<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
September 25, 1996 (August 16, 1996)
Mississippi Chemical Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Mississippi 2-7803 64-0292638
----------------- ------------ ----------------
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
P.O. Box 388, Yazoo City, Mississippi 39194
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
601-746-4131
Page 1 of 36 sequentially numbered pages.
Index to exhibits is located on sequentially numbered page 5.
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS.
(a) Financial Statements of Business Acquired.
This item is amended to provide financial statements of each
of Eddy Potash, Inc. and New Mexico Potash Corporation, which
are filed as Exhibits 99.1 and 99.2, respectively, to this
Current Report on Form 8-K.
(i) Eddy Potash, Inc.
a. Audited Annual Financial Statements
Independent Auditors' Report
Balance Sheets as of December 31, 1995 and
1994
Statements of Operations and Retained
Earnings for the years ended December 31,
1995 and 1994
Statements of Cash Flows for the years ended
December 31, 1995 and 1994
Notes to Financial Statements
b. Unaudited Interim Financial Statements
Balance Sheet as of June 30, 1996
Statements of Income for the six months ended
June 30, 1996 and 1995
Statements of Cash Flows for the six months
ended June 30, 1996 and 1995
(ii) New Mexico Potash Corporation
a. Audited Annual Financial Statements
Report of Independent Accountants
Balance Sheet as of December 31, 1995
Statement of Income and Retained Earnings for
the year ended December 31, 1995
2
<PAGE> 3
Statement of Cash Flows for the year ended
December 31, 1995
Notes to Financial Statements
b. Unaudited Interim Financial Statements
Balance Sheet as of June 30, 1996
Statements of Income for the six months ended
June 30, 1996 and 1995
Statements of Cash Flows for the six months
ended June 30, 1996 and 1995
(b) Pro Forma Financial Information.
This item is amended to provide the following unaudited pro
forma condensed consolidated financial statements, which are
filed as Exhibit 99.3 to this Current Report on Form 8-K.
Pro Forma Condensed Balance Sheet as of June 30, 1996
Pro Forma Condensed Consolidated Statement of Income
for the fiscal year ended June 30, 1996
Notes to Pro Forma Financial Statements
(c) Exhibits.
See "Index to Exhibits."
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mississippi Chemical Corporation
Date: September 25, 1996 By: /s/ Robert E. Jones
-------------------
Robert E. Jones
Senior Vice President & General
Counsel
4
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Exhibit 2.1 Asset Purchase Agreement, dated as of May 21, 1996, by and among
Mississippi Chemical Corporation, Mississippi Acquisition I, Inc.,
Mississippi Acquisition II, Inc., Eddy Potash, Inc. and New Mexico Potash
Corporation. Filed as an Exhibit to the Current Report of the Company on
Form 8-K dated September 3, 1996 and incorporated herein by reference.
--
Exhibit 4.1 Loan Agreement, dated as of April 26, 1996, by and among Mississippi
Chemical Corporation, Mississippi Phosphates Corporation, Mississippi
Potash, Inc., and MCC Pipeline, Inc., the various banks and lending
institutions on the signature pages hereto together with all assignees of
such banks and lending institutions, NationsBank of Tennessee, N.A., as
the Swingline Bank, and NationsBank of Tennessee, N.A. Filed as an
Exhibit to the Current Report of the Company on Form 8-K dated September
3, 1996 and incorporated herein by reference.
--
Exhibit 99.1 Financial Statements of Eddy Potash, Inc. Filed herewith. 6
Exhibit 99.2 Financial Statements of New Mexico Potash Corporation. Filed herewith.
17
Exhibit 99.3 Pro Forma Financial Information. Filed herewith. 31
</TABLE>
5
<PAGE> 1
EXHIBIT 99.1
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Trans-Resources, Inc.
New York, New York
We have audited the accompanying balance sheets of Eddy Potash, Inc. (a wholly
owned subsidiary of Trans-Resources, Inc.) (the "Company") as of December 31,
1995 and 1994, and the related statements of operations and retained earnings
and of cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Eddy Potash, Inc. as of December 31, 1995
and 1994, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
March 15, 1996
1
<PAGE> 2
EDDY POTASH, INC.
(A WHOLLY OWNED SUBSIDIARY OF TRANS-RESOURCES, INC.)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS 1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 51
Accounts receivable, less allowance for doubtful
accounts of $171 in both 1995 and 1994 $ 2,261 1,861
Inventories - finished goods 3,636 5,064
Prepaid expenses 1,682 1,966
------- -------
Total current assets 7,579 8,942
PROPERTY, PLANT AND EQUIPMENT - Net of accumulated
depreciation and depletion of $22,018 and $21,344
in 1995 and 1994, respectively 4,342 3,859
DEFERRED TAXES 2,682 2,682
OTHER ASSETS 1,299 1,240
------- -------
TOTAL $15,902 $16,723
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,450 $ 1,201
Accrued expenses and other current liabilities 2,646 2,765
Intercompany debt - net 173 892
------- -------
Total current liabilities 4,269 4,858
LONG-TERM DEBT 1,257
STOCKHOLDER'S EQUITY:
Additional paid-in capital 6,000 6,000
Retained earnings 4,376 5,865
------- -------
Total stockholder's equity 10,376 11,865
------- -------
TOTAL $15,902 $16,723
======= =======
</TABLE>
See notes to financial statements.
