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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission file number 1-9759
IMC GLOBAL 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: (847) 272-9200
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X . No .
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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: 92,487,536 shares, excluding 5,545,884
treasury shares as of November 5, 1996.
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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 1996
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 1995 amounts have been
reclassified to conform to the 1996 presentation. Interim results are
not necessarily indicative of the results expected for the fiscal year.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In millions except per share amounts)
Three months ended
September 30,
1996 1995
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Net sales $603.6 $599.4
Cost of goods sold 448.1 450.7
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Gross margins 155.5 148.7
Selling, general and administrative expenses 56.4 46.0
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Operating earnings 99.1 102.7
Other (income) and expense, net (2.6) (4.6)
Interest expense 15.1 16.8
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Earnings before minority interest 86.6 90.5
Minority interest 41.6 38.8
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Earnings before taxes 45.0 51.7
Provision for income taxes 16.4 19.6
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Earnings before extraordinary item 28.6 32.1
Extraordinary loss - debt retirement (7.5)
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Net earnings $ 21.1 $ 32.1
====== ======
Earnings per share:
Earnings before extraordinary item $ .31 $ .35
Extraordinary loss - debt retirement (.08)
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Net earnings $ .23 $ .35
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Weighted average number of shares and
equivalent shares outstanding 93.6 92.2
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions except per share amounts)
September 30, June 30,
Assets 1996 1996
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Current assets:
Cash and cash equivalents $ 54.5 $ 9.6
Receivables, net 224.4 350.2
Inventories 514.4 476.7
Deferred income taxes 58.6 61.4
Other current assets 24.1 20.3
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Total current assets 876.0 918.2
Property, plant and equipment 4,171.2 4,123.6
Accumulated depreciation and depletion (1,821.8) (1,772.3)
-------- --------
Net property, plant and equipment 2,349.4 2,351.3
Other assets 160.9 167.3
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Total assets $3,386.3 $3,436.8
======== ========
Liabilities and Stockholders' Equity
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Current liabilities:
Accounts payable $ 179.0 $ 193.5
Accrued liabilities 125.1 145.1
Short-term debt and current maturities
of long-term debt 24.6 27.8
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Total current liabilities 328.7 366.4
Long-term debt, less current maturities 717.8 736.7
Deferred income taxes 316.6 315.7
Other noncurrent liabilities 355.1 352.0
Minority interest 494.2 509.7
Stockholders' equity:
Common stock, $1 par value, authorized
250,000,000 shares; issued 98,024,029
shares and 97,863,784 shares at
September 30 and June 30, respectively 98.0 97.9
Capital in excess of par value 824.9 821.7
Retained earnings 372.7 359.1
Treasury stock, at cost, 5,545,884 shares (107.3) (107.3)
Foreign currency translation adjustment (14.4) (15.1)
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Total stockholders' equity 1,173.9 1,156.3
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Total liabilities and stockholders' equity $3,386.3 $3,436.8
======== ========
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
Three months ended
September 30,
1996 1995
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Cash Flows from Operating Activities
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Net earnings $ 21.1 $ 32.1
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation, depletion and amortization 42.2 39.8
Minority interest 41.0 38.3
Deferred income taxes 3.7 (4.1)
Other non-cash charges and credits, net 17.7 (5.8)
Changes in:
Receivables 125.8 (2.5)
Inventories (37.7) (23.2)
Other current assets (3.8) 4.4
Accounts payable (14.5) (58.1)
Accrued liabilities (20.0) 4.9
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Net cash provided by operating activities 175.5 25.8
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Cash Flows from Investing Activities
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Capital expenditures (44.0) (37.8)
Sales of property, plant and equipment .3
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Net cash used in investing activities (44.0) (37.5)
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Net cash provided (used) before
financing activities 131.5 (11.7)
Cash Flows from Financing Activities
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Joint venture cash distributions to FRP (60.3) (51.7)
Payments of long-term debt (139.4)
Proceeds from issuance of long-term debt 120.5 4.7
Changes in short-term debt, net (3.2) 65.9
Stock options exercised 3.3 6.7
Cash dividends paid (7.5) (7.1)
Other 10.0
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Net cash (used in) provided by
financing activities (86.6) 28.5
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Net increase in cash and cash equivalents 44.9 16.8
Cash and cash equivalents - beginning
of period 9.6 203.7
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Cash and cash equivalents - end of period $ 54.5 $220.5
