-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pq50TGSdKiQfsrl21SPrdj6MPKvArHo5pU6AbX00zLGRZQ0Xj11C1CSK1ZsoAc1F ZJhxThlXSYCw2ErTMurERQ== 0000950131-97-005972.txt : 19971002 0000950131-97-005972.hdr.sgml : 19971002 ACCESSION NUMBER: 0000950131-97-005972 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19971001 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FMC CORP CENTRAL INDEX KEY: 0000037785 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 940479804 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-02376 FILM NUMBER: 97689600 BUSINESS ADDRESS: STREET 1: 200 E RANDOLPH DR CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3128616000 FORMER COMPANY: FORMER CONFORMED NAME: BEAN SPRAY PUMP CO DATE OF NAME CHANGE: 19670706 FORMER COMPANY: FORMER CONFORMED NAME: FOOD MACHINERY & CHEMICAL CORP DATE OF NAME CHANGE: 19670706 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended..................................March 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from.......................to................... Commission file number.................................................... A. UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN (Full title of the Plan) B. FMC CORPORATION 200 East Randolph Drive, Chicago, Illinois 60601 (Name and Address of Issuer) Page 1 SIGNATURES - ---------- The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, FMC Corporation, as Plan Administrator, has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN By /s/ J. Paul McGrath ---------------------------------------- J. P. McGrath Senior Vice President, General Counsel and Secretary FMC Corporation (Plan Administrator) Dated: October 1, 1997 Page 2 Independent Auditors' Report The Board of Directors The Employee Welfare Benefits Plan Committee of FMC Corporation: We have audited the accompanying Statements of Financial Position of United Defense, L. P. Salaried Employees' Plan (Plan) as of March 31, 1997 and 1996, and the related Statements of Earnings and Changes in Plan Equity for the years ended March 31, 1997 and 1996, and for the period from January 1, 1995 through March 31, 1995. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Plan as of March 31, 1997 and 1996, and the results of its operations and the changes in its plan equity for the years ended March 31, 1997 and 1996, and for the period from January 1, 1995 through March 31, 1995 in conformity with generally accepted accounting principles. /s/ KMPG Peat Marwick LLP Chicago, Illinois September 24, 1997 UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Statements of Financial Position March 31, 1997 and 1996
================================================================================ 1997 1996 - -------------------------------------------------------------------------------- Assets: Investments in the FMC Corporation Salaried Employees' Master Trust (notes 2 and 3) $ 80,068,087 54,601,585 Participant loans receivable 2,001,349 717,097 - -------------------------------------------------------------------------------- Total assets $ 82,069,436 55,318,682 ================================================================================ Total plan equity $ 82,069,436 55,318,682 ================================================================================
See accompanying notes to financial statements. 1 UNITED DEFENSE, L. P. SALARIED EMPLOYEES' PLAN Statement of Earnings and Changes in Plan Equity Year ended March 31, 1997
- ------------------------------------------------------------------------------------------------------- FMC Fixed Harsco Combined Stock Income Equity Stock Balance Fund Fund Fund Fund - ------------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Net investment income from the FMC Corporation Salaried Employees' Master Trust: Dividends $ 782,978 610 -- 232,265 550,103 Interest 909,648 3,512 899,100 2,998 4,038 Realized and unrealized gains (losses), net (2,548,375) (5,546,820) (20,552) 978,519 2,040,478 - ------------------------------------------------------------------------------------------------------- Total investment income (loss) (855,749) (5,542,698) 878,548 1,213,782 2,594,619 - ------------------------------------------------------------------------------------------------------- Contributions and deposits: Participating employees 16,666,447 9,766,004 1,818,214 3,143,215 1,939,014 Employer 7,636,350 7,636,350 -- -- -- Rollovers 8,776,584 861,314 6,655,696 1,256,994 2,580 - ------------------------------------------------------------------------------------------------------- Total contributions and deposits 33,079,381 18,263,668 8,473,910 4,400,209 1,941,594 - ------------------------------------------------------------------------------------------------------- Total additions 32,223,632 12,720,970 9,352,458 5,613,991 4,536,213 - ------------------------------------------------------------------------------------------------------- Deductions from net assets attributed to: Employee withdrawals from the plan (5,421,385) (2,367,122) (756,596) (475,917) (1,821,750) Fund transfers -- (46,478) 47,845 19,248 (20,615) Expenses (51,493) -- (51,493) -- -- - ------------------------------------------------------------------------------------------------------- Total deductions (5,472,878) (2,413,600) (760,244) (456,669) (1,842,365) - ------------------------------------------------------------------------------------------------------- Net increase 26,750,754 10,307,370 8,592,214 5,157,322 2,693,848 Plan equity, beginning of year 55,318,682 19,706,741 6,185,818 5,232,581 24,193,542 - ------------------------------------------------------------------------------------------------------- Plan equity, end of year $82,069,436 30,014,111 14,778,032 10,389,903 26,887,390 =======================================================================================================
