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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
Commission file number 1-9164
Phosphate Resource Partners Limited Partnership
(Exact name of Registrant as specified in its charter)
Delaware 72-1067072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Sanders Road (Zip Code)
Northbrook, Illinois 60062
(Address or principal
executive offices)
Registrant's telephone number, including area code: (847) 272-9200
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 .
------ -------
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying interim condensed financial statements of
Phosphate Resource Partners Limited Partnership (PLP) do not
include all disclosures normally provided in annual financial
statements. These financial statements, which should be read
in conjunction with the financial statements contained in
PLP's Annual Report on Form 10-K for the year ended December
31, 1998, are unaudited but include all adjustments which the
management of IMC Global Inc. (IMC), the managing general
partner of PLP, considers necessary for a fair presentation.
These adjustments consist of normal recurring accruals.
Certain 1998 amounts have been reclassified to conform to the
1999 presentation. Interim results are not necessarily
indicative of the results expected for the full year.
<TABLE>
CONDENSED STATEMENT OF EARNINGS
(In millions, except per unit amounts)
<CAPTION>
Three months ended
March 31
1999 1998
<S> <C> <C>
Net sales $ 167.4 $ 158.8
Cost of goods sold 123.6 123.4
------ ------
Gross margins 43.8 35.4
Selling, general and administrative expenses 7.5 8.2
Exploration expenses 1.5 9.5
------ ------
Operating earnings 34.8 17.7
Interest expense 9.9 9.6
Other (income) expense, net (2.5) (0.7)
------ ------
Earnings before cumulative effect of a
change in accounting principle 27.4 8.8
Cumulative effect of a change in
accounting principle (2.6) -
------ ------
Earnings $ 24.8 $ 8.8
====== ======
<PAGE>
Earnings per unit:
Earnings before cumulative effect of a change
in accounting principle $ 0.26 $ 0.09
Cumulative effect of a change in
accounting principle (0.02) -
------ ------
Earnings per unit $ 0.24 $ 0.09
====== ======
Average units outstanding 103.5 103.5
Distributions paid per publicly held unit $ 0.10 $ -
</TABLE>
(See Notes to Condensed Financial Statements)
<PAGE>
<TABLE>
CONDENSED BALANCE SHEET
(In millions)
<CAPTION>
March 31, December 31,
Assets 1999 1998
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 9.4 $ 10.8
Receivables, net 56.2 65.0
Inventories, net 110.9 122.2
Other current assets 0.7 0.9
------- -------
Total current assets 177.2 198.9
Property, plant and equipment, net 492.8 477.5
Other assets 37.9 43.4
------- -------
Total assets $ 707.9 $ 719.8
======= =======
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 43.8 $ 59.5
Short-term debt and current maturities
of long-term debt 4.7 4.4
------- -------
Total current liabilities 48.5 63.9
Long-term debt, less current maturities 543.5 556.9
Other noncurrent liabilities 260.4 258.0
Partners' deficit (144.5) (159.0)
------- -------
Total liabilities and partners' deficit $ 707.9 $ 719.8
======= =======
</TABLE>
(See Notes to Condensed Financial Statements)
<PAGE>
<TABLE>
CONDENSED STATEMENT OF CASH FLOWS
(In millions)
<CAPTION>
Three months ended
March 31,
1999 1998
<S> <C> <C>
Cash Flows from Operating Activities
Earnings $ 24.8 $ 8.8
Adjustments to reconcile earnings to
net cash provided by operating activities:
Depreciation, depletion and amortization 5.6 6.1
Oil and gas exploration expenses - 7.2
Other charges and credits, net 4.4 1.6
Changes in:
Receivables 8.8 10.1
Inventories 11.3 (0.1)
Other current assets 0.2 0.8
Accounts payable and accrued liabilities (14.9) (13.4)
------ ------
Net cash provided by operating activities 40.2 21.1
------ ------
Cash Flows from Investing Activities
Capital expenditures (17.3) (27.5)
Proceeds from sale of property, plant
and equipment 0.4 0.3
------ ------
Net cash used in investing activities (16.9) (27.2)
------ ------
Net cash provided (used) before
financing activities 23.3 (6.1)
------ ------
Cash Flows from Financing Activities
Cash distributions to unitholders (10.3) -
Payments of long-term debt (14.4) -
Proceeds from issuance of long-term debt - 6.2
Changes in short-term debt, net - (0.4)
------ ------
Net cash provided by (used in)
financing activities (24.7) 5.8
------ ------
Net decrease in cash and cash equivalents (1.4) (0.3)
Cash and cash equivalents - beginning of period 10.8 17.4
------ ------
Cash and cash equivalents - end of period $ 9.4 $ 17.1
====== ======
</TABLE>
(See Notes to Condensed Financial Statements)
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Dollars in millions)
