-----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, GdqBhwx7z8LDMBQMc0J4/D5UG1Raa7zF6l+Su3XzsTmMevOdfHbyhZvS9vwaZmkU jGBdTdCdBFix4MsPke7GLg== 0000820626-99-000029.txt : 19990816 0000820626-99-000029.hdr.sgml : 19990816 ACCESSION NUMBER: 0000820626-99-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMC GLOBAL INC CENTRAL INDEX KEY: 0000820626 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 363492467 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09759 FILM NUMBER: 99688248 BUSINESS ADDRESS: STREET 1: 2100 SANDERS RD CITY: NORTHBROOK STATE: IL ZIP: 60062 BUSINESS PHONE: 8472729200 MAIL ADDRESS: STREET 1: 2345 WAUKEGAN ROAD - SUITE E-200 CITY: BANNOCKBURN STATE: IL ZIP: 60015-5516 FORMER COMPANY: FORMER CONFORMED NAME: IMC FERTILIZER GROUP INC DATE OF NAME CHANGE: 19920703 10-Q 1 FOR QUARTER ENDED 06/30/99 ========================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 Commission file number 1-9759 IMC Global Inc. (Exact name of Registrant as specified in its charter) Delaware 36-3492467 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2100 Sanders Road Northbrook, Illinois 60062 (Address of principal executive (Zip Code) offices) Registrant's telephone number, including area code: (847) 272-9200 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . ------- ------- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: 114,476,119 shares, excluding 10,676,276 treasury shares as of August 9, 1999. ======================================================================== PART I.FINANCIAL INFORMATION Item 1.Financial Statements. The accompanying interim condensed consolidated financial statements of IMC Global Inc. (Company) do not include all disclosures normally provided in annual financial statements. These financial statements, which should be read in conjunction with the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1998, are unaudited but include all adjustments which the Company's management considers necessary for a fair presentation. These adjustments consist of normal recurring accruals except as discussed in the Notes to Condensed Consolidated Financial Statements. Certain 1998 amounts have been reclassified to conform to the 1999 presentation. Interim results are not necessarily indicative of the results expected for the full year. CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (In millions, except per share amounts)
Three months ended Six months ended June 30, June 30, 1999 1998 1999 1998 - ------------------------------------------------------------------------- Net sales $ 765.4 $ 793.4 $1,534.8 $1,329.9 Cost of goods sold 582.7 579.4 1,141.2 962.0 -------- -------- -------- -------- Gross margins 182.7 214.0 393.6 367.9 Selling, general and administrative expenses 43.3 53.9 85.6 91.3 Exploration expenses 1.9 9.4 3.4 18.9 -------- -------- -------- -------- Operating earnings 137.5 150.7 304.6 257.7 Interest expense 45.5 55.8 92.8 77.0 Other (income) expense, net (3.1) (4.7) (5.6) (8.6) -------- -------- -------- -------- Earnings from continuing operations before minority interest 95.1 99.6 217.4 189.3 Minority interest 11.6 11.8 24.8 17.2 -------- -------- -------- -------- Earnings from continuing operations before taxes 83.5 87.8 192.6 172.1 Provision for income taxes 31.3 30.9 72.2 60.5 -------- -------- -------- -------- Earnings from continuing operations before extraordinary item and cumulative effect of a change in accounting principle 52.2 56.9 120.4 111.6 Earnings from discontinued operations - 30.1 - 23.4 -------- -------- -------- -------- Earnings before extraordinary item and cumulative effect of a change in accounting principle 52.2 87.0 120.4 135.0 Extraordinary charge - debt retirement - - - (2.7) Cumulative effect of a change in accounting principle - - (7.5) - -------- -------- -------- -------- Net earnings $ 52.2 $ 87.0 $ 112.9 $ 132.3 ======== ======== ======== ======== Basic earnings per share: Earnings from continuing operations before extraordinary item and cumulative effect of a change in accounting principle $ 0.46 $ 0.50 $ 1.06 $ 0.98 Earnings from discontinued operations - 0.26 - 0.20 Extraordinary charge - debt retirement - - - (0.02) Cumulative effect of a change in accounting principle - - (0.07) - -------- -------- -------- -------- Net earnings per share $ 0.46 $ 0.76 $ 0.99 $ 1.16 ======== ======== ======== ======== Basic weighted average number of shares outstanding 114.4 114.3 114.3 114.1 Diluted earnings per share: Earnings from continuing operations before extraordinary item and cumulative effect of a change in accounting principle $ 0.46 $ 0.50 $ 1.06 $ 0.98 Earnings from discontinued operations - 0.26 - 0.20 Extraordinary charge - debt retirement - - - (0.02) Cumulative effect of a change in accounting principle - - (0.07) - -------- -------- -------- -------- Net earnings per share $ 0.46 $ 0.76 $ 0.99 $ 1.16 ======== ======== ======== ======== Diluted weighted average number of shares outstanding 114.6 115.0 114.6 114.8 (See Notes to Condensed Consolidated Financial Statements)
CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in millions)