2
<PAGE> 3
EDDY POTASH, INC.
(A WHOLLY OWNED SUBSIDIARY OF TRANS-RESOURCES, INC.)
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
NET SALES $ 24,509 $ 31,324
OPERATING COSTS AND EXPENSES:
Cost of products sold 23,666 32,565
Selling, general and administrative 1,445 1,923
-------- --------
Total operating costs and expenses 25,111 34,488
-------- --------
OPERATING LOSS (602) (3,164)
INTEREST EXPENSE (30) (43)
INTEREST INCOME 143 57
-------- --------
NET LOSS (489) (3,150)
DIVIDENDS PAID TO PARENT (1,000)
RETAINED EARNINGS AT JANUARY 1 5,865 9,015
-------- --------
RETAINED EARNINGS AT DECEMBER 31 $ 4,376 $ 5,865
======== ========
</TABLE>
See notes to financial statements.
3
<PAGE> 4
EDDY POTASH, INC.
(A WHOLLY OWNED SUBSIDIARY OF TRANS-RESOURCES, INC.)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (489) $(3,150)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and depletion 674 3,397
(Increase) decrease in accounts receivable (400) 1,400
Decrease in inventories 1,428 3,460
Decrease in prepaid expenses 284 53
(Increase) in other assets (59) (443)
Increase (decrease) in accounts payable 249 (152)
(Decrease) increase in accrued expenses and other current
liabilities (119) 73
------- -------
Net cash provided by operating activities 1,568 4,638
INVESTING ACTIVITIES - Additions to property, plant
and equipment (1,157) (476)
FINANCING ACTIVITIES:
Proceeds from long-term debt 1,257
Decrease in intercompany debt (719) (4,304)
Dividends paid to parent (1,000)
------- -------
Net cash used in financing activities (462) (4,304)
------- -------
NET DECREASE IN CASH AND CASH (51) (142)
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT JANUARY 1 51 193
------- -------
CASH AND CASH EQUIVALENTS AT
DECEMBER 31 $NIL $ 51
------- -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION -
Cash paid during the year for interest $ 30 $ 43
</TABLE>
See notes to financial statements.
4
<PAGE> 5
EDDY POTASH, INC.
(A WHOLLY OWNED SUBSIDIARY OF TRANS-RESOURCES, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE COMPANY
Eddy Potash, Inc. (the "Company") is a wholly owned subsidiary of
Trans-Resources, Inc. ("TRI") and was organized on March 17, 1988 under the
laws of the State of Delaware for the mining, refining and marketing of
potash and its related products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
REVENUE RECOGNITION - Revenue is recognized upon shipment of the Company's
finished product.
CASH AND CASH EQUIVALENTS - For purposes of the statements of cash flows,
the Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
INVENTORIES - Inventories are stated at the lower of cost or market. Cost
is determined using the first-in, first-out method.
PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is stated at
cost. Depreciation is determined principally using the straight-line
method over the estimated useful lives of the respective assets. Effective
January 1, 1995, in order to give effect to the Company's estimate of the
life of the mine and to more closely approximate the economic lives of such
assets, the Company adjusted the remaining depreciable lives of all fixed
assets from three years to ten years. The effect of this change in
estimate was to decrease depreciation expense in 1995 by $2,834,000.
Depletion of mineral reserves is determined using the unit-of-production
method based on estimated proved developed mineral reserves.
Maintenance, repairs and minor renewals are charged to operations as
incurred. Major renewals and betterments are capitalized.
5
<PAGE> 6
INCOME TAXES - The Company accounts for income taxes under the provisions
of Statement of Financial Accounting Standards No. 109. Under SFAS No.
109, the amounts provided for income taxes are based on the amounts of
current and deferred taxes payable or refundable at the date of the
financial statements as a result of all events recognized in the financial
statements as measured by the provisions of enacted tax laws. Deferred tax
charges on the balance sheets primarily result from excess cumulative book
depreciation over tax depreciation and accrued expenses not deductible for
tax purposes.
RECLASSIFICATIONS - Certain prior year amounts have been reclassified to
conform to the manner of presentation in the current year.
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
1995 1994
(IN THOUSANDS)
<S> <C> <C>
Land $ 46 $ 46
Building and improvements 5,750 5,537
Machinery and equipment 18,335 17,401
Furniture and fixtures 299 289
Mineral reserves 1,778 1,778
Water rights 152 152
------- -------
Total 26,360 25,203
Less accumulated depreciation and depletion 22,018 21,344
------- -------
Property, plant and equipment - net $ 4,342 $ 3,859
======= =======
</TABLE>
The Company leases mineral rights from the Federal government, the State of
New Mexico and various private enterprises for a nominal fixed amount plus
contingent rentals based upon potash sales from the various leases. The
Company expensed approximately $181,000 and $860,000 related to these
mineral leases during the years ended December 31, 1995 and 1994,
respectively. As of December 31, 1995 based on current rates of production
and depending on future market conditions and production costs, the
Company's ore reserves are estimated to be sufficient to support mining
operations for at least 14 years.