See accompanying notes to financial statements. 2 UNITED DEFENSE, L. P. SALARIED EMPLOYEES' PLAN Statement of Earnings and Changes in Plan Equity Year ended March 31, 1996
=============================================================================================================================== FMC Fixed Harsco Combined Stock Income Equity Stock Balance Fund Fund Fund Fund - ------------------------------------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Net investment income from the FMC Corporation Salaried Employees' Master Trust: Dividends $ 830,708 -- -- 299,746 530,962 Interest 417,435 1,436 409,987 699 5,313 Realized and unrealized gains (losses), net 10,384,824 1,995,833 (55,372) 758,187 7,686,176 - ------------------------------------------------------------------------------------------------------------------------------- Total investment income 11,632,967 1,997,269 354,615 1,058,632 8,222,451 - ------------------------------------------------------------------------------------------------------------------------------- Contributions and deposits: Participating employees 14,304,317 7,682,439 2,651,109 1,857,281 2,113,488 Employer 6,580,140 6,580,140 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Total contributions and deposits 20,884,457 14,262,579 2,651,109 1,857,281 2,113,488 - ------------------------------------------------------------------------------------------------------------------------------- Total additions 32,517,424 16,259,848 3,005,724 2,915,913 10,335,939 - ------------------------------------------------------------------------------------------------------------------------------- Deductions from net assets attributed to: Employee withdrawals from the plan (3,117,278) (482,640) (814,757) (227,059) (1,592,822) Fund Transfers -- (333,329) 168,017 96,001 69,311 - ------------------------------------------------------------------------------------------------------------------------------- Total deductions (3,117,278) (815,969) (646,740) (131,058) (1,523,511) - ------------------------------------------------------------------------------------------------------------------------------- Net increase 29,400,146 15,443,879 2,358,984 2,784,855 8,812,428 Plan equity, beginning of period 25,918,536 4,262,862 3,826,834 2,447,726 15,381,114 - ------------------------------------------------------------------------------------------------------------------------------- Plan equity, end of period $55,318,682 19,706,741 6,185,818 5,232,581 24,193,542 ===============================================================================================================================
See accompanying notes to financial statements. 3 UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Statement of Earnings and Changes in Plan Equity For the period from January 1, 1995 through March 31, 1995
==================================================================================================================================== FMC Fixed Harsco Combined Stock Income Equity Stock Balance Fund Fund Fund Fund - ------------------------------------------------------------------------------------------------------------------------------------ Additions to net assets attributed to: Net investment income from the FMC Corporation Salaried Employees' Master Trust: Dividends $ 118,128 - - 1,739 116,389 Interest 85,671 290 81,268 1,309 2,804 Realized and unrealized gains (losses), net 1,435,012 166,776 (12,463) 266,584 1,014,115 - ------------------------------------------------------------------------------------------------------------------------------------ Total investment income 1,638,811 167,066 68,805 269,632 1,133,308 - ------------------------------------------------------------------------------------------------------------------------------------ Contributions and deposits: Participating employees 3,746,974 1,939,259 734,272 548,179 525,264 Employer 1,723,461 1,654,128 - - 69,333 Rollovers 19,392,091 525,313 3,163,041 1,757,686 13,946,051 - ------------------------------------------------------------------------------------------------------------------------------------ Total contributions and deposits 24,862,526 4,118,700 3,897,313 2,305,865 14,540,648 - ------------------------------------------------------------------------------------------------------------------------------------ Total additions 26,501,337 4,285,766 3,966,118 2,575,497 15,673,956 - ------------------------------------------------------------------------------------------------------------------------------------ Deductions from net assets attributed to: Employee withdrawals from the plan (582,762) (22,904) (139,245) (127,771) (292,842) Expenses (39) - (39) - - - ------------------------------------------------------------------------------------------------------------------------------------ Total deductions (582,801) (22,904) (139,284) (127,771) (292,842) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase 25,918,536 4,262,862 3,826,834 2,447,726 15,381,114 Plan equity, beginning of period - - - - - - ------------------------------------------------------------------------------------------------------------------------------------ - Plan equity, end of period $ 25,918,536 4,262,862 3,826,834 2,447,726 15,381,114 ====================================================================================================================================