Current assets: Cash and cash equivalents $ 64.9 $ 110.6 Receivables, net 325.7 421.5 Inventories, net 490.5 580.6 Assets of discontinued operations held for sale - 273.3 Deferred income taxes 91.1 91.1 Other current assets 16.8 5.5 ---------- ---------- Total current assets 989.0 1,482.6 Property, plant and equipment, net 3,752.0 3,697.4 Other assets 1,220.6 1,276.9 ---------- ---------- Total assets $ 5,961.6 $ 6,456.9 ========== ========== Liabilities and Stockholders' Equity - -------------------------------------------------------------------- Current liabilities: Accounts payable $ 176.2 $ 255.9 Accrued liabilities 246.5 240.9 Short-term debt and current maturities of long-term debt 19.1 408.3 ---------- ---------- Total current liabilities 441.8 905.1 Long-term debt, less current maturities 2,480.6 2,638.7 Deferred income taxes 574.0 566.6 Other noncurrent liabilities 484.6 486.1 Stockholders' equity: Common stock, $1 par value, authorized 300,000,000 shares; issued 125,150,730 and 125,072,811 shares at June 30 and December 31, respectively 125.1 125.0 Capital in excess of par value 1,697.8 1,697.3 Retained earnings 493.6 400.6 Accumulated other comprehensive income (41.4) (66.3) Treasury stock, at cost, 10,676,276 and 10,738,520 shares at June 30 and December 31, respectively (294.5) (296.2) ---------- ---------- Total stockholders' equity 1,980.6 1,860.4 ---------- ---------- Total liabilities and stockholders' equity $ 5,961.6 $ 6,456.9 ========== ========== (See Notes to Condensed Consolidated Financial Statements)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (In millions)
Six months ended June 30, 1999 1998 - ------------------------------------------------------------------- Cash Flows from Operating Activities Net earnings $ 112.9 $ 132.3 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, depletion and amortization 135.3 124.6 Minority interest 24.8 17.2 Deferred income taxes 7.4 (56.7) Other charges and credits, net 14.1 (117.4) Changes in: Receivables 95.8 (53.8) Inventories 90.1 46.7 Other current assets (1.8) 43.0 Accounts payable (79.7) (66.5) Accrued liabilities 14.2 105.2 --------- --------- Net cash provided by operating activities 413.1 174.6 --------- --------- Cash Flows from Investing Activities Capital expenditures (156.8) (174.0) Acquisitions, net of cash acquired - (393.3) Proceeds from sale of business 263.9 44.8 Proceeds from sale of investment 12.8 - Other (5.7) 5.1 ---------- --------- Net cash provided by (used in) investing activities 114.2 (517.4) ---------- --------- Net cash provided (used) before financing activities 527.3 (342.8) ---------- --------- Cash Flows from Financing Activities Cash distributions to the unitholders of Phosphate Resource Partners Limited Partnership (6.5) - Payments of long-term debt (90.0) (842.6) Proceeds from issuance of long-term debt, net 3.0 912.1 Changes in short-term debt, net (463.7) 332.0 Decrease in securitization of accounts receivable, net - (15.8) Stock options exercised and restricted stock awards 2.5 8.6 Cash dividends paid (18.3) (18.3) Other - (3.1) ---------- --------- Net cash provided by (used in) financing activities (573.0) 372.9 ---------- --------- Net change in cash and cash equivalents (45.7) 30.1 Cash and cash equivalents - beginning of period 110.6 109.7 ---------- --------- Cash and cash equivalents - end of period $ 64.9 $ 139.8 ========== ========= (See Notes to Condensed Consolidated Financial Statements)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in millions, except per share amounts) 1.Acquisitions ------------ In April 1998, the Company acquired privately held Harris Chemical Group, Inc. and its Australian affiliate, Harris Chemical Australia Pty Ltd. & Its Controlled Entities (collectively, Harris), for approximately $1.4 billion (Harris Acquisition). Under the terms of the Harris Acquisition, the Company purchased all Harris equity for approximately $450.0 million in cash and assumed approximately $1.0 billion of debt. Harris is a leading producer of salt, soda ash, boron chemicals and other inorganic chemicals, including potash crop nutrients. For financial statement purposes, the Harris Acquisition was accounted for as a purchase and, accordingly, Harris' results have been included in the consolidated financial statements since the date of acquisition. The purchase price has been allocated to acquired assets and liabilities based on estimated fair values at the date of acquisition. This allocation resulted in an excess of purchase price over identifiable net assets acquired, or goodwill, of approximately $326.0 million which is included in Other assets in the Condensed Consolidated Balance Sheet. This goodwill is being amortized on a straight-line basis over 40 years. 2.Restructuring Plan ------------------ During the fourth quarter of 1998, the Company developed and began execution of a plan to improve profitability (Restructuring Plan). The Restructuring Plan was comprised of four major initiatives: (i) the combination of the potash and phosphates business units in an effort to realize certain operating and staff reduction synergies; (ii) restructuring of the phosphate rock mining, concentrated phosphate and salt production/distribution operations and processes in an effort to reduce costs; (iii) simplification of the current business activities by eliminating businesses not deemed part of the Company's core competencies; and (iv) reduction of operational and corporate headcount. In conjunction with the Restructuring Plan, the Company recorded pre-tax charges totaling $193.3 million ($162.0 million net of minority interest) in the fourth quarter of 1998. The following table summarizes the activity during the period January 1, 1999 to June 30, 1999 of the accruals recorded in conjunction with the Restructuring Plan.
