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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION******Washington, D.C. 20549

**FORM 10-Q**

QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004Commission file number 1-9759

**IMC Global Inc.**(Exact name of registrant as specifiedin its charter)

| **Delaware**(State or other jurisdiction of  incorporation or organization)                                                                                                           | **36-3492467**(I.R.S. Employer  Identification No.) |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
| **100 South Saunders Road  Lake Forest, Illinois 60045  (847) 739-1200**(Address and zip code of principal  executive offices and registrant's telephone number, including area code) |

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

Yes  X  .             No____.

Indicateby check mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Exchange Act).

Yes  X  .           No____.

APPLICABLEONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding of eachof the issuer's classes of common stock as of the latest practicable date: 115,833,820shares, excluding 14,932,223 treasury shares as of July 30, 2004.

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**Table of Contents**

| **Part I**   | **Financial Information** | ***Page***                                                                             |
|--------------|---------------------------|----------------------------------------------------------------------------------------|
|              | Item 1                    | Financial  Statements                                                                  | 1 |
| * *     |                           | * -  Condensed Consolidated Statement of Operations*                    | 2 |
| * *     |                           | * -  Condensed Consolidated Balance  Sheet*                             | 3 |
| * *     |                           | * -  Condensed Consolidated Statement of  Cash Flows*                        | 4 |
| * *     |                           | * -  Notes to Condensed Consolidated Financial Statements*              | 5 |
|              | Item 2                    | Management's Discussion and Analysis of  Financial Condition and Results of Operations | 22 |
| *** *** | ** **                | *-  Results of Operations*                                                   | 22 |
| * *     | * *                  | *-  Capital Resources and Liquidity*                                         | 28 |
|              | Item 3                    | Quantitative and Qualitative Disclosure About Market Risk                              | 31 |
| ** **   | Item 4                    | Controls  and Procedures                                                               | 31 |
| **Part II**  | **Other Information**     | ***Page***                                                                             |
| * *     | Item 1                    | Legal Proceedings                                                                      | 32 |
| * *     | Item 2                    | Changes in Securities and Use of Proceeds                                              | 32 |
| * *     | Item 4                    | Submission of Matters to a Vote of Security  Holders                                   | 32 |
| * *     | Item 6                    | Exhibits and Reports on Form 8-K                                                       | 33 |
|              | Signatures                | S-1                                                                                    |
|              | Exhibit  Index            | E-1                                                                                    |

 

**PART I. FINANCIALINFORMATION**

Item 1.     FinancialStatements.

The accompanying interimcondensed consolidated financial statements of IMC Global Inc. (Company or IMC)do not include all disclosures normally provided in annual financialstatements.  These financial statements, which should be read in conjunctionwith the consolidated financial statements contained in the Company's AnnualReport on Form 10‐K for the year ended December 31, 2003 are unauditedbut include all adjustments which the Company's management considers necessaryfor fair presentation.  These adjustments consist of normal recurring accrualsand the adoption of new accounting pronouncements.  Certain 2003 amounts havebeen reclassified to conform to the 2004 presentation.  Interim results are notnecessarily indicative of the results expected for the full year.

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CONDENSEDCONSOLIDATED STATEMENT OF OPERATIONS (In millions, except per share amounts)(Unaudited)

|                                                                                                                                    | *Three months ended  June 30*                                        | *Six months ended  June 30*          |
|------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------------------------------------|
|                                                                                                                                    | *2004*                                                               | *2003*                               | *2004* | *2003* |
| Net  sales                                                                                                                         | $  748.8                                              | $  538.7              | $1,333.0  | $1,090.8  |
| Cost of goods sold                                                                                                                 | 620.5                                                           | 494.9                           | 1,125.9  | 1,010.9  |
| Gross margins                                                                                                                      | 128.3                                                           | 43.8                            | 207.1  | 79.9  |
| Selling,  general and administrative expenses                                                                                      | 20.1                                                            | 22.1                            | 36.9  | 40.4  |
| Gain on sale of operating  assets                                                                                                  | -                                                               | (16.5)                               | -  | (16.5) |
| Restructuring charges                                                                                                              | -                                                               | 0.3                             | -  | 3.7  |
| Operating earnings                                                                                                                 | 108.2                                                           | 37.9                            | 170.2  | 52.3  |
| Interest  expense                                                                                                                  | 47.3                                                            | 46.0                            | 94.4  | 91.9  |
| Foreign currency  transaction (gain) loss                                                                                          | (11.7)                                                               | 28.8                            | (16.3) | 50.7  |
| Gain on sale of securities                                                                                                         | -                                                               | (35.5)                               | -  | (35.5) |
| Debt refinancing expense                                                                                                           | -                                                               | -                               | -  | 2.9  |
| Other (income) expense, net                                                                                                        | 6.1                                                             | (4.3)                                | 14.9  | (2.4) |
| Earnings (loss) before  minority interest                                                                                          | 66.5                                                            | 2.9                             | 77.2  | (55.3) |
| Minority interest                                                                                                                  | (4.3)                                                                | (11.1)                               | (12.8) | (22.7) |
| Earnings (loss) before  taxes                                                                                                      | 70.8                                                            | 14.0                            | 90.0  | (32.6) |
| Provision (benefit) for  income taxes                                                                                              | 28.1                                                            | (8.1)                                | 35.7  | (23.0) |
| Earnings (loss) from  continuing operations                                                                                        | 42.7                                                            | 22.1                            | 54.3  | (9.6) |
| Loss from discontinued  operations                                                                                                 | -                                                               | (29.0)                               | (2.4) | (29.0) |
| Earnings (loss) before  cumulative effect of a change in accounting principle                                                      | 42.7                                                            | (6.9)                                | 51.9  | (38.6) |
| Cumulative effect of a  change in accounting principle (net of minority     interest of $6.9 and a  tax benefit of $3.0) | -                                                               | -                               | -  | (4.9) |
| Net earnings (loss)                                                                                                                | $    42.7                                   | $     (6.9) | $     51.9  | $    (43.5) |
| *Earnings  (loss) from continuing operations available for common  shareholders:*                                             |                                                                      |                                      |  |  |
| Earnings (loss) from continuing  operations                                                                                        | $    42.7                                   | $    22.1   | $     54.3  | $      (9.6) |
| Preferred stock dividend                                                                                                           | (2.6)                                                                | -                               | (5.2) | -  |
|                                                                                                                                    | $    40.1                                   | $    22.1   | $     49.1  | $      (9.6) |
| *Basic  earnings (loss) per share:*                                                                                                |                                                                      |                                      |  |  |
| Earnings (loss) from  continuing operations available for common   shareholders                                          | $    0.35                                   | $    0.19   | $     0.43  | $    (0.08) |
| Loss from discontinued  operations                                                                                                 | -                                                               | (0.25)                               | (0.02) | (0.25) |
| Cumulative effect of a  change in accounting principle                                                                             | -                                                               | -                               | -  | (0.04) |
| Net earnings (loss) per  share available for common shareholders                                                                   | $    0.35                                   | $   (0.06)            | $     0.41  | $    (0.37) |
| Basic  weighted average number of shares outstanding                                                                               | 115.0                                                           | 114.8                           | 115.0  | 114.7  |
| *Diluted  earnings (loss) per share:*                                                                                              |                                                                      |                                      |  |  |
| Earnings (loss) from  continuing operations                                                                                        | $    0.32                                   | $    0.19   | $     0.41  | $    (0.08) |
| Loss from discontinued  operations                                                                                                 | -                                                               | (0.25)                               | (0.02) | (0.25) |
| Cumulative effect of a  change in accounting principle                                                                             | -                                                               | -                               | -  | (0.04) |
| Net earnings (loss) per  share                                                                                                     | $    0.32                                   | $   (0.06)            | $     0.39  | $    (0.37) |
| Diluted  weighted average number of shares outstanding                                                                             | 134.2                                                           | 115.4                           | 133.9  | 114.7  |
| Dividends  declared per share of common stock                                                                                      | $          -  | $    0.02   | $           -  | $     0.04  |
|                                                                                                                                    |                                                                      |                                      |  |  |