1. Cumulative Effect of a Change in Accounting Principle
In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 98-5, "Reporting the
Costs of Start-Up Activities," which requires that costs related to
start-up activities be expensed as incurred, effective January 1,
1999. Prior to 1999, PLP capitalized its start-up activity costs.
PLP adopted the provisions of SOP 98-5 in its financial statements
for the year beginning January 1, 1999. The effect of the adoption
of SOP 98-5 was to record a charge for the cumulative effect of a
change in accounting principle of $2.6 million to expense start-up
costs that had been capitalized prior to 1999. The future impact
of SOP 98-5 will not be material to the Company's operating
results.
2. Operating Segments
Segment information for 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
IMC-Agrico
IMC-Agrico Feed
Phosphates Ingredients Oil & Gas Other(a) Total
---------- ----------- --------- -------- -----
<S> <C> <C> <C> <C> <C>
Three months ended March 31, 1999
Net sales $ 147.8 $ 18.0 $ 1.6 $ - $ 167.4
Intersegment net sales 8.4 - - - 8.4
Gross margins 36.0 3.8 1.1 2.9 43.8
Exploration expenses - - 1.5 - 1.5
Operating earnings 32.3 3.2 (0.4) (0.3) 34.8
<PAGE>
IMC-Agrico
IMC-Agrico Feed
Phosphates Ingredients Oil & Gas Other(a) Total
---------- ----------- --------- -------- -----
Three months ended March 31, 1998
Net sales $ 142.1 $ 16.7 $ - $ - $ 158.8
Intersegment net sales 8.0 - - - 8.0
Gross margins 29.4 3.1 - 2.9 35.4
Exploration expenses - - 9.5 - 9.5
Operating earnings 25.2 2.4 (9.5) (0.4) 17.7
(a) Segment information below the quantitative thresholds is
attributable to PLP corporate headquarters. PLP's 1998 Form
10-K included IMC-Agrico Feed Ingredients (Feed Ingredients) in
Other as its segment information was below the quantitative
thresholds. In 1999, Feed Ingredients' segment information
met the quantitative thresholds and, accordingly, was
disclosed as a separate segment.
</TABLE>
3. Restructuring Charge
The following footnote discloses amounts in total for IMC-Agrico
Company (IMC-Agrico).
During the fourth quarter of 1998, IMC-Agrico developed and began
execution of a plan to improve profitability (Restructuring Plan).
The Restructuring Plan was comprised of four major initiatives: (i)
the combination of the potash and phosphates business units of IMC
in an effort to realize certain operating and staff function
synergies; (ii) restructuring of the phosphate rock mining and
concentrated phosphate production/distribution operations and
processes in an effort to reduce costs; (iii) simplification of the
current business activities by eliminating businesses not deemed
part of IMC-Agrico's core competencies; and (iv) reduction of
operational and administrative headcount. In conjunction with the
Restructuring Plan, IMC-Agrico recorded pre-tax charges totaling
$148.8 million in the fourth quarter of 1998.
<PAGE>
The following table summarizes the activity during the period
January 1, 1999 to March 31, 1999 of the accruals recorded in
conjunction with the Restructuring Plan.