Accrual at Accrual at January 1, 1999 Cash Paid June 30, 1999 --------------- --------- ------------- Non-employee exit costs: Demolition and closure $ 33.6 $ 2.3 $ 31.3 costs Idled leased transportation equipment 13.2 2.2 11.0 Other 5.3 3.1 2.2 Employee headcount reductions: Severance benefits 17.4 16.3 1.1 -------- -------- --------- Total $ 69.5 $ 23.9 $ 45.6 ======== ======== =========
The timing and costs of the Restructuring Plan are generally on schedule with the original time and dollar estimates disclosed in the fourth quarter of 1998. During the first six months of 1999, 62 employees, who had accepted a voluntary retirement plan as of December 31, 1998, left the Company in accordance with their target retirement date. 3.Discontinued Operations ----------------------- In April 1999, the Company completed the sale of IMC AgriBusiness (AgriBusiness) and received proceeds of $263.9 million which were used to reduce the amount of the Company's outstanding indebtedness. The final sale proceeds still remain subject to the settlement of certain items outlined in the definitive sales agreement. The Company expects final settlement during the third quarter of 1999. 4.Divestitures ------------ In June 1998, the Company completed the sale of its IMC Vigoro business unit which consisted primarily of consumer lawn and garden and professional products for $44.8 million in cash. In connection with this transaction, the Company recorded a non-recurring charge of approximately $14.0 million, $9.1 million after tax benefits, or $0.08 per share. Of the $14.0 million charge, $4.1 million was included in Cost of goods sold and $9.9 million was included in Selling, general, and administrative expenses in the Consolidated Statement of Operations. 5.Extraordinary Charge - Debt Retirement -------------------------------------- In January 1998, the Company prepaid $120.0 million of unsecured term loans which bore interest at rates ranging between 7.12 percent and 7.18 percent which were to mature at various dates between 2000 and 2005. In connection with the prepayment of such unsecured term loans, the Company recorded an extraordinary charge, net of taxes, of $2.7 million for redemption premiums incurred. This prepayment was financed by net debt proceeds from the issuance in January 1998 of $150.0 million 6.55 percent senior notes due 2005 and $150.0 million 7.30 percent debentures due 2028. 6.Change in Accounting Principle ------------------------------ In April 1998, the American Institute of Certified Public Accountants issued Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities," which mandated that costs related to start-up activities be expensed as incurred, effective January 1, 1999. Prior to the adoption of SOP 98-5, the Company capitalized its start-up costs (i.e., pre-operating costs). The Company adopted the provisions of SOP 98-5 in its financial statements beginning on January 1, 1999 and in accordance with SOP 98-5 recorded a charge for the cumulative effect of an accounting change of $7.5 million or $0.07 per share, net of tax benefits and minority interest, in order to expense start-up costs that had been previously capitalized. The future impact of SOP 98-5 is not expected to be material to the Company's operating results. 7.Operating Segments ------------------ Segment information for 1999 and 1998 was as follows(a):
IMC-Agrico IMC IMC IMC Phosphates Kalium Salt Chemicals Other(b) Total ---------- ------ ---- --------- -------- ----- Three months ended June 30, 1999 Net sales from external customers $373.7 $197.2 $ 47.9 $101.3 $ 45.3 $ 765.4 Intersegment net sales 20.7 5.3 0.5 - - 26.5 Gross margins 80.3 69.7 9.5 12.3 10.9 182.7 Operating earnings (loss) 71.3 65.4 (0.1) 5.6 (4.7) 137.5 Six months ended June 30, 1999 Net sales from external customers $711.5 $358.4 $172.9 $201.7 $ 90.3 $1,534.8 Intersegment net sales 57.7 31.1 1.1 - - 89.9 Gross margins 167.0 139.6 54.2 23.8 9.0 393.6 Operating earnings (loss) 148.9 130.3 36.1 9.8 (20.5) 304.6 IMC-Agrico IMC IMC IMC Phosphates Kalium Salt Chemicals Other(b) Total ---------- ------ ---- --------- -------- ----- Three months ended June 30, 1998 Net sales from external customers $407.0 $185.8 $ 40.9 $102.8 $ 56.9 $ 793.4 Intersegment net sales 49.6 18.7 - - - 68.3 Gross margins(c) 116.0 78.6 7.2 12.3 4.0 218.1 Operating earnings (loss)(d) 106.4 70.9 (0.9) 6.2 (17.9) 164.7 Six months ended June 30, 1998 Net sales from external customers $723.2 4336.0 $ 43.3 $102.8 $124.6 $1,329.9 Intersegment net sales 97.9 44.1 - - 3.0 145.0 Gross margins(c) 187.3 155.4 7.3 12.3 9.7 372.0 Operating earnings (loss)(d) 167.5 141.1 (1.6) 6.2 (41.5) 271.7 (a) The operating results and assets of Great Salt Lake Minerals (GSL), IMC Salt (Salt) and IMC Chemicals (Chemicals), acquired as part of the Harris Acquisition, are included in the segment information since the date of acquisition, April 1998. See Note 1, "Acquisitions." The operating results of AgriBusiness have not been included in the segment information provided as this business had been classified as discontinued operations until its divestiture in April 1999. See Note 3, "Discontinued Operations." (b) Segment information below the quantitative thresholds is attributable to two business units (IMC-Agrico Feed Ingredients (Feed Ingredients) and IMC Vigoro) and corporate headquarters. The Company produces and markets animal feed ingredients through Feed Ingredients. IMC Vigoro manufactured and distributed consumer lawn and garden products; produced and marketed professional products for turf, nursery and horticulture markets; and produced and distributed potassium-based ice melter products. IMC Vigoro was sold in June 1998. See Note 4, "Divestitures." Corporate headquarters includes the elimination of inter-business unit transactions and oil and gas activities through its interest in Phosphate Resource Partners Limited Partnership. (c) Before non-recurring charges of $4.1 million related to the sale of IMC Vigoro in June 1998. See Note 4, "Divestitures." (d) Before non-recurring charges of $14.0 million related to the sale of IMC Vigoro in June 1998. See Note 4, "Divestitures."