(See Notes to Condensed Consolidated FinancialStatements)

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CONDENSEDCONSOLIDATED BALANCE SHEET (Dollars in millions)

| ** **                                                                                                                                                                                                           | *(Unaudited)  June 30, 2004*                    | *December 31, 2003*                             |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|-------------------------------------------------|
| **Assets**                                                                                                                                                                                                           | *** ***                                    | *** ***                                    |
| *Current assets:*                                                                                                                                                                                                    |                                       |                                                 |
|    Cash and cash  equivalents                                                                                                                                                                         | $      48.0  | $      76.8  |
|    Restricted  cash                                                                                                                                                                                   | -                                          | 12.4                                       |
|    Receivables,  net                                                                                                                                                                                  | 232.9                                      | 194.8                                      |
|    Inventories,  net                                                                                                                                                                                  | 292.9                                      | 305.7                                      |
|    Deferred  income taxes                                                                                                                                                                             | 7.1                                        | 7.1                                        |
|    Other  current assets                                                                                                                                                                              | 36.7                                       | 42.8                                       |
|       Total current  assets                                                                                                                                                            | 617.6                                      | 639.6                                      |
| Property,  plant and equipment, net                                                                                                                                                                                  | 2,310.0                                    | 2,357.8                                    |
| Goodwill, net                                                                                                                                                                                                        | 289.0                                      | 289.0                                      |
| Deferred income taxes                                                                                                                                                                                                | 7.1                                        | -                                          |
| Other assets                                                                                                                                                                                                         | 408.3                                      | 384.3                                      |
| Total  assets                                                                                                                                                                                                        | $ 3,632.0                             | $ 3,670.7                             |
| **Liabilities  and Stockholders' Equity**                                                                                                                                                                            | ** **                                      | ** **                                      |
| *Current  liabilities:*                                                                                                                                                                                              |                                                 |                                                 |
|    Accounts  payable                                                                                                                                                                                  | $    160.1             | $    185.7             |
|    Accrued  liabilities                                                                                                                                                                               | 285.3                                      | 242.9                                      |
|    Short-term  debt and current maturities of long-term debt                                                                                                                                          | 43.4                                       | 25.4                                       |
|        Total  current liabilities                                                                                                                                                 | 488.8                                      | 454.0                                      |
| Long-term  debt, less current maturities                                                                                                                                                                             | 2,047.7                                    | 2,091.4                                    |
| Deferred income taxes                                                                                                                                                                                                | -                                          | 19.9                                       |
| Other noncurrent  liabilities                                                                                                                                                                                        | 552.1                                      | 578.8                                      |
| *Stockholders'  equity:*                                                                                                                                                                                             |                                                 |                                                 |
|    Preferred  stock, 7.5% mandatory convertible preferred, $1 par value, issued 2,750,000         as of June 30 and December 31 (liquidation preference $50 per  share) | 2.8                                        | 2.8                                        |
|    Common  stock, $1 par value, authorized 300,000,000 shares; issued 130,752,511       shares and 130,589,425  shares as of June 30 and December 31, respectively           | 130.8                                      | 130.6                                      |
|    Capital  in excess of par value                                                                                                                                                                    | 1,866.2                                    | 1,871.7                                    |
|    Accumulated  deficit                                                                                                                                                                               | (1,085.5)                                       | (1,132.2)                                       |
|    Accumulated  other comprehensive income (loss)                                                                                                                                                     | (32.3)                                          | 1.0                                        |
|    Treasury  stock, at cost, 14,922,406 and 15,486,798 shares  as of June 30 and         December 31, respectively                                                      | (338.6)                                         | (347.3)                                         |
|        Total  stockholders' equity                                                                                                                                                | 543.4                                      | 526.6                                      |
| Total  liabilities and stockholders' equity                                                                                                                                                                          | $ 3,632.0                             | $ 3,670.7                             |
|                                                                                                                                                                                                                      |                                                 |                                                 |

