<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 March 31, 1995
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: 29,503,069 shares, excluding 2,776,420
treasury shares as of April 30, 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. 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 Nine Months Ended
March 31, March 31,
1995 1994 1995 1994
-----------------------------------------------------------------------
Net sales $ 550.0 $ 410.5 $1,422.6 $1,005.9
Cost of goods sold 400.0 332.8 1,082.0 887.0
-------- -------- -------- --------
Gross margins 150.0 77.7 340.6 118.9
Selling, general and
administrative expenses (Note 1) 19.3 15.8 55.2 45.4
Other operating (income)
and expense, net (.5) (3.8) (6.4) (13.5)
-------- -------- -------- --------
Operating earnings (Note 2) 131.2 65.7 291.8 87.0
Equity in (earnings) loss of
oil and gas joint venture
(Note 3) (.6) .1 (1.3) 20.6
Interest earned and other
non-operating (income) and
expense, net (.3) 1.0 (3.0) 4.3
Interest charges 12.2 19.9 40.5 62.7
-------- -------- -------- --------
Earnings (loss) before
minority interest and items
noted below 119.9 44.7 255.6 (.6)
Minority interest in earnings
of consolidated joint venture 44.7 23.0 100.2 28.3
-------- -------- -------- --------
Earnings (loss) before items
noted below 75.2 21.7 155.4 (28.9)
Provision (credit) for income
taxes (Note 4) 29.5 16.3 60.0 (8.2)
-------- -------- -------- --------
Earnings (loss) before
cumulative effect of
accounting change and
extraordinary item 45.7 5.4 95.4 (20.7)
Cumulative effect of
accounting change (Note 5) (5.9)
Extraordinary loss-debt
<PAGE>
retirement (Note 6) (.7) (3.7) (23.8)
-------- -------- -------- --------
Net earnings (loss) $ 45.0 $ 5.4 $ 85.8 $ (44.5)
======== ======== ======== ========
Earnings (loss) per share
(Note 7):
Earnings (loss) before
cumulative effect of
accounting change and
extraordinary item $ 1.54 $ .21 $ 3.22 $ (.85)
Cumulative effect of
accounting change (Note 5) (.20)
Extraordinary loss-debt
retirement (Note 6) (.02) (.12) (.98)
-------- -------- -------- --------
Net earnings (loss) $ 1.52 $ .21 $ 2.90 $ (1.83)
======== ======== ======== ========
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions except per share amounts)
March 31, June 30,
Assets 1995 1994
-----------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 140.2 $ 169.0
Receivables, net (Note 8) 119.2 109.1
Inventories:
Products (principally finished) 169.2 185.5
Operating materials and supplies 68.4 67.6
-------- --------
237.6 253.1
Prepaid expenses 4.5 2.8
-------- --------
Total current assets 501.5 534.0
Investment in oil and gas joint venture 16.5 19.0
Property, plant and equipment 3,432.7 3,394.1
Accumulated depreciation and depletion (1,556.9) (1,466.7)
-------- --------
Net property, plant and equipment 1,875.8 1,927.4
Deferred income taxes 224.8 223.6
Other assets 67.1 74.3
-------- --------
$2,685.7 $2,778.3
======== ========
Liabilities and Stockholders' Equity
-----------------------------------------------------------------------
Current liabilities:
Accounts payable $ 102.1 $ 110.3
Accrued liabilities 118.3 98.0
Current maturities of long-term debt 8.8 1.1
-------- --------
Total current liabilities 229.2 209.4
Long-term debt, less current maturities 549.5 688.1
Deferred income taxes 382.7 372.6
Other noncurrent liabilities 289.8 275.1
Minority interest in consolidated joint
venture 498.4 578.1
Stockholders' equity:
Common stock, $1 par value authorized
50,000,000 shares; issued 32,278,174
shares and 32,232,865 shares at March 31
and June 30, respectively 32.3 32.2
Capital in excess of par value 737.6 736.2
Retained earnings (deficit) 73.6 (6.3)
Treasury stock, at cost, 2,776,420 shares
and 2,770,259 shares at March 31 and
June 30, respectively (107.4) (107.1)
-------- --------
Total stockholders' equity 736.1 655.0
-------- --------
$2,685.7 $2,778.3
======== ========
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
Nine months ended
March 31,
1995 1994
-----------------------------------------------------------------------
Cash Flows from Operating Activities
------------------------------------
Net earnings (loss) $ 85.8 $ (44.5)
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Minority interest in earnings of consolidated
joint venture 100.2 28.3
