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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1994
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 33-11634

TRANS-RESOURCES, INC.
(Exact name of registrant as specified in its charter)

Delaware 36-2729497
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
9 West 57th Street, New York, NY 10019
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (212) 888-3044
____________________
Securities registered pursuant to Section 12 (b) of the Act: NONE
____________________
Securities registered pursuant to Section 12 (g) of the Act: NONE
____________________
Indicate by check mark whether 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 registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES X NO
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. /X/

State the aggregate market value of the voting stock held by
non-affiliates of registrant. None held by non-affiliates

Indicate the number of shares outstanding of each of registrant's
classes of common stock, as of the latest practicable date.

Class Outstanding at March 27, 1995
----- -----------------------------

Common Stock, par value $.01 per share 3,000 shares
(Owned by TPR Investment Associates, Inc.)

Documents incorporated by reference.
None
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TABLE OF CONTENTS

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PART I

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . 11

PART II

Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 13

Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . 17

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 17

PART III

Item 10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . 18

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . 22

Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . 22

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . 23

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

PART I

ITEM 1. Business

Trans-Resources, Inc., a privately owned Delaware corporation ("the
Company"), is a multinational manufacturer of specialty plant nutrients,
organic chemicals, industrial chemicals and potash and distributes its products
in over 80 countries. The Company is the world's largest producer of potassium
nitrate, which is marketed by the Company principally under the brand names
K-Power domestically and Multi-K internationally (collectively, referred to as
K-Power). The Company is also the world's largest producer of propanil, a
leading rice herbicide. In addition, the Company is the largest United States
producer of potash. During 1994, specialty plant nutrients, organic chemicals,
industrial chemicals and potash contributed approximately 41%, 11%, 31% and
17%, respectively, of the Company's total revenues. The following table sets
forth the primary markets and applications for each of the Company's principal
products:

Principal Products Primary Markets Applications
------------------------- ------------------------------------- ------------------------------------

SPECIALTY PLANT NUTRIENTS
K-Power - Fresh fruits and vegetables, - Fertigation and foliar sprays
flowers, cotton and tobacco (fully soluble, readily absorbed,
Polyfeed Horticulture no harmful residues)
Multi-MAP Horticulture
Multi-MKP Horticulture
Magnisal Vegetables, citrus, tropical fruits
and flowers
Multicote - Vegetables, turf, fruit trees and - Time release of nutrients (to
potted plants optimize plant feeding and
minimize labor requirements)

ORGANIC CHEMICALS
Propanil - Rice - Broad spectrum weed control
Dichloroaniline - Organic chemical manufacturers - Intermediate propanil product
Butoxone - Peanuts - Weed control
Ethephon - Cotton, fruit and vegetables - Plant growth regulator
Custom Manufacturing - Various industrial companies - Various organic synthesis

INDUSTRIAL CHEMICALS
Technical Grade Potassium - Glass, ceramics, food, explosives, - Oxidization and ion exchange
Nitrate metal, petrochemical and heat
treatment industries
Potassium Carbonate - Glass, detergents and horticulture - Oxidization and cleansing
Phosphoric Acid - Industrial production, food and - Metal treatment, industrial
fertilizer industries cleaning and fermentation
Sodium Tripolyphosphate - Soaps and detergents - Cleansing ingredient
Monoammonium Phosphate - Chemical manufacturers - Fire extinguishing powders
Diammonium Phosphate Chemical manufacturers and fire retardant formulations
Monopotassium Phosphate - Food processing companies - Fermentation process
Sodium Acid Pyrophosphate - Food processing companies - Baking powders and potato
processing
Chlorine - Chemical companies - Water purification, production of paper pulp and PVC
pipe
Nitrogen Tetroxide - United States Government - Aerospace fuel additive

POTASH
Agricultural Grade - Corn, wheat, rice, soybeans - Fertilizer
Industrial Grade - Various industrial companies - Intermediate production of chemicals and lubricants

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Of the Company's total revenues for the year ended December 31, 1994,
approximately 37% and 35% were derived from sales in the United States and
Europe, respectively, with the remainder derived from sales in many other
countries.

On February 7, 1994, the smaller of the two potassium nitrate
production units of the Company's Israeli subsidiary, Haifa Chemicals Limited
("HCL"), was damaged by a fire, causing a temporary reduction of the Company's
potassium nitrate production capacity. The impact of the loss of the
production unit, including the effect of business interruption, is
substantially covered by insurance. The insurance proceeds for the property
damage is for replacement value, which substantially exceeds the recorded
carrying value of the damaged assets. See Note D of Notes to Consolidated
Financial Statements for additional information. The Company is currently
replacing the damaged production unit and expects to complete the construction
of the replacement unit by April, 1995.

Management is not aware of any independent, authoritative source of
information about sizes, growth rates or shares for the Company's markets. The
market size, market growth rate and market share estimates contained herein
have been developed by the Company from internal sources and reflect the
Company's current estimates. However, no assurance can be given regarding the
accuracy of such estimates.

The Company's operations are conducted through its direct and indirect
wholly-owned subsidiaries which include HCL, and HCL's wholly-owned subsidiary,
Haifa Chemicals South, Ltd., an Israeli corporation ("HCS"); Cedar Chemical
Corporation, a Delaware corporation ("Cedar"), and Cedar's wholly-owned
subsidiaries, Vicksburg Chemical Company, a Delaware corporation ("Vicksburg"),
and New Mexico Potash Corporation, a New Mexico corporation ("NMPC"); and Eddy
Potash, Inc., a Delaware corporation ("Eddy"). The Company was incorporated in
Delaware in 1971 under the name Trans-Pacific Resources, Inc.
("Trans-Pacific").

SPECIALTY PLANT NUTRIENTS

The Company is a multinational manufacturer of a range of specialty
plant nutrients, which contributed approximately $136,000,000 to the Company's
revenues for the fiscal year ended December 31, 1994, of which K-Power
contributed a substantial portion.

Products and Markets. K-Power, Polyfeed (a fully soluble plant
nutrient containing nitrogen, phosphate and potassium), Magnisal (magnesium
nitrate), Multi-MAP (monoammonium phosphate) and Multi-MKP (monopotassium
phosphate) are suitable for intensive high value crops such as fresh fruit and
vegetables, flowers, cotton and tobacco, since they are fully soluble, easily
absorbed and leave no harmful residues such as chloride, sodium or sulfate.
Because of their solubility, these products can be used with modern drip
irrigation systems, which are increasingly being employed to conserve water.
The Company produces several grades of agricultural potassium nitrate,
including standard and prilled. The Company is the world's largest producer of
potassium nitrate.

Worldwide demand for potassium nitrate has been growing steadily since
potassium nitrate was introduced in the 1960s. The market for K-Power has
enjoyed steady volume growth because it increases plant yields, improves crop
quality and shortens growing cycles. As a result, potassium nitrate commands a
price premium over other potassic plant nutrients such as potassium sulfate and
sulfate of potash magnesia, used in combination with ammonium nitrate.

After a multi-year research and development effort, the Company
developed a technology for the coating of potassium nitrate and other specialty
plant nutrients which promotes the controlled release of nutrients over time.
These products increase nutrient uptake by plants while minimizing fertilizer
runoff into the soil, thus satisfying growing environmental concerns, and
reducing labor requirements. The Company is marketing these controlled release
plant nutrients products under the Multicote brand name.

Marketing and Sales. As part of the Company's market development and
sales efforts, resident agronomists are located in the United States, Italy,
France, the United Kingdom, Greece, Mexico, South Africa, Japan and the Benelux
countries. The steady growth in demand for the Company's specialty plant
nutrients has been supported by agronomic activities in many countries which
have demonstrated the benefits of using K-Power. Horticultural and
agricultural growers generally require substantial testing under their own
specific climatic, soil and growing conditions before they will adopt a new
plant nutrient. The Company has developed application expertise which has
produced a growing number of applications and users.

To market its specialty plant nutrients, the Company has established a
worldwide network of agents and distributors and uses storage facilities in
certain countries to provide prompt and responsive customer service. However,
depending on the conditions prevailing in the particular market, certain large
users are serviced directly and certain products are covered by product
managers who have worldwide responsibility for such products. In order to
further improve service to its customers in Western Europe, the Company has
established subsidiaries in the United Kingdom, Belgium, Spain and Italy. A
French subsidiary engaged in the fertilizer business and having its own sales
and distribution network also markets the Company's specialty plant nutrients.
For United States sales, the Company utilizes its own sales force and also
works in selected areas through brokers.

In general, in the United States, the Company sells K-Power to
blenders who produce mixed fertilizers containing potassium nitrate, which is
then sold to growers. Internationally, the Company's distributors usually sell
directly to growers.

Manufacturing. The Company believes it accounts for approximately 65%
of the world's production of potassium nitrate and its current annual potassium
nitrate production capacity is approximately 510,000 metric tons. This
capacity includes the construction of the replacement of the plant damaged in
the February 1994 fire at HCL, which is scheduled to be completed in April,
1995. To meet the anticipated continued growing demand of the market, in late
1994 the Company expanded its production capacity by constructing a new
facility (the "K3 Plant") in Israel, with capacity to produce approximately
100,000 metric tons of potassium nitrate annually. Capacity of the K3 Plant
may be expanded in subsequent years. See "Facilities and Suppliers" below.

Competition. The Company's only significant competitor in the
production and sale of potassium nitrate is Sociedad Quimica Y Minera De Chile,
S.A., a Chilean company. The principal methods of competition are product
quality, customer service, agronomic expertise and price.

ORGANIC CHEMICALS

The Company's organic chemicals business has grown by building upon
its capabilities in specialized areas of complex organic synthesis. Its sales
were approximately $38,000,000 in 1994, with sales of propanil representing
approximately 62% thereof.

Products and Markets. The Company's organic chemicals products
include propanil (a leading rice herbicide, which Cedar markets principally
under the Cedar label and the brand names "Wham! EZ" and "Super Wham!"),
dichloroanaline ("DCA," the principal raw material for the production of
propanil), Butoxone (a peanut herbicide) and Diuron (a broad use herbicide used
on food crops, alfalfa and cotton). During 1994, the Company received an EPA
Registration for Ethephon, a cotton, fruit and vegetable growth regulator.
The Company estimates that it currently produces approximately 85% of the
propanil sold in the United States. The Company has also developed several new
propanil formulations which offer various advantages in terms of ease of
application and improved environmental impact in an effort to expand the
propanil market. The Company is currently the only producer of DCA in North
America.

Although the United States is currently the largest propanil market,
representing approximately 35% of the world market, the United States contains
only a small proportion of the world's rice acreage. Accordingly, the Company
believes there is significant potential for propanil growth internationally.
The

Company has established an international market development program to
introduce propanil to additional markets around the world. As the largest
propanil producer in the world and a low cost producer, the Company believes it
is positioned to benefit from growth in the international propanil market.

The Company also produces other organic chemicals as a contract
manufacturer for various chemical companies. Through this contract
manufacturing, the Company has developed certain techniques for the synthesis
of complex organic chemicals which has been beneficial to it in both its
contract manufacturing activities as well as its own developmental efforts for
proprietary products.

Marketing and Sales. The Company produces and sells propanil under
its own brand name and supplies propanil to other agrichemical companies under
long-term supply contracts. Sales by the Company of propanil and DCA under a
long-term supply contract with the company that, prior to 1992, was the world's
largest producer of propanil, represented approximately 17% of the Company's
sales of organic chemicals in 1994.

The Company sells propanil and its other organic chemical products
through its own sales force, distributors, regional dealers, cooperatives and
international brokers.

Manufacturing. The Company is a low cost producer of propanil as a
result of its 1991 acquisition, relocation and upgrading of a DCA manufacturing
plant. The Company intends to continue to expand its organic chemicals business
by developing and/or distributing new products that draw upon its skills in
organic chemical synthesis and/or its sales organization.

Competition. In the United States market, the Company competes
primarily with two other propanil suppliers, while in international markets the
Company competes with several producers. Propanil competes with several other
rice herbicides, but is currently the most commonly used rice herbicide.
Diuron and Ethephon compete with other products supplied by several
multi-national companies. In contract manufacturing, the Company competes with
various other producers and the basis of competition is generally the quality
and range of production capabilities, service and price.

INDUSTRIAL CHEMICALS

The Company's industrial chemical products include technical grade
potassium nitrate, technical and food grade sodium tripolyphosphate ("STPP"),
technical and food grade phosphoric acid, technical grade monoammonium
phosphate and diammonium phosphate ("MAP" and "DAP"), technical and food grade
monopotassium phosphate ("MKP"), food grade sodium acid pyrophosphate ("SAPP"),
chlorine, nitrogen tetroxide and food grade salts. Industrial chemicals
contributed approximately $103,000,000 to the Company's revenues for the fiscal
year ended December 31, 1994. The Company began production of potassium
carbonate in 1995 at a new plant constructed for this purpose by Vicksburg.

Products and Markets. Technical grade potassium nitrate is used in
the glass industry for making fine tableware glass, TV tubes and crystal glass;
in the metal industry for heat treatment; in the ceramics industry for the
glazing process; for making explosives and for the production of heat transfer
salts in the petrochemical industry; and for solar energy systems.

Phosphoric acid is used in metal treatment, industrial cleaning
solutions, fermentation processes and for carbonated drinks in the food
industry. STPP is used primarily in the manufacturing of detergents and
specialty cleaning compounds and in the textile and ceramic clay industry; MAP
and DAP are used for fire extinguishing powders and fire retardant functions;
MKP is used for the fermentation process; and SAPP is an ingredient in baking
powders and is used for potato processing. Chlorine is used in the pulp and
paper industry and as a swimming pool disinfectant. Nitrogen tetroxide is an
aerospace fuel additive. Food grade salts are used in food processing.
Potassium carbonate produced at Vicksburg's new plant will be used primarily in
the glass industry.

Marketing and Sales. The Company sells its industrial chemicals
through its own sales force and brokers in the United States and
internationally through a worldwide network of agents and distributors.
Nitrogen tetroxide is primarily sold under a long-term contract to the United
States Government. The Company utilizes storage facilities in certain
countries.

Production. Many of these industrial products are co-products of the
Company's potassium nitrate manufacturing process. Given its production
flexibility, the Company can vary the relative proportion of the various
phosphate chemicals (STPP, MAP, MKP, DAP and SAPP) to optimize its product mix
in light of then prevailing market conditions.

Competition. Certain of the Company's industrial chemicals products,
such as STPP and phosphoric acid, compete in large industrial chemical markets
in which the Company has a small position. Others, such as technical grade
potassium nitrate, MAP, MKP and nitrogen tetroxide have relatively significant
competitive positions in their respective niche markets. The nature of
competition for the various industrial chemicals sold by the Company varies by
product. However, in general, the principal methods of competition are product
quality, customer service and price.

POTASH

The Company is the largest United States producer of potash, producing
approximately 800,000 short tons in 1994, primarily for agricultural use as
fertilizer. During 1994, the Company's share of total potash production in the
United States was approximately 31% and its share of total North American
potash production was approximately 5%. Potash provides potassium, an
essential nutrient for a wide range of crops, including wheat, soybeans and
corn. The Company, through Eddy and NMPC, mines, refines and distributes
potash from two mines and related refineries located in New Mexico. Potash
sales in 1994, excluding intercompany sales to Vicksburg, amounted to
approximately $57,000,000.

Products and Markets. During 1994, approximately 73% of the Company's
potash production was sold as fertilizer and the balance was sold for
industrial uses or used by Vicksburg as a raw material in the production of
potassium nitrate. The Company does not view these operations as a source of
growth.

Marketing and Sales. In the United States, the Company's sales force
sells potash to blenders for fertilizer material and to industrial customers.
Export sales are handled by a sales subsidiary of Potash Corporation of
Saskatchewan. During 1994, the Company sold approximately 75% of its potash
production domestically and 25% internationally.

Average selling prices for potash in the United States have increased
over the last year, and continue to be above the 1987 price levels, at least in
part as a result of the United States Government's preliminary findings in a
Canadian potash antidumping investigation and the subsequent Canadian potash
antidumping agreement. If such agreement is terminated or violated by the
Canadian producers, then depending on the actions taken by the United States
Government, the production and pricing decisions of Canadian producers, and
other market factors, it is possible that the current price levels for potash
could decline substantially, which would adversely affect the Company's results
of operations. See Item 3 - "Legal Proceedings" below.