====== ======
Supplemental cash flow disclosures:
Interest paid $ 17.1 $ 10.4
Income taxes paid, net of refunds $ 12.2 $ 15.5
(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)
Three months ended
September 30,
1996 1995
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Common stock:
Balance at June 30 $ 97.9 $ 96.4
Stock options exercised .1 .3
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Balance at September 30 98.0 96.7
Capital in excess of par value:
Balance at June 30 821.7 782.6
Stock options exercised 3.2 6.3
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Balance at September 30 824.9 788.9
Retained earnings:
Balance at June 30 359.1 246.1
Net earnings 21.1 32.1
Dividends ($.08 per share) (7.5) (7.1)
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Balance at September 30 372.7 271.1
Treasury stock:
Balance at June 30 and September 30 (107.3) (107.4)
Foreign currency translation adjustment:
Balance at June 30 (15.1) (9.9)
Foreign currency translation adjustment .7 4.7
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Balance at September 30 (14.4) (5.2)
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Total stockholders' equity $1,173.9 $1,044.1
======== ========
(See Notes to Condensed Consolidated Financial Statements on Page 5)
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Vigoro Merger
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On March 1, 1996, the Company completed the merger with The Vigoro
Corporation (Vigoro) which resulted in Vigoro becoming a subsidiary of
the Company (Merger). Upon consummation of the Merger, the Company
issued approximately 32.4 million shares of its common stock in
exchange for all of the outstanding shares of Vigoro. The Merger was
structured to qualify as a tax-free reorganization for income tax
purposes and was accounted for as a pooling of interests. Accordingly,
the Company's financial statements have been restated for all periods
prior to the Merger to include the accounts and operations of Vigoro.
2. Acquisitions
------------
In October 1995, the Company acquired the animal feed ingredients
business (Feed Ingredients) of Mallinckrodt Group Inc. and subsequently
contributed the business to IMC-Agrico Company. The acquisition was
accounted for under the purchase method of accounting. Operating
results of Feed Ingredients (net of minority interest) have been
included in the Company's Condensed Consolidated Statement of Earnings
since the respective date of acquisition.
3. Extraordinary Loss - Debt Retirement
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On September 5, 1996, the Company completed a tender offer to
purchase portions of its high-cost senior notes. In connection with
the purchase of such notes, the Company recorded an extraordinary
charge, net of taxes, of $7.5 million for redemption premium incurred
and write-off of previously deferred finance charges associated with
such notes. The tendered notes were financed at lower interest rates
under the Company's credit facility.
4. Earnings Per Share
------------------
Earnings per share were based on the weighted average number of
shares and equivalent shares outstanding. Fully diluted earnings per
share were not significantly different from primary earnings per share
and, accordingly, are not presented.
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This Quarterly Report on Form 10-Q contains certain forward-looking
statements concerning the Company's operations, economic performance
and financial condition. Such statements are subject to various risks
and uncertainties which could cause results to differ materially from
those currently anticipated.
<PAGE>
Results of Operations
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Three months ended September 30, 1996 vs. three months ended September
30, 1995
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OVERVIEW
Net sales for the first quarter ended September 30, 1996 were $603.6
million and gross margins were $155.5 million while net earnings,
before an extraordinary charge, were $28.6 million, or $0.31 per share.
An extraordinary charge of $7.5 million, or $0.08 per share, related to
the early extinguishment of debt, reduced net earnings to $21.1
million, or $0.23 per share.
Net sales for the first quarter ended September 30, 1995 were $599.4
million while gross margins were $148.7 million. Net earnings for the
prior year first quarter were $32.1 million, or $0.35 per share.
Net sales for the first quarter increased one percent over the prior
year first quarter while gross margins increased five percent as
compared to the same period one year ago. These increases reflected
the mixed operating results of the Company's three largest business
units and the impact of various non-operating factors discussed below.
IMC-AGRICO CROP NUTRIENTS OPERATIONS
IMC-Agrico Crop Nutrients net sales for the first quarter decreased
10 percent to $391.2 million compared to $433.7 million one year ago.
This decrease was primarily the result of lower international shipments
of concentrated phosphates to China, India and Japan, which unfavorably
impacted net sales by $48.5 million. In addition, management's efforts
to phase out phosphate rock export sales resulted in a $14.4 million
decrease in revenues. These sales volume decreases were partially
offset by higher average sales realizations for diammonium phosphate
(DAP), which favorably impacted net sales by $18.3 million.
Gross margins remained relatively flat totaling $97.5 million for
the quarter compared to $98.0 million last year, despite the sales
decrease noted above, mainly as a result of product mix.
IMC KALIUM OPERATIONS
IMC Kalium net sales increased 11 percent to $109.9 million in the
current quarter from $99.4 million in the prior year first quarter.