(See Notes to Condensed Consolidated FinancialStatements)

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CONDENSEDCONSOLIDATED STATEMENT OF CASH FLOWS(In millions)(Unaudited)

|                                                                                                                           | *Six months ended  June 30*               |
|---------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|
|                                                                                                                           | *2004*                                    | *2003* |
| **Cash  Flows from Operating Activities**                                                                                 | **  **                          | ** ** |
|    Net  earnings (loss)                                                                                    | $     51.9  | $     (43.5) |
|    *Adjustments  to reconcile net earnings (loss) to net cash provided by operating activities:* |                                           |  |
|        Adjustments  from continuing operations:                                        |                                           |  |
|            Depreciation,  depletion and amortization               | 91.1                                 | 84.2  |
|            Gain  on sale of assets                                 | -                                    | (52.0) |
|            Minority  interest                                      | (12.8)                                    | (22.7) |
|            Deferred  income taxes                                  | (21.1)                                    | (24.4) |
|            Cumulative  effect of a change in accounting principle  | -                                    | 4.9  |
|            Other  charges                                          | 7.8                                  | 40.5  |
|            Other  credits                                          | (71.2)                                    | (49.7) |
|            *Changes  in:*                                          |                                           |  |
|               Receivables                           | (38.1)                                    | 8.6  |
|               Inventories                           | 12.8                                 | 26.1  |
|               Other  current assets                 | 4.3                                  | 27.7  |
|               Accounts  payable                     | (25.6)                                    | (1.9) |
|               Accrued  liabilities                  | 45.4                                 | 6.3  |
|       Adjustments  from discontinued operations                                             | (2.0)                                     | 0.8  |
|       Net  cash provided by operating activities                                            | 42.5                                 | 4.9  |
| **Cash  Flows from Investing Activities**                                                                                 | ** **                                | ** ** |
|    Capital  expenditures                                                                                   | (59.9)                                    | (48.6) |
|    Proceeds  from the sale of assets                                                                       | 4.1                                  | 77.6  |
|       Net  cash provided by (used in) investing activities                                  | (55.8)                                    | 29.0  |
|       Net  cash provided (used) before financing activities                                 | (13.3)                                    | 33.9  |
| **Cash  Flows from Financing Activities**                                                                                 | ** **                                | ** ** |
|    Payments  of long-term debt                                                                             | (195.6)                                   | (739.5) |
|    Proceeds  from issuance of long-term debt                                                               | 192.3                                | 737.1  |
|    Changes  in short-term debt, net                                                                        | (19.2)                                    | (96.4) |
|    Changes  in restricted cash                                                                             | 12.4                                 | 105.5  |
|    Issuance  of preferred shares                                                                           | -                                    | 133.4  |
|    Debt  refinancing and issuance costs                                                                    | (2.0)                                     | (2.4) |
|    Stock  options exercised                                                                                | 1.8                                  | -  |
|    Cash  dividends paid                                                                                    | (5.2)                                     | (4.6) |
|       Net  cash provided by (used in) financing activities                                  | (15.5)                                    | 133.1  |
| Net  change in cash and cash equivalents                                                                                  | (28.8)                                    | 167.0  |
| Cash and cash equivalents -  beginning of period                                                                          | 76.8                                 | 17.7  |
| Cash and cash equivalents -  end of period                                                                                | $     48.0  | $     184.7  |
|                                                                                                                           |                                           |  |

(See Notes to Condensed Consolidated FinancialStatements)

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NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Dollars in millions, except per share amounts)(Unaudited)

1.   RESTRUCTURING CHARGES

Activityrelated to the Company's restructuring accruals during the period January 1,2004 to June 30, 2004 was as follows: 

| * *                         | *Accrual as of   January 1, 2004* | *Cash Paid* | *Accrual as of  June 30, 2004* |
|----------------------------------|-----------------------------------|-------------|--------------------------------|
| *Non-employee  exit costs:*      |                                   |             |                                |
| Demolition and  closure costs    | $   18.8           | $(2.4)      | $16.4                          |
| *Employee headcount reductions:* |                                   |             |                                |
| Severance  benefits              | 3.2                               | (1.2)       | 2.0                            |
| Total                            | $   22.0           | $(3.6)      | $18.4                          |
|                                  |                                   |             |                                |

The timing and costs of the prior restructuringactivities are generally on schedule with the time and dollar estimatesdisclosed in the Company's 2003 Annual Report on Form 10-K.

2.   DISCONTINUEDOPERATIONS

In December 1999, the Company receivedapproval from the Board of Directors for a plan to sell the entire IMCChemicals (Chemicals) business unit.  On November 5, 2001, the Company soldPenrice Soda Products Pty. Ltd., an Australian unit of Chemicals.  On February21, 2003, the Company sold its White River Nahcolite Minerals sodiumbicarbonate mine and plant for proceeds of approximately $20.6 million.  On March 23, 2004 the Company sold substantially allof its remaining discontinued Chemicals entities, which generally comprised thesoda ash and boron businesses, for gross proceeds of $6.0 million and retaineda minority economic interest in the resulting company.  In the first quarter of2004, the Company recorded an additional loss on disposal of $2.4 million,which included an additional operating loss of $4.0 million, $3.0 million aftertax, to reflect the terms of the sale.  

At December 31, 2003 forfinancial reporting purposes*,* the assetsand liabilities of Chemicals, net of the estimated losses on disposal, wereclassified in Other current assets as net assets of discontinued operationsheld for sale.  See the table below for the detail and classification of assetsand liabilities.

