(NOTIFY) 72731,347
(CONTACT-NAME) David A. Kain
(CONTACT-PHONE) (312) 861-6050
PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(x) Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1994
or
( ) Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from ____ to ____
Commission File Number 1-9569
FMC Gold Company
(Exact name of registrant as specified in its charter)
Delaware 88-0226676
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5011 Meadowood Way, Reno, Nevada 89502
(Address of principal executive offices) (Zip Code)
(702) 827-3777
Registrant's telephone number,
including area code
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the
past 90 days.
Yes X No_____
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at June 30, 1994
Common Stock, par value $0.01 per share 3,484,395
PAGE 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FMC Gold Company
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Six Months
Ended June 30 Ended June 30
1994 1993 1994 1993
Sales $17,848 $31,260 $40,149 $66,731
Costs and expenses
Cost of sales 15,641 25,829 30,694 55,927
Exploration costs 3,385 4,165 6,390 6,601
Selling, general and
administrative expenses 1,410 1,684 2,921 3,251
Total costs and expenses 20,436 31,678 40,005 65,779
Earnings (loss) before interest
and taxes (2,588) (418) 144 952
Interest income 2,209 1,843 4,377 3,933
Income (loss) before income taxes (379) 1,425 4,521 4,885
Provision (benefit) for income taxes (54) 431 198 1,080
Net income (loss) $ (325) $ 994 $ 4,323 $ 3,805
Earnings per common share $ - $ 0.01 $ 0.06 $ 0.05
Number of common shares used in
earnings per share computations 73,484 73,484 73,484 73,484
See accompanying notes to consolidated financial statements.
PAGE 3
FMC Gold Company
Consolidated Balance Sheets
(In thousands, except per share data)
June 30
1994 December 31
Assets (Unaudited) 1993
Current assets:
Cash $ 272 $ -
Loans due from FMC Corporation 162,000 167,326
Trade receivables 1,281 2,527
Inventories (Note 2) 3,542 3,776
Other current assets 791 1,236
Total current assets 167,886 174,865
Property, plant and equipment, net 64,102 60,605
Deferred income taxes 2,527 2,527
Other assets 4,765 638
Total assets $239,280 $238,635
Liabilities and Stockholders' Equity
Current liabilities:
Outstanding checks in excess of
bank balances $ - $ 542
Accounts payable, trade and other 6,143 8,206
Accrued and other liabilities 11,856 11,935
Amounts due to FMC Corporation 632 1,069
Income taxes payable 4,430 4,922
Total current liabilities 23,061 26,674
Other long-term liabilities 12,251 12,316
Stockholders' equity:
Preferred stock, $1.00 par value,
authorized 100,000 shares; none
issued or outstanding - -
Common stock, $0.01 par value, authorized
150,000,000 shares; issued and
outstanding 73,484,395 shares 735 735
Capital in excess of par value 68,609 68,609
Retained earnings 134,624 130,301
Total stockholders' equity 203,968 199,645
Total liabilities and stockholders' equity $239,280 $238,635
See accompanying notes to consolidated financial statements.
PAGE 4
FMC Gold Company
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
Six Months
Ended June 30
1994 1993
Increase (Decrease) in Cash and Cash Equivalents
Net cash provided by operating activities $ 7,871 $ 17,753
Cash flows from investing activities:
Capital spending (8,380) (10,413)
Disposal of property, plant and
equipment, net 124 36
Increase in other assets (4,127) (124)
Net cash used in investing activities (12,383) (10,501)
Increase (decrease) in cash and cash
equivalents (4,512) 7,252
Cash and cash equivalents, beginning
of period 166,784 154,316
Cash and cash equivalents, end of period $162,272 $161,568
Reconciliation of Net Income to Net Cash Provided by Operations
Net income $ 4,323 $3,805
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for depreciation and
amortization 4,759 16,501
(Increase) decrease in assets:
Trade receivables 1,246 336
Inventories 234 862
Other current assets 445 (664)
(Decrease) in liabilities:
Accounts payable, trade and other (2,063) (610)
Accrued and other liabilities (79) (216)
Amounts due to FMC Corporation (437) (685)
Income taxes payable (492) (981)
Other long-term liabilities (65) (595)
Net cash provided by operating activities $ 7,871 $ 17,753
See accompanying notes to consolidated financial statements.