See accompanying notes to financial statements. 4 UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements March 31, 1997 and 1996 ================================================================================ (1) Description of the Plan The following description of the United Defense, L. P. Salaried Employees' Plan (the Plan) provides only general information. Participants should refer to the plan text for a more complete description of the Plan's provisions. (a) General The Plan is a qualified salary-reduction plan established on January 1, 1995 under Section 401(k) of the Internal Revenue Code, which covers all full-time employees of United Defense, L. P. (the Company) (other than employees who generally reside or work outside of the United States and employees covered by a collective bargaining agreement which does not provide for participation in the Plan). Such employees are eligible to participate in the Plan immediately upon commencement of their employment with the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). United Defense, L. P. is a 60% owned joint venture of FMC Corporation (the Parent Company). The remaining 40% is owned by Harsco Corporation. (b) Contributions Participants may currently elect to have their annual compensation reduced by up to $9,500, subject to adjustments to reflect changes in the cost of living, but not by more than 15% of their total compensation in the aggregate. The aggregate amount of such reductions is contributed to the plan trust on a pre-tax basis. Participants may also elect to make after- tax contributions, either as an alternative to pre-tax contributions, or in addition to the maximum pre-tax contributions of $9,500 (but not more than 15% of their total compensation in the aggregate). The Company makes matching contributions of from 15% to 100% of the portion of those contributions not in excess of 5% of each participant's compensation (Basic Contribution), regardless of the $9,500 limit on pre-tax contributions. (c) Trust Agreement Effective January 1, 1995, the Parent Company and Harris Trust and Savings Bank (the Trustee) established the FMC Corporation Salaried Employees' Master Trust (the Master Trust) for the collective investment of the assets of the Plan's trust, the trust associated with the FMC Employees' Thrift and Stock Purchase Plan and of a trust associated with the United Defense, L.P., York Plan. Upon establishment of the Master Trust, the net assets of the trusts were transferred to the Master Trust. On July 1, 1996, the net assets were transferred to Citibank, N. A. (Citibank) as a result of Citibank's purchase of Harris Trust and Savings Bank's Master Trust Division. 5 UNITED DEFENSE, L. P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements ================================================================================ (d) Investment of Funds Within the Master Trust, the Trustee has established an FMC Stock Fund, a Fixed Income Fund, an Equity Fund, and a Harsco Fund. The FMC Stock Fund consists of shares of the common stock of the Parent Company. The Fixed Income Fund consists of investments in contracts with banks and insurance companies which guarantee repayment of principle with interest at a fixed or fixed minimum rate for a specified period of time. The Fixed Income Fund is authorized to include (1) securities issued or guaranteed by the U. S. Government, or any of its agencies or instrumentalities, and (2) short- term, interest-bearing debt obligations pending investment in guaranteed income contracts or government securities. The Equity Fund consists of shares of mutual funds registered under the Investment Company Act of 1940. The Harsco Stock Fund consists of common shares of Harsco Corporation, and was not available as an investment election of the Parent Company's plan included in the Master Trust. All Company contributions to the Plan are invested by the Trustee in the FMC Stock Fund and credited to the respective accounts of the employees participating in the Plan. All employees contributing to the Plan are entitled to elect to have the Trustee invest their contributions in 25% increments in: (i) the FMC Stock Fund, (ii) the Fixed Income Fund, (iii) the Equity Fund, or (iv) the Harsco Stock Fund. A participant's investment election may be changed prospectively for any plan year. In addition, a participant who has attained age 55 may elect to have all or part (in increments of 25%) of the accumulated balance of the participant's FMC Stock, Fixed Income, Harsco Stock, and Equity Funds attributable to the participant's contributions transferred among those funds. (e) Vesting Participants are immediately vested in their elective contributions plus actual earnings thereon. Vesting in the Company's contribution and related earnings is based on years of service. A participant is 100% vested after five years of service. (f) Payment of Benefits On termination of service or attainment of age 59-1/2, any participant may elect to immediately receive a lump-sum distribution equal to the value of his or her account. Participants aged 55 or older or whose accounts are valued at not less than $3,500 may upon termination elect to defer their lump-sum distribution or receive annual installments over a ten-year period. If a participant is not fully vested in the Company's contributions to his or her account on the date of termination of the participant's employment, the unvested portion is forfeited. Such forfeitures reduce future Company contributions to the Plan. (Continued) 6 UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements ================================================================================ (g) Expenses The compensation and expenses of the Trustee are paid by the Company. All other expenses of the Plan may be paid by the Trustee out of the assets of the Plan and constitute a charge upon the respective investment funds or upon an individual participant's account as provided in the Plan. (h) Withdrawals and Loans The Plan allows participants to make hardship cash withdrawals (subject to income taxation and IRS penalties) of some or all of their vested account balances. Eligible participants may also receive money from the Plan in the form of loans. The minimum that may be borrowed is $1,000; the maximum is the lesser of $50,000, as adjusted, or 50% of the participant's vested account balance. Loans must be repaid over 60 months with interest at the announced Fixed Income Fund rate or some other reasonable rate as determined by the Company. Participant loans outstanding as of March 31, 1997 and 1996 were approximately $2 million and $0.7 million, respectively. (i) Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Plan and ERISA. In the event of plan termination, participants will become 100% vested in their account balances. (2) Summary of Significant Accounting Policies The following are the significant accounting policies which have been applied in the preparation of the accompanying financial statements. (a) Basis of Accounting The Plan's financial statements are prepared on the accrual basis of accounting. (b) Investments Security transactions are recorded in the financial statements on a settlement date basis, which does not differ materially from a trade date basis. (c) Valuation of Investments Quoted or estimated market prices are used to value investments except for certain contracts with banks and insurance companies which guarantee repayment of principal with interest at a fixed or fixed minimum rate for a specified period of time. These contracts are valued at contract value. 7 (Continued) UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements ================================================================================ (d) Participants' Equity For financial statement purposes, the cost per share of FMC Corporation common stock is stated at the price paid by the Trustee on a national securities exchange. In computing individual participants' equity for tax purposes, the cost per share of FMC Corporation common stock is determined by (i) the price paid by the Trustee on a national securities exchange or (ii) the price paid per share of FMC Corporation common stock reacquired from a withdrawing participant electing a cash withdrawal. (e) Basis of Allocation of Master Trust Net Assets and Net Income The Trusts participating in the Master Trust have an undivided interest in the assets (except for Harsco Corporation stock), liabilities, income, expenses, and gains or losses of the Master Trust. For allocation purposes, each of the participating trusts retain an ownership percentage in the Master Trust net assets which was initially established on the basis of relative net assets contributed by each plan to the Master Trust. Each month, the percentage is adjusted based on the relative amount of contributions and distributions attributable to each plan. The percentage calculated at each month-end is used to allocate the investment income, net of expenses, and gains or losses of Master Trust investments during that month. At March 31, 1997 and 1996, the Plan's (and its trust's) interests in the net assets of the Master Trust were approximately 10% and 6% respectively, which included investments in the following funds: ===============================================================================
March 31, --------- 1997 1996 ----------- ---------- FMC Stock Fund $29,545,175 19,538,707 Fixed Income Fund 14,236,633 5,991,812 Equity Fund 10,066,307 5,116,650 Harsco Stock Fund 26,219,972 23,954,416 - ------------------------------------------------------------------------------- $80,068,087 54,601,585 ===============================================================================
(f) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amount of revenue and expenses during the reporting period. Actual results could differ from these estimates, but the plan administrator does not believe such differences will materially affect the Plan's financial position or results of operations. (Continued) 8 UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements ================================================================================ (3) Master Trust Investments The following tables present the cost and fair value of investments for the Master Trust at March 31, 1997 and 1996. All individual investments greater than 5% of Plan assets are separately identified: ================================================================================
March 31, 1997 Number of ------------------ shares Market Cost - ------------------------------------------------------------------------------- (in thousands) Investments at fair value as determined by quoted market prices: FMC common stock 7,551,260 $462,515 87,877 Harsco common stock 1,128,242 41,039 16,673 - ------------------------------------------------------------------------------- 503,554 104,550 FNMA bonds 49,127 49,392 - ------------------------------------------------------------------------------- 552,681 153,942 - ------------------------------------------------------------------------------- Investments at estimated fair value: Mutual funds 75,310 53,157 Cash 12,517 12,517 - ------------------------------------------------------------------------------- 87,827 65,674 - ------------------------------------------------------------------------------- Investments at contract value-- fixed rate insurance contracts 175,628 186,725 - ------------------------------------------------------------------------------- $816,136 406,341 ===============================================================================
