<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the Year Ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the Transition Period From to
Commission File Number 1-8520
A. Full title of the Plan and the address of the Plan, if different from that
of the issuer named below:
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
TERRA INDUSTRIES INC.
TERRA CENTRE
600 FOURTH STREET
P.O. BOX 6000
SIOUX CITY, IOWA 51102-6000
<PAGE>
REQUIRED INFORMATION
Plan financial statements and schedules are prepared in accordance with the
financial reporting requirements of ERISA and are included therein as listed in
the table of contents below.
<TABLE>
<CAPTION>
Table of Contents
- -----------------
(a) Financial Statements Pages
------------------------ -----
<S> <C>
Independent Auditors' Report 3
Statements of Net Assets Available for Benefits at
December 31, 1995 and 1994 4-5
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1995 and 1994 6-7
Notes to Financial Statements 8-11
(b) Supplemental Schedules
--------------------------
Schedule of Assets Held for Investment Purposes 12-13
Schedule of Reportable Transactions 14
(c) Exhibits
------------
Exhibit E - Independent Auditors' Consent 15
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants and
Administrator of the
Terra Industries Inc.
Employees' Savings and Investment Plan
We have audited the accompanying statements of net assets available for benefits
of the Terra Industries Inc. Employees' Savings and Investment Plan as of
December 31, 1995 and 1994, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan'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 net assets available for benefits of the Terra Industries Inc.
Employees' Savings and Investment Plan as of December 31, 1995 and 1994, and the
changes in net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1995, and (2) reportable
transactions for the year ended December 31, 1995, are presented for purposes of
additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental information by fund in
the statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for the purpose of
additional analysis rather than to present the net assets available for benefits
and changes in net assets available for benefits of the individual funds. The
supplemental schedules and supplemental information by fund is the
responsibility of the Plan's management. Such supplemental schedules and
supplemental information by fund have been subjected to the auditing procedures
applied in our audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 26, 1996
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Supplemental Information by Fund
--------------------------------------------------------------------
Employer
Directed Participant Directed
------------ -----------------------------------------------------
Terra
Terra Industries
Industries Inc.
Inc. Voluntary Equity
Common Stock Common Stock Income Intermediate Stock
ASSETS: Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Terra Industries Inc. Common Stock $22,849,038 $6,166,806 $ -- $ -- $ --
Fidelity Magellan Fund -- -- -- -- 16,680,769
Vista Growth and Income Fund -- -- 8,963,731 -- --
Vanguard Windsor Fund -- -- -- -- --
Vista U.S. Government Income Fund -- -- -- 4,415,907 --
Vista U.S. Government Money Market Fund -- -- -- -- --
American Performance Cash Management Fund -- -- -- -- --
BancOklahoma GIC Fund -- -- -- -- --
Chase Bank Domestic Liquidity Fund 184,067 3,321 46 24 --
----------- ---------- ---------- ---------- -----------
Total investments at fair value 23,033,105 6,170,127 8,963,777 4,415,931 16,680,769
Loans to participants -- -- -- -- --
----------- ---------- ---------- ---------- -----------
Total investments 23,033,105 6,170,127 8,963,777 4,415,931 16,680,769
Accrued investment income -- -- -- 21,281 --
Employer contributions receivable 192,627 -- -- -- --
Participant contributions receivable -- 30,521 43,237 22,890 76,301
