-----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, QmvkpkeMlrsuJrb8FWXKlAAH8jJjEthnFO80/xGVa6t4FvcV0+ffAEDTKsv2TWF/ PAgHyudQdM7/8+bquLSPhA== 0000950131-97-004156.txt : 19970627 0000950131-97-004156.hdr.sgml : 19970627 ACCESSION NUMBER: 0000950131-97-004156 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA INDUSTRIES INC CENTRAL INDEX KEY: 0000722079 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190] IRS NUMBER: 521145429 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08520 FILM NUMBER: 97630452 BUSINESS ADDRESS: STREET 1: TERRA CENTRE 600 4TH ST STREET 2: P.O. BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 BUSINESS PHONE: 7122771340 MAIL ADDRESS: STREET 1: TERRA CENTER STREET 2: 600 4TH ST P O BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 FORMER COMPANY: FORMER CONFORMED NAME: INSPIRATION RESOURCES CORP DATE OF NAME CHANGE: 19920517 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 (NO FEE REQUIRED) For the Year Ended December 31, 1996 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 1-8520 A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: TERRA INDUSTRIES INC. TERRA CENTRE 600 FOURTH STREET P.O. BOX 6000 SIOUX CITY, IOWA 51102-6000 REQUIRED INFORMATION Plan financial statements and schedules are prepared in accordance with the financial reporting requirements of ERISA and are included therein as listed in the table of contents below.
Table of Contents - ----------------- (a) Financial Statements Pages ------------------------ ----- Independent Auditors' Report 3 Statements of Net Assets Available for Benefits at December 31, 1996 and 1995 4-5 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1996 and 1995 6-7 Notes to Financial Statements 8-12 (b) Supplemental Schedules -------------------------- Schedule of Assets Held for Investment Purposes 13 Schedule of Reportable Transactions 14-16 (c) Exhibits ------------ Exhibit E - Independent Auditors' Consent 17
INDEPENDENT AUDITORS' REPORT To the Participants and Administrator of the Terra Industries Inc. Employees' Savings and Investment Plan We have audited the accompanying statements of net assets available for benefits of the Terra Industries Inc. Employees' Savings and Investment Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for the years then ended. 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Terra Industries Inc. Employees' Savings and Investment Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets held for investment purposes as of December 31, 1996, and (2) reportable transactions for the year ended December 31, 1996, are presented for purposes of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information by fund in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. The supplemental schedules and supplemental information by fund is the responsibility of the Plan's management. Such supplemental schedules and supplemental information by fund have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. DELOITTE & TOUCHE LLP Omaha, Nebraska May 30, 1997
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 ------------------------------------------------------------------- Supplemental Information by Fund ------------------------------------------------------------------- Employer Directed Participant Directed ------------- ---------------------------------------------------- Terra Terra Industries Industries Inc. Inc. Voluntary Putnam Putnam Common Common Growth & Putnam New Stock Stock Income Income Opportunities ASSETS: Fund Fund Fund Fund Fund Investments, at fair value: Terra Industries Inc. Common Stock $27,175,208 $5,182,742 $ - $ - $ - Putnam Fund for Growth and Income - - 11,200,356 - - Putnam Income Fund - - - 3,852,029 - Putnam New Opportunities Fund - - - - 7,149,056 Putnam Money Market Fund - - - - - Putnam International Growth Fund - - - - - Putnam Asset Allocation - Growth Portfolio - - - - - Putnam Asset Allocation - Balanced Portfolio - - - - - Putnam Asset Allocation - Conservative Portfolio - - - - - Putnam Voyager Fund - - - - - ----------- ---------- ----------- ---------- ---------- Total investments at fair value 27,175,208 5,182,742 11,200,356 3,852,029 7,149,056 Loans to participants - - - - - ----------- ---------- ----------- ---------- ---------- Total investments 27,175,208 5,182,742 11,200,356 3,852,029 7,149,056 Employer contributions receivable 108,026 - - - - Participant contributions receivable - 24,148 17,562 15,367 61,468 Receivable - securities sold - 726,795 - - - Total assets ----------- ---------- ----------- ---------- ---------- 27,283,234 5,933,685 11,217,918 3,867,396 7,210,524 LIABILITIES: Accrued administrative expenses - 651 1,234 420 786 Payable - securities purchased 181,766 - - - - ----------- ---------- ----------- ---------- ---------- Total liabilities 181,766 651 1,234 420 786 ----------- ---------- ----------- ---------- ---------- Net assets available for benefits $27,101,468 $5,933,034 $11,216,684 $3,866,976 $7,209,738 =========== ========== =========== ========== ==========