6
<PAGE> 7
4. INTERCOMPANY DEBT
Intercompany debt consists of the following:
<TABLE>
<CAPTION>
1995 1994
(IN THOUSANDS)
<S> <C> <C>
Federal income taxes payable to TRI $ 878 $ 878
Advances due to TRI 14
Accounts payable - Cedar Chemical
Corporation ("Cedar"), a wholly-owned
subsidiary of TRI 7
Accounts payable - New Mexico Potash
Corporation, a wholly-owned
subsidiary of Cedar 15
Accounts receivable - Vicksburg Chemical
("Vicksburg"), a subsidiary of Cedar (727)
----- -----
Total $ 173 $ 892
===== =====
</TABLE>
The Company pays Cedar a management fee to reimburse Cedar for costs
incurred by Cedar on behalf of the Company related to marketing and
financial services. The Company has recorded a management fee of
approximately $687,000 and $1,175,000 for the years ended December 31, 1995
and 1994, respectively. The Company had sales to Vicksburg of $1,214,000
in 1995.
5. LONG-TERM DEBT
The Company entered into a long-term credit agreement on October 13, 1995,
as amended, which provides a revolving credit loan up to $3,000,000,
including a $1,500,000 letter of credit facility, through October 13, 1998.
The annual interest rate on all borrowings is equal to the published 30 day
dealer placed commercial paper rate plus 3% per annum, which was 8.8% at
December 31, 1995. Borrowings against the revolving credit loan totaled
$1,257,000 at December 31, 1995, and were collateralized by substantially
all assets of the Company. The credit agreement requires certain financial
covenants relating to minimum earnings, tangible net worth, fixed charge
coverage ratios and maximum capital expenditure amounts.
6. EMPLOYEE AND RETIREE BENEFITS
The Company sponsors an employee 401(k) plan covering substantially all of
its employees. The Company makes contributions equal to 25% of the
contributions made by the employees, not to exceed 2% of applicable
employees' earnings in any year. An additional contribution of 1% of
applicable employees' earnings is also required. The
7
<PAGE> 8
Company has recorded approximately $184,000 and $199,000 of expenses for
employer contributions for the years ended December 31, 1995 and 1994,
respectively.
A severance pay plan was established effective July 1, 1991 to provide for
severance pay to all employees who are still working for the Company when
it ceases operations. The Company recorded an expense of $308,000 in 1994
and none in 1995 for this plan. The Company has transferred all funds
related to the severance pay plan into a trust fund held by a bank. The
fair market value of the assets in this trust fund is $1,009,000 and
$944,000 at December 31, 1995 and 1994, respectively.
7. MAJOR CUSTOMERS
During the years ended December 31, 1995 and 1994, one major customer
accounted for 21% and 19%, respectively, of the Company's total revenues.
Another customer during 1995 and 1994 accounted for 10% and 14%,
respectively, of total revenues. No other customer contributed more than
10% of the Company's total revenues in 1995 or 1994.
8. INCOME TAXES
The provision for income taxes in 1995 and 1994 represent effective tax
rates of 0.0% for both years. These amounts differ from the amounts of
$(171,000) and $(1,102,000), respectively, computed by applying the
statutory Federal income tax rates to loss before income taxes. The
reasons for such variances were as follows:
<TABLE>
<CAPTION>
1995 1994
------------------- -------------------
AMOUNT PERCENT AMOUNT PERCENT
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
Statutory Federal rate $ (171) (35.0)% $(1,102) (35.0)%
Increase (decrease) in income tax
rate resulting from:
Increase (decrease) in
valuation allowance (192) (39.3)% 720 22.9%
State income taxes - net (63) (2.1)%
Unrecognized tax loss
carryforwards 363 74.3% 445 14.2%
------- ------ ------- ------
Total $ 0 0.0% $ 0 0.0%
======= ====== ======= ======
</TABLE>
8
<PAGE> 9
The tax effects of significant items comprising the Company's deferred tax
asset as of December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
(IN THOUSANDS)
<S> <C> <C>
Cumulative book depreciation over tax depreciation $ 3,103 $ 3,524
Non-deductible accruals 785 669
Other temporary differences 133 15
Unrecognized tax loss carryforwards 786 433
Valuation allowance (2,125) (1,959)
------- -------
Net deferred tax asset $ 2,682 $ 2,682
======= =======
</TABLE>
The Company is included in the consolidated Federal income tax return of
TRI and TRI's parent company and, accordingly, pays its applicable Federal
income taxes to TRI and computes its Federal income tax as if it were
filing on a separate company basis. No federal income taxes were paid to
TRI during 1995 or 1994. The Company paid no state income taxes in 1995 or
1994.