8.Comprehensive Income -------------------- Comprehensive income, net of taxes, was as follows:
Three months ended Six months ended June 30, June 30, 1999 1998 1999 1998 -------------------------------------------------------------------- Comprehensive income: Net earnings $ 52.2 $ 87.0 $112.9 $132.3 Foreign currency translation adjustment 13.3 (18.4) 24.9 (16.0) ------- ------- ------ ------ Total comprehensive income for the period $ 65.5 $ 68.6 $137.8 $116.3 ======= ======= ====== ======
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.(1) Results of Operations Three months ended June 30, 1999 vs. three months ended June 30, 1998 Overview Net sales for the second quarter of 1999 were $765.4 million and gross margins were $182.7 million. Earnings from continuing operations for the second quarter of 1999 were $52.2 million, or $0.46 per share. Net sales for the second quarter of 1998 were $793.4 million and gross margins, excluding non-recurring charges of $4.1 million, related to the divestiture of IMC Vigoro, were $218.1 million. Earnings from continuing operations for the second quarter of 1998, excluding non- recurring charges of $9.1 million, or $0.08 per share, related to the divestiture of IMC Vigoro, were $66.0 million, or $0.58 per share. Including the non-recurring charges, earnings from continuing operations were $56.9 million, or $0.50 per share. Net earnings for the second quarter of 1998 of $87.0 million, or $0.76 per share included earnings from discontinued operations of $30.1 million, or $0.26 per share. Net sales for the second quarter of 1999 decreased four percent from the prior year second quarter while gross margins, before non-recurring charges, decreased 16 percent. The decrease in sales was mainly attributable to reduced domestic sales volumes and prices at IMC-Agrico Phosphates (Phosphates) as well as the absence of sales in the current quarter for IMC Vigoro, which was divested in June 1998. See Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. These decreases were partially offset by higher sales at Salt resulting from increased demand across all product lines and improved sales, both to domestic and international customers, at Feed Ingredients. The gross margin decrease was primarily attributable to reduced sales volumes and prices at Phosphates, as discussed above, and lower margins at IMC Kalium (Kalium) caused by plant shutdowns to balance supply with demand. The operating results of the Company's significant business units are discussed in more detail below. IMC-Agrico Phosphates Phosphates' net sales for the second quarter of 1999 declined 14 percent to $394.4 million compared to $456.6 million for the same period last year largely due to decreased sales volumes and lower average sales realizations. Decreased shipments of granular monoammonium phosphate (GMAP) and granular triple superphosphate (GTSP), partially offset by a slight increase in shipments of diammonium phosphate (DAP) reduced sales by $35.3 million. These decreased volumes were mainly attributable to lower international shipments to certain countries as well as lower domestic shipments resulting from cutbacks in overall application rates coupled with aggressively priced imports. Lower average concentrate sales prices, driven by lower average DAP realizations, reduced sales by $16.2 million. Additionally, sales of uranium, ammonia and urea decreased $3.7 million, $2.2 million and $1.9 million, respectively. Gross margins decreased 31 percent to $80.3 million for the second quarter of 1999 compared to $116.0 million last year, mainly due to higher production costs as well as the lower volumes and prices discussed above. Production costs increased compared to the prior year's second quarter primarily as a result of higher idle plant costs, partially offset by reduced spending and lower raw material prices. IMC Kalium Kalium's net sales were essentially unchanged at $202.5 million in the second quarter of 1999 as compared to $204.5 million in the prior year quarter. Gross margins decreased 11 percent to $69.7 million for the second quarter of 1999 from $78.6 million in the same period one year ago. Gross margins were negatively impacted by a change in product mix as well as by plant shutdowns in the current quarter in an effort to balance supply with demand. As a result of the shutdowns, current quarter production costs increased eight percent. IMC Salt Salt's net sales increased 18 percent to $48.4 million in the second quarter of 1999 compared to $40.9 million in the second quarter of 1998. This increase in sales was attributable to higher demand for salt products across all product lines, coupled with a new midwest marketing strategy and the addition of two distributorships in the United Kingdom. Gross margins increased 32 percent to $9.5 million for the second quarter of 1999 from $7.2 million in the same period one year ago as a result of increased sales volumes, particularly for consumer products and restocking rock salt with deicing customers in the United Kingdom. Other The Company's net sales and gross margins in the current quarter also included results for Feed Ingredients and Chemicals. Sales at Chemicals of $101.3 million remained essentially unchanged from prior period sales of $102.8 million. Gross margins at Chemicals for the second quarter of 1999 remained unchanged at $12.3 million. Sales and gross margins at Feed Ingredients for the second quarter of 1999 increased ten percent and 52 percent, respectively, to $41.9 million and $9.4 million, respectively, as compared to the prior year period. The Feed Ingredients increases were driven by improved sales, both to domestic and international customers, and positive leveraging of lower production costs related to increased production volumes. Partially offsetting these increases in current quarter sales and gross margins, as compared to the same period in the prior year, was the absence of sales and margins for IMC Vigoro as a result of its divestiture during the second quarter of 1998. See Note 4, "Divestitures" and Note 7, "Operating Segments," of Notes to Condensed Consolidated Financial Statements. Key Statistics The following table summarizes the Company's core business sales volumes and average selling prices for the three months ended June 30:
1999 1998 ---- ---- Sales volumes (in thousands of short tons)(a): IMC-Agrico Phosphates 1,973 2,161 IMC Kalium 2,355 2,435 IMC Salt 1,435 1,216 Average price per ton(b): DAP $168 $178 Potash 85 82 Salt 34 34 (a) Sales volumes include tons sold captively. Phosphates' volumes represent dry product tons, primarily DAP. (b) Average prices represent sales made FOB mine/plant.
Selling, General and Administrative Expenses Selling, general and administrative expenses decreased $0.7 million, or two percent, to $43.3 million, before non-recurring charges of $9.9 million related to the divestiture of IMC Vigoro in June 1998. See Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. Exploration Expenses The Company participates in the exploration and production of oil and gas (Exploration Program) through its ownership of PLP. Exploration expenses relate to the Exploration Program and are largely comprised of geological and geophysical expenses. Exploration expenses totaled $1.9 million in the second quarter of 1999, a decrease of $7.5 million from the same period in the prior year as a result of the absence of dry hole costs in the current quarter compared to $7.1 million of dry hole costs for the same period in 1998. Interest Expense Interest expense totaled $45.5 million in the current quarter, a decrease of $10.3 million from the same period in the prior year. The decrease in interest expense was the result of a decrease in outstanding debt primarily as a result of the paydown of debt assumed in connection with the Harris Acquisition. Six months ended June 30, 1999 vs. six months ended June 30, 1998 Overview Net sales for the first six months of 1999 were $1,534.8 million and gross margins were $393.6 million. Earnings from continuing operations before a cumulative effect of a change in accounting principle, were $120.4 million, or $1.06 per share. A cumulative