Production. The Company's potash is mined from approximately 90,000
acres which are under long-term lease, principally from the United States
Government and the State of New Mexico. Such leases cover estimated ore
reserves, as of December 31, 1994, of approximately 95,000,000 short tons of
recoverable ore, at thicknesses ranging from four to eight feet. At average
recovery rates these ore reserves are estimated to be sufficient to yield
approximately 16,500,000 short tons of potash concentrate with an average grade
of 60% to 62% "K2O" (a common standard of measurement established by the
industry by defining a product's potassium content in terms of equivalent
percentages of potassium oxide). As of December 31, 1994 and based on current
rates of production (aggregating approximately 800,000 short tons annually) and
depending on market conditions and production costs, these ore reserves are
estimated to be sufficient to support the mining operations of NMPC for
approximately 25 years and of Eddy for approximately 10 years. In June,

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1994, Eddy reduced its annual production rate by about 45% (to approximately
285,000 tons per year), reduced its workforce by about 30%, changed its product
mix to higher priced products and began mining a greater percentage of another
ore zone. These changes are anticipated to cause a significant improvement in
the estimated life of Eddy's mine reserves.

Competition. Potash is available from several sources, both domestic
and foreign, including very large Canadian sources of supply. As a result, the
market is highly competitive. Since potash is a commodity product, the most
significant competitive factor affecting sales is price.

FACILITIES AND SUPPLIERS

Vicksburg owns the property, plant and equipment located at its
Vicksburg, Mississippi site and Cedar owns the property, plant and equipment
located at its West Helena, Arkansas site. The Vicksburg plant consists of two
adjacent manufacturing plants situated on 600 contiguous acres. Vicksburg
recently completed the construction of a third manufacturing plant on its
property, which is being used for the production of potassium carbonate. The
West Helena plant is located on a 60 acre site. The plants are encumbered by
first mortgages and security interests securing long-term bank indebtedness.
Cedar's corporate offices are located in leased premises in Memphis, Tennessee.

The major raw materials required by Vicksburg for production of
potassium nitrate are potash supplied by NMPC and nitric acid which is produced
at the Vicksburg plant. Ammonia, the principal raw material required for
production of nitric acid, is supplied from two plants owned by a third party
in close proximity to the Vicksburg facility. The major raw material for the
production of propanil is DCA. The principal raw material for the production
of DCA is provided to the Company under a supply contract. Such raw material
is available from multiple sources.

NMPC owns the property, plant and equipment located at its 320 acre
site near Hobbs, New Mexico. The property, plant and equipment is encumbered
by a first mortgage and security interest securing long-term bank indebtedness.

Eddy owns the property, plant and equipment located at its 680 acre
site in Eddy County, New Mexico.

HCL owns its machinery and equipment and leases its land and buildings
from Oil Refineries Ltd. ("ORL"), a corporation which is majority-owned by the
Israeli Government. The leases expire at various dates, principally in 21
years. Substantially all of the assets of HCL are subject to security
interests in favor of the State of Israel or banks. HCL also has a contract
with ORL for steam and processed water which expires on December 31, 1996 and a
lease from ORL of a pipeline which transports ammonia from the port in Haifa to
HCL's plant. HCS leases its land from the Israeli Government under a 49 year
lease commencing in 1994, with the payments for such lease paid in advance and
included in the K3 construction costs.

HCL recently expanded its production capacity by constructing the K3
Plant, with the capacity to produce annually approximately 100,000 metric tons
of potassium nitrate and 15,000 metric tons of phosphoric acid. The K3 Plant
was built in the southern part of Israel, on land leased on a long-term basis
from the Government of Israel - see Note D of Notes to Consolidated Financial
Statements. Capacity of the K3 Plant may be expanded in subsequent years.
Provided it complies with the conditions specified in the applicable
certificate of approval, HCL will receive, with respect to taxable income
derived from the K3 Plant, certain benefits accorded under Israel's Investments
Law.

On February 7, 1994, the smaller of HCL's two potassium nitrate
production units was damaged by a fire, causing a temporary reduction of the
Company's potassium nitrate production capacity. The impact of the loss of the
production unit, including the effect of business interruption, is
substantially covered by insurance. The insurance proceeds for the property
damage is for replacement value, which substantially exceeds the recorded
carrying value of the damaged assets. See Note D of Notes to Consolidated
Financial

6
9

Statements for additional information. The Company is currently replacing the
damaged production unit and expects to complete the construction during April,
1995.

HCL obtains its major raw materials, potash and phosphate rock, in
Israel. HCL purchases potash solely from Dead Sea Works, Ltd. ("DSW") in
accordance with a supply contract expiring December 31, 1999. The contract
provides for prices to be established quarterly, based on the weighted average
of the FOB Israeli port prices paid to DSW by its overseas customers during the
preceding quarter plus certain adjustments thereto. HCL purchases phosphate
rock solely from Rotem Deshanim ("Rotem") (formerly known as Negev Phosphates,
Ltd.) pursuant to a supply agreement expiring on June 30, 1995. Based on a
letter of intent between Rotem and HCL, a long-term contract is being
negotiated. DSW and Rotem are companies that are majority-owned by the Israeli
Government and the sole suppliers in Israel of potash and phosphate rock,
respectively. While HCL views its current relationships with both of its
principal suppliers to be good, the loss of supply from either of these sources
would have an adverse effect on the Company.

Ammonia, which is used to produce nitric acid (which in turn is used
to produce potassium nitrate), is manufactured in Israel as well as imported.
The ammonia used by HCL is currently imported from a producer under supply
agreements expiring on December 31, 1995. HCL owns ammonia terminal facilities
located on leased property in the port of Haifa which have the capacity to
store an amount of ammonia sufficient to meet HCL's requirements.

Management believes that its facilities are in good operating
condition and adequate for its current needs. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Capital
Expenditures".

RESEARCH AND DEVELOPMENT

The Company has developed and patented certain manufacturing processes
and has submitted other applications for patents for additional processes. As
of December 31, 1994, the Company employed 70 research and development
scientists, engineers and technicians, who are involved in the development and
evaluation of process technologies, efficiencies and quality control. For the
years ended December 31, 1992, 1993, and 1994, the Company spent approximately
$2,945,000, $3,206,000 and $3,978,000, respectively, on these efforts, which
have been charged to current operations.

PERSONNEL AND LABOR RELATIONS

As of December 31, 1994 the Company employed approximately 1,400
people. Approximately 260 employees have advanced technical and academic
qualifications.

None of Cedar's, Vicksburg's or NMPC's employees are represented by
any collective bargaining unit. Eddy's hourly work force is represented by
three labor unions. Eddy's collective bargaining agreements covering the
hourly work force expire in July 1995. Eddy has enjoyed good relations with
its labor unions and has not had a significant work stoppage for many years.

Technicians and engineers of HCL are members of the Union of
Technicians and Engineers, which operates throughout Israel, and substantial
terms of their employment (e.g. salaries and promotions) are governed by a
general collective agreement which HCL does not negotiate directly with such
employees. The other employees of HCL are members of the "Histadrut", the
dominant labor union in Israel, and their terms of employment are governed by a
Specific Collective Agreement ("SCA") negotiated by HCL with the Histadrut and
the representatives of the employees. The contractual terms of the most recent
SCA expired on December 31, 1994, with the result that it remains statutorily
in effect until terminated by either party thereto at any time upon two months
prior written notice. In 1994, a new agreement was signed with the technicians
and engineers for the three year period ending December 31, 1996. HCL is
currently negotiating a new SCA for the two year period ending December 31,
1996.

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HCL's last major labor dispute took place in July 1991 and related to
negotiations of the SCA for 1990 and 1991. As a result of this dispute, HCL's
employees went on strike for approximately four weeks during the third quarter
of 1991. Prior to that, the last major labor dispute took place in 1983, which
resulted in a strike of approximately two weeks.

ENVIRONMENTAL MATTERS

Cedar and Vicksburg

Vicksburg's plant located in Vicksburg, Mississippi and Cedar's West
Helena, Arkansas plant discharge process waste water and storm water pursuant
to permits issued in accordance with the Federal Clean Water Act and related
state statutes. Air emissions at each plant are regulated by permits issued
pursuant to the Federal Clean Air Act and related state statutes. While the
plants have generated solid waste regulated by the Federal Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid
Waste Amendments of 1984 ("RCRA") and related state statutes, the Company
believes that such waste is currently handled and disposed of in a manner which
does not require the Company to have permits under RCRA or any related state
statute.

The Environmental Protection Agency's (the "EPA") Regional Office in
Atlanta notified Cedar in 1989 that unspecified corrective action will be
required to protect against the release of contaminants allegedly present at
the Vicksburg plant as a result of previous pesticide manufacturing operations.
As a result of the notice, Cedar reached agreement with the EPA and the
Department of Justice on the terms of a Consent Decree which was filed in the
United States District Court at Jackson, Mississippi in January 1992. Pursuant
to the Consent Decree, Cedar submitted a report of current conditions. Upon
agency approval of this report and of the facility investigation work plan to
be thereafter submitted for the Vicksburg plant, Vicksburg will undertake a
site investigation and corrective measures study, followed by implementation of
appropriate corrective action. Compliance with the Consent Decree is expected
to occur over a five to six year period.

Cedar's West Helena plant utilizes a surface impoundment for
biological treatment of non-hazardous waste streams which was the subject of an
enforcement proceeding initiated by the Arkansas Department of Pollution
Control and Ecology (the "ADPCE") in 1986. The proceeding resulted in a
Consent Administrative Order which required Cedar to carry out various studies,
ultimately leading to the implementation of a groundwater monitoring system.
Based in part on the results of groundwater monitoring and in part on the
discovery of a drum burial area on the West Helena plant site, the ADPCE
requested Cedar to initiate an expanded plant- wide investigation pursuant to a
Consent Administrative Order. The Order was entered in the third quarter of
1991. Implementation is expected to occur over a five year period.

Cedar removed the buried drums from the West Helena site in accordance
with a work plan incorporated in the Consent Administrative Order and, shortly
thereafter, filed a suit against a former operator of the plant site for
contribution for the costs incurred. In October 1994, Cedar reached a
settlement pursuant to which it recovered $1,580,000 of its previously incurred
drum removal and investigative costs. The settlement also provides for binding
arbitration among Cedar and two former operators at the plant site to apportion
future investigative and remedial costs required under the Order.

The Company believes that the future costs required to complete the
site investigation and corrective measures studies at Vicksburg and the
plant-wide investigation at West Helena will be between $500,000 and $1,000,000
and will be expended over two to three years. Interim corrective measures may
also be implemented at one or both of these locations during this same period.
As of December 31, 1993 and 1994, the Company has accrued an aggregate of
$1,250,000 for these matters. Until these investigations are completed, it is
not possible to definitively determine the costs of any interim or final
corrective actions which will be required. Any such corrective action costs
will be expended over a period of years. There can be no assurance that such
costs will not be material.

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In November 1992, Cedar entered into an agreement with the ADPCE to
resolve alleged violations of Cedar's National Pollutant Discharge Elimination
System permit (issued to its West Helena Plant in accordance with the Federal
Clean Water Act and related state statutes) by agreeing to enter into an
additional Consent Administrative Order which will require implementation of
additional corrective measures intended to assure future compliance with the
requirements of the permit and which required the payment of a penalty of
$80,000. As of December 31, 1994, Cedar had substantially completed
implementation of all measures required under this Order.

In 1987, Cedar entered into a cost sharing agreement with 55 other
companies to fund costs associated with the clean-up of an abandoned waste
disposal site located near Bayou Sorrel, Louisiana. The sharing agreement was
the basis for a consent decree to which Cedar and the other companies are
parties, settling claims brought by the EPA pursuant to the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended. The
sharing agreement allocates approximately 4% of the clean-up costs to Cedar.
The remedy selected by EPA for this site has been successfully implemented and
the participating parties' respective shares for cost of future monitoring and
maintenance activities on the site until the year 2022 was redetermined.
Cedar's share of such future costs was determined to be approximately $170,000,
which includes a 25% contingency factor.

Eddy and NMPC

The Company's potash operations are subject to various Federal, state
and local environmental laws. The Company does not believe significant
expenditures will be required for the potash operations in the near future or
that its ongoing environmental operating costs will be material.

HCL

As a result of the chemicals and processes used by HCL in the course
of production, nitrous oxide ("NOX") gases, potassium nitrate and STPP dusts
are emitted into the air. In 1986, the Israeli Ministry of Interior issued an
order (the "Order") under the Law for the Prevention of Hazards of 1961
directing HCL to avoid unreasonable air pollution and to take certain remedial
actions, including the installation of measuring devices. In response to the
Order, HCL installed analyzers for the continuous measuring of the NOX content
of the tail gases in its two nitric acid plants and opacity meters for the
measurement of dust content in the air emitted from potassium nitrate dryers.
An additional absorption tower for the recovery of NOX from the tail gases of
the larger nitric acid plant was installed in 1989 as well as two ventury
scrubber units for the reduction of the dust content in the air emitted from
the dryers of both potassium nitrate plants. As part of a 1990 nitric acid
capacity increase, an NOX abatement unit was installed in the smaller nitric
acid plant. As a result of these actions, HCL complied with the Order.

As a result of the production of phosphoric acid, HCL generates acid
sludge and liquid acid effluent. HCL had previously disposed of its acid sludge
in designated approved sites. In accordance with a permit issued by the
Israeli Agency for Environmental Preservation of the Ministry of Interior
pursuant to the Law for the Prevention of Sea Pollution (Disposing of Wastes)
of 1983 and 1984, HCL is now disposing of the acid sludge in a designated site
in the Mediterranean Sea, situated 20 nautical miles from the Israeli coast.
The permit allows for the disposal of a quantity which is sufficient to satisfy
HCL's needs. The permit is valid until December 31, 1995.

HCL currently disposes of its liquid acid effluents in a local river.
Local authorities have advised HCL that it must find an alternative site for
such disposal. On December 21, 1994, Man, Nature and Law, an Israeli
fellowship for the protection of the environment, together with six fishing
companies, filed a complaint in the Magistrate's Court of Haifa against HCL and
its directors alleging violation of specified Israeli environmental laws
through HCL dumping of chemical waste into this river without adequate permits.
HCL believes that disposition of this complaint will not have a material
adverse effect on its financial position or operations. The present solution
proposed by HCL as an alternative to disposal in the river, is to dispose of
the liquid acid waste four kilometers into Haifa Bay utilizing a marine
pipeline. This proposal, accepted in principle by both the local authorities
for environmental protection and the Haifa port authorities, was

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12
submitted for approval to the Ministry of Environmental Protection in
Jerusalem. The Ministry gave HCL permission to proceed with the design of the
marine pipeline, subject to HCL fulfilling certain requirements, including
studies of sea conditions in the area for the proposed pipeline and of the
effect of the acid waste on the sea environment. The Company estimates that
HCL will be required to invest approximately $8,000,000 over the next two years
if this proposed solution is adopted and annual operating costs, after
completion of the project, will be approximately $800,000.

Appropriate provisions have been made in the consolidated financial
statements with respect to the above matters. See Notes A and N of Notes to
Consolidated Financial Statements.

ITEM 2. Properties.

Reference is made to "Facilities and Suppliers" in Item 1 above,
"Business," for information concerning the Company's properties. See also Note
D of Notes to Consolidated Financial Statements for additional information.

ITEM 3. Legal Proceedings.

1. On or about December 20, 1991, Peter N. Zachary together with
fifteen other persons, claiming to be shareholders of Sylvan Learning Centers,
Inc., The Enstar Group, Inc. ("Enstar"), Kinder-Care, Inc. and Kinder-Care
Learning Centers, Inc., filed a complaint in the Circuit Court for Montgomery
County, Alabama against Richard J. Grassgreen ("Grassgreen") and Perry Mendel
("Mendel") (each a former indirect stockholder and director of the Company),
another former indirect stockholder and director of the Company, TPR Investment
Associates, Inc. ("Associates," which is a former parent corporation of the
Company), Trans-Pacific (the former name of the Company) and various other
named persons and entities and certain unnamed entities. The complaint alleges
that in January 1986, Grassgreen and Mendel became part owners of Associates
along with the other former indirect stockholder and director of the Company
and certain employees of Drexel Burnham Lambert Incorporated. The complaint
also alleges that in January 1986, Grassgreen caused Enstar, through its
subsidiary, Care Investors, Inc., to purchase a one-third interest in
Associates for $3,000,000 and to loan Associates $10,000,000 to permit it to
acquire Trans-Pacific, which would substantially increase the profits
Grassgreen and Mendel could make on their investments in Trans-Pacific. The
complaint does not explain how these allegations are actionable against
Associates or Trans-Pacific. The Company filed a motion to dismiss the
complaint. On or about May 27, 1993, the Court entered an order dismissing
substantially the entire complaint. Plaintiffs thereafter filed a second
amended complaint, against which the Company also filed a motion to dismiss.
On or about August 10, 1993 the Court entered an order dismissing four of the
five Counts of the amended complaint. The Company has interposed an answer to
the remaining Count in the complaint.