Receivable - securities sold -- 79,793 -- -- --
Cash 82 1 -- -- 203
----------- ---------- ---------- ---------- -----------
Total assets 23,225,814 6,280,442 9,007,014 4,460,102 16,757,273
LIABILITIES:
Accrued administrative expenses -- 2,988 4,593 2,424 8,485
Payable - securities purchased 133,053 -- -- -- --
----------- ---------- ---------- ---------- -----------
Total liabilities 133,053 2,988 4,593 2,424 8,485
----------- ---------- ---------- ---------- -----------
Net assets available for benefits $23,092,761 $6,277,454 $9,002,421 $4,457,678 $16,748,788
=========== ========== ========== ========== ===========
<CAPTION>
Participant Directed
------------------------------------------------------
Money
Market GIC Windsor Participant
ASSETS: Fund Fund Fund Loans Total
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Terra Industries Inc. Common Stock $ -- $ -- $ -- $ -- $29,015,844
Fidelity Magellan Fund -- -- -- -- 16,680,769
Vista Growth and Income Fund -- -- -- -- 8,963,731
Vanguard Windsor Fund -- -- 8,882,165 -- 8,882,165
Vista U.S. Government Income Fund -- -- -- -- 4,415,907
Vista U.S. Government Money Market Fund 3,621,921 -- -- -- 3,621,921
American Performance Cash Management Fund -- 159,390 -- -- 159,390
BancOklahoma GIC Fund -- 3,055,795 -- -- 3,055,795
Chase Bank Domestic Liquidity Fund -- 63,503 -- -- 250,961
---------- ---------- ---------- ---------- -----------
Total investments at fair value 3,621,921 3,278,688 8,882,165 -- 75,046,483
Loans to participants -- -- -- 3,136,466 3,136,466
---------- ---------- ---------- ---------- -----------
Total investments 3,621,921 3,278,688 8,882,165 3,136,466 78,182,949
Accrued investment income -- 584 -- -- 21,865
Employer contributions receivable -- -- -- -- 192,627
Participant contributions receivable 20,347 17,804 43,238 -- 254,338
Receivable - securities sold -- -- -- -- 79,793
Cash 77 1 -- -- 364
---------- ---------- ---------- ---------- -----------
Total assets 3,642,345 3,297,077 8,925,403 3,136,466 78,731,936
LIABILITIES:
Accrued administrative expenses 2,042 21,000 4,288 -- 45,820
Payable - securities purchased -- -- -- -- 133,053
---------- ---------- ---------- ---------- -----------
Total liabilities 2,042 21,000 4,288 -- 178,873
---------- ---------- ---------- ---------- -----------
Net assets available for benefits $3,640,303 $3,276,077 $8,921,115 $3,136,466 $78,553,063
========== ========== ========== ========== ===========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental Information by Fund
------------------------------------------------------------
Employer
Directed Participant Directed
-------------- -------------------------------------------
Terra
Terra Industries
Industries Inc.
Inc. Voluntary Equity
Common Stock Common Stock Income Intermediate
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Terra Industries Inc. Common Stock $14,260,220 $3,332,045 $ -- $ --
Fidelity Magellan Fund -- -- -- --
Vista Growth and Income Fund -- -- 6,716,116 --
Vanguard Windsor Fund -- -- -- --
Vista U.S. Government Income Fund -- -- -- 4,164,658
Vista U.S. Government Money Market Fund -- -- -- --
American Performance Cash Management Fund -- -- -- --
BancOklahoma GIC Fund -- -- -- --
Chase Bank Domestic Liquidity Fund 6,012 484 45 28
American Performance Equity Fund -- -- -- --
BancOklahoma Balanced Investment Fund -- -- -- --
American Performance Aggressive Growth Fund -- -- -- --
American Performance Bond Fund -- -- -- --
----------- ---------- ---------- ----------
Total investments at fair value 14,266,232 3,332,529 6,716,161 4,164,686
Loans to participants -- -- -- --
----------- ---------- ---------- ----------
Total investments 14,266,232 3,332,529 6,716,161 4,164,686
Accrued investment income -- -- 38,325 25,360
Employer contributions receivable 183,171 -- -- --
Participant contributions receivable -- 11,820 48,969 32,083
Cash -- -- -- --
----------- ---------- ---------- ----------