Supplemental Information by Fund ------------------------------------------------------------------------------------ Participant Directed ------------------------------------------------------------------------------------ Putnam Putnam Putnam Putnam Putnam Money International AA AA AA Putnam Market Growth Growth Balanced Conservative Voyager Participant ASSETS: Fund Fund Fund Fund Fund Fund Loans Investments, at fair value: Terra Industries Inc. Common Stock $ - $ - $ - $ - $ - $ - $ - Putnam Fund for Growth and Income - - - - - - - Putnam Income Fund - - - - - - - Putnam New Opportunities Fund - - - - - - - Putnam Money Market Fund 5,177,084 - - - - - - Putnam International Growth Fund - 1,545,185 - - - - - Putnam Asset Allocation - Growth Portfolio - - 1,325,313 - - - - Putnam Asset Allocation - Balanced Portfolio - - - 659,142 - - - Putnam Asset Allocation - Conservative Portfolio - - - - 281,753 - Putnam Voyager Fund - - - - - 24,544,054 - ---------- ---------- ---------- -------- -------- ----------- ---------- Total investments at fair value 5,177,084 1,545,185 1,325,313 659,142 281,753 24,544,054 - Loans to participants - - - - - - 3,282,504 ---------- ---------- ---------- -------- -------- ----------- ---------- Total investments 5,177,084 1,545,185 1,325,313 659,142 281,753 24,544,054 3,282,504 Employer contributions receivable - - - - - - - Participant contributions receivable 13,172 50,492 - - - 37,320 - Receivable - securities sold - - - - - - - Total assets ---------- ---------- ---------- -------- -------- ----------- ---------- 5,190,256 1,595,677 1,325,313 659,142 281,753 24,581,374 3,282,504 LIABILITIES: Accrued administrative expenses 570 170 149 75 27 2,698 - Payable - securities purchased - - - - - - - Total liabilities ---------- ---------- ---------- -------- -------- ----------- ---------- 570 170 149 75 27 2,698 - Net assets available for benefits ---------- ---------- ---------- -------- -------- ----------- ---------- $5,189,686 $1,595,507 $1,325,164 $659,067 $281,726 $24,578,676 $3,282,504 ========== ========== ========== ======== ======== =========== ========== See notes to financial statements.
- --------
ASSETS: Total Investments, at fair value: Terra Industries Inc. Common Stock $32,357,950 Putnam Fund for Growth and Income 11,200,356 Putnam Income Fund 3,852,029 Putnam New Opportunities Fund 7,149,056 Putnam Money Market Fund 5,177,084 Putnam International Growth Fund 1,545,185 Putnam Asset Allocation - Growth Portfolio 1,325,313 Putnam Asset Allocation - Balanced Portfolio 659,142 Putnam Asset Allocation - Conservative Portfolio 281,753 Putnam Voyager Fund 24,544,054 ----------- Total investments at fair value 88,091,922 Loans to participants 3,282,504 Total investments 91,374,426 Employer contributions receivable 108,026 Participant contributions receivable 219,529 Receivable - securities sold 726,795 ----------- Total assets 92,428,776 LIABILITIES: Accrued administrative expenses 6,780 Payable - securities purchased 181,766 ----------- Total liabilities 188,546 ----------- Net assets available for benefits $92,240,230 ===========
-4- TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS 31-December 1995 - ------------------------------------------------------------------------------------------------------------------------------------ Supplemental Information by Fund ----------------------------------------------------------------------------------------------------- Employer Directed Participant Directed ---------- ----------------------------------------------------------------------------------------- Terra Terra Industries Industries Inc. Inc. Voluntary Common Common Equity Money Stock Stock Income Intermediate Stock Market GIC Windsor Participant ASSETS: Fund Fund Fund Fund Fund Fund Fund Fund Loans Total Investments, at fair value: Terra Industries Inc. Common Stock $22,849,038 $6,166,806 $ - $ - $ - $ - $ - $ - $ - $29,015,844 Fidelity Magellan Fund - - - - 16,680,769 - - - - 16,680,769 Vista Growth and Income Fund - - 8,963,731 - - - - - - 8,963,731 Vanguard Windsor Fund - - - - - - - 8,882,165 - 8,882,165 Vista U.S. Government Income Fund - - - 4,415,907 - - - - - 4,415,907 Vista U.S. Government Money Market Fund - - - - - 3,621,921 - - - 3,621,921 American Performance Cash Management Fund - - - - - - 159,390 - - 159,390 BancOklahoma GIC Fund - - - - - - 3,055,795 - - 3,055,795 Chase Bank Domestic Liquidity Fund 184,067 3,321 46 24 - - 63,503 - - 250,961 ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Total investments at fair value 23,033,105 6,170,127 8,963,777 4,415,931 16,680,769 3,621,921 3,278,688 8,882,165 - 75,046,483 Loans to participants - - - - - - - - 3,136,466 3,136,466 ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Total investments 23,033,105 6,170,127 8,963,777 4,415,931 16,680,769 3,621,921 3,278,688 8,882,165 3,136,466 78,102,949 Accrued investment income - - - 21,281 - - 584 - - 21,865 Employer contributions receivable 192,627 - - - - - - - - 192,627 Participant contributions receivable - 30,521 43,237 22,890 76,301 20,347 17,804 43,238 - 254,338 Receivable - securities sold - 79,793 - - - - - - - 79,793 Cash 82 1 - - 203 77 1 - - 364 ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Total assets 23,225,814 6,280,442 9,007,014 4,460,102 16,757,273 3,642,245 3,297,077 8,295,403 3,136,466 78,731,936 LIABILITIES: Accrued administrative expenses - 2,988 4,593 2,424 8,485 2,042 21,000 4,288 - 45,820 Payable - securities purchased 133,053 - - - - - - - - 133,053 ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Total liabilities 133,053 2,988 4,593 2,424 8,485 2,042 21,000 4,288 - 178,873 ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------- Net assets available for benefits $23,092,761 $6,277,454 $9,002,421 $4,457,678 $16,748,788 $3,640,303 $3,276,077 $8,921,115 $3,136,466 $78,553,063 =========== ========== ========== ========== =========== ========== ========== ========== ========== ===========