This increase was driven largely by increased demand as higher domestic
and export volumes favorably impacted net sales by $12.0 million. In
addition, higher export sales realizations increased net sales by $2.0
million. Partially offsetting these increases were lower domestic
sales realizations which negatively impacted net sales by $4.0 million.
Despite improved sales, gross margins decreased 15 percent to $32.3
million for the quarter from $38.1 million one year ago. In addition
to the price and volume impacts discussed above, margins were further
impacted by increased production costs associated with a prolonged
summer shutdown at IMC Kalium's Canadian mines. This shutdown was
undertaken to reduce high inventory levels which resulted from wet
spring weather in the midwestern United States.
<PAGE>
IMC AGRIBUSINESS OPERATIONS
IMC AgriBusiness net sales increased 12 percent to $106.0 million in
the first quarter as compared to $94.9 million for the same prior year
period. Factors contributing to this increase were increased chemical
sales volume due to late planting and chemical application caused by
wet weather in the spring of 1996, which favorably impacted net sales
by $4.5 million, as well as increased ammonia and nitrogen solutions
volumes which favorably impacted net sales by an additional $4.5
million.
Gross margins increased 53 percent from $12.9 million in the first
quarter one year ago to $19.7 million in the current quarter. Improved
gross margins were the result of higher sales volume described above,
which in turn served to increase chemical rebates, generating
additional margins.
OTHER
The remaining increases in first quarter net sales and margins were
primarily the result of the Feed Ingredients acquisition in October
1995.
The following table summarizes the Company's sales of crop nutrient
products and average selling prices for the three months ended
September 30:
1996 1995
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Sales volumes (in thousands of short
tons) (a):
IMC-Agrico Crop Nutrients 1,804 2,045
IMC Kalium 1,750 1,549
Average price per ton (b):
DAP $181.31 $173.98
Potash $ 63.33 $ 64.78
(a) Sales volumes include tons sold captively. IMC-Agrico Crop
Nutrients volumes represent dry product tons, primarily DAP.
(b) Average prices represent sales made FOB mine/plant.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased $10.4 million
to $56.4 million for the first quarter compared to $46.0 million one
year ago primarily due to acquisition of the Feed Ingredients,
Agri-Supply and Madison Feed businesses as well as increased operating
expenses associated with higher sales volumes at IMC AgriBusiness.
INTEREST EXPENSE
Interest expense totaled $15.1 million in the current quarter, down
$1.7 million or 10 percent from the same period last year when interest
expense totaled $16.8 million. The decrease in interest expense was a
direct result of lower credit line and short-term borrowings as
compared to the prior year first quarter and the refinancing of
high-cost, long-term indebtedness in September 1996 at lower interest
rates.
<PAGE>
INCOME TAXES
The effective tax rate for the first quarter was 36.4 percent,
compared to an effective tax rate of 37.9 percent one year ago. The
effective rate decreased as a result of merger-related benefits at the
state and local level, along with tax planning in other areas.
EXTRAORDINARY LOSS - DEBT RETIREMENT
See Note 3, "Extraordinary Loss - Debt Retirement," of Notes to
Condensed Consolidated Financial Statements.
Capital Resources and Liquidity
- -------------------------------
LIQUIDITY AND OPERATING CASH FLOW
Cash and cash equivalents as of September 30, 1996 were $54.5
million as compared to $9.6 million at June 30, 1996. Net cash inflows
of $175.5 million generated from operating activities were used to fund
capital expenditures of $44.0 million, distributions to
Freeport-McMoRan Resource Partners, Limited Partnership (FRP) of $60.3
million and common stock dividend payments of $7.5 million. The
Company believes that internally generated cash flow will continue to
be its primary source of funds for such purposes.
The Company's working capital ratio at September 30, 1996 was 2.7:1
versus 2.5:1 at June 30, 1996. Debt to total capitalization improved
to 38.7 percent from 39.8 percent at June 30, 1996.
Net cash provided by operating activities totaled $175.5 million for
the first quarter versus $25.8 million for the same period a year ago.
The increase in operating cash was primarily the result of a decrease
in working capital levels, largely related to the reduction of
receivables from an unusually high level at June 30, 1996.
Net cash used in investing activities, for capital expenditures, for
the quarter ended September 30, 1996 and 1995 was $44.0 million and
$37.8 million, respectively.
Net cash used in financing activities for the current quarter was
$86.6 million while cash provided by financing activities was $28.5
million for the same period one year ago. Net debt payments for the
first quarter were $22.1 million while net proceeds from issuances of
debt were $70.6 million for the same period last year. The current
quarter results reflect the Company's purchase of a portion of its
high-cost, long-term indebtedness as part of an ongoing effort to
reduce interest costs. Additionally, as a result of improved earnings
generated by IMC-Agrico, distributions to FRP increased to $60.3
million during the quarter compared to $51.7 million for the same
period one year ago. Dividends paid during the three month period
ended September 30, 1996 and 1995 were $7.5 million and $7.1 million,
respectively.
