debt and borrowings
under uncommitted credit facilities of $23.1 million and $8.9 million,
respectively. In February 2000, FMC retired $17.0 million in senior long-term
bonds due in 2011, bearing interest at 7.75 percent.
The company has $800.0 million in committed credit facilities, consisting of a
$350.0 million, 364-day non-amortizing revolving credit agreement due in July
2000 and a $450.0 million, five-year non-amortizing revolving credit agreement
due in December 2001. As of March 31, 2000, the company had no borrowings under
the revolving credit agreements and had commercial paper borrowings (supported
by committed credit facilities) of $360.0 million and borrowings under
uncommitted U.S. credit facilities of $80.8 million.
On August 3, 1998, a universal shelf registration statement became effective,
under which $500.0 million of debt and/or equity securities may be offered.
Unused capacity of $345.0 million remains available under the 1998 shelf
registration at March 31, 2000.
During the first quarter of 1999, the company issued $25.0 million of medium-
term notes at 6.53 percent. The net proceeds of $24.9 million were used to
retire other borrowings and repurchase FMC common stock.
During 1999, the company completed the common stock open-market repurchase
program originally authorized by the Board of Directors on August 28, 1997.
Purchases for 1999 totaled 2.5 million shares at a cost of $137.5 million. A
total of 7.7 million shares were repurchased during fiscal years 1997 through
1999. The net cost of approximately $502 million represents purchases related to
the repurchase program and purchases made for an employee benefit trust of
approximately $495 million and $7 million, respectively.
During the three months ended March 31, 2000, the company repurchased
approximately 17 thousand of its common shares for an employee benefit trust at
a cost of $0.8 million. During the three months ended March 31, 1999, the
company repurchased approximately 1.0 million common shares under the stock
repurchase program at a cost of $50.6 million.
On August 27, 1999, the Board of Directors authorized an additional $50 million
of open market repurchases of FMC common stock, which the company has not
commenced as of March 31, 2000. Depending on market conditions, the company may,
from time to time, purchase additional shares of its common stock on the open
market.
<PAGE>
PAGE 15
The company expects to meet operating needs, fund capital expenditures and
potential acquisitions, and meet debt service requirements for the remainder of
2000 through cash generated from operations and available credit facilities. FMC
expects its remaining cash requirements for 2000 to include approximately $195
million for planned capital expenditures, excluding potential acquisitions, and
including approximately $84 million for capital projects related to
environmental control facilities. Projected remaining 2000 spending also
includes approximately $45 million for environmental compliance at current
operating sites, which is an operating expense of the company, plus
approximately $54 million of remediation spending and $4 million for
environmental study costs at current operating, previously operated and other
sites, which has been accrued in prior periods.
The company's accumulated other comprehensive loss increased from $203.5 million
at December 31, 1999 to $231.9 million at March 31, 2000, as a result of foreign
currency translation adjustments primarily reflecting the negative translation
impact of the Spanish peseta against the U.S. dollar.
The company's ratios of earnings to fixed charges were 2.4x and 2.2x for the
three-month periods ended March 31, 2000 and 1999, respectively. The increase in
the ratio when compared with March 31, 1999 is primarily the result of lower
interest expense and higher income before income taxes in 2000.
<PAGE>
PAGE 16
DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISKS
-------------------------------------------------
FMC's primary financial market risks include fluctuations in interest rates and
currency exchange rates. The company manages these risks by using derivative
financial instruments in accordance with established policies and procedures.
FMC does not use derivative financial instruments for trading purposes.
When FMC sells or purchases products or services outside the United States,
transactions are frequently denominated in currencies other than U.S. dollars.
Exposure to variability in currency exchange rates is mitigated, when possible,
through the use of natural hedges, whereby purchases and sales in the same
foreign currency and with similar maturity dates offset one another.
Additionally, FMC initiates hedging activities by entering into foreign exchange
forward contracts with third parties when natural hedges do not exist. The
maturity dates of the currency exchange agreements that provide hedge coverage
are consistent with those of the underlying purchase or sales commitments.