See notes to financial statements. -5- TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 - --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------- Employer Directed - ---------------------------------------------------------------------------------------------------- Terra Terra Industries Industries Inc. Inc. Voluntary Common Common Equity Stock Stock Income Intermediate Stock Fund Fund Fund Fund Fund Investment income: Dividend, interest, and other income $ 261,179 $ 66,762 $ 105,612 $ 196,025 $ 649,272 Net appreciation (depreciation) in fair value of investments 1,402,944 184,017 1,063,070 (257,318) 109,022 ----------- ---------- ----------- ----------- ------------ Total investment income 1,664,123 250,779 1,168,682 (61,293) 758,294 Employer contributions 3,665,799 - - - - Participant contributions - 919,711 1,071,165 606,048 2,091,030 ----------- ---------- ----------- ----------- ------------ Total additions 5,329,922 1,170,490 2,239,847 544,755 2,849,324 Deductions: Benefit payments 1,277,288 179,962 688,776 199,045 1,178,565 Administrative expenses - 13,447 21,599 11,824 38,674 Interfund transfers/net loans 43,927 1,321,501 10,531,893 4,791,564 18,380,873 ----------- ---------- ----------- ----------- ------------ Total deductions 1,321,215 1,514,910 11,242,268 5,002,433 19,598,112 ----------- ---------- ----------- ----------- ------------ Net increase (decrease) 4,008,707 (344,420) (9,002,421) (4,457,678) (16,748,788) Assets available for benefits: Beginning of year 23,092,761 6,277,454 9,002,421 4,457,678 16,748,788 ----------- ---------- ----------- ----------- ------------ End of year $27,101,468 $5,933,034 $ - $ - $ - =========== ========== =========== =========== ============
Supplemental Information by Fund - ----------------------------------------------------------------------------------------------------------------------------- Participant Directed - ----------------------------------------------------------------------------------------------------------------------------- U.S. Gov't Putnam Putnam Putnam Money Growth & Putnam New Money Market GIC Windsor Income Income Opportunities Market Fund Fund Fund Fund Fund Fund Fund Investment income: Dividend, interest, and other income $ 132,592 $ 9,212 $ 143,972 $ 767,642 $ 83,663 $ 53,560 $ 71,773 Net appreciation (depreciation) in fair value of investments - 124,366 1,215,899 165,318 70,991 (266,459) - ----------- ----------- ----------- ------------ ---------- ----------- ----------- Total investment income 132,592 133,578 1,359,871 927,960 154,654 (212,899) 71,773 Employer contributions - - - - - - - Participant contributions 437,905 367,375 1,328,392 374,195 162,295 301,688 168,697 ----------- ----------- ----------- ------------ ---------- ----------- ----------- Total additions 570,497 500,953 2,688,263 1,302,155 316,949 88,789 240,470 Deductions: Benefit payments 239,520 179,656 354,222 130,517 85,153 20,934 30,504 Administrative expenses 7,988 5,705 24,173 1,302 482 842 636 Interfund transfers/net loans 3,963,292 3,591,669 11,230,983 (10,046,348) (3,635,662) (7,142,725) (4,980,356) ----------- ----------- ----------- ------------ ---------- ----------- ----------- Total deductions 4,210,800 3,777,030 11,609,378 (9,914,529) (3,550,027) (7,120,949) (4,949,216) ----------- ----------- ----------- ------------ ---------- ----------- ----------- Net increase (decrease) (3,640,303) (3,276,077) (8,921,115) 11,216,684 3,866,976 7,209,738 5,189,686 Assets available for benefits: Beginning of year 3,640,303 3,276,077 8,921,115 - - - - ----------- ----------- ----------- ------------ ---------- ----------- ----------- End of year $ - $ - $ - $ 11,216,684 $ 3,866,976 $ 7,209,738 $ 5,189,686 =========== =========== =========== ============ =========== =========== ===========
