(NOTIFY) 72731,347 (CONTACT-NAME) David A. Kain (CONTACT-PHONE) (312) 861-6050 PAGE 0 DOCUMENT HEADER DOCUMENT DESCRIPTION 8-K-A DOCUMENT TYPE 1 COUNT 28 PAGE 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K-A Amendment to Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Amendment No. 1 Amendment to Current Report on Form 8-K date January 28, 1994, and filed on February 14, 1994 FMC CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-2376 94-0479804 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 200 East Randolph Drive, Chicago, Illinois 60601 (Address of principal executive offices) Zip Code) (312) 861-6000 Registrant's telephone number, including area code PAGE 2 The undersigned registrant hereby amends the following item of its Current Report on Form 8- K dated January 28, 1994, and filed February 14, 1994, as set forth in the pages attached hereto: Item 7. Financial Statements and Exhibits (a) Financial Statements of BMY-Combat Systems- A Division of Harsco Corporation 1. Independent Auditors Report 2. Balance Sheet as of December 31, 1993 3. Statement of Income for the Year 1993 4. Statement of Cash Flows for the Year 1993 5. Notes to Financial Statements (b) Pro Forma Financial Information (unaudited) to reflect FMC's acquisition of an interest in United Defense, L.P. formed to combine FMC's Defense Systems Group and Harsco's BMY-Combat Systems Division 1. Balance Sheet as of December 31, 1993 2. Statement of Income for the Year Ended December 31, 1993 (c) Exhibits Number Exhibit 15 Consent of Independent Accountants PAGE 3 ITEM 7(a) BMY-COMBAT SYSTEMS A DIVISION OF HARSCO CORPORATION STATEMENT OF INCOME for the year 1993 (All dollars in thousands) 1993 Net sales $347,958 Operating expenses: Cost of sales 261,254 Selling, administrative and general expenses 20,510 Research and development 2,140 283,904 Profit from operations 64,054 Other income (expense): Interest income 25 Interest expense (16) Other, net 3 12 Income before provision for income taxes 64,066 Provision for income taxes 24,653 Net income $ 39,413 See accompanying notes to the financial statements. PAGE 4 BMY-COMBAT SYSTEMS A DIVISION OF HARSCO CORPORATION BALANCE SHEET as of December 31, 1993 (All dollars in thousands) 1993 ASSETS Current assets: Accounts receivable U.S. government $12,813 Other accounts receivable 32,503 Allowance for uncollectible accounts (30) $ 45,286 Inventories 86,815 Deferred income taxes 5,615 Other 759 Total current assets 138,475 Property, plant and equipment, net 50,597 Other assets 212 $189,284 PAGE 5 1993 LIABILITIES Current liabilities: Accounts payable $18,272 Accrued expenses: Compensation 8,628 Long-term contract costs 528 Insurance 1,205 Other 8,658 Advances on long-term contracts 78,882 Total current liabilities 116,173 Pension plans 4,452 Postretirement benefits 4,661 Deferred income taxes 3,544 Other liabilities 51 128,881 COMMITMENTS AND CONTINGENCIES Parent's Equity in Division 60,403 $189,284 See accompanying notes to the financial statements. PAGE 6 BMY-COMBAT SYSTEMS A DIVISION OF HARSCO CORPORATION STATEMENT OF CASH FLOWS for the year 1993 (All dollars in thousands) 					 1993 Cash flows from operating activities: Net income 								 $ 39,413 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 								 9,110 Loss on sale of equipment 								 39 Changes in assets and liabilities: Notes and accounts receivable 					 		30,728 Inventories 									 (15,363) Accounts payable 									 (3,916) Accrued long-term contract costs 								528 Advance deposits on long-term contracts received 								 38,383 Advance deposits on long-term contracts utilized 									(25,610) Other assets and liabilities								 3,656 Net cash provided by operating activities 								 76,968 Cash flows from investing activities: Expenditures for property, plant and equipment 								 (5,141) Proceeds from sale of property, plant and equipment 							 29 Net cash used by investing activities 								 (5,112) Cash flows from financing activities: Parent company capital withdrawals, net 								 (71,856) Net cash used by financing activities 								 (71,856) Net decrease in cash and cash equivalents 							 -0- Cash and cash equivalents at beginning of year 							 -0- Cash and cash equivalents at end of year 							 $ -0- See accompanying notes to the financial statements. PAGE 7 BMY-COMBAT SYSTEMS A DIVISION OF HARSCO CORPORATION STATEMENT OF CHANGES IN PARENT'S EQUITY IN DIVISION for the year 1993 (All dollars in thousands) 														 