<TABLE>
<CAPTION>
Accrual at Accrual at
January 1, 1999 Cash Paid March 31, 1999
--------------- --------- -------------
<S> <C> <C> <C>
Asset impairments:
Facilities closed prior
to December 31, 1998 $ - $ - $ -
Facilities to be closed
in 1999 - - -
Non-employee exit costs:
Demolition and closure
costs 31.2 1.3 29.9
Idled leased
transportation equipment 13.2 1.5 11.7
Other 4.6 1.5 3.1
Employee headcount reductions:
Severance benefits - - -
Settlement, curtailment
and special termination
benefits - - -
Inventories and spare parts of exited businesses:
Finished goods inventories - - -
Spare parts inventories - - -
------ ------ ------
Total $ 49.0 $ 4.3 $ 44.7
====== ====== ======
</TABLE>
The timing and costs of the Restructuring Plan are generally on
schedule with the original time and dollar estimates disclosed in
the fourth quarter of 1998. During the first quarter of 1999, 41
employees, who had accepted a voluntary retirement plan as of
December 31, 1998, left IMC-Agrico in accordance with their
target retirement date.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.(1)
Results of Operations
---------------------
Three months ended March 31, 1999 vs. three months ended
March 31, 1998
--------------------------------------------------------
Overview
PLP, through its joint venture operation in IMC-Agrico, is one
of the world's largest and lowest cost producers, marketers
and distributors of phosphate crop nutrients and animal feed
ingredients, with operations in central Florida and on the
Mississippi River in Louisiana. IMC-Agrico is 41.5 percent
owned by PLP and 58.5 percent owned by IMC. PLP also
participates in the exploration and production of oil and gas
(Exploration Program) primarily through its agreement with
McMoRan Exploration Company (MMR).
PLP's first quarter net sales of $167.4 million increased five
percent from $158.8 million in the year-earlier period
principally due to a four percent increase in sales for IMC-
Agrico in the first quarter. PLP's gross margins of $43.8
million in the first quarter of 1999 increased 24 percent from
gross margins of $35.4 million in the first quarter of 1998
primarily as a result of a 22 percent increase in IMC-Agrico's
gross margins.
IMC-Agrico Company
IMC-Agrico's operations consist of its phosphate crop
nutrients business (Phosphates) and its animal feed
ingredients business (Feed Ingredients).
The amounts included in the following Phosphates and Feed
Ingredients discussions are shown in total for the respective
operations, unless otherwise indicated.
Phosphates
Phosphates' net sales for the first quarter increased $10.3
million from $364.5 million in 1998 to $374.8 million in 1999,
primarily as a result of higher average concentrates sales
realizations and higher uranium sales volumes, partially
offset by lower sales volumes of concentrates. Higher average
concentrate sales prices of $5.3 million were driven by higher
average diammonium phosphate (DAP) realizations. A decrease
of $7.0 million in sales volumes of concentrated phosphates
<PAGE>
was primarily due to decreased shipments of monoammonium
phosphate, granular monoammonium phosphate and granular triple
superphosphate, partially offset by increased shipments of
merchant acid and DAP. The decreased shipments were mainly
attributable to lower international shipments to certain
countries. Uranium volumes increased net sales by $9.3
million as a result of the absence of sales in the prior year
caused by a temporary delay pending an anticipated upswing in
spot market prices.
Gross margins increased 22 percent to $86.7 million in the
first quarter of 1999 compared to $71.3 million in the first
quarter of 1998, mainly due to lower production costs and the
higher prices discussed above, partially offset by the lower
volumes discussed above. Production costs decreased compared
to the prior year's first quarter primarily as a result of
improved mining conditions for the phosphate rock operations,
as well as the following factors: (i) dry weather; (ii) a
reduction in water removal efforts; and (iii) lower raw
material costs for purchased ammonia and natural gas.
The following table summarizes Phosphates' sales volumes and
average selling prices for the three months ended March 31:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Sales volumes
(in thousands of short tons)(a): 1,690 1,758
Average DAP price per ton(b): $176 $171
(a) Sales volumes include tons sold captively and represent
dry product tons, primarily DAP.