Putnam Putnam Putnam Putnam International AA AA AA Putnam Growth Growth Balanced Conservative Voyager Participant Fund Fund Fund Fund Fund Loans Total Investment income: Dividend, interest, and other income $ 20,292 $ 64,617 $ 35,771 $ 12,670 $1,542,405 $ 297,869 $ 4,509,888 Net appreciation (depreciation) in fair value of investments (10,177) (66,880) (35,769) (12,375) (1,887,852) - 1,798,797 ----------- ----------- ----------- ------------ ---------- ----------- ----------- Total investment income 10,115 (2,263) 2 295 (345,447) 297,869 6,308,685 Employer contributions - - - - - - 3,665,799 Participant contributions 86,136 32,455 11,469 2,846 800,518 - 8,761,925 ----------- ----------- ----------- ------------ ---------- ----------- ----------- Total additions 96,251 30,192 11,471 3,141 455,071 297,869 18,736,409 Deductions: Benefit payments 105 5 3,932 397 227,975 122,598 4,919,154 Administrative expenses 170 171 75 27 2,968 5 130,088 Interfund transfers/net loans (1,499,531) (1,295,148) (651,603) (279,009) (24,354,548) 29,228 - ----------- ----------- ----------- ------------ ---------- ----------- ----------- Total deductions (1,499,256) (1,294,972) (647,596) (278,585) (24,123,605) 151,831 5,049,242 ----------- ----------- ----------- ------------ ---------- ----------- ----------- Net increase (decrease) 1,595,507 1,325,164 659,067 281,726 24,578,676 146,038 13,687,167 Assets available for benefits: Beginning of year - - - - - 3,136,466 78,553,063 ----------- ----------- ----------- ------------ ---------- ----------- ----------- End of year $ 1,595,507 $ 1,325,164 $ 659,067 $ 281,726 $24,578,676 $ 3,282,504 $92,240,230 =========== =========== =========== ============ =========== =========== ===========
See notes to financial statements. -6-
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1995 - --------------------------------------------------------------------------------------------------------------------------------- Supplemental Information by Fund ------------------------------------------------------------------------- Employer Directed Participant Directed ----------- --------------------------------------------------------- Terra Terra Industries Industries Inc. Inc. Voluntary Equity Common Stock Common Stock Income Intermediate Stock Fund Fund Fund Fund Fund Investment income: Dividend, interest, and other income $ 155,555 $ 44,373 $ 172,768 $ 270,215 $ 568,706 Net appreciation in fair value of investments 5,504,919 1,604,341 1,743,823 444,492 3,439,276 ----------- ------------ ---------- ---------- ----------- Total investment income 5,660,474 1,648,714 1,916,591 714,707 4,007,982 Employer contributions 3,887,731 - - - - Participant contributions - 879,661 1,269,662 641,543 1,868,448 ----------- ------------ ---------- ---------- ----------- Total additions 9,548,205 2,528,375 3,186,253 1,356,250 5,876,430 Deductions: Benefit payments 957,499 202,646 493,375 231,945 755,384 Administrative expenses - 13,694 22,158 12,378 37,586 Interfund transfers/net loans (52,652) (621,070) 467,723 873,926 (2,096,625) ----------- ------------ ---------- ---------- ----------- Total deductions 904,847 (404,730) 983,256 1,118,249 (1,303,655) ----------- ------------ ---------- ---------- ----------- Net increase (decrease) 8,643,358 2,933,105 2,202,997 238,001 7,180,085 Assets available for benefits: Beginning of year 14,449,403 3,344,349 6,799,424 4,219,677 9,568,703 ----------- ------------ ---------- ---------- ----------- End of year $23,092,761 $ 6,277,454 $9,002,421 $4,457,678 $16,748,788 =========== ============ ========== ========== ===========
Money Merged Market GIC Windsor Participant Plan Fund Fund Fund Loans (Note F) Investment income: Dividend, interest, and other income $ 214,533 $ 16,082 $ 324,710 $ 215,874 $ - Net appreciation in fair value of investments - 196,221 1,332,075 - - ----------- ------------ ---------- ---------- ----------- Total investment income 214,533 212,303 1,656,785 215,874 - Employer contributions - - - - - Participant contributions 623,095 469,400 997,438 - - ----------- ------------ ---------- ---------- ----------- Total additions 837,628 681,703 2,654,223 215,874 - Deductions: Benefit payments 488,454 154,499 217,460 83,859 - Administrative expenses 11,195 37,045 18,405 - - Interfund transfers/net loans 247,427 (2,785,918) (6,502,757) (1,502,881) 11,972,827 ----------- ------------ ---------- ---------- ----------- Total deductions 747,076 (2,594,374) (6,266,892) (1,419,022) 11,972,827 ----------- ------------ ---------- ---------- ----------- Net increase (decrease) 90,552 3,276,077 8,921,115 1,634,896 (11,972,827) Assets available for benefits: Beginning of year 3,549,751 - - 1,501,570 11,972,827 ----------- ------------ ---------- ---------- ----------- End of year $ 3,640,303 $ 3,276,077 $8,921,115 $3,136,466 $ - =========== ============ ========== ========== ===========
Total Investment income: Dividend, interest, and other income $ 1,982,816 Net appreciation in fair value of investments 14,265,147 ----------- Total investment income 16,247,963 Employer contributions 3,887,731 Participant contributions 6,749,247 ----------- Total additions 26,884,941 Deductions: Benefit payments 3,585,121 Administrative expenses 152,461 Interfund transfers/net loans - ----------- Total deductions 3,737,582 ----------- Net increase (decrease) 23,147,359 Assets available for benefits: Beginning of year 55,405,704 ----------- End of year $78,553,063 ===========