To monitor its currency exchange rate risks, the company uses a sensitivity
analysis, which measures the impact on earnings of a 10 percent devaluation of
the foreign currencies to which it has exposure. Based on a sensitivity analysis
at March 31, 2000, fluctuations in currency exchange rates in the near term
would not materially affect FMC's consolidated operating results, financial
position or cash flows. FMC's management believes that its hedging activities
have been effective in reducing its risks related to currency exchange rate
fluctuations.
During September 1998, the company entered into $65.0 million of forward
contracts to offset risks associated with the real-denominated portions of FMC's
Brazilian investments. During the first quarter of 1999, the Brazilian real
devalued. Losses from the decline in value of the company's real-denominated
investments during the 1999 devaluation, as well as 1999 economic losses related
to the Brazilian economic crisis, were offset by the forward contracts.
RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
Recent accounting pronouncements that have affected or will affect the company
are discussed in Note 2 to the March 31, 2000 consolidated financial statements.
YEAR 2000
---------
As described in the company's 1999 Annual Report on Form 10-K, the company had
instituted a corporate-wide year 2000 ("Y2K") readiness project to identify all
systems which would require modification or replacement, and to establish
appropriate remediation and contingency plans to avoid an impact on the
company's ability to continue to provide its products and services and to ensure
the continued safety of its employees, facilities and the environment. Through
the date of this report, the company has not experienced any significant Y2K
problems but will continue to monitor its critical systems over the next several
months. The company has not incurred any significant Y2K-related costs
subsequent to December 31, 1999.
<PAGE>
PAGE 17
RESULTS OF OPERATIONS
---------------------
Industry segment financial data is included in Note 13 to the company's March
31, 2000 consolidated financial statements.
General
- -------
First quarter 2000 sales of $959 million decreased slightly from $975 million in
last year's first quarter. Increased sales in 2000 for Agricultural Products
arising primarily from stronger herbicide sales were more than offset by
reductions in Energy Systems revenues due to lower sales of offshore oil
exploration and production equipment. In addition, lower sales for the Specialty
Chemicals segment reflect the mid-1999 divestiture of two businesses, partly
offset by a 1999 acquisition. Operating profit (net of minority interests)
decreased in 2000 to $91 million from $95 million in the year-ago quarter,
primarily the result of the decrease in sales volume for Energy Systems.
Net income increased to $32.8 million, or $1.05 per share on a diluted basis, in
the first quarter of 2000 from $30.3 million, or $0.92 per share, in the first
quarter of 1999. Increased net income in the first quarter of 2000 when compared
with the same period in 1999 reflects reductions in interest expense and
corporate costs, which more than offset reduced operating profit.
Average shares outstanding used in the quarters' diluted earnings per share
calculations decreased to 31.3 million in 2000 from 33.0 million in the prior
year's quarter due to the company's share repurchase program in 1999.
Energy Systems
- --------------
Energy Systems sales of $256 million in the first quarter of 2000 declined 12
percent from $290 million in the 1999 first quarter, while first quarter 2000
earnings of $11 million were down 35 percent from $17 million in first quarter
1999. The decline in sales and earnings is primarily driven by reduced sales of
oil exploration and production systems, partially offset by a slight increase in
sales of certain fluid control products. While revenues have been negatively
affected by delays in new orders for large projects, management expects these
delays to be temporary based on industry surveys indicating that oil companies
have increased exploration and production budgets for 2000. In addition, FMC
regards the increase in orders for fluid control equipment during the first
quarter of 2000, particularly flowline products, to be a leading indicator of an
increase in industry activity.
Petroleum equipment and systems division sales and earnings decreased in the
first quarter of 2000 due primarily to lower sales of subsea equipment,
particularly in North America. With oil prices stabilizing at favorable levels,
FMC expects oil companies to move forward with increased exploration and
production spending, and management anticipates seeing increased orders by the
third quarter of 2000.
Sales for the energy transportation and measurement division were up slightly in
the first quarter of 2000 when compared with the prior year's first quarter,
while profits were down slightly. There was an increase in sales of fluid
control products in the first quarter of 2000 when compared with the first
quarter of 1999. Those sales were partially offset by reduced sales of metering
products, which had a negative impact on margins and operating profitability.