2. Beginning in April 1993 a number of class of action lawsuits were
filed in several United States District Courts against the major Canadian and
United States potash producers, including Eddy and NMPC. The purported class
actions were on behalf of all purchasers of potash from any of the defendants
or their respective affiliates, at any time during the period from April 1987
to the present, and alleged that the defendants conspired to fix, raise,
maintain and stabilize the prices of potash in the United States purchased by
the plaintiffs and the other members of the class in violation of the United
States antitrust laws. The complaints seek unspecified treble damages,
attorneys fees and injunctive relief against the defendants. Pursuant to an
order of the Judicial Panel for Multidistrict Litigation, all of the Federal
District Court actions have been consolidated for pretrial purposes in the
United States District Court for Minnesota and captioned In Re Potash Antitrust
Litigation. On March 14, 1994, this Court scheduled the trial to begin on or
about January 1, 1996. Several additional and/or amended complaints were filed
in the Minnesota Federal District Courts making substantially the same
allegations as the earlier complaints. These complaints have been superseded
by or deemed included in the Third Amended and Consolidated Class Action
Complaint, to which NMPC and Eddy served and filed answers denying all the
material allegations thereof on or about July 22, 1994. On or about January
12, 1995 this Court granted plaintiffs' motion to certify the plaintiff class.

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On or about May 27, 1993 a purported class action captioned Angela
Coleman v. New Mexico Potash Corp., et al. was filed against the major Canadian
and United states potash producers, including Eddy and NMPC, and unnamed
co-conspirators in the Superior Court of the State of California for the County
of Los Angeles. The Coleman action was commenced by Angela Coleman on behalf
of a class consisting of all California indirect purchasers of potash, and
alleges that the defendants conspired to fix, raise, maintain and stabilize
the prices of potash indirectly purchased by the members of the class in
violation of specified California antitrust and unfair competition statues.
The complaint in Coleman seeks unspecified treble damages, attorneys fees and
injunctive relief against the defendants. In addition, on or about March 29,
1994, a purported class action captioned Neve Bros. et al. v. Potash
Corporation of Saskatchewan, et. al., was commenced in the Superior Court of
the State of California for the City and County of San Francisco against the
major Canadian and United States potash producers and unnamed co-conspirators.
Eddy, NMPC, NMPC's parent, Cedar Chemical Corporation ("Cedar"), and Cedar's
parent, Nine West Corporation, and the Company are among the named defendants
in the Neve action. The Neve action, also brought on behalf of a class of
indirect purchasers of potash in California, makes substantially the same
allegations as made in the Coleman action and seeks substantially the same
legal and equitable remedies and relief. Motions have been filed for Eddy to
be dismissed from both the Coleman and Neve actions, and for Nine West
Corporation and the Company to be dismissed from the Neve actions, in each case
for lack of personal jurisdiction. Cedar and NMPC have served and filed
answers in the Neve action, and NMPC has served and filed an answer in the
Coleman action, in each case denying all material allegations of the respective
complaint. The Coleman action has been consolidated with the Neve action in
the Superior Court of the State of California for the City and County of San
Francisco.

On or about August 2, 1994, a purported class action on behalf of
indirect purchasers of potash outside of California, David B. Gaebler v. New
Mexico Potash Corporation, et at., was commenced against the major Canadian and
United States potash producers, including Eddy and NMPC, in the Circuit Court
of Cook County, Illinois under the Illinois consumer fraud statue. The Gaebler
action makes substantially the same allegations made in the Neve and Coleman
actions and seeks unspecified compensatory and punitive damages and an award of
attorneys' fees and costs. On February 28, 1995, the defendants served motions
to dismiss the complaint in the Gaebler action.

Management has no knowledge of any conspiracy of the type alleged in
these complaints.

There are several other legal proceedings pending against the Company
and certain of its subsidiaries arising in the ordinary course of its business
which management does not consider material.

Management of the Company believes, based upon its assessment of the
actions and claims outstanding against the Company and certain of its
subsidiaries, and after discussion with counsel, that the eventual disposition
of the matters described or referred to above should not have a material
adverse effect on the financial position, future operations or liquidity of the
Company.

On or about November 26, 1993 Eddy and NMPC (and other major United
States potash producers) were served with subpoenas issued by the United States
District Court for the Northern District of Ohio to produce documents to a
grand jury authorized by the U.S. Department of Justice Antitrust Division
("DOJ") to investigate possible violations of the antitrust laws in connection
with the allegations made in the civil actions describe above. A salesman
employed by the sales group for Eddy and NMPC testified before the grand jury
pursuant to a subpoena. Eddy and NMPC are cooperating with DOJ in connection
with the subpoenas.

For information relating to certain environmental proceedings
affecting the Company, see "Environmental Matters" in Item 1 above, "Business."

ITEM 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security holders during the
quarter ended December 31, 1994.

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PART II

ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.

All of the Company's equity securities are owned by TPR Investment
Associates, Inc. ("TPR"). See Item 12 - "Security Ownership of Certain
Beneficial Owners and Management." In addition, see Note G of Notes to
Consolidated Financial Statements for information regarding certain
restrictions on the Company's payment of dividends. During 1992, 1993 and 1994
the Company paid or declared dividends on its Common Stock in the amounts of
$13,136,000, $7,508,000 and $4,466,000, respectively.

ITEM 6. Selected Financial Data.

The following table presents selected consolidated financial data of
the Company for the five year period ended December 31, 1994. This data has
been derived from the consolidated financial statements of the Company and
should be read in conjunction with the notes thereto.

Year Ended December 31,
-----------------------------------------------------------
1990 1991 1992 1993 1994
------- ------- ------- ------- -------
(in thousands)

Results of Operations:
Revenues . . . . . . . . . . . . . . . . . $292,235 $309,068 $345,356 $326,315 $334,107
Operating costs and expenses:
Cost of goods sold . . . . . . . . . . 219,878 238,489 266,770 255,563 265,795
General and administrative . . . . . . 29,488 33,262 36,270 38,375 37,780
-------- -------- -------- -------- --------
Operating income . . . . . . . . . . . . . 42,869 37,317 42,316 32,377 30,532
Interest expense . . . . . . . . . . . . . (32,153) (31,210) (27,542) (27,405) (28,369)
Interest and other income
(expense) - net (1) . . . . . . . . . . . (4,647) 14,159 8,476 6,014 15,056
-------- -------- -------- -------- --------
Income before income taxes,
extraordinary item and change
in accounting principle . . . . . . . . . 6,069 20,266 23,250 10,986 17,219
Income tax provision . . . . . . . . . . . 11,037 2,582 11,231 7,920 14,669
-------- -------- -------- -------- --------
Income (loss) before extraordinary item
and change in accounting principle . . . (4,968) 17,684 12,019 3,066 2,550
Extraordinary item - net . . . . . . . . . 263 1,186 - (8,830) -
Cumulative effect on prior years of
change in accounting for income taxes . . - - 1,130 - -
-------- -------- -------- -------- --------
Net income (loss) . . . . . . . . . . . . . $ (4,705) $ 18,870 $ 13,149 $ (5,764) $ 2,550
======== ======== ======== ======== ========

Dividends:
Preferred stock . . . . . . . . . . . . . . $ 855 $ 214 $ - $ - $ -
Common stock . . . . . . . . . . . . . . . 2,175 2,850 13,136 7,508 4,466

__________________

(1) Includes (a) security losses of $15,490,000 (which amount relates
principally to the Company's investment in Enstar) in the year ended
December 31, 1990, (b) gains of $10,000,000 and $18,100,000 in the years
ended December 31, 1991 and 1994, respectively, representing the excess of
insurance proceeds over the carrying value of certain HCL property
destroyed in a fire, (c) security gains (losses) of $2,865,000, $2,261,000
and ($1,178,000) in the years ended December 31, 1992, 1993 and 1994,
respectively, and (d) foreign currency gains (losses) of $4,000,000,
$850,000 and ($3,800,000) in the years ended December 31, 1992, 1993, and
1994, respectively. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note K of Notes to
Consolidated Financial Statements.

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December 31,
----------------------------------------------------------
1990 1991 1992 1993 1994
-------- -------- -------- -------- --------
(in thousands)

Financial Position:
Cash and cash equivalents . . . . . . . . . $ 54,999 $ 39,276 $ 54,745 $ 25,742 $ 15,571
Working capital . . . . . . . . . . . . . . 122,387 130,072 107,850 103,776 66,294
Total assets . . . . . . . . . . . . . . . 373,083 381,841 341,055 365,865 550,954
Short-term debt, including current
maturities of long-term debt . . . . . . 29,383 50,105 42,666 47,282 157,986(a)
Long-term debt, excluding current
maturities and subordinated debt . . . . 125,745 84,132 71,318 61,328 102,059
Senior subordinated debt - net . . . . . . 120,309 110,716 103,689 140,133 140,385
Junior subordinated debt - net . . . . . . 7,213 14,735 15,089 15,495 7,981
Stockholder's equity . . . . . . . . . . . 15,824 28,772 28,882 15,794 20,550

(a) Collateralized, in part, by $100,000,000 of certificates of deposit,
which are included in "other current assets" in the accompanying December 31,
1994 Consolidated Balance Sheet.

ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

RESULTS OF OPERATIONS

The following table sets forth as a percentage of revenues and the
percentage change of those items as compared to the prior period, certain items
appearing in the Consolidated Financial Statements.

PERCENTAGE OF REVENUES YEAR-TO-YEAR CHANGES
-------------------------- --------------------
1993 1994
YEAR ENDED DECEMBER 31, VS. VS.
--------------------------
1992 1993 1994 1992 1993
---- ---- ---- ---- ----

Revenues . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% (5.5)% 2.4%
----- ----- -----
Cost and expenses:
Cost of goods sold . . . . . . . . . . . . . . 77.2 78.3 79.5 (4.2) 4.0
General and administrative . . . . . . . . . . 10.5 11.8 11.3 5.8 (1.6)
----- ----- -----
Operating income . . . . . . . . . . . . . . . . . 12.3 9.9 9.2 (23.5) (5.7)
Interest expense . . . . . . . . . . . . . . . (8.0) (8.4) (8.5) (.5) 3.5
Interest and other income - net . . . . . . . 2.4 1.9 4.5 (29.1) 150.4
----- ----- -----
Income before income taxes, extraordinary
item and change in accounting principle . . . 6.7 3.4 5.2 (52.8) 56.7
Income tax provision . . . . . . . . . . . . . . . 3.2 2.5 4.4 (29.4) 85.2
----- ----- -----
Income before extraordinary item and
change in accounting principle . . . . . . . . 3.5 .9 .8 (74.5) (16.8)
Extraordinary item - net . . . . . . . . . . . . . - (2.7) - (100.0) 100.0
Cumulative effect on prior years of
change in accounting for income taxes . . . . .3 - - (100.0) -
----- ----- -----
Net income (loss) . . . . . . . . . . . . . . . . . 3.8% (1.8)% .8% (143.8)% 144.2%
===== ===== =====

1994 Compared with 1993

Revenues increased by 2.4% to $334,107,000 in 1994 from $326,315,000 in
1993, an increase of $7,792,000, resulting from (i) increased sales of
specialty plant nutrients and industrial chemicals ($7,300,000), primarily
relating to potassium nitrate, which includes the unfavorable effect
($9,900,000) of certain weakened European currencies in relation to the U.S.
dollar (including those covered by forward exchange contracts) in 1994 as
compared to the prior year, and (ii) increased sales of organic chemicals
($200,000) and potash ($300,000).

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Cost of goods sold as a percentage of revenues increased to 79.5% in 1994
compared with 78.3% in 1993, primarily due to the adverse effects of (i) the
above-mentioned weakened European currencies, (ii) cancellation of the program
of exchange rate insurance by the Israeli Government in August 1993 (which
contributed $1,600,000 in revenues in 1993) and (iii) lower margins realized in
the potash business, with these items being partially offset by certain cost
reductions and the receipt of a $1,800,000 refund from a utility supplier.
Gross profit was $68,312,000 in 1994 compared with $70,752,000 in 1993, a
decrease of $2,440,000, with such decrease primarily being the net result of
the increase in revenues as well as the net effect of the items described in
the previous sentence. General and administrative expense decreased slightly
to $37,780,000 in 1994 from $38,375,000 in 1993 (11.3% and 11.8% of revenues in
1994 and 1993, respectively).

As a result of the matters described above, the Company's operating income
decreased by $1,845,000 to $30,532,000 in 1994 as compared with $32,377,000 in
1993.

Interest expense increased by $964,000 ($28,369,000 in 1994 compared with
$27,405,000 in 1993), primarily as a result of (i) higher interest rates in
1994 and (ii) the June 30, 1994 Loan Agreement described below (see Note G of
Notes to Consolidated Financial Statements). Interest and other income - net
increased in 1994 by $9,042,000, principally as the result of a gain relating
to the February, 1994 fire at HCL ($18,100,000), partially offset by several
factors during the 1994 period including (i) lower investment income and
security gains ($4,300,000) and (ii) a provision for loss on certain foreign
currency transactions ($3,800,000) - see Notes D and K of Notes to Consolidated
Financial Statements.

As a result of the above factors, income before income taxes and
extraordinary item increased by $6,233,000 in 1994. The Company's provisions
for income taxes are impacted by the mix between domestic and foreign earnings
and vary from the U.S. Federal statutory rate principally due to the impact of
foreign operations and certain losses for which there is no current tax
benefit. See Note J of Notes to Consolidated Financial Statements for
information regarding effective tax rates.

In the 1993 period the Company acquired $65,497,000 principal amount of its
13 1/2% Senior Subordinated Debentures and $21,500,000 principal amount of its
Senior Subordinated Reset Notes, which resulted in a loss of $8,830,000. Such
loss (which has no current tax benefit) is classified as an extraordinary item
in the accompanying Consolidated Statements of Operations. No such debt was
acquired in the 1994 period. See Note G of Notes to Consolidated Financial
Statements.

1993 Compared with 1992

Revenues decreased by 5.5% to $326,315,000 in 1993 from $345,356,000
in 1992, a decrease of $19,041,000, resulting from decreased sales of potash
($10,700,000), specialty plant nutrients and industrial chemicals ($1,500,000)
and organic chemicals (primarily contract manufacturing activities)
($6,800,000).

Cost of goods sold as a percentage of revenues increased to 78.3% in
1993 compared with 77.2% in 1992 primarily due to higher costs associated with
contract manufacturing activities in the Company's organic chemicals business
and lower potash prices. During the 1993 period margins on specialty plant
nutrients, industrial chemicals and the organic chemicals' pesticide business
increased, but were offset by reduced margins in contract manufacturing
activities and in the potash business. Gross profit was $70,752,000 in 1993
compared with $78,586,000 in 1992, a decrease of $7,834,000, principally the
result of a decrease in potash gross profit. General and administrative
expense increased to $38,375,000 in 1993 from $36,270,000 in 1992 (11.8% and
10.5% of revenues in 1993 and 1992, respectively), with the increase of
$2,105,000 principally due to increased selling and marketing expenses for
specialty plant nutrients and organic chemicals.

As a result of the matters described above, the Company's operating
income decreased by $9,939,000 to $32,377,000 in 1993 as compared with
$42,316,000 in 1992.

Interest expense decreased by $137,000 ($27,405,000 in 1993 compared
with $27,542,000 in 1992). While the Company's outstanding debt at December
31, 1993 exceeded the outstanding debt at December

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31, 1992 primarily as a result of the Company's issuance of its 11 7/8% Senior
Subordinated Notes due 2002 (see Note G of Notes to Consolidated Financial
Statements), interest expense declined as a result of scheduled debt repayments
and lower interest rates in the 1993 period. Interest and other income - net
decreased in 1993 by $2,462,000, principally as the result of reduced interest
and dividend income and security gains in 1993 and other non-recurring income
earned in 1992 (see Notes D and K of Notes to Consolidated Financial
Statements).

As a result of the above factors, income before income taxes,
extraordinary item and change in accounting principle decreased by $12,264,000
in 1993. The Company's provisions for income taxes are impacted by the mix
between domestic and foreign earnings and vary from the U.S. Federal statutory
rate principally due to the impact of foreign operations and certain losses for
which there is no current tax benefit. See Note J of Notes to Consolidated
Financial Statements for information regarding effective tax rates.

In the 1993 period the Company acquired $65,497,000 principal amount
of its 13 1/2% Senior Subordinated Debentures and $21,500,000 principal amount
of its Senior Subordinated Reset Notes, which resulted in a loss of $8,830,000.
Such loss (which has no current tax benefit) is classified as an extraordinary
item in the accompanying Consolidated Statement of Operations. No debt was
acquired in the 1992 period. See Note G of Notes to Consolidated Financial
Statements.