Total assets 14,449,403 3,344,349 6,803,455 4,222,129
LIABILITIES:
Accrued administrative expenses -- -- 4,031 2,452
Other payables -- -- -- --
----------- ---------- ---------- ----------
Total liabilities -- -- 4,031 2,452
----------- ---------- ---------- ----------
Net assets available for benefits $14,449,403 $3,344,349 $6,799,424 $4,219,677
=========== ========== ========== ==========
Money Merged
Stock Market Participant Plan
Fund Fund Loans (Note F) Total
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Terra Industries Inc. Common Stock $ -- $ -- $ -- $ -- $17,592,265
Fidelity Magellan Fund 9,520,440 -- -- -- 9,520,440
Vista Growth and Income Fund -- -- -- -- 6,716,116
Vanguard Windsor Fund -- -- -- 4,861,016 4,861,016
Vista U.S. Government Income Fund -- -- -- -- 4,164,658
Vista U.S. Government Money Market Fund -- 3,528,158 -- -- 3,528,158
American Performance Cash Management Fund -- -- -- 544,395 544,395
BancOklahoma GIC Fund -- -- -- 2,279,472 2,279,472
Chase Bank Domestic Liquidity Fund 1,412 -- -- -- 7,981
American Performance Equity Fund -- -- -- 1,223,346 1,223,346
BancOklahoma Balanced Investment Fund -- -- -- 951,498 951,498
American Performance Aggressive
Growth Fund -- -- -- 476,869 476,869
American Performance Bond Fund -- -- -- 425,324 425,324
---------- ---------- ---------- ----------- -----------
Total investments at fair value 9,521,852 3,528,158 -- 10,761,920 52,291,538
Loans to participants -- -- 1,501,570 1,027,871 2,529,441
---------- ---------- ---------- ----------- -----------
Total investments 9,521,852 3,528,158 1,501,570 11,789,791 54,820,979
Accrued investment income -- -- -- 8,212 71,897
Employer contributions receivable -- -- -- 85,808 268,979
Participant contributions receivable 52,346 23,640 -- 159,514 328,372
Cash -- 16 -- -- 16
---------- ---------- ---------- ----------- -----------
Total assets 9,574,198 3,551,814 1,501,570 12,043,325 55,490,243
LIABILITIES:
Accrued administrative expenses 5,495 2,063 -- 48,016 62,057
Other payables -- -- -- 22,482 22,482
---------- ---------- ---------- ----------- -----------
Total liabilities 5,495 2,063 -- 70,498 84,539
---------- ---------- ---------- ----------- -----------
Net assets available for benefits $9,568,703 $3,549,751 $1,501,570 $11,972,827 $55,405,704
========== ========== ========== =========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Supplemental Information by Fund
------------------------------------------------------------------------
Employer
Directed Participant Directed
------------ --------------------------------------------------------
Terra
Terra Industries
Industries Inc.
Inc. Voluntary Equity
Common Stock Common Stock Income Intermediate Stock
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Investment income:
Dividend, interest, and other income $ 155,555 $ 44,373 $ 172,768 $ 270,215 $ 568,706
Net appreciation in fair value
of investments 5,504,919 1,604,341 1,743,823 444,492 3,439,276
----------- ---------- ---------- ---------- -----------
Total investment income 5,660,474 1,648,714 1,916,591 714,707 4,007,982
Employer contributions 3,887,731 -- -- -- --
Participant contributions -- 879,661 1,269,662 641,543 1,868,448
----------- ---------- ---------- ---------- -----------
Total additions 9,548,205 2,528,375 3,186,253 1,356,250 5,876,430
Deductions:
Benefit payments 957,499 202,646 493,375 231,945 755,384
Administrative expenses -- 13,694 22,158 12,378 37,586
Interfund transfers/net loans (52,652) (621,070) 467,723 873,926 (2,096,625)
----------- ---------- ---------- ---------- -----------
Total deductions 904,847 (404,730) 983,256 1,118,249 (1,303,655)
----------- ---------- ---------- ---------- -----------
Net increase (decrease) 8,643,358 2,933,105 2,202,997 238,001 7,180,085
Assets available for benefits:
Beginning of year 14,449,403 3,344,349 6,799,424 4,219,677 9,568,703
----------- ---------- ---------- ---------- -----------
End of year $23,092,761 $6,277,454 $9,002,421 $4,457,678 $16,748,788