<PAGE>
PAGE 18
Food and Transportation Systems
- -------------------------------
Food and Transportation Systems sales of $185 million for the first quarter of
2000 were up slightly from $182 million in last year's quarter. Earnings of $12
million were slightly improved from $11 million in 1999. Higher sales and
earnings of food processing and citrus systems were partially offset by lower
airport products sales and earnings.
FMC FoodTech's first quarter 2000 sales and profits increased from last year's
quarter, reflecting strong sales of sterilization and tomato processing
equipment and improved customer collections. An increase in citrus processing
activity in Florida and Brazil positively impacted citrus systems division sales
when compared with 1999. Management predicts a strong year for food processing
equipment based on the volume of orders received, particularly from customers in
China. In addition, sales of industrial food freezing equipment will be enhanced
by the February 2000 acquisition of York International's Northfield Freezing
Systems Group.
Sales and earnings for airport products and systems were slightly lower in the
first quarter of 2000 from reduced sales of aircraft cargo loading equipment as
customers have completed replacement programs. The decrease in revenues from
cargo loaders was partially offset by increased sales of passenger boarding
bridges. Reduced profitability in the first quarter of 2000 was the result of
decreased demand for higher margin equipment, partially offset by lower costs
achieved through manufacturing efficiencies. Management expects that the current
high level of backlog for passenger boarding bridges will translate into strong
sales through 2000.
Agricultural Products
- ---------------------
Agricultural Products sales for the 2000 quarter were $166 million, up from $147
million in last year's quarter due to higher sales of sulfentrazone to DuPont as
well as higher sales of carfentrazone.
Earnings were $14 million, down $1 million from last year. Higher earnings from
improved sales were offset by higher expenses, including increased research and
development costs for early-stage development of a new potential herbicide, as
well as to fund ongoing projects to discover new insecticides with Devgen, a
Belgium-based biotechnology company. The company expects a return in 2000 to
more normal pest levels, which were extremely low during the 1999 North American
growing season and adversely affected 1999 sales.
Specialty Chemicals
- -------------------
Specialty Chemicals sales were $125 million in the first quarter of 2000, down
from $148 million in the prior-year period. Earnings of $19 million were up
slightly over the prior year.
Lower sales reflected the divestiture of the process additives and bioproducts
operations in July 1999. (See Note 10 to the company's March 31, 2000
consolidated financial statements.) These lower sales from divestitures were
partially offset by higher sales from pharmaceutical and food ingredients, as
well as the Pronova alginate business, which was acquired in mid-1999. Earnings
were up slightly, reflecting these generally higher-margin sales.
Improved sales and earnings in the lithium division reflected higher
butyllithium sales in Europe and Asia. FMC currently sources a majority of its
lithium carbonate from a South American manufacturer under a three-year
agreement. In addition, FMC periodically evaluates various sourcing, production
and restructuring alternatives to continue to improve its results
<PAGE>
PAGE 19
of operations, some of which could reduce the company's reliance on certain
components of its existing asset base.
Industrial Chemicals
- --------------------
Industrial Chemicals first quarter sales of $229 million in 2000 improved seven
percent from first quarter 1999 sales of $213 million, while earnings (net of
minority interest) were $35 million in both periods.
Sales of alkali products increased compared to the first quarter of 1999,
reflecting higher volumes gained primarily from the TgSA acquisition completed
in mid-1999. Earnings were flat due to lower pricing in Asia in order to
maintain market share in the face of Chinese competition. Higher energy and
other operating costs were offset by reductions in transportation costs.
Following a workforce reduction in the first quarter of 2000, the company
expects to realize savings in manufacturing costs beginning in the second
quarter of 2000.
Phosphorus revenues and earnings increased in the first quarter of 2000 compared
with the 1999 quarter, primarily reflecting higher sales of elemental phosphorus
and a gain realized in connection with revisions to a contractual agreement.
As more fully discussed in Note 11 to the March 31, 2000 consolidated financial
statements, the company and Solutia Inc have announced the formation of a joint
venture, Astaris LLC, which will merge the companies' North American and
Brazilian phosphorus operations. FMC expects to benefit from significant
efficiencies and cost savings upon formation of the joint venture and completion
of phosphorus plant rationalizations and certain restructuring activities.