CAPITAL EXPENDITURES
The Company estimates that its capital expenditures for fiscal 1997
will total approximately $270.0 million. The Company expects to
finance these expenditures primarily from operations. Pursuant to the
IMC-Agrico Partnership Agreement (Partnership Agreement), IMC-Agrico is
required to obtain the approval of the Policy Committee of IMC-Agrico
(which consists of two representatives each from the Company and FRP)
prior to making capital expenditures for expansion of its business in
<PAGE>
any fiscal year in excess of $5.0 million (adjusted annually for
inflation). In the event that the Policy Committee fails to approve
future capital expenditures, IMC-Agrico's ability to expand its
business could be adversely affected.
FINANCING
On February 28, 1996, the Company entered into an unsecured credit
facility (Credit Facility) with a group of banks. Under the terms of
the Credit Facility, the Company and certain of its subsidiaries may
borrow up to $450.0 million under a revolving credit facility which
matures on March 1, 1999 and $50.0 million under a long-term credit
facility which matures on March 2, 2001. On November 5, 1996, the
Company and its subsidiaries had borrowed $158.0 million under the
revolving credit facility and $50.0 million under the long-term credit
facility. Additionally, $33.7 million was drawn under the Credit
Facility as letters of credit principally to support industrial revenue
bonds and other debt and credit risk guarantees.
IMC-Agrico has an agreement with a group of banks to provide it with
a $45.0 million unsecured revolving credit facility (Initial Facility)
until February 1997 (on October 30, 1996, the Initial Facility was
reduced from $75.0 million). On November 5, 1996, there were no
outstanding borrowings under the Initial Facility. In addition, in May
1996, IMC-Agrico entered into two additional unsecured revolving credit
facilities under which it may borrow up to $75.0 million until February
1997 (collectively with the Initial Facility, IMC-Agrico Working
Capital Facility). On August 30, 1996, one of the additional unsecured
revolving credit facilities was increased by $5.0 million which
increased the borrowing level under the additional credit facilities to
$80.0 million. On November 5, 1996, $32.0 million was outstanding
under these additional facilities.
The Credit Facility contains provisions which (i) restrict the
Company's ability to make capital expenditures and dispose of assets,
(ii) limit the payment of dividends or other distributions to
stockholders, and (iii) limit the incurrence of additional
indebtedness. The Credit Facility also contains various financial
ratios and covenants. The IMC-Agrico Working Capital Facility also
contains various financial ratios and covenants, 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). In addition, pursuant to the Partnership
Agreement, IMC-Agrico is required to obtain the approval of the Policy
Committee of IMC-Agrico prior to incurring more than an aggregate of
$5.0 million (adjusted annually for inflation) in indebtedness
(excluding a total of $125.0 million of indebtedness under the IMC-
Agrico Working Capital Facility).
Under an agreement with a financial institution, IMC-Agrico may
sell, on an ongoing basis, an undivided percentage interest in a
designated pool of receivables in an amount not to exceed $65.0
million. At September 30, 1996, IMC-Agrico had sold $59.4 million of
such receivable interests.
On September 5, 1996, the Company completed a tender offer to
purchase portions of its high-cost senior notes. See Note 3,
"Extraordinary Loss - Debt Retirement," of Notes to Condensed
Consolidated Financial Statements.
<PAGE>
On October 30, 1996, the Company announced it will call for
redemption on November 15, 1996 all of its outstanding 6.25 percent
convertible subordinated notes due 2001. As of September 30, 1996
approximately $114.9 million of such notes were outstanding.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of its business, the Company is and will
from time to time be involved in routine litigation.
Item 4. Submission of
Matters to a Vote of Security Holders.
(a) The 1996 Annual Meeting of Stockholders was held October 17,
1996.
(b) Not
applicable.
(c) The
following matters were voted upon at the 1996 Annual
Meeting of Stockholders:
1.Election of Directors
The following directors were elected at the 1996 Annual
Meeting of Stockholders:
Term expiring in 1998 Billie B. Turner
Term expiring in 1999 Robert E. Fowler, Jr.
" " " " Harold H. MacKay
" " " " David B. Mathis
" " " " Richard L. Thomas
The following directors continue in office:
Raymond E. Bentele
Wendell F. Bueche
Rod F. Dammeyer
Dr. James M. Davidson
Thomas H. Roberts, Jr.