See notes to financial statements. -7- TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------- A. DESCRIPTION OF PLAN The following brief description of the Terra Industries Inc. Employees' Savings and Investment Plan (the Plan) is provided for general information only. Participants should refer to the Plan Document for more complete information. General - The Plan, established as of January 1, 1984, is a defined contribution plan covering eligible employees of Terra Industries Inc. and eligible subsidiaries and affiliates (collectively, the Company). The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA) and is administered by the Employee Benefit Committee (the Committee) of the Company. The assets of the Plan are held by Putnam Investments (Chase Manhattan Bank, N.A., through September 30, 1996), the trustee of the Plan. Certain Plan investments are funds managed by the trustee of the Plan and, therefore, qualify as party-in-interest. Participation - All full-time active employees of the Company are eligible for Plan participation on the first day of the month following the date their employment commenced. In addition, part time or temporary employees with at least one year of service and 1,000 hours are eligible for participation. Participation in the Plan is voluntary. Participants' Accounts - Each participant's account is credited with the participant's contributions, the employer's matching contributions and an allocation of fund earnings. A participant's benefit is limited to the amount that can be provided from the participant's account, subject to the applicable vesting requirements. Contributions - Participants earning $66,000 or less annually in 1996 and 1995, could elect to contribute up to 15% of annual compensation (10% of their annual compensation through November 1996) on a pretax basis and 10% on an after-tax basis. The maximum combined deferral on a pretax and after- tax basis is 20%. Participants earning more than $66,000 in 1996 and 1995, respectively, could contribute up to 6% of their annual compensation on a combined pretax and after-tax basis. The maximum participant pretax contribution was $9,500 and $9,240 in 1996 and 1995, respectively. Participants may elect to invest their contributions in one or more of the ten available participant directed investment options. Employer - The Company contributes an amount determined by its Board of Directors, equal to 100% of the participants' contributions up to 3% of their annual compensation, and 50% up to an additional 3% of annual compensation in 1996 and 1995. The contributions made by the Company must be invested in the Terra Industries Inc. Common Stock Fund. The Company may elect to make an additional contribution, subject to certain limitations as defined in the Plan, in such amount as its Board of Directors shall determine. No such additional contributions were made in 1996 or 1995. Employer contributions are reduced by the amount of any participant forfeitures during the period. Participant forfeitures totaled $127,643 and $82,977 in 1996 and 1995, respectively. -8- Maximum Contributions Per Participant - The sum of a participant's contribution and employer matching contribution cannot exceed the lesser of $30,000 or 25% of net compensation of the participant. Net compensation is defined as total participant compensation less any pretax contributions made by the participant. Eligible compensation was limited to $150,000 in 1996 and 1995. Vesting - Participants are immediately fully vested in their contributions and earnings on their voluntary contributions. Employer contributions vest at a rate of 20% per year, until fully vested after five years of service. Participant Loans - Participants may borrow from their individual contribution accounts subject to maximum limitations as defined in the Plan. Loan repayments are reinvested in the funds in accordance with the participant's investment election at the time of repayment. Benefits - Participants or their beneficiaries are eligible to receive the value of their vested account balance upon the occurrence of one of the following: early or normal retirement; termination of employment; death or total disability. B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Valuation of Investments - Investments, except for loans to participants, are reported at fair value, which is determined, in the case of Terra Industries Inc.'s Common Stock, from the latest available market quotations and, in the case of investments in mutual funds, at quoted net asset value. Money market funds are reported at fair value as determined by the issuer and common funds are valued at the unit value as reported by the fund. In accordance with the policy of stating investments at fair value, the net change in realized and unrealized appreciation or depreciation in fair value is included in income from investments, which is reflected in the statement of changes in net assets available for benefits. Dividend income is recorded on the ex-dividend date. Investment transactions are recognized on a trade date basis. Participant loans are reported at the outstanding balance. The outstanding balance of participant loans approximates fair value. The Plan has investments in eleven funds. The net assets and net investment income of the funds are allocated to the participants in the Plan based upon each participant's participation relative to the total participation in each of the eleven investment funds. At the close of business on September 30, 1996, all investment fund options