Depreciation, depletion and amortization 99.7 82.9
Postemployment employee benefits 9.6
Deferred income taxes 8.9 (40.9)
Cash distributions in excess of equity in
operating results of oil and gas joint
venture (including a $20.3 write-down
in 1994) 4.2 34.2
Other non-cash charges and credits, net (2.7) (11.4)
Changes in:
Receivables (10.1) 2.9
Inventories 15.5 37.6
Prepaid expenses (1.7)
Accounts payable, accrued liabilities
and income taxes 14.7 (58.1)
------- -------
Net cash provided by operating activities 324.1 31.0
------- -------
Cash Flows from Investing Activities
------------------------------------
Capital expenditures (38.9) (19.7)
Other 4.2 4.7
------- -------
Net cash used by investing activities (34.7) (15.0)
------- -------
Net cash provided before financing
activities 289.4 16.0
------- -------
Cash Flows from Financing Activities
------------------------------------
Proceeds from issuance of long-term
debt, net 1.2 173.6
Payments of long-term debt (132.1) (243.2)
Joint venture cash distributions to FRP (181.4) (48.2)
Cash dividends paid (5.9)
Issuance of common stock from treasury 113.4
------- -------
Net cash used by financing activities (318.2) (4.4)
------- -------
Net (decrease) increase in cash and cash
equivalents (28.8) 11.6
Cash and cash equivalents - beginning
of period 169.0 111.6
<PAGE>
------- -------
Cash and cash equivalents - end of period $ 140.2 $ 123.2
======= =======
Supplemental cash flow disclosures:
Interest paid $ 33.7 $ 42.6
Income taxes paid $ 47.8 $ 10.3
(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)
Nine months ended
March 31,
1995 1994
-----------------------------------------------------------------------
Common stock:
Balance at June 30 $ 32.2 $ 32.2
Stock options exercised .1
------ ------
Balance at March 31 32.3 32.2
Capital in excess of par value:
Balance at June 30 736.2 768.4
Stock options exercised 1.1 .1
Restricted stock awards .3 3.0
Issuance of common stock (20.6)
------ ------
Balance at March 31 737.6 750.9
Retained earnings (deficit):
Balance at June 30 (6.3) 22.5
Net earnings (loss) 85.8 (44.5)
Dividends ($.20 a share in 1995) (5.9)
------ ------
Balance at March 31 73.6 (22.0)
Treasury stock:
Balance at June 30 (107.1) (392.7)
Acquisition of shares (.3)
Issuance of common stock from treasury 134.1
Restricted stock award (.2)
------ ------
Balance at March 31 (107.4) (258.8)
------ ------
Total stockholders' equity $736.1 $502.3
====== ======
(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 restructuring
charges totaling $5.0 million ($3.9 million net of minority interest)
for the nine months ended March 31, 1995 resulting from the adoption of
a restructuring plan which shifted the marketing and administrative
functions of Phosphate Chemicals Export Association, Inc. (formed to
market concentrated phosphates internationally) to its member
companies.
2. Environmental Matters
---------------------
Operating earnings included provisions totaling $9.0 million ($5.1
million net of minority interest) for the nine months ended March 31,
1995 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 nine months ended March 31, 1994 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
------------
In 1994, the provision (credit) for income taxes included a first
quarter charge of $4.1 million for an adjustment to the Company's net
deferred tax liability for the effect of changes in U.S. corporate tax
rates and a third quarter charge of $5.0 million to reflect a change in
the annual effective tax rate due to an improved earnings outlook.
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 nine months ended March 31, 1995 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 nine months' earnings before the cumulative effect of the
accounting change was not material.
6. Extraordinary Loss-Debt Retirement
----------------------------------
<PAGE>
In connection with the purchase of portions of the Company's Senior
Notes during the three and nine months ended March 31, 1995 and the
fiscal 1994 purchase of $220 million of its 11.25 percent Notes, the
Company recorded extraordinary charges, net of taxes, of $.7 million,
$3.7 million and $23.8 million, respectively, for redemption premium
incurred and write-off of previously deferred finance charges
associated with such notes.
