PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 6, 1997
FMC CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-2376 94-0479804
---------------------------- ------------ ----------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(312) 861-6000
------------------------------
Registrant's telephone number,
including area code
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This Form 8-K/A amends Form 8-K (dated October 6, 1997 and filed by Registrant
on October 8, 1997) by providing (1) additional information regarding
Registrant's sale of United Defense, L.P. as required under Item 2, and (2) pro
forma financial information and exhibits related to such sale as required under
Items 7(b) and (c), respectively.
Item 2. Acquisition or Disposition of Assets
On August 25, 1997, FMC Corporation (the "company" or "FMC"), Harsco
Corporation, Harsco UDLP Corporation (together with Harsco Corporation,
"Harsco"), and Iron Horse Acquisition Corp., an affiliate of The Carlyle Group
("Carlyle"), signed a definitive agreement for the sale of United Defense, L.P.
("United Defense" or "UDLP") and certain other assets to Carlyle for
approximately $850 million. The transaction closed on October 6, 1997.
FMC was the managing general partner and 60 percent owner of United Defense,
which was formed in 1994 by combining FMC's Defense Systems Group with Harsco's
BMY Combat Systems Division. Harsco owned the remaining 40 percent of UDLP.
United Defense supplies ground combat and naval weapons systems for the U.S. and
military customers around the world.
The sale proceeds consist of approximately $800 million cash, to be adjusted
based on certain audited closing balance sheet items as of October 6, 1997, and
a $50 million note payable to FMC by Carlyle upon the finalization of certain
international joint venture agreements. Of the estimated proceeds, FMC will
receive $460 million cash (subject to adjustment) and the note, which FMC
expects to collect in 1998.
In addition to its interest in the UDLP joint venture, FMC also sold to Carlyle
as part of UDLP its wholly-owned Corporate Technology Center ("CTC"). FMC also
agreed to contract for certain research services with CTC in the future. FMC
also transferred approximately 94 of its CTC, corporate legal and defense audit
staff to UDLP in conjunction with the disposition of UDLP. These staff primarily
performed defense-related duties while at FMC.
After deducting its investment in UDLP and providing for transaction costs,
results reported by UDLP during the pre-sale period subsequent to the
measurement date, valuation reserves against certain retained properties, and
other costs, FMC estimates it will recognize a gain of approximately $300
million ($170 million after tax) during the fourth quarter of 1997. As
previously discussed, such estimates are subject to final audits and resolution
of closing issues in accordance with the sales contract. FMC has not determined
the ultimate use of the sale proceeds, but currently expects to use cash
received to retire variable rate debt or commercial paper, contribute towards a
recently-announced common stock repurchase program, and/or invest in short-term
instruments.
Item 7. Financial Statements and Exhibits
(b) The following unaudited, pro forma consolidated financial statements are
filed with this report:
Pro Forma Consolidated Statements of Income:
For the Year Ended December 31, 1996............................ Page 4
For the Year Ended December 31, 1995............................ Page 5
For the Year Ended December 31, 1994............................ Page 6
For the Six Months Ended June 30, 1997.......................... Page 7
For the Six Months Ended June 30, 1996.......................... Page 8
Pro Forma Condensed Consolidated Balance Sheet at June 30,
1997............................................................. Page 9
Notes to the Unaudited Pro Forma Consolidated Financial
Statements....................................................... Page 10
PAGE 3
The unaudited, pro forma consolidated financial statements are presented for
informational purposes only and do not purport to be indicative of the results
of operations which would actually have been obtained if the transaction had
occurred in the periods indicated below or which may exist or be obtained in the
future. The ultimate use of the proceeds may differ from the assumptions used
herein.
The unaudited, pro forma consolidated statements of income for the years ended
December 31, 1996, 1995 and 1994, and the six months ended June 30, 1997 and
1996, give effect to:
i. the elimination of the results of operations of United Defense, L.P., a
partnership owned 60% by FMC, and certain related operations, which were
sold as described in Item 2 and in the accompanying notes, and
ii. the related pro forma adjustments described in the accompanying notes.