CAPITAL RESOURCES AND LIQUIDITY

The Company's consolidated working capital at December 31, 1994 and
1993 was $66,294,000 and $103,776,000, respectively.

Operations for the years ended December 31, 1994 and 1993, after
adding back non-cash items, provided cash of approximately $26,900,000 and
$17,000,000, respectively. During such periods other changes in working
capital provided (used) cash of approximately $13,000,000 and ($10,200,000),
respectively, resulting in net cash being provided from operating activities
and working capital management of approximately $39,900,000 and $6,800,000,
respectively.

Investment activities during the years ended December 31, 1994 and
1993 used cash of approximately $201,000,000 and $53,400,000, respectively,
including additions to property in 1994 and 1993 of approximately $93,300,000
and $29,100,000, respectively, and net purchases of marketable securities and
short-term investments of approximately $134,800,000 and $34,100,000,
respectively. The 1994 property additions principally relate to (i) the
construction of the K3 plant, (ii) the replacement of the production unit
damaged in the fire in February, 1994 and (iii) the construction of a new
potassium carbonate manufacturing facility (see "Capital Expenditures" below).
Purchases of marketable securities and short-term investments in 1994 include
$100,000,000 of certificates of deposit ("CD's") relating to the Loan Agreement
described below, which CD's were pledged to a bank.

Financing activities during the years ended December 31, 1994 and 1993
provided cash of approximately $150,900,000 and $17,600,000 respectively.
During 1994 the Company entered into the Loan Agreement described below which
resulted in new bank loans aggregating $140,000,000 and the repayment of bank
loans of approximately $19,000,000. During 1993 the Company issued
$115,000,000 principal amount of 11 7/8% Senior Subordinated Notes, due 2002,
and acquired approximately $65,500,000 principal amount of its 13 1/2% Senior
Subordinated Debentures and $21,500,000 principal amount of its Senior
Subordinated Reset Notes. During 1994, the Company dividended certain
short-term investments to its parent. The carrying value of these investments
on the dividend date ($4,241,000) approximated market value.

On June 30, 1994, the Company entered into the Loan Agreement with a
bank and borrowed $40,000,000 (repayable quarterly over a four year period) and
utilized a portion of the proceeds to prepay approximately $19,000,000 then
owed to such bank. Pursuant to the Loan Agreement, the Company also borrowed
an additional $100,000,000, repayable in January, 1996. Under certain
specified circumstances prior to such date, the Company could have converted
such loan into a term loan maturing five years from the date of conversion.
The Company pledged CD's with a principal amount of $100,000,000 as collateral
for such

15
18
loan (such CD's are included in "other current assets" in the accompanying
Consolidated Balance Sheet). In addition, the Company has pledged 79% of the
capital stock of HCL to secure its obligations under the Loan Agreement. On
January 5, 1995, the Company liquidated the pledged CD's and prepaid the
$100,000,000 loan. See Notes B, E and G of Notes to Consolidated Financial
Statements.

As of December 31, 1994, the Company had outstanding long-term debt
(excluding current maturities) of $250,425,000. The Company's primary source
of liquidity is cash flow generated from operations and the revolving loan
commitments described in Note E of Notes to Consolidated Financial Statements.

The principal purpose of the Company's hedging program (which is for
other than trading purposes) is to mitigate the impact of fluctuations against
the U.S. dollar, as well as to protect against significant adverse changes in
exchange rates. Accordingly, the gains and losses recognized relating to the
hedging program in any particular period and the impact on revenues had the
Company not had such a program are not necessarily indicative of its
effectiveness.

CAPITAL EXPENDITURES

During 1994 (excluding the K3 Plant described below and the reconstruction
of the production unit damaged by fire in February 1994) the Company invested
approximately $30,000,000 in capital expenditures. During 1993 the Company
commenced construction of the K3 Plant, a new facility in Israel, with initial
capacity to produce approximately 100,000 metric tons of potassium nitrate
annually. The Company substantially completed the construction of the K3 Plant
in the fourth quarter of 1994 - see Note D of Notes to Consolidated Financial
Statements. In addition, in 1994 the Company invested approximately
$20,000,000 in connection with the replacement of the damaged production unit.

The Company currently anticipates that capital expenditures for the year
ending December 31, 1995 (excluding the K3 Plant and the reconstruction of the
damaged production unit) will aggregate approximately $19,000,000. The
Company's capital expenditures will be used primarily for increasing certain
production capacity and efficiency, product diversification, and for ecological
matters. The Company expects to be able to finance its capital expenditures
from internally generated funds, borrowings from traditional lending sources
and, where applicable, Israeli Government grants and entitlements and, with
respect to the damaged production unit, insurance proceeds.

EXCHANGE RATE INSURANCE

In 1981, HCL joined a program of exchange rate insurance of the Israeli
Government designed to protect participating Israeli exporters from losses
resulting from the widening of the gap between the inflation rate in Israel and
the rate of devaluation of the New Israeli Shekel ("NIS") against a weighted
basket of currencies of Israel's major trading partners. The net benefits
received by HCL for the years ended December 31, 1992 and 1993 were $4,056,000
and $1,616,000, respectively, which benefits have been included in revenues.
As part of various economic measures adopted in Israel subsequent to December
31, 1988, the Israeli Government has gradually reduced the insurance proceeds
granted under its program of exchange rate insurance, with the program having
been fully eliminated on August 31, 1993. See Note A of Notes to Consolidated
Financial Statements.

16
19
INFLATION

Inasmuch as only approximately $40,000,000 of HCL's annual operating costs
are denominated in NIS, HCL is exposed to inflation in Israel to a limited
extent. The combination of price increases coupled with devaluation of the NIS
have in the past generally enabled HCL to avoid a material adverse impact from
inflation in Israel. However, HCL's earnings could increase or decrease to the
extent that the rate of future NIS devaluation differs from the rate of Israeli
inflation. For the years ended December 31, 1993 and 1994, the inflation rate
of the NIS as compared to the U.S. Dollar exceeded the devaluation rate in
Israel by 3.2% and 13.4%, respectively.

ENVIRONMENTAL MATTERS

See Item 1 - "Business - Environmental Matters" above and Note N of Notes
to Consolidated Financial Statements for information regarding environmental
matters relating to the Company's various facilities.

ITEM 8. Financial Statements and Supplementary Data.

See Index to Consolidated Financial Statements and Schedules on page F-1.

ITEM 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

17
20
PART III

ITEM 10. Directors and Executive Officers of the Registrant.

The directors and executive officers of the Company are as follows:

NAME AGE POSITION
---- --- --------

Arie Genger . . . . . . . . 49 Chairman of the Board and Chief Executive Officer

Thomas G. Hardy . . . . . . 49 President and Chief Operating Officer; Director

Martin A. Coleman . . . . . 64 Director

Sash A. Spencer . . . . . . 63 Director

Lester W. Youner . . . . . 49 Vice President, Treasurer and Chief Financial Officer

Bernard J. Blaney . . . . . 70 Vice President

FINANCIAL ADVISORY COMMITTEE
----------------------------

Lawrence M. Small

Thomas G. Hardy

Sash A. Spencer

The By-laws of the Company provide for at least one director.
Directors hold office until the next annual meeting of stockholders or until
their successors are elected and qualified. There are no arrangements or
understandings between any director or executive officer of the Company and any
other person pursuant to which such person was elected as a director or
executive officer. The executive officers serve at the discretion of the Board
of Directors.

There are no family relationships among any directors or executive
officers of the Company.

The following are descriptions of the directors and executive officers
of the Company and the members of the Financial Advisory Committee. The
Financial Advisory Committee advises the Board of Directors regarding financial
matters and, when the Committee deems appropriate, make recommendations to the
Board of Directors.

Arie Genger has been a director and Chairman of the Board of Directors
and Chief Executive Officer of the Company since 1986, the sole member of the
Executive Committee since June 1988, and was President of the Company from 1986
to December 1993.

Thomas G. Hardy has been President and Chief Operating Officer of the
Company since December 1993, was Executive Vice President of the Company from
June 1987 to December 1993 and has been a director and member of the Financial
Advisory Committee since October 1992. He has been a director of Laser
Industries Limited (a manufacturer and distributor of surgical lasers and other
medical technology in which the Company has an ownership interest) since
January 1990.

18
21
Martin A. Coleman has been a director since March 1993. Since January
1991 he has been a private investor. Prior to that he was a member of the law
firm of Rubin Baum Levin Constant & Friedman, general counsel to the Company,
for more than five years.

Sash A. Spencer has been a director since October 1992 and a member of
the Financial Advisory Committee since March 1993. He has been a private
investor and Chairman of Holding Capital Management Corp., a private investment
firm, for more than five years. He has been a director of Empire Gas Corp., a
corporation engaged in the propane gas business, since 1983.

Lester W. Youner has been Vice President, Treasurer and Chief Financial
Officer of the Company since October 1987. From June 1979 until October 1987
he was a Partner of Deloitte & Touche, a public accounting firm.

Bernard J. Blaney has been a Vice President of the Company since
January 1987.

Lawrence M. Small, 53, has been Chairman of the Financial Advisory
Committee of the Board of Directors since October 1992. Mr. Small is President
and Chief Operating Officer of Fannie Mae (Federal National Mortgage
Association) headquartered in Washington, DC, which he joined in September
1991. Prior to that, he was Vice Chairman and Chairman of the Executive
Committee of the Boards of Directors of Citicorp and Citibank, N.A., where he
was employed for 27 years. He serves as a director of Fannie Mae and of the
Chubb Corporation (an insurance company).

19
22
ITEM 11. Executive Compensation

The following table sets forth the aggregate compensation paid or
accrued by the Company for the past three fiscal years to its Chief Executive
Officer and to other executive officers whose annual compensation exceeded
$100,000 for the fiscal year ended December 31, 1994:

SUMMARY COMPENSATION TABLE

Annual Compensation (1) All Other
---------------------------------- Compen-
Name and Principal Position Year Salary (2) Bonus sation (3)
--------------------------- ---------- ---------- -------- ----------

Arie Genger . . . . . . . . . . . . . . . . . 1994 $750,000 $ - $ 509,000
Chairman of the Board 1993 750,000 92,000 519,000
and Chief Executive Officer 1992 750,000 143,000 437,000

Thomas G. Hardy . . . . . . . . . . . . . . . 1994 400,000 - 1,406,000
President and Chief Operating Officer 1993 350,000 50,000 8,000
and Director 1992 350,000 100,000 11,000

Lester W. Youner . . . . . . . . . . . . . . 1994 241,000 55,000 6,000
Vice President, Treasurer and 1993 226,000 70,000 8,000
Chief Financial Officer 1992 206,000 70,000 11,000

Martin A. Eichen (4) . . . . . . . . . . . . 1994 149,000 11,000 6,000
Vice President 1993 149,000 15,000 7,000
1992 149,000 15,000 9,000

Kenneth H. Traub (4) . . . . . . . . . . . . 1994 120,000 19,000 4,000
Vice President 1993 105,000 25,000 4,000
1992 95,000 30,000 6,000

____________________

(1) During the period covered by the table, the Company did not make any
restricted stock awards and did not have in effect any stock option or
stock appreciation rights plan. See "Compensation Agreements" for Mr.
Hardy's bonus arrangement.

(2) Amounts shown for 1993 do not include in the case of Messrs. Genger, Hardy
and Youner $500,000, $275,000 and $20,000, respectively, of 1994 salary
which was prepaid in 1993. Amounts shown for 1994 include such
prepayments.

(3) For 1994, consists of: (i) in the case of Mr. Genger, $250,000 for an
annual premium on ordinary life insurance, $250,000 for related income tax
gross-up, $4,000 for the Company's matching contribution to a profit
sharing thrift plan, and $5,000 for the premium on term life insurance;
(ii) in the case of Messrs. Hardy, Youner, Eichen and Traub $4,000 each
for the Company's matching contribution to a profit sharing thrift plan;
and (iii) $2,000 each for Messrs. Hardy, Youner and Eichen for the premium
on term life insurance. In the case of Mr. Hardy, also includes
$1,400,000 deposited in trust for Mr. Hardy. See "Compensation
Agreements".

For 1993, consists of: (i) in the case of Mr. Genger, $250,000 for an
annual premium on ordinary life insurance, $258,000 for related income tax
gross-up, $6,000 for the Company's matching contribution to a profit
sharing thrift plan, and $5,000 for the premium on term life insurance;
(ii) in the case of Messrs. Hardy, Youner, Eichen and Traub $6,000,
$6,000, $5,000 and $4,000, respectively, for the Company's matching
contribution to a profit sharing thrift plan; and (iii) $2,000 each for
Messrs. Hardy, Youner and Eichen for the premium on term life insurance.

For 1992, consists of: (i) in the case of Mr. Genger, $241,000 for an
annual premium on ordinary life insurance, $183,000 for related income tax
gross-up, $9,000 for the Company's matching contribution to a profit
sharing thrift plan, and $4,000 for the premium on term life insurance;
(ii) in the case of Messrs.

20
23
Hardy, Youner, Eichen and Traub $9,000, $9,000, $7,000 and $6,000,
respectively, for the Company's matching contribution to a profit sharing
thrift plan; and (iii) $2,000 each for Messrs. Hardy, Youner and Eichen for
the premium on term life insurance.

(4) Resigned effective December 31, 1994.

COMPENSATION AGREEMENTS

Pursuant to an Agreement entered into in March 1994 (the "New Agreement"),
the Company and Mr. Hardy modified and superseded a bonus arrangement entered
into on January 15, 1988, as amended (the "Old Agreement"), under which no
payments had been made. The Old Agreement provided for a payment upon
termination of Mr. Hardy's employment in an amount equal to 2% of the Company's
average annual after-tax consolidated net income (as defined) for the three
years ending on December 31st of the year immediately prior to the termination
of Mr. Hardy's employment, multiplied by either the multiple of the market
price to such net income of the Company's common stock if publicly traded or,
if privately held at the time of such termination, by a multiple of 11.
Pursuant to the New Agreement, the Company is required to irrevocably deposit
in trust for the benefit of Mr. Hardy an aggregate of $2,800,000, of which
$1,400,000 was deposited upon execution of the New Agreement, with the
remaining $1,400,000 to be deposited in 1996 (or under certain circumstances,
including a change in control of the Company, earlier). The deposited funds
are held under a Trust Agreement (the "Trust Agreement"), which provides that
the assets held thereunder are subject to the claims of the Company's general
creditors in the event of insolvency of the Company. The Trust Agreement
provides that the assets are payable in a lump sum to Mr. Hardy or his
beneficiaries upon the earlier of December 1, 2001 or the termination of his
employment with the Company.

During July 1994, the Company entered into an employment agreement with Mr.
Hardy, effective as of June 1, 1993, having a primary term of seven years,
renewable for 10 additional years unless either party gives at least 12 months'
prior written notice of termination. The agreement provides for an annual
salary of $400,000, subject to negotiated annual increases commencing in the
year 2000. With certain restrictions, Mr. Hardy will be entitled to receive a
bonus (the "Bonus") based on a percentage of the fair market value (the
"Value") of the Company's equity at December 31st of the year Mr. Hardy's
employment terminates, he turns 65 or certain acceleration events, including a
change of control of the Company, occur. If the Company and Mr. Hardy cannot
agree on the Value, each may propose an amount. If only one makes a proposal,
that would constitute the Value. If each makes a proposal, an investment
banker would choose between them. The Bonus, generally payable in
installments, would be equal to the excess over $2,800,000 (the aggregate
amount Mr. Hardy is to receive under the New Agreement) of specified
percentages of different ranges of Value. Mr. Hardy is not entitled to the
Bonus if he voluntarily terminates his employment during the primary term
(other than by death or disability) or if Mr. Hardy's employment is terminated
for cause (as defined).

During August, 1994, the Company entered into a salary continuation agreement
with Lester W. Youner which obligates the Company to pay Mr. Youner a
retirement allowance ("Allowance") of $100,000 per year for life commencing at
age 65. In the event of Mr. Youner's death after the commencement of the
payment of the Allowance, Mr. Youner's designated beneficiary is to receive the
Allowance until 10 annual payments shall have been made to Mr. Youner and his
beneficiary. Mr. Youner will be 25% vested in the Allowance on December 31,
1996 and shall continue to vest at the rate of 5% per year thereafter provided
that he remains in the employ of the Company. Notwithstanding the foregoing,
the Allowance will become 100% vested on the earlier of Mr. Youner's 65th
birthday or the occurrence of an acceleration event, including a change of
control of the Company. Mr. Youner forfeits the Allowance if his employment is
terminated for cause (as defined) or, if within two years after the voluntary
termination of his employement, Mr. Youner engages directly or indirectly in
any activity competitive with the Company or any of its subsidiaries. The
agreement further provides that in the event of Mr. Youner's death prior to his
65th birthday while in the active employ of the Company, his designated
beneficiary is to receive an annual death benefit of $100,000 for 10 years.
Mr. Youner's death benefit is currently 50% vested and will become 100% vested
on the earlier of December 31, 1996 or the occurrence of an acceleration event.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors does not have a Compensation Committee. Executive
officer compensation matters were determined by the Board of Directors, whose
four members currently include Mr. Genger, Chairman of the Board and Chief
Executive Officer of the Company, and Mr. Hardy, President and Chief Operating
Officer of the Company. No company director has a relationship that would
constitute an interlocking relationship with executive officers or directors of
another entity.