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 29,639,432 and 29,575,520 shares for the three and
nine months ended March 31, 1995, respectively. For the three and nine
months ended March 31, 1994, shares and equivalent shares outstanding
totaled 25,704,403 and 24,259,699 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 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 March 31,
1995, IMC-Agrico had sold $56.0 million of such receivable interests.
Related costs, charged to interest earned and other non-operating
income and expense, net, totaled $.9 million and $1.5 million for the
three and nine months ended March 31, 1995, respectively. 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 March 31, 1995 vs. three months ended March 31, 1994
-----------------------------------------------------------------------
Net earnings for the three months ended March 31, 1995 totaled
$45.0 million, or $1.52 per share, significantly higher than last
year's third quarter when the Company reported net earnings of $5.4
million, or $.21 per share. This third quarter performance represents
the highest quarterly net earnings since the Company was formed in
1988. Included in 1995 operating results was an extraordinary charge
of $.7 million, or $.02 per share, related to the early extinguishment
of debt. In 1994, operating results included a charge of $5.0 million,
or $.19 per share, to reflect a change in the annual effective tax rate
due to an improved earnings outlook.
Net sales for the three months ended March 31, 1995 were $550.0
million, a 34 percent increase over 1994 when sales were $410.5
million. Record purchases of concentrated phosphates and potash by
China continued to be filled during the quarter. In addition,
<PAGE>
shipments under a fiscal 1995 long-term phosphate rock supply contract
also helped contribute to the overall sales increase.
Gross margins increased $72.3 million from last year's third
quarter primarily due to higher margins for concentrated phosphates, a
$49 million increase, potash, a $13 million increase, and phosphate
rock, a $4 million increase.
Concentrated phosphate margins increased primarily as a result of
higher prices ($63 million) as average diammonium phosphate (DAP)
prices increased 21 percent over year-earlier levels. Other
concentrated phosphate products showed similar price improvements.
Recently, DAP prices have declined but still remain strong. Future
price levels will depend upon the domestic planting season and
continued export demand. Likewise, sales volume increased ($15
million) primarily due to export shipping demand which increased 39
percent from the same period a year ago. Partially offsetting these
increases were higher production costs ($29 million) primarily due to
higher raw material costs. Currently, all concentrated phosphate
production facilities, with the exception of Taft, are operating at
full production capacity. On May 8, 1995, IMC-Agrico suspended
operations at its Taft, Louisiana, concentrated phosphate production
facility subject to improved market conditions. The decision to halt
production was made in order to balance production levels with market
requirements and to ensure inventory levels are adequate to meet
customers' near-term needs.
Potash margins increased as a result of higher prices ($5 million)
and sales volume ($4 million) as average potash prices and volume
increased 7 percent and 12 percent, respectively, over the same period
a year ago. The increased sales volume was almost entirely due to
higher export shipments, primarily to China. In addition, production
costs were $4 million lower due to lower water inflow spending.
Phosphate rock margins increased due primarily to increased sales
volume, up 36 percent or $2 million. In addition, production costs
were $2 million lower as all operating plants were at full capacity.
The following table summarizes the Company's sales of crop nutrient
products and average selling prices for the three months ended March
31, 1995 and 1994:
(Tons in millions of short tons)
1995 1994
--------- ---------
Concentrated phosphates
Total dry product sales tons
(primarily DAP) 1.975 1.666
Average DAP price per ton * $169.66 $140.16
* Average DAP prices represent sales made FOB Florida, Louisiana and
regional warehouses.
Phosphate rock
Sales tons 3.060 2.246
Average price per ton $20.25 $20.67
Potash
<PAGE>
Sales tons 1.128 1.009
Average price per ton $62.24 $58.36
Selling, general and administrative expenses increased $3.5 million
over the same period a year ago primarily due to increased legal
expenses and higher accruals associated with long-term compensation
plans.
Other operating income and expense for the three months ended March
31, 1995 included $.7 million from the amortization of a deferred gain
resulting from the exchange of the Company's phosphate business for a
56.5 percent interest in IMC-Agrico. In 1994, other operating income
and expense included $3.6 million of such amortization.