1993 Balance January 1, 1993 														 $ 92,846 Net income 														 39,413 Parent company capital withdrawals, net												 (71,856) Balance December 31, 1993 														 $ 60,403 See accompanying notes to the financial statements. PAGE 8 BMY-COMBAT SYSTEMS A DIVISION OF HARSCO CORPORATION NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation: The BMY-Combat Systems Division of Harsco Corporation (BMY-CS) is a prime contractor to the United States Department of Defense for the design, development and manufacturing of select defense systems composed mainly of tracked vehicles, and an important supplier to international customers. This Division is also a provider of research and development services to the U.S. Government and a co-producer of tracked vehicles in the Far East. BMY-CS's customer basis is limited, by the nature of its current products, to U.S. and foreign government agencies. In 1993, two customers comprise 95% of net sales. The financial statements reflect the results of operations and financial position of BMY-CS, including certain allocations by the parent company. For the purpose of this presentation, various assets and liabilities of Harsco Corporation which relate to the operations of BMY-CS (whether actual or contingent) are reflected in these financial statements as if BMY-CS was a stand-alone entity. Cash and Capital Requirements: As an operating division of Harsco Corporation (Harsco), BMY-CS participates in Harsco's centralized cash management system. Accordingly, cash received from BMY-CS's operations is administered centrally along with the financing of working capital requirements and capital expenditures. Under this system BMY- CS has had no external sources of financing, such as available lines of credit, as may be necessary to operate as a separate entity. The statement of cash flow is prepared as though the cash received and disbursed on behalf of BMY- CS by Harsco was transacted through BMY-CS. Inventory Valuation: Inventories are stated at the lower of cost or market, cost being determined using the average cost method. Property, Plant and Equipment: Property, plant and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. Generally, when property is retired from service, the cost of the retirement is charged to the allowance for depreciation to the extent of the accumulated depreciation thereon and the balance is charged to income. PAGE 9 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) Long-term Defense Contracts: Defense contracts are accounted for under the percentage of completion (units-of-delivery) method, whereby sales and estimated average cost of the units to be produced under a contract are recognized as deliveries are made or accepted. Changes in estimates for sales, costs, and profits are recognized in the period in which they are determinable using the cumulative catch- up method of accounting. Claims are considered in the estimated contract performance at such time as realization is probable. Any anticipated losses on contracts are charged to operations as soon as they are determinable. Inventory costs include factory overhead, general and administrative expenses, initial tooling and other related costs. BMY-CS sponsored research and development costs are charged to expense or allocated to production contracts, as applicable, when incurred. Under certain arrangements in which a customer shares in product development costs, BMY-CS's portion of such costs are expensed as incurred. Income Taxes: BMY-CS is not a separate tax paying entity. Accordingly, its results of operations have been included in tax returns filed by Harsco. The accompanying financial statements include a charge in lieu of tax which approximates the tax provision assuming BMY-CS filed separate returns and utilized an Export Sales Corporation. This tax provision is prepared as though the Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" was adopted prior to 1993. Employee Benefits: BMY-CS's salaried employees are covered under a Harsco pension plan and hourly employees under a BMY-CS pension plan, both are noncontributory, covering substantially all its employees. The benefits for salaried employees generally are based on years of service and the employee's level of compensation during specified periods of employment. The BMY-CS plan covering hourly employees generally provides benefits of stated amounts for each year of service. The funding policy for qualified plans is consistent with federal regulations