(Continued) 9 UNITED DEFENSE, L. P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements
=============================================================================== March 31, 1996 Number of ----------------------- shares Market Cost - ------------------------------------------------------------------------------- (in thousands) Investments at fair value as determined by quoted market prices: FMC common stock 7,636,816 $573,716 78,164 Harsco common stock 572,730 37,943 16,551 - ------------------------------------------------------------------------------- 611,659 94,715 FNMA bonds 49,427 49,392 - ------------------------------------------------------------------------------- 661,086 144,107 - ------------------------------------------------------------------------------- Investments at estimated fair value: Mutual funds 58,820 41,798 Cash 419 419 - ------------------------------------------------------------------------------- 59,239 42,217 - ------------------------------------------------------------------------------- Investments at contract value- fixed rate insurance contracts 184,717 184,717 - ------------------------------------------------------------------------------- $905,042 371,041 ===============================================================================
(Continued) 10 UNITED DEFENSE, L.P. SALARIED EMPLOYEES' PLAN Notes to Financial Statements ================================================================================ Investment income for the Master Trust for the years ended March 31, 1997 and 1996, and for the period from January 1, 1995 through March 31, 1995 is as follows:
================================================================================================== The period from Year ended Year ended January 1, 1995 March 31, March 31, through 1995 1996 March 31, 1995 - -------------------------------------------------------------------------------------------------- (in thousands) Investment income: Net appreciation (depreciation) in fair value of investments: FMC common stock $ (111,194) 104,906 19,361 Harsco common stock 3,177 12,668 1,761 Mutual funds 8,663 10,868 4,002 FNMA bonds (1,548) (2,867) -- - -------------------------------------------------------------------------------------------------- (100,902) 125,575 25,124 Interest 18,733 19,597 5,156 Dividends 2,975 4,754 228 - -------------------------------------------------------------------------------------------------- $ (79,194) 149,926 30,508 ==================================================================================================
(4) Income Taxes The Plan has applied for but has not yet received a favorable determination letter from the Internal Revenue Service as to the Plan's qualification. The plan administrator is confident that the Plan is qualified under Section 401(a) of the Internal Revenue Code (Code) and therefore, the related trust is exempt from tax under Section 501(a) of the Code. The plan administrator is not aware of any activity or transactions that may adversely affect the qualified status of the Plan. The Company receives a Federal income tax deduction for its contributions to the Plan. Participating employees are not subject currently to Federal income tax on their elective contributions, Company contributions, appreciation in the Company's common stock, income, and other items allocated to their individual accounts. Individual participants are taxed on such items at the time of distribution from the Plan. 11
PAGE 1 EXHIBIT INDEX EXHIBIT TABLE DESCRIPTION - ------------- ----------- 10.1 United Defense, L.P. Salaried Employees' Plan (incorporated by reference from Exhibits 4.6 and 4.7 to the Registration Statement on Form S-8 filed on October 1, 1997). 10.2 FMC Corporation Salaried Employees' Master Trust Agreement effective January 1, 1995 (incorporated by reference from Exhibit 10.3 to the Form 11-K filed on October 12, 1995). 10.3 Amendment to FMC Salaried Employees' Master Trust dated April 20, 1995 and effective January 1, 1995 (incorporated by reference from Exhibit 10.4 to the Form 11-K filed on October 12, 1995). 23 Consent of KPMG Peat Marwick LLP
EX-23 2 CONSENT OF KPMG PEAT MARWICK LLP [LETTERHEAD OF KPMG PEAT MARWICK LLP APPEARS HERE] EXHIBIT 23 CONSENT OF KPMG PEAT MARWICK LLP The Board of Directors FMC Corporation: We consent to incorporation by reference in the registration statement on Form S-8 of FMC Corporation of our reports dated September 24, 1997, relating to the Statements of Financial Position of the United Defense, L.P. York Plan as of March 31, 1997 and 1996, and the Statements of Earnings and Changes in Plan Equity for each of the years in the two-year period ended March 31, 1997 and the period from January 1, 1995 through March 31, 1995 and the Statements of Financial Position of the United Defense, L.P. Salaried Employees Plan as of March 31, 1997 and 1996, and the Statements of Earnings and Changes in Plan Equity for each of the years in the two-year period ended March 31, 1997 and the period from January 1, 1995 through March 31, 1995. /s/ KPMG Peat Marwick LLP Chicago, Illinois September 26, 1997 -----END PRIVACY-ENHANCED MESSAGE-----