effect of a change in accounting principle of $7.5 million, or $0.07 per share, reduced net earnings to $112.9 million, or $0.99 per share. Net sales for the first six months of 1998 were $1,329.9 million and gross margins, excluding non-recurring charges of $4.1 million, related to the divestiture of IMC Vigoro, were $372.0 million. Earnings from continuing operations, excluding non-recurring charges of $9.1 million, or $0.08 per share, related to the divestiture of IMC Vigoro, were $120.7 million, or $1.06 per share. Including the non-recurring charges, earnings from continuing operations before an extraordinary charge were $111.6 million, or $0.98 per share. Net earnings of $132.3 million, or $1.16 per share included earnings from discontinued operations of $23.4 million, or $0.20 per share and were reduced by an extraordinary charge of $2.7 million, or $0.02 per share, related to an early extinguishment of debt. See Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. Net sales for the first six months of 1999 increased 15 percent when compared to the first six months of the prior year period while gross margins, before non-recurring charges, increased six percent from the comparable period one year ago. This improvement was largely a consequence of additional revenues from the former Harris operations partially offset by decreased sales at Phosphates as a result of significantly reduced phosphate pricing and lower domestic volumes. Additionally, the absence of sales in the current period from IMC Vigoro as a result of its divestiture during the second quarter of 1998 further reduced the Company's overall sales improvement from the prior year period. See Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. The gross margin increase was primarily attributable to favorable margins from the Harris Acquisition partially offset by reduced sales volumes and prices at Phosphates, as discussed above, lower margins at Kalium caused by plant shutdowns to control inventory and the absence of sales from IMC Vigoro as a result of its divestiture during the second quarter of 1998. See Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. The operating results of the Company's significant business units are discussed in more detail below. IMC-Agrico Phosphates Phosphates' net sales for the first six months of 1999 declined six percent to $769.2 million compared to $821.1 million for the same period last year primarily as a consequence of decreased concentrate sales volumes and lower average sales realizations. Decreased shipments of GMAP and GTSP, partially offset by an increase in shipments of DAP reduced sales by $42.3 million. These unfavorable volume variances reflected the following factors: (i) a cutback in overall domestic application rates, (ii) continued availability of aggressively priced GTSP imports, and (iii) lower international shipments. Average sales realizations for the first six months of 1999 decreased as compared to the prior year period primarily as a result of lower domestic and international DAP realizations. Gross margins declined 11 percent to $167.0 million for the first six months of 1999 compared to $187.3 million for the first six months of last year, mainly because of the lower volumes and prices discussed above, partially offset by decreased production costs. Production costs were lower when compared to the prior year's first six months primarily as a result of the following: (i) lower raw material costs for purchased ammonia and natural gas; (ii) favorable variances from phosphate rock operations due to reduced spending; partially offset by (iii) unfavorable variances from concentrated phosphate operations created by lower bone phosphate of lime levels and higher turnaround amortization. IMC Kalium Kalium's net sales for the first six months of 1999 increased two percent to $389.5 million as compared to $380.1 million in the prior year period. Gross margins for the first six months of 1999 decreased ten percent to $139.6 million from $155.4 million in the same period one year ago. Gross margins were affected by plant shutdowns in the current period for inventory control. Gross margins were also negatively impacted by additional costs related to the acquisition of GSL as part of the Harris Acquisition. Finally, increased water control expenditures and resource taxes in the current period led to a further margin erosion. IMC Salt Salt's net sales for the first six months of 1999 were $174.0 million with gross margins of $54.2 million. These results were higher than comparable pre-acquisition amounts in the first six months of 1998 of $133.1 million and $46.8, respectively. Salt was established in April 1998 concurrent with the Harris Acquisition; consequently, operating results for the six months ended June 30, 1998 included only partial year activity. Increased demand for salt products across all product lines, a new midwest marketing strategy and the addition of two distributorships in the United Kingdom lifted current period sales above those of the prior year period. The rise in gross margins resulted from increased sales volumes, particularly for consumer products and restocking rock salt with deicing customers in the United Kingdom. Other The Company's net sales and gross margins for the first six months of 1999 also included results from Feed Ingredients and Chemicals. Chemicals, with sales and gross margins for the first six months of 1999 of $201.7 million and $23.8 million, respectively, was established concurrent with the Harris Acquisition in April 1998; consequently, operating results for the six months ended June 30, 1998 included only partial year activity. Sales and gross margins at Feed Ingredients for the first six months of 1999 increased nine percent and 36 percent, respectively, to $85.3 million and $18.6 million, respectively, as compared to the prior year period. The Feed Ingredients increases were driven by improved sales, both to domestic and international customers, lower production costs related to increased production volumes, and overall lower raw material costs. Partially offsetting these increases in current period sales and gross margins, as compared to the same period in the prior year, was the absence of sales and margins for IMC Vigoro as a result of its divestiture during the second quarter of 1998. See Note 4, "Divestitures" and Note 7, "Operating Segments," of Notes to Condensed Consolidated Financial Statements. Key Statistics The following table summarizes the Company's core business sales volumes and average selling prices for the six months ended June 30:
1999 1998 ---- ---- Sales volumes (in thousands of short tons)(a): IMC-Agrico Phosphates 3,663 3,919 IMC Kalium 4,512 4,722 IMC Salt(c) 6,645 4,960 Average price per ton(b): DAP $171 $175 Potash 85 80 Salt(c) 26 26 (a) Sales volumes include tons sold captively. Phosphates' volumes represent dry product tons, primarily DAP. (b) Average prices represent sales made FOB mine/plant. (c) Salt was established in April 1998 concurrent with the Harris Acquisition. Information for the six months ended June 30, 1998 is provided for comparative purposes only.