 

| * *                                            | *December 31, 2003*                |
|-----------------------------------------------------|------------------------------------|
| *Assets:*                                           | ** **                         |
|   Receivables, net                        | $   38.9            |
|   Inventories, net                        | 48.8                               |
|   Other  current assets                   | 0.7                                |
|   Other  assets                           | 4.4                                |
|   Total  assets                           | 92.8                               |
| *Liabilities:*                                      |                                    |
|   Accounts  payable                       | 27.8                               |
|   Accrued  liabilities                    | 22.1                               |
|   Estimated  accrued loss on disposal     | 35.0                               |
|   Other  noncurrent liabilities           | 5.9                                |
|   Total  liabilities                      | 90.8                               |
| Net assets of discontinued operations held for sale | $     2.0 |
|                                                     |                                    |

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3.   INVENTORIES

| * *                          | *June 30, 2004* | *December 31, 2003*      |
|-----------------------------------|-----------------|--------------------------|
| Products  (principally finished)  | $221.2          | $  235.3  |
| Operating materials and  supplies | 77.5            | 75.5                |
|                                   | 298.7           | 310.8               |
| Less: Allowances                  | (5.8)           | (5.1)                    |
| Inventories, net                  | $292.9     | $  305.7  |
|                                   |                 |                          |

 

4.   FINANCING ARRANGEMENTS

In May 2001, the Company entered into a senior securedcredit facility pursuant to a credit agreement.  The credit facility, asamended and restated (Credit Facility) consists of a revolving credit facility(Revolving Credit Facility) of up to $210.0 million available for revolvingcredit loans and letters of credit and of a term loan facility (Term Loan Facility)of approximately $250.7 million.  As of June 30, 2004, the Company had nooutstanding borrowings under the Revolving Credit Facility; outstanding lettersof credit totaling $82.2 million, $1.5 million of which do not reduceavailability under the Revolving Credit Facility; and $250.7 millionoutstanding under the Term Loan Facility.  The net available borrowings underthe Revolving Credit Facility as of June 30, 2004, were approximately $129.3million.  

The Credit Facility contains certain covenants thatlimit matters, including capital expenditures, joint venture investments,monetary acquisitions, indebtedness, the payment of dividends, and repurchasesor redemptions of capital stock. The Credit Facility also requires the Companyto meet certain financial tests, including, but not limited to, a maximum totalleverage ratio, a maximum secured leverage ratio, a minimum interest coverageratio and a maximum ratio of the sum of certain secured obligations as of anydate to the collateral coverage amount (as defined in the Credit Facility). The Company expects to be in compliance with the provisions of the CreditFacility throughout 2004.  Under the covenants limiting the payment ofdividends, as of June 30, 2004, the Company had $33.6 million available for thepayment of cash dividends with respect to its common stock.  The amountavailable for payment of dividends is increased by 25 percent of cumulativeConsolidated Net Income (as defined) for each fiscal year.  Additionally, afterthe payment of any future cash dividends on common stock, the Company must haveat least $50.0 million of additional borrowings available under the RevolvingCredit Facility. 

In March 2004, IMC announced that it had obtainedamendments to the credit agreement governing its Credit Facility (CreditAgreement).  The descriptions of the terms of the Credit Agreement belowreflect those amendments.  

The interest expense coverage ratio is the ratio ofconsolidated Credit Agreement adjusted EBITDA to consolidated interest expense(as defined in the Credit Agreement governing IMC's credit facilities), andsuch ratio is required to equal or exceed the following ratios for the fourconsecutive fiscal quarters ended on any date during any period set forthbelow: (i) 1.70 to 1.00 for the period of January 1, 2004 to and includingDecember 31, 2004; and (ii) 2.50 to 1.00 after December 31, 2004.  For the fourfiscal quarters ended June 30, 2004, IMC's interest expense coverage ratio was2.26 to 1.00.

The total leverage ratio is the ratio of totalindebtedness to consolidated Credit Agreement adjusted EBITDA (each as definedin the Credit Agreement governing IMC's credit facilities) for the precedingfour fiscal quarters, and such ratio is required to be equal to or less thanthe ratios set forth below as of the last day of any fiscal quarter endingduring any period set forth below: (i) 6.50 to 1.00 for the period of January1, 2004 to and including December 31, 2004; and (ii) 4.00 to 1.00 afterDecember 31, 2004.  For the four fiscal quarters ended June 30, 2004, IMC'stotal leverage ratio was 4.55 to 1.00.

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The secured leverage ratio is the ratio of the totalprincipal amount of the loans under the credit facilities to consolidatedCredit Agreement adjusted EBITDA (each as defined in the Credit Agreementgoverning IMC's credit facilities) for the preceding four fiscal quarters, andas of the period ended March 31, 2003 and the last day of any fiscal quarterthereafter, such ratio was required to be less than 2.00 to 1.00.  For the fourfiscal quarters ended June 30, 2004, IMC's secured leverage ratio was 0.60 to1.00.    

The collateral coverage ratio is the ratio of thetotal value of the collateral securing IMC's credit facilities to the sum ofthe total principal amount of the loans under IMC's credit facilities plus theamount of any outstanding letters of credit, and as of the date of the CreditFacility and any date thereafter, such ratio was required to be equal to orgreater than 1.00 to 1.00.  At June 30, 2004, IMC's collateral coverage ratiowas 1.64 to 1.00.

As part of the March 2004 amendments to the CreditAgreement, IMC amended the former provisions pursuant to which the CreditFacility (which otherwise matures in May 2006 in the case of the RevolvingCredit Facility and November 2006 in the case of the Term Loan Facility) wouldhave matured on October 15, 2004 if IMC had not refinanced its 7.625 percentSenior Notes due in 2005 and 6.55 percent Senior Notes due in 2005(collectively 2005 Notes) prior to October 15, 2004.  In 2003, IMC refinancedapproximately $413.5 million of the $450.0 million 2005 Notes thenoutstanding.  Pursuant to the amendments, the Credit Facility will not matureuntil the dates in 2006 referred to above as long as IMC repays approximately $10.0million of the 2005 Notes at maturity in January 2005 and refinances theremaining approximately $27.0 million balance of the 2005 Notes by March 24,2005 with the proceeds from an offering of debt securities that do not matureor require any amortization or other payment prior to May 31, 2007 or with theproceeds from an offering of equity securities.  