Interest charges for the three months ended March 31, 1995 were
$7.7 million lower than last year which reflected management's
continuing efforts to reduce high-cost, long-term indebtedness prior to
maturity.
Nine months ended March 31, 1995 vs. nine months ended March 31, 1994
---------------------------------------------------------------------
Net earnings for the nine months ended March 31, 1995 totaled $85.8
million, or $2.90 per share, up significantly over last year when the
Company reported a net loss of $44.5 million, or $1.83 per share.
Included in 1995 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
$3.7 million, or $.12 per share, related to the early extinguishment of
debt. In 1994, the loss included an extraordinary charge of $23.8
million, or $.98 per share, related to the early extinguishment of
debt, a charge of $20.3 million, $12.4 million after taxes, or $.51 per
share, related to the write-down of the Company's investment in an oil
and gas joint venture, 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, and a charge of $5.0
million, or .21 per share, to reflect a change in the annual effective
tax rate due to an improved earnings outlook. See Notes to Condensed
Consolidated Financial Statements for further discussion of these non-
recurring items.
Net sales for the nine months ended March 31, 1995 were $1,422.6
million, a 41 percent increase over 1994 when sales were $1,005.9
million. The Company continued to benefit from record purchases of
potash and concentrated phosphates by China. This, along with
continued strong domestic crop nutrient demand, contributed
significantly to this increase.
Gross margins increased $221.7 million from the same period a year
ago, primarily due to higher margins for concentrated phosphates, a
$175 million increase, potash, a $32 million increase, phosphate rock,
a $3 million increase, and mixed goods, a $3 million increase.
Concentrated phosphate margins have increased significantly
primarily due to higher prices ($182 million) and volume ($48 million)
<PAGE>
as average DAP prices increased 29 percent over the same period a year
ago. In addition, sales volume increased 22 percent reflecting record
purchases by China. These factors, along with continued strong
domestic crop nutrient demand, have until recently decreased domestic
inventory levels resulting in higher prices. Partially offsetting the
price and volume increases were higher production costs ($55 million)
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.
Potash margins also increased primarily due to higher sales volume
($14 million) as export shipments rose 70 percent, reflecting record
potash purchases by China. In addition, domestic potash shipments rose
12 percent over last year. This has resulted in lower producer
inventory levels and higher prices ($10 million) as supply has
tightened. Production costs were lower ($8 million) due primarily to
lower water inflow control spending.
Phosphate rock margins increased primarily due to increased sales
volume and prices ($7 million), mostly due to the addition of a new
long-term supply contract to fiscal 1995 operating results. Partially
offsetting the increase were higher production costs ($4 million) as
excessive rainfalls in Florida early in the first half of fiscal 1995
affected phosphate rock production levels. In addition, costs were
incurred in the startup of the Company's previously idled Payne Creek
mine, while repair and cleanup costs associated with an earthen dam
breach at the Company's Payne Creek and Hopewell phosphate mining
facilities in Florida also contributed to higher costs.
Mixed goods margins increased primarily due to increased prices ($4
million) and sales volume ($2 million), partially offset by higher
production costs ($3 million) resulting from higher raw material costs.
The following table summarizes the Company's sales of crop nutrient
products and average selling prices for the nine months ended March 31,
1995 and 1994:
(Tons in millions of short tons)
1995 1994
-------- --------
Concentrated phosphates
Total dry product sales tons
(primarily DAP) 5.593 4.576
Average DAP price per ton * $159.72 $123.35
* Average DAP prices represent sales made FOB Florida, Louisiana and
regional warehouses.
Phosphate rock
Sales tons 8.353 6.915
Average price per ton $20.12 $20.03
Potash
Sales tons 2.817 2.209
Average price per ton $64.66 $63.74
Selling, general and administrative expenses increased $9.8 million
over the same period a year ago primarily due to restructuring charges
<PAGE>
discussed in Note 1 of Notes to Condensed Consolidated Financial
Statements.
Other operating income and expense for the nine months ended March
31, 1995 included a gain of $5.0 million from the sale of land in
Florida and $2.1 million from the amortization of a deferred gain
resulting from the exchange of the Company's phosphate business for a
56.5 percent interest in IMC-Agrico. In 1994, other operating income
and expense included $11.4 million of such amortization.