Joseph P. Sullivan
Dr. Clayton K. Yeutter
2.Approval of the 1996 Long-Term Incentive Plan
The adoption of the 1996 Long-Term Incentive Plan to provide
long-term incentives to executive officers and key employees
of the Company was ratified by the affirmative vote of
holders of an aggregate of 78,790,915 shares of common stock.
Holders of 1,115,125 shares of common stock voted against
adoption. Holders of 3,341,698 shares of common stock
abstained from voting.
3.Approval of an amendment to the 1988 Stock Option and Award
Plan
<PAGE>
The adoption of the amendment to the Company's 1988 Stock
Option and Award Plan to limit the aggregate number of shares
of common stock that may be subject to options granted in any
fiscal year to any employee to 500,000 shares was ratified by
the affirmative vote of holders of an aggregate of 78,716,193
shares of common stock. Holders of 1,187,045 shares of
common stock voted against adoption. Holders of 3,344,500
shares of common stock abstained from voting.
4.Approval of Appointment of Independent Auditors.
The appointment of Ernst & Young LLP, independent
accountants, as auditors of the Registrant for the fiscal
year ending June 30, 1997, was ratified by the affirmative
vote of holders of an aggregate of 83,188,578 shares of
common stock. Holders of 18,179 shares of common stock voted
against the appointment. Holders of 40,981 shares of common
stock abstained from voting.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit
No. Description
----------
----------------------------------------------
10.77 1996 Long-Term Incentive Plan
11.3 Fully diluted earnings per share computation for the
three months ended September 30, 1996
27 Financial Data Schedule
(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.
/s/ Anne M. Scavone
----------------------------------
Anne M. Scavone
Corporate Controller
(on behalf of the Registrant and as
Chief Accounting Officer)
Date: November 13, 1996
IMC GLOBAL INC.
1996 LONG-TERM INCENTIVE PLAN
I. Introduction
1.1 Purpose. The 1996 Long-Term Incentive Plan (the "Plan") of IMC
Global Inc. (the "Company") is intended to operate in conjunction with
the IMC Global Inc. 1988 Stock Option and Award Plan to provide long-
term incentives to officers and other key employees of the Company and
its subsidiaries and thereby advance the interests of the Company by
attracting and retaining officers and other key employees and
motivating such persons to act in the long-term best interests of the
Company's stockholders.
1.2 Certain Definitions.
"Board" shall mean the Board of Directors of the Company.
"Business Unit" shall mean a subsidiary, division, joint venture
or other unit of the Company's business which is designated as such by
the Committee.
"Change in Control" shall have the meaning set forth in Section
3.6(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Committee designated by the Board,
consisting of two or more members of the Board, each of whom shall be
(i) a "Non-Employee Director" within the meaning of Rule 16b-3 under
the Exchange Act and (ii) an "outside director" within the meaning of
Section 162(m) of the Code, subject to any transition rules applicable
to the definition of outside director.
"Common Stock" shall mean the common stock, $1.00 par value, of
the Company.
"Company" has the meaning specified in Section 1.1.
"Economic Profit" shall have the meaning specified in Section
2.2(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the mean between the highest and
lowest prices at which the Common Stock is traded on the date on which
such value is being determined, as reflected on the consolidated tape
of New York Stock Exchange issues, or if such date is not a trading
day, on the first trading day preceding such date. If there are no
such sales of Common Stock on the date on which such value is being
determined (or on the first trading day preceding such date, if
applicable) the mean between the bid and the asked prices as reflected
on the consolidated tape of New York Stock Exchange issues at the close
of the market on such date shall be deemed to be the fair market value
of the Common Stock.
"Incumbent Board" shall have the meaning set forth in Section
3.6(b)(2) hereof.
"Performance Award" shall mean a right, contingent upon the
attainment of specified Performance Measures within a specified
Performance Period, to receive payment in cash or in shares of Common
Stock of a specified amount.
"Performance Measures" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met during
the applicable Performance Period as a condition to the holder's
receipt of the payment with respect to a Performance Award. Such
criteria and objectives shall be based on the Economic Profit of a
Business Unit and/or of the Company as a whole. If the Committee
desires that compensation payable pursuant to any award subject to
Performance Measures be "qualified performance-based compensation"
within the meaning of Section 162(m) of the Code, the Performance
Measures (i) shall be established by the Committee no later than 90
days after the beginning of the Performance Period (or such other time
designated by the Internal Revenue Service) and (ii) shall satisfy all
other applicable requirements imposed under Treasury Regulations
promulgated under Section 162(m) of the Code, including the requirement
that such Performance Measures be stated in terms of an objective
formula or standard.
