<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
---
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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 1-9759
IMC GLOBAL INC.
(Formerly IMC Fertilizer Group, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 36-3492467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Sanders Road
Northbrook, Illinois 60062
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 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 .
------ ------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS: Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by
Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by
a court. Yes . No .
------ ------
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock as of the
latest practicable date: 29,486,524 shares, excluding 2,774,335
treasury shares as of January 31, 1995.
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying interim condensed consolidated financial
statements of IMC Global Inc. (the Company) do not include all
disclosures normally provided in annual financial statements. These
financial statements, which should be read in conjunction with the
consolidated financial statements contained in the Company's 1994
Annual Report to Stockholders, are unaudited but include all
adjustments which the Company's management considers necessary for a
fair presentation. These adjustments consist of normal recurring
accruals except as discussed in the following Notes to Condensed
Consolidated Financial Statements. Certain 1993 amounts have been
reclassified to conform to the 1994 presentation. Interim results are
not necessarily indicative of the results expected for the fiscal year.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions except per share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
1994 1993 1994 1993
------------------------------------------------------------------
Net sales $451.8 $329.0 $872.6 $595.4
Cost of goods sold 337.9 295.2 682.0 554.2
------ ------ ------ ------
Gross margins 113.9 33.8 190.6 41.2
Selling, general and
administrative expenses (Note 1) 21.6 15.7 35.9 29.6
Other operating (income) and
expense, net .2 (3.1) (5.9) (9.7)
------ ------ ------ ------
Operating earnings (Note 2) 92.1 21.2 160.6 21.3
Equity in (earnings) loss of oil
and gas joint venture (Note 3) (.6) 20.6 (.7) 20.5
Interest earned and other non-
operating (income) and expense,
net (.1) .1 (2.7) 3.3
Interest charges 13.3 20.3 28.3 42.8
------ ------ ------ ------
Earnings (loss) before minority
interest and items noted below 79.5 (19.8) 135.7 (45.3)
Minority interest in earnings
of consolidated joint venture 34.0 6.5 55.5 5.3
------ ------ ------ ------
Earnings (loss) before items
noted below 45.5 (26.3) 80.2 (50.6)
Provision (credit) for income
taxes (Note 4) 17.6 (22.7) 30.5 (24.5)
------ ------ ------ ------
Earnings (loss) before
cumulative effect of accounting
change and extraordinary item 27.9 (3.6) 49.7 (26.1)
Cumulative effect of accounting
change (Note 5) (5.9)
Extraordinary loss-debt
retirement (Note 6) (1.8) (3.0) (23.8)
------ ------ ------ ------
Net earnings (loss) $ 26.1 $ (3.6) $ 40.8 $(49.9)
<PAGE>
====== ====== ====== ======
Earnings (loss) per share: (Note 7)
Earnings (loss) before
cumulative effect of accounting
change and extraordinary item $ .94 $ (.14) $ 1.68 $(1.11)
Cumulative effect of accounting
change (Note 5) (.20)
Extraordinary loss-debt
retirement (Note 6) (.06) (.10) (1.01)
------ ------ ------ ------
Net earnings (loss) $ .88 $ (.14) $ 1.38 $(2.12)
====== ====== ====== ======
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions except per share amounts)
December 31,June 30,
Assets 1994 1994
-------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 76.6 $ 169.0
Receivables, net (Note 8) 129.9 109.1
Inventories:
Products (principally finished) 187.8 185.5
Operating materials and supplies 67.3 67.6
-------- --------
255.1 253.1
Prepaid expenses 5.0 2.8
-------- --------
Total current assets 466.6 534.0
Investment in oil and gas joint venture 18.3 19.0
Property, plant and equipment 3,423.0 3,394.1
Accumulated depreciation and depletion (1,526.1) (,466.7)
-------- --------
Net property, plant and equipment 1,896.9 1,927.4
Deferred income taxes 226.0 223.6
Other assets 69.1 74.3
-------- --------
$2,676.9 $2,778.3
======== ========
Liabilities and Stockholders' Equity
-----------------------------------------------------------------
Current liabilities:
Accounts payable $ 96.0 $ 110.3
Accrued liabilities 108.6 98.0
Current maturities of long-term debt 8.8 1.1
-------- --------
Total current liabilities 213.4 209.4
Long-term debt, less current maturities 576.4 688.1
Deferred income taxes 374.5 372.6
Other noncurrent liabilities 290.9 275.1
Minority interest in consolidated joint
venture 528.4 578.1
Stockholders' equity:
Common stock, $1 par value, authorized
50,000,000 shares; issued 32,244,185
shares and 32,232,865 shares at
December 31 and June 30, respectively 32.2 32.2
Capital in excess of par value 736.6 736.2
Retained earnings (deficit) 31.6 (6.3)
Treasury stock, at cost, 2,770,259 shares (107.1) (107.1)
-------- --------
Total stockholders' equity 693.3 655.0
-------- --------
$2,676.9 $2,778.3
======== ========
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
Six months ended
December 31,
1994 1993
------------------------------------------------------------------
Cash Flows from Operating Activities
------------------------------------
Net earnings (loss) $ 40.8 $ (49.9)
Adjustments to reconcile net earnings
(loss) to net cash provided (used)
by operating activities:
Depreciation, depletion and amortization 66.7 54.0
Minority interest in earnings of
consolidated joint venture 55.5 5.3
Postemployment employee benefits 9.6
Cash distributions in excess of equity
in operating results of oil and gas
joint venture (including a $20.3
write-down in 1993) 1.9 31.3
Deferred income taxes (.5) (18.5)
Other non-cash charges and credits, net (7.3) (8.6)
Changes in:
Receivables (20.8) 27.2
Inventories (2.0) 11.7
Prepaid expenses (2.2) .6
Accounts payable, accrued liabilities
and income taxes (1.0) (115.2)
------- -------
Net cash provided (used) by operating
activities 140.7 (62.1)
------- -------
Cash Flows from Investing Activities
------------------------------------
Capital expenditures (27.2) (12.5)
Other 4.8 2.6
------- -------
Net cash used by investing activities (22.4) (9.9)
------- -------
Net cash provided (used) before
financing activities 118.3 (72.0)
------- -------
Cash Flows from Financing Activities
------------------------------------