(b) Average prices represent sales made FOB plant.
</TABLE>
Feed Ingredients
Feed Ingredients' net sales increased eight percent to $43.4
million in the current quarter from $40.2 million in the prior
year quarter, mainly as a result of an increase of $3.0
million in international sales volumes, primarily in the Asian
market.
Gross margins increased 23 percent to $9.2 million in the
first quarter of 1999 from $7.5 million in the first quarter
of 1998. This increase resulted from lower production and
limestone costs.
<PAGE>
Oil and Gas Operations
The Exploration Program had net sales of $1.6 million and
gross margins of $1.1 million for the current quarter as
production began at both Vermilion Block 159 and West Cameron
Block 616.
Exploration expenses of $1.5 million for the three months
ended March 31, 1999 related primarily to the Exploration
Program and were largely comprised of geological and
geophysical expenses. The decrease from prior year expenses
of $9.5 million occurred largely because of the absence of dry
hole costs in the current quarter compared to $7.2 million of
dry hole costs during the same period last year.
Other (Income) Expense, Net
Other income for the first quarter of 1999 increased $1.8
million from the prior year primarily as a result of a gain on
the sale of an IMC-Agrico investment.
Restructuring Plan
The timing and costs of the Restructuring Plan are generally
on schedule with the original time and dollar estimates
disclosed in the fourth quarter of 1998. During the first
quarter of 1999, 41 employees, who had accepted a voluntary
retirement plan as of December 31, 1998, left IMC-Agrico in
accordance with their target retirement date. See Note 3,
"Restructuring Charge," of Notes to Condensed Financial
Statements.
Capital Resources and Liquidity
-------------------------------
PLP generates cash through its joint venture operations in
IMC-Agrico and has sufficient borrowing capacity to meet its
operating and discretionary spending requirements. Net cash
provided by operating activities totaled $40.2 million for the
three months ended March 31, 1999 versus $21.1 million for the
same period one year ago. The increase in net cash provided
by operating activities was mainly due to a decrease in
working capital primarily related to a reduction in uranium
inventories resulting from the increased sales volumes
discussed above.
<PAGE>
Net cash used in investing activities for the first three
months of 1999, which consisted primarily of capital
expenditures, decreased to $16.9 million from $27.2 million in
the same period one year ago. This decrease was mainly
attributable to a reduction in capital expenditures for the
Exploration Program.
Net cash used in financing activities was $24.7 million for
the three months ended March 31, 1999 compared to net cash
provided by financing activities of $5.8 million for the same
period in the prior year. The increase in cash used in
financing activities of $30.5 million was primarily due to a
reduction of $14.4 million in long-term debt due to payments
to reduce working capital loans with IMC and an increase in
distributions to unitholders of $10.3 million during the first
three months of the current year resulting from the payment of
a distribution of $0.10 per unit declared in January 1999.
Year 2000 Compliance
--------------------
All references herein to PLP refer to PLP's business
activities as executed through its ownership interest in IMC-
Agrico. Like other businesses dependent on modern technology,
PLP must address potential Year 2000-related issues. PLP and
IMC (as General Partner) are progressing through a
comprehensive program (Year 2000 Program) to evaluate and
address the impact of Year 2000-related issues on PLP's
operational systems, business application software, computer
hardware, facilities infrastructure and equipment with
embedded technology and Year 2000-related risks associated
with its vendors and customers.
PLP's Year 2000-related effort is a cooperative venture
coordinated among all of the business units of IMC and
appropriate members of IMC's senior management. Progress
reviews are held regularly with senior management and the
Board of Directors of IMC. IMC has also created the position
of Year 2000 Risk Manager to provide leadership, oversight and
coordination of its Year 2000 project.
State of Readiness
PLP is using both internal and external resources to implement
its Year 2000 Program, which includes the following
overlapping phases: (i) system inventory and analysis; (ii)
remediation, testing and implementation; and (iii) vendor and
customer review. PLP expects that its Year 2000 Program will
be substantially complete by the end of the third quarter of
1999.
