PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
or
( ) Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from-------- to---------
Commission File Number 1-2376
FMC Corporation
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-0479804
----------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
-----------------------------------------------------
(312) 861-6000
------------------------------------
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at March 31, 1995
- ---------------------------------------- -----------------------------
Common Stock, par value $0.10 per share 36,548,435
PAGE 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ----------------------------
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Income (Unaudited)
- ---------------------------------------------
(In thousands, except per share data)
Three Months
Ended March 31
----------------------
1995 1994
---- ----
Revenue:
Sales $1,015,524 $908,300
Equity in net earnings
of affiliates 1,104 1,653
Other revenue 15,528 18,409
---------- --------
Total revenue 1,032,156 928,362
---------- --------
Costs and expenses:
Cost of sales 745,812 654,917
Selling, general and
administrative expenses 140,825 142,442
Research and development 38,261 38,182
Other (income) and expense, net 149 (4,692)
---------- --------
Total costs and expenses 925,047 830,849
---------- --------
Earnings before interest, minority
interests and taxes 107,109 97,513
Minority interests 16,512 14,925
Interest income 3,344 1,594
Interest expense 19,030 16,407
---------- --------
Income before income taxes 74,911 67,775
Provision for income taxes 22,473 21,688
---------- --------
Net income $ 52,438 $ 46,087
========== ========
Average number of shares:
Primary 37,534 37,022
---------- --------
Fully diluted 37,595 37,036
========== ========
Earnings per common share:
Primary $1.40 $1.24
========== ========
Fully diluted $1.39 $1.24
========== ========
See accompanying notes to consolidated financial statements.
PAGE 3
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Balance Sheets
- ---------------------------
(In thousands, except per share data) March 31
1995 December 31
Assets: (Unaudited) 1994
----------- -----------
Current assets:
Cash and cash equivalents $ 145,994 $ 98,367
Trade receivables, net of allowance
for doubtful accounts of $12,061 and
$10,929 in 1995 and 1994, respectively 695,550 642,754
Inventories 455,459 403,943
Other current assets 176,448 137,582
Deferred income taxes 86,936 93,647
---------- ----------
Total current assets 1,560,387 1,376,293
Investments 129,500 141,702
Property, plant and equipment at cost 3,977,695 3,897,467
Less -- accumulated depreciation 2,404,731 2,360,091
---------- ----------
Net property, plant and equipment 1,572,964 1,537,376
Other assets 220,030 208,863
Deferred income taxes 78,189 87,252
---------- ----------
Total assets $3,561,070 $3,351,486
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt $ 166,847 $ 66,854
Accounts payable, trade and other 676,746 676,929
Accrued and other current liabilities 358,388 405,853
Current portion of long-term debt 36,932 41,339
Current portion of accrued pension
and other postretirement benefits 17,196 22,818
Income taxes payable 58,032 55,114
---------- ----------
Total current liabilities 1,314,141 1,268,907
Long-term debt, less current portion 998,313 901,180
Accrued pension and other postretirement
benefits, less current portion 309,438 306,476
Reserve for discontinued operations 184,256 189,885
Other liabilities 168,701 169,000
Minority interests in consolidated companies 112,674 99,555
Stockholders' equity:
Common stock, $0.10 par value, authorized
60,000,000 shares; issued 36,846,661
shares in 1995 and 36,813,530 shares
in 1994 3,685 3,681
Capital in excess of par value
of capital stock 91,678 90,366
Retained earnings 432,940 380,502
Foreign currency translation adjustment (45,709) (49,019)
Treasury stock, common, at cost;
298,226 shares in 1995 and 1994 (9,047) (9,047)
---------- ----------
Total stockholders' equity 473,547 416,483
---------- ----------
Total liabilities and stockholders' equity $3,561,070 $3,351,486
========== ==========
See accompanying notes to consolidated financial statements.