Payments of long-term debt (114.9) (220.4)
Proceeds from issuance of long-term
debt, net 10.9 171.6
Joint venture cash distributions to FRP (106.7) (17.2)
Issuance of common stock from treasury 113.5
------- -------
Net cash (used) provided by
financing activities (210.7) 47.5
------- -------
Net decrease in cash and cash equivalents (92.4) (24.5)
Cash and cash equivalents-beginning of period 169.0 111.6
------- -------
<PAGE>
Cash and cash equivalents-end of period $ 76.6 $ 87.1
======= =======
Supplemental cash flow disclosures:
Interest paid $ 29.2 $ 37.1
Income taxes paid (refunded) $ 32.4 $ (4.1)
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In millions except per share amounts)
Six months ended
December 31,
1994 1993
-------------------------------------------------------------------
Common stock:
Balance at June 30 and December 31 $ 32.2 $ 32.2
Capital in excess of par value:
Balance at June 30 736.2 768.4
Restricted stock awards .4 (.1)
Issuance of common stock (20.6)
------ ------
Balance at December 31 736.6 747.7
Retained earnings (deficit):
Balance at June 30 (6.3) 22.5
Net earnings (loss) 40.8 (49.9)
Dividends ($.10 a share in 1994) (2.9)
------ ------
Balance at December 31 31.6 (27.4)
Treasury stock:
Balance at June 30 (107.1) (392.7)
Issuance of common stock from treasury 134.1
Restricted stock award (.2)
------ ------
Balance at December 31 (107.1) (258.8)
------ ------
Total stockholders' equity $693.3 $493.7
====== ======
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Restructuring Charges
---------------------
Selling, general and administrative expenses included
reorganization charges totaling $5.0 million ($4.1 million net of
minority interest) for the three and six months ended December 31, 1994
resulting from the adoption of a restructuring plan which shifted the
marketing and administrative functions of Phosphate Chemicals Export
Association, Inc. (PhosChem) (formed to market concentrated phosphates
internationally) to its member companies.
2. Environmental Matters
---------------------
Operating earnings included provisions totaling $1.4 million and
$9.0 million ($.8 million and $5.1 million net of minority interest)
for the three and six months ended December 31, 1994 to provide for
additional remediation costs associated with a sinkhole beneath a
phosphogypsum storage stack at IMC-Agrico's New Wales concentrated
phosphate production facility in Florida and repair and cleanup costs
related to an earthen dam breach at IMC-Agrico's Payne Creek and
Hopewell phosphate mining facilities in Florida. These charges were
partially offset by a gain of $5.0 million from the sale of land in
Florida in September 1994.
3. Write-Down of Investment in Oil and Gas Joint Venture
-----------------------------------------------------
Results for the three and six months ended December 31, 1993
included a charge of $20.3 million from the write-down of the Company's
investment in its oil and gas partnership.
4. Income Taxes
------------
The provision (credit) for income taxes included a charge of $4.1
million for the six months ended December 31, 1993 which adjusted the
Company's net deferred tax liability for the effect of changes in U.S.
corporate tax rates.
5. Accounting for Postemployment Benefits
--------------------------------------
Effective July 1, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 112, ``
Employers' Accounting for
Postemployment Benefits,''
to account for disability benefits. Prior
to July 1, 1994, the Company recognized the cost of providing certain
of these benefits on a cash basis. SFAS No. 112 requires the cost of
providing these benefits be recognized when it becomes probable that
such benefits will be paid and when sufficient information exists to
make reasonable estimates of the amounts to be paid. Consequently,
results for the six months ended December 31, 1994 reflected a charge
of $5.9 million, net of taxes, for the cumulative effect of the
adoption of SFAS No. 112. The effect of the adoption of SFAS No. 112
on the three and six months' earnings before the cumulative effect of
the accounting change was not material.
6. Extraordinary Loss-Debt Retirement
-----------------------------------
In connection with the purchase of portions of the Company's Senior
Notes during the three and six months ended December 31, 1994 the
<PAGE>
Company recorded extraordinary charges, net of taxes, of $1.8 million
and $3.0 million, respectively, for redemption premium incurred and
write-off of previously deferred finance charges associated with such
notes. In September 1993, the Company purchased $220 million of its
11.25 percent Notes from The Prudential Insurance Company of America
and recorded an extraordinary charge of $23.8 million for redemption
premium incurred and write-off of previously deferred finance charges
associated with such notes, net of taxes.
7. Earnings (Loss) Per Share
--------------------------
Earnings (loss) per share were based on the weighted average number
of shares and equivalent shares outstanding. Shares used in the
calculations were 29,563,096 shares and 29,550,647 shares for the three
and six months ended December 31, 1994. For the three and six months
ended December 31, 1993, shares and equivalent shares outstanding
totaled 25,045,475 and 23,549,925 shares, respectively. The above
shares reflected common stock offerings of 3,450,000 and 4,000,000
shares in October 1993 and May 1994, respectively.
8. Sale of Receivables
-------------------
In October 1994, IMC-Agrico Company entered into an agreement with
a financial institution whereby it can sell, on an ongoing basis, up to
$75.0 million of an undivided percentage interest in certain
receivables, subject to limited recourse provisions. At December 31,
1994, IMC-Agrico Company had sold $39.7 million of such receivable
interests. Related costs, charged to interest earned and other
non-operating income and expense, net, totaled $.6 million for the
three and six months ended December 31, 1994. The Company's portion of
the proceeds from the sale of receivable interests was used primarily
to retire long-term debt.
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
---------------------
Three months ended December 31, 1994 vs. three months ended December
31, 1993
----------------------------------------------------------------------
Net earnings for the three months ended December 31, 1994 totaled
$26.1 million, or $.88 per share, significantly higher than last year's
second quarter when the Company reported a net loss of $3.6 million, or
$.14 per share.