The pro forma results of operations are presented assuming that the disposition
had been completed as of the beginning of the respective periods. These
statements include all material adjustments necessary to restate the historical
results to accommodate these assumptions.
The unaudited, pro forma, condensed, consolidated balance sheet as of June 30,
1997 gives effect to the sale of United Defense, L.P. and certain related
operations and the related pro forma adjustments described in Item 2 and the
accompanying notes. The balance sheet is presented as though the transaction had
occurred on June 30, 1997.
These statements should be read in conjunction with the historical financial
statements and accompanying notes of the Registrant, as previously filed.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Pro Forma Consolidated Statement of Income (Unaudited)
- ------------------------------------------------------
Year Ended December 31, 1996
- ----------------------------
(In millions, except per share data)
- ------------------------------------
Pro Forma
-----------------------------
Historical Defense FMC
FMC Segment Adjustments Footnote Pro Forma
------------- ------------- -------------- ------------ -----------
Revenue:
Sales $4,969.4 $1,018.8 $3,950.6
Other revenue 111.2 31.6 79.6
-------- -------- --------
Total revenue 5,080.6 1,050.4 4,030.2
-------- -------- --------
Costs and expenses:
Cost of sales 3,726.0 796.7 2,929.3
Selling, general and
administrative
expenses 692.7 106.8 585.9
Research and
development 189.4 12.9 176.5
-------- -------- --------
Total costs and
expenses 4,608.1 916.4 3,691.7
-------- -------- --------
Income from continuing
operations before minority
interests, net interest
expense and income taxes 472.5 134.0 338.5
Minority interests 56.9 47.2 9.7
Net interest expense 93.0 - $(20.6) 2.C. 72.4
-------- -------- ------ --------
Income from continuing
operations before income
taxes 322.6 86.8 20.6 256.4
Provision for income taxes 104.5 31.5 8.3 2.C. 81.3
-------- -------- ------ --------
Income from continuing
operations $ 218.1 $ 55.3 $ 12.3 $ 175.1
======== ======== ====== ========
Earnings per common share
from continuing operations $ 5.73 $ 4.60
======== ========
Average number of shares 38.1 38.1
======== ========
See notes to pro forma consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Pro Forma Consolidated Statement of Income (Unaudited)
- ------------------------------------------------------
Year Ended December 31, 1995
- ----------------------------
(In millions, except per share data)
- ------------------------------------
Pro forma
------------------------------
Historical Defense FMC
FMC Segment Adjustments Footnote Pro Forma
------------- ------- ----------- -------- ---------
Revenue:
Sales $4,450.8 $968.2 $3,482.6
Other revenue 56.9 21.4 35.5
-------- ------ --------
Total revenue 4,507.7 989.6 3,518.1
-------- ------ --------
Costs and expenses:
Cost of sales 3,267.3 726.8 2,540.5
Selling, general and
administrative
expenses 631.3 98.1 533.2
Research and
development 187.8 12.4 175.4
Restructuring and other
charges 134.5 - 134.5
-------- ------ --------
Total costs and
expenses 4,220.9 837.3 3,383.6
-------- ------ --------
Income from continuing
operations before minority
interests, net interest
(income) expense, gain on
sale of FMC Wyoming stock
and income taxes 286.8 152.3 134.5
Minority interests 58.7 53.6 5.1
Net interest (income)
expense 74.6 (1.8) $(22.9) 2.C. 53.5
Gain on sale of FMC
Wyoming stock 99.7 - - 99.7
-------- ------ ------ --------
Income from continuing
operations before income
taxes 253.2 100.5 22.9 175.6
Provision for income taxes 35.7 37.7 9.2 2.C. 7.2
-------- ------ ------ --------
Income from continuing