Interest rates associated with the Term Loan Facilityand the Revolving Credit Facility vary depending upon the Company's leverageratio.  With respect to the Revolving Credit Facility, interest on this loan iscalculated at either prime plus 150.0 to 225.0 basis points or LIBOR plus 250.0to 325.0 basis points.  With respect to the Term Loan Facility, interest onsuch loans is calculated at either prime plus 275.0 to 300.0 basis points orLIBOR plus 375.0 to 400.0 basis points.  The Revolving Credit Facility and theTerm Loan Facility bear interest at LIBOR plus 325.0 basis points and LIBORplus 400.0 basis points, respectively, as of June 30, 2004.

IMC and Cargill, Incorporated (Cargill) announced onJanuary 27, 2004 the signing of a definitive agreement to combine IMC andCargill Crop Nutrition to create a new, publicly traded company (Note 11).  IMC must obtain the consent of the lenders underthe Credit Facility prior to completion of the transactions contemplated by theagreement with Cargill.  While IMC intends to seek the consent of such lendersand anticipates that it will receive their consent, there can be no assurancethat their consent will be obtained.

The indentures relating to the Company's 10.875percent notes due 2008 and the 11.25 percent notes due 2011, collectively IMCSenior Notes, contain provisions requiring IMC to offer to purchase all of theoutstanding IMC Senior Notes upon a change of control of IMC at 101 percent ofthe principal amount thereof (plus accrued and unpaid interest).  Thecompletion of the combination with Cargill Crop Nutrition will constitute achange of control of IMC under the terms of IMC's indentures.  As of June 30,2004, $1.2 billion of IMC Senior Notes were outstanding and subject to thechange of control purchase offer requirements.  It is possible that IMC willnot have sufficient funds available at the time of the change of control tomake the required purchases of the IMC Senior Notes.  In such case, IMC may berequired to borrow additional funds in order to make the required purchases. However, IMC may not be able to borrow those additional funds or such borrowingmay not be available on terms favorable to IMC.  Failure to make the requiredpurchases after the change of control of IMC would cause IMC to be in defaultunder IMC's indentures, and would also constitute a default under IMC's creditfacilities.  Upon closing of the combination with Cargill Crop Nutrition anduntil expiration of the change of control purchase offer, IMC will reclassifythe IMC Senior Notes from long-term debt to current maturities of long-termdebt.  However, the Senior Notes are currently trading at a substantial premiumover par (15 - 20%).  It would be uneconomical for investors to put the SeniorNotes at 101% when they could be sold for a substantially higher price. Accordingly, IMC does not currently expect that the noteholders will exercisetheir put option.

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----

On May 7, 2003, IMC USA Inc. LLC (IMC USA) enteredinto a five year $55.0 million revolving credit facility (Potash Facility)where it may borrow up to a maximum of $52.5 million subject to a borrowingbase calculation based on eligible inventory and accounts receivable.Borrowings under the facility bear an interest rate of LIBOR plus a spread(initially 275.0 basis points), and are secured by IMC USA's accountsreceivable and inventory.  The Potash Facility is available for the generalcorporate purposes of IMC USA. Borrowings under the Potash Facility areguaranteed on an unsecured basis by IMC USA Holdings Inc., a subsidiary of theCompany and the parent of IMC USA. Neither the Company, nor any othersubsidiary is a guarantor for the borrowings under the Potash Facility. As ofJune 30, 2004, the Potash Facility had a borrowing base that could supportborrowings up to $21.9 million, under which IMC USA had no outstandingborrowings.

In June 2003, the Company sold 2.75 million shares of7.5 percent Mandatory Convertible Preferred Shares (liquidation preference $50per share) (Preferred Shares) for net proceeds of $133.1 million.  ThePreferred Shares have a dividend yield of 7.5 percent, a 22 percent conversionpremium (for an equivalent conversion price of $7.76 per common share) and willmandatorily convert into shares of the Company's common stock on July 1, 2006. The net proceeds of the offering were used for general corporate purposes,which included funding working capital and debt reduction. 

The Preferred Shares have an initial conversion rateof not more than 7.8616 shares and not less than 6.4440 shares of the Company'scommon stock, based upon the average market price of the Company's commonstock.  At any time prior to the mandatory conversion of the Preferred Shares,the holder may elect to convert each of such holder's Preferred Shares into6.4440 shares of the Company's common stock.  In addition, if the closing priceper share of the Company's common stock exceeds $11.64 for at least 20 tradingdays within a period of 30 consecutive trading days, the Company may elect tocause the conversion of all of the Preferred Shares then outstanding for sharesof common stock at a conversion rate of 6.4440 shares of common stock for eachPreferred Share; in such event the Company must also pay the holder, in cash,the present value of all the remaining dividend payments up to and includingJuly 1, 2006.  In the event of a merger, acquisition or consolidation in whichat least 30 percent of the consideration for shares of the Company's commonstock consists of cash or cash equivalents, each holder of Preferred Shareswill have the right to convert such holder's Preferred Shares into common stockat the mandatory conversion rate.  The number of common shares that could beissued upon conversion of the 2.75 million Preferred Shares ranges fromapproximately 17.7 million shares to 21.6 million shares, based upon theaverage market price of the Company's common stock.  The conversion rates andthe numbers of shares of the Company's common stock issuable upon a conversionare subject to anti-dilution adjustments under certain circumstances.

Dividends on the Preferred Shares are cumulative. Dividend rights and liquidation preferences of the Preferred Stock are seniorto those of the Company's common stock.  The Company is permitted (subject tocompliance with the registration provisions under the Securities Act of 1933and other applicable requirements) to pay dividends on the Preferred Shares bydelivering common stock to the transfer agent for the Preferred Shares, whichcommon stock would be sold to pay the dividend.  