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased $4.2 million, or five percent, to $85.6 million, before non-recurring charges of $9.9 million related to the divestiture of IMC Vigoro in June 1998. This increase was primarily due to the Harris Acquisition as the prior year's amount for Salt and Chemicals represented activity for only the three months ended June 30, 1998. This increase was partially offset by the divestiture of IMC Vigoro in June 1998. See Note 1, "Acquisitions" and Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. Exploration Expenses Exploration expenses totaled $3.4 million for the first six months of 1999, a decrease of $15.5 million from the same period in the prior year as a result of the absence of dry hole costs in the current period as compared to $14.3 million of dry hole costs for the same period in 1998. Interest Expense Interest expense for the first six months of 1999 totaled $92.8 million, an increase of $15.8 million from the same period in the prior year. The increase in interest expense was due to increased debt outstanding primarily as a result of debt assumed in connection with the Harris Acquisition. Other (Income) Expense, Net Other income for the first six months of 1999 decreased $3.0 million from the same period in the prior year. The decrease was mainly attributable to the absence of income received from interest rate locks associated with January 1998 debt issuances and higher debt fee amortization for the first six months of 1999 as a result of refinancing debt assumed as part of the Harris Acquisition. Minority Interest Minority interest for the first six months of 1999 increased $7.6 million from the same period last year to $24.8 million. The increase in minority interest expense was attributable to significantly reduced dry hole cost expenditures in the current period partially offset by lower IMC-Agrico Company earnings. Restructuring Plan The timing and costs of the Restructuring Plan are generally on schedule with the original time and dollar estimates disclosed in the fourth quarter of 1998. During the first six months of 1999, 62 employees, who had accepted a voluntary retirement plan as of December 31, 1998, left the Company in accordance with their target retirement date. See Note 2, "Restructuring Plan," of Notes to Condensed Consolidated Financial Statements. Capital Resources and Liquidity The Company generates significant cash from operations and has sufficient borrowing capacity to meet its operating and discretionary spending requirements. Operating activities generated $413.1 million of cash for the first six months of 1999 compared with $174.6 million for the same period in 1998. The increase of $238.5 million was primarily a result of a decrease in working capital, lower litigation payments and lower debt fee payments as a result of a reduction in debt issuances. The change in working capital was primarily the result of lower inventory levels based on market conditions and increased collection of receivables. Net cash provided by investing activities for the first six months of 1999 increased $631.6 million compared with the same period in 1998 from a use of funds of $517.4 million to a source of funds of $114.2 million. In April 1999, the Company completed the sale of AgriBusiness and received proceeds of approximately $265.0 million which were used to reduce the amount of the Company's outstanding indebtedness. In the prior year, proceeds of $44.8 million were received from the sale of IMC Vigoro while $393.3 million was expended to fund the Harris Acquisition. See Note 1, "Acquisitions," Note 3, "Discontinued Operations," and Note 4, "Divestitures," of Notes to Condensed Consolidated Financial Statements. Additionally, current period capital expenditures decreased $17.2 million as a consequence of the absence of capital expenditures for AgriBusiness and a significant reduction in PLP well exploration activity. The Company estimates that its capital expenditures for 1999 will be approximately $265.0 million and will be financed primarily through operations. Cash generated from financing activities decreased $945.9 million for the first six months of 1999 from a source of funds of $372.9 million to a use of funds of $573.0 million. This decrease in financing funds was primarily a result of lower net debt proceeds in 1999 of $952.2 million. In the prior year, the net debt proceeds were used, in part, to finance the Harris Acquisition which was funded through the Company's commercial paper borrowings. In April 1999, the Company terminated its Amended and Restated Credit Agreement which had provided $250.0 million of credit support for the Company's commercial paper program. This termination was made possible through the reduction of the Company's commercial paper using proceeds from the sale of AgriBusiness as discussed above. Year 2000 Compliance -------------------- Like other businesses dependent on modern technology, the Company must address potential Year 2000-related issues. The Company is progressing through a comprehensive program (Year 2000 Program) to evaluate and address the impact of Year 2000- related issues on its operational systems, business application software, computer hardware, facilities infrastructure and equipment with embedded technology, and Year 2000-related risks associated with its vendors and customers. The Company's Year 2000-related effort is a cooperative venture coordinated among business units and appropriate members of the Company's senior management. Progress reviews are held regularly with senior management and the Board of Directors. As an additional step, the Company has created the position of Year 2000 Risk Manager to provide Company-wide leadership, oversight and coordination of its Year 2000 project. State of Readiness The Company is using both internal and external resources to implement its Year 2000 Program, which includes the following overlapping phases: (i) system inventory and analysis; (ii) remediation, testing and implementation; and (iii) vendor and customer review. The Company expects that its Year 2000 Program will be substantially complete by the end of the third quarter of 1999. System Inventory and Analysis Phase: The system inventory and analysis phase consists of compiling a detailed inventory of all of the Company's systems and platforms to determine which items are date sensitive, affected by the Year 2000, and therefore require remediation. Each of the Company's business units has focused specifically on the following seven target areas: (i) business application software; (ii) mainframe hardware and software; (iii) network servers; (iv) desktop environment; (v) network and telephone systems; (vi) non-information technology assets and facilities; and (vii) major suppliers and service providers. This analysis has involved both an internal assessment conducted by Company engineers, technicians and business unit managers, as well as contact with the manufacturers of computer systems and equipment used by the Company in its operations. Each of the Company's business units has completed its system inventory and analysis phase. The principal business application systems requiring remediation that were identified by the Company during this stage include the following systems: (i) equipment maintenance; (ii) spare parts inventory; (iii) distribution; (iv) customer order entry; and (v) financial/accounting. In addition, some Company plants have identified certain production control systems that will require Year 2000-related remediation in order to remain operative. Remediation, Testing and Implementation Phase: The remediation, testing and implementation phase involves determining and implementing a remediation method (upgrade, replace or discontinue) that is most appropriate for each specific date- sensitive item. The remediated item is then tested and returned to normal operations when Year 2000-related issues have been addressed. Testing includes functional testing of remedial measures and regression testing to validate that changes have not altered existing functionality. Several system manufacturers have provided testing procedures for their equipment and have been available for consultations about Year 2000-related testing. In certain cases, the Company has also retained special consultants to assist with its remediation efforts. The Company expects all of its business units to have substantially completed the remediation, testing and implementation phase in the third quarter of 1999. As a separate initiative, the Company is implementing its Global Vision Project, an enterprise-wide resource planning (ERP) software package. Its scope includes accounts payable, inventory, purchasing, general ledger, payroll, human resources and plant maintenance. This new ERP software and the improvements to the infrastructure hardware required to support the Global Vision Project should further remediate issues associated with the Year 2000. Vendor and Customer Review Phase: Vendor reviews consist of assessing vendor readiness, and if necessary, identifying alternate channels to receive critical materials and/or supplies. Each business unit has developed