-----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, O30kObrD4lFNFfQMc4aq47vOjvrs7ypk/FrxDnxluppdZ7UgMFXEY9YhYN7oy+7m Tp5FPhytSP5UhosLqYaU4Q== 0000950131-99-004324.txt : 19990716 0000950131-99-004324.hdr.sgml : 19990716 ACCESSION NUMBER: 0000950131-99-004324 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990715 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: 8-K SEC ACT: SEC FILE NUMBER: 001-08520 FILM NUMBER: 99664974 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 8-K 1 FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 30, 1999 TERRA INDUSTRIES INC. (Exact name of registrant as specified in its charter) Maryland 1-8520 52-1145429 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or organization) Number) Identification No.) Terra Centre 600 Fourth Street P.O. Box 6000 Sioux City, Iowa 51102-6000 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (712) 277-1340 ================================================================================ ITEM 2. Acquisition or Disposition of Assets. ------------------------------------ Terra Industries Inc. completed on June 30, 1999 the sale of its Distribution business to Agro Distribution, LLC, an affiliate of Cenex/Land O'Lakes Agronomy Company for $390 million. The transaction was structured as a sale of assets and the purchase price was determined on an arms-length basis. The final purchase price is subject to an independent audit and post-closing adjustments based on any differences between estimated and actual working capital balances at June 30, 1999 and net cash flows for the business in the 1999 second quarter. Terra used approximately $350 million of sale proceeds to settle outstanding obligations for an accounts receivable securitization program, to repurchase a preferred minority interest in one of its subsidiaries (Beaumont Methanol Limited Partnership), and to repay seasonal short-term borrowings. The remainder of sales proceeds was used for general corporate purposes and to repay bank debt. The assets of the Distribution business that were sold include about 400 farm service centers and the associated improvements, equipment, inventory and receivables. This business distributes and markets a comprehensive line of fertilizers, crop protection products, seed and services to farmers and dealers located in the midwestern and southern regions of the United States and the eastern region of Canada. The buyer entered into a three-year supply contract with Terra's Nitrogen business that makes them Terra's largest customer. ITEM 7. Financial Statements and Exhibits. ---------------------------------
(b) Pro forma financial information: Page ---- Introductory paragraph to pro forma information F-1 Pro forma consolidated statement of financial position at March 31, 1999 F-2 Pro forma consolidated statement of income (loss) from continuing operations for the quarter ended March 31, 1999 and 1998 F-3 Pro forma consolidated statement of income (loss) from continuing operations for the year ended December 31, 1998 F-4
2 (c) Exhibits: 10.12 Asset Sale and Purchase Agreement dated as of May 3, 1999 by and between Terra Industries Inc. and Cenex/Land O'Lakes Agronomy Company, filed as Exhibit 10.12 to Terra Industries Inc. Form 8-K dated May 3, 1999, is incorporated herein by reference. SIGNATURE 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. TERRA INDUSTRIES INC. By: /s/ Francis G. Meyer ------------------------------------- Francis G. Meyer Senior Vice President and Chief Financial Officer Date: July 14, 1999 3 Pro Forma Consolidated Financial Statements The following pro forma consolidated financial statements of Terra have been prepared to give effect to the sale of its Distribution business segment, which sale was completed on June 30, 1999. These pro forma consolidated financial statements have been derived from, and should be read in conjunction with, the historical financial statements and related notes of Terra. The Pro Forma Consolidated Statement of Financial Position assumes that the disposition of the Distribution business segment occurred as of March 31, 1999. The Pro Forma Consolidated Statements of Income (Loss) From Continuing Operations assume that the disposition of the Distribution business segment occurred on January 1, 1998. The pro forma adjustments are based on available financial information and certain estimates and assumptions. Therefore, it is likely that actual results will differ from the pro forma adjustments. Management of Terra believes that any differences between the actual results and the pro forma adjustments will not have a material effect on the pro forma consolidated financial statements as presented herein. THE FOLLOWING UNAUDITED PRO FORMA FINANCIAL DATA ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY AND ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT ACTUALLY WOULD HAVE OCCURRED HAD THE DISPOSITION BEEN CONSUMMATED ON THE DATES INDICATED OR THE RESULTS THAT MAY OCCUR OR BE OBTAINED IN THE FUTURE. F-1 TERRA INDUSTRIES, INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ProForma Discontinued Distribution Business Segment (in thousands)