PAGE 4
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
- -------------------------------------------------
(Dollars in thousands)
Three Months
Ended March 31
---------------------------
1995 1994
--------------- ----------
Reconciliation from net income to
cash provided (required) by operating
activities:
Net income $ 52,438 $ 46,087
Adjustments for non-cash components of
net income:
Depreciation and amortization 58,551 53,893
Deferred income taxes 12,204 12,560
Equity in net earnings of affiliates (1,104) (1,653)
Amortization of accrued pension costs 279 (2,881)
Minority interests 16,512 14,925
Other 990 (1,283)
Increase in assets:
Trade receivables, net (52,796) (47,991)
Inventories (51,516) (67,956)
Other current assets and other assets (52,578) (12,265)
(Decrease) increase in liabilities:
Accounts payable, accrued and other
current liabilities and other liabilities (34,848) 2,563
Income taxes payable 2,918 (8,035)
Restructuring reserve (13,112) (8,854)
Accrued pension and other
postretirement benefits, net (2,939) 906
Cash provided (required)
by operating activities $(64,731) $(19,984)
======== ========
See accompanying notes to consolidated financial statements.
PAGE 5
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
- -------------------------------------------------
(Dollars in thousands)
Three Months
Ended March 31
--------------------------
1995 1994
---- ----
Cash (required) by operating activities $(64,731) $(19,984)
Cash (required) by discontinued operations (2,046) (3,438)
Cash provided (required) by investing
activities:
Capital spending (93,102) (46,735)
Disposal of property, plant and
equipment 2,569 2,946
Decrease in investments 13,306 3,063
-------- --------
(77,227) (40,726)
-------- --------
Cash provided (required) by financing
activities:
Net increase (decrease) in short-term debt 99,993 (5,350)
Net borrowings under credit facilities 89,000 208,000
Proceeds from issuance of domestic
long-term debt 69 74
Repayment of domestic long-term debt (125) (129)
Net increase (decrease) in foreign
long-term debt 3,782 (77,200)
Distributions to limited partner (3,325) -
Issuance of capital stock, net 1,316 3,384
-------- --------
190,710 128,779
-------- --------
Effect of exchange rate changes on cash
and cash equivalents 1,191 (1,633)
-------- --------
Increase in cash and cash equivalents 47,627 62,998
Cash and cash equivalents, beginning
of year 98,367 77,521
-------- --------
Cash and cash equivalents, end
of period $145,994 $140,519
======== ========
Supplemental disclosure of cash flow information
Cash paid for interest, net of amounts capitalized, was
$18.8 million and $15.5 million, and cash paid for
income taxes, net of refunds, was $3.4 million and $11.2
million for the three-month periods ended March 31, 1995
and 1994, respectively.
See accompanying notes to consolidated financial statements.
PAGE 6
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------
Note 1: Financial information
- ------------------------------
The consolidated balance sheet as of March 31, 1995, and the related statements
of income and cash flows for the interim periods ended March 31, 1995 and 1994
have been reviewed by FMC's independent auditors. The review is discussed more
fully in their report included herein. In the opinion of management, such
financial statements have been prepared in conformity with generally accepted
accounting principles and reflect all adjustments necessary for a fair statement
of the results of operations for the interim periods. All such adjustments are
of a normal recurring nature. The results of operations for the three-month
periods ended March 31, 1995 and 1994 are not necessarily indicative of the
results of operations for the full year.
Certain prior period balances have been reclassified to conform with the current
period's presentation.
The accounting policies are set forth in Note 1 to the company's 1994 financial
statements which are incorporated by reference in Form 10-K.
Note 2: Other income and expense, net
- ---------------------------------------
Other income and expense, net, for the three-month periods ended March 31, 1995
and 1994 includes pension-related income (expense) of $(0.3) million and $2.9
million, and LIFO-related income of $0.1 million and $1.8 million, respectively.