Interest charges for the nine months ended March 31, 1995 were
$22.2 million lower than last year which reflected management's efforts
to reduce high-cost, long-term indebtedness prior to maturity.
Financial Condition
-------------------
Since June 30, 1994, cash and cash equivalents have decreased $28.8
million. Primary uses of cash included $181.4 million of cash sharing
distributions to Freeport-McMoRan Resource Partners, Limited
Partnership (FRP), $132.1 million to purchase portions of the Company's
outstanding Senior Notes and $38.9 million of capital expenditures.
Partially offsetting these cash outflows was $324.1 million generated
by operating activities which included $56.0 million from the sale of
receivable interests discussed below.
The Company's working capital ratio at March 31, 1995 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 43.1 percent at March 31, 1995 compared to 63.5 percent a
year ago and 51.3 percent at June 30, 1994.
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 March 31, 1995, $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. There were no other
borrowings under the agreement at March 31, 1995.
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 March 31, 1995, $12.4 million
was drawn down in the form of letters of credit. There were no other
borrowings under this agreement at March 31, 1995.
In October 1994, IMC-Agrico 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 March 31,
1995, IMC-Agrico had sold $56.0 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.
<PAGE>
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
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 March 31, 1995, both the Company and
IMC-Agrico were in compliance with all of the covenants in the
indentures and other agreements governing their indebtedness.
IMC-Agrico makes cash distributions to each partner based on
formulas and sharing ratios as defined in the Partnership Agreement.
For the nine months ended March 31, 1995, the total amount of
Distributable Cash generated by IMC-Agrico was $378.9 million, of which
$205.9 million was distributed to FRP, including $46.7 million
subsequent to March 31, 1995.
Capital expenditures for the year ending June 30, 1995 are
estimated to total $66 million (including $48 million by IMC-Agrico).
The Company believes that its current liquidity position, its cash flow
from operations and available borrowings under the Company's credit
facilities should be sufficient to meet its working capital needs and
expansion of its operations in the near term.
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 nine months
ended March 31, 1994 would have been $32.8 million, or $1.11 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 1994 Annual Report on Form 10-K.
Other Matters
-------------
IMC-Agrico has experienced concentrations of groundwater
contaminants in a cooling pond at the New Wales concentrated phosphate
production facility. Concentrations of such contaminants had been
slowly dropping and approaching permitted levels following the plugging
of 12 former recharge wells located beneath the cooling pond. However,
in June 1994, concentration levels increased significantly when a large
hole was discovered atop the New Wales phosphogypsum stack, believed to
have been caused by a sinkhole beneath the stack. Failure to reach
permitted levels could potentially result in the incurrence of
substantial expenditures to line or relocate the cooling pond.
Initial grouting operations to plug the sinkhole have been
completed and concentration levels have dropped significantly.
However, concentrations are currently in excess of permitted levels.
<PAGE>
Because IMC-Agrico is pumping water from the aquifer to use at the New
Wales facility, it is believed that the contamination believed to be
caused by the sinkhole is confined to company property. IMC-Agrico is
working with government authorities in connection with the sinkhole,
and remediation of the groundwater contamination levels is seen as a
part of the overall situation.
In November 1994, the earthen wall of a settling pond at one of
IMC-Agrico's phosphate rock mining 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. (Mallinckrodt), the Company has
agreed to indemnify Mallinckrodt 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), Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994 (the First Quarter 10-Q), and Quarterly Report
on Form 10-Q for the quarter ended December 31, 1994 (the Second
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, First Quarter 10-Q and Second 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
----------------------
In connection with the Company's previously disclosed Texas
litigation (Texas Action) relating to the May 1991 explosion at a
nitroparaffins plant located in Sterlington, Louisiana, the Texas Court
of Appeals reversed an earlier decision of the trial judge. The Texas
Court of Appeals has ruled that under Texas law, the April 1,1993
settlement agreement (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. The Texas Court of Appeals entered judgment on this issue for
the Company on February 2, 1995. On February 17, 1995, Angus filed a
motion for a rehearing with the Texas Court of Appeals. The Texas
Court of Appeals has not yet ruled on this motion.