9. CONTINGENCIES
In April 1993 and subsequent thereto, several lawsuits were filed against
the Company and other potash producers alleging that the defendants
conspired to fix, raise, maintain and stabilize the prices of potash in the
United States purchased by the plaintiffs in violation of United States
antitrust laws.
The Company has no knowledge of any conspiracy of the type alleged in the
complaints. The lawsuit is in an early stage and the Company intends to
vigorously defend itself against these allegations.
The United States Department of Justice Antitrust Division ("DOJ") is
conducting a separate investigation concerning possible violations of the
antitrust laws in connection with the production, sale and marketing of
potash. In connection therewith, the Company and other potash producers
have been served with subpoenas to produce documents for a grand jury
authorized by the DOJ. The Company is cooperating with the DOJ in
connection with providing documents sought by the subpoena.
In the opinion of management, the ultimate outcome of these lawsuits and
investigation will not have a material adverse effect on the financial
position of the Company.
The Company's last major labor dispute took place in July 1995. As a
result of this dispute, union employees of the Company had a work stoppage
for approximately three weeks.
9
<PAGE> 10
10. LEASE COMMITMENTS
The Company leases railcars under various operating lease agreements. Rent
expenses under these leases totaled $64,000 and $168,000 in 1995 and 1994,
respectively. Remaining commitments under these leases for fiscal years
subsequent to December 31, 1995 are as follows: 1996 - $37,000 and 1997 -
$28,000.
* * * * * * *
10
<PAGE> 11
EDDY POTASH, INC.
UNAUDITED BALANCE SHEET
JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS
- ------
CURRENT ASSETS:
Accounts receivable, net $ 3,096
Inventories -- Finished goods 3,909
Prepaid expenses 1,423
-------
Total current assets 8,428
PROPERTY, PLANT AND EQUIPMENT, Net
of accumulated depreciation and depletion of $22,418 4,453
OTHER ASSETS 4,047
-------
$16,928
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 2,939
Accrued expense and other current liabilities 3,540
-------
Total current liabilities 6,479
LONG-TERM DEBT 1,058
OTHER LIABILITIES 64
STOCKHOLDER'S EQUITY:
Additional paid-in capital 6,000
Retained earnings 3,327
-------
Total stockholders' equity 9,327
-------
$16,928
=======
</TABLE>
1
<PAGE> 12
EDDY POTASH, INC.
UNAUDITED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
NET SALES $ 11,420 $ 14,439
OPERATING COSTS AND EXPENSES:
Cost of products sold 11,739 13,411
Selling, general and administrative 716 678
-------- --------
Total operating costs and expenses 12,455 14,089
-------- --------
OPERATING (LOSS) INCOME (1,035) 350
INTEREST EXPENSE (93) 0
INTEREST INCOME 79 76
-------- --------
NET (LOSS) INCOME $ (1,049) $ 426
======== ========
</TABLE>
2
<PAGE> 13
EDDY POTASH, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income $(1,049) $ 426
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization 400 360
Increase in Accounts receivable (804) (1,434)
(Increase) decrease in Inventories (273) 2,295
Decrease in Prepaid expenses 282 168
Increase in Accounts payable 1,489 3
Increase in Accrued expenses and other current liabilities 731 40
------- -------
Net cash provided by operating activities 776 1,858
------- -------
INVESTING ACTIVITIES:
Additions to property, plant and equipment (511) (463)
Other increase in investments in other assets (65) (21)
------- -------
Net Cash used by investment activities (576) (484)
------- -------
FINANCING ACTIVITIES:
Dividends to stockholders 0 (1,000)
Payments and current maturities of long-term debt (200) 0
------- -------
Net Cash used by financing activities (200) (1,000)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 0 374
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 0 51
------- -------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 0 $ 425
======= =======
</TABLE>
3
<PAGE> 1
EXHIBIT 99.2
REPORT OF INDEPENDENT ACCOUNTANTS
February 9, 1996, except as to
Note 12, which is as of May 21, 1996
To the Board of Directors and Shareholder of
New Mexico Potash Corporation
In our opinion, the accompanying balance sheet and the related statements of
income and retained earnings and of cash flows present fairly, in all material
respects, the financial position of New Mexico Potash Corporation at December
31, 1995, and the results of its operations and its cash flows for the year in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for the
opinion expressed above.