Included in 1994 operating results was an extraordinary charge of
$1.8 million, or $.06 per share, related to the early extinguishment of
debt. In 1993, the loss included a charge of $20.3 million, $12.4
million after taxes, or $.49 per share, related to the write-down of
the Company's investment in an oil and gas joint venture. See Notes to
Condensed Consolidated Financial Statements for further discussion of
these non-recurring items.
Net sales for the three months ended December 31, 1994 were $451.8
million, a 37 percent increase over 1993 when sales were $329.0
<PAGE>
million. The Company continued to experience higher sales volume and
prices across all product lines, particularly concentrated phosphates,
where continued strength in global markets contributed heavily to the
increase.
Gross margins increased $80.1 million from last year's second
quarter primarily due to higher margins for concentrated phosphates, a
$58 million increase, potash, a $10 million increase, and phosphate
rock, a $7 million increase. With recent record orders from China for
concentrated phosphates and potash, the global market has tightened for
each of these product lines.
Concentrated phosphate margins increased primarily as a result of
higher prices ($59 million) as average diammonium phosphate prices
increased 30 percent over year-earlier levels. Other related
concentrated phosphate products showed similar price improvements. In
addition, sales volume increased ($8 million) as domestic and export
shipping demand increased 13 percent from the same period a year ago.
As a result of increased market demand, in January 1995 the Company
reopened its Taft, Louisiana, concentrated phosphates production
facility which had been idled since May 1994. Partially offsetting the
above increases were higher production costs ($9 million) primarily due
to higher raw material costs.
Potash margins increased as a result of higher prices ($5 million)
and increased sales volume ($4 million) as average potash prices and
sales volume increased 3 percent and 28 percent, respectively, over the
same period a year ago. In addition, production costs were $1 million
lower primarily due to increased production levels.
Phosphate rock margins increased due primarily to increased sales
volume and higher prices ($5 million) as phosphate rock contracts, tied
partially to concentrated phosphate pricing, were positively affected.
In addition, production costs were $2 million lower as all plants
operated at higher production levels.
The following table summarizes the Company's sales of crop nutrient
products and average selling prices for the three months ended December
31, 1994 and 1993:
(Tons in millions of short tons)
1994 1993
----------- -----------
Concentrated phosphates - primarily
diammonium phosphate (DAP)
Total dry product sales tons 1.360 1.141
Average DAP price per ton * $156.50 $120.76
* Average DAP prices represent sales made FOB Florida, Louisiana and
regional warehouses.
Phosphate rock
Sales tons 2.937 2.460
Average price per ton $20.35 $19.47
Potash
Sales tons .779 .610
Average price per ton $70.67 $68.38
<PAGE>
Selling, general and administrative expenses increased $5.9 million
over the same period a year ago primarily due to reorganization charges
which were incurred after a restructuring plan was adopted to shift the
marketing and administrative functions of PhosChem to its member
companies.
Other operating income and expense for the three months ended
December 31,1994 included $.7 million from the amortization of a
deferred gain resulting from the exchange of the Company's phosphate
business for a 56.3 percent interest in IMC-Agrico. In 1993, other
operating income and expense included $3.9 million of such
amortization.
Interest charges for the three months ended December 31, 1994 were
$7 million lower than last year, which reflected management's efforts
to reduce high-cost, long-term indebtedness over the past year.
Six months ended December 31, 1994 vs. six months ended December 31,
1993
----------------------------------------------------------------------
Net earnings for the six months ended December 31, 1994 totaled
$40.8 million, or $1.38 per share, a marked improvement over last year
when the Company reported a net loss of $49.9 million, or $2.12 per
share.
Included in 1994 operating results was a one-time charge of $5.9
million, or $.20 per share, for the cumulative effect on prior years of
a change in accounting for postemployment benefits resulting from the
adoption of SFAS No. 112 on July 1, 1994 and an extraordinary charge of
$3.0 million, or $.10 per share, related to the early extinguishment of
debt. In 1993, the loss included an extraordinary charge of $23.8
million, or $1.01 per share, related to the early extinguishment of
debt, a charge of $20.3 million, $12.4 million after taxes, or $.49 per
share, related to the write-down of the Company's investment in an oil
and gas joint venture and a charge of $4.1 million, or $.17 per share,
for an adjustment to the Company's net deferred tax liability for the
effect of changes in U.S. corporate tax rates. See Notes to Condensed
Consolidated Financial Statements for further discussion of these
non-recurring items.
Net sales for the six months ended December 31, 1994 were $872.6
million, a 47 percent increase over 1993 when sales were $595.4
million. The Company continued to experience higher sales volume and
prices across all product lines, particularly concentrated phosphates,
where continued strength in global markets contributed heavily to the
increase.
Gross margins increased $149.4 million from the same period a year
ago primarily due to higher margins for concentrated phosphates, a $126
million increase, and potash, a $19 million increase.
Concentrated phosphate margins have increased significantly
primarily due to higher prices ($118 million) as average DAP prices
increased 35 percent over last year's first half. At the same time,
sales volume increased ($26 million) as export shipments were up 41
percent over last year's first half. Partially offsetting the price
and sales volume increases were higher production costs ($18 million)
<PAGE>
primarily due to higher raw material costs and a charge resulting from
remediation costs associated with a sinkhole described in Note 2 of
Notes to Condensed Consolidated Financial Statements. In December
1994, China, a major crop nutrient customer, placed a record order with
PhosChem for 900,000 metric tons of DAP (with an option to purchase an
additional 200,000 metric tons) for shipment through June 1995.
Potash margins also increased primarily due to higher sales volume
($10 million) as domestic and export shipments rose 41 percent over
last year. Correspondingly, prices have begun to rise ($5 million) as
demand has recently increased. Production costs were lower ($4
million) due primarily to higher production levels. In November 1994,
China placed a record order with Canpotex, a Canadian export consortium
(of which the Company is a member), for 800,000 metric tons of potash
with an option to purchase an additional 500,000 metric tons.