=========== ========== ========== ========== ===========
<CAPTION>
Supplemental Information by Fund
--------------------------------------------------------------------------------------
Participant Directed
-----------------------------------------------------------------------
Money Merged
Market GIC Windsor Participant Plan
Fund Fund Fund Loans (Note F) Total
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend, interest, and other income $ 214,533 $ 16,082 $ 324,710 $ 215,874 $ -- $ 1,982,816
Net appreciation in fair value
of investments -- 196,221 1,332,075 -- -- 14,265,147
---------- ----------- ----------- ----------- ------------ -----------
Total investment income 214,533 212,303 1,656,785 215,874 -- 16,247,963
Employer contributions -- -- -- -- -- 3,887,731
Participant contributions 623,095 469,400 997,438 -- -- 6,749,247
---------- ----------- ----------- ----------- ------------ -----------
Total additions 837,628 681,703 2,654,223 215,874 -- 26,884,941
Deductions:
Benefit payments 488,454 154,499 217,460 83,859 -- 3,585,121
Administrative expenses 11,195 37,045 18,405 -- -- 152,461
Interfund transfers/net loans 247,427 (2,785,918) (6,502,757) (1,502,881) 11,972,827 --
---------- ----------- ----------- ----------- ------------ -----------
Total deductions 747,076 (2,594,374) (6,266,892) (1,419,022) 11,972,827 3,737,582
---------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) 90,552 3,276,077 8,921,115 1,634,896 (11,972,827) 23,147,359
Assets available for benefits:
Beginning of year 3,549,751 -- -- 1,501,570 11,972,827 55,405,704
---------- ----------- ----------- ----------- ------------ -----------
End of year $3,640,303 $ 3,276,077 $ 8,921,115 $ 3,136,466 $ -- $78,553,063
========== =========== =========== =========== ============ ===========
</TABLE>
See notes to financial statements.
-6-
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Supplemental Information by Fund
---------------------------------------------------------
Employer
Directed Participant Directed
---------- --------------------------------------------
Terra
Terra Industries
Industries Inc.
Inc. Voluntary Equity
Common Stock Common Stock Income Intermediate
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Investment income:
Dividend, interest, and other income $ 110,058 $ 21,981 $ 217,460 $ 381,069
Net appreciation (depreciation) in fair value
of investments 3,682,515 725,856 (373,042) (496,865)
----------- ---------- --------- ---------
Total investment income 3,792,573 747,837 (155,582) (115,796)
Employer contributions 1,339,290 - - -
Participant contributions - 351,851 1,464,477 918,700
Transfer of assets from merged plan - - - -
----------- ---------- --------- ---------
Total additions 5,131,863 1,099,688 1,308,895 802,904
Deductions:
Benefit payments 949,775 49,202 873,203 815,500
Administrative expenses - 74 28,375 17,915
Interfund transfers/net loans 2,992 (616,062) 546,293 615,607
----------- ---------- ---------- ----------
Total deductions 952,767 (566,786) 1,447,871 1,449,022
----------- ---------- ---------- ----------
Net increase (decrease) 4,179,096 1,666,474 (138,976) (646,118)
Assets available for benefits:
Beginning of year 10,270,307 1,677,875 6,938,400 4,865,795
----------- ---------- ---------- ----------
End of year $14,449,403 $3,344,349 $6,799,424 $4,219,677
=========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Supplemental Information by Fund
---------------------------------------------------------
Participant Directed
---------------------------------------------------------
Money Merged
Stock Market Participant Plan
Fund Fund Loans (Note F) Total
<S> <C> <C> <C> <C> <C>
Investment income:
Dividend, interest, and other income $ 376,829 $ 118,733 $ 183,523 $ - $1,409,653
Net appreciation (depreciation) in fair value
of investments (548,140) - - - 2,990,324
---------- ---------- --------- ----------- -----------
Total investment income (171,311) 118,733 183,523 - 4,399,977