PAGE 5
FMC Gold Company
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
Supplemental disclosure of cash flow information:
Cash and cash equivalents consists of:
June 30
(Unaudited) December 31
1994 1993 1993 1992
Loans due from FMC Corporation $162,000 $161,500 $167,326 $154,826
Cash 272 - - -
Outstanding checks in excess of
bank balances - - (542) (510)
Total cash and cash equivalents $162,272 $161,500 $166,784 $154,316
PAGE 6
FMC Gold Company
Notes to Consolidated Financial Statements (Unaudited)
Note 1: Financial Information
The consolidated balance sheet at June 30, 1994, and
the related statements of income and cash flows for the
interim periods ended June 30, 1994 and 1993 have been
reviewed by the company's independent auditors. The
review is discussed more fully in their report included
herein. In the opinion of management, such financial
statements have been prepared in conformity with
generally accepted accounting principles and reflect
all adjustments necessary for a fair statement of the
results of operations for the interim periods. All
such adjustments are of a normal recurring nature. The
results of operations for the three and six-month
periods ended June 30, 1994 and 1993 are not
necessarily indicative of the results of operations for
the full year.
The accounting policies followed by the company are set
forth in Note 1 to the company's financial statements
in the 1993 FMC Gold Company Annual Report, which is
incorporated by reference in Form 10-K.
Note 2: Inventories
Inventories included in current assets were:
(In Thousands)
June 30 December 31
1994 1993
Gold and silver dore $ 621 $ 482
Materials and supplies 2,921 3,294
$ 3,542 $ 3,776
Gold and silver inventories are in the form of dore
which is suitable for delivery to precious metal
treatment facilities. These inventories are generally
sold to and further processed by these facilities into
forms suitable for end uses.
Note 3: Accounting Standards Adopted
Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" was
implemented by the company effective January 1, 1994.
Statement No. 112 requires accrual of the expected cost
of providing certain benefits to former or inactive
employees after employment but before retirement. The
effect of implementation was not material, and
accordingly, has been included as part of costs and
expenses.
PAGE 7
Note 4: Acquisitions
In June 1994, the company purchased the remaining 14
percent interest in the Beartrack joint venture from
MINEX, bringing the company's ownership interest in the
property to 100 percent. The Beartrack property is
more fully described in management's discussion and
analysis of financial condition and results of
operations.
In April 1993, the company purchased the remaining 50
percent interest in the Humboldt Gold joint venture
from the TRE Management Company for $5.5 million,
bringing the company's ownership interest in all gold
and precious metal-bearing ores in the related property
to 100 percent. The Humboldt Gold venture is targeting
deep gold mineralization at the "Rossi Property" on the
Carlin Gold Trend in Nevada. In addition, the company
obtained certain water rights associated with the
property.
PAGE 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Cash to meet the company's operating needs, finance
capital expenditures and fund exploration activities
was generated from operations and existing cash
reserves. Cash generated in excess of these
requirements is loaned to FMC Corporation ("FMC") at
varying maturities, repayable on demand. As of June
30, 1994, loans to FMC totaled $162.0 million. As of
June 30, 1994, FMC's cash on hand and available credit
lines were more than adequate to allow for repayment of
these loans.
Known cash requirements for the remainder of 1994 are
approximately $58 million for planned capital
expenditures, $7 million for exploration costs and $3.7
million for dividends, based on the current dividend
rate. The company expects to fund these requirements
from existing cash and cash equivalents and cash flow
from operations. The company believes any unexpected
cash requirements could be funded through borrowings.
During the second quarter, the company purchased put
options and entered into certain forward contracts in
connection with gold production. The options were
purchased for $4 million and provide the company the
right to sell gold at an agreed upon price. The
options are recorded in other assets and will be
amortized in accordance with production. The last
option expires in 2001.