Note 3: Long-term debt
- -----------------------
Advances under uncommitted credit facilities were $178 million at March 31,
1995. Committed credit available under the five-year $250 million Revolving
Credit Agreement provides management with the ability to refinance $80 million
of the advances under uncommitted credit facilities on a long-term basis. Since
it is management's intent to do so, advances under the uncommitted facilities
totalling $80 million have been classified as long-term debt in the accompanying
consolidated balance sheets.
Note 4: Accounting Standards Adopted
- ------------------------------------
Statement of Financial Accounting Standards No. 112, " Employers' Accounting for
Postemployment Benefits" was adopted by the company effective January 1, 1994.
Statement No. 112 requires accrual of the expected cost of providing certain
benefits to former or inactive employees after employment but before retirement.
The effect of adoption was not material, and accordingly, has been included as
part of costs and expenses.
PAGE 7
Note 5: Formation of United Defense, L.P.
- ------------------------------------------
On January 28, 1994, FMC and Harsco Corporation ("Harsco") announced completion
of a series of agreements, first announced in December 1992, to combine certain
assets and liabilities of FMC's Defense Systems Group ("DSG") and Harsco's BMY
Combat Systems Division ("BMY"). The effective date of the combination was
January 1, 1994. The combined company, United Defense, L. P. ("UDLP"), operates
as a limited partnership, with FMC as the Managing General Partner with a 60
percent equity interest and Harsco Defense Holding as the Limited Partner
holding a 40 percent equity interest.
Beginning in the first quarter 1994, all sales and earnings of UDLP are included
in FMC's consolidated financial statements. Harsco's share of the partnership's
earnings are included in minority interest. All of the assets and liabilities
of UDLP are also consolidated in the balance sheet.
Note 6: Soda Ash Joint Venture
- ------------------------------
On February 6, 1995 the company announced that it has reached agreement with
Nippon Sheet Glass Co., Ltd., Tokyo, and Sumitomo Corporation, Tokyo to sell a
minority interest in its soda ash business for $150 million. In addition,
Nippon Sheet Glass Co., Ltd. and Sumitomo Corporation will be investing in FMC's
$135 million two-phased solution mining project. When the deal is completed, the
Japanese companies will hold a 20 percent equity interest in FMC Wyoming
Corporation, a wholly owned subsidiary of FMC, which will be composed solely of
FMC's soda ash business. FMC Wyoming will supply soda ash to the glass
manufacturing operations of Nippon Sheet Glass.
FMC will retain management control of both the soda ash business and its Green
River, Wyoming soda ash mining and manufacturing facility. FMC will also retain
100 percent ownership of the non-soda ash facilities and businesses located in
Green River. The joint venture is expected to be completed around mid-year,
subject to various conditions, which include completion of due diligence,
approval by the companies' respective boards of directors and receipt of
requisite government approvals.
Note 7: Moorco Acquisition Proposal
- -----------------------------------
On April 4, 1995, the company announced that it had proposed to acquire Moorco
International Inc. for approximately $223 million in a negotiated merger
transaction whereby Moorco's stockholders would receive $20.00 per share in cash
for all outstanding Moorco shares (including associated preferred stock purchase
rights). After a month in which the company's efforts to engage Moorco in
constructive discussions regarding the proposal were rejected unless the company
would agree to unreasonable conditions, on May 5, 1995, the company commenced a
tender offer for all outstanding Moorco shares at $20 per share in cash. Also
on May 5, 1995, FMC commenced litigation in the Court of Chancery of the State
of Delaware against Moorco and its directors asking that the Court, among other
things, require the defendants to carry out their fiduciary duties by
negotiating in good faith with FMC. Moorco responded by filing a petition in
the District Court of Nueces County, Texas, asking that court, among other
things, to enjoin FMC's bid to acquire Moorco, alleging that FMC improperly
acquired confidential information about Moorco during Moorco plant visits which
information is alleged to have been essential to FMC's corporate decision-
making. FMC does not believe that it received any confidential information. At
a hearing on May 8, 1995, in the Texas lawsuit, the Court granted FMC's request
for a continuance until Thursday, May 11, 1995, at which time the Court will
consider Moorco's request for expedited discovery and FMC's motion that the
Texas proceedings be stayed. Also on May 8, 1995, FMC filed a complaint in the
U.S. District Court in Delaware seeking a declaratory judgment that FMC's
Schedule 14D-1, filed in connection with its tender offer, does not violate
Section 14(e) of the Securities Exchange Act of 1934 as a result of Moorco's
allegations relating to the acquisition and use of information.