Phosphate rock margins showed little change from a year ago as
increased sales volume ($2 million), a 13 percent improvement over last
year's first half, and higher prices ($3 million) were completely
offset by higher production costs ($5 million) as excessive rainfalls
in Florida early in the first half affected phosphate rock production
and additional costs were incurred in the startup of the Company's
previously idled Payne Creek mine. In addition, repair and cleanup
costs associated with an earthen dam breach at the Company's Payne
Creek and Hopewell phosphate mining facilities in Florida contributed
to higher production costs.
The following table summarizes the Company's sales of crop nutrient
products and average selling prices for the six months ended December
31, 1994 and 1993:
(Tons in millions of short tons)
1994 1993
----------- -----------
Concentrated phosphates - primarily DAP
Total dry product sales tons 2.668 2.073
Average DAP price per ton * $154.11 $114.20
* Average DAP prices represent sales made FOB Florida, Louisiana and
regional warehouses.
Phosphate rock
Sales tons 5.293 4.669
Average price per ton $20.05 $19.73
Potash
Sales tons 1.689 1.200
Average price per ton $66.27 $68.26
Selling, general and administrative expenses increased $6.3 million
over the same period a year ago primarily due to reorganization charges
which were incurred after a restructuring plan was adopted to shift the
marketing and administrative functions of PhosChem to its member
companies.
Other operating income and expense for the six months ended
December 31, 1994 included a gain of $5.0 million from the sale of land
in Florida and $1.4 million from the amortization of a deferred gain
<PAGE>
resulting from the exchange of the Company's phosphate business for a
56.3 percent interest in IMC-Agrico. In 1993, other operating income
and expense included $7.7 million of such amortization.
Interest charges for the six months ended December 31, 1994 were
$14.5 million lower than last year which reflected management's efforts
to reduce high-cost, long-term indebtedness over the past year.
Financial Condition
-------------------
Since June 30, 1994, cash and cash equivalents have decreased $92.4
million. Primary uses of cash included $114.9 million to purchase
portions of the Company's outstanding Senior Notes, $106.7 million of
cash sharing distributions to Freeport-McMoRan Resource Partners,
Limited Partnership (FRP) and $27.2 million of capital expenditures.
Partially offsetting these cash outflows were $140.7 million generated
by operating activities, $10.9 million of proceeds from debt issuances
and $6.0 million from the sale of fixed assets.
The Company's working capital ratio at December 31, 1994 was 2.2
versus 2.6 at June 30, 1994 and declined primarily due to the sale of
receivable interests discussed in Note 8 of Notes to Condensed
Consolidated Financial Statements. Debt to total capitalization
improved to 45.8 percent at December 31, 1994 compared to 64.4 percent
a year ago and 51.3 percent at June 30, 1994 and reflects management's
efforts to reduce long-term indebtedness over the past year.
The Company has an agreement with a group of banks to provide it
with an unsecured revolving credit facility (the Working Capital
Facility) under which the Company may borrow up to $100 million until
June 30, 1996. At December 31, 1994, $10.0 million was drawn down for
temporary working capital purposes and $29.7 million was drawn down in
the form of letters of credit principally to support industrial revenue
bonds and other debt and credit risk guarantees.
IMC-Agrico also has an agreement with a group of banks to provide
it with a $75 million unsecured revolving credit facility (the
IMC-Agrico Working Capital Facility). At December 31, 1994, $12.4
million was drawn down in the form of letters of credit. There were no
other borrowings under this agreement at December 31, 1994.
In October 1994, IMC-Agrico Company entered into an agreement with
a financial institution whereby it can sell, on an ongoing basis, up to
$75.0 million of an undivided percentage interest in certain
receivables, subject to limited recourse provisions. At December 31,
1994, IMC-Agrico Company had sold $39.7 million of such receivable
interests. The Company's portion of the proceeds from the sale of
receivable interests was used primarily to retire long-term debt.
Certain debt agreements contain provisions which restrict the
Company's ability to make capital expenditures, dispose of assets,
limit the payment of dividends or other distributions to stockholders,
and prohibit the incurrence of additional indebtedness. The Working
Capital Facility also contains financial ratios and tests which must be
met with respect to interest and fixed charge coverage, tangible net
worth, working capital and debt to total capitalization. In addition,
the IMC-Agrico Working Capital Facility contains financial and minimum
<PAGE>
net Partners' capital requirements, places limitations on indebtedness
of IMC-Agrico and restricts the ability of IMC-Agrico to make cash
distributions in excess of Distributable Cash (as defined in the
Partnership Agreement). At December 31, 1994, both the Company and
IMC-Agrico were in compliance with all of the covenants in the
indentures and other agreements governing its indebtedness.
IMC-Agrico makes cash distributions to each partner based on
formulas and sharing ratios as defined in the Partnership Agreement.
For the six months ended December 31, 1994, the total amount of
Distributable Cash generated by IMC-Agrico was $201.2 million, of which
$108.8 million was distributed to FRP, including $24.2 million
subsequent to December 31, 1994.
Capital expenditures for the year ending June 30, 1995 are
estimated to total $67 million (including $49 million by IMC-Agrico).
The Company believes that its current liquidity position and cash flow
from operations should be sufficient to meet its working capital needs
and expansion of its operations.
In October 1993 and May 1994, the Company successfully completed
common stock offerings totaling 7,450,000 shares, the proceeds of which
were used to reduce long-term indebtedness. Assuming the common stock
offerings had occurred on July 1, 1993 and the proceeds used to reduce
outstanding indebtedness, the pro forma net loss for the six months
ended December 31, 1993 would have been $40.9 million, or $1.38 per
share.
There were no other material changes in the Company's financial
condition, capital resources, or liquidity from that described in the
Company's Annual Report on Form 10-K for the year ended June 30, 1994.
Other Matters
-------------
Pursuant to the development order for the New Wales concentrated
phosphate facility, the Company has been monitoring groundwater
contamination levels, and had until October 30, 1994 to achieve
permitted levels or seek an extension of time in order to accomplish
it. Failure to reach such levels could potentially result in the
incurrence of substantial expenditures to line or relocate a New Wales
cooling pond.