were changed, except for the Terra Industries Inc. Common Stock Fund and Terra Industries Inc. Voluntary Common Stock Fund, and assets were transferred to Putnam Investments. A summary description of each investment fund follows: Terra Industries Inc. Common Stock Fund (Employer Directed) - A fund invested primarily in Terra Industries Inc. Common Stock which is limited to employer contributions only. Terra Industries Inc. Voluntary Common Stock Fund (Participant Directed) - A fund invested primarily in Terra Industries Inc. Common Stock. Putnam Growth and Income Fund (Participant Directed) - A fund invested in shares of Putnam Fund for Growth and Income, which is comprised primarily of common stocks that offer potential for capital growth, current income, or both. Putnam Income Fund (Participant Directed) - A fund invested in shares of Putnam Income Fund, which is comprised primarily of debt securities, including both government and corporate obligations, preferred stocks and dividend-paying common stocks. -9- Putnam New Opportunities Fund (Participant Directed) - A fund invested in shares of Putnam New Opportunities Fund, which is comprised principally of common stocks of companies in sectors of the economy which Putnam Management believes possess above-average long-term growth potential. Putnam Money Market Fund (Participant Directed) - A fund invested in shares of Putnam Money Market Fund, which is comprised principally of high-quality money market instruments and seeks as high a rate of current income as Putnam Management believes is consistent with preservation of capital and maintenance of liquidity. Putnam International Growth Fund (Participant Directed) - A fund invested in shares of Putnam International Growth Fund, which is comprised primarily of equity securities of companies located in a country other than the United States. Putnam AA Growth Fund (Participant Directed) - A fund invested in shares of Putnam Asset Allocation: Growth Portfolio, which seeks capital appreciation and is comprised 65% to 95% of equity securities and 5% to 35% of fixed income securities. Putnam AA Balanced Fund (Participant Directed) - A fund invested in shares of Putnam Asset Allocation: Balanced Portfolio, which is comprised 50% to 75% of equity securities and 25% to 50% of fixed income securities. Putnam AA Conservative Fund (Participant Directed) - A fund invested in shares of Putnam Asset Allocation: Conservative Portfolio, which is comprised 25% to 45% of equity securities and 55% to 75% of fixed income securities. Putnam Voyager Fund (Participant Directed) - A fund invested in shares of Putnam Voyager Fund, which is comprised primarily of common stocks of companies which Putnam Management believes have potential for capital appreciation which is significantly greater than that of market averages. Through September 30, 1996, the Plan had the following investment fund options in addition to the Terra Industries Inc. Common Stock Fund and Terra Industries Inc. Voluntary Common Stock Fund: Equity Income Fund (Participant Directed) - A fund invested primarily in shares of Vista Growth and Income Fund, which is comprised primarily of income producing equity securities and securities convertible into such equity securities. Intermediate Fund (Participant Directed) - A fund invested primarily in shares of Vista U.S. Government Income Fund, which is comprised primarily of debt obligations backed by the full faith and credit of the U.S. Government. Stock Fund (Participant Directed) - A fund invested primarily in shares of Fidelity Magellan Fund, which is comprised primarily of common stocks and which seeks long-term capital appreciation. Money Market Fund (Participant Directed) - A fund invested primarily in shares of Vista U.S. Government Money Market Fund so as to preserve capital and maintain a high degree of liquidity. -10- GIC Fund (Participant Directed) - A fund invested primarily in shares of BancOklahoma Guaranteed Investment Contract Fund so as to provide current income while maintaining a stable market valuation. Windsor Fund (Participant Directed)- A fund invested primarily in shares of Vanguard Windsor Fund, a fund invested principally in income producing equity securities. Benefits Payable - The Plan's policy is to record benefit payments upon distribution of balances to participants. Benefits due and unpaid to retired and terminated participants were $269,751 at December 31, 1995. There were no benefits payable as of December 31, 1996. Administrative Expenses - Administrative expenses are comprised of charges relating to routine services provided by the Plan's trustee and recordkeeping agent and fees associated with the annual audit of the Plan's financial statements. Administrative expenses are allocated to the investment funds, other than the Terra Industries Inc. Employer Directed Common Stock Fund, based upon the fair value of each fund's investment relative to the total fair value of all investment funds to which expenses are allocated. C. INVESTMENTS The fair value of the Plan's investments, other than loans to participants, by basis of valuation, are presented in the following tables.