Price Waterhouse LLP
1
<PAGE> 2
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
BALANCE SHEET
DECEMBER 31, 1995 (DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,053
Receivables, less allowance for doubtful
accounts of $155 4,024
Receivables from affiliates
Trade 887
Other 9,818
Inventories 4,675
Prepaid expenses and other current assets 2,934
Deferred income taxes 332
-------
Total current assets 23,723
Property, plant and equipment, net 10,379
Deposits 1,361
Other assets 39
Deferred income taxes 837
-------
Total assets $36,339
=======
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 7,371
Income taxes payable 154
-------
Total liabilities 7,525
-------
Commitments and contingencies (Notes 10 and 11)
Shareholder's equity:
Common stock, no par value Class A, 1,000 shares 10
authorized, 10 shares issued and outstanding
Retained earnings 28,804
-------
Total shareholder's equity 28,814
-------
Total liabilities and shareholder's equity $36,339
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 3
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
STATEMENT OF INCOME AND RETAINED EARNINGS
DECEMBER 31, 1995 (DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Net sales to nonaffiliates $ 29,120
Net sales to affiliates 6,030
--------
Net sales 35,150
Operating cost and expenses:
Cost of products sold 28,650
Selling and administrative 1,854
Depreciation and amortization 2,854
--------
Operating income 1,792
Interest expense (1,110)
Interest and other income, net 36
--------
Income before income taxes 718
Income tax provision 92
--------
Net income 626
Retained earnings:
Beginning of year 9,417
Rescission of dividends declared (Note 8) 18,761
--------
End of year $ 28,804
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
STATEMENT OF CASH FLOWS
DECEMBER 31, 1995 (DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 626
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Depreciation and amortization 2,854
Deferred income taxes (567)
(Increase) decrease in assets:
Receivables, net (383)
Inventories (904)
Prepaid expenses and other current assets 401
Other assets (625)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 2,924
Income taxes payable (109)
-------
Net cash flows provided by operating
activities 4,217
-------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,272)
-------
Net cash flows used in investing activities (1,272)
-------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on parent company debt (1,913)
-------
Net cash used in financing activities (1,913)
-------
CASH AND CASH EQUIVALENTS:
Net increase 1,032
At beginning of year 21
-------
At end of year $ 1,053
=======
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $ 147
Interest paid $ 1,110
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
The Company is engaged in the mining and processing of potash. The Company is
a wholly owned subsidiary of Cedar Chemical Corporation (the "parent company"
or "Cedar") which in turn is a wholly owned subsidiary of Trans-Resources, Inc.
("TRI").
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of certain assets and liabilities and
disclosure of contingencies at the date of the financial statements and the
related reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVENTORIES
Inventories are stated at the lower of cost or market, with cost being
determined using the first-in, first-out ("FIFO") method.
MAINTENANCE AND OPERATING SUPPLIES
Maintenance and operating supplies are stated at the lower of cost or market,
with cost being determined using the FIFO method. At December 31, 1995,
maintenance and operating supplies totaling $2,754,000 were included in prepaid
expenses and other current assets.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost including the cost of
additions and improvements which materially increase the useful lives or values
of the assets. The cost and accumulated depreciation of assets retired or sold
are removed from the related accounts; gains or losses are included in income.
Repair and maintenance costs are expensed as incurred. Depreciation is
provided on a straight-line basis over the estimated useful lives of the
respective assets. Annual depreciation rates are as follows: buildings and
land improvements - 5%; equipment - 10% to 25%.
5
<PAGE> 6
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
INCOME TAXES
The Company's operations are included in a consolidated federal income tax
return with TRI. The Company's provision for income taxes is computed on a
separate return basis. Income taxes payable on the balance sheet are payable
to TRI.
The amounts provided for income taxes are based on the amounts of current and
deferred taxes payable or refundable at the date of the financial statements as
a result of all events recognized in the financial statements as measured by
the provisions of enacted tax laws.
FUTURES CONTRACTS
In 1994, the Company purchased natural gas futures contracts to hedge the
future cost of gas. No such contracts were purchased in 1995, however, 11
contracts purchased in November 1994 were closed in January 1995 resulting in a
realized loss of $51,000.
ENVIRONMENTAL COSTS
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation ("environmental clean-up costs"), are expensed. Liabilities
are recorded when environmental assessments and/or remedial efforts are
probable, and the cost can be reasonably estimated. Generally, the timing of
these accruals coincides with the earlier of completion of a feasibility study
or the Company's commitment to a formal plan of action. Accruals relating to
costs to be incurred, if any, at the end of the useful life of equipment,
facilities or other assets are made over the useful life of the respective
assets.
STATEMENT OF CASH FLOWS
Investments with original maturities of three months or less are classified as
cash equivalents by the Company. Noncash financing and investing activities,
consisting of various related party transactions described in Note 2, are not
included in the statement of cash flows.
6
<PAGE> 7
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 2 - RELATED PARTY TRANSACTIONS
During 1995, the Company consummated the following transactions with affiliates
through common direct and indirect ownership, its parent company, and TRI:
-- Cedar allocated $689,000 of expenses and interest in the form of a
management fee to the Company. These cost have been reflected as
operating cost and expenses and as interest expense.
-- The Company sold $6,030,000 of product to an affiliate through common
ownership. The cost of these goods was $5,226,000.
NOTE 3 - CONCENTRATION OF CREDIT RISKS
During 1995, a subsidiary of Cedar accounted for approximately 17.15% of the
Company's sales. Additionally, an unrelated customer accounted for
approximately 10.84% of sales. At December 31, 1995, this unrelated customer's
receivable accounted for 10.79% of nonrelated receivables.