operations $ 217.5 $ 62.8 $ 13.7 $ 168.4
======== ====== ====== ========
Earnings per common share
from continuing operations $ 5.77 $ 4.47
======== ========
Average number of shares 37.7 37.7
======== ========
See notes to pro forma consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Pro Forma Consolidated Statement of Income (Unaudited)
- ------------------------------------------------------
Year Ended December 31, 1994
- ----------------------------
(In millions, except per share data)
- ------------------------------------
Pro forma
------------------------------
Historical Defense FMC
FMC Segment Adjustments Footnote Pro Forma
---------- ------- ----------- -------- ---------
Revenue:
Sales $3,949.9 $1,080.5 $2,869.4
Other revenue 39.4 10.5 28.9
-------- -------- --------
Total revenue 3,989.3 1,091.0 2,898.3
Costs and expenses:
Cost of sales 2,874.0 798.6 2,075.4
Selling, general and
administrative
expenses 568.4 108.0 460.4
Research and
development 166.8 16.3 150.5
-------- -------- --------
Total costs and
expenses 3,609.2 922.9 2,686.3
-------- -------- --------
Income from continuing
operations before minority
interests, net interest
(income) expense and income
taxes 380.1 168.1 212.0
Minority interests 61.3 59.7 1.6
Net interest (income)
expense 57.1 (2.4) $(22.9) 2.C. 36.6
-------- -------- ------ --------
Income from continuing
operations before income
taxes 261.7 110.8 22.9 173.8
Provision for income taxes 85.5 43.9 9.2 2.C. 50.8
-------- -------- ------ --------
Income from continuing
operations $ 176.2 $ 66.9 $ 13.7 $ 123.0
======== ======== ====== ========
Earnings per common share
from continuing operations $ 4.73 $ 3.31
======== ========
Average number of shares 37.2 37.2
======== ========
See notes to pro forma consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Pro Forma Consolidated Statement of Income (Unaudited)
- ------------------------------------------------------
Six Months Ended June 30, 1997
- ------------------------------
(In millions, except per share data)
- ------------------------------------
Pro forma
------------------------------
Historical Defense FMC
FMC Segment Adjustments Footnote Pro Forma
---------- ------- ----------- -------- ---------
Revenue:
Sales $2,735.8 $608.6 $2,127.2
Other revenue 40.0 11.9 28.1
-------- ------ --------
Total revenue 2,775.8 620.5 2,155.3
-------- ------ --------
Costs and expenses:
Cost of sales 2,065.1 481.5 1,583.6
Selling, general and
administrative
expenses 363.3 45.9 317.4
Research and
development 89.3 6.3 83.0
-------- ------ --------
Total costs and
expenses 2,517.7 533.7 1,984.0
-------- ------ --------
Income from continuing
operations before minority
interests, net interest
expense and income taxes 258.1 86.8 171.3
Minority interests 40.6 35.4 5.2
Net interest expense 58.8 - $(10.5) 2.C. 48.3
-------- ------ ------ --------
Income from continuing
operations before income
taxes 158.7 51.4 10.5 117.8
Provision for income taxes 46.0 20.6 4.2 2.C. 29.6
-------- ------ ------ --------
Income from continuing
operations $ 112.7 $ 30.8 $ 6.3 $ 88.2
======== ====== ====== ========
Earnings per common share
from continuing operations $ 2.95 $ 2.31
======== ========
Average number of shares 38.2 38.2
======== ========
See notes to pro forma consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Pro Forma Consolidated Condensed Statement of Income (Unaudited)
- ----------------------------------------------------------------
Six Months Ended June 30, 1996
- ------------------------------
(In millions, except per share data)
- ------------------------------------
Pro forma
-----------------------------
Historical Defense FMC
FMC Segment Adjustments Footnote Pro Forma
---------- ------- ----------- -------- ---------