December 31, 1996 Number of Shares or Principal Amount Fair Value Investments, at Fair Value: Terra Industries Inc. Common Stock 2,230,710 $32,357,950 Putnam Growth and Income Fund 621,551 11,200,356 Putnam Income Fund 549,505 3,852,029 Putnam Voyager Fund 1,522,584 24,544,054 Putnam New Opportunities Fund 175,955 7,149,056 Putnam Asset Allocation - Growth Portfolio 118,015 1,325,313 Putnam Asset Allocation - Balanced Portfolio 62,835 659,142 Putnam Asset Allocation - Conservative Portfolio 29,411 281,753 Putnam International Growth Fund 102,807 1,545,185 Putnam Money Market Fund 5,177,084 5,177,084 ----------- $88,091,922 ===========
-11-
December 31, 1995 Number of Shares or Principal Amount Fair Value Investments, at Fair Value: Terra Industries Inc. Common Stock 2,054,219 $29,015,844 Fidelity Magellan Fund 194,008 16,680,769 Vista Growth and Income Fund 258,470 8,963,731 Vanguard Windsor Fund 611,298 8,882,165 Vista U.S. Government Income Fund 380,026 4,415,907 Vista U.S. Government Money Market Fund 3,621,921 3,621,921 American Performance Cash Management Fund 159,390 159,390 BancOklahoma Guaranteed Investment Contract Fund 177,240 3,055,795 Chase Bank Domestic Liquidity Fund 250,961 250,961 ----------- $75,046,483 ===========
D. PLAN TERMINATION Although it has expressed no intent to do so, the Company specifically reserves the right to amend or terminate the Plan or to discontinue contributions at any time. Upon termination, a participant's entire account will become fully vested and the assets shall be administered in the manner provided for in the Plan. E. FEDERAL INCOME TAX STATUS The Plan obtained its latest determination letter dated November 21, 1995, in which the Internal Revenue Service stated that the Plan, as amended March 9, 1995, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan administrator believes that the Plan is currently designed and is being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax exempt as of the financial statement date. Therefore, no provision for income taxes has been included in the Plan's financial statements. Plan income, participant pretax contributions and employer contributions represent taxable income to the participating employees at the time of distribution in accordance with IRS regulations currently in effect. -12-
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN PN 333 EIN #52-1145429 ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - ---------------------------------------------------------------------------------------------------------------------- Column B Column C Column D Column E Description of investment Identity of issue, including collateral, rate borrower, lessor or of interest, maturity date, Current similar party par or maturity value Cost Value Common Stock: *Terra Industries Inc. 2,230,710 shares $17,422,575 $32,357,950 Mutual Funds: *Putnam Growth and Income Fund 621,551 shares 11,257,250 11,200,356 *Putnam Income Fund 549,505 shares 3,821,995 3,852,029 *Putnam New Opportunities Fund 175,955 shares 7,407,328 7,149,056 *Putnam Money Market Fund 5,177,084 shares 5,177,084 5,177,084 *Putnam International Growth Fund 102,807 shares 1,553,138 1,545,185 *Putnam Asset Allocation - Growth Portfolio 118,015 shares 1,392,076 1,325,313 *Putnam Asset Allocation - Balanced Portfolio 62,835 shares 694,576 659,142 *Putnam Asset Allocation - Conservative Portfolio 29,411 shares 294,102 281,753 *Putnam Voyager Fund 1,522,584 shares 26,522,627 24,544,054 Other Investments: *Loans to Participants Principal balance of $3,282,504 bearing interest rates ranging from 5.75% to 14% and maturing from January 1997 to October 2025 3,282,504 ----------- $91,374,426 ===========
* Party-In-Interest
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN PN 333 EIN #52-1145429 ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 - --------------------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column E Total Dollar Identity of Number of Number of Value of Party Involved Description of Asset Purchases Sales Purchases Series of Transactions When Aggregated Involving an Amount in Excess of 5 Percent of the Current Value of Plan Assets *Terra Industries, Inc. Common Stock 60 78 $5,505,900 Fidelity Institutional Retirement Services Company Fidelity Magellan Fund 23 36 5,314,580 *Chase Manhattan Bank, N.A. Vista Growth and Income Fund 25 30 1,819,962 The Vanguard Group Vanguard Windsor Fund 30 22 3,689,808 *Chase Manhattan Bank, N.A. Vista U.S. Government Money Market Fund 45 38 690,825 *Chase Manhattan Bank, N.A. Vista U.S. Government Income Fund 26 36 934,200 *Chase Manhattan Bank, N.A. Chase Bank Domestic Liquidity Fund 289 254 7,233,394