NOTE 4 - INVENTORIES
Inventories at December 31, 1995 are summarized as follows (in thousands):
<TABLE>
<S> <C>
Raw materials $ 149
Finished goods 4,526
-------
$ 4,675
=======
</TABLE>
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT
At December 31, 1995, property, plant and equipment is composed of (in
thousands):
<TABLE>
<S> <C>
Buildings $ 577
Equipment 26,400
--------
26,977
Less accumulated depreciation and amortization (16,598)
--------
$ 10,379
========
</TABLE>
7
<PAGE> 8
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 6 - INCOME TAXES
The income tax provision consists of the following (in thousands):
<TABLE>
<S> <C>
Federal:
Current $ 555
Deferred (478)
-----
77
-----
State:
Current 104
Deferred (89)
-----
15
-----
$ 92
=====
</TABLE>
All income was from U. S. sources. The income tax provision in the statement
of income and retained earnings reflects effective tax rates that vary from the
statutory U. S. federal income tax rate of 35%. The primary reasons for the
differences are as follows (dollars in thousands):
<TABLE>
<CAPTION>
% OF
AMOUNT PRETAX INCOME
------ -------------
<S> <C> <C>
Income tax provision at statutory rate $ 251 35.0
Excess depletion expense (119) (16.6)
Other (40) (5.6)
----- ------
$ 92 12.8
===== ======
</TABLE>
Deferred income taxes are provided in recognition of temporary differences in
reporting certain revenues and expenses for financial statement and income tax
purposes. The reporting differences relate principally to depreciation
methods.
8
<PAGE> 9
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The net deferred tax asset consists of the following (in thousands):
<TABLE>
<S> <C>
Current deferred tax asset/(liability):
Allowance for doubtful accounts $ 59
Workers' compensation accrual 257
Vacation pay accrual 61
Inventory valuation (64)
Other 19
-----
$ 332
=====
Noncurrent deferred asset:
Depreciation $ 837
=====
</TABLE>
NOTE 7 - RETIREMENT AND PROFIT SHARING PLANS
The Company provides a profit sharing plan designed to conform to Internal
Revenue Code Section 401(k) and to the requirements of ERISA. The plans, which
cover all full-time employees, allow participants to contribute as much as 15%
of their annual compensation, up to the maximum permitted by law, through
salary reductions. The Company's contributions to the plans are based on a
percentage of participants' contributions, and the Company may make additional
contributions to the plan at the discretion of the Board of Directors. The
Company's contribution expense relating to the profit sharing thrift plan
totaled $243,000 during 1995.
NOTE 8 - SHAREHOLDER'S EQUITY
Prior to 1995, the Company declared approximately $18.8 million of dividends
payable to Cedar which were reflected in prior year financial statements as a
reduction in receivables from Cedar. During 1995, the Company reversed this
declaration when Cedar notified the Company that no cash payment was required.
The rescission of the dividend is considered noncash financing activity and has
been excluded from the statement of cash flows.
NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS
At December 31, 1995, the Company did not have any outstanding financial
derivative instruments. The carrying amounts of cash, accounts receivable and
accounts payable approximate fair value because of the short maturity of those
instruments.
9
<PAGE> 10
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES AND OTHER MATTERS
The mining of raw materials and processing ore involves the use, handling and
processing of materials that may be considered hazardous within the meaning of
applicable environmental or health and safety laws. Accordingly, the Company's
operations are subject to federal, state and local regulatory requirements
relating to environmental matters. Operating permits are required for the
operation of the Company's facilities, and these permits are subject to
revocation, modification and renewal. Government authorities have the power to
enforce compliance with these regulations and permits, and violators are
subject to civil and criminal penalties, including civil fines, injunctions or
both.
The Company has several legal actions and regulatory matters pending incident
to the ordinary course of business. In the opinion of management, the eventual
disposition of the matters described above should have no material adverse
effect on the financial position or future operations of the Company. During
1993, the Company, among other defendants, was notified of a legal action
regarding alleged violation of certain anti-trust and other laws which the
Company is defending vigorously. As a result, the Company has also had
inquiries and requests to provide certain information to the U.S. Department of
Justice, which the Company has provided.
NOTE 11 - OPERATING LEASES
The Company is obligated under noncancelable leases covering principally
machinery and equipment. At December 31, 1995, the minimum annual rental
commitments under these leases are as follows (in thousands):
<TABLE>
<S> <C>
1996 $1,102
1997 1,048
1998 1,026
1999 1,019
2000 722
Thereafter -
------
Total minimum lease payments $4,917
======
</TABLE>
Rent expense for 1995 was $443,000.
10
<PAGE> 11
NEW MEXICO POTASH CORPORATION
(A WHOLLY OWNED SUBSIDIARY OF CEDAR CHEMICAL CORPORATION)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 12 - SUBSEQUENT EVENT
On May 21, 1996, the Company and Cedar entered into an asset purchase agreement
with Mississippi Chemical Corporation ("MCC") whereby substantially all the
assets of the Company will be sold to MCC. The sale is expected to close later
in 1996, and the Company's financial statements do not reflect any adjustments
as the result of this proposed transaction.