"Performance Period" shall mean the period determined under
Section 2.2(c)during which the Performance Measures applicable to a
Performance Award shall be measured.
"Subsidiary" shall have the meaning set forth in Section 1.4.
"Tax Date" shall have the meaning set forth in Section 3.4.
1.3 Administration. This Plan shall be administered by the Committee.
The Committee shall, subject to the terms of this Plan, select eligible
persons for participation in this Plan and determine the form, amount
and timing of each award to such persons, the time and conditions of
payment of the award and all other terms and conditions of the award.
The Committee may, in its sole discretion and for any reason at any
time, subject to the requirements imposed under Section 162(m) of the
Code and regulations promulgated thereunder in the case of an award
intended to be qualified performance-based compensation, take action
such that all or a portion of the Performance Period applicable to any
outstanding Performance Award shall lapse, and the Performance Measures
applicable to any outstanding Performance Award shall be deemed to be
satisfied at the maximum or any other level. The Committee shall,
subject to the terms of this Plan, interpret this Plan and the
application thereof, establish rules and regulations it deems necessary
or desirable for the administration of this Plan and may impose,
incidental to the grant of an award, conditions with respect to the
award, such as limiting competitive employment or other activities.
All such interpretations, rules, regulations and conditions shall be
final, binding and conclusive.
The Committee may delegate some or all of its power and authority
hereunder to the Chief Executive Officer (the "CEO") or such other
executive officer of the Company as the Committee deems appropriate;
provided, however, that the Committee may not delegate its power and
authority with regard to (i) the grant of an award to any person who is
a "covered employee" within the meaning of Section 162(m) of the Code
or who, in the Committee's judgment, is likely to be a covered employee
at any time during the period an award hereunder to such employee would
be outstanding or (ii) the selection for participation in this Plan of
an officer or other person subject to Section 16 of the Exchange Act or
decisions concerning the timing or amount of an award to such an
officer or other person.
A majority of the Committee shall constitute a quorum. The acts
of the Committee shall be either (i) acts of a majority of the members
of the Committee present at any meeting at which a quorum is present or
(ii) acts approved in writing by all of the members of the Committee
without a meeting.
1.4 Eligibility. Participants in this Plan shall consist of such
officers and other key employees of the Company, and its subsidiaries
(individually a "Subsidiary" and collectively the "Subsidiaries"),
including IMC-Agrico MP, Inc., as the Committee in its sole discretion
may select from time to time. For purposes of this Plan, references to
employment by the Company shall also mean employment by a Subsidiary.
The Committee's selection of a person to participate in this Plan at
any time shall not require the Committee to select such person to
participate in this Plan at any other time.
II. Performance Awards
2.1 Performance Awards. The Committee may, in its discretion, grant
Performance Awards to such eligible persons as may be selected by the
Committee.
2.2 Terms of Performance Awards. Performance Awards shall be subject
to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as
the Committee shall deem advisable.
(a) Amount of Performance Award. The amount of a Performance
Award shall be determined by the Committee; provided, however, that the
maximum amount that may be paid to any individual under any Performance
Award for any Performance Period shall not exceed $3,000,000, adjusted
for increases in the Consumer Price Index between July 1, 1996 and the
beginning of the Performance Period.
(b) Performance Measures. The Performance Measures applicable to
a Performance Award shall be determined by the Committee based upon
the achievement during the applicable Performance Period of the
Economic Profit goals established by the Committee for the Business
Unit in which the holder of the Performance Award is employed and/or
for the Company as a whole.
Economic Profit means "After-Tax Cash Flow" (defined below)
divided by "Capital Employed" (defined below).
"After-Tax Cash Flow" means earnings before interest, taxes,
depreciation, depletion and amortization ("EBITDA") less cash taxes
(i.e. provision for income taxes excluding deferred taxes).
"Capital Employed" means working capital (excluding cash, current
and deferred tax assets and liabilities and short-term debt) plus gross
fixed assets (before accumulated depreciation and depletion and
excluding joint venture step-up) and other assets (before accumulated
amortization of goodwill). Capital Employed will be calculated based
on beginning of month (or quarter) balances resulting in a 12-month (or
4-quarter) average for the year.
(c) Performance Periods. In general, a Performance Period shall
be a period consisting of three consecutive fiscal years of the
Company. The first and second Performance Periods, however, shall
consist of one and two fiscal years of the Company, respectively,
beginning with the fiscal year of the Company beginning July 1, 1996.
(d) Settlement of Performance Awards. A Performance Award may
be settled in shares of Common Stock by means of a restricted stock
award under the terms of the IMC Global Inc. 1988 Stock Option and
Award Plan or cash or a combination thereof, as determined by the
Committee. Prior to the settlement of a Performance Award in shares of
Common Stock, the holder of such award shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock
subject to such award and shall have rights as a stockholder of the
Company in accordance with Section 3.8.
