SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 31, 2001
FMC CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-2376 94-4079804
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
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(Address of principal executive offices) (Zip Code)
(312) 861-6000
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Registrant's telephone number,
including area code
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Item 9. Regulation FD Disclosure
On July 31, 2001, FMC Corporation issued the following release:
FMC Reports 2001 Second Quarter Results
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Chicago, July 31, 2001--FMC Corporation today reported 2001 second quarter
income per share from continuing operations of $1.58 on a diluted basis, before
restructuring and impairment charges, on sales of $1 billion. FMC also
announced restructuring and impairment charges of $351 million after tax
(approximately $87 million in cash costs), primarily related to its phosphorus
and lithium operations.
In June, FMC Technologies, Inc., a subsidiary of FMC, launched an IPO of 17
percent of its stock, which is now trading on the New York Stock Exchange. FMC
said it still is on track to distribute the remaining FMC-owned shares of FMC
Technologies' stock by the end of 2001.
The company noted that it is providing background pro forma earnings information
(attached) for the machinery and chemical operations as if they had been
unaffiliated companies for the last six quarters.
According to FMC Chairman and Chief Executive Officer Robert N. Burt: "Our
operating results for the quarter matched our expectations given the current
economic slowdown. We took a write-off in the second quarter, primarily
reflecting ongoing problems in our U.S. phosphorus and Argentine lithium
businesses. Looking ahead, the current malaise in the United States and within
the global economy is lasting longer than expected, particularly in the
manufacturing sector. What we see in manufacturing is continued weakness well
into the third quarter, with modest improvement in the fourth quarter.
"We expect the chemical company profits for the third quarter to be a little
more than half of last year's third quarter in the pro forma statements, while
full-year results for the chemical company before impairment and restructuring
charges should be approximately 80 percent of 2000's pro forma performance.
Given the uncertainties in the economic outlook, we are not predicting next
year's earnings."
Review of Operations
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Energy Systems sales were $270 million, up from $255 million in the second
quarter of 2000. Earnings were $13 million, down from $20 million in the same
period last year. Higher sales volumes were due to strong fluid control demand,
while earnings were down on continued weakness in measurement systems and lower
volumes and profits in floating production systems. Energy Systems inbound
orders totaled $354 million for the quarter, up 63 percent from the prior-year
period, primarily on strong subsea orders. Subsea inbound orders were strong
across all geographic areas, including orders from Enterprise Oil offshore
Brazil, Statoil offshore Norway, TotalFinaElf offshore West Africa, and BP in
the Gulf of Mexico. The BP order for five trees is for its Crazy Horse field
offshore Louisiana and is the first order under the new $250 million, five-year
frame agreement between FMC Technologies and BP. Energy Systems total backlog
increased approximately 30 percent in the second quarter of 2001, to
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$635 million, compared with $490 million for the same period in 2000. The
backlog for floating production systems improved with recent orders for turret
mooring and related systems for a Floating Production and Storage and Offloading
vessel to be used in developing Enterprise Oil's Bijupira and Salema fields.
MODEC International LLC, a joint venture that is 37.5 percent owned by FMC
Technologies, obtained the $290 million order from Enterprise Oil for this FPSO.
Food and Transportation Systems sales of $212 million were down from $240
million in the prior-year second quarter, and earnings of $16 million also
declined from $23 million in the same period. Sales and profits were down for
freezing systems and sterilization systems, due to the slowing U.S. and global
economy, which has caused many food processors to postpone capital spending
plans. The company expects potential orders to remain uncertain until food
processors see an upturn in economic activity.
Sales were up, and profits were flat for airport systems. Volumes for ground
support equipment, especially loaders, were the primary contributor to the
improved sales compared with the second quarter of 2000. A weaker U.S. economy,
high fuel prices and labor issues continue to put profit pressure on FMC
Technologies' airline and freight customers. However, order activity has
remained fairly steady, and inbound orders for loaders and ground support
equipment totaled more than $75 million during the second quarter. Profit
pressure on airlines may slow orders in the second half of the year and in 2002,
which may partially offset the benefit from the initial orders and delivery of
loaders for the U.S. Air Force under the Next Generation Smaller Loader program.