and customarily equals the amount deducted for federal income tax purposes. BMY-CS's policy is to amortize prior service costs over the average future service period of active plan participants. PAGE 10 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) Employee Benefits (Continued): BMY-CS provides and accrues postretirement life insurance benefits for a majority of employees, and postretirement health care benefits for a limited number of employees. The postretirement health care and life insurance plans are unfunded. Effective January 1, 1993, BMY-CS adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS 112). This statement requires companies to accrue postemployment benefits if the obligation is attributable to employees' services already rendered, employees' rights to those benefits accumulate or vest, payment of the benefits is probable and the amount of the benefits can be reasonably estimated. As of January 1, 1993 there was no accumulated effect to be recorded. Casualty Insurance: BMY-CS, through Harsco's wholly-owned captive insurance company, provides for the payment of its claims under a risk retention program. BMY- CS is insured for workers compensation, automobile, general, and product liability losses through this risk retention program. BMY- CS accrues for the estimated losses occurring from both asserted and unasserted claims. The estimate of the liability for unasserted claims arising from unreported incidents is allocated to BMY-CS based on an analysis of historical claims data. Monthly contributions are made by Harsco to the captive insurance company to provide funding for its retained risk. Environmental Compliance and Remediation: Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with completion of a feasibility study or BMY-CS's commitment to a plan of action based on the then known facts. PAGE 11 2. INVENTORIES: Inventories are summarized as follows: (In thousands) 													 1993 Classification: Long-term contract costs (including general and administrative costs of $7,432) 														 $105,849 Contract loss reserves 															 (2,372) Progress payments - U.S. Government 														 (16,662) 													 $ 86,815 Valued at lower of cost or market: Average cost basis 													 $ 86,815 BMY-CS has incurred costs that are assignable to units not yet produced. The aggregate amount incurred, exclusive of raw materials and purchased parts included in long-term contract costs, was $12,041,000 as of December 31, 1993. These costs relate primarily to U.S. Government contracts for certain tracked vehicles. The U.S. Government has a lien on inventories to the extent of any progress payments relating thereto. PAGE 12 3. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment, net consists of the following: (In thousands) 1993 Land 	 $ 991 Buildings and improvements 	 36,309 Machinery and equipment 	 84,443 Uncompleted construction 	 1,317 	123,060 Less allowance for depreciation 	72,463 	 $50,597 PAGE 13 4. INCOME TAXES: Income before taxes and the provision for income taxes in the statement of income consist of: (In thousands) 												 1993 Income before provision for income taxes: 														 $64,066 Provision for income taxes: Currently payable: Federal 														 $19,004 State 														 4,644 														 23,648 Deferred Federal 														 790 Deferred State 														 215 														 $24,653 These financial statements have been prepared as though the financial responsibility for income taxes currently payable has been retained by Harsco. The following is a reconciliation of the normal expected statutory federal income tax rates to the effective rates as a percentage of income before provision for income taxes as reported in the financial statements: 																			 1993 U.S. federal income tax rate 																				 35.0% State income taxes, net of federal income tax benefit 																				 4.9 Export sales corporation benefit 																				 (1.4) Effective income tax rate 																				 38.5% PAGE 14 4. INCOME TAXES: (continued) The tax effects of the primary temporary differences giving rise to deferred tax assets and liabilities as of December 31, 1993 are as follows: (In thousands) 																	 1993 Deferred Income Taxes: 																			 Asset Liability Depreciation 																		 $ - $5,450 Expense accruals 																		 5,044 	 - Inventories 																		 559 	 - Postretirement benefits 																		 1,906 	 - Other 																		12 	 - Total deferred income taxes																	$7,521 	 $5,450 PAGE 15 5. EMPLOYEE BENEFIT PLANS: The status of defined benefit plans at December 31, 1993, is as follows: 																	 Salary Hourly (In thousands) 																	 Plan Plan Actuarial present value of benefit obligations: Vested 																				 $11,707													$20,921 Non-Vested 																 1,617																	455 Accumulated benefit obligation 													13,324 					 21,376 Effect of increase in compensation 															 12,905 			 - Projected benefit obligation 													 26,229 					 21,376 Plan assets at fair value 										21,864 								 22,894 Plan assets in excess of (less than) projected benefit obligations													 (4,365) 					 1,518 Unrecognized prior service costs 												 2,118 						 2,835 Unrecognized net (gain) loss 													 (256) 						 (802) Unrecognized transition asset (2,503) 						 (2,997) Prepaid (Accrued) pension cost $(5,006) 					 $ 554 Plan assets are primarily those assets that are part of a collective investment trust fund in which other Harsco Division pension plans participate. The fund assets include equity and fixed income securities. PAGE 16 5. EMPLOYEE BENEFIT PLANS: (continued) Pensions: Net pension cost includes the following components: 									 1993 (In thousands) 									 Salary					 Hourly							Total Defined benefit plans Service cost 											 $ 2,700					 $ 921					 $ 3,621 Interest cost 											 1,478					 1,367					 2,845 Actual return on plan assets											(1,938)						(2,415) 					(4,353) Net amortization and deferral 									 11 						 506 						 517 Net periodic pension cost 											$ 2,251 					$ 379					 $ 2,630 The actuarial assumptions used in computing the above are as follows: 										 Salary 		 Hourly 											Plan Plan Assumed discount rate 									 7.0% 	 7.0% Expected average rate of return on plan assets 									 9.0% 	 9.0% Assumed average rate of compensation increase 									 5.0% 			 - BMY-CS's pension assets and expense under the Harsco salary pension plan are determined under the allocation method. Under this method, market value of assets at the end of each year is determined by adding to the beginning value the allocated contributions, investment income and gains and subtracting allocated investment losses, benefits payments and expenses for the year. PAGE 17 5. EMPLOYEE BENEFIT PLANS: (continued) Postretirement Benefits: Postretirement benefit (health care and life insurance) costs for 1993 include the following components: (In thousands) 									 1993 																					 Health Life 																					 Care Insurance 			 Total Service cost 																				$ 175 	$ 23 	 $ 198 Interest cost 																				 226 	 60 		 286 Total postretirement benefit costs 																				 $ 401 	$ 83 	 $ 484 The accumulated postretirement benefit obligation at December 31, 1993 is as follows: (In thousands) 												 1993 																							 Health Life 																								 Care Insurance 	Total Current retirees 																						 $ 167 $ 539 $ 706 Future retirees 																						 3,237 329 3,566 Total 																						 3,404 868 4,272 Unrecognized gain 																						 271 	 118 389 Accumulated postretirement benefit obligation 																						$3,675 $ 986 $4,661 The assumed discount rate used to measure the accumulated postretirement benefit obligation was 7.0% at December 31, 1993. The health care cost trend rate in 1993 was approximately 13%, decreasing to an ultimate rate in the year 2004 of approximately 6%. A one percentage point increase in the assumed health care cost trend rate for each future year would have increased the cost components of 1993 net periodic postretirement benefit cost by approximately $67,000 and would have increased the accumulated postretirement benefit obligation as of December 31, 1993 by approximately $495,000. PAGE 18 5. EMPLOYEE BENEFIT PLANS: (continued) Postemployment Benefits: In 1993, BMY-CS recorded $1,040,000 for postemployment benefits due to reductions in the workforce. Savings Plans: BMY-CS participates in Harsco's defined contribution savings plans designed to comply with the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA") and Section 401(k) of the Internal Revenue Code. The plans cover all eligible employees that wish to participate in the Plans. Employee contributions are generally determined as a percentage of covered employee's