Concentrations of groundwater contaminants had been slowly dropping
and approaching permitted levels following plugging of the 12 former
recharge wells located beneath the cooling pond. The concentrations
increased significantly, however, at the time of the appearance of a
large hole atop the New Wales phosphogypsum stack, believed to be
caused by a sinkhole beneath the stack.
Concentrations are currently substantially in excess of permitted
levels. Because the Company is pumping water from the aquifer to use
at the New Wales facility, the contamination has not traveled outside
the Company's property.
The Company is working with government authorities in connection
with the sinkhole, and remediation of the groundwater contamination
<PAGE>
levels is seen as a part of the overall situation; accordingly no
formal request for extension under the development order has been
filed.
The Company also resolved a dispute with the U.S. Environmental
Protection Agency concerning alleged violations of water discharge
permits at several phosphate facilities in Florida. Under the terms of
the settlement the Company has paid a penalty of $835,000 and has
agreed to complete supplementary environmental projects valued at
$265,000.
In November of 1994, the earthen wall of a settling pond at one of
the Company's phosphate facilities in Florida was breached, allowing
water to flow onto neighboring property, including streams. Corrective
action was promptly taken and remedial measures are also being taken.
An investigation into the incident is presently being conducted in
cooperation with environmental agencies. This breach was the second
such incident at Company facilities in 1994; the earlier incident, also
in Florida, involved the release of water onto Company property and
property of a corporate neighbor, plus lesser amounts into streams.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.
Pursuant to certain agreements between the Company and its former
parent company, Mallinckrodt Group Inc., the Company has agreed to
indemnify Mallinckrodt Group Inc. against any liability or costs
attributable to, among other things, litigation involving the crop
nutrient business, whether or not the events which give rise to the
litigation predated July 1, 1987.
In the ordinary course of its business, the Company is and will
from time to time be involved in routine litigation. Except for (i)
the matters discussed in the Company's 1994 Annual Report on Form 10-K
(the 1994 Form 10-K) and Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994 (the First Quarter 10-Q) and (ii) the matters
discussed below, certain of which matters were previously discussed in
greater detail in the Company's 1994 Form 10-K and First Quarter 10-Q,
none of the litigation pending or known to be threatened at this time
is regarded by the Company as potentially material.
Sterlington Litigation
----------------------
A new trial judge has been assigned to the previously disclosed
Texas litigation relating to the May 1991 explosion at a nitroparaffins
plant in Sterlington, Louisiana. The previous judge did not rule on
pending motions before leaving the bench. The Texas Court of Appeals
has now reversed an earlier decision of the trial judge and has ruled
that, under Texas law, the April 1,1993 settlement agreement discussed
in the 1994 Form 10-K between the Company and Angus Chemical Company
(Angus) released the insurers of the Company to the same extent that it
released the Company. Neither the trial judge nor the Texas Court of
Appeals ruled as to whether Louisiana law permits Angus to pursue its
<PAGE>
previously disclosed direct action claims against the Company's
insurers.
Potash Antitrust Litigation
---------------------------
The judge in the previously disclosed potash antitrust action filed
in federal court in Minnesota against U.S. potash producers, including
the Company, has certified a class of all direct U.S. potash purchasers
as plaintiffs in that case.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit
No. Description
--------------------------------------------------------
10.55 Amendment No. 6, dated as of November 30, 1994 to
Credit Agreement dated as of June 29, 1993 among IMC
Global Operations Inc., IMC Global Inc. and the Banks
Listed Therein
11.3 Fully diluted earnings per share computation for the
six months ended December 31, 1994
(b) Reports on Form 8-K.
Up to the date of this report, the following report on Form
8-K was filed:
A report under Item 5 dated November 19, 1994.
* * * * * * * * * * * * * * * *
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.
IMC GLOBAL INC.
Robert C. Brauneker
------------------------------------------
Robert C. Brauneker
Executive Vice President
and Chief Financial Officer
Date: February 13, 1995
<PAGE>
Exhibit 10.55
EXECUTION COPY
AMENDMENT NO. 6
This AMENDMENT NO. 6 dated as of November 30, 1994 among IMC
Global USA, Inc., formerly known as IMC Fertilizer, Inc., a Delaware
corporation (the ``
Borrower''), IMC Global, Inc., formerly known as IMC
--------
Fertilizer Group, Inc., a Delaware corporation (the ``
Guarantor''), the
---------
lenders party to the Credit Agreement referred to below (the
``
Lenders''), Citibank, N.A. (``Citibank''), as Administrative Agent,
------- --------
and Citibank, NationsBank of North Carolina, N.A., and Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., as co-agents for the Lenders
(the ``
Co-Agents'').
---------
PRELIMINARY STATEMENTS:
(1) The Borrower, the Guarantor, the Lenders, the
Administrative Agent and the Co-Agents are parties to a Credit
Agreement dated as of June 29, 1993, as amended by Amendment No. 1 and
Waiver No. 1 dated as of June 30, 1993, Amendment No. 2, Waiver No. 2
and Consent No. 1 dated as of September 3, 1993, Amendment No. 3 dated
as of December 30, 1993, Amendment No. 4 dated as of March 10, 1994,
and Amendment No. 5 dated as of June 30, 1994 (the ``
Credit
------
Agreement''
; the terms defined therein being used herein as therein
---------
defined).
(2) The Borrower and the Lenders have agreed to further
amend the Credit Agreement as hereinafter set forth, and the Guarantor
has consented to such amendment.
SECTION 1. Amendments to Credit Agreement. The Credit
------------------------------
Agreement is, effective as of the date first above written, hereby
amended as follows:
(a) The definition of ``
Applicable Margin'' contained in
Section 1.01 is amended in full to read as follows:
``
`Applicable Margin' means, in the case of Base Rate
-----------------
Advances and Eurodollar Rate Advances, at any time a rate
equal to the rate per annum set forth in the table below
under the heading ``
Applicable Margin for Base Rate
Advances''
or ``Applicable Margin for Eurodollar Rate
Advances''
, as the case may be, opposite the leverage ratio
(calculated as set forth in Section 5.04(f) (the ``
Leverage
--------
Ratio''
)) set forth below as calculated at the time of
-----
determination; provided that, for Levels 1 through 4, no
<PAGE>
--------
Default or Event of Default resulting from a breach of any
financial covenant contained in Section 5.04 shall have
occurred and be continuing at such time of determination.