<PAGE>
System Inventory and Analysis Phase The system inventory and
analysis phase consists of compiling a detailed inventory of
all of PLP's systems and platforms to determine which items
are date sensitive, affected by the Year 2000, and therefore,
require remediation. PLP has focused specifically on the
following seven target areas: (i) business application
software; (ii) mainframe hardware and software; (iii) network
servers; (iv) desktop environment; (v) network and telephone
systems; (vi) non-information technology assets and
facilities; and (vii) major suppliers and service providers.
This analysis has involved both an internal assessment
conducted by PLP engineers, technicians and managers, as well
as contact with the manufacturers of computer systems and
equipment used by PLP in its operations. PLP has completed
its system inventory and analysis phase. The principal
business application systems requiring remediation that were
identified by PLP during this stage include the following
systems: (i) equipment maintenance; (ii) spare parts
inventory; (iii) purchasing; (iv) mine simulation; (v)
payroll/human resource; and (vi) financial/accounting. In
addition, certain PLP plants have identified production
control systems that will require Year 2000-related
remediation in order to remain operative.
Remediation, Testing and Implementation Phase The
remediation, testing and implementation phase involves
determining and implementing a remediation method (upgrade,
replace or discontinue) that is most appropriate for each
specific date-sensitive item. The remediated item is then
tested and returned to normal operations when Year 2000-
related issues have been addressed. Testing includes
functional testing of remedial measures and regression testing
to validate that changes have not altered existing
functionality. Several system manufacturers have provided
testing procedures for their equipment and have been available
for consultations about Year 2000-related testing. PLP
expects to have substantially completed the remediation
testing and implementation phase in the third quarter of 1999.
As a separate initiative, IMC is implementing its Global
Vision Project, an enterprise-wide resource planning (ERP)
software package. Its scope includes accounts payable,
inventory, purchasing, general ledger, payroll, human
resources and plant maintenance. This new ERP software and
the improvements to the infrastructure hardware required to
support the Global Vision Project should further remediate
issues associated with the Year 2000.
<PAGE>
Vendor and Customer Review Phase Vendor reviews consist of
assessing vendor readiness, and if necessary, identifying
alternate channels to receive critical materials and/or
supplies. PLP has developed a questionnaire that has been
submitted to its primary suppliers and vendors to determine
their Year 2000-related status. PLP currently is analyzing
the information provided in these responses, and will
determine the best way to address any specific issues. As an
additional precaution, when appropriate, PLP's purchase orders
now contain a Year 2000-related clause to help ensure that any
newly purchased equipment adequately addresses Year 2000-
related issues.
Although PLP is attempting to monitor and validate the efforts
of other parties, it may not have control over the success of
these efforts. If satisfactory commitments from key suppliers
are not received, PLP is forming plans for the continuing
availability of critical materials and supplies through
alternate channels. In general, however, PLP is satisfied
with the progress made by key vendors to date and no critical
issues have been identified.
In addition to investigating its key suppliers, PLP will be
contacting key customers to explain its Year 2000-related
efforts and to solicit certain information about each
customer's Year 2000-related efforts to assess potential Year
2000-related problems that could affect future orders from
such customers.
MMR Review
PLP is assessing Year 2000-related issues with respect to the
Exploration Program. PLP is monitoring the public disclosures
of MMR with respect to its progress toward remediation of its
Year 2000-related issues and, as appropriate, has discussions
with MMR personnel regarding MMR's Year 2000-related issues.
Costs
PLP does not currently expect that the costs of addressing its
Year 2000-related issues will have a material effect on its
financial position, results of operations or liquidity.
Modification costs related to Year 2000-related issues are
expensed as incurred and are funded through operating cash
flows. PLP estimates its total Year 2000-related technology
and non-information technology systems remediation costs to be
approximately $1.8 million, of which $0.6 million was expended
in 1998. The remaining costs will be incurred during 1999. A
sizable portion of these costs represent the redeployment of
existing employee resources rather than incremental expenses.