21
24

COMPENSATION OF DIRECTORS

Officers of the Company who serve as directors do not receive any
compensation for serving as directors. Martin A. Coleman and Sash A. Spencer
each receive $15,000 annually for serving as directors.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information as of March 27, 1995, as
to the beneficial ownership of the Common Stock of the Company, which is the
only outstanding class of voting security of the Company:

SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED CLASS
---------------- ------------- ----------

Common Stock, $.01 par value (1):

TPR (2)
9 West 57th Street
New York, NY 10019 . . . . . . . . . . . 3,000 100%

All executive officers and directors as a group
(six persons)(2) . . . . . . . . . . . . 3,000 100%

_____________________

(1) All of the shares of the Common Stock of the Company are pledged to
secure an outstanding TPR note of $7,000,000 issued to a former
indirect stockholder and director of the Company.

(2) Mr. Genger and members of his family own all of the capital stock of
TPR.

ITEM 13. Certain Relationships and Related Transactions.

The Company is, for Federal income tax purposes, a member of a
consolidated tax group of which TPR is the common parent. The Company, TPR,
Eddy, Cedar and certain other subsidiaries are parties to a tax sharing
agreement, dated as of December 30, 1991, under which, among other things, the
Company and such other parties have each agreed to pay TPR amounts equal to the
amounts of Federal income taxes that each such party would be required to pay
if it filed a Federal income tax return on a separate return basis (or in the
case of Cedar, a consolidated Federal income tax return for itself and its
eligible subsidiaries), computed without regard to net operating loss
carrybacks and carryforwards. However, TPR may, at its discretion, allow tax
benefits for such losses. See Note A of Notes to Consolidated Financial
Statements.

See Notes G and L of Notes to Consolidated Financial Statements for a
description of a transaction pursuant to which TPR acquired the Company's
$9,000,000, 9 1/2% junior subordinated debentures due 2005 (the "9.5%
Debentures") and became the obligor on an outstanding 8 3/4%, $4,000,000 note
due 2005 payable to the Company. Upon TPR's acquisition of the 9.5%
Debentures, TPR exchanged the 9.5% Debentures for a new preferred stock of the
Company described in said Note L.

22
25

PART IV

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) (1)-(2) See Index to Consolidated Financial Statements and
Schedules on Page F-1.

(3) See Index to Exhibits on Page E-1.

Management contracts or compensatory plans and
arrangements required to be filed as exhibits are as
follows:

(i) Agreement between the Company and Thomas G. Hardy,
dated March 22, 1994, concerning incentive bonus
compensation, including, as Exhibit A thereto, the
related Trust Agreement.

(ii) Split Dollar Insurance Agreement, entered into as
of August 26, 1988, between the Company and Arie
Genger.

(iii) Employment agreement between the Company and Thomas
G. Hardy, dated as of June 1, 1993.

(iv) Salary Continuation Agreement between the Company
and Lester W. Youner, dated as of August 24, 1994.

(b) No reports on Form 8-K were filed during the last quarter of the
year ended December 31, 1994.

23
26
SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15 (d) 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.

Trans-Resources, Inc.
(Registrant)

By Lester W. Youner
---------------------------
Lester W. Youner
Vice President, Treasurer
and Chief Financial Officer

Dated: March 27, 1995

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED:

POWERS OF ATTORNEY AUTHORIZING LESTER W. YOUNER TO SIGN THIS REPORT AND ANY
AMENDMENTS HERETO ON BEHALF OF THE PRINCIPAL EXECUTIVE OFFICER AND THE
DIRECTORS ARE BEING FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WITH THIS
REPORT.

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT:

No annual report or proxy materials have been sent to the Company's
security holders. This Annual Report on Form 10-K will be furnished to the
holders of the Company's 11 7/8% Notes and Reset Notes.

24
27
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

FINANCIAL STATEMENTS Page
-------------------- ----

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Balance Sheets, December 31, 1993 and 1994 . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Operations,
for the Years Ended December 31, 1992, 1993 and 1994 . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Stockholder's Equity,
for the Years Ended December 31, 1992, 1993 and 1994 . . . . . . . . . . . . . . . . . F-6
Consolidated Statements of Cash Flows,
for the Years Ended December 31, 1992, 1993 and 1994 . . . . . . . . . . . . . . . . . F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . F-8

SCHEDULE
--------

Schedule I - Condensed Financial Information of Registrant,
for the Years Ended December 31, 1992, 1993 and 1994 . . . . . . . . . . . . . . . . . S-1

F - 1
28

[DELOITTE & TOUCHE LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of Trans-Resources, Inc.
New York, New York

We have audited the accompanying consolidated financial statements and
financial statement schedule of Trans-Resources, Inc. (a wholly-owned
subsidiary of TPR Investment Associates, Inc.) and Subsidiaries listed in the
foregoing Index. These financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedule based on our audits. We did not audit the consolidated financial
statements of Cedar Chemical Corporation, a wholly-owned subsidiary, which
statements reflect total assets constituting 21 percent and 26 percent of
consolidated total assets as of December 31, 1994 and 1993, respectively, and
total revenues constituting 38 percent, 35 percent and 35 percent of
consolidated total revenues for the years ended December 31, 1994, 1993 and
1992, respectively. Such financial statements were audited by other auditors
whose report has been furnished to us, and our opinion, insofar as it relates
to the amounts included for Cedar Chemical Corporation, is based solely on the
report of such other auditors.

We conducted our audits 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 audits and the report of other
auditors provide a reasonable basis for our opinion.

In our opinion, based upon our audits and the report of other auditors, such
consolidated financial statements present fairly, in all material respects, the
financial position of Trans-Resources, Inc. and Subsidiaries as of December 31,
1994 and 1993, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles. Also, in our opinion, based on
our audits and the report of other auditors, such financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly in all material respects the information set
forth therein.

As discussed in Note A to the Consolidated Financial Statements, the Company
changed its method of accounting for income taxes during the year ended
December 31, 1992.

Deloitte & Touche LLP

March 24, 1995

F - 2
29

Report of Independent Accountants

To the Board of Directors and Shareholder
of Cedar Chemical Corporation:

In our opinion, the consolidated balance sheets and the related consolidated
statements of income and retained earnings and of cash flows (not presented
separately herein) present fairly, in all material respects, the financial
position of Cedar Chemical Corporation (a wholly-owned subsidiary of
Trans-Resources, Inc.) and its subsidiaries ("Cedar") at December 31, 1993 and
1994, and the results of their operations and their cash flows for the years
ended December 31, 1992, 1993 and 1994, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Cedar's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audits 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

Price Waterhouse LLP

Memphis, Tennessee
February 16, 1995

F - 3
30
TRANS-RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

DECEMBER 31,
---------------------
1993 1994
---- ----
(IN THOUSANDS)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 25,742 $ 15,571
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . 55,681 66,106
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,929 51,313
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . 56,172 168,200
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,485 18,852
-------- --------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . 216,009 320,042

PROPERTY, PLANT AND EQUIPMENT - net . . . . . . . . . . . . . . . . . . . . 131,001 202,085

OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,855 28,827
-------- --------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $365,865 $550,954
======== ========

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt . . . . . . . . . . . . . . . . . $ 24,801 $124,465
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,481 33,521
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,924 57,077
Accrued expenses and other current liabilities . . . . . . . . . . . . 30,027 38,685
-------- --------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . 112,233 253,748
-------- --------

LONG-TERM DEBT - net:
Senior indebtedness, notes payable and other obligations . . . . . . . 61,328 102,059
Senior subordinated debt - net . . . . . . . . . . . . . . . . . . . . 140,133 140,385
Junior subordinated debt - net . . . . . . . . . . . . . . . . . . . . 15,495 7,981
-------- --------
Long-Term Debt - net . . . . . . . . . . . . . . . . . . . . . . . 216,956 250,425
-------- --------

OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,882 26,231
-------- --------

STOCKHOLDER'S EQUITY:
Preferred stock, $1.00 par value, 100,000 shares
authorized, issued and outstanding . . . . . . . . . . . . . . . . - 7,960
Common stock, $.01 par value, 3,000 shares authorized,
issued and outstanding . . . . . . . . . . . . . . . . . . . . . . - -
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . 500 505
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 15,348 13,432
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . (54) (360)
Unrealized gains (losses) on marketable securities . . . . . . . . . . - (987)
-------- --------
Total Stockholder's Equity . . . . . . . . . . . . . . . . . . . . 15,794 20,550
-------- --------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $365,865 $550,954
======== ========

See notes to consolidated financial statements.

F - 4
31
TRANS-RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31, 1992, 1993 and 1994

1992 1993 1994
---- ---- ----
(IN THOUSANDS)

REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . $345,356 $326,315 $334,107

OPERATING COSTS AND EXPENSES:
Cost of goods sold . . . . . . . . . . . . . . . . . . . . 266,770 255,563 265,795
General and administrative . . . . . . . . . . . . . . . . 36,270 38,375 37,780
-------- -------- --------

OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . 42,316 32,377 30,532

Interest expense . . . . . . . . . . . . . . . . . . . . . (27,542) (27,405) (28,369)
Interest and other income - net . . . . . . . . . . . . . . 8,476 6,014 15,056
-------- -------- --------

INCOME BEFORE INCOME TAXES,
EXTRAORDINARY ITEM AND CHANGE IN
ACCOUNTING PRINCIPLE . . . . . . . . . . . . . . . . . . . 23,250 10,986 17,219

INCOME TAX PROVISION . . . . . . . . . . . . . . . . . . . . . 11,231 7,920 14,669
-------- -------- --------

INCOME BEFORE EXTRAORDINARY ITEM
AND CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . . . . . . 12,019 3,066 2,550

EXTRAORDINARY ITEM - Loss on repurchase
of debt (no income tax benefit) . . . . . . . . . . . . . . . . - (8,830) -

CUMULATIVE EFFECT ON PRIOR YEARS OF
CHANGE IN ACCOUNTING FOR INCOME TAXES . . . . . . . . . . . 1,130 - -
-------- -------- --------

NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . . $ 13,149 $ (5,764) $ 2,550
======== ======== ========

See notes to consolidated financial statements.

F - 5
32
TRANS-RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

For the Years Ended December 31, 1992, 1993 and 1994

UNREALIZED
ADDITIONAL CUMULATIVE GAINS
PREFERRED COMMON PAID-IN RETAINED TRANSLATION (LOSSES) ON
STOCK STOCK CAPITAL EARNINGS ADJUSTMENT SECURITIES TOTAL
--------- ------ ---------- -------- ----------- ----------- -----
(IN THOUSANDS)

BALANCE, JANUARY 1, 1992 . . . . . . . . . . $ - $ - $500 $ 28,607 $(335) $ - $ 28,772

Net income . . . . . . . . . . . . . . . 13,149 13,149
Dividends - common stock . . . . . . . . (13,136) (13,136)
Net change during year . . . . . . . . . 97 97
------ ------ ---- -------- ----- ----- --------

BALANCE, DECEMBER 31, 1992 . . . . . . . . . - - 500 28,620 (238) - 28,882

Net loss . . . . . . . . . . . . . . . . (5,764) (5,764)
Dividends - common stock . . . . . . . . (7,508) (7,508)
Net change during year . . . . . . . . . 184 184
------ ------ ---- -------- ----- ----- --------

BALANCE, DECEMBER 31, 1993 . . . . . . . . . - - 500 15,348 (54) - 15,794

Net income . . . . . . . . . . . . . . . 2,550 2,550
Dividends - common stock, including
non-cash dividend of $4,241,000 . . . (4,466) (4,466)
Issuance of preferred stock
upon conversion of 9 1/2%
junior subordinated debentures . . . . 7,960 7,960
Net change during year . . . . . . . . . 5 (306) (987) (1,288)
------ ------ ---- -------- ----- ----- --------

BALANCE, DECEMBER 31, 1994 . . . . . . . . . $7,960 $ - $505 $ 13,432 $(360) $(987) $ 20,550
====== ====== ==== ======== ===== ===== ========

See notes to consolidated financial statements.

F - 6
33
TRANS-RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 1992, 1993 and 1994

1992 1993 1994
---- ---- ----
(IN THOUSANDS)

OPERATING ACTIVITIES AND WORKING CAPITAL
MANAGEMENT:
Operations:
Net income (loss) . . . . . . . . . . . . . . . . $ 13,149 $ (5,764) $ 2,550
Items not requiring cash:
Depreciation and amortization . . . . . . . . 20,979 24,490 20,859
Increase in other liabilities . . . . . . . . 265 725 509
Deferred taxes and other - net . . . . . . . . (1,694) (2,494) 2,986
-------- -------- --------
Total . . . . . . . . . . . . . . . . . . 32,699 16,957 26,904
Working capital management:
Accounts receivable and other current assets . . . 45,416 (9,222) (26,105)
Inventories . . . . . . . . . . . . . . . . . . . (3,538) (9,872) 9,616
Prepaid expenses . . . . . . . . . . . . . . . . . 155 (2,187) (1,367)
Accounts payable . . . . . . . . . . . . . . . . . (14,175) 9,842 22,153
Accrued expenses and other current liabilities . . (1,297) 1,323 8,658
-------- -------- --------
Cash provided by operations and
working capital management . . . . . . . . . . 59,260 6,841 39,859
-------- -------- --------

INVESTMENT ACTIVITIES:
Additions to property, plant and equipment . . . . . . (26,143) (29,056) (93,314)
Sales of marketable securities and
short-term investments . . . . . . . . . . . . . . 15,391 15,825 33,543
Purchases of marketable securities and short-
term investments, including in 1994 purchase
of CD's securing a bank loan (see Note G) . . . . (12,819) (34,118) (134,790)
Other - net . . . . . . . . . . . . . . . . . . . . . 2,405 (6,087) (6,403)
-------- -------- --------
Cash used in investment activities . . . . . . . . (21,166) (53,436) (200,964)
-------- -------- --------

FINANCING ACTIVITIES:
Increase in long-term debt . . . . . . . . . . . . . . 10,850 124,660 183,330
Repurchases, payments and current maturities of
long-term debt . . . . . . . . . . . . . . . . . . (18,314) (109,286) (43,211)
Increase (decrease) in short-term debt . . . . . . . . (2,025) 9,726 11,040
Dividends to stockholders . . . . . . . . . . . . . . (13,136) (7,508) (225)
-------- -------- --------
Cash provided by (used in) financing activities . (22,625) 17,592 150,934
-------- -------- --------

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . 15,469 (29,003) (10,171)

CASH AND CASH EQUIVALENTS:
Beginning of year . . . . . . . . . . . . . . . . . . 39,276 54,745 25,742
-------- -------- --------
End of year . . . . . . . . . . . . . . . . . . . . . $ 54,745 $ 25,742 $ 15,571
======== ======== ========

See notes to consolidated financial statements.

F - 7
34
TRANS-RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of Trans-Resources, Inc. ("TRI"
or the "Company"), include the Company and its subsidiaries, after elimination
of intercompany accounts and transactions. The Company's principal
subsidiaries are Cedar Chemical Corporation ("Cedar"), and Cedar's two
wholly-owned subsidiaries -New Mexico Potash Corporation ("NMPC") and Vicksburg
Chemical Company ("Vicksburg"); Eddy Potash, Inc. ("Eddy"); and Haifa Chemicals
Ltd. ("HCL") and HCL's wholly-owned subsidiary, Haifa Chemicals South, Ltd.
("HCSL"). The Company is a wholly-owned subsidiary of TPR Investment
Associates, Inc. ("TPR").

Substantially all of the companies' revenues, operating profits and
identifiable assets are related to the chemical industry. The Company is a
multinational manufacturer of specialty plant nutrients, organic chemicals,
industrial chemicals and potash and distributes its products internationally.