Revenue:
Sales $2,345.0 $510.1 $1,834.9
Other revenue 54.9 30.3 24.6
-------- ------ --------
Total revenue 2,399.9 540.4 1,859.5
Costs and expenses:
Cost of sales 1,744.8 401.4 1,343.4
Selling, general and
administrative
expenses 325.7 51.0 274.7
Research and
development 89.3 6.0 83.3
-------- ------ --------
Total costs and
expenses 2,159.8 458.4 1,701.4
-------- ------
Income from continuing
operations before minority
interests, net interest
expense and income taxes 240.1 82.0 158.1
Minority interests 35.5 31.4 4.1
Net interest expense 45.3 - $(10.3) 2.C. 35.0
-------- ------ ------ --------
Income from continuing
operations before income
taxes 159.3 50.6 10.3 119.0
Provision for income taxes 45.1 16.6 4.1 2.C. 32.6
-------- ------ ------ --------
Income from continuing
operations $ 114.2 $ 34.0 $ 6.2 $ 86.4
======== ====== ====== ========
Earnings per common share
from continuing operations $ 3.00 $ 2.27
======== ========
Average number of shares 38.0 38.0
======== ========
See notes to pro forma consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
- ----------------------------------------------------------
June 30, 1997
- -------------
(In millions, except share and per share data)
Pro forma
-----------------------
Historical Defense FMC
FMC Segment Adjustments Footnote Pro Forma
----------- ------- ----------- -------- ---------
Assets:
Current assets:
Cash and cash equivalents $ 105.6 $ - $ (55.1) 2.G. $ 50.5
Trade receivables, net of
allowance of $11.7 (pro forma
$11.6) 985.2 (68.0) 917.2
Inventories 893.4 (344.9) 548.5
Other current assets 159.2 (7.9) 50.0 2.E. 201.3
Deferred income taxes 80.5 - 9.6 2.F. 90.1
-------- ------- ------- --------
Total current assets 2,223.9 (420.8) 4.5 1,807.6
Investments 52.5 (3.6) 48.9
Net assets of discontinued
operation - 95.6 (95.6) 2.A. -
Net property, plant and equipment at cost 1,958.1 (115.1) 1,843.0
Goodwill and intangible assets 470.1 (28.9) 441.2
Other assets and deferred income
taxes 288.3 (39.3) 14.1 2.F. 263.1
-------- ------- ------- --------
Total assets $4,992.9 $(512.1) $ (77.0) $4,403.8
======== ======= ======= ========
Liabilities and Stockholders'
Equity:
Current liabilities:
Short-term and current debt $ 387.9 $ - $ 387.9
Accounts payable, trade and other 945.7 (344.2) 601.5
Accrued and other current
liabilities and taxes payable 614.5 (70.9) $ 177.7 2.F. 721.3
-------- ------- ------- --------
Total current liabilities 1,948.1 (415.1) 177.7 1,710.7
Long-term debt, less current
portion 1,315.1 - (460.0) 2.C. 855.1
Accrued pension and other
liabilities 490.8 (11.3) 479.5
Reserve for discontinued operations 174.8 - 35.3 2.D. 210.1
Minority interests in consolidated
companies 144.2 (85.7) 58.5
Stockholders' equity:
Preferred stock, no par value,
authorized 5,000,000 shares;
no shares issued - - -
Common stock, $0.10 par value,
authorized 60,000,000 shares;
issued 37,664,542 3.8 - 3.8
Capital in excess of par value 129.2 - 129.2
Retained earnings 919.5 - 170.0 2.B. 1,089.5
Foreign currency translation adj. (113.0) - (113.0)
Treasury stock, common at cost;
452,891 shares (19.6) - (19.6)
-------- ------- ------ --------
Total stockholders' equity 919.9 - 170.0 1,089.9
-------- ------- ------ --------
Total liabilities and stockholders'
equity $4,992.9 $(512.1) $(77.0) $4,403.8
======== ======= ====== ========
See accompanying notes to pro forma consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Notes to Unaudited Pro Forma Consolidated Financial Statements
- --------------------------------------------------------------
Note 1: Basis of Presentation
- ------------------------------
The accompanying pro forma financial statements are presented in accordance with
Article 11 of Regulation S-X.