On March 31, 1994, FMC increased its ownership interest
in the company to 80 percent. Due to this increased
ownership percentage, the company is now required to be
included in FMC's federal tax return. The company has
filed separate consolidated returns for tax periods
beginning May 16, 1990 and will continue to do so
through the March 31, 1994 tax period. For tax periods
beginning April 1, 1994, the company will be included
in FMC's federal tax return under a tax sharing
agreement whereby the company will pay to FMC amounts
generally equal to the tax the company would have been
required to pay had it filed a separate return.
On May 4, 1994, the company announced plans to invest
$57 million to develop the Beartrack property located
near Salmon, Idaho. The decision to proceed with the
development was based largely on improved project
economics and issuance of a biological opinion by the
National Marine Fisheries Service (NMFS) that the
proposed Beartrack mine was "not likely to jeopardize"
the continued existence of the Snake River salmon. By
letter dated July 14, 1994, the Sierra Club Legal
Defense Fund, Inc., ("Sierra"), on behalf of itself and
certain other organizations, gave NMFS and other
federal agencies a statutorily required sixty-day
notice of intent to sue for violation of the Endangered
Species Act (the "Act") alleging that NMFS' biological
opinion failed to satisfy the requirements of the Act.
The company believes that the opinion was carefully
considered and fully supported by the record and
intends to continue development of Beartrack. The
Beartrack project encompasses approximately 30 square
miles of mining claims and contains approximately one
million ounces of proven and probable reserves.
PAGE 9
Second Quarter of 1994 Compared with Second Quarter of 1993
Sales in the second quarter of 1994 were $17.8 million,
$13.4 million lower than last year's quarter due to a
50 percent decline in gold production and an 84 percent
decline in silver production. Realized gold prices
rose from $362 per ounce to $381 per ounce. Net loss
was $0.3 million, less than $0.01 per share, compared
with net income of $1.0 million, or $0.01 per share in
1993 due to the decrease in gold production.
Second quarter gold production was 43,000 ounces
compared with 86,000 in the second quarter of 1993.
Production from the Paradise Peak mine was 9,000
ounces, down 35,000 ounces due to the mill closure in
1993. The company's 30 percent share of production
from the Jerritt Canyon mine declined to 22,000 ounces
from 27,000 in the year-ago period as grades declined.
Production from the Royal Mountain King mine declined
by 3,000 ounces due to declines in grades and
recoveries.
Silver production was 39,000 ounces in the second
quarter of 1994 compared with 247,000 ounces in the
prior year period due to the mill closure at Paradise
Peak and the expected decline in grades.
Cost of sales declined to $15.6 million. Costs at
Paradise Peak declined $8.1 million, reflecting the
cessation of milling and mining in 1993. Royal
Mountain King mine costs declined $2.8 million due to
reduced mine operating costs.
Exploration costs in the second quarter of 1994 were
$3.4 million and included continuing work within the
vicinity of the Jerritt Canyon operating property,
exploration and evaluation of grassroots properties in
the United States, Mexico and Chile. The company is
also pursuing opportunities in the Russian Federation
and in the Peoples Republic of China.
Administrative expenses were $0.3 million lower than
the year ago period due to lower allocations from FMC.
The company remains debt free with interest income of
$2.2 million earned on cash loaned to FMC. Interest
income was $0.4 million higher than in 1993 reflecting
higher interest rates achieved on the loans to FMC.
The provision for income tax of $(0.1) million was $0.5
million lower than the prior year period. The 14.2
percent effective tax rate is based on the latest
forecast for 1994.
Six Months of 1994 Compared With Six Months of 1993
Sales in the first six months of 1994 were $40.1
million compared with $66.7 million for the first six
months of 1993. Net income was $4.3 million, or $0.06
per share, versus 1993 net income of $3.8 million or
$0.05 per share, as the increase in gold prices helped
offset the declines in production.
PAGE 10
Sales were $26.6 million lower than in 1993 due to
decreased production at all mine sites. Production at
Paradise Peak was 74,000 ounces lower as mill ore
reserves were exhausted in May of 1993. Production
from the Royal Mountain King mine decreased 4,000
ounces to 25,000 ounces due to a 17 percent decline in
grades and a 13 percent decline in recoveries. The
mill at Royal Mountain King was shut down July 7, 1994,
as expected. The company's 30 percent share of
production from the Jerritt Canyon mine decreased 5,000
ounces to 51,000 ounces as grades decreased 12 percent.