FMC expects its second quarter 2000 results to reflect a charge associated with
the formation of Astaris LLC and the related restructuring of FMC's chemical
businesses and support services. In addition, following formation of the joint
venture, FMC expects to receive an initial dividend that could be in excess of
$100 million.
Peroxygen sales and earnings were up on higher volumes and average prices, as
demand from the pulp and paper industry improved. In addition, the division
benefited from cost reductions in 2000. The company anticipates continued
revenue growth during the remainder of the year, as the hydrogen peroxide market
continues to recover from a 1998 downturn and excess industry capacity is
reduced.
Spain-based FMC Foret's sales and earnings decreased from the first quarter of
1999 due to the weakening of the euro and higher energy costs in 2000. The
declines were partly offset by improved hydrogen peroxide market conditions.
Corporate
- ----------
During the first quarter of 2000, corporate expenses decreased to $17 million,
compared with $20 million in the 1999 period, reflecting the results of
corporate cost reductions as well as timing of expenses.
Net interest expense
- --------------------
Net interest expense of $23 million in 2000 decreased from $28 million in the
1999 first quarter due to lower average debt levels, the retirement in 1999 of
$250.0 million of higher-cost senior debt, an increase in capitalized interest
in the first quarter of 2000 when compared with first quarter of 1999, and a
gain in 2000 on a hedge of eurobond borrowing rates.
<PAGE>
PAGE 20
Effective tax rates
- -------------------
The company's effective tax rates for the quarters ended March 31, 2000 and 1999
were 24.5 and 25.7 percent, respectively.
Order backlog
- -------------
FMC's backlog of unfilled orders of $528 million for Energy Systems was down $65
million from the year-end backlog at December 31, 1999, and down $253 million
from a backlog of $781 million at March 31, 1999. The reduction in backlog
results from lower petroleum exploration and production spending. While backlog
continued to decline in the first quarter of 2000, the rate of decline has
slowed when compared with 1999. Projections of increased oil company spending
later in the year and a higher demand for fluid control products in the first
quarter of 2000 provide a basis for management's expectation that backlog will
increase during 2000.
Food and Transportation Systems backlog of $295 million increased $48 million
from the end of 1999 and $17 million from March 31, 1999. Increased backlog
occurred in most FMC FoodTech product lines, especially in freezer systems,
reflecting added backlog from the Northfield freezer business, which was
acquired from York International during the first quarter of 2000.
Backlog is not reported for the Agricultural Products, Specialty Chemicals or
Industrial Chemicals segments due to the nature of these businesses.
Legal contingencies
- -------------------
On April 14, 1998, a jury returned a verdict against the company in conjunction
with a False Claims Act action against the company. See Note 12 to the company's
March 31, 2000 consolidated financial statements for a discussion of the
lawsuit.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- ------ ---------------------------------------------------------
The information required by this item is provided in "Derivative Financial
Instruments and Market Risks", under ITEM 2 - Management's Discussion and
Analysis of Financial Condition and Results of Operations.
<PAGE>
PAGE 21
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
A report by KPMG LLP, FMC's independent accountants, on the financial statements
included in Form 10-Q for the quarter ended March 31, 2000 is included on page
22.
<PAGE>
PAGE 22
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
The Board of Directors
FMC Corporation:
We have reviewed the accompanying consolidated balance sheet of FMC Corporation
and consolidated subsidiaries as of March 31, 2000, and the related consolidated
statements of income and cash flows for the three-month periods ended March 31,
2000 and 1999. These consolidated financial statements are the responsibility of
the company's management.