The Leverage Ratio must be less than or equal to the ratio
set forth below in order for the indicated Applicable Margin
to apply.
Applicable Margin Applicable Margin
for Base Rate for Eurodollar
Level Leverage Ratio Advances Advances
----- -------------- -------- --------
Level 1 .4725 0.00% 0.75%
Level 2 .4897 0.00% 1.00%
Level 3 .5068 0.50% 1.50%
Level 4 .5240 1.00% 2.00%
Level 5 greater than 1.75% 2.75%''
Level 4
(b) The definition of ``
Clean-Down Period'' contained in
Section 1.01 is amended in full to read as follows:
``
`Clean-Down Period' means the last 30 consecutive days
-----------------
occurring during any period of twelve consecutive calendar
months, unless during such 12 month period the aggregate
amount of outstanding Advances shall have been equal to or
less than $25,000,000 for a period of 30 consecutive days.''
(c) The definition of ``
Material Contract'' contained in
Section 1.01 is amended in full to read as follows:
``
`Material Contract' means the Joint Venture Agreement.''
-----------------
(d) The definition of ``
Permitted Liens'' contained in
Section 1.01 is amended by inserting immediately before the
colon in the third line thereof the following:
``
or as to which such enforcement, collection, execution,
levy or foreclosure proceeding is being contested in good
faith in a proper proceeding, and is not reasonably likely to
have a Material Adverse Effect''
.
(e) Section 2.05(b)(i) is amended by deleting clause (A)
thereof in its entirety, and is further amended by deleting the
phrase ``and (B)''
appearing immediately after such clause.
(f) Section 2.07(a) is amended in full to read as follows:
``
(a) Commitment Fee. the Borrower shall pay to the
--------------
<PAGE>
Administrative Agent for the account of the Lenders a
commitment fee on the average daily Unused Working Capital
commitment of such Lender from the date hereof in the case of
each bank and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination
Date at a rate per annum determined by reference to the
Leverage Ratio in effect from time to time as set forth
below:
Level Leverage Ratio Commitment Fee Rate
----- -------------- -------------------
Level 1 .4725 0.25%
Level 2 .7897 0.25%
Level 3 .5068 0.375%
Level 4 .5240 0.50%
Level 5 greater than 0.50%
Level 4
Such commitment fee shall in all cases be payable in arrears quarterly
o the last Business Day of each March, June, September and December,
commencing on June 30, 1993 and on the Termination Date; provided,
--------
however, that any commitment fee accrued with respect to any of the
-------
Commitments of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall
not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall
otherwise have been due and payable by the Borrower prior to such time;
and provided further that no commitment fee shall accrue on any of the
-------- -------
Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.''
(g) Section 2.13(e)(i) is amended in full to read as
follows:
``
(e) Compensation. (i) The Borrower shall pay to the
------------
Administrative Agent for the account of each Lender a
commission on such Lender's Pro Rata share of the average
daily aggregate Available Amount of all Letters of Credit
outstanding from time to time at a rate per annum determined
by reference to the Leverage Ratio in effect from time to
time as set forth below, payable in arrears quarterly on the
last Business Day of each March, June, September and December
commencing June 30, 1993 and on the Termination Date:
Level Leverage Ratio Letter of Credit Fee Rate
----- -------------- -------------------------
Level 1 .4725 0.75%
Level 2 .4897 1.00%
<PAGE>
Level 3 .5068 1.50%
Level 4 .5240 2.00%
Level 5 greater than 2.75%''
Level 4
(h) Section 4.01(j) is amended by deleting the phrase
``
adverse change'' in the fourth line from the bottom thereof and
substituting therefor the phrase ``
Material Adverse Change''.
(i) Section 4.01(k) is amended by inserting after the word
``
acquire'' in the second line thereof the phrase ``, in connection
with a hostile or contested bid,''
.
(j) Section 4.01(l) is amended in full to read as follows:
``
(l) (A) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying,
and no proceeds of any Advance will be used to extend credit
to others for the purpose of purchasing or carrying, Margin
Stock, and (B) no proceeds of any Advance will be used to
purchase or carry any Margin Stock in connection with a
hostile or contested bid.''
(k) Section 4.01(s) is amended by inserting after the word
``
could'' in the penultimate line thereof the words ``reasonably be
expected to''
.
(l) Section 4.01(t) is amended by inserting after the word
``
could'' in the ninth lines thereof the words ``reasonably be expected
to''
.
(m) Section 4.01(w) is amended by inserting after the word
``
could'' in the penultimate line thereof the words ``reasonably be
expected to''
.
(n) Section 4.01(aa) is amended by inserting after the word
``
default'' in the third to the last line thereof the phrase ``as of
such date''
.
(o) Section 4.01 is further amended by adding to the end
thereof a new subsection (ee), to read as follows:
``
(ee) Following application of the proceeds of each Advance,
not more than 25% of the value of the assets (of either Loan
Party individually or with its Subsidiaries taken as a whole)
subject to the provisions of Section 5.02(a), 5.02(e) or
5.02(n) or subject to any restriction contained in any
agreement or instrument between either Loan Party and any
Lender or any Affiliate of any Lender relating to Debt and
within the scope of Section 6.01(e) will be Margin Stock.''
(p) Section 5.02(b)(i)(C) is amended in full to read as
follows:
``
(C) Debt of the Borrower owed to IMC-Canada;''
<PAGE>
(q) Section 5.02(b)(ii)(B) is amended in full to read as
follows:
``
(C) Debt of the Guarantor owed to IMC-Canada;''
(r) Section 5.02(b)(iii) is amended by adding at the end
thereof the following proviso:
``
provided that in the case of Debt of IMC-Canada owed to the
--------
Borrower or the Guarantor or to a wholly-owned Subsidiary of
the Borrower or the Guarantor, such Debt shall not exceed
$50,000,000 in an aggregate amount at any time outstanding;''
(s) Section 5.02(e) is amended by deleting the figure
``
$15,000,000'' in clause (iii) and substituting therefor the figure
``
$50,000,000'', is further amended by deleting in full the proviso at
the end thereof, and is further amended by substituting a period for
the semi-colon at the end of clause (vi) thereof.