11
<PAGE> 12
NEW MEXICO POTASH CORPORATION
UNAUDITED BALANCE SHEET
JUNE 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
Assets
Current Assets:
Cash and cash equivalents $ 39
Accounts receivable, less allowance for doubtful
accounts 4,091
Receivables from affiliate 26
Inventories 3,862
Prepaid expenses and other current assets 2,891
Deferred income taxes 333
--------
Total current assets 11,242
Property, plant and equipment, net 9,833
Other assets 2,238
--------
$ 23,313
========
Liabilities and Shareholder's Equity
Current Liabilities:
Accounts payable and accrued expenses $ 4,360
Income taxes payable (58)
--------
Total current liabilities 4,302
Intercompany payable (receivable) (9,642)
Commitments and contingencies
Shareholder's equity:
Common stock, no par value Class A, 1,000 shares
authorized, 10 shares issued and outstanding 10
Retained earnings 28,643
--------
Total shareholder's equity 28,653
--------
$ 23,313
========
</TABLE>
1
<PAGE> 13
NEW MEXICO POTASH CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net Sales $ 20,669 $ 18,165
Operating Costs and Expenses:
Cost of products sold 19,002 16,358
Selling and administrative 1,005 912
-------- --------
Operating Income 662 895
Interest expense (946) (554)
Interest income 40 9
-------- --------
(Loss) income before income taxes (244) 350
Income tax (benefit) provision (83) 21
-------- --------
Net (loss) income $ (161) $ 329
======== ========
</TABLE>
2
<PAGE> 14
NEW MEXICO POTASH CORPORATION
UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from Operating Activities:
Net (loss) income $ (161) $ 329
Adjustments to reconcile net (loss) income to net
cash flows provided (used) by operating activities:
Depreciation 1,504 1,516
(Increase) decrease in assets:
Receivables, net 812 681
Inventories 813 148
Prepaid expenses and other current assets 43 177
Other assets -- 12
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (3,011) (161)
Other current liabilities (212) 9
------- -------
Net cash provided (used) by operating
activities (212) 2,711
------- -------
Cash flows from investment activities:
Capital expenditures (958) (565)
------- -------
Net cash used in investment activities (958) (565)
------- -------
Cash flows from financing activities:
Decrease in notes payable -- (171)
Accounts payable/receivable - intercompany 156 (1,188)
Net payments and current maturities of long-term
debt -- (787)
------- -------
Net cash provided (used) by financing activities 156 (2,146)
------- -------
Cash and cash equivalents:
Net decrease (1,014) --
------- -------
At beginning of period 1,053 21
------- -------
At end of period $ 39 $ 21
======= =======
</TABLE>
3
<PAGE> 1
EXHIBIT 99.3
MISSISSIPPI CHEMICAL CORPORATION UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
The unaudited pro forma financial information set forth below is presented
to show the pro forma effect of the acquisition of certain assets and
assumption of certain liabilities of New Mexico Potash Corporation ("NMPC") and
Eddy Potash, Inc. ("Eddy"), collectively referred to as the "Potash Companies,"
as if the transaction had been consummated on June 30, 1996, for balance sheet
presentation purposes and July 1, 1995, for income statement presentation
purposes pursuant to the assumption and adjustments in the accompanying Notes
to Mississippi Chemical Unaudited Condensed Pro Forma Consolidated Financial
Statements. The acquisition will be accounted for as a purchase. The
allocation of the purchase price has not been finally determined; accordingly,
the amounts reflected below may differ from the amounts that would have been
determined if the final purchase price allocation had been determined.
The following pro forma information is not necessarily indicative of the
results of operation and financial position of Mississippi Chemical as they may
be in the future or they might have been had the acquisition occurred as of the
respective dates assumed. This pro forma information should be read in
conjunction with the historical Consolidated Financial Statements of
Mississippi Chemical and its current report on Form 8-K dated September 3, 1996
which has been incorporated herein by reference. This pro forma information
should also be read in conjunction with the historical financial statements as
of and for the period ended December 31, 1995, for the Potash Companies
included in this document.
1
<PAGE> 2
MISSISSIPPI CHEMICAL CORPORATION UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
BALANCE SHEET
JUNE 30, 1996
(IN THOUSANDS)
The following Unaudited Condensed Pro Forma Consolidated Balance Sheet is based
on (i) the audited historical Consolidated Balance Sheet of Mississippi
Chemical as of June 30, 1996, and (ii) the unaudited historical combined
balance sheet of the Potash Companies as of June 30, 1996, and has been
prepared to reflect the acquisition by Mississippi Chemical of the Potash
Companies after giving effect to the pro forma adjustments described in the
Notes as if the acquisition had occurred on June 30, 1996.