The unaudited, pro forma consolidated statements of income for the years ended
December 31, 1996, 1995 and 1994, and the six months ended June 30, 1997 and
1996, were prepared assuming the disposition of the company's 60% interest in
United Defense, L.P. had been completed as of the beginning of the respective
periods. The unaudited, pro forma condensed, consolidated balance sheet as of
June 30, 1997 assumes the transaction had been completed on June 30, 1997. The
unaudited, pro forma consolidated financial statements were prepared based upon
historical financial information from the consolidated FMC and United Defense,
L.P. financial statements as of and for the periods indicated above. The
unaudited, pro forma, consolidated financial statements should be read in
conjunction with the historical, consolidated financial statements of FMC
Corporation, as previously filed.
Note 2: Pro Forma Adjustments
- ------------------------------
The following pro forma adjustments have been made to the pro forma consolidated
financial statements:
A. Elimination of the results of operations of the company's Defense Systems
segment (which includes United Defense, L.P., a partnership owned 60% by FMC,
as described in Item 2), and of the assets, liabilities and net worth
attributable to the segment. (See "Defense Segment" column on pro forma
consolidated financial statements.)
B. Assumed after-tax gain on the transaction estimated at $170 million at June
30, 1997, noting that such gain amount is estimated based on final proceeds
to be determined in accordance with the sale agreement and subject to audit,
which amount has not yet been finalized. The pro forma condensed,
consolidated balance sheet reflects the estimated after-tax gain on the sale
only to the extent it affects the company's equity at June 30, 1997.
C. Assumed after-tax proceeds from the transaction of $375 million for each
period presented, noting that such proceeds are estimated based on final
proceeds determined in accordance with the sale agreement and subject to
post-closing audit, which amount has not yet been finalized. Use of the net
cash proceeds from the sale to reduce FMC's long-term debt outstanding under
its revolving term credit facility, commercial paper obligations and other
debt issues, and the related income tax effect; reduction in related interest
expense is based on the weighted average rates of interest associated with
specific debt assumed to be paid of 5.6%, 5.5%, 6.1% and 6.1% in 1997, 1996,
1995 and 1994, respectively.
D. Recognition of liabilities associated with the discontinued Defense Systems
segment.
E. Recognition of a $50 million short-term note receivable from the buyer.
F. Recognition of accrued liabilities related to closing and other costs, and of
income tax payable and deferred income taxes on the transaction.
G. Payment of intercompany loan of $55.1 million.
PAGE 11
(c) See Exhibit Index
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FMC CORPORATION
By /s/ Michael J. Callahan
-------------------------------
Michael J. Callahan
Executive Vice President and
Chief Financial Officer
Date: October 16, 1997
PAGE 13
Exhibit Index
Number in
Exhibit Table Description
- ------------- -----------
2.1 Purchase Agreement, dated as of August 25, 1997, by and among
FMC Corporation, Harsco Corporation, Harsco UDLP Corporation
and Iron Horse Acquisition Corp.
10.1 Supplemental Agreement No. 1 to Purchase Agreement, dated as of
August 25, 1997, by and among FMC Corporation, Harsco
Corporation, Harsco UDLP Corporation and Iron Horse Acquisition
Corp. (confidential portions omitted pursuant to a Confidential
Treatment Request separately filed with the Commission).
10.2 Allocation and Contribution Agreement, dated as of August 25,
1997, by and among FMC Corporation, Harsco Corporation and
Harsco UDLP Corporation (confidential portions omitted pursuant
to a Confidential Treatment Request separately filed with the
Commission).