Holders of the Preferred Shares do not have votingrights except, in general: (i) as required by applicable Delaware law, (ii) theright (together with holders of other preferred stock having dividendpreferences similar to the Preferred Shares) to elect two directors in theevent dividends on the Preferred Shares (and any other such preferred stock)are not paid for six quarters, (iii) in the event of certain amendments to theCompany's certificate of incorporation that adversely affect the holders ofPreferred Shares, and (iv) in connection with certain issuances orauthorizations of securities having dividend or liquidation preferences seniorto the Preferred Shares.

On August 1, 2003 the Company issued $400.0 millionprincipal amount of 10.875 percent notes due 2013 (August Note Offering) forproceeds before fees and expenses of $391.1 million.  The August Note Offeringcontains covenants similar to and rank pari pasu with IMC Senior Notes. The IMCSenior Notes contain certain covenants that limit matters including the makingof restricted payments, as defined.  Under the most restrictive of thecovenants limiting restricted payments, as of June 30, 2004, the Company had$17.0 million available for the payment of cash dividends with respect to itscommon and preferred stock.  In addition, the agreement with Cargill (Note 11)****limits dividends on the Company's common andpreferred stock to regular quarterly cash dividends of $0.02 per share and$0.9375 per share, respectively.

-8-

----

As of June 30, 2004, the estimated fair value oflong-term debt was approximately $183.0 million more than the carrying valueamount of such debt.  The fair value was estimated based on each debtinstrument's market price as of June 30, 2004.

5.   PENSION PLANS AND OTHER BENEFITS

Thecomponents of net pension costs were:

| * *                                           | *Three  months ended  June 30* | * *                     | *Six  months  ended  June 30* |
|----------------------------------------------------|--------------------------------|------------------------------|------------------------------------|
| * *                                           | *2004*                         | *2003*                       | * *                           | *2004* | *2003* |
| Service cost for benefits earned during the period | $   1.5    | $   1.7  | ** **                         | $   3.0  | $   3.4  |
| Interest cost  on projected benefit obligation     | 7.0                       | 7.1                     | ** **                         | 14.0  | 14.2  |
| Return on plan  assets                             | (7.1)                          | (8.0)                        | ** **                         | (14.2) | (16.0) |
| Net  amortization and deferral                     | 2.4                       | 1.6                     | ** **                         | 4.8  | 3.2  |
| Curtailments  and settlements                      | -                         | 0.1                     | ** **                         | -  | 0.2  |
| Net pension and  other benefits expense            | $   3.8    | $   2.5  | ** **                         | $   7.6  | $   5.0  |
| ** **                                         |                                | ** **                   | **  **                   |  | ** ** |

Thecomponents of other benefits costs were:

| * *                                           | *Three  months ended  June 30* | * *               | *Six   months ended  June 30* |
|----------------------------------------------------|--------------------------------|------------------------|------------------------------------|
| * *                                           | *2004*                         | *2003*                 | * *                           | *2004* | *2003* |
| Service cost for benefits earned during the period | $   0.4    | $  0.4  | ** **                         | $   0.8  | $   0.8  |
| Interest cost  on projected benefit obligation     | 1.8                       | 2.7               | ** **                         | 3.6  | 5.4  |
| Net  amortization and deferral                     | (3.4)                          | (2.0)                  | ** **                         | (6.8) | (4.0) |
| Curtailments  and settlements                      | -                         | (0.7)                  | ** **                         | -  | (1.5) |
| Net pension and  other benefits (income) expense   | $ (1.2)                   | $  0.4  | ** **                         | $ (2.4) | $   0.7  |
| ** **                                         |                                | ** **             | **  **                   |  | ** ** |

The Company estimates that contributions to its pensionplans will be $32.6 million in 2004.  The Company's estimated contributions to itsother benefits plans are generally on schedule with the dollar estimatesdisclosed in the Company's 2003 Annual Report on Form 10-K.

In December 2003, the Medicare Prescription Drug,Improvement and Modernization Act of 2003 (Act) was signed into law. The Actexpands Medicare, primarily by adding a prescription drug benefit for Medicare-eligiblesstarting in 2006.   The Act provides employers currently sponsoringprescription drug programs for Medicare-eligibles with a range of options forcoordinating with the new government-sponsored program to potentially reduceprogram cost. These options include supplementing the government program on asecondary payor basis or accepting a direct subsidy from the government tosupport a portion of the cost of the employer's program.   

Statement of Financial Accounting Standards (SFAS) No.106, *Employers' Accounting for Postretirement Benefits Other Than Pensions*,requires that presently enacted changes in law impacting employer-sponsoredretiree health care programs which take effect in future periods be consideredin current-period measurements for benefits expected to be provided in thosefuture periods. Therefore, under SFAS No. 106 guidance, measures of planliabilities and annual expense on or after the date of enactment should reflectthe effects of the Act. 

-9-

----

Also in December 2003, the Financial AccountingStandards Board (FASB) staff issued FASB Staff Position SFAS No. 106-1, whichallows for a one-time election to defer the accounting for the Act.  TheCompany has chosen to defer recognition of the potential effects of the Act inthese 2004 disclosures.  Therefore, the information reported in thesefinancial statements does not yet reflect any potential impact of the Act.Specific, authoritative guidance on the accounting for the government subsidyis pending and that guidance, when issued, could require the Company to changepreviously reported information.

In 2004, the Company intends to review the other benefitplans in light of the Act.  The Company will most likely amend the other benefitsplans to coordinate with the new Medicare prescription drug program or toreceive the direct subsidy from the government.  As a result, the Companyanticipates that the other benefit plans' obligations and costs could bereduced once any amendment is adopted and/or the government subsidies areconsidered.