<PAGE>
On June 19, 1995, the trial court in the Texas Action is scheduled
to hear the parties' pending motions for summary judgment which the
previous trial judge did not rule on before leaving the bench.
Pursuant to the trial court's current scheduling order, a jury trial is
scheduled to commence on October 9, 1995, on the parties' respective
claims for contribution and indemnity and the Company's claims to
reform the Settlement Agreement.
Angus has now served the lawsuit it filed in Louisiana against the
Company and two of its excess liability insurers (discussed in the 1994
Form 10-K) seeking damages in addition to the amounts paid pursuant to
the Settlement Agreement. This case has been assigned to the same
judge as was assigned to the class action lawsuits pending against the
Company in Louisiana.
Angus Environmental Litigation
------------------------------
On February 17, 1995, Angus Chemical Company filed a complaint
against the Company, IMC Global Operations Inc. and Mallinckrodt (known
collectively as the Defendants) pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) in the
United States District Court for the Western District of Louisiana.
According to the complaint, Angus' Sterlington, Louisiana
nitroparaffins plant (NP Plant) included a storage tank (Tank G-62S),
which was constructed in approximately 1949 and was used for the
storage of, among other things, 2 nitropropane. Angus alleges that
commencing in 1991 it has incurred approximately $1.4 million in
response costs in excavating, transporting and disposing of 3,609 tons
of soil allegedly containing 2 nitropropane.
The complaint further alleges that prior to February 28, 1992, the
Defendants' operation of the NP Plant allowed hazardous substances
within the meaning of CERCLA to be released into the environment in the
vicinity of the tank.
The Company and Mallinckrodt have until May 18, 1995 to respond to
the complaint. The Company intends to vigorously defend this matter;
however, given that this litigation is in its early stages of discovery
and due to the uncertainties inherent in litigation, no assurances can
be given that the Company will prevail in this matter.
Potash Antitrust Litigation
---------------------------
Discovery has begun in the previously disclosed potash antitrust
action filed in federal court in Minnesota against U.S. potash
producers, including the Company, following certification of a class of
all direct U.S. potash purchasers as plaintiffs.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit
No. Description
-------------------------------------------------------
<PAGE>
11.3 Fully diluted earnings per share computation for the
nine months ended March 31, 1995
(b) No Reports on Form 8-K were filed during the quarter.
* * * * * * * * * * * * * * * *
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: May 15, 1995
<PAGE>
<PAGE>
EXHIBIT 11.3
EARNINGS (LOSS) PER SHARE
FULLY DILUTED COMPUTATION
FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994
(IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS)
At March 31,
-----------------------
1995 1994
----------- -----------
Basis for computation of fully diluted
earnings (loss) per share:
Earnings (loss) before extraordinary item
and cumulative effect of accounting change,
as reported $ 95.4 $ (20.7)
Add interest charges on convertible debt 5.4 5.4
Less provision for taxes (2.1) (2.1)
---------- ----------
Earnings (loss) before cumulative effect of
accounting change and extraordinary item,
as adjusted 98.7 (17.4)
Cumulative effect of accounting change (5.9)
Extraordinary loss - debt retirement (3.7) (23.8)
---------- ----------
Net earnings (loss) applicable to
common stock $ 89.1 $ (41.2)
========== ==========
Number of shares:
Weighted average shares outstanding 29,648,660 24,285,491
Conversion of convertible subordinated
notes into common stock 1,811,024 1,811,024
---------- ----------
Total common and common equivalent
shares assuming full dilution 31,459,684 26,096,515
========== ==========
Fully diluted earnings (loss) per share:
Earnings (loss) before cumulative effect of
accounting change and extraordinary item $ 3.14 $ (.67)
Cumulative effect of accounting change (.19)
Extraordinary loss - debt retirement (.12) (.91)
---------- ----------
Net earnings (loss) $ 2.83 $ (1.58)
========== ==========
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.
<TABLE> <S> <C>
<PAGE>
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> MAR-31-1995
<CASH> (14,900)
<SECURITIES> 155,100
<RECEIVABLES> 122,800
<ALLOWANCES> 3,600
<INVENTORY> 237,600
<CURRENT-ASSETS> 501,500
<PP&E> 3,432,700
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0
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<OTHER-SE> 703,800
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