2.3 Termination of Employment or Service. All of the terms relating
to the satisfaction of Performance Measures and the termination of the
Performance Period relating to a Performance Award, or any cancellation
or forfeiture of such Performance Award upon a termination of
employment with the Company of the holder of such Performance Award,
whether by reason of disability, retirement, death or other
termination, shall be determined by the Committee and communicated to
the recipient of a Performance Award at the time the Performance Award
is granted.
III. General
3.1 Effective Date and Term of Plan. This Plan shall be submitted to
the stockholders of the Company for approval and, if approved by the
affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the 1996 annual meeting of
stockholders of the Company, shall become effective on the date of such
approval. This Plan shall terminate ten years after its effective
date, unless terminated earlier by the Board. Termination of this Plan
shall not affect the terms or conditions of any award granted prior to
termination.
3.2 Amendments. The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval required
by applicable law, rule or regulation, including Section 162(m) and
Section 422 of the Code; provided, however, that no amendment shall be
made without stockholder approval if such amendment would extend the
term of this Plan. No amendment may impair the rights of a holder of
an outstanding award without the consent of such holder.
3.3 Non-Transferability of Awards. No award shall be transferable
other than by will, the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company. Each award
may be settled during the holder's lifetime only by the holder or the
holder's legal representative or similar person. No award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of
any such award, such award and all rights thereunder shall immediately
become null and void.
3.4 Tax Withholding. The Company shall have the right to require,
prior to the issuance or delivery of any shares of Common Stock or the
payment of any cash pursuant to an award made hereunder, payment by the
holder of such award of any Federal, state, local or other taxes which
may be required to be withheld or paid in connection with such award.
The Committee may determine that (i) the Company shall withhold whole
shares of Common Stock which would otherwise be delivered to a holder,
having an aggregate Fair Market Value determined as of the date the
obligation to withhold or pay taxes arises in connection with an award
(the "Tax Date"), or withhold an amount of cash which would otherwise
be payable to a holder, in the amount necessary to satisfy any such
obligation or (ii) the holder may satisfy any such obligation by any of
the following means: (A) a cash payment to the Company, (B)
authorizing the Company to withhold whole shares of Common Stock which
would otherwise be delivered having an aggregate Fair Market Value,
determined as of the Tax Date, or withhold an amount of cash which
would otherwise be payable to a holder, equal to the amount necessary
to satisfy any such obligation, (C) any combination of (A) and (B), in
each case to the extent set forth in the Agreement relating to the
award; provided, however, that the Company shall have sole discretion
to disapprove of an election pursuant to any of clauses (B) and (C) and
that in the case of a holder who is subject to Section 16 of the
Exchange Act, the Company may require that the method of satisfying
such an obligation be in compliance with Section 16 and the rules and
regulations thereunder. Any fraction of a share of Common Stock which
would be required to satisfy such an obligation shall be disregarded
and the remaining amount due shall be paid in cash by the holder.
3.5 Adjustment. In the event of any recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation,
spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities available for the payment
of Performance Awards under this Plan shall be appropriately adjusted
by the Committee. The decision of the Committee regarding any such
adjustment shall be final, binding and conclusive. If any such
adjustment would result in a fractional security being available under
this Plan, such fractional security shall be disregarded.
3.6 Change in Control.
(a) (1) Notwithstanding any provision in this Plan, in the event
of a Change in Control, the Committee may, but shall not be required
to, make such adjustments to outstanding awards hereunder as it deems
appropriate, including, without limitation, causing the Performance
Period applicable to any outstanding Performance Award to lapse,
causing the Performance Measures applicable to any outstanding
Performance Award to be deemed to be satisfied at the minimum, target
or maximum level, or electing that each outstanding award shall be
surrendered to the Company by the holder thereof, and that each such
award shall immediately be canceled by the Company, and that the holder
shall receive, within a specified period of time from the occurrence of
the Change in Control, a cash payment from the Company in an amount
equal to the amount payable with respect to such Performance Award if
the applicable Performance Measures were satisfied at the maximum
level.