PAGE 8
Note 8: Sub Contract Dispute
- ----------------------------
On May 1 the U.S. District Court for the Northern District of Alabama entered a
$17.8 million judgment in favor of FMC in a pricing dispute with a subcontractor
for FMC's multiyear program to supply a track system for the U.S. Army's M1
Abrams tank. The court ruled that the subcontractor was contractually obligated
to perform subcontracted work for FMC at agreed upon pricing and quantity levels
for the final three years of the five year contract. The subcontractor can
appeal the court's decision.
The company and the subcontractor completed deliveries to the U.S. Army under
the contract in first quarter 1995. The company had previously expensed
disputed amounts and has not reflected the possible recovery from the legal
ruling in the first quarter financial statements. The company is continuing to
monitor the situation.
Note 9: Environmental
- ---------------------
Reserves at March 31, 1995 were provided for potential environmental obligations
which management considers probable and for which a reasonable estimate of the
obligation could be made. Where the available information is sufficient to
estimate the amount of liability, that estimate has been used; where the
information is only sufficient to establish a range of probable liability and no
point within the range is more likely than any other, the lower end of the range
has been used. Estimates are reviewed quarterly by the company's Environmental
Health and Safety organization, as well as financial and legal management and,
if necessary, adjusted as additional information becomes available. The
estimates can change substantially as additional information becomes available
regarding the nature or extent of site contamination, required remediation
methods, and other actions by governmental agencies or private parties.
Reserves of $222 million and $229 million, before recoveries, have been provided
at March 31, 1995 and December 31, 1994, respectively, of which $136 million and
$142 million are included in the reserve for discontinued operations at March
31, 1995 and December 31, 1994, respectively. In addition, the company has
estimated reasonably possible environmental loss contingencies may exceed
amounts accrued by as much as $230 million.
The liability arising from potential environmental obligations that have not
been reserved for at this time may be material to any one quarter's or year's
results of operations in the future. Management, however, believes the
liability arising from the potential environmental obligations is not likely to
have a material adverse effect on the company's liquidity or financial condition
and may be satisfied over the next 20 years or longer.
To ensure FMC is held responsible only for its equitable share of site
remediation costs, FMC has initiated, and will continue to initiate, legal
proceedings for contributions from other Potentially Responsible Parties, and
for a determination of coverage against its comprehensive general liability
insurance carriers.
Approximately $121 million of recoveries ($44 million as other assets and $77
million as an offset to the reserve for discontinued operations) and
approximately $123 million of recoveries ($44 million as other assets and $79
million as an offset to the reserve for discontinued operations), has been
recorded as probable realization on claims against insurance companies and other
third parties at March 31, 1995 and December 31, 1994, respectively.
PAGE 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------ ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
-------------------
As of March 31, 1995, the company had advances under uncommitted facilities of
$178 million. The company also has $500 million in committed credit facilities
consisting of a $250 million, 364 day non-amortizing revolving credit agreement
due in December 1995 and a $250 million, five-year non-amortizing revolving
credit agreement due in December 1999. As of March 31, 1995, the company had
advances under the five-year revolving credit agreement of $170 million. It is
the company's practice to maintain unused credit availability under the
Revolving Credit Agreements at least equal to the amount of advances under
uncommitted facilities. As of March 31, 1995, the company's committed credit
line under the Revolving Credit Agreements exceeded committed and uncommitted
agreement borrowings by $152 million.