Twelve loaders of the 264-unit program will be delivered prior to year-end.
Food and Transportation Systems total backlog increased 13 percent in the second
quarter of 2001, to $270 million, compared with $239 million for the same period
in 2000.
Agricultural Products sales were $206 million, up from $185 million in the
prior-year period. Earnings increased to $41 million from $37 million in the
2000 second quarter. The increased sales reflected higher sales of specialty
products--including turf, ornamental and termiticide products--as well as higher
sales of herbicides in Latin America. Earnings increased, reflecting higher
sales and an additional sulfentrazone profit protection payment from DuPont.
Specialty Chemicals sales were $120 million, down from $126 million in last
year's second quarter. Profits were $21 million, down from $26 million in the
prior-year period. Lower sales and profits primarily reflected customer
inventory corrections, a weak euro and weakness in some industrial specialty
markets. Lithium sales were down slightly, but profits were even on lower costs
and improved product mix.
Industrial Chemicals sales of $200 million were down from $207 million in the
second quarter last year. Earnings of $18 million were down from $28 million in
the prior-year period. Soda ash sales were down slightly on lower volumes, but
earnings were even with last year's second quarter on higher export prices and
lower costs. Hydrogen peroxide sales and profits were down on lower volumes to
pulp and textile customers, who are operating at lower
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rates in the current economic downturn. FMC's share of profits from Astaris,
its 50 percent-owned joint venture, was down on lower volumes and prices,
reflecting weaker economic conditions and increased foreign competition due to
the strong dollar. During the quarter, Astaris began the resale of contracted,
low-cost power to a power supplier, which should improve results in the second
half of 2001.
Corporate expense was $17 million--even with last year's quarter--and net
interest expense was $24 million, down from $26 million in the prior-year
period. FMC Corporation consolidated debt at the end of the second quarter was
$1.2 billion, which was net of the FMC Technologies IPO proceeds, after
expenses, of approximately $200 million. Depreciation and amortization for the
2001 second quarter was $50 million and capital expenditures were $67 million,
with the difference between them primarily driven by high consent decree
spending at our phosphorus operation in Pocatello, Idaho.
Asset Impairments and Restructuring Charges
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FMC announced one-time after-tax charges of $351 million ($508 million before
tax), of which approximately $87 million represents cash costs. Of these cash
costs, $60 million represents previously disclosed commitments.
These charges included asset impairments and restructuring charges of $227
million ($372 million before tax) for FMC's U.S. phosphorus-related activities.
High manufacturing expenses related to increased energy costs and weak market
conditions have required FMC to take these asset impairment and restructuring
charges.
The charges for the phosphorus-related activities were largely related to FMC's
environmental assets at the Pocatello, Idaho plant, but also included FMC's
investment in the Astaris joint venture and other future commitments, including
a fund for the Shoshone-Bannock tribes. The tribes have agreed to support a
proposal to amend a consent decree to permit closure of the remaining waste
treatment pond that is part of the Astaris facility located on the Fort Hall
Reservation near Pocatello. This agreement provides greater operating
flexibility as alternatives for the Pocatello plant continue to be evaluated.
Also included in the restructuring and impairment charges is a non-cash
impairment of $97 million ($99 million before tax) of assets of FMC's lithium
operation in Argentina. This operation, which is situated in the Andes
Mountains, anticipates continued unfavorable market conditions that will not
allow recovery of FMC's capital investment in Argentina.
Finally, restructuring and impairment charges for the quarter included $15
million ($18 million before tax) related to FMC's corporate restructuring costs
and $12 million ($19 million before tax) reflecting a restructuring of chemical
operations.
Other income and expense, net, for the three months ended June 30, 2001, was $7
million unfavorable to the prior year, primarily as a result of higher pension
and LIFO inventory charges for the quarter.
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Including special expense items, FMC reported a net loss of $300 million for the
second quarter, and a loss per share of $9.62.
Six Month Results
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For the first six months of 2001, sales were $1.9 billion, compared with $2
billion in the first six months of 2000. After-tax income from continuing
operations before restructuring and impairment charges was $69 million, down
from $106 million in the prior-year period. Income per share from continuing
operations before one-time charges was $2.14, down from $3.36 per share in the
first six months of 2000.