compensation received. The expense for contributions to the plans by BMY-CS was $1,441,000 in 1993. This expense is based on the actual payroll dollars of each BMY-CS employee contributions to the 401(k) Savings Plan. PAGE 19 6. COMMITMENTS AND CONTINGENCIES: M9 Armored Combat Earthmover Claim: BMY-CS and its legal counsel are of the opinion that the US. Government did not exercise option three under the M9 Armored Combat Earthmover (ACE) contract in a timely manner, with the result that the unit price for options three, four and five are subject to renegotiation. Claims reflecting BMY-CS's position have been filed with respect to all options purported to be exercised, which together with other claims on this program, will be in excess of $70 million (in excess of $60 million applies to late option exercise) plus interest. Other than the settlement of a minor claim on this contract, amounting to approximately $1.4 million, no recognition has been given in the accompanying financial statements for any recovery on these claims. BMY-CS is awaiting a decision on its Motion for Summary Judgment relating to the late option exercise that is now pending before the Armed Services Board of Contract Appeals. Government Furnished Equipment Overcharge Claims: BMY-CS filed a claim in the Armed Services Board of Contract Appeals asserting that the United State Government has overcharged BMY-CS in the sale of government furnished equipment on various contracts, all of which have been completed. BMY-CS has advised the Government that the overpayment on these contracts is approximately $24 million. The Government disputes BMY-CS's position, but the parties are exploring the possibility of settling this case and similar issues relating to other completed contracts that are not included in the litigation. Other Defense Litigation: On March 13, 1992, the U.S. Government filed the previously threatened counterclaim against BMY-CS in a civil suit alleging violations of the False Claims Act and breach of a contract to supply M109A2 Self-Propelled Howitzers. The counterclaim was filed in the United States Claims Court along with the Government's answer to BMY-CS's claim of approximately $5 million against the Government for costs incurred on this contract relating to the same issue. The Government claims breach of contract damages of $7.3 million and in addition seeks treble that amount under the False Claims Act plus unquantified civil penalties which BMY-CS estimates to be approximately $3.3 million. BMY-CS and its counsel believe it is unlikely BMY-CS will incur any material liability as a result of these claims. PAGE 20 6. COMMITMENTS AND CONTINGENCIES: Other Defense Litigation (Continued): Iran's Ministry of Defense has initiated arbitration procedures against BMY-CS under the rules of the International Chamber of Commerce for damages allegedly resulting from breach of various contracts executed by BMY-CS and the Ministry of Defense between 1970 and 1978. The contracts were terminated in 1978 and 1979 during the period of civil unrest in Iran that preceded the Iranian revolution. Iran has asserted a claim under one contract for repayment of a $7.5 million advance payment it made to BMY-CS, plus interest at 12% through June 27, 1991 in the amount of $25.3 million. Iran has also asserted a claim for damages under other contracts for $32.1 million plus interest. BMY-CS intends to assert various defenses and also has filed counterclaims against Iran for damages in excess of $7.5 million which it sustained as a result of Iran's breach of contract, plus interest; however, the ultimate outcome of this matter cannot presently be determined. Environmental: BMY-CS is involved in a number of environmental remediation investigations and clean-ups and, along with other companies, has been identified as a "potentially responsible party" for certain waste disposal sites. While each of these matters is subject to various uncertainties, it is probable BMY-CS will agree to make payments toward funding certain of these activities. It is possible that some of these matters will be decided unfavorably to BMY-CS. BMY- CS has evaluated its potential liability, and its financial exposure is dependent upon such factors as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the allocation of cost among potentially responsible parties, the years of remedial activity required and the remediation methods selected. The liability for future remediation costs is evaluated on a quarterly basis, and