Capital spending of $93 million for the quarter ended March 31, 1995 increased
$46 million versus first quarter 1994. The increase is primarily driven by
spending on previously announced major capital projects including the two-phased
solution mining project at Green River, development of FMC Gold Company's
Beartrack property, construction of a new agricultural chemical plant for a new
class of herbicide, development of a lithium resource in Argentina and the new
Northern European hydrogen peroxide facility.
Expected cash requirements for the remainder of 1995 include approximately $300-
$400 million for planned capital expenditures and potential acquisitions
(excluding the proposed Moorco acquisition described in Note 7) and net after
tax interest payments of approximately $30 million based on current debt levels.
Cash to meet these requirements will be provided by the company's operations
supplemented by $150 million of expected proceeds from the sale of a minority
interest in the soda ash business, and, if necessary, by existing cash balances
and available credit facilities.
Spending charged to the restructuring reserve in the first quarter of 1995 was
approximately $13 million primarily for severance and downsizing activities in
the machinery and equipment segment and severance costs for functional staff.
Projected requirements for the remainder of 1995 are approximately $30-35
million for severance, downsizing and other restructuring related costs. Total
spending and resulting savings are unchanged from prior estimates.
PAGE 10
RESULTS OF OPERATIONS
---------------------
First quarter 1995 compared to first quarter 1994
-------------------------------------------------
Industry Segment Data (Unaudited)
---------------------------------
(Dollars in millions)
Three Months Ended
March 31
------------------
1995 1994
-------- ------
Sales
- -----
Performance Chemicals $ 284.9 $250.6
Industrial Chemicals 228.4 197.7
Machinery and Equipment 264.1 202.6
Defense Systems 235.3 242.8
Precious Metals 9.0 21.8
Eliminations (6.2) (7.2)
-------- ------
$1,015.5 $908.3
======== ======
Income before taxes
- -------------------
Performance Chemicals $ 41.0 $ 37.9
Industrial Chemicals 41.4 34.8
Machinery and Equipment 9.1 8.2
Defense Systems 45.0 35.8
Precious Metals (5.1) 2.8
-------- ------
Operating profit 131.4 119.5
Corporate and other (24.2) (26.7)
Net interest expense (15.7) (14.8)
Other income and (expense), net (0.1) 4.7
Minority interest /(1)/ (16.5) (14.9)
-------- ------
Total $ 74.9 $ 67.8
======== ======
(1) Minority interests are primarily United Defense, L.P. (17.1)
and FMC Gold 0.7 in 1995 and United Defense, L.P. (13.8) and
FMC Gold (0.9) in 1994.
PAGE 11
Sales of $1 billion increased 12 percent from last year's quarter, driven by
improving markets in Industrial Chemicals, strong growth in Performance
Chemicals and integration of acquisitions in Machinery and Equipment. Income
from operations was $91 million before interest and taxes and net of minority
interest, despite further devaluation of the Mexican peso. In the 1994 quarter,
income from operations was $83 million on the same basis.
Performance Chemicals sales of $285 million increased 14 percent compared with
results of $251 million in last year's period. First quarter 1995 results
benefited from higher volumes of agricultural chemicals in North America, Europe
and Asia-Pacific, reflecting increased market demand, new product registrations
and label expansions.
In addition, improving markets and new applications for lithium products, market
share gains in flame retardants and higher worldwide volumes of pharmaceutical
ingredients benefited segment results.
Profits of $41 million increased 8 percent compared with last year's strong
results. The segment performance includes the effects of the Mexican peso
devaluation, as well as increased expenses to expand the food ingredients and
pharmaceutical businesses and to support growth in Agricultural Products through
label expansions, new product registrations and commercialization of a new class
of herbicides.