We conducted our review 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 review, 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, 1999 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 19, 2000, 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, 1999 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
KPMG LLP
Chicago, Illinois
April 19, 2000
<PAGE>
PAGE 23
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
There has been no material change in the company's significant legal proceedings
from the information reported in Part I, Item 3 of the company's 1999 Annual
Report on Form 10-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits
--------
<TABLE>
<CAPTION>
Number in
Exhibit Table Description
------------- -----------
<S> <C>
11 Statement re: computation of
diluted earnings per share
12 Statement re: computation of
ratios of earnings to fixed
charges
15 Letter re: unaudited
interim financial information
27 Financial data schedule
</TABLE>
(b) Reports on Form 8-K
-------------------
None
<PAGE>
PAGE 24
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: May 10, 2000 /s/ Ronald D. Mambu
-------------------------------
Vice President, Controller, and
duly authorized officer
<PAGE>
PAGE 1
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Number in
Exhibit Table Description
------------- -----------
<S> <C>
11 Statement re: computation of
diluted earnings per share
12 Statement re: computation of
ratios of earnings to fixed
charges
15 Letter re: unaudited
interim financial
information (KPMG LLP)
27 Financial data schedule
</TABLE>
<PAGE>
FMC Corporation
Quarterly Report
on Form 10-Q for
March 31, 2000
Exhibit 11 Statement re:
-------------
Computation of Diluted Earnings Per Share (Unaudited)
-----------------------------------------------------
(In thousands, except per share data)
-------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended March 31
-----------------------
2000 1999
-------- ---------
<S> <C> <C>
Earnings:
Net income $32,806 $30,312
======= =======
Shares:
Weighted average number of shares of
common stock outstanding 30,358 32,286
Weighted average additional shares assuming
conversion of stock options 937 744
------- -------
Shares - diluted basis 31,295 33,030
======= =======
Diluted earnings per share $ 1.05 $ 0.92
======= =======
</TABLE>
<PAGE>
FMC Corporation
Quarterly Report
on Form 10-Q for
March 31, 2000
Exhibit 12 Statement re:
------------
Computation of Ratios of Earnings to Fixed Charges
--------------------------------------------------
(In millions, except ratio data)
--------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
<S> <C> C>
2000 1999
----- -----
Earnings:
Income before income taxes $43.4 $40.8
Minority interests 0.7 0.6
Undistributed earnings of affiliates 0.4 0.5
Interest expense and amortization
of debt discount, fees and expenses 24.8 30.2
Amortization of capitalized interest 0.9 0.7
Interest included in rental expense 4.4 3.9
----- -----
Total earnings $74.6 $76.7
===== =====
Fixed charges:
Interest expense and amortization
of debt discount, fees and expenses $24.8 $30.2
Interest capitalized as part of
fixed assets 1.9 0.7
Interest included in rental expense 4.4 3.9
----- -----
Total fixed charges $31.1 $34.9
===== =====
Ratio of earnings to fixed charges 2.4x 2.2x
==== ====
</TABLE>
<PAGE>
PAGE 4
FMC Corporation
Quarterly Report
on Form 10-Q for
March 31, 2000
Exhibit 15 Letter re: Unaudited Interim Financial Information
--------------------------------------------------
FMC Corporation
Chicago, Illinois
Ladies and Gentlemen:
Re: Registration Statements No. 33-10661, No. 33-7749, No. 33-41745, No. 33-
48984, No. 333-18383, No. 333-24039, No. 333-62683 and No. 333-69805 on Form S-8
and Registration Statement No. 33-59543 on Form S-3.
With respect to the subject registration statements, we acknowledge our
awareness of the incorporation by reference therein of our report dated April
19, 2000 related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered 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 LLP
Chicago, Illinois
May 10, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
FMC Corporation Form 10-Q for the quarter ended March 31, 2000 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 52
<SECURITIES> 0
<RECEIVABLES> 636
<ALLOWANCES> 15
<INVENTORY> 447
<CURRENT-ASSETS> 1,414
<PP&E> 3,734
<DEPRECIATION> 2,043
<TOTAL-ASSETS> 3,998
<CURRENT-LIABILITIES> 1,605
<BONDS> 928
0
0
<COMMON> 4
<OTHER-SE> 744
<TOTAL-LIABILITY-AND-EQUITY> 3,998
<SALES> 959
<TOTAL-REVENUES> 959
<CGS> 717
<TOTAL-COSTS> 892
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23
<INCOME-PRETAX> 43<F1>
<INCOME-TAX> 10
<INCOME-CONTINUING> 33
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33
<EPS-BASIC> 1.08
<EPS-DILUTED> 1.05
<FN>
<F1> - Pretax income is net of $(0.7) of minority interests, which are primarily
partners' share of partnership profits.
</FN>
</TABLE>