it is the opinion of management that any liability over the amounts accrued will not have a materially adverse effect on BMY-CS's financial position or results of operations. Other: BMY-CS is subject to various other claims, legal proceedings and investigations covering a wide range of matters that arose in the ordinary course of business. In the opinion of management, all such matters are adequately covered by insurance or by accruals, and if not so covered, are without merit or are of such kind, or involve such amounts, as would not have a significant effect on the financial position or results of operations of BMY-CS, if disposed of unfavorably. PAGE 21 7. LEASE OBLIGATIONS: Capital Leases: BMY-CS has a gross asset value of $577,000 for Machinery and Equipment under capital lease arrangements as of December 31, 1993. There is one year remaining of minimum lease payments amounting to $75,000 in 1994, related to these assets. Operating Leases: BMY-CS leases certain office space, and various office and manufacturing equipment under noncancellable operating leases. At December 31, 1993, total minimum lease payments are as follows: 																												 Amounts Years 																											 (In Thousands) 1994 																												 $1,159 1995 																													 638 1996 																													 310 1997 																													 155 1998 																													 70 Thereafter 																													 11 Total 																												 $ 2,343 Total operating lease expense in 1993 was $1,577,000. 8. FINANCIAL INSTRUMENTS: Off-Balance Sheet Risk: As collateral for performance and advances on long-term contracts and to ceding insurers, BMY-CS is contingently liable under standby letters of credit and bonds in the amount of $161.9 million at December 31, 1993. These standby letters of credit and bonds are generally in force from one to three years for which BMY-CS pays fees to various banks and insurance companies that generally range from .25 to 1 percent per annum of their face value. If BMY-CS were required to obtain replacement standby letters of credit and bonds as of December 31, 1993 for those currently outstanding, it is BMY-CS's opinion that the replacement costs for such standby letters of credit and bonds would not significantly vary from the present fee structure. Concentrations of Credit Risk: BMY-CS has a concentration of credit risk with respect to accounts receivable due to the limited number of customers, mainly the U.S. and foreign government agencies. At December 31, 1993, accounts receivable of $45,286,000 include a receivable from Saudi Arabia of $24,396,000. PAGE 22 9. RELATED PARTY TRANSACTIONS: The financial statements include allocations by Harsco for certain corporate administrative costs incurred for the benefit of all operating divisions. These costs are allocated to operating divisions on a variety of methodologies as follows: a)Specific identification - based on services provided. b)Relative identification - based on relevant criteria that establishes the division's relationship to the entire pool of beneficiaries. c)Formula driven - nonidentifiable to division but incurred for the benefit of all. Corporate costs include executive, legal, accounting, tax, auditing, cash management, safety, human resources, environmental and employee benefits. Allocated costs included in general and administrative expenses for 1993 were $4,416,000. The allocation methods, while reasonable under the current circumstances, may not represent the cost of similar activities on a separate entity basis. 10.SUBSEQUENT EVENT - FORMATION OF DEFENSE BUSINESS PARTNERSHIP: On January 28, 1994, FMC Corporation and Harsco announced the completion of the joint venture, that was first announced in December 1992, to combine FMC's Defense Systems Group and Harsco's BMY-Combat Systems Division. The new partnership is known as United Defense, L.P., and is effective January 1, 1994. United Defense, L.P. is jointly owned, with FMC holding an interest of 60 percent and Harsco holding 40 percent. FMC is the managing general partner, and Harsco is a limited partner. United Defense, L.P. expects to achieve annual sales of about $1 billion in 1994. PAGE 23 REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders of Harsco Corporation: We have audited the accompanying balance sheet of BMY-Combat Systems, a division of Harsco Corporation, as of December 31, 1993, and the related statements of income, changes in