6.   OPERATING SEGMENTSa

| * *                                | *IMC  PhosFeed*          | *IMC  Potash*      | *Other*                                                        | *Total*                        |
|-----------------------------------------|--------------------------|--------------------|----------------------------------------------------------------|--------------------------------|
| *Three  months ended June 30, 2004*     |                          |                    |                                                                |                                |
| Net sales from external  customers      | $  407.3  | $  341.5 | $         -  | $   748.8       |
| Intersegment net sales                  | 16.9                | 2.0                | -                                                         | 18.9                           |
| Gross margins                           | 19.1                | 113.4              | (4.2)                                                          | 128.3                          |
| Operating  earnings (loss)              | 8.6                 | 105.9              | (6.3)                                                          | 108.2                          |
| *Six  months ended June 30, 2004*       | * *                 | * *           | * *                                                       | * *                       |
| Net sales from external  customers      | $  754.2  | $  578.8 | $         -  | $1,333.0                       |
| Intersegment net sales                  | 33.3                | 4.3                | -                                                         | 37.6                           |
| Gross margins                           | 37.5                | 178.6              | (9.0)                                                          | 207.1                          |
| Operating  earnings (loss)              | 16.2                | 163.9              | (9.9)                                                          | 170.2                          |
| *Three  months ended June 30, 2003*     | * *                 | * *           | * *                                                       | * *                       |
| Net sales from external  customers      | $  301.8  | $  236.9 | $         -  | $    538.7 |
| Intersegment net sales                  | 16.8                | 2.2                | -                                                         | 19.0                           |
| Gross margins                           | (13.4)                   | 62.7               | (5.5)                                                          | 43.8                           |
| Operating  earnings (loss)b             | (23.9)                   | 71.9               | (10.1)                                                         | 37.9                           |
| *Six   months ended June 30, 2003* | * *                 | * *           | * *                                                       | * *                       |
| Net  sales from external customers      | $  642.3  | $  448.5 | $         -  | $ 1,090.8                 |
| Intersegment  net sales                 | 35.3                | 4.8                | -                                                         | 40.1                           |
| Gross  margins                          | (28.2)                   | 118.1              | (10.0)                                                         | 79.9                           |
| Operating earnings  (loss)c             | (52.2)                   | 120.2              | (15.7)                                                         | 52.3                           |

 

a    Theoperating results of Chemicals were not included in the segment information asit has been classified as a discontinued operation (Note 2).

b    IMC Potash operating earnings include a gain on thesale of assets of $16.5 million and restructuring charges of $0.3 million.

c Operating earnings (loss) include restructuring chargesof $2.4 million, $1.1 million and $0.2 million for IMC PhosFeed, IMC Potash andOther, respectively, as well as the gain on the sale of assets of $16.5 millionincluded for IMC Potash.

-10-

----

7.   COMPREHENSIVE INCOME 

| * *                                                                       | *Three months  ended  June 30* | *Six  months ended  June 30* |
|--------------------------------------------------------------------------------|--------------------------------|-----------------------------------|
| * *                                                                       | *2004*                         | *2003*                            | *2004* | *2003* |
| *Comprehensive  income:*                                                       |                                |                                   |  |  |
|    Net  earnings (loss)                                         | $   42.7   | $   (6.9)          | $   51.9  | $  (43.5) |
|    Net  unrealized gain (loss) on derivative instruments        | (7.1)                          | 7.6                          | (7.3) | 13.8  |
|    Minimum  pension liability                                   | 0.7                       | -                            | 0.9  | 3.8  |
|    Foreign  currency translation adjustment                     | (20.8)                         | 56.0                         | (30.7) | 95.2  |
|    Unrealized  gain on available-for-sale security              | 3.8                       | -                            | 3.8  | -  |
|       Total  comprehensive income for the period | $   19.3   | $   56.7      | $   18.6  | $   69.3  |
|                                                                      |                      |                         |    |    |

8.   EARNINGS PER SHARE

The following is a reconciliation of the numeratorfor basic earnings (loss) per share: 

| * *                                          | *Three months  ended  June 30* | *Six months ended  June 30* |
|---------------------------------------------------|--------------------------------|-----------------------------|
| * *                                          | *2004*                         | *2003*                      | *2004* | *2003* |
| Net  earnings (loss)                              | $  42.7         | $   (6.9)    | $  51.9  | $ (43.5) |
| Preferred dividends accrued                       | (2.6)                          | -                      | (5.2) | -  |
| Earnings (loss) available  to common shareholders | $  40.1         | $   (6.9)    | $  46.7  | $ (43.5) |
|                                         |                      |                   |    |    |

The numerator for diluted earnings per share (EPS)is net earnings (loss), unless the conversion of preferred stock isantidilutive, in which case earnings (loss) available to common shareholders isused.  The denominator for basic EPS is the weighted-average number of sharesoutstanding during the period (Denominator).  The following is a reconciliationof the Denominator for the basic and diluted earnings (loss) per sharecomputations:

| * *                                                        | *Three months  ended  June 30* | *Six months ended  June 30* |
|-----------------------------------------------------------------|--------------------------------|-----------------------------|
| * *                                                        | *2004*                         | *2003*                      | *2004* | *2003* |
| Basic  EPS shares                                               | 115.0                          | 114.8                       | 115.0 | 114.7 |
| Common shares issuable upon  conversion of preferred shares     | 17.7                           | -                           | 17.7 | - |
| Common shares issuable upon  vesting of restricted stock awards | 0.8                            | 0.6                         | 0.8 | - |
| Common stock equivalents                                        | 0.7                            | -                           | 0.4 | - |
| Diluted EPS shares                                              | 134.2                          | 115.4                       | 133.9 | 114.7 |
|                                                       |                      |                   |    |    |

Options to purchase approximately 8.9 million and 9.5million common shares for the three months and six months ended June 30, 2004,respectively and approximately 14.5 million shares for the three months and sixmonths ended June 30, 2003 were not included in the computation of diluted EPS,because the exercise price was greater than the average market price of theCompany's common stock and, therefore, the effect of their inclusion would beantidilutive.  Common shares issuable upon the vesting of restricted stockawards and options with exercise prices less than the average market price of 0.5million common shares for the six months ended June 30, 2003 were not includedin the computation of diluted earnings per share because the Company incurred aloss from continuing operations and, therefore, the effect of their inclusionwould be antidilutive.