<PAGE>
Risks
Progress reports on PLP's Year 2000 Program are presented
regularly to IMC's Board of Directors and senior management.
As the program continues, PLP may discover additional Year
2000-related challenges, including that remediation plans are
not feasible or that the cost of such plans exceed current
expectations. In many cases, PLP is relying on written
assurances from vendors that the current systems are, or that
new or upgraded systems acquired by PLP will, adequately
address Year 2000-related issues. PLP believes that one of
its principal Year 2000-related risks is the effect Year 2000-
related issues will have on its vendors, especially its
utilities vendors. A substantial part of PLP's day-to-day
operations is dependent on power, transportation systems and
telecommunication services, as to which alternative sources of
service may not be available. PLP will continue to
investigate the readiness of its suppliers, including
utilities, and pursue the availability of alternatives to
further diminish the extent of any impact Year 2000-related
issues may have on PLP. Although there can be no assurance
that PLP will be able to complete all of the modifications in
the required time frame or that no unanticipated events will
occur, it is management's belief that PLP is taking adequate
action to address Year 2000-related issues. However, because
of the range of possible issues and the large number of
variables involved, it is impossible to quantify the potential
cost of problems should PLP's remediation efforts or the
efforts of those it does business with not be successful. If
either PLP or its vendors fail to adequately address Year
2000-related issues, PLP may suffer business interruptions.
If such interruptions cause PLP to be unable to fulfill its
obligations to third parties, PLP may potentially be exposed
to third-party liability.
Contingency Planning
PLP is planning to develop contingency measures to address the
possibility that it will not have fully addressed Year 2000-
related issues by December 31, 1999. PLP is currently
developing a contingency plan based upon templates and
suggested procedures that have been provided by IMC's Year
2000 Manager. PLP's contingency plan will identify the risk
and document the steps that need to be taken to allow PLP to
continue to meet the needs of its customers in the event of a
Year 2000-related failure. PLP expects to complete its
contingency plan in the third quarter of 1999.
<PAGE>
The above section, even if incorporated by reference into
other documents or disclosures, is a Year 2000 Readiness
Disclosure as defined under the Year 2000 Information and
Readiness Disclosure Act of 1998.
Item 3. Market Risk.
PLP is exposed to the impact of interest rate changes and the
impact of fluctuations in the purchase price of natural gas,
ammonia and sulphur consumed in operations, as well as changes
in the fair value of its financial instruments. PLP
periodically enters into derivatives in order to minimize
these risks, but not for trading purposes. At March 31, 1999,
PLP's exposure to these market risk factors was not
significant and had not materially changed from December 31,
1998.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.(1)
FTX Merger Litigation
---------------------
In August 1997, five identical class action lawsuits were
filed in Chancery Court in Delaware by unitholders of PLP.
Each case named the same defendants and broadly alleged that
FTX and FMRP Inc. (FMRP) had breached fiduciary duties owed
to the public unitholders of PLP. IMC was alleged to have
aided and abetted these breaches of fiduciary duty.
In November 1997, an amended class action complaint was filed
with respect to all cases. The amended complaint named the
same defendants and raised the same broad allegations of
breaches of fiduciary duty against FTX and FMRP for allegedly
favoring the interests of FTX and FTX's common stockholders
in connection with the FTX Merger. The plaintiffs claimed
specifically that, by virtue of the FTX Merger, the public
unitholders' interests in PLP's ownership of IMC-Agrico would
become even more subject to the dominant interest of IMC.
The amended complaint seeks certification as a class action
and an injunction against the proposed FTX Merger or, in the
alternative, rescissionary damages. The defendants' moved
the court to dismiss the amended complaint in November 1998.
In May 1999, the plaintiffs agreed to dismiss the action.
Final terms of the dismissal have not yet been determined.
<PAGE>
In May 1998, IMC and PLP (collectively, Plaintiffs) filed a
lawsuit (IMC Action) in Delaware Chancery Court against
certain former directors of FTX (Director Defendants) and
MOXY. The Plaintiffs allege that the Director Defendants, as
the directors of PLP's administrative managing general
partner FTX, owed duties of loyalty to PLP and its limited
partnership unitholders. The Plaintiffs further allege that
the Director Defendants breached their duties by causing PLP
to enter into a series of interrelated non-arm's-length
transactions with MOXY, an affiliate of FTX.