<TABLE>
<CAPTION>
Mississippi Mississippi
Chemical Potash Pro Forma Chemical
Historical Companies Adjustments Pro Forma
---------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 60,214 $ -- $ (55,112)(2) $ 5,102
Accounts receivable 34,630 7,104 -- 41,734
Inventories 40,633 7,771 -- 48,404
Prepaid expenses and other current assets 6,172 3,884 -- 10,056
--------- --------- --------- ---------
Total current assets 141,649 18,759 (55,112) 105,296
Investments and other assets:
Investments 15,478 -- -- 15,478
Other 12,189 -- -- 12,189
--------- --------- --------- ---------
Total investments and other assets 27,667 -- -- 27,667
Properties held for sale 52,919 -- -- 52,919
Property, plant and equipment, at cost, less
accumulated depreciation, depletion and
amortization 118,771 14,286 30,814(1) 163,871
--------- --------- --------- ---------
$ 341,006 $ 33,045 $ (24,298) $ 349,753
========= ========= ========= =========
Current liabilities:
Long-term debt due within one year $ 78 $ -- $ -- $ 78
Accounts payable and accrued liabilities 54,720 8,805 63,525
Income taxes payable 5,238 (58) 5,180
--------- --------- --------- ---------
Total current liabilities 60,036 8,747 -- 68,783
Other long-term liabilities and deferred
credits 18,218 -- -- 18,218
Deferred income taxes 14,927 -- -- 14,927
Commitments and contingencies
Shareholders' equity:
Common stock 229 -- -- 229
Additional paid-in capital 178,364 -- -- 178,364
Retained earnings 99,814 -- -- 99,814
Parent company investment in subsidiaries
sold -- 24,298 (24,298)(1) --
Treasury stock (30,582) -- (30,582)
--------- --------- --------- ---------
Total shareholders' equity 247,825 24,298 (24,298) 247,825
--------- --------- --------- ---------
$ 341,006 $ 33,045 $ (24,298) $ 349,753
========= ========= ========= =========
</TABLE>
The Unaudited Condensed Pro Forma Consolidated Balance Sheet should be read in
conjunction with the accompanying notes to the Unaudited Condensed Pro Forma
Consolidated Financial Statements.
2
<PAGE> 3
MISSISSIPPI CHEMICAL CORPORATION UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
INCOME STATEMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
The following Unaudited Condensed Pro Forma Consolidated Income Statement for
the fiscal year ended June 30, 1996, is based on (i) the audited historical
Consolidated Statement of Income of Mississippi Chemical for the fiscal year
ended June 30, 1996, and (ii) the unaudited combined statement of income of the
Potash Companies for the fiscal year ended June 30, 1996, after giving effect
to the pro forma adjustments described in the Notes. Such adjustments have
been made assuming that the acquisition by Mississippi Chemical of the Potash
Companies took place on July 1, 1995.
<TABLE>
<CAPTION>
Mississippi Mississippi
Chemical Potash Pro Forma Chemical
Historical Companies Adjustments Pro Forma
---------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 428,789 $ 53,986 $ - $ 482,775
Operating expenses:
Cost of products sold 291,403 51,142 (759)(3) 341,786
Selling, general and administrative 52,568 1,511 - 54,079
--------- --------- --------- ---------
343,971 52,653 (759) 395,865
Operating Income 84,818 1,333 759 86,910
Other Income (expense):
Interest, net 2,229 - (2,446)(4) (1,028)
(811)(4)
Other 1,446 298 - 1,744
--------- --------- --------- ---------
Income before income taxes 88,493 1,631 (2,498) 87,626
Income tax expense 34,315 652 (981)(5) 33,986
--------- --------- --------- ---------
Net income $ 54,178 $ 979 $ (1,517) $ 53,640
========= ========= ========= =========
Earnings per share $ 2.46 $ 2.44
========= =========
</TABLE>
The Unaudited Condensed Pro Forma Consolidated Income Statement should be read
in conjunction with the accompanying notes to the Unaudited Condensed Pro Forma
Consolidated Financial Statements.
3
<PAGE> 4
NOTES TO UNAUDITED CONDENSED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
Balance sheet adjustments
The Unaudited Condensed Pro Forma Consolidated Balance Sheet gives effect to
the adjustments set forth below necessary to reflect the acquisition of the
Potash Companies for approximately $55 million of cash.
(1) Allocation of the Potash Companies' purchase price adjustments.
(2) Cash paid for purchase of the Potash Companies.
Income statement adjustments
The Unaudited Condensed Pro Forma Consolidated Income Statement gives effect to
the following pro forma adjustments necessary to reflect the acquisition of the
Potash Companies:
(3) Adjustments to the Potash Companies to reflect the application of purchase
accounting adjustments and MCC accounting policies relating to depreciation
on property, plant and equipment.
(4) Estimated foregone interest income on cash used to purchase the Potash
Companies of $2,446 and incremental interest expense of $811 for
approximately $11,000 of debt assumed to have been incurred to fund the
purchase.
(5) Reflects tax effects of the purchase price adjustments and interest
charges.
4