Silver production was 102,000 ounces, down 637,000
ounces from the same period in 1993 as a result of the
decreased mill ore reserves at Paradise Peak.
Profits declined as production decreased and cash costs
per ounce increased at Jerritt Canyon. Exploration
spending was $0.2 million lower than the 1993 level.
Selling, general and administrative expenses decreased
$0.3 million to $2.9 million due to lower allocations
from FMC.
The effective tax rate was 4% versus 22% in 1993
primarily reflecting lower expected full year earnings
in 1994.
PAGE 11
Following is a summary of key operating data for the
company for the three and six-month periods ended June
30, 1994 and 1993:
FMC Gold Company
Operating Data (Unaudited)
Three Months Six Months
Ended June 30 Ended June 30
1994 1993 1994 1993
Tons of ore processed (thousands)
Paradise Peak
- Mill - 188 - 587
- Heap Leach - 1,122 - 1,952
Total - 1,310 - 2,539
Jerritt Canyon (FMC Gold
share) 233 235 463 458
Royal Mountain King 349 333 681 656
Ore grade (ounces per ton milled)
Paradise Peak
- Gold - 0.126 - 0.115
- Silver - 1.823 - 1.900
Jerritt Canyon 0.104 0.121 0.120 0.136
Royal Mountain King 0.048 0.058 0.051 0.056
Mill recoveries
Paradise Peak
- Gold - 84.5% - 89.2%
- Silver - 51.3% - 56.7%
Jerritt Canyon 89.2% 89.8% 89.0% 89.8%
Royal Mountain King 70.1% 80.7% 72.5% 78.8%
Production (thousands of ounces)
Gold
Paradise Peak 9 44 29 103
Jerritt Canyon 22 27 51 56
Royal Mountain King 12 15 25 29
Total 43 86 105 188
Silver 39 247 102 739
Cash cost of production ($ per gold
equivalent ounce)
Paradise Peak $ 144 $ 141 $ 92 $ 133
Jerritt Canyon $ 332 $ 234 $ 278 $ 225
Royal Mountain King $ 276 $ 312 $ 302 $ 346
Average $ 276 $ 198 $ 232 $ 191
PAGE 12
INDEPENDENT AUDITORS' REPORT
A report by KPMG Peat Marwick, the company's independent
accountants, on the financial statements included in Form
10-Q for the quarter ended June 30, 1994 is included on
page 13.
PAGE 13
Independent Auditors' Report
The Board of Directors
FMC Gold Company:
We have reviewed the accompanying consolidated
balance sheet of FMC Gold Company and consolidated
subsidiaries as of June 30, 1994 and the related
consolidated statements of income for the three-month
and six-month periods ended June 30, 1994 and 1993,
and the related consolidated statements of cash flows
for the six-month periods ended June 30, 1994 and
1993. These financial statements are the
responsibility of the company's management.
We conducted our review in accordance with standards
established by the American Institute of Certified
Public Accountants. A review of interim financial
information consists principally of applying
analytical procedures to financial data and making
inquiries of persons responsible for financial and
accounting matters. It is substantially less in
scope than an audit conducted in accordance with
generally accepted auditing standards, the objective
of which is the expression of an opinion regarding
the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying
financial statements referred to above for them to be
in conformity with generally accepted accounting
principles.