At March 31, 1999 ----------------- As Reported Adjustments ProForma ----------- ----------- ---------- Assets: Cash and short-term investments $ 25,808 $ 15,000 (b) $ 40,808 Accounts receivable, net 234,523 (139,861)(a) 94,662 Inventories 565,420 (415,607)(a) 149,813 Other current assets 73,378 (1,431)(a) 71,947 ---------- ---------- ---------- Total current assets 899,129 (541,899) 357,230 Equity and other investments 11,374 (9,449)(a) 1,925 Property, plant and equipment, net 1,156,195 (142,785)(a) 1,013,410 Excess of cost over net assets of acquired businesses 285,163 (18,347)(a) 266,816 Deferred tax asset 6,683 - 6,683 Other assets 76,087 (1,893)(a) 74,194 ---------- ---------- ---------- Total assets $2,434,631 $ (714,373) $1,720,258 ========== ========== ========== Liabilities Debt due within one year $ 43,572 $ (34,000)(b) $ 9,572 Accounts payable 339,213 (277,360)(a) 61,853 Accrued and other liabililies 257,386 (171,891)(a) 85,495 ---------- ---------- ---------- Total current liabilities 640,171 (483,251) 156,920 Long-term debt 485,204 (7,000)(b) 478,204 Deferred income taxes 204,153 (6,122)(b) 198,031 Other liabilities 62,013 17,000 (b) 79,013 Minority interest 335,886 (225,000)(b) 110,886 ---------- ---------- ---------- Total liabilities 1,727,427 (704,373) 1,023,054 ---------- ---------- ---------- Stockholders' equity Capital stock 127,888 - 127,888 Paid in capital 552,899 - 552,899 Accumulated other comprehensive income (21,851) - (21,851) Retained earnings 48,268 (10,000)(b) 38,268 ---------- ---------- ---------- Total stockholders' equity 707,204 (10,000) 697,204 ---------- ---------- ---------- Total liabilities and stockholders' equity $2,434,631 $ (714,373) $1,720,258 ========== ========== ==========
(a) To eliminate the assets and liabilities included in the balance sheet of the Company's Distribution business segment. (b) To reflect use of proceeds from sale ($285 million net of accounts receivable securitization) and establish appropriate reserves for expected future costs of the Distribution business segment. The reserves have not been included in the accompanying proforma Consolidated Statements of Income (Loss) From Continuing Operations and will be recorded in the income statements of the Company in subsequent periods. F-2 TERRA INDUSTRIES INC. CONSOLIDATED STATEMENT OF INCOME (LOSS) FROM CONTINUING OPERATIONS Pro Forma Discontinued Distribution Business Segment (in thousands, except per share amounts)
Three Months Ended March 31, 1999 -------------------------------------------- As Reported Adjustments (a) Pro Forma ----------- ----------- ----------- Revenues - -------- Net sales $ 406,632 $ (234,568) $ 172,064 Other income 8,026 (3,300) 4,726 ---------- ----------- ----------- Total revenues 414,658 (237,868) (b) 176,790 ---------- ----------- ----------- Costs and Expenses - ------------------ Cost of sales 378,453 (195,524) 182,929 Selling, general and administrative 75,627 (64,711) 10,916 Equity in earnings of affiliates 1,013 696 1,709 ---------- ----------- ----------- Total costs and expenses 455,093 (259,539) (b) 195,554 ---------- ----------- ----------- Income (loss) from operations (40,435) 21,671 (18,764) Gain on sale of unconsolidated affiliates 9,804 (9,804) (b) - Interest income 967 (939) (c) 28 Interest expense (14,818) 2,202 (c) (12,616) Minority interest (4,155) - (4,155) ---------- ----------- ----------- Income before income taxes (48,637) 13,130 (35,507) Income tax (expense) provision 19,450 (5,251) (d) 14,199 ---------- ----------- ----------- Income (loss) from continuing operations $ (29,187) $ 7,879 $ (21,308) ========== =========== =========== Basic weighted average shares 74,166 74,166 74,166 ========== =========== =========== Diluted weighted average shares 74,166 74,166 74,166 ========== =========== =========== Basic Earnings Per Share: Income from continuing operations $ (0.39) $ 0.11 $ (0.28) ========== =========== =========== Diluted Earnings Per Share: Income from continuing operations $ (0.39) $ 0.11 $ (0.28) ========== =========== ===========