Operating Data

The Company's revenues by region for the years ended December 31,
1992, 1993 and 1994 are set forth below:

1992 1993 1994
---- ---- ----
(IN MILLIONS)

Western Hemisphere:
United States . . . . . . . . . . . $133 $121 $122
Other . . . . . . . . . . . . . . . 30 30 23
Europe . . . . . . . . . . . . . . . . . 124 119 117
Asia and Australia . . . . . . . . . . . 29 30 41
Israel . . . . . . . . . . . . . . . . . 18 17 18
Africa and other . . . . . . . . . . . . 11 9 13
---- ---- ----
Total . . . . . . . . . . . . . . . $345 $326 $334
==== ==== ====

As of December 31, 1993 and 1994, the Company's assets were located in
the United States (49% and 44%, respectively) and abroad (principally Israel)
(51% and 56%, respectively). The Company has no single customer accounting for
more than 10% of its revenues.

Contracts and Revenue Recognition

Under the terms of a long-term contract with the U.S. Government for
the manufacture of an industrial chemical, revenues are recognized ratably for
the duration of the contract and billings are rendered as product is shipped.
Current deferred revenue of $2,772,000 and $2,541,000 at December 31, 1993 and
1994 and non-current deferred revenue of $2,645,000 at December 31, 1993,
represent billings in excess of revenues recognized under the contract. Such
current and non-current amounts are classified within "accrued expenses and
other current liabilities" and "other liabilities", respectively, in the
accompanying Consolidated Balance Sheets.

F - 8
35
Functional Currency and Transaction Gains and Losses

Approximately 90% of HCL's sales are made outside of Israel in various
currencies, of which approximately 34% are in U.S. dollars, with the remainder
principally in Western European currencies. In order to mitigate the impact of
currency fluctuations against the U.S. dollar, the Company has a policy of
hedging a significant portion of its foreign sales denominated in Western
European currencies by entering into forward exchange contracts. A portion of
these contracts qualify as hedges pursuant to Statement of Financial Accounting
Standards No. 52 and accordingly, unrealized gains and losses arising therefrom
are deferred and accounted for in the subsequent year as part of sales.
Unrealized gains and losses for the remainder of the forward exchange contracts
are recognized in income currently. At December 31, 1993 and 1994, there were
outstanding contracts to purchase $167 million and $117 million, respectively,
in Deutsche Marks. In addition, at December 31, 1993 there were outstanding
contracts to sell $56 million in Deutsche Marks and to buy United States
dollars. Gains (losses) of approximately $2,400,000 and ($2,300,000) were
deferred at December 31, 1993 and 1994, respectively, for forward exchange
contracts which qualify as hedges.

During the years ended December 31, 1992, 1993 and 1994, the Company
recorded gains (losses) of approximately ($7,000,000), $6,100,000 and
($11,200,000), respectively, relating to foreign currency transactions, which
for 1992, 1993 and 1994 include gains (losses) of $4,000,000, $850,000 and
($3,800,000), respectively, which are included in "interest and other income"
relating to certain forward exchange contracts which do not qualify as hedges.

Raw materials purchased in Israel are mainly quoted at prices linked
to the U.S. dollar. The U.S. dollar is the functional currency and accordingly
the financial statements of HCL are prepared, and the books and records of HCL
(except for a subsidiary described below) are maintained, in U.S. dollars.

The assets, liabilities and operations of one of HCL's foreign
subsidiaries are measured using the currency of the primary economic
environment in which the subsidiary operates. Assets and liabilities are
translated at the exchange rate as of the balance sheet date. Revenues,
expenses, gains and losses are translated at the weighted average exchange rate
for the period. Translation adjustments, resulting from the process of
translating such subsidiary's financial statements from its currency into U.S.
dollars, are recorded directly as a separate component of stockholder's equity.

Exchange Rate Insurance

In 1981, HCL joined a program of exchange rate insurance of the
Israeli Government designed to protect participating Israeli exporters from
losses resulting from the widening of the gap between the inflation rate in
Israel and the rate of devaluation of the New Israeli Shekel against a weighted
basket of currencies of Israel's major trading partners. The net benefits
received by HCL for the years ended December 31, 1992 and 1993 were $4,056,000
and $1,616,000, respectively, which benefits have been included in revenues.
As part of various economic measures adopted in Israel subsequent to December
31, 1988, the Israeli Government has gradually reduced the insurance proceeds
granted under its program of exchange rate insurance, with the program having
been fully eliminated on August 31, 1993.

Inventories

Inventories are carried at the lower of cost or market. Cost is
determined on the first-in, first-out method.

F - 9
36
Property, Plant and Equipment

Property, plant and equipment are carried at cost. Depreciation is
recorded under the straight-line method at generally the following annual
rates:

Buildings . . . . . . . . . . . . . . . 5-8 %
Machinery, plant and equipment . . . . 7-25%
Office furniture and equipment . . . . 6-20%

Expenditures for maintenance and repairs are charged to expense as
incurred. Investment grants from the Israeli Government are initially recorded
as a reduction of the capitalized asset and are recognized in income over the
estimated useful life of the respective asset. HCL recorded investment grants
for the years ended December 31, 1992, 1993 and 1994 amounting to $846,000,
$10,952,000 and $22,708,000, respectively.

Effective January 1, 1993 and July 1, 1994, the Company revised the
estimate of depreciable lives of its property, plant and equipment at Eddy and
HCL, respectively, to more closely approximate the economic lives of those
assets. The effect of these changes in estimate was to decrease depreciation
expense in 1993 and 1994 by approximately $630,000 and $1,800,000,
respectively.

Investments In Marketable Securities and Other Short-Term Investments

At December 31, 1993 the Company carried its investments in marketable
equity securities at the lower of cost or market. To the extent that the
quoted market value was less than cost, an unrealized loss on marketable equity
securities would be recorded and classified as a reduction of common
stockholder's equity. At December 31, 1993 the aggregate quoted market value
of the marketable equity securities owned by the Company exceeded the aggregate
cost.

The Company's other investments (principally short-term investments)
at December 31, 1993 are carried at cost. Should declines in the carrying
value of any of these securities (as well as the marketable equity securities
described above) be considered to be other than temporary, such declines are
recognized by an appropriate charge in the Consolidated Statements of
Operations.

In May 1993, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" ("SFAS 115"). The adoption of this Statement,
which was not required until 1994, required the Company to classify its equity
and fixed maturity securities as available-for-sale and reported at fair value,
with unrealized gains and losses included as a separate component of
stockholder's equity. Effective January 1, 1994, the Company adopted SFAS No.
115. The initial adoption of SFAS No. 115 did not have a material effect on
the Company's consolidated financial position or results of operations.

Income Taxes

The Company is included in the consolidated Federal income tax return
of TPR. Under the tax allocation agreement with TPR, the annual current
Federal income tax liability for the Company and each of its domestic
subsidiaries reporting profits is determined as if such entity had filed a
separate Federal income tax return; no tax benefits are given for companies
reporting losses. However, TPR may, at its discretion, allow tax benefits for
such losses.

For purposes of the consolidated financial statements, taxes on income
have been computed as if the Company and its domestic subsidiaries filed its
own consolidated Federal income tax return without regard to the tax allocation
agreement. Payments to TPR, if any, representing the excess of amounts
determined under the tax allocation agreement over amounts determined for the
purposes of consolidated financial statements are charged to retained earnings.

F - 10
37
Effective January 1, 1992, the Company changed its method of
accounting for income taxes to conform with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"), which requires a
change from the deferred method to the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred income taxes
are recognized for the tax consequences of "temporary differences" by applying
enacted statutory tax rates applicable to future years to differences between
the financial statement carrying amounts and the tax bases of existing assets
and liabilities. Under SFAS 109, the effect on deferred taxes of a change in
tax rates is recognized in income in the period that includes the enactment
date. The Company has reported the cumulative effect on prior years of the
change in the method of accounting for income taxes as of January 1, 1992 in
the Consolidated Statement of Operations.

The effect of adopting SFAS 109 in 1992 was to decrease net income by
approximately $1,170,000, representing an increased income tax provision of
$2,300,000 and an increase in income for the cumulative effect of the change in
accounting principle of $1,130,000.

Environmental Costs

Environmental expenditures that relate to current operations are
expensed or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations (including fines levied under
environmental laws, reclamation costs and litigation costs), and which do not
contribute to current or future revenue generation ("environmental clean-up
costs"), are expensed. Such environmental clean-up costs do not encompass
ongoing operating costs relating to compliance with environmental laws,
including disposal of waste. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, the cost can be reasonably
estimated and the Company's responsibility is established. Generally, the
timing of these accruals coincides with the earlier of completion of a
feasibility study or the Company's commitment to a formal plan of action.
Accruals relating to costs to be incurred, if any, at the end of the useful
life of equipment, facilities or other assets are made over the useful life of
the respective assets.

During 1992, 1993 and 1994 the Company incurred environmental clean-up
costs of approximately $1,900,000, $900,000 and $600,000, respectively. In
addition, at both December 31, 1993 and 1994, the Company has accrued
approximately $1,600,000 related to the estimated costs to be incurred for
various environmental liabilities.

Research and Development Costs

Research and development costs are charged to expense as incurred and
amounted to $2,945,000, $3,206,000 and $3,978,000 for the years ended December
31, 1992, 1993 and 1994, respectively.

Statements of Cash Flows

Investments with original maturities of three months or less are
classified as cash equivalents by the Company.

Concentration of Credit Risk

The Company believes no significant concentration of credit risk
exists with respect to investments and accounts receivable.

Reclassifications

Certain prior year amounts have been reclassified to conform to the
manner of presentation in the current year.

F - 11
38

B. OTHER CURRENT ASSETS

Other current assets consist of the following at December 31, 1993 and
1994:

1993 1994
---- ----
(IN THOUSANDS)

Marketable securities (carried principally at cost
in 1993, at market in 1994 - see Note A) . . . . . . . . . . . . . $34,611 $ 22,923
Certificates of deposit pledged as collateral (see Note G) . . . . . . - 100,040
Miscellaneous receivables, other securities,
deferred income taxes etc . . . . . . . . . . . . . . . . . . . . 21,561 45,237
------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $56,172 $168,200
======= ========

The Company classifies all of its marketable securities (including
U.S. Government obligations) as available-for-sale securities. The
following is a summary of available-for-sale securities as of December
31, 1994:

Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----------- ------------- -----------
(IN THOUSANDS)

U.S. Government obligations . . . . . . $ 1,989 $ 2 $ - $ 1,991
Foreign Government obligations . . . . . 989 34 - 1,023
------- ------- ------ -------
Total debt securities . . . . . . . 2,978 36 - 3,014
------- ------- ------ -------

Common stocks and mutual funds
investing primarily therein . . . . . 10,418 31 637 9,812
Mutual funds investing in U.S.
government bonds and investment
grade corporate bonds . . . . . . . . 9,970 - 318 9,652
Preferred stocks . . . . . . . . . . . . 544 - 99 445
------- ------- ------ -------
Total equity securities . . . . . . 20,932 31 1,054 19,909
------- ------- ------ -------

Total . . . . . . . . . . . . . $23,910 $ 67 $1,054 $22,923
======= ======= ====== =======

The cost and estimated fair value of debt securities at December
31, 1994, by contractual maturity, are as follows:

Estimated
Cost Fair Value
---- ----------
(IN THOUSANDS)

Due in one year or less . . . . . . . . . . . . $1,989 $1,991
Due after one year through three years . . . . . 989 1,023
------- ------
Total . . . . . . . . . . . . . . . . . $2,978 $3,014
====== ======

During 1994, the gross realized gains on sales of securities totaled
approximately $66,000 and the gross realized losses totaled
approximately $1,244,000 (see Note K ).

F - 12
39

C. INVENTORIES

Inventories consist of the following at December 31, 1993 and 1994:

1993 1994
---- ----
(IN THOUSANDS)

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,602 $17,566
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . 50,327 33,747
------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,929 $51,313
======= =======

D. PROPERTY, PLANT AND EQUIPMENT - NET

Property, plant and equipment at December 31, 1993 and 1994 consists
of the following:

1993 1994
---- ----
(IN THOUSANDS)

Land . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,116 $ 2,116
Buildings . . . . . . . . . . . . . . . . . . . . . . . 19,994 21,753
Machinery, plant and equipment . . . . . . . . . . . . 187,566 181,364
Office furniture, equipment and water rights . . . . . 9,892 10,750
Construction-in-progress . . . . . . . . . . . . . . . 24,197 102,494
-------- --------
Total, at cost . . . . . . . . . . . . . . . . . . 243,765 318,477
Less accumulated depreciation and amortization . . . . 112,764 116,392
-------- --------
Property, plant and equipment - net . . . . . . . . $131,001 $202,085
======== ========

During 1993 the Company commenced construction of the K3 Plant, a new
facility in Israel, with initial capacity to produce approximately 100,000
metric tons of potassium nitrate annually. The Company substantially completed
the construction of the K3 Plant in the fourth quarter of 1994. During 1993
and 1994 capital expenditures in connection with the K3 Plant (net of aggregate
Israeli Government grants of approximately $33,000,000) amounted to
approximately $19,000,000 and $43,000,000, respectively. Product sales from
the K3 Plant have commenced in 1995. The capacity of the new plant may be
expanded in subsequent years.

The Company capitalized interest costs aggregating $200,000, $352,000
and $3,360,000 during the years ended December 31, 1992, 1993 and 1994,
respectively, with respect to the financing of several construction projects.
Certain property, plant and equipment has been pledged as collateral for
long-term debt - see Note G.

F - 13
40
On February 7, 1994, the smaller of HCL's two potassium nitrate
production units was damaged by a fire, causing a temporary reduction of the
Company's potassium nitrate production capacity. The Company currently expects
to complete the replacement of the damaged unit during April 1995. The impact
of the loss of the facility, including the effect of business interruption, is
substantially covered by insurance. The insurance proceeds relating to the
property damage is for replacement value, which at a minimum will be $20
million greater than the recorded carrying value of the damaged assets.
Accordingly, during the year ended December 31, 1994, HCL has recorded a gain
of $20,000,000 less a provision for certain estimated costs related to the fire
of approximately $1,900,000. Such pre-tax gain of approximately $18,100,000 is
included in the caption "interest and other income-net" in the accompanying
Consolidated Statements of Operations - see Note K. Additional insurance
proceeds relating to the property damage, if any, will be reflected in income
as the amounts are determined.

E. SHORT-TERM DEBT

The weighted average interest rates for short-term debt outstanding at
December 31, 1993 and 1994 were 6.9% and 8.8%, respectively.

Cedar has a revolving loan commitment from two banks aggregating
$28,000,000 for 1994 (approximately $500,000 unused at December 31, 1994) and
$33,000,000 for 1995. HCSL has a $10,000,000 revolving loan commitment from
two banks through December 31, 1997, which permits borrowings commencing
January 1, 1995.

F. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the
following at December 31, 1993 and 1994:

1993 1994
-------- --------
(in thousands)

Compensation and payroll taxes . . . . . . . . . . . . . . . . $ 8,827 $ 9,625
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,795 11,437
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . 1,004 3,127
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,401 14,496
------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $30,027 $38,685
======= =======

F - 14
41
G. LONG-TERM DEBT - NET

Long-term debt consists of the following at December 31, 1993 and 1994:

Payable
Description Interest Rate* Through 1993 1994
----------- -------------- ------- ---- ----
(in thousands)

TRI:

Bank loans (1) . . . . . . . . . . . . . . . . . Various 1998 $ 26,540 $137,500
Senior subordinated reset notes, net of
unamortized debt discount of $522,000 and
$349,000 (effective interest rate of 15.4%) (2) 14.5% 1996 26,228 26,401
11.875% Senior subordinated notes, net of
unamortized debt discount of $1,095,000 and
$1,016,000 (effective interest rate of 12.1%) (3) 11.875% 2002 113,905 113,984

9.5% Junior subordinated debentures, net of
unamortized debt discount of $2,505,000 and
$1,019,000 (effective interest rate of 14.1%) (4) 9.5% 1998 15,495 7,981

Subsidiaries:
Bank loans and Industrial Revenue Bond
financing . . . . . . . . . . . . . . . . . . Various 2005 59,589 89,024
--------- --------
Total . . . . . . . . . . . . . . . . . . . 241,757 374,890
Less current portion . . . . . . . . . . . . 24,801 124,465
-------- --------
Long-term debt - net . . . . . . . . . . . . $216,956 $250,425
======== ========

____________________
* As prevailing on respective balance sheet dates. Such rates (other than
the subordinated debt) generally "float" according to changes in the Prime or
LIBOR rates. At December 31, 1994 such rates were approximately 8.5% and 5.5%,
respectively.