-11-

----

9.   STOCK OPTIONS

The Company uses the intrinsic value method toaccount for stock-based employee compensation in each period presented.

Ifthe Company's stock option plans' compensation cost had been determined basedon the fair value at the grant date, consistent with the provisions of SFAS No.123, *Accounting for Stock-Based Compensation*, the Company's net earnings(loss) and earnings (loss) per share available for common shareholders wouldhave changed to the following pro forma amounts:

| * *
*Three months  ended  June 30*
*Six months ended  June 30*
* *
*2004*
*2003*
*2004*
*2003*
*Stock compensation cost (net of tax):*

    As reported

$     0.5 

$     0.3 

$     1.1 

$     0.7 

    Pro  forma

$     1.6 

$     1.6 

$     3.5 

$     3.5 

*Net earnings (loss):*

* *

* *

* *

* *

    As reported

$   42.7 

$   (6.9)

$   51.9 

$ (43.5)

    Pro  forma

$   41.6 

$   (8.2)

$   49.5 

$ (46.3)

*Diluted net earnings (loss) per share:*
 
 
 
       As reported
  $   0.32 
  $  (0.06)
  $   0.39 
  $ (0.37)
    Pro forma
  $   0.31 
  $  (0.07)
  $   0.37 
  $ (0.40)
10.  PENSACOLA SETTLEMENT

On March 28, 2001, and again on April 25, 2001,plaintiffs from Pensacola, Florida filed class-action lawsuits against AgricoChemical Company (Agrico), a subsidiary of Phosphate Resource Partners LimitedPartnership (PLP) and a number of unrelated defendants (First action - Sampleset al. vs. Conoco Inc. et al., Second Action - Williams et al. vs. Conoco Inc.,both in the Circuit Court of the First Judicial Circuit, Escambia CountyFlorida).  The Company has an indirect 51.6 percent ownership interest in PLP. In addition, the Company was initially a defendant in the Williams case but wasvoluntarily dismissed by plaintiffs on July 31, 2003.  The complainants inthese cases seek damages in an unspecified amount purportedly arising fromreleases to groundwater occurring at the Agrico Superfund site in Pensacola,Florida.  As a division of Conoco Inc. (Conoco) and then as a subsidiary of TheWilliams Companies, Agrico owned and operated this facility for a number ofyears to produce crop nutrients and crop nutrient-related materials.  TheSamples case primarily seeks unspecified compensation for alleged diminution inproperty value, loss of use of groundwater, restoration costs, unjustenrichment and other damages.  The Williams action asserts a state law claimseeking medical monitoring as a result of the releases to groundwater.  OnApril 2, 2004, the Company signed a term sheet to settle these two lawsuits ona class-wide basis. The term sheet provides that the defendants collectivelywill pay a total of $65.0 million to class members in Pensacola to addressconcerns regarding impacts to property and an additional $3.5 million to fund avoluntary medical monitoring program.  The defendants also will reimburseplaintiff attorneys' fees and costs, once those have been requested from andapproved by a Florida Circuit Court (Circuit Court).  The definitive agreementsreflecting the settlement terms of both settlements received preliminaryapproval from the Circuit Courts on June 1, 2004.  Notice of these settlements has been provided to class members.  The Court is expected to hold fairnesshearings in late September.  The full terms of the settlement will not be finaluntil such hearings are held and the Court issues final approvals.

As a result of the proposed settlementand legal expenses, the Companyrecorded a charge in the first six months of 2004 of $6.8 million, net of previouslyestablished reserves in Other (income) expense, net.  Thischarge negatively impacted Earnings (loss) from continuing operations by $0.9million, net of minority interest and taxes.

-12-

11.  CARGILL CROPNUTRITION AND PLP MERGERS

The Company and Cargill announced on January 27, 2004the signing of a definitive agreement to combine the Company and Cargill CropNutrition to create a new, publicly traded company.  Under terms of thedefinitive agreement, IMC common stockholders and Cargill will own on a proforma basis 33.5 percent and 66.5 percent, respectively, of the outstandingcommon shares of the new company.  On April 8, 2004, Global NutritionSolutions, Inc. (which has been renamed Mosaic) filed a Registration Statementon Form S-4 with the U.S. Securities and Exchange Commission (SEC) containing apreliminary proxy statement/prospectus regarding the proposed transactionbetween IMC and Cargill Crop Nutrition.  On June 17, 2004, Global NutritionSolutions, Inc. filed an amendment to such Registration Statement.  Thecombination is subject to regulatory approval in the U.S. and Canada; theapproval of IMC Global's common shareholders; the completion of the PLP mergerreferred to below; and satisfaction of other customary closing conditions. Necessary antitrust or competition processes required in several otherjurisdictions, including China, have been fully satisfied.  Closing isanticipated in September of 2004.  IMC will not distribute the definitive proxystatement/prospectus regarding the proposed transaction to its commonstockholders until the SEC has completed to review of such RegistrationStatement and such Registration Statement has been declared effective by theSEC.

On March 19, 2004, IMC and PLP announced the signingof a definitive agreement to merge PLP into a subsidiary of IMC.  Pursuant tothe merger, each publicly traded PLP unit would be converted into the right toreceive 0.2 shares of IMC common stock.  Alpine Capital and The Anne T. andRobert M. Bass Foundation (collectively, the largest public holders of PLPunits) have agreed to support such a transaction.  On April 20, 2004, IMC fileda Registration Statement on Form S-4 with the SEC containing a preliminaryproxy statement/prospectus regarding the proposed PLP merger.  On June 17,2004, IMC filed an amendment to such Registration Statement.  The PLP merger issubject to certain conditions, including among other things, approval by thepartners of PLP, and other