Employer contributions - - - - 1,339,290
Participant contributions 1,564,946 676,944 - - 4,976,918
Transfer of assets from merged plan - - - 11,972,827 11,972,827
---------- ---------- --------- ----------- -----------
Total additions 1,393,635 795,677 183,523 11,972,827 22,689,012
Deductions:
Benefit payments 1,057,277 299,018 67,417 - 4,111,392
Administrative expenses 37,877 12,208 - - 96,449
Interfund transfers/net loans (22,977) (256,587) (269,266) - -
---------- ---------- ---------- ----------- -----------
Total deductions 1,072,177 54,639 (201,849) - 4,207,841
---------- ---------- ---------- ----------- -----------
Net increase (decrease) 321,458 741,038 385,372 11,972,827 18,481,171
Assets available for benefits:
Beginning of year 9,247,245 2,808,713 1,116,198 - 36,924,533
---------- ---------- ---------- ----------- -----------
End of year $9,568,703 $3,549,751 $1,501,570 $11,972,827 $55,405,704
========== ========== ========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
A. DESCRIPTION OF PLAN
The following brief description of the Terra Industries Inc. Employees'
Savings and Investment Plan (the Plan) is provided for general information
only. Participants should refer to the Plan Document for more complete
information.
GENERAL - The Plan, established as of January 1, 1984, is a defined
contribution plan covering eligible employees of Terra Industries Inc. and
eligible subsidiaries and affiliates (collectively, the Company). The Plan
is subject to the Employee Retirement Income Security Act of 1974 (ERISA)
and is administered by the Employee Benefit Committee (the Committee) of
the Company. The assets of the Plan are held by Chase Manhattan Bank, N.A.,
the trustee of the Plan. Certain Plan investments are funds managed by the
trustee of the Plan and, therefore, qualify as party-in-interest.
PARTICIPATION - All full-time active employees of the Company are eligible
for Plan participation on the first day of the month following the date
their employment commenced. In addition, part time or temporary employees
with at least one year of service and 1,000 hours are eligible for
participation. Participation in the Plan is voluntary.
PARTICIPANTS' ACCOUNTS - Each participant's account is credited with the
participant's contributions, the employer's matching contributions and an
allocation of fund earnings. A participant's benefit is limited to the
amount that can be provided from the participant's account, subject to the
applicable vesting requirements.
CONTRIBUTIONS - Participants earning $66,000 or less annually in 1995 and
1994, could elect to contribute up to 10% of their annual compensation on a
pretax basis and 10% on an after-tax basis. Participants earning more than
$66,000 in 1995 and 1994, respectively, could contribute up to 6% of their
annual compensation on a combined pretax and after-tax basis.
The maximum participant pretax contribution was $9,240 in 1995 and 1994.
Participants may elect to invest their contributions in one or more of the
seven available participant directed investment options.
EMPLOYER - The Company contributes an amount determined by its Board of
Directors, equal to 100% of the participants' contributions up to 3% of
their annual compensation, and 50% for up to an additional 3% of annual
compensation in 1995, and equal to one half of the participants'
contributions up to 6% of their annual compensation for 1994. The
contributions made by the Company must be invested in the Terra Industries
Inc. Common Stock Fund. The Company may elect to make an additional
contribution, subject to certain limitations as defined in the Plan, in
such amount as its Board of Directors shall determine. No such additional
contributions were made in 1995 or 1994. Employer contributions are reduced
by the amount of any participant forfeitures during the period. Participant
forfeitures totaled to $82,977 and $196,592 in 1995 and 1994, respectively.