Energy Systems sales of $517 million were up slightly from $512 million in the
first six months of 2000. Earnings of $22 million were down from $31 million in
the prior-year period, based on continued weak margins in measurement systems
and loading systems, accompanied by margin declines in floating production
systems.
Food and Transportation Systems sales of $395 million decreased from $426
million in the first six months of 2000. Earnings of $26 million also were down
from $35 million in the same period a year ago. Lower volumes and margins in
food processing equipment, including sterilization, as well as continued weak
margins in freezing systems, affected results. Within airport systems,
increased volumes and margins in ground support equipment, particularly loaders,
were partially offset by weakness in passenger boarding bridges.
Agricultural Products sales were $340 million compared with $350 million in the
first half of last year. Earnings increased to $55 million from $51 million in
the prior-year period. Lower sales reflected reduced sales in Asia and lower
sulfentrazone sales to DuPont. Higher earnings reflected the receipt of contract
profit protection payments from DuPont, as well as lower costs.
Specialty Chemicals sales were $236 million, down from $251 million in the 2000
first half. Earnings were $41 million, compared with $45 million in the prior-
year period. Sales and profits were down on softer demand, especially in the
industrial specialty markets.
Industrial Chemicals sales were $399 million, down from $481 million in the
first six months of last year. Earnings were $33 million compared with $63
million in the prior-year period. Lower sales primarily reflected the
deconsolidation of phosphorus sales after last year's second quarter formation
of Astaris LLC, the company's 50-50 phosphorus chemicals joint venture with
Solutia Inc. Lower earnings primarily resulted from significantly lower
phosphorus earnings caused by higher power costs and higher environmental
consent decree spending.
Year-to-date corporate expenses were $34 million, down from $35 million in the
prior-year period. Net interest expense for the six-month period ending June 30
was $47 million, down from $49 million in the same period last year.
Depreciation and amortization was $96 million for the first six months of 2001,
and capital expenditures were $118 million for the same period.
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FMC is one of the world's leading producers of chemicals and machinery for
industry and agriculture. FMC employs approximately 15,000 people at 90
manufacturing facilities and mines in 25 countries. The company divides its
businesses into five segments: Energy Systems, Food and Transportation Systems,
Agricultural Products, Specialty Chemicals and Industrial Chemicals.
Safe Harbor Statement under the Private Securities Act of 1995: Statements in
this news release that are forward-looking statements are subject to various
risks and uncertainties concerning specific factors in the corporation's 2000
Form 10-K and other SEC filings. Such information contained herein represents
management's best judgment as of the date hereof based on information currently
available. The corporation does not intend to update this information and
disclaims any legal obligation to the contrary.
# # #
FMC will conduct its second quarter conference call at 11:30 a.m. (Eastern
Daylight Time) on Tuesday, July 31. The event will be available at www.fmc.com.
It will also be available for replay after the event at the same website.
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The news release in this Form 8-K and the information contained in the exhibits
thereto may also be accessed at the company's website (www.fmc.com). The
posting and furnishing of this information is not intended to, and does not,
constitute a determination by FMC Corporation that the information is material
or that investors should consider this information before deciding to buy or
sell FMC Corporation securities.
PAGE 7
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are furnished:
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Exhibit Number Exhibit Description
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Exhibit 99a FMC Corporation and Consolidated
Subsidiaries - Industry Segment Data
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Exhibit 99b FMC Corporation and Consolidated
Subsidiaries - Condensed Consolidated
Statements of Income
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Exhibit 99c FMC Corporation and Consolidated
Subsidiaries - Condensed Consolidated
Statements of Income Excluding Special
Expense Items
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Exhibit 99d FMC Corporation (Chemicals Operations)
Business Segment Data - Pro Forma
Basis
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Exhibit 99e FMC Corporation (FMC Technologies)
Business Segment Data - Pro Forma
Basis
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FMC CORPORATION
By /s/ Stephen F. Gates
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Stephen F. Gates
Senior Vice President, General
Counsel and Secretary
Date: August 9, 2001