(t) Section 5.02(g)(ii) is amended by deleting the figure
``
25%'' in the sixth line thereof and substituting therefor the figure
``
50%'', by deleting the date ``June 30, 1993'' in the seventh line
thereof and substituting therefor the date ``
January 1, 1994'', and by
adding at the end of clause (a) thereof the following proviso:
``
;provided, that one-time accounting adjustments required by
--------
the Financial Accounting Standards Board (``
FASB'') as
----
deduction from the calculation of net income shall not be
deducted from the calculation of net income solely for the
purposes of this Section 5.02(g)(ii)(a);''
(u) Section 5.03(o) is amended by inserting after the word
``
could'' in the sixth line thereof the words ``reasonably be expected
to''
.
(v) Section 5.04(a) is amended in full to read as follows:
``
(a) Net Worth. Maintain an excess of (i) Consolidated total
---------
assets less goodwill and capitalized finance charges over
----
(ii) Consolidated total liabilities of not less than
$525,000,000 for the fiscal quarter ending December 31, 1994
and for each fiscal quarter thereafter.''
(w) Section 5.04(b) is amended by deleting the table
contained therein and substituting therefor the following:
``
Four Fiscal
Quarters Ending on Ratio
------------------ -----
December 31, 1994 2.50
March 31, 1995 2.75
June 30, 1995 and thereafter 3.00''
<PAGE>
(x) Section 5.04(c) is amended by deleting the table
contained therein and substituting therefor the following:
``
Four Fiscal
Quarters Ending on Ratio
------------------ -----
December 31, 1994 1.75
March 31, 1995 1.75
June 30, 1995 and thereafter 2.00''
(y) Section 5.04(f) is amended by deleting the table
contained therein and substituting therefor the following:
``
Quarter
-------
Ending on Ratio
--------- -----
December 31, 1994 0.60
June 30, 1995 and thereafter 0.55''
(z) Section 6.01(a) is amended in full to read as follows:
``
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, (ii) the
Borrower shall fail to pay any interest on any Advance within
three Business Days of the date such interest becomes due and
payable, or (iii) either Loan Party shall fail to make any
other payment under any Loan Document within three Business
days of the date such payment becomes due and payable; or''
(aa) Section 6.01(f) is amended by deleting the figure ``
30''
in the eighth line from the bottom thereof and substituting therefor
the figure ``
60''.
(bb) Section 6.01(g) is amended by inserting after the figure
``
$5,000,000'' in the second line thereof the following:
``
(calculated after deducting therefrom any amount that will
be paid by any insurer rated at least A+ by A.M. Best Company
to the extent such insurer has confirmed in writing to such
Loan Party or Subsidiary such insurer's obligation to pay
such amount with respect to such judgment or order)''
(cc) Section 6.01(h) is amended by inserting after the word
``
could'' in the third line thereof the words ``reasonably be expected
to''
.
(dd) Section 6.01(j)(ii) is amended in full to read as
follows:
``
during any period of up to 24 consecutive months,
commencing after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of
the Guarantor shall cease for any reason (other than due to
death or disability) to constitute a majority of the board of
directors of the Guarantor, except to the extent that
individuals who at the beginning of such 24-month period were
replaced by individuals (x) elected by 66-2/3% of the
<PAGE>
remaining members of the board of directors of the Guarantor
or (y) nominated for election by a majority of the remaining
members of the board of directors of the Guarantor and
thereafter elected as directors by the shareholders of the
Guarantor; or''
(ee) Section 6.01(k) is amended by deleting the figure
``
$1,000,000'' and substituting therefor the figure
``
$5,000,000''.
(ff) Section 6.01(l) is amended by deleting the figure
``
$1,000,000''and substituting therefor the figure
``
$5,000,000'', and further amended by deleting the figure
``
$250,000'' therein and substituting for such figure the
figure ``
$500,000''.
(gg) Section 6.01(m) is amended by deleting the figure
``
$250,000''and substituting therefor the figure ``$500,000'', and
further amended by deleting the ``
or'' at the end thereof.
(hh) Section 6.01(n) is deleted in full.
(ii) Section 9.07(a)(ii) is amended in full to read as
follows:
``
(ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an
assignment of all of a Lender's rights and obligations under
this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less
than $10,000,000 and shall be an integral multiple of
$1,000,000,''
.
SECTION 2. Conditions of Effectiveness. This Amendment
---------------------------
shall become effective when, and only when, the Administrative Agent
shall have received counterparts of this Amendment executed by the
Borrower, the Guarantor and all of the Lenders or, as to any of the
Lenders, advice satisfactory to the Administrative Agent that such
Lenders have executed this Amendment.
SECTION 3. Representations and Warranties of the Borrower.
----------------------------------------------
Each of the Borrower and the Guarantor represents and warrants as
follows:
(a) Each Loan Party is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(b) The execution, delivery and performance by each Loan
Party of this Amendment and the performance of the Loan Documents,
as amended hereby, to which it is a party are within such Loan
Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene such Loan
Party's charter or by-laws, (ii) violate any law, rule,
<PAGE>
regulation, order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the
breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting either Loan Party, any of its
Subsidiaries or any of their properties or (iv) result in or
require the creation or imposition of any Lien upon or with
respect to any of the properties of either Loan Party or any of
its Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due
execution, delivery, or performance of this Amendment by either
Loan Party, or the performance by either Loan Party of any of the
Loan Documents, as amended hereby, to which it is a party, or for
the consummation of the transactions contemplated hereby, or (ii)
the exercise by the Administrative Agent, any Co-Agent or any
Lender of its rights under the Loan Documents.