-8-
<PAGE>
MAXIMUM CONTRIBUTIONS PER PARTICIPANT - The sum of a participant's
contribution and employer matching contribution cannot exceed the lesser of
$30,000 or 25% of net compensation of the participant. Net compensation is
defined as total participant compensation less any pretax contributions
made by the participant. Eligible compensation was limited to $150,000 in
1995 and 1994.
VESTING - Participants are immediately fully vested in their contributions
and earnings on their voluntary contributions. Employer contributions vest
at a rate of 20% per year, until fully vested after five years of service.
PARTICIPANT LOANS - Participants may borrow from their individual
contribution accounts subject to maximum limitations as defined in the
Plan. Loan repayments are reinvested in the funds in accordance with the
participant's investment election at the time of repayment.
BENEFITS - Participants or their beneficiaries are eligible to receive the
value of their vested account balance upon the occurrence of one of the
following: early or normal retirement; termination of employment; death or
total disability.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS - Investments, except for loans to participants,
are reported at fair value, which is determined, in the case of Terra
Industries Inc.'s Common Stock, from the latest available market quotations
and, in the case of investments in mutual funds, at quoted net asset value.
Money market funds are reported at fair value as determined by the issuer
and common funds are valued at the unit value as reported by the fund. In
accordance with the policy of stating investments at fair value, the net
change in realized and unrealized appreciation or depreciation in fair
value is included in income from investments, which is reflected in the
statement of changes in net assets available for benefits. Dividend income
is recorded on the ex-dividend date. Investment transactions are recognized
on a trade date basis. Participant loans are reported at the outstanding
balance. The outstanding balance of participant loans approximates fair
value.
The Plan has investments in eight funds. The net assets and net investment
income of the funds are allocated to the participants in the Plan based
upon each participant's participation relative to the total participation
in each of the eight investment funds. A summary description of each
investment fund follows:
TERRA INDUSTRIES INC. COMMON STOCK FUND (EMPLOYER DIRECTED) - A fund
invested primarily in Terra Industries Inc. Common Stock which is
limited to employer contributions only.
TERRA INDUSTRIES INC. VOLUNTARY COMMON STOCK FUND (PARTICIPANT
DIRECTED) - A fund invested primarily in Terra Industries Inc. Common
Stock.
EQUITY INCOME FUND (PARTICIPANT DIRECTED) - A fund invested primarily
in shares of Vista Growth and Income Fund, which is comprised
primarily of income producing equity securities and securities
convertible into such equity securities.
INTERMEDIATE FUND (PARTICIPANT DIRECTED) - A fund invested primarily
in shares of Vista U.S. Government Income Fund, which is comprised
primarily of debt obligations backed by the full faith and credit of
the U.S. Government.
STOCK FUND (PARTICIPANT DIRECTED)- A fund invested primarily in shares
of Fidelity Magellan Fund, which is comprised primarily of common
stocks and which seeks long-term capital appreciation.
-9-
<PAGE>
MONEY MARKET FUND (PARTICIPANT DIRECTED) - A fund invested primarily
in shares of Vista U.S. Government Money Market Fund so as to preserve
capital and maintain a high degree of liquidity.
GIC FUND (PARTICIPANT DIRECTED) - A fund invested primarily in shares
of BancOklahoma Guaranteed Investment Contract Fund so as to provide
current income while maintaining a stable market valuation.
WINDSOR FUND (PARTICIPANT DIRECTED) - A fund invested primarily in
shares of Vanguard Windsor Fund, a fund invested principally in income
producing equity securities.
BENEFITS PAYABLE - The Plan's policy is to record benefit payments upon
distribution of balances to participants. Benefits due and unpaid to
retired and terminated participants were $269,751 and $96,718 at December
31, 1995 and 1994, respectively.
ADMINISTRATIVE EXPENSES - Administrative expenses are comprised of charges
relating to routine services provided by the Plan's trustee and
recordkeeping agent and fees associated with the annual audit of the Plan's
financial statements. Administrative expenses are allocated to the
investment funds, other than the Terra Industries Inc. Common Stock Fund,
based upon the fair value of each fund's investment relative to the total
fair value of all investment funds to which expenses are allocated.