1. On June 30, 1994, the Company entered into a Loan Agreement with a bank and
borrowed $40,000,000 (repayable quarterly over a four year period) and utilized
a portion of the proceeds to prepay approximately $19,000,000 then owed to such
bank. Pursuant to the Loan Agreement, the Company also borrowed an additional
$100,000,000, repayable in January, 1996. Under certain specified
circumstances prior to such date, the Company could have converted such loan
into a term loan maturing five years from the date of conversion. At December
31, 1994 the Company pledged certificates of deposit ("CD's") with a principal
amount of $100,000,000 as collateral for such loan (such CD's are included in
"other current assets" in the accompanying Consolidated Balance Sheet). The
Company has pledged 79% of the capital stock of HCL to secure its obligations
under the Loan Agreement. On January 5, 1995, the Company liquidated the
pledged CD's and prepaid, in full, the $100,000,000 loan. Such loan is
included in current maturities of long-term debt at December 31, 1994.

2. The Senior Subordinated Reset Notes (the "Reset Notes") bear interest at
14.5% and mature on September 30, 1996. The Reset Notes are not subject to any
mandatory sinking fund requirement.

3. On March 30, 1993, the Company privately placed $115,000,000 principal
amount of the 11 7/8% Notes at 99% of principal amount (the "Offering"). The
net proceeds to the Company from the Offering were approximately $109,700,000.
Approximately $24,200,000 of such proceeds were used to acquire $21,500,000
principal amount of the Company's Reset Notes. In addition, approximately
$63,900,000 of the proceeds were used in May, 1993 to acquire all of the
Company's $60,997,000 then outstanding principal amount of the 13.5% Senior
Subordinated Debentures (the "Debentures") through utilization of the
applicable sinking fund and optional redemption provisions of the Debentures.
As a result of the redemptions and purchases

F - 15
42
described above, as well as the Company's acquisition of $4,500,000 principal
amount of the Debentures in January 1993, the Company has recorded an
extraordinary loss of $8,830,000 during 1993, including the write-off of
applicable deferred debt issuance costs. Such loss has no current tax benefit.

On May 6, 1993, to satisfy its obligations with respect to the registration of
the 11 7/8% Notes, the Company commenced an offer (the "Exchange Offer") to
exchange up to $115,000,000 principal amount of its registered 11 7/8% Senior
Subordinated Notes due 2002, Series B (the "New 11 7/8% Notes") for a like
principal amount of the 11 7/8% Notes. The terms of the 11 7/8% Notes and the
New 11 7/8% Notes were identical in all material respects. Pursuant to the
Exchange Offer, which expired on June 9, 1993, all outstanding 11 7/8% Notes
were tendered and exchanged for New 11 7/8% Notes.

The New 11 7/8% Notes mature on July 1, 2002 and are redeemable at the option
of the Company at any time after July 1, 1998 at stipulated redemption prices.
There are no mandatory sinking fund requirements.

4. On November 28, 1986, the Company issued the junior subordinated debentures
(the "9.5% Debentures") in the aggregate principal amount of $9,000,000, with
interest payable from October 1, 1987 and quarterly thereafter. Such 9.5%
Debentures were initially recorded at $6,700,000, the estimated value on the
date of issue, and mature in 1998.

During 1991, the Company's then outstanding redeemable preferred stock was
converted into $9,000,000 principal amount of the Company's 9.5% Debentures.
Subsequently, during 1991, the then holder of this $9,000,000 principal amount
of 9.5% Debentures agreed to extend the maturity date of such principal amount
by seven years to the year 2005. The carrying value of the 9.5% Debentures
issued upon conversion of the redeemable preferred stock was equivalent to the
previous carrying value of the preferred stock. During 1994, as a result of
the settlement of certain litigation with a former indirect stockholder and
director of the Company, TPR acquired the 9.5% Debentures then held by the wife
of such stockholder. Upon TPR's acquisition of such 9.5% Debentures, TPR and
the Company exchanged these 9.5% Debentures for a new preferred stock - see
Note L. Also as part of the settlement of such litigation, TPR assumed a
$4,000,000 obligation that was previously owed to the Company by the wife of
the former indirect stockholder and director. Such obligation, which is
included in "other assets" in the accompanying Consolidated Balance Sheets,
bears interest at the rate of 8.75% per year and is due in the year 2005.

The Reset Notes are pari passu with the New 11 7/8% Notes and are
subordinated in right of payment to all Senior Indebtedness (as defined) of the
Company and senior to the 9.5% Debentures.

Certain of the Company's and its subsidiaries' loan agreements and
Indentures require the Company and/or the respective subsidiary to, among other
things, maintain various financial ratios including minimum net worth, ratios
of debt to net worth, interest and fixed charge coverage tests and current
ratios. In addition, there are certain limitations on the Company's ability
make certain Restricted Payments and Restricted Investments (each as defined),
etc. The Company is also required to offer to purchase a portion of the New 11
7/8% Notes and the Reset Notes if it fails to maintain minimum amounts of
Junior Subordinated Capital (as defined). In the event of a Change in Control
(as defined), the Company is required to offer to purchase all the New 11 7/8%
Notes and Reset Notes as well as to repay certain bank loans. Certain of the
respective instruments also limit the payment of dividends, capital
expenditures and the incurring of additional debt and liens.

F - 16
43
As of December 31, 1994, the Company and its subsidiaries are in
compliance with the covenants of each of the respective loan agreements and
Indentures.

The aggregate maturities of long-term debt are set forth below.

Years Ending
December 31, (in thousands)
------------

1995 . . . . . . . . . . . . . . . . . . . . . $124,465
1996 . . . . . . . . . . . . . . . . . . . . . 48,496
1997 . . . . . . . . . . . . . . . . . . . . . 21,746
1998 . . . . . . . . . . . . . . . . . . . . . 28,246
1999 . . . . . . . . . . . . . . . . . . . . . 9,396
Thereafter . . . . . . . . . . . . . . . . . . 144,925
Unamortized debt discount . . . . . . . . . . . (2,384)
--------
Total . . . . . . . . . . . . . . . . . . . $374,890
========

Substantially all of the assets of HCL are subject to security
interests in favor of the State of Israel and/or banks. In addition,
substantially all of Cedar's, Vicksburg's and NMPC's assets are subject to
security interests in favor of banks pursuant to loan agreements. The capital
stock of HCL, Cedar, Vicksburg and NMPC has also been pledged to the banks
pursuant to these agreements. The Company's common stock is pledged to secure
the repayment obligations of TPR under a note issued by it to a former indirect
shareholder of the Company.

Interest paid on the long-term debt obligations, net of capitalized
interest, totaled $26,386,000, $21,852,000 and $24,089,000 for the years ended
December 31, 1992, 1993 and 1994, respectively.

H. OTHER LIABILITIES

Under Israeli law and labor agreements, HCL is required to make
severance and pension payments to dismissed employees and to employees leaving
employment in certain other circumstances. These liabilities are covered by
regular deposits to various severance pay funds and by payment of premiums to
an insurance company for officers and non-factory personnel under approved
plans. "Other liabilities" in the Consolidated Balance Sheets as of December
31, 1993 and 1994 include accruals of $2,116,000 and $2,596,000, respectively,
for the estimated unfunded liability of complete severance of all HCL
employees. Cost incurred was approximately $1,673,000, $1,974,000 and
$2,648,000 for the years ended December 31, 1992, 1993 and 1994, respectively.

No information is available regarding actuarial present value of HCL's
pension plans and the plans' net assets available for benefits, as these plans
are multi-employer, external and independent of HCL.

F - 17
44
Cedar has a defined benefit pension plan which covers all of the
full-time employees of Cedar and Vicksburg. Funding of the plan is made
through payment to various funds managed by a third party and is in accordance
with the funding requirements of the Employee Retirement Income Security Act of
1974 ("ERISA").

Cedar's net pension cost for the years ended December 31, 1992, 1993
and 1994 included the following benefit and cost components:

1992 1993 1994
------ ------ ------
(in thousands)

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . $540 $552 $657
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . 523 659 756
Amortization of unrecognized prior service cost . . . . . . . . . 72 120 109
Actual return on plan assets . . . . . . . . . . . . . . . . . . (526) (592) (751)
Amortization of unrecognized net transition obligation . . . . . 59 58 58
---- ---- ----
Net pension cost . . . . . . . . . . . . . . . . . . . . . . $668 $797 $829
==== ==== ====

The funded status and the amounts recognized in the Company's December
31, 1993 and 1994 Consolidated Balance Sheets for Cedar's benefit plan is as
follows:

1993 1994
-------- --------
(in thousands)

Plan assets at market value . . . . . . . . . . . . . . $ 8,066 $ 8,604
Actuarial present value of projected benefit obligation 10,222 10,210
------- -------
Funding status . . . . . . . . . . . . . . . . . . . . . (2,156) (1,606)
Unrecognized net transition obligation . . . . . . . . . 468 410
Unrecognized prior service cost . . . . . . . . . . . . 1,265 1,061
Unrecognized net loss . . . . . . . . . . . . . . . . . 762 475
------- -------
Prepaid pension cost . . . . . . . . . . . . . . . . . . $ 339 $ 340
======= =======

At December 31, 1993 and 1994 the actuarial present value of Cedar's
vested benefit obligation was $7,115,000 and $7,512,000 and the accumulated
benefit obligation was $7,533,000 and $7,922,000, respectively.

Actuarial assumptions used at December 31, 1993 and 1994 were as
follows:

1993 1994
------ ------

Discount rate . . . . . . . . . . . . . . . . . . . . . 7.5% 8.2%
Rate of increase in compensation levels . . . . . . . . 5.0% 5.0%
Expected long-term rate of return on assets . . . . . . 9.0% 9.0%

The unrecognized net transition obligation is being amortized on a
straight-line basis over fifteen years beginning January 1, 1987.

Cedar and its subsidiaries and Eddy have profit sharing thrift plans
designed to conform to Internal Revenue Code Section 401(k) and to the
requirements of ERISA. The plans, which cover all full-time employees (and one
of which includes Company headquarters employees), allow participants to
contribute as much as 15% of their annual compensation, up to a maximum
permitted by law, through salary reductions. The companies' contributions to
the plans are based on a percentage of the participant's contributions, and the
companies may make additional contributions to the plans at the discretion of
their respective Boards of Directors. The contribution expense relating to the
profit sharing thrift plans totaled $653,000, $595,000 and $538,000 for the
years ended December 31, 1992, 1993 and 1994, respectively.

F - 18
45
I. COMMITMENTS

Operating Leases

The Company and its subsidiaries are obligated under non-cancelable
operating leases covering principally land and office facilities. At December
31, 1994, minimum annual rental commitments under these leases are:

Years Ending
December 31, (in thousands)
------------

1995 . . . . . . . . . . . . . . . . . . $ 2,232
1996 . . . . . . . . . . . . . . . . . . 2,129
1997 . . . . . . . . . . . . . . . . . . 2,011
1998 . . . . . . . . . . . . . . . . . . 1,721
1999 . . . . . . . . . . . . . . . . . . 1,662
Thereafter . . . . . . . . . . . . . . . 10,542
-------
Total . . . . . . . . . . . $20,297
=======

Rent expense for 1992, 1993 and 1994 was $3,637,000, $3,835,000 and
$3,485,000, respectively, covering land, office facilities and equipment.

Purchase Commitment

HCL has an agreement for the purchase of potash which expires in 1999.
The terms of the agreement require HCL to purchase a minimum quantity at the
weighted average of the FOB Israeli port prices received by the seller for the
immediately preceding quarter plus certain adjustments thereto. Based upon
current prices and at current capacity, the annual commitment is approximately
$16,000,000. There are currently no purchase commitments in excess of market
prices.

J. INCOME TAXES

The Company's income tax provision for the years ended December 31,
1992, 1993 and 1994 consist of the following:

1992 1993 1994
---- ---- ----
(in thousands)

Currently payable:
Federal . . . . . . . . . . . . . . . . . . . . . $ - $ - $ 2,193
Foreign . . . . . . . . . . . . . . . . . . . . . 11,276 7,939 4,872
State . . . . . . . . . . . . . . . . . . . . . . 1,232 301 432
------- ------ -------
Total . . . . . . . . . . . . . . . . . . . . 12,508 8,240 7,497
------- ------ -------

Deferred (benefit):
Foreign . . . . . . . . . . . . . . . . . . . . . (785) (472) 7,135
State . . . . . . . . . . . . . . . . . . . . . . (492) 152 37
------- ------ ------
(1,277) (320) 7,172
-------- ------ -------

Total . . . . . . . . . . . . . . . . . . . . $11,231 $7,920 $14,669
======= ====== =======

F - 19
46

The provision for income taxes for the years ended December 31, 1992,
1993 and 1994 amounted to $11,231,000, $7,920,000 and $14,669,000,
respectively, representing effective income tax rates of 48.3%, 72.1% and
85.2%, respectively. These amounts differ from the amounts of $7,905,000,
$3,845,000 and $6,027,000, respectively, computed by applying the statutory
Federal income tax rates to income before income taxes. The reasons for such
variances from statutory rates were as follows:

1992 1993 1994
---- ---- ----

Statutory Federal rates . . . . . . . . . . . . . . . . 34.0% 35.0% 35.0%
Increase (decrease) in income tax rate resulting from:
Israeli operations - net impact of Israeli statutory
rate, effects of "inflation allowances",
withholding taxes etc. . . . . . . . . . . . . . 3.3 (10.1) (6.1)
Net losses without current tax benefit,
Alternative Mininum Tax and other . . . . . . . 15.5 47.4 56.1
Additional depletion expense . . . . . . . . . . . . (6.6) (2.9) (1.6)
State and local income taxes - net . . . . . . . . . 2.1 2.7 1.8
---- ---- ----
Effective income tax rates . . . . . . . . . . . . . . . 48.3% 72.1% 85.2%
==== ==== ====

At December 31, 1994 and 1993, deferred taxes (liabilities) consisted
of the following:

1993 1994
---- ----
(in thousands)

Depreciation and property and equipment basis differences . . . $(15,063) $(19,841)
Contract revenue recognition method . . . . . . . . . . . . . . 2,107 965
Nondeductible reserves . . . . . . . . . . . . . . . . . . . . . 3,683 3,976
Net operating loss carryforwards . . . . . . . . . . . . . . . . 18,973 -
Capital loss and capital loss carryforwards . . . . . . . . . . 5,574 3,762
Foreign tax credit carryovers . . . . . . . . . . . . . . . . . 3,000 2,517
AMT credit carryovers . . . . . . . . . . . . . . . . . . . . . 1,693 3,886
Investment tax credit carryovers . . . . . . . . . . . . . . . . 200 200
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,160 140
-------- --------
Deferred taxes - net, exclusive of valuation allowance . . . . . 21,327 (4,395)
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . (32,503) (13,968)
-------- --------
Deferred taxes - net . . . . . . . . . . . . . . . . . . . . . . $(11,176) $(18,363)
========= ========

At December 31, 1993, deferred tax assets of $2,100,000 are classified
as "other current assets" and deferred tax liabilities of $13,276,000 are
classified as "other liabilities". At December 31, 1994, deferred tax assets
of $1,050,000 are classified as "other current assets" and deferred tax
liabilities of $19,413,000 are classified as "other liabilities". The
reduction in the valuation allowance is principally due to the utilization of
net operating loss carryforwards to offset taxable dividends from a foreign
subsidiary.

F - 20
47
At December 31, 1994, the Company had various tax loss and credit
carryovers which expire as follows:

Foreign Investment
Capital Tax Tax
Expiration Loss Credit Credit
---------- ------------ ------------ ------------
(in thousands)

1997 . . . $8,900
1998 . . . $2,000
1999 . . . 500
2001 . . . $200
-------- ------ ----
Total . . . $8,900 $2,500 $200
====== ====== ====

Income taxes paid totalled approximately $7,800,000, $11,600,000 and
$7,300,000, respectively, during the years ended December 31, 1992, 1993 and
1994.

K. INTEREST AND OTHER INCOME - NET

Interest and other income - net for the years ended December 31, 1992,
1993 and 1994 consists of the following:

1992 1993 1994
---- ---- ----
(in thousands)

Interest and dividend income . . . . . . . . . . . . . . $ 3,735 $ 3,258 $2,442
Security gains (losses) - net . . . . . . . . . . . . . 2,865 2,261 (1,178)
Gain on involuntary conversion (see Note D) . . . . . . - - 18,100
Other, including a gain (loss) of $4,000,000 and
($3,800,000) in 1992 and 1994, respectively,
relating to foreign currencies (see Note A) . . . . 1,876 495 (4,308)
------- ------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . $ 8,476 $ 6,014 $15,056
======= ======= =======

L. PREFERRED STOCK

As discussed in Note G, preferred stock was issued to TPR in December,
1994. The dividend on the preferred stock is cumulative at the rate of $8.50
per share per annum. The preferred shares are non-voting and were recorded at
$7,960,000, TRI's carrying value of the 9.5% Debentures held by TPR on the date
of conversion. The preferred shares are redeemable, at the option of the
Company, at any time, at a redemption price of $79.60 per share, plus an amount
equal to cumulative dividends, accrued and unpaid thereon up to the date of
redemption.

M. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments." The estimated fair value amounts have been determined
by the Company, using available market information and appropriate valuation
methodologies. However, considerable judgment is necessarily required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts
that the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.

F - 21
48

December 31, 1993 December 31, 1994
---------------------- -----------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
-------- ------------ -------- ------------
(in thousands)

Assets:
Marketable securities (included within
"other current assets") . . . . . . . . $ 34,611 $ 34,977 $ 22,923 $ 22,923
Investments in certain securities
(included within "other assets" and
accounted for by the equity method) . . 2,274 8,524 3,335 5,855

Liabilities:
Long-term debt . . . . . . . . . . . . . . . 241,757 246,330 374,890 366,731

Off-balance sheet financial instruments:
Foreign currency contracts . . . . . . . . . 850 3,250 (3,800) (6,100)

Cash and Cash Equivalents, Accounts Receivable, Short-Term Debt and
Accounts Payable - The carrying amounts of these items are a reasonable
estimate of their fair value.

Investments in Securities - The fair value of these securities are
estimated based on quoted market prices.

Long-Term Debt - Interest rates that are currently available to the
Company for issuance of debt with similar terms and remaining maturities are
used on a discounted cash flow basis to estimate fair value for debt issues for
which no market quotes are available.

Foreign Currency Contracts - The fair value of foreign currency
contracts is estimated by obtaining quotes from brokers. The contractual
amount of these contracts totals approximately $111,000,000 and $117,000,000 as
of December 31, 1993 and 1994, respectively.

The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1993 and 1994. Although
management is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date, and
current estimates of fair value may differ significantly from the amounts
presented herein.

N. CONTINGENT LIABILITIES AND OTHER MATTERS

For a description of certain pending legal proceedings, see Item 3 -
"Legal Proceedings", which is an integral part of these financial statements.
The Company is vigorously defending against the allegations described therein.

Management of the Company believes, based upon its assessment of the
actions and claims outstanding against the Company and certain of its
subsidiaries, and after discussion with counsel, that the eventual disposition
of the matters referred to above should not have a material adverse effect on
the financial position, future operations or liquidity of the Company.

The production of fertilizers and chemicals involves the use, handling
and processing of materials that may be considered hazardous within the meaning
of applicable environmental or health and safety laws. Accordingly, the
Company's operations are subject to extensive Federal, state and local
regulatory requirements in the United States and regulatory requirements in
Israel relating to environmental matters. Operating permits are required for
the operation of the Company's facilities, and these permits are subject to
revocation, modification and renewal. Government authorities have the power to
enforce compliance with these regulations and permits, and violators are
subject to civil and criminal penalties, including civil fines,

F - 22
49
injunctions or both. The Company has entered into consent decrees and
administrative orders with certain governmental authorities which are expected
to result in unspecified corrective actions - see "Environmental Matters" in
Item 1 - "Business". There can be no assurance that the costs of such
corrective actions will not be material.

The Company has accrued for the estimated costs of facility
investigations, corrective measures studies and known remedial measures
relating to environmental clean-up costs. However, the Company has been unable
to ascertain the range of reasonably possible costs that may be incurred for
environmental clean-up costs pending completion of investigations and studies.

Based on currently available information, Management believes that the
Company's expenditures for environmental capital investment and remediation
necessary to comply with present regulations governing environmental protection
and other expenditures for the resolution of environmental actions will not
have a material adverse effect on the Company's liquidity and capital
resources, competitive position or financial statements. However, Management
cannot assess the possible effect on compliance with future requirements.

F - 23
50
CONDENSED FINANCIAL INFORMATION OF REGISTRANT SCHEDULE I

TRANS-RESOURCES, INC.
BALANCE SHEETS

December 31,
------------------------
1993 1994
---- ----
(in thousands)

ASSETS

CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 9,800 $ 9,570
Receivables and other current assets . . . . . . . . . . . . . . . 35,474 133,492
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 891 40
-------- --------
Total Current Assets . . . . . . . . . . . . . . . . . . . 46,165 143,102

INVESTMENTS IN SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . 131,861 143,324

DUE FROM SUBSIDIARIES - net . . . . . . . . . . . . . . . . . . . . . . 19,402 17,324

OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,282 16,221
-------- --------

Total . . . . . . . . . . . . . . . . . . . . . . $208,710 $319,971
======== ========

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt . . . . . . . . . . . . . . . $ 9,810 $110,000
Accrued expenses and other current liabilities . . . . . . . . . . 7,805 10,583
-------- --------
Total Current Liabilities . . . . . . . . . . . . . . . . 17,615 120,583
-------- --------

LONG-TERM DEBT - net:
Senior indebtedness, notes payable and other obligations . . . . . 16,730 27,500
Senior subordinated debt - net . . . . . . . . . . . . . . . . . . 140,133 140,385
Junior subordinated debt - net . . . . . . . . . . . . . . . . . . 15,495 7,981
-------- --------
Long-Term Debt - net (Note) . . . . . . . . . . . . . . . 172,358 175,866
-------- --------

OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . 2,943 2,972
-------- --------

STOCKHOLDER'S EQUITY:
Preferred stock, $1.00 par value, 100,000 shares
authorized, issued and outstanding . . . . . . . . . . . . - 7,960
Common stock, $.01 par value, 3,000 shares authorized,
issued and outstanding . . . . . . . . . . . . . . . . . . - -
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . 500 505
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 15,348 13,432
Cumulative translation adjustment . . . . . . . . . . . . . . . . (54) (360)
Unrealized gains (losses) on marketable securities . . . . . . . . - (987)
-------- --------
Total Stockholder's Equity . . . . . . . . . . . . . . . . 15,794 20,550
-------- --------

Total . . . . . . . . . . . . . . . . . . . . . . $208,710 $319,971
======== ========

____________________
Note - The aggregate maturities of long-term debt during the next five years
is approximately as follows: 1995 - $110,000,000; 1996 - $36,750,000;
1997 - $10,000,000; 1998 - $16,500,000 and 1999 - $0. Also, see Note
G of Notes to Consolidated Financial Statements.

S - 1
51
CONDENSED FINANCIAL INFORMATION OF REGISTRANT SCHEDULE I
(continued)

TRANS-RESOURCES, INC.

STATEMENTS OF OPERATIONS

For the Years Ended December 31, 1992, 1993 and 1994

1992 1993 1994
---- ---- ----
(in thousands)

REVENUES - EQUITY IN NET
EARNINGS OF SUBSIDIARIES:
Dividends received from subsidiaries . . . . . . . . . $ 5,132 $ 34,932 $ 17,005
Undistributed earnings of subsidiaries . . . . . . . . 25,213 (12,474) 11,764
-------- -------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . 30,345 22,458 28,769

COSTS AND EXPENSES . . . . . . . . . . . . . . . . . . . . (4,527) (4,111) (3,674)

INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . (20,682) (22,121) (23,243)

INTEREST AND OTHER INCOME - net . . . . . . . . . . . . . 4,970 5,797 1,392
-------- -------- --------

INCOME BEFORE INCOME TAXES,
EXTRAORDINARY ITEM AND CHANGE IN
ACCOUNTING PRINCIPLE . . . . . . . . . . . . . . . . . 10,106 2,023 3,244

INCOME TAX BENEFIT (PROVISION) . . . . . . . . . . . . . . 2,080 1,043 (694)
-------- -------- --------

INCOME BEFORE EXTRAORDINARY ITEM
AND CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . . . . 12,186 3,066 2,550

EXTRAORDINARY ITEM - Loss on repurchase
of debt (no income tax benefit) . . . . . . . . . . . . - (8,830) -

CUMULATIVE EFFECT ON PRIOR YEARS OF
CHANGE IN ACCOUNTING FOR INCOME TAXES . . . . . 963 - -
-------- -------- --------

NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . $ 13,149 $(5,764) $ 2,550
======== ======== ========

S - 2
52
CONDENSED FINANCIAL INFORMATION OF REGISTRANT SCHEDULE I
(concluded)

TRANS-RESOURCES, INC.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 1992, 1993 and 1994

1992 1993 1994
---- ---- ----
(in thousands)

OPERATING ACTIVITIES AND WORKING CAPITAL
MANAGEMENT:
Operations:
Net income (loss) . . . . . . . . . . . . . . . . $13,149 $(5,764) $ 2,550
Items not requiring cash:
Unremitted earnings of subsidiaries . . . . . . (25,213) 12,474 (11,764)
Depreciation and amortization . . . . . . . . . 1,307 3,985 1,226
Increase in other liabilities . . . . . . . . . 594 744 29
Deferred taxes and other - net . . . . . . . . 1,125 (1,048) 242
-------- ------- ---------
Total . . . . . . . . . . . . . . . . . . . . . . . (9,038) 10,391 (7,717)
Working capital management:
Receivables and other current assets . . . . . . . . 23,171 4,926 (3,064)
Prepaid expenses . . . . . . . . . . . . . . . . . . (642) (155) 851
Accrued expenses and other current liabilities . . . (7,764) 3,816 2,778
-------- ------- ---------
Cash provided by (used in) operations and
working capital management . . . . . . . . . . . . . 5,727 18,978 (7,152)
-------- ------- ---------

INVESTMENT ACTIVITIES:
Additions to property, plant and equipment . . . . . . (28) (75) (70)
Sales of marketable securities and
short-term investments . . . . . . . . . . . . . . . 12,578 12,435 33,543
Purchases of marketable securities and
short-term investments, including in 1994 purchase
of CD's securing a bank loan (see Note G) . . . . . (12,819) (34,118) (133,396)
Other - net . . . . . . . . . . . . . . . . . . . . . . (645) (4,539) (3,464)
-------- ------- ---------
Cash used in investment activities . . . . . . . . . . (914) (26,297) (103,387)
-------- ------- ---------

FINANCING ACTIVITIES:
Increase in long-term debt . . . . . . . . . . . . . . - 109,166 139,574
Payments and current maturities of long-term debt . . . (475) (90,457) (29,040)
Dividends to stockholders . . . . . . . . . . . . . . . (13,136) (7,508) (225)
-------- ------- ---------
Cash provided by (used in) financing activities . . . . (13,611) 11,201 110,309
-------- ------- ---------

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . (8,798) 3,882 (230)

CASH AND CASH EQUIVALENTS:
Beginning of year . . . . . . . . . . . . . . . . . . . 14,716 5,918 9,800
-------- -------- ---------
End of year . . . . . . . . . . . . . . . . . . . . . . $ 5,918 $ 9,800 $ 9,570
--------------- ======== ======== =========
Interest paid . . . . . . . . . . . . . . . . . . . . . . $ 19,497 $ 16,557 $ 19,913
======== ======== =========
Income taxes paid . . . . . . . . . . . . . . . . . . . . $ 506 $ 2,100 $ 1,113
======== ========= =========

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53

TRANS-RESOURCES, INC.

INDEX TO EXHIBITS

Exhibit Description Page No.
------- ----------- --------

3.1 Certificate of Incorporation of the Company, as amended (in
restated form). E - 4

3.2 By-laws of the Company, filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991 (the "1991 Form 10-K"), which is
incorporated herein by reference. *

4.1 Indenture, dated as of March 1, 1989, between the Company
and First Alabama Bank, as Trustee, relating to the Senior
Subordinated Reset Notes due 1996, filed as Exhibit 4.3 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1988, which is incorporated herein by reference. *

4.2 Indenture, dated as of March 30, 1993 between the Company
and First Alabama Bank, as Trustee, relating to the 11 7/8%
Senior Subordinated Notes due 2002, filed as Exhibit 4.1 to
the Registration Statement of the Company on Form S-1,
filed on April 16, 1993, as amended, Registration No.
33-61158 (the "1993 Form S-1"), which is incorporated
herein by reference. *

10.1 Potash Sales Agreement between Haifa Chemicals Ltd. and
Dead Sea Works Limited, dated January 1, 1980 (termination
date extended to December 31, 1999), concerning the supply
of potash, filed as Exhibit 10.2 to the Registration
Statement of the Company on Form S-1, filed on January 30,
1987, as amended, Registration No. 33-11634 (the "1987 Form
S-1"), which is incorporated herein by reference. *

10.2 Manufacturing Processes Agreement between Haifa Chemicals
Ltd. and Oil Refineries Ltd., dated December 28, 1981,
concerning the supply of steam and water, filed as Exhibit
10.6 to the 1987 Form S-1, which is incorporated herein by
reference. *

10.3 Agreement of Use of Ammonia Pipeline between Haifa
Chemicals Ltd. and Oil Refineries Ltd., dated August 7,
1977, as amended, concerning the use of an ammonia
pipeline, filed as Exhibit 10.8 to the 1987 Form S-1, which
is incorporated herein by reference. *

10.4 Lease between Haifa Chemicals Ltd. and Oil Refineries Ltd.,
dated December 20, 1968, concerning real property, filed as
Exhibit 10.9 to the 1987 Form S-1, which is incorporated
herein by reference. *

10.5 Lease between Haifa Chemicals Ltd. and Oil Refineries Ltd.,
dated March 31, 1974, concerning real property, filed as
Exhibit 10.10 to the 1987 Form S-1, which is incorporated
herein by reference. *

10.6 Lease between Haifa Chemicals Ltd. and Oil Refineries Ltd.,
dated April 5, 1978, concerning real property, filed as
Exhibit 10.11 to the 1987 Form S-1, which is incorporated
herein by reference. *

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54

Exhibit Description Page No.
------- ----------- --------

10.7 Lease between Haifa Chemical Ltd. and Oil Refineries Ltd.,
dated June 25, 1978, concerning real property, filed as
Exhibit 10.12 to the 1987 Form S-1, which is incorporated
herein by reference. *

10.8 Lease between Haifa Chemicals Ltd. and Oil Refineries Ltd.,
dated September 25, 1986, concerning real property, filed
as Exhibit 10.13 to the 1987 Form S-1, which is
incorporated herein by reference. *

10.9 Agreement between Haifa Chemicals Ltd. and The Port
Authorities, dated January 31, 1980 (termination date
extended to June 1996), concerning real property, filed as
Exhibit 10.15 to the 1987 Form S-1, which is incorporated
herein by reference. *

10.10 Agreement between the Company and Thomas G. Hardy, dated
March 22, 1994, concerning incentive bonus compensation,
including, as Exhibit A thereto, the related Trust
Agreement, filed as Exhibit 10.10 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993
(the "1993 Form 10-K"), which is incorporated herein by
reference.
*
10.11 Employment Agreement between the Company and Thomas G.
Hardy, dated as of June 1, 1993. E - 5

10.12 Salary Continuation Agreement between the Company and
Lester W. Youner, dated as of August 24, 1994. E - 6

10.13 Amended and Restated Credit Agreement, dated as of June 2,
1993 (The "Cedar/NMPC/Vicksburg Credit Agreement"), among
Cedar Chemical Corporation, New Mexico Potash Corporation,
the Banks parties thereto and The First National Bank of
Boston, as Agent (exhibits and schedules omitted), filed a
Exhibit 10.15 to the 1993 Form 10-K, which is incorporated
herein by reference. *

10.14 Restated Amendment No. 1, dated as of November 10, 1993, to
the Cedar/NMPC/Vicksburg Credit Agreement (exhibits and
schedules omitted), filed a Exhibit 10.16 to the 1993 Form
10-K, which is incorporated herein by reference. *

10.15 Loan Agreement, dated as of June 30, 1994, between the
Company and Bank Hapoalim (certain exhibits and schedules
omitted) filed as Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
1994, which is incorporated herein by reference. *

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55

Exhibit Description Page No.
------- ----------- --------

10.16 Tax Sharing Agreement, dated as of December 30, 1991, among
TPR Investment Associates, Inc., the Company, Eddy Potash,
Inc., Nine West Corporation, TR Media Corporation and Cedar
Chemical Corporation, filed as Exhibit 10.23 to the 1991
Form 10-K, which is incorporated herein by reference. *

10.17 Split Dollar Insurance Agreement, entered into as of August
26, 1988, between the Company and Arie Genger, filed as
Exhibit 10.27 to the Registration Statement of the Company
on Form S-1, filed on October 20, 1992, as amended,
Registration No. 33-53486, which is incorporated herein by
reference. *

10.18 Bond Purchase Agreement, dated November 10, 1993, among
Mississippi Business Finance Corporation, Vicksburg
Chemical Company and the banks named as Purchasers therein,
filed as Exhibit 10.22 to the 1993 Form 10-K, which is
incorporated herein by reference. *

21 Subsidiaries of the Company. E - 7

24 Power of Attorney authorizing Lester W. Youner to sign this
report and any amendments hereto on behalf of the principal
executive officer and the directors. E - 8

27 Financial Data Schedule. E - 9

--------------
* Incorporated by reference

E - 3