(d) This Amendment has been duly executed and delivered by
each Loan Party. This Amendment and each of the Loan Documents,
as amended hereby, constitute the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms.
(e) There is no action, suit, investigation, litigation or
proceeding affecting either Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before
any court, governmental agency or arbitrator that (i) could
reasonably be expected to have a Material Adverse Effect (other
than the Disclosed Litigation) or (ii) purports to affect the
legality, validity or enforceability of this Amendment or any Loan
Document, as amended hereby, or the consummation of the
transactions contemplated hereby or thereby. There has been no
adverse change in the status, or financial effect on either Loan
Party or any of their Subsidiaries, of the Disclosed Litigation
from that described on Schedule 3.01(g) to the Credit Agreement.
SECTION 4. Reference to and Effect on the Loan Documents.
---------------------------------------------
(a) Upon the effectiveness of this Amendment, on and after the date
hereof each reference in the Credit Agreement to ``
this Agreement'',
``
hereunder'', ``hereof'' or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to
``
the Credit Agreement'', ``thereunder'', ``
thereof'', or words of like
import referring to the Credit Agreement, shall mean and be a reference
to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit
Agreement and the Notes, and all other Loan Documents, are and shall
continue to be in full force and effect and are hereby in all respects
ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender, the Administrative
<PAGE>
Agent, or any Co-Agent under any of the Loan Documents, nor constitute
a waiver of any provision of any of the Loan Documents.
SECTION 5. Execution in Counterparts. This Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 6. Governing Law. This Amendment shall be governed
-------------
by, and construed in accordance with, the laws of the State of New
York.
<PAGE>
IN WITNESS HEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
IMC GLOBAL USA, INC., as Borrower
By JOHN E. GALVIN
---------------------
Title: Vice President
IMC GLOBAL, INC., as
Guarantor
By JOHN E. GALVIN
---------------------
Title: Vice President
CITIBANK, N.A., as
Administrative Agent, Co-Agent
and a Lender
By
---------------------
Title:
NATIONSBANK OF NORTH CAROLINA,
N.A., as Co-Agent and a Lender
By
---------------------
Title:
<PAGE>
IN WITNESS HEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
IMC GLOBAL USA, INC., as Borrower
By
---------------------
Title:
IMC GLOBAL, INC., as
Guarantor
By
---------------------
Title:
CITIBANK, N.A., as
Administrative Agent, Co-Agent
and a Lender
By MARY CORKRAN
---------------------
Title: MARY W. CORKRAN
Vice President
NATIONSBANK OF NORTH CAROLINA,
N.A., as Co-Agent and a Lender
By
---------------------
Title:
<PAGE>
IN WITNESS HEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
IMC GLOBAL USA, INC., as Borrower
By
---------------------
Title:
IMC GLOBAL, INC., as
Guarantor
By
---------------------
Title:
CITIBANK, N.A., as
Administrative Agent, Co-Agent
and a Lender
By
---------------------
Title:
NATIONSBANK OF NORTH CAROLINA,
N.A., as Co-Agent and a Lender
By CHRISTOPHER B. TORIE
--------------------------
Title: Senior Vice President
<PAGE>
EXHIBIT 11.3
EARNINGS (LOSS) PER SHARE
FULLY DILUTED COMPUTATION
FOR THE SIX MONTHS ENDED DECEMBER 31, 1994 AND 1993
(IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS)
At December 31,
-----------------------
1994 1993
----------- -----------
Basis for computation of fully diluted
earnings (loss)per share:
Earnings (loss) before extraordinary item
and cumulative effect of accounting change,
as reported $ 49.7 $ (26.1)
Add interest charges on convertible debt 3.6 3.6
Less provision for taxes (1.4) (1.4)
---------- ----------
Earnings (loss) before cumulative effect of
accounting change and extraordinary item,
as adjusted 51.9 (23.9)
Cumulative effect of accounting change (5.9)
Extraordinary loss - debt retirement (3.0) (23.8)
---------- ----------
Net earnings (loss) applicable to
common stock $ 43.0 $ (47.7)
========== ==========
Number of shares:
Weighted average shares outstanding 29,597,882 23,585,531
Conversion of convertible subordinated
notes into common stock 1,811,024 1,811,024
---------- ----------
Total common and common equivalent
shares assuming full dilution 31,408,906 25,396,555
========== ==========
Fully diluted earnings (loss) per share:
Earnings (loss) before cumulative effect of
accounting change and extraordinary item $ 1.65 $ (.94)
Cumulative effect of accounting change (.19)
Extraordinary loss - debt retirement (.09) (.94)
---------- ----------
Net earnings (loss) $ 1.37 $ (1.88)
========== ==========
This calculation is submitted in accordance with Regulation S-K item
601(b)(11). However, under APB Opinion No. 15, calculation of fully
diluted earnings (loss) per share would exclude the conversion of
convertible securities which would have an antidilutive effect on
earnings (loss) per share for each period.
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> DEC-31-1994
<CASH> (7,700)
<SECURITIES> 84,300
<RECEIVABLES> 132,200
<ALLOWANCES> 2,300
<INVENTORY> 255,100
<CURRENT-ASSETS> 466,600
<PP&E> 3,423,000
<DEPRECIATION> 1,526,100
<TOTAL-ASSETS> 2,676,900
<CURRENT-LIABILITIES> 213,400
<BONDS> 576,400
<COMMON> 32,200
0
0
<OTHER-SE> 661,100
<TOTAL-LIABILITY-AND-EQUITY> 1,983,600
<SALES> 872,600
<TOTAL-REVENUES> 879,900
<CGS> 682,000
<TOTAL-COSTS> 719,300
<OTHER-EXPENSES> 52,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,300
<INCOME-PRETAX> 80,200
<INCOME-TAX> 30,500
<INCOME-CONTINUING> 49,700
<DISCONTINUED> 0
<EXTRAORDINARY> (3,000)
<CHANGES> (5,900)
<NET-INCOME> 40,800
<EPS-PRIMARY> 1.38
<EPS-DILUTED> 1.37
</TABLE>