C. INVESTMENTS
The fair value of the Plan's investments, other than loans to participants,
by basis of valuation, are presented in the following tables. Investments
that represent 5% or more of the Plan's investments are separately
identified.
<TABLE>
<CAPTION>
December 31, 1995
Number of
Shares or
Principal
Amount Fair Value
<S> <C> <C>
Investments, at Fair Value:
Terra Industries Inc. Common Stock 2,054,219 $29,015,844
Fidelity Magellan Fund 194,008 16,680,769
Vista Growth and Income Fund 258,470 8,963,731
Vanguard Windsor Fund 611,298 8,882,165
Vista U.S. Government Income Fund 380,026 4,415,907
Vista U.S. Government Money Market Fund 3,621,921 3,621,921
American Performance Cash Management Fund 159,390 159,390
BancOklahoma Guaranteed Investment Contract Fund 177,240 3,055,795
Chase Bank Domestic Liquidity Fund 250,961 250,961
-----------
$75,046,483
===========
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
December 31, 1994
Number of Shares
or Principal Amount Fair Value
<S> <C> <C>
Investments, at Fair Value:
Terra Industries Inc. Common Stock 1,695,640 $17,592,265
Fidelity Magellan Fund 142,522 9,520,440
Vista Growth and Income Fund 230,874 6,716,116
Vanguard Windsor Fund 386,101 4,861,016
Vista U.S. Government Income Fund 396,257 4,164,658
Vista U.S. Government Money Market Fund 3,528,158 3,528,158
American Performance Cash Management Fund 544,395 544,395
BancOklahoma Guaranteed Investment Contract Fund 140,089 2,279,472
Chase Bank Domestic Liquidity Fund 7,981 7,981
American Performance Equity Fund 121,364 1,223,346
BankOklahoma Balanced Investment Fund 57,371 951,498
American Performance Aggressive Growth Fund 38,395 476,869
American Performance Bond Fund 48,332 425,324
-----------
$52,291,538
===========
</TABLE>
D. PLAN TERMINATION
Although it has expressed no intent to do so, the Company specifically
reserves the right to amend or terminate the Plan or to discontinue
contributions at any time. Upon termination, a participant's entire account
will become fully vested and the assets shall be administered in the manner
provided for in the Plan.
E. FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter dated November 21, 1995,
in which the Internal Revenue Service stated that the Plan, as amended
March 9, 1995, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan administrator believes that the Plan is
currently designed and is being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, they believe that the
Plan was qualified and the related trust was tax exempt as of the financial
statement date. Therefore, no provision for income taxes has been included
in the Plan's financial statements.
Plan income, participant pretax contributions and employer contributions
represent taxable income to the participating employees at the time of
distribution in accordance with IRS regulations currently in effect.
F. PLAN MERGER
Effective December 31, 1994, the AMCI Employees' Savings Plan was merged
into the Terra Industries Inc. Employees' Savings and Investment Plan as a
result of the Company's acquisition of Agricultural Minerals and Chemicals,
Inc. (AMCI). As a result of the merger of these plans, $11,972,827 was
transferred into the Terra Industries Inc. Employees' Savings and
Investment Plan. Subsequent to December 31, 1994, the assets of the merged
plan, except for the GIC Fund, Vanguard Windsor Fund, and Participant
Loans, were sold. The proceeds of the sale were reinvested in the five
investment fund options available to participants (Note B). The GIC Fund
and the Vanguard Windsor Fund were added as additional investment fund
options available to all participants effective January 1, 1995.