Column A Column B Column F Column G Total Dollar Identity of Value of Net Gain Party Involved Description of Asset Sales or (Loss) Series of Transactions When Aggregated Involving an Amount in Excess of 5 Percent of the Current Value of Plan Assets *Terra Industries, Inc. Common Stock $ 3,750,755 $1,034,021 Fidelity Institutional Retirement Services Company Fidelity Magellan Fund 22,104,371 3,378,850 *Chase Manhattan Bank, N.A. Vista Growth and Income Fund 11,846,763 2,341,372 The Vanguard Group Vanguard Windsor Fund 13,787,872 1,809,352 *Chase Manhattan Bank, N.A. Vista U.S. Government Money Market Fund 4,312,746 - *Chase Manhattan Bank, N.A. Vista U.S. Government Income Fund 5,092,789 (151,170) *Chase Manhattan Bank, N.A. Chase Bank Domestic Liquidity Fund 7,484,355 -
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN PN 333 EIN #52-1145429 ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS, (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1996 - ----------------------------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column E Total Dollar Identity of Number of Number of Value of Party Involved Description of Asset Purchases Sales Purchases Series of Transactions When Aggregated Involving an Amount in Excess of 5 Percent of the Current Value of Plan Assets *Putnam Investments Putnam Growth and Income Fund 30 30 $13,881,826 *Putnam Investments Putnam Income Fund 21 28 5,310,032 *Putnam Investments Putnam New Opportunities Fund 27 19 7,773,232 *Putnam Investments Putnam Money Market Fund 44 33 7,689,132 *Putnam Investments Putnam Voyager Fund 28 36 34,314,279
Column A Column B Column F Column G Total Dollar Identity of Value of Net Gain Party Involved Description of Asset Sales or (Loss) Series of Transactions When Aggregated Involving an Amount in Excess of 5 Percent of the Current Value of Plan Assets *Putnam Investments Putnam Growth and Income Fund $2,846,788 $222,212 *Putnam Investments Putnam Income Fund 1,528,994 40,957 *Putnam Investments Putnam New Opportunities Fund 357,717 (8,187) *Putnam Investments Putnam Money Market Fund 2,512,048 - *Putnam Investments Putnam Voyager Fund 7,882,373 90,722
*Party-In-Interest
TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN PN 333 EIN #52-1145429 ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS, (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1996 - --------------------------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column G Identity of Purchase Selling Cost of Party Involved Description of Asset Price Price Asset Single Transactions: Fidelity Institutional Retirement Fidelity Magellan Services Company Fund $ - $17,249,798 $16,141,459 *Chase Manhattan Bank, N.A. Vista U.S. Government Income Fund - 4,434,069 4,571,808 The Vanguard Group Vanguard Windsor Fund - 13,150,381 11,411,963 *Chase Manhattan Bank, N.A. Vista Growth and Income Fund - 10,979,418 8,792,731 *Putnam Investments Putnam Growth and Income Fund 10,515,135 - 10,515,135 *Putnam Investments Putnam New Opportunities Fund 6,675,570 - 6,675,570 *Putnam Investments Putnam Voyager Fund 24,495,072 - 24,495,072 *Putnam Investments Putnam Money Market Fund 4,973,039 - 4,973,039
Column A Column B Column H Column I Current Value Identity of on Transaction Net Gain Party Involved Description of Asset Date or (Loss) Single Transactions: Fidelity Institutional Retirement Fidelity Magellan Services Company Fund $17,249,798 $1,108,339 *Chase Manhattan Bank, N.A. Vista U.S. Government Income Fund 4,434,069 (137,739) The Vanguard Group Vanguard Windsor Fund 13,150,381 1,738,418 *Chase Manhattan Bank, N.A. Vista Growth and Income Fund 10,979,418 2,186,687 *Putnam Investments Putnam Growth and Income Fund 10,515,135 - *Putnam Investments Putnam New Opportunities Fund 6,675,570 - *Putnam Investments Putnam Voyager Fund 24,495,072 - *Putnam Investments Putnam Money Market Fund 4,973,039 -
*Party-In-Interest -13- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Terra Industries Inc. Benefits Committee have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TERRA INDUSTRIES INC. EMPLOYEES' SAVINGS AND INVESTMENT PLAN June 26, 1997 /s/ George H. Valentine Date_________________________ By___________________________________ George H. Valentine Senior Vice President, General Counsel and Corporate Secretary EX-23 2 INDEPENDENT AUDITORS' CONSENT EXHIBIT E INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement 33-46734 on Form S-8 of our report dated May 30, 1997, appearing in this Annual Report on Form 11-K of the Terra Industries Inc. Employees' Savings and Investment Plan for the year ended December 31, 1996. DELOITTE & TOUCHE LLP Omaha, Nebraska June 19, 1997 -----END PRIVACY-ENHANCED MESSAGE-----