a questionnaire that has been submitted to its primary suppliers and vendors to determine their Year 2000-related status. The business units are currently analyzing the information provided in these responses, and will determine the best way to address any specific issues. As an additional precaution when appropriate, each business unit's purchase orders now contain a Year 2000- related clause to help ensure that any newly purchased equipment adequately addresses Year 2000-related issues. Although the Company is attempting to monitor and validate the efforts of other parties, it may not have control over the success of these efforts. In the event that satisfactory commitments from key suppliers are not received, the Company is forming plans for the continuing availability of critical materials and supplies through alternate channels. In general, however, the Company is satisfied with the progress made by key vendors to date and no critical issues have been identified. In addition to investigating the Company's key suppliers, the Company's business units have also contacted key customers to explain the Company's Year 2000-related efforts and to solicit certain information about each customer's Year 2000-related efforts to assess potential Year 2000-related problems that could affect future orders from such customers. While the Company's business units continue to be apprised of the progress made by these key customers in addressing their own Year 2000 issues, no guarantees can be made that these key customers will be Year 2000 compliant by December 31, 1999. If these key customers fail in their attempts to be Year 2000 compliant, the Company could potentially experience a delay in order processing. In general, however, the Company's business units are satisfied with the progress made to date by these key customers. Costs The Company does not currently expect that the costs of addressing its Year 2000-related issues will have a material effect on its financial position, results of operations or liquidity. Modification costs for Year 2000-related issues are expensed as incurred and are funded through operating cash flows. In a few limited instances, some business units have deferred certain non-Year 2000-related information technology projects due to their respective Year 2000-related efforts. The Company believes, however, that these deferred projects are not critical to its present or future financial performance or business operations. The Company estimates its total Year 2000- related technology and non-information technology systems remediation costs to be approximately $7.3 million, of which approximately $2.0 million was expended in 1998. The remaining costs will be incurred during 1999. A sizable portion of these costs represent the redeployment of existing employee resources rather than incremental expenses. Risks Progress reports on the Year 2000 Program are presented regularly to the Company's Board of Directors and senior management. As the program continues, the Company may discover additional Year 2000-related challenges, including that remediation plans are not feasible or that the cost of such plans exceeds current expectations. In many cases, the Company is relying on written assurances from vendors that the current systems are, or that new or upgraded systems acquired by the Company will adequately address Year 2000-related issues. The Company believes that one of its principal Year 2000-related risks is the effect Year 2000-related issues will have on its vendors, especially its utilities vendors. A substantial part of the Company's day-to-day operations is dependent on power, transportation systems, and telecommunication services, as to which alternative sources of service may not be available. The Company will continue to investigate the readiness of its suppliers, including utilities, and pursue the availability of alternatives to further diminish the extent of any impact Year 2000-related issues may have on the Company. Although there can be no assurance that the Company will be able to complete all of the modifications in the required time frame or that no unanticipated events will occur, it is management's belief that the Company is taking adequate action to address Year 2000- related issues. However, because of the range of possible issues and the large number of variables involved, it is impossible to quantify the potential cost of problems should the Company's remediation efforts or the efforts of those it does business with not be successful. If either the Company, or the Company's vendors, fail to adequately address Year 2000-related issues, the Company may suffer business interruptions. If such interruptions cause the Company to be unable to fulfill its obligations to third parties, the Company may potentially be exposed to third-party liability. Contingency Planning The Company continues to develop contingency measures to address the possibility that it will not have fully addressed Year 2000- related issues by December 31, 1999. These contingency measures provide the Company with an alternative plan of action in the event the Company experiences a shutdown in one of its mission critical systems, or a failure in the delivery of needed supplies, services, or equipment. Each of the Company's business units is developing a contingency plan based upon templates and suggested procedures that have been provided by the Year 2000 Risk Manager. Each business unit contingency plan will identify the risk and document the steps that need to be taken to allow the Company to continue to meet the needs of its customers in the event of a Year 2000-related failure. As part of the on-going contingency planning effort, the Company's business units continue to identify alternative channels for receiving critical supplies from alternate vendors. Although the Company expects each business unit to complete its contingency plan in the third quarter of 1999, each business unit will continue to revise and supplement its contingency plan through December 31, 1999. The above section, even if incorporated by reference into other documents or disclosures, is a Year 2000 Readiness Disclosure as defined under the Year 2000 Information and Readiness Disclosure Act of 1998. Item 3. Market Risk. The Company is exposed to the impact of interest rate changes, fluctuations in foreign currency, and fluctuations in the purchase price of natural gas, ammonia and sulphur consumed in operations, as well as changes in the market value of its financial instruments. The Company periodically enters into derivatives in order to minimize these risks, but not for trading purposes. At June 30, 1999, the Company's exposure to these market risk factors was not significant and had not materially changed from December 31, 1998. Part II.OTHER INFORMATION Item 1. Legal Proceedings.(1) Potash Antitrust Litigation The Company was a defendant, along with other Canadian and United States potash producers, in a class action antitrust lawsuit filed in federal court in 1993. The plaintiffs alleged a price-fixing conspiracy among North American potash producers beginning in 1987 and continuing until the filing of the complaint. The class action complaint against all defendants, including the Company, was dismissed by summary judgment in January 1997. The summary judgment dismissing the case was appealed by the plaintiffs to the United States Court of Appeals for the Eighth Circuit (Court of Appeals). Recently, the Court of Appeals in a divided opinion (2 to 1) rendered its decision reversing the grant of summary judgment as to certain defendants, including the Company, and affirming as to certain other defendants. The dissent strongly disagreed with the majority opinion, stating that the majority had erred in not affirming the dismissal of the case as to all of the defendants. According to the dissent, all of the defendants were entitled to summary judgment. The Company, along with the other defendants remaining in the case, sought rehearing of the case from the entire Court of Appeals, which has been granted. In addition, in 1993 and 1994, class action antitrust lawsuits with allegations similar