-11-
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
PN 333
EIN #52-1145429
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of investment
Identity of issue, including collateral, rate
borrower, lessor or of interest, maturity date, Current
similar party par or maturity value Cost Value
<S> <C> <C> <C>
Common Stock:
*Terra Industries Inc. 2,054,219 shares $14,088,379 $29,015,844
Mutual Funds:
Fidelity Magellan Fund 194,008 shares 13,410,941 16,680,769
*Vista Growth and Income Fund 258,470 shares 7,685,429 8,963,731
Vanguard Windsor Fund 611,298 shares 8,288,712 8,882,165
*Vista U.S. Government Income
Fund 380,026 shares 4,309,759 4,415,907
*Vista U.S. Government Money
Market Fund 3,621,921 shares 3,621,921 3,621,921
*American Performance Cash
Management Fund 159,390 units 159,390 159,390
* Party-In-Interest
</TABLE>
-12-
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
PN 333
EIN #52-1145429
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of investment
Identity of issue, including collateral, rate
borrower, lessor or of interest, maturity date, Current
similar party par or maturity value Cost Value
<S> <C> <C> <C>
Common Funds:
*BancOklahoma GIC Fund 177,240 units $2,677,141 $3,055,795
Bank Money Market Funds:
*Chase Bank Domestic
Liquidity Fund 250,961 shares 250,961 250,961
Other Investments:
*Loans to Participants Principal balance of $3,136,466
bearing interest at rates ranging
from 5.5% to 14% and maturing
from January 1996 to
September 2025 3,136,466
-----------
$78,182,949
===========
* Party-In-Interest
-13-
</TABLE>
<PAGE>
TERRA INDUSTRIES INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
PN 333
EIN #52-1145429
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D
Identity of Number of Number of
Party Involved Description of Asset Purchases Sales
<S> <C> <C> <C>
Series of Transactions When Aggregated
Involving an Amount in Excess of 5 Percent
of the Current Value of Plan Assets
- ------------------------------------------
*Terra Industries, Inc. Common Stock 46 36
Fidelity Institutional Retirement
Services Company Fidelity Magellan Fund 41 41
*Chase Manhattan Bank, N.A. Vista Growth and
Income Fund 33 49
The Vanguard Group Vanguard Windsor
Fund 44 23
*Chase Manhattan Bank, N.A. Vista U.S. Government
Money Market Fund 44 49
*BancOklahoma Trust Company American Performance
Cash Management
Fund 29 15
*Chase Manhattan Bank, N.A. Chase Bank Domestic
Liquidity Fund 309 272
* Party-In-Interest
</TABLE>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995--Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Column A Column E Column F Column G
Total Dollar Total Dollar
Identity of Value of Value of Net Gain
Party Involved Purchases Sales or (Loss)
<S> <C> <C> <C>
Series of Transactions When Aggregated
Involving an Amount in Excess of 5 Percent
of the Current Value of Plan Assets
- ------------------------------------------
*Terra Industries, Inc. $5,239,150 $ 924,831 $409,853
Fidelity Institutional Retirement
Services Company 5,455,292 1,734,239 619,303
*Chase Manhattan Bank, N.A.
2,480,042 1,976,250 572,188
The Vanguard Group
3,963,816 1,274,742 478,037
*Chase Manhattan Bank, N.A.
1,666,783 1,573,020 --
*BancOklahoma Trust Company
2,196,571 2,581,576 --
*Chase Manhattan Bank, N.A.
9,637,108 9,394,128 --
* Party-In-Interest
</TABLE>
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the members
of the Terra Industries Inc. Employee Benefit Committee have duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
TERRA INDUSTRIES INC. EMPLOYEES'
SAVINGS AND INVESTMENT PLAN
Date June 28, 1996 By /s/ George H. Valentine
-------------- ------------------------------------
George H. Valentine
Senior Vice President, General Counsel
and Corporate Secretary
<PAGE>
EXHIBIT E
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement 33-46734
on Form S-8 of our report dated April 26, 1996, appearing in this Annual Report
on Form 11-K of the Terra Industries Inc. Employees' Savings and Investment Plan
for the year ended December 31, 1995.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 20, 1996