IMC also alleges that MOXY knowingly aided and abetted and
conspired with the Director Defendants to breach their
fiduciary duties. On behalf of the PLP public unitholders,
IMC seeks to reform or rescind the contracts that PLP entered
into with MOXY and to recoup the monies expended as a result
of PLP's participation in those agreements. The Director
Defendants and MOXY have filed motions to dismiss the
Plaintiffs' claims. The defendants filed their briefs in
support of their motions in January 1999. IMC filed its
amended complaint, and its responses to the motions to
dismiss in February 1999. In response, the Director
Defendants filed renewed motions which are awaiting argument.
No trial date has been scheduled. IMC intends to pursue this
action vigorously.
In May 1998, Jacob Gottlieb filed an action (Gottlieb Action)
on behalf of himself and all other PLP unitholders against
the Director Defendants, MOXY and IMC asserting the same
claims that IMC asserts in the IMC Action. Because IMC and
PLP had already asserted these claims, IMC has filed a motion
to dismiss the Gottlieb Action. The court has not set a
briefing schedule for IMC's motion to dismiss. IMC and PLP
intend to defend this action vigorously.
Other
-----
PLP is involved from time to time in various legal
proceedings of a character normally incident to its
businesses. PLP believes that its potential liability in any
such pending or threatened proceedings will not have a
material adverse effect on the financial condition or results
of operations of PLP. PLP, through IMC and IMC-Agrico,
maintains liability insurance to cover some, but not all,
potential liabilities normally incident to the ordinary
course of its businesses with such coverage limits as
management of IMC deems prudent.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description
27 Financial Data Schedule
(b) Reports on Form 8-K.
Up to the date of this report, no reports on Form 8-K
were filed.
* * * * * * * * * * * * * * * *
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.
PHOSPHATE RESOURCE PARTNERS
LIMITED PARTNERSHIP
By: IMC GLOBAL INC.,
Its Administrative Managing
General Partner
By: /s/ Anne M. Scavone
----------------------------
Anne M. Scavone
Vice President and Controller
(on behalf of the Registrant
and as Chief Accounting
Officer)
Date: May 14, 1999
<PAGE>
- ----------------------------
(1) All statements, other than statements of historical fact,
appearing under Part I, Item 2, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and
Part II, Item 1, "Legal Proceedings," constitute "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.
Factors that could cause actual results to differ materially from
those expressed or implied by the forward-looking statements
include, but are not limited to, the following: general business
and economic conditions in the agricultural industry, the oil &
gas industry or in localities where PLP or its customers operate;
weather conditions; the impact of competitive products; pressure
on prices realized by PLP for its products; constraints on
supplies of raw materials used in manufacturing certain of PLP's
products; capacity constraints limiting the production of certain
products; difficulties or delays in the development, production,
testing and marketing of products; difficulties or delays in
receiving required governmental and regulatory approvals; market
acceptance issues, including the failure of products to generate
anticipated sales levels; difficulties in integrating acquired
businesses and in realizing related cost savings and other
benefits; the effects of and change in trade, monetary and fiscal
policies, laws and regulations; foreign exchange rates and
fluctuations in those rates; the costs and effects of legal
proceedings, including environmental, and administrative
proceedings involving PLP; the completion of PLP's Year 2000
program; and the other risk factors reported from time to time in
PLP's Securities and Exchange Commission reports.
<TABLE> <S> <C>
<PAGE>
<S> <C>
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<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> (1,200)
<SECURITIES> 10,600
<RECEIVABLES> 57,400
<ALLOWANCES> 1,200
<INVENTORY> 110,900
<CURRENT-ASSETS> 700
<PP&E> 1,024,600
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<COMMON> 0
0
0
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<SALES> 167,400
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<CHANGES> (2,600)
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