to those made in the federal case were filed against the Company and other Canadian and United States potash producers in state courts in Illinois and California. The Illinois case was dismissed for failure to state a claim. In the California litigation, all proceedings have been stayed pending the decision of the Court of Appeals. FTX Merger Litigation In August 1997, five identical class action lawsuits were filed in Chancery Court in Delaware by unitholders of PLP. Each case named the same defendants and broadly alleged that FTX and FMRP Inc. (FMRP) had breached fiduciary duties owed to the public unitholders of PLP. The Company was alleged to have aided and abetted these breaches of fiduciary duty. In November 1997, an amended class action complaint was filed with respect to all cases. The amended complaint named the same defendants and raised the same broad allegations of breaches of fiduciary duty against FTX and FMRP for allegedly favoring the interests of FTX and FTX's common stockholders in connection with the FTX Merger. The plaintiffs claimed specifically that, by virtue of the FTX Merger, the public unitholders' interests in PLP's ownership of IMC-Agrico would become even more subject to the dominant interest of the Company. The amended complaint seeks certification as a class action and an injunction against the proposed FTX Merger or, in the alternative, rescissionary damages. The defendants' moved the court to dismiss the amended complaint in November 1998. In May 1999, the plaintiffs agreed to dismiss the action. Final terms of the dismissal have not yet been determined. In May 1998, IMC and PLP (collectively, Plaintiffs) filed a lawsuit (IMC Action) in Delaware Chancery Court against certain former directors of FTX (Director Defendants), and MOXY. IMC alleges that the Director Defendants, as the directors of PLP's administrative managing general partner FTX, owed duties of loyalty to PLP and its limited partnership unitholders. IMC further alleges that the Director Defendants breached their duties by causing PLP to enter into a series of interrelated non-arm's-length transactions with MOXY, an affiliate of FTX, which IMC alleges unfairly benefited MOXY and the Director Defendants to PLP's detriment. IMC also alleges that MOXY knowingly aided and abetted and conspired with the Director Defendants to breach their fiduciary duties. On behalf of the PLP public unitholders, IMC seeks to rescind the contracts that PLP entered into with MOXY and to recoup the monies expended as a result of PLP's participation in those agreements. The Director Defendants and MOXY have filed motions to dismiss the Plaintiffs' claims. The defendants filed their briefs in support of their motions in January 1999. IMC filed its amended complaint, and its responses to the motions to dismiss in February 1999. In response, the Director Defendants filed renewed motions to dismiss which are awaiting argument. No trial date has been scheduled. IMC intends to pursue this action vigorously. In May 1998, Jacob Gottlieb filed an action (Gottlieb Action) on behalf of himself and all other PLP unitholders against the Director Defendants, MOXY and IMC asserting the same claims that IMC asserts in the IMC Action. Because IMC and PLP had already asserted these claims, IMC has filed a motion to dismiss the Gottlieb Action. The court has not set a briefing schedule for IMC's motion to dismiss. IMC intends to defend this action vigorously. Other In the ordinary course of its business, the Company is and will from time to time be involved in legal proceedings of a character normally incident to its business. The Company believes that its potential liability in any such pending or threatened proceedings will not have a material adverse effect on the financial condition or results of operations of the Company. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Exhibit No. Description ----------- -------------------------------------------- 11 Earnings Per Share Computation 27 Financial Data Schedule (b) Reports on Form 8-K. Up to the date of this report, the following reports on Form 8- K were filed: Report under Items 5 and 7 dated May 27, 1999. ************************** 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. IMC GLOBAL INC. by: /s/ Anne M. Scavone ---------------------------------- Anne M. Scavone Vice President and Controller (on behalf of the Registrant and as Chief Accounting Officer) Date: August 13, 1999 - ----------------------------- (1)All statements, other than statements of historical fact, appearing under Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Part II, Item 1, "Legal Proceedings," constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: general business and economic conditions in the agricultural industry or in localities where the Company or its customers operate; weather conditions; the impact of competitive products; pressure on prices realized by the Company for its products; constraints on supplies of raw materials used in manufacturing certain of the Company's products; capacity constraints limiting the production of certain products; difficulties or delays in the development, production, testing and marketing of products; difficulties or delays in receiving required governmental and regulatory approvals; market acceptance issues, including the failure of products to generate anticipated sales levels; difficulties in integrating acquired businesses and in realizing related cost savings and other benefits; the effects of and change in trade, monetary and fiscal policies, laws and regulations; foreign exchange rates and fluctuations in those rates; the costs and effects of legal proceedings, including environmental, and administrative proceedings involving the Company; the completion of the Company's Year 2000 program; and the other risk factors reported from time to time in the Company's Securities and Exchange Commission reports. EX-11 2 EARNINGS PER SHARE EXHIBIT 11 EARNINGS PER SHARE DILUTED COMPUTATION FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS)
Three months ended Six months ended June 30, June 30, ---------------- ----------------- 1999 1998 1999 1998 ---- ---- ---- ---- Basis for computation of diluted earnings per share: Earnings from continuing operations before extraordinary item and cumulative effect of a change in accounting principle $ 52.2 $ 56.9 $ 120.4 $ 111.6 Earnings from discontinued operations - 30.1 - 23.4 Extraordinary charge - debt retirement - - - (2.7) Cumulative effect of a change in accounting principle - - (7.5) - ----------- ----------- ----------- ----------- Net earnings applicable to common stock $ 52.2 $ 87.0 $ 112.9 $ 132.3 =========== =========== =========== =========== Number of shares: Weighted average shares outstanding 114,353,541 114,259,700 114,323,038 114,132,765 Common stock equivalents 280,407 745,281 312,721 755,554 ------------ ----------- ----------- ----------- Total common and common equivalent shares assuming dilution 114,633,948 115,004,981 114,635,759 114,888,319 =========== =========== =========== =========== Diluted earnings per share: Earnings from continuing operations before extraordinary item and cumulative effect of a change in accounting principle $ 0.46 $ 0.50 $ 1.06 $ 0.98 Earnings from discontinued operations - 0.26 - 0.20 Extraordinary charge - debt retirement - - - (0.02) Cumulative effect of a change in accounting principle - - (0.07) - ----------- ----------- ----------- ----------- Net earnings $ 0.46 $ 0.76 $ 0.99 $ 1.16 =========== =========== =========== =========== This calculation is submitted in accordance with Regulation S-K Item 601(b)(11).
EX-27 3 FINANCIAL DATA SCHEDULE
5 1000 6-MOS Dec-31-1999 Jun-30-1999 42,800 22,100 333,800 8,100 490,500 989,000 6,109,800 2,357,800 5,961,600 441,800 2,480,600 125,100 0 0 1,855,500 5,961,600 1,534,800 1,534,800 1,141,200 1,230,200 19,200 0 92,800 192,600 72,200 120,400 0 0 (7,500) 112,900 0.99 0.99 Earnings per share has been calculated in accordance with Statement of Financial Accounting Standard No. 128, "Earnings Per Share," and is, therefore, stated on a basic and diluted basis.
-----END PRIVACY-ENHANCED MESSAGE-----