parent's equity in division, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BMY-Combat Systems, a division of Harsco Corporation, as of December 31, 1993, and the results of its operations and its cash flows for the year ended December 31, 1993 in conformity with generally accepted accounting principles. As discussed in Note 6 to the financial statements, the Company is involved in a dispute regarding a breach of contract and other unrelated contract matters. Also, the Company has filed or is in the process of filing various claims against the Government relating to certain contracts. The ultimate outcome of these matters cannot presently be determined. Accordingly, no provision for such potential additional losses or recognition of possible recovery from such claims has been reflected in the accompanying financial statements. /S/ Coopers & Lybrand Philadelphia, Pennsylvania January 28, 1994 PAGE 24 ITEM 7(b) FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION (Unaudited) On January 28, 1994, FMC Corporation ("FMC") and Harsco Corporation ("Harsco") announced completion of a series of agreements ("Agreements"), first announced in December 1992, to combine certain assets and liabilities of FMC's Defense Systems Group ("DSG") and Harsco's BMY Combat Systems Division ("BMY"). The effective date of the combination was January 1, 1994. The combined company, United Defense, L. P. ("UDLP"), will operate as a limited partnership, with FMC as the Managing General Partner with a 60 percent equity interest and Harsco Defense Holding as the Limited Partner holding a 40 percent equity interest. The following unaudited pro forma financial statements combine the financial statements of FMC and consolidated subsidiaries and BMY and establish a minority interest in UDLP for Harsco's ownership. The assumption, for the balance sheet, is that the combination occurred on December 31, 1993, and for the income statement that the combination date was January 1, 1993. The pro forma operating results are not necessarily indicative of what would have occurred had the combination actually taken place on January 1, 1993, or of what they are expected to be in 1994. Also, no adjustments have been made to operations for the impact of certain anticipated operational and administrative efficiencies which are expected to be realized over the first two years of UDLP's operation. PAGE 25 FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES PRO FORMA COMBINED BALANCE SHEET (Unaudited) December 31, 1993 (In Millions) FMC BMY Pro forma Pro Assets Corporation Adjustments forma Combined Current Assets: Cash and marketable $ 78 $ - $ 5 (a) $ 83 securities Trade receivables, net 573 45 (38)(a) 580 Inventories 268 8 Other current assets 241 6 (6)(a) 241 Total current assets 1,160 138 (39) 1,259 Net property, plant & 1,390 51 - 1,441 equipment Other assets 263 - 37 (b) 300 Total assets $2,813 $ 189 $ (2) $3,000 Liabilities and stockholders' equity Current liabilities: Short-term debt and current maturities of long-term debt $ 82 $ - $ - $ 82 Accounts payable, trade and 501 97 (1)(a) 597 other Accrued and other 486 				 19 (4)(a) 501 liabilities Income taxes payable 87 					 - - 87 Total current liabilities 1,156 				 116 (5) 		 1,267 Long-term debt, less current 750 					 - - 750 Accrued pension and other post-retirement benefits, 303 				 9 - 312 less current Reserve for discontinued operations, restructuring and other reserves 344 				 - - 344 Deferred income taxes - 				4 (4)(a) 		 -	 Minority interests 43 				- 67 (b) 110 Stockholders' Equity 217 60 (60)(a)(b) 217 Total liabilities and stockholders' equity $ 2,813 $ 189 $ (2) $3,000 See accompanying notes to unaudited pro forma combined condensed financial statements PAGE 26 FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES PRO FORMA COMBINED STATEMENT OF INCOME (Unaudited) Year ended December 31, 1993 (In millions, except per share data) FMC BMY Pro Pro Corporation forma forma Adjustments Combined Sales and other revenue $3,789 $ 348 $ - $4,137 Costs and expenses: Cost of Sales 2,835 261 - 3,096 Selling, general and 540 21 (5)(c) 556 administrative Research and development 149 2 - 151 Restructuring and other 172 - - 172 charges Other (income) and expense, net (10) - 2(b)		 						(8) Total costs and expenses 3,686 284 (3) 3,967 Operating income 103 64 3 170 Interest income (expense) net (62) - - (62) Minority interests (3) - (84)(d) (87) Income before income taxes and extraordinary items 38 64 (81) 21 Income tax (expense) benefit 3 (25) 31(e) 9 Income before extraordinary $ 41 $ 3 $ (50) $ 30 items Earnings per common share before extraordinary items $ 1.11 $ 1.05 $(1.35) $ .81 Average common shares outstanding 36.9 36.9 36.9 36.9 See accompanying notes to unaudited pro forma condensed financial statements PAGE 27 FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (Unaudited) (a) Under the Agreements, Harsco is required to contribute net assets with a historical net book value of $30 million, including $5 million of cash. Harsco also will retain financial responsibility for certain items which are not contributed to the joint venture, including accounts receivable balances in excess of what needs to be contributed to meet the required net assets of $30 million. These adjustments are to reflect the contribution of cash, the retention of accounts receivable, and the elimination of those accounts provided for in the Agreements. (b) This adjustment provides for Harsco's initial equity interest in UDLP of $67 million, calculated at 40 percent of the combined net assets contributed by FMC and Harsco of $168 million; eliminates Harsco's capital contribution of $30 million; and establishes an intangible asset of $37 million. The assets and liabilities contributed by FMC and Harsco to the joint venture will be recorded at their historical net book values. Harsco's 40 percent equity interest in the joint venture exceeds the book value of its net assets contributed by approximately $37 million. As the fair market value of net assets contributed is considered to exceed the net book value of such net assets by at least $37 million, an intangible asset of $37 million is recorded. This amount will be amortized by FMC over a 15 year period, which is approximately the estimated remaining life of the property, plant and equipment contributed. The related amortization for 1993 would have been approximately $2 million, which is shown as an adjustment to Other (income) and expense. (c) $5 million of general and administrative expense incurred by Harsco and allocated to BMY in 1993 has been eliminated in order to approximate the operating results assuming the transaction had occurred on January 1, 1993. (d) The Agreements provide for sharing the income before income taxes of the venture generally on the basis of the partners' equity ownership interests, after giving effect to a limited partner preferred distribution. The minority interest adjustment of $84 million includes the limited partner preferred distribution and 40% of the remaining pro forma pre-tax earnings of UDLP. The pro forma earnings of the venture give effect to adjustments related to items for which financial responsibility will not be assumed by the venture (primarily certain customer contracts) in order to approximate the results of operations assuming the transaction had been effective on January 1, 1993. (e) The income tax benefit results from the pro forma adjustments to income at a combined Federal and State statutory tax rate of approximately 40%. PAGE 28 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FMC CORPORATION BY Robert L. Day Robert L. Day Corporate Secretary Date: April 14, 1994 PAGE 0 DOCUMENT HEADER DOCUMENT DESCRIPTION EXHIBIT INDEX DOCUMENT TYPE 2 COUNT 1 PAGE 1 EXHIBIT INDEX 																									 														 Sequential Exhibit No. 			 Exhibit Description Page No. 15 			 Letter regarding Audited 		 Financial Information																			1 PAGE 0 DOCUMENT HEADER DOCUMENT DESCRIPTION EXHIBIT 15 DOCUMENT TYPE 2 COUNT 1 PAGE 1 Exhibit 15 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the following registration statements of FMC Corporation and Subsidiary Companies of our report, which includes an explanatory paragraph regarding (i) a breach of contract and other unrelated contract matters and (ii) the Company's claims against the Government relating to certain contracts, dated January 28, 1994, on our audit of the balance sheet of BMY-Combat Systems, a division of Harsco Corporation, as of December 31, 1993, and the related statements of income, changes in parent's equity in division, and cash flows for the year then ended, which report is included in this Amendment No. 1 to Current Report on Form 8-K dated January 28, 1994, and filed on February 14, 1994. Form S-8 registration statement (registration No. 33-7749). Form S-8 registration statement (registration No. 33-10661). Form S-3 registration statement (registration No. 33-45648). Philadelphia, Pennsylvania April 14, 1994