Salt Lake City, Utah
July 19, 1994
PAGE 14
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Registrant's Annual Meeting of Stockholders was held on
May 4, 1994. At the meeting, stockholders voted on (i)
the election of seven directors and (ii) ratification
of the appointment of KPMG Peat Marwick as Registrant's
Independent Auditors for 1994. Voting on each such
matter was as follows:
Votes Withheld/ Broker
1. Election of Directors Votes For Against Abstentions Non-Votes
L.D. Brady 72,352,862 - 335,998 -
R.N. Burt 72,347,102 - 341,758 -
P.L. Davies, Jr. 72,590,602 - 98,258 -
N.D. Hoang 72,349,150 - 339,710 -
B.J. Kennedy 72,349,602 - 339,258 -
E.W. Littlefield 72,590,752 - 98,108 -
A.D. Lyons 72,352,202 - 336,658 -
2. Ratification of Auditors 72,615,142 51,445 22,273 -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Page Number in
Number in Document Numbering
Exhibit Table Description System
10 Statement re: tax sharing Document type 2, page 1
agreement between FMC and
FMC Gold
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
PAGE 0
DOCUMENT HEADER
DOCUMENT DESCRIPTION EXHIBIT INDEX
DOCUMENT TYPE 2
COUNT 1
PAGE 1
FMC Gold Company
Quarterly Report
on Form 10-Q for
June 30, 1994
Exhibit 10 TAX SHARING AGREEMENT
This AGREEMENT is effective as of the first day of the
consolidated return year beginning April 1, 1994, by and
between FMC Corporation, a Delaware corporation ("FMC")
and FMC Gold Company, a Delaware corporation, and FMC
Paradise Peak Corporation, FMC Jerritt Canyon
Corporation, Meridian Gold Company and FMC Minerals
Corporation, its wholly owned subsidiaries, plus any
companies which become subsidiaries hereafter
(hereinafter collectively referred to as "FMC Gold").
WITNESSETH
WHEREAS, FMC is the common parent corporation of an
affiliated group of corporations (the "FMC Group")
within the meaning of Section 1504(a) of the Internal
Revenue Code of 1986 (the "Code"), and FMC Gold is a
member of said affiliated group; and
WHEREAS, FMC files various separate, consolidated,
and/or combined unitary state income tax returns; and
WHEREAS, FMC and FMC Gold deem it appropriate to define
the method and the manner by which the Federal and state
income tax liability or benefit of the FMC Group shall
be allocated and paid amongst the parties;
NOW, THEREFORE, in consideration of the premises of the
mutual covenants and agreements hereinafter set forth,
the parties hereto agree as follows:
1.DETERMINATION OF FMC GOLD'S ALLOCABLE FEDERAL
INCOME TAX LIABILITIES OR BENEFITS
(a) FMC shall prepare and file a consolidated federal
income tax return for each year, commencing with
the taxable year ending December 31,1994, during
the term of this Agreement (a "Consolidated Return
Year") and pay any consolidated federal income tax
liability (the "Tax Liability") of the FMC Group in
respect of such year. FMC is hereby irrevocably
constituted the exclusive agent and attorney-in-
fact of FMC Gold to file such return, pay such tax,
and take any action reasonably necessary or
appropriate in connection with the determination of
the ultimate liability of the FMC Group for such
tax, including, without limiting the generality of
the foregoing, contesting the assessment of any
deficiency, entering into any closing agreement,
compromise, or settlement, filing any amended
return, and prosecuting any action for a refund, on
behalf of the FMC Group. FMC Gold shall execute
any consents or documents relating to any of the
foregoing.
PAGE 2
(b) For each Consolidated Return Year, there shall be
computed, the federal income tax liability of FMC
Gold, including alternative minimum tax ("AMT") and
the environmental tax provided in Section 59A, and
any other federal tax, as if FMC Gold had filed a
separate federal income tax return under the Code
for the taxable year ending December 31, 1994 and
all subsequent taxable years subject to this
Agreement.
(c) The tax liability/benefit of FMC Gold shall be
determined upon the following basis:
(i) Carrybacks and/or carryovers of AMT credits,
net operating losses, investment tax credits,
foreign tax credits, capital losses, excess
charitable contributions and similar tax
attributes shall be determined in accordance
with the limitations and restrictions of the
Code and Regulations applicable to such tax
year and shall be accounted for as if separate
federal income tax returns had been filed by
FMC Gold commencing with the taxable year
ending December 31, 1994 and for all
subsequent taxable years covered by this
Agreement.