Three Months Ended March 31, 1998 -------------------------------------------- As Reported Adjustments (a) Pro Forma ----------- ----------- ----------- Revenues - -------- Net sales $ 455,621 $ (258,260) $ 197,361 Other income 10,051 (6,556) 3,495 ---------- ----------- ----------- Total revenues 465,672 (264,816) (b) 200,856 ---------- ----------- ----------- Costs and Expenses - ------------------ Cost of sales 394,682 (225,236) 169,446 Selling, general and administrative 81,828 (70,608) 11,220 Equity in earnings of affiliates 695 641 1,336 ---------- ----------- ----------- Total costs and expenses 477,205 (295,203) (b) 182,002 ---------- ----------- ----------- Income (loss) from operations (11,533) 30,387 18,854 Gain on sale of unconsolidated affiliates - - - Interest income 1,568 (1,543) (c) 25 Interest expense (14,982) 2,745 (c) (12,237) Minority interest (6,301) - (6,301) ---------- ----------- ----------- Income before income taxes (31,248) 31,589 341 Income tax (expense) provision 12,982 (13,110) (d) (142) ---------- ----------- ----------- Income (loss) from continuing operations $ (18,280) $ 18,479 $ 199 ========== =========== =========== Basic weighted average shares 73,860 73,860 73,860 ========== =========== =========== Diluted weighted average shares 73,860 73,860 73,860 ========== =========== =========== Basic Earnings Per Share: Income from continuing operations $ (0.25) $ 0.25 - ========== =========== =========== Diluted Earnings Per Share: Income from continuing operations $ (0.25) $ 0.25 - ========== =========== ===========
(a) The final purchase price is subject to an independent audit and post-closing adjustments based on any differences between estimated and actual working capital balances at June 30, 1999 and net cash flows for the business in the 1999 second quarter. (b) To eliminate the revenue, costs, and expenses of the Company's Distribution business segment for the entire period, including allocated indirect general and administrative expenses of less than 3%. (c) To reflect the interest income and expense allocated to the Company's Distribution business segment based upon capital utilized. (d) To reflect the income taxes allocated to the Company's Distribution business segment based upon the then current effective rate applied to income or loss. F-3 TERRA INDUSTRIES INC. CONSOLIDATED STATEMENT OF INCOME (LOSS) FROM CONTINUING OPERATIONS ProForma Discontinued Distribution Business Segment (in thousands, except per share amounts)
Year Ended December 31, 1998 ---------------------------- As Reported Adjustments (a) ProForma ----------- --------------- -------- Revenues - -------- Net sales $2,472,961 $(1,658,075) $814,886 Other income 79,057 (76,182) 2,875 ---------- ----------- -------- Total revenues 2,552,018 (1,734,257)(b) 817,761 ---------- ----------- -------- Costs and Expenses - ------------------ Cost of sales 2,152,392 (1,406,577) 745,815 Selling, general and administrative 357,441 (308,229) 49,212 Equity in earnings of affiliates (3,172) 1,936 (1,236) ---------- ----------- -------- Total costs and expenses 2,506,661 (1,712,870)(b) 793,791 ---------- ----------- -------- Income (loss) from operations 45,357 (21,387) 23,970 Interest income 4,553 (4,227)(c) 326 Interest expense (63,649) 12,527 (c) (51,122) Minority interest (27,510) - (27,510) ---------- ----------- -------- Income before income taxes (41,249) (13,087) (54,336) Income tax (expense) provision 15,000 4,759 (d) 19,759 ---------- ----------- -------- Income (loss) from continuing operations $ (26,249) $ (8,328) $(34,577) ========== =========== ======== Basic weighted average shares 73,954 73,954 73,954 ========== =========== ======== Diluted weighted average shares 73,954 73,954 73,954 ========== =========== ======== Basic Earnings Per Share: Income from continuing operations $ (0.35) $ (0.11) $ (0.46) ========== =========== ======== Diluted Earnings Per Share: Income from continuing operations $ (0.35) $ (0.11) $ (0.46) ========== =========== ========
(a) The final purchase price is subject to an independent audit and post-closing adjustments based on any differences between estimated and actual working capital balances at June 30, 1999 and net cash flows for the business in the 1999 second quarter. (b) To eliminate the revenue, costs, and expenses of the Company's Distribution business segment for the entire period, including allocated indirect general and administrative expenses of less than 3%. (c) To reflect the interest income and expense allocated to the Company's Distribution business segment based upon capital utilized. (d) To reflect the income taxes allocated to the Company's Distribution business segment based upon the then current effective rate applied to income or loss. F-4 -----END PRIVACY-ENHANCED MESSAGE-----