(b) "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
15% or more of either (i) the then outstanding shares of common stock
of the Company (the "Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Voting
Securities"); excluding, however, the following: (A) any acquisition
directly from the Company (excluding any acquisition resulting from the
exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired
directly from the Company), (B) any acquisition by the Company, (C)
any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by
the Company or (D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (3) of this Section 3.6(b);
(2) individuals who, as of the date this Plan is approved by the
Board of Directors constitute the Board of Directors (the "Incumbent
Board") cease for any reason to constitute at least a majority of such
Board; provided that any individual who becomes a director of the
Company subsequent to the date this Plan is approved by the Board of
Directors whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member
of the Incumbent Board; and provided further, that any individual who
was initially elected as a director of the Company as a result of an
actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act, or any
other actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall not be deemed a member
of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation of the Company or sale or other
disposition of all or substantially all of the assets of the Company (a
"Corporate Transaction"); excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals or
entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 60% of, respectively, the outstanding
shares of common stock, and the combined voting power of the
outstanding securities of such corporation entitled to vote generally
in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or indirectly) in substantially the same proportions relative
to each other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (ii) no Person (other than: the
Company; any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company;
the corporation resulting from such Corporate Transaction; and any
Person which beneficially owned, immediately prior to such Corporate
Transaction, directly or indirectly, 25% or more of the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power
of the outstanding securities of such corporation entitled to vote
generally in the election of directors and (iii) individuals who were
members of the Incumbent Board will constitute at least a majority of
the members of the board of directors of the corporation resulting from
such Corporate Transaction; or
(4) the consummation of a plan of complete liquidation or
dissolution of the Company.
3.7 No Right of Participation or Employment. No person shall have any
right to participate in this Plan. Neither this Plan nor any award
made hereunder shall confer upon any person any right to continued
employment by the Company, any Subsidiary or any affiliate of the
Company or affect in any manner the right of the Company, any
Subsidiary or any affiliate of the Company to terminate the employment
of any person at any time without liability hereunder.
3.8 Rights as Stockholder. No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock
or other equity security of the Company which is subject to an award
hereunder unless and until such person becomes a stockholder of record
with respect to such shares of Common Stock or equity security.
3.9 Governing Law. This Plan, each award hereunder, and all
determinations made and actions taken pursuant thereto, to the extent
not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts
of laws.
3.10 Foreign Employees. Without amending this Plan, the Committee may
grant awards to eligible persons who are foreign nationals on such
terms and conditions different from those specified in this Plan as may
in the judgment of the Committee be necessary or desirable to foster
and promote achievement of the purposes of this Plan and, in
furtherance of such purposes the Committee may make such modifications,
amendments, procedures, subplans and the like as may be necessary or
advisable to comply with provisions of laws in other countries or
jurisdictions in which the Company or its Subsidiaries operates or has
employees.
EXHIBIT 11.3
EARNINGS (LOSS) PER SHARE
FULLY DILUTED COMPUTATION
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS)
At September 30,
-----------------------
1996 1995
---------- ----------
Basis for computation of fully diluted
earnings per share:
Earnings before extraordinary item,
as reported $ 28.6 $ 32.1
Add interest charges on convertible debt 1.8 1.8
Less provision for taxes (.7) (.7)
---------- ----------
Earnings before extraordinary item,
as adjusted 29.7 33.2
Extraordinary loss - debt retirement 7.5
---------- ----------
Net earnings applicable to common stock $ 22.2 $ 33.2
========== ==========
Number of shares:
Weighted average shares outstanding 93,629,449 92,220,755
Conversion of convertible subordinated
notes into common stock 3,619,783 3,622,040
---------- ----------
Total common and common equivalent
shares assuming full dilution 97,249,232 95,842,795
========== ==========
Fully diluted earnings per share:
Earnings before cumulative effect of
accounting change and extraordinary item $ .31 $ .35
Extraordinary loss - debt retirement (.08)
---------- ----------
Net earnings $ .23 $ .35
========== ==========
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.
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<ARTICLE> 5
<MULTIPLIER> 1000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,600
<SECURITIES> 52,900
<RECEIVABLES> 232,100
<ALLOWANCES> 7,700
<INVENTORY> 514,400
<CURRENT-ASSETS> 876,000
<PP&E> 4,171,200
<DEPRECIATION> 1,821,800
<TOTAL-ASSETS> 3,386,300
<CURRENT-LIABILITIES> 328,700
<BONDS> 717,800
<COMMON> 98,000
0
0
<OTHER-SE> 1,075,900
<TOTAL-LIABILITY-AND-EQUITY> 3,386,300
<SALES> 603,600
<TOTAL-REVENUES> 603,600
<CGS> 448,100
<TOTAL-COSTS> 504,500
<OTHER-EXPENSES> 39,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,100
<INCOME-PRETAX> 45,000
<INCOME-TAX> 16,400
<INCOME-CONTINUING> 28,600
<DISCONTINUED> 0
<EXTRAORDINARY> 7,500
<CHANGES> 0
<NET-INCOME> 21,100
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
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