(ii) Any tax benefits made available to the FMC Group
by FMC Gold in any taxable year commencing
with the taxable year ending December 31, 1994
or any subsequent taxable year covered by this
Agreement and not utilized by FMC Gold shall
be allocated to FMC Gold only in the year, and
to the extent, that such benefits could have
been utilized by FMC Gold on a separate return
basis (such as AMT credits of FMC Gold or a
net operating loss of FMC Gold made available
to the FMC Group). Such allocation shall give
rise to an adjustment in favor of FMC Gold to
reduce its separate return tax liability in an
amount equal to the amount of the United
States federal income tax saving which FMC
Gold could have affected in such year, or in
later years in the case of carryovers, by its
own use on a separate return basis of such tax
benefit.
(iii) In the case of carrybacks of tax benefits
to an earlier year in which FMC Gold could have
utilized such tax benefit, but not before the
taxable year ending December 31, 1987, FMC
shall pay to FMC Gold an amount equal to the
benefit that FMC Gold would have derived from
the carryback on a separate return basis. FMC
shall not pay or credit any amounts to FMC
Gold for the use of FMC Gold tax benefits
which FMC Gold would have been unable to
utilize on a separate return basis.
(iv) Intercompany transactions between FMC Gold
and any other member of FMC Group shall be taken in
the manner required by Regulations Section
1.1502-13.
PAGE 3
(v) If, at any time, FMC Gold ceases to be
includible in the affiliated FMC Group within
the meaning of Code Section 1504 (a), the
Alternative Minimum Tax Credit ("MTC") allocable
to FMC Gold shall be based upon the formulary
allocation provided in the Consolidated Return
Regulations for purposes of computing earnings
and profits (as currently provided in Prop.
Reg. Sec 1.1502-55(h)(6)(vi) and Prop. Reg.
Sec. 1.1502-55 (h) (7)). To the extent that
this amount is greater than MTC attributable
to FMC Gold on a separate return basis as
computed under clauses 1(c)(i), 1(c)(ii), 1
(c)(iii) and 1(c)(iv) of this Agreement, FMC
Gold must pay the difference to FMC. To the
extent this amount is less than MTC
attributable to FMC Gold on a separate return
basis as computed under clauses 1(c)(i),
1(c)(ii), and 1(c)(iii) and 1(c)(iv) of this
Agreement, FMC must pay the difference to FMC
Gold.
2.DETERMINATION OF FMC GOLD'S STATE TAX LIABILITIES OR
BENEFITS
(a) Commencing with the taxable year ending December
31, 1994, FMC shall include FMC Gold in the
combined unitary income tax returns in all states
in which it is possible to do so and FMC Gold will
not file separate income tax returns for any state
in which it is included in the FMC combined unitary
tax return.
(b) For each year, FMC Gold's state income tax
liability or benefit for each combined unitary
state shall be determined by subtracting from:
(i) FMC's state income tax liability or benefit
based upon FMC's combined unitary taxable income for
such state, excluding FMC's Gold's income or
loss and its payroll, property, and sales
factors for such state.
(ii) FMC's state income tax liability or benefit
based upon FMC's combined unitary taxable income for
such state, including FMC Gold's income or
loss and its payroll, property and sales
factors for such state. The excess of
subsection (ii) over subsection (i) shall
constitute FMC Gold's state income tax
liability, and, the excess of subsection (i)
over subsection (ii) shall constitute FMC
Gold's state income tax benefit for such
state.
FMC Gold's state income tax liability or benefit
for each year shall be the sum of its liabilities
and benefits for each combined unitary state for
which it is included within FMC's combined unitary
return.
PAGE 4
3.PAYMENTS TO/FROM FMC GOLD WITH RESPECT TO ITS TAX
LIABILITIES/ BENEFITS
(a) FMC Gold shall pay to FMC:
(i) On each date that quarterly estimated tax
payments are due (including those for AMT), the
amount of the estimated federal income tax liability
which would have been payable by FMC Gold on
such date, if it were filing on a separate
return basis as computed under clause 1 above,
even if the FMC Group is not in a United
States federal income tax paying position.
(ii) On the filing date of the FMC Group
consolidated return, the balance, if any, of the
tax liability of FMC Gold determined as if FMC
Gold had filed on a separate federal income
tax return basis as computed under clause 1
above, less any payments theretofore made by
FMC Gold pursuant to clause 3(a)(i) above,
even if FMC Group is not in a United States
federal income tax paying position.
(iii) On the statutory due date for the filing
of each state income tax return by FMC, or if
earlier, the due date of any estimated taxes, to
that extent, the amount of any liability for state
tax of FMC Gold as determined under clause 2
herein.
(b) FMC shall pay to FMC Gold:
(i) In the case of an adjustment in favor of
FMC Gold as a result of a carryover which FMC Gold
could have utilized on a separate return basis
as described in 1(c)(ii), the amount of the
tax saving due to FMC Gold shall be paid on
the statutory due date for the carryover
year(s).
(ii) In the case of an adjustment in favor of
FMC Gold as a result of a carryback which FMC Gold
could have utilized on a separate return basis
as described in 1(c)(iii), the amount of the
tax saving due to FMC Gold shall be paid
within 10 days of the filing date of the
return year in which the carryback arose.
PAGE 5
4. REDETERMINATION OF TAX LIABILITY
If any recomputation under any paragraph of this
Agreement relating to any year is required or
appropriate for any reason, including, without
limiting the generality of the foregoing, by reason
of refunds received or liabilities incurred as a
result of the filing of an amended return or the
examination of a return by the IRS or an
application for refund, such recomputation shall be
made forthwith by FMC. In accordance with any such
recomputation, any additional sums payable by FMC
Gold to FMC or vice versa as the case may be,
including any penalty or any interest received on
any refund or payable on any deficiency or penalty
fairly attributable to the reduced or additional
tax liability, shall be paid by FMC Gold (or by FMC
as the case may be) within 45 days after its
receipt of the written computation reflecting the
change or correction.
5. EFFECTIVE DATES AND COVERAGE
(a) The provisions of this Agreement shall become
effective as of April 1, 1994 as if FMC Gold had
been formed on such date, but will not be
applicable to estimated tax payments due prior to
April 1, 1994. The Agreement shall continue in
effect so long as FMC Gold remains a member of the
affiliated group of FMC Group. FMC may terminate
the FMC Group at any time in its sole discretion,
in accordance, with the applicable provisions of
the Code and Regulations. If FMC Gold is no longer
included in the Consolidated Return filed by FMC,
the provisions of this Agreement with respect to
tax liabilities and benefits in respect of years
prior to such time, but after the date hereof,
shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors
and assigns.
(b) Any subsidiary of FMC Gold which is hereinafter
required to join in the filing of consolidated
federal income tax returns with FMC shall become a
party to this Agreement by signing a master copy of
this agreement.
6. OTHER MATTERS
(a) This Agreement contains the entire understanding of
the parties hereto with respect to the subject
matter contained herein. No alteration, amendment,
or modification of any of the terms of this
Agreement shall be valid unless made by an
instrument signed in writing by an unauthorized
officer of each party hereto. Notwithstanding the
foregoing, this Agreement may be amended consistent
with the intent of this Agreement by FMC in its
sole discretion to reflect changes in the Code,
regulations, or other precedent thereunder or any
state or local tax laws. This Agreement shall be
binding upon and inure to the benefit of each party
thereto and their respective successors and
assigns.
PAGE 6
(b) The prior tax sharing agreement entered into May
18, 1987 shall continue to apply with respect to
all tax matters to which it pertains for all tax
periods ending on or before May 15, 1990. The
prior tax sharing agreement entered into May 15,
1990 shall apply with respect to all matters to
which it pertains for all tax periods ending on or
before the effective date of this agreement.
(c) This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware.
(d) All notices and other communications hereunder
shall be deemed to have been duly given if
delivered by hand or mailed certified or registered
mail, postage prepaid to
(i)FMC GOLD COMPANY
7011 Meadowood Way
Reno, Nevada 89502
Attention: President
(ii)FMC CORPORATION
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Vice President, Finance
IN WITNESS WHEREOF, this Agreement has been duly
executed on the date and year first above written on
behalf of the parties hereto by their respective
officers and duly authorized.
FMC CORPORATION
By: J. E. Rogers
Assistant Treasurer
FMC GOLD COMPANY
By: B. J. Kennedy
President
PAGE 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
FMC GOLD COMPANY
(Registrant)
Date: August 12, 1994 Steven E. Baginski
Vice President, Finance