Industrial Chemicals sales increased 16 percent to $228 million, reflecting a
continued strengthening of end-markets for key products. Profits of $41 million
increased 19 percent compared with last year's strong quarter. In the 1995
quarter, soda ash volumes and prices increased, reflecting strong export
markets, improving domestic markets and conversions from caustic soda. Higher
domestic hydrogen peroxide volumes and prices were driven by the continuing
increased demand from the pulp and paper market. Segment profits benefited from
a decrease in the estimate of certain previously accrued expenses at FMC Foret.
European chemical volumes and pricing also improved, reflecting the economic
recovery. Part of the year over year sales increase is due to favorable
currency translations reflecting the recent weakness of the U.S. dollar.
On February 6, 1995 FMC announced its agreement to form a Soda Ash joint venture
with Nippon Sheet Glass and Sumitomo Corporation. The joint venture is fully
discussed in Note 6 of the financial statements.
In the seasonally weak first quarter, Machinery and Equipment reported sales of
$264 million and profits of $9 million, reflecting continuing segment
improvement and contributions of acquisitions. These acquisitions and
improvements more than offset the absence of several oilfield projects that were
completed during the first quarter of 1994, the lack of recovery in Food
Machinery markets and unfavorable currency translation.
PAGE 12
Machinery and Equipment backlog was $588 million at the end of the quarter, up
from $480 million at the end of the year and up from $372 million in the prior
year's quarter. The increased backlog since the end of 1994 reflects the
success of the Energy business in winning major international contracts and
gaining market share, as well as the benefits of improving worldwide markets for
airline products and contribution from the Jetway acquisition.
Defense system segment sales of $235 million decreased 3 percent from last
year's $243 million, reflecting lower production volumes. Profits (net of
minority interest) totaled $28 million in the quarter. This compared with
profits of $22 million (net of minority interest) in the 1994 period. The
absence of expenses incurred in 1994 related to the formation of United Defense,
L.P. and higher international earnings were the primary drivers of the profit
increase. Defense backlog was $1.4 billion at the end of the quarter, unchanged
from the end of 1994.
FMC's joint venture in Turkey to produce armored fighting vehicles for the
Turkish army continues to encounter delays of payment for outstanding
receivables. Payments have been received during the first quarter and
negotiations with the customer involving outstanding payments under the terms of
the contract as well as other contract matters are continuing. Income from the
joint venture is recognized as dividends and royalties are received.
Precious Metals sales of $9 million declined significantly compared with 1994
first quarter results of $22 million. The segment posted a loss of $4 million
net of minority interest compared with last year's profits of $2 million on the
same basis.
First quarter 1995 results reflect lower results at the Jerritt Canyon mine,
minimal heap-leach production from the Paradise Peak mine, the shut-down of the
Royal Mountain King mine and exploration expenses to develop several grassroot
properties. The company expects improved results in the second half of the year
as its Beartrack property goes into production.
Results from exploration efforts are encouraging at FMC Gold's El Penon, Chile,
and Rossi, Nevada, properties. At the Chilean property, significant gold
mineralization has been identified, with the potential to become an economic ore
body. There are 155 completed exploration drill holes, with 33 holes in the
primary target area having intercepted significant gold mineralization. FMC
Gold expects to increase its spending to better define this gold resource. At
the Rossi property, FMC gold has drilled 96 holes, with 22 holes in the primary
target area resulting in 45 significant intercepts.
At Beartrack, an injunction against all ongoing and future forest activities,
including mining, that could affect the local endangered species of salmon, was
issued, stayed and subsequently dissolved during the first quarter of 1995.
Another lawsuit filed last year by the Sierra Club Legal Defense Fund is still
pending. The lawsuit alleges that the biological opinion issued by the National
Marine Fisheries Service on the Beartrack property fails to satisfy the
requirements of the Endangered Species Act. FMC Gold believes the biological
opinion was carefully considered and is fully supported by the record.
PAGE 13
Development at Beartrack has continued uninterrupted, and production is
scheduled to begin during the second quarter of 1995.
Also during the quarter, FMC Corporation engaged Wood Gundy, an investment
banking firm specializing in precious metals properties, to evaluate the
strategic options related to its ownership interests in FMC Gold Company.
Certain corporate income and expense items are not allocated to specific
business segments due to their nature. During the quarter, corporate expenses
declined 9 percent to $24 million as lower staff expenses more than offset
timing of investment income. In the year-ago period, other income, primarily
LIFO and pension income, totaled $5 million. The company does not expect income
from either of these sources in 1995.
The effective tax rate for the quarters ended March 31, 1995 and
1994 was 30 percent and 32 percent, respectively. The decrease is primarily due
to lower taxes on foreign earnings.
INDEPENDENT ACCOUNTANTS' REPORTS
--------------------------------
A report by KPMG Peat Marwick LLP, FMC's independent accountants, on
the financial statements included in Form 10-Q for the quarter
ended March 31, 1995 is included on page 14.
A report by Ernst and Young LLP, UDLP's independent accountants, on the
financial statements referred to by KPMG Peat Marwick LLP in its report noted
above is included on page 15.
PAGE 14
SIGNATURE
Independent Accountants' Report
-------------------------------
The Board of Directors
FMC Corporation:
We have reviewed the accompanying consolidated balance sheet of FMC Corporation
and consolidated subsidiaries as of March 31, 1995, and the related consolidated
statements of income and cash flows for the three-month periods ended March 31,
1995 and 1994. These consolidated financial statements are the responsibility
of the company's management.
We were furnished with the report of other accountants on their review of the
interim financial information of United Defense, L.P., whose total assets as of
March 31, 1995, and whose revenues for the three-month period then ended
constituted 14 percent and 24 percent, respectively, of the related consolidated
totals.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review and the report of other accountants, we are not aware of
any material modifications that should be made to the consolidated financial
statements referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of FMC Corporation and consolidated
subsidiaries as of December 31, 1994 and the related consolidated statements of
income, cash flows and changes in stockholders' equity for the year then ended
(not presented herein); and in our report dated January 23, 1995, we expressed
an unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of December 31, 1994 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
KPMG Peat Marwick LLP
Chicago, Illinois
April 20, 1995
Page 15
SIGNATURE
Independent Accountants' Review Report
--------------------------------------
Partners
United Defense, L.P.
Arlington, Virginia
We have reviewed the balance sheet of United Defense, L.P. as of March 31, 1995,
and the related statements of income and cash flows for the three month periods
ended March 31, 1995 and 1994 and the statement of partners' equity for the
three month period ended March 31, 1995. These financial statements (not
presented separately in the FMC Corporation Form 10-Q for the quarter ended
March 31, 1995) are the responsibility of the Partnership's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that should
be made to the Partnership's financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
Ernst and Young LLP
Washington, D.C.
April 13, 1995
PAGE 16
Part II - Other Information
---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits
Page Number in
Number in Document Numbering
Exhibit Table Description System
------------- ----------- ------------------
11 Statement re: computation Document type 2, page 2
of per share earnings
assuming full dilution
15 Letters re: unaudited Document type 2, page 3
interim financial
information
27 Financial Data Schedule Document type EX-27,
page 5
(b) Reports on Form 8-K
-------------------
Form 8-K dated February 6, 1995 describing FMC's agreement to form
a Soda Ash joint venture with Nippon Sheet Glass and Sumitomo
Corporation.
PAGE 17
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FMC CORPORATION
---------------
(Registrant)
Date: May 11, 1995 Ronald D. Mambu
------------ ---------------
Controller and duly authorized
officer
PAGE 1
EXHIBIT INDEX
-------------
Page Number in
Number in Document Numbering
Exhibit Table Description System
- ------------- ----------- ------------------
11 Statement re: computation 1
of per share earnings
assuming full dilution
15.1 Letters re: unaudited 2
interim financial
information (KPMG Peat Marwick LLP)
15.2 Letter re: unaudited 3
interim financial
information (Ernst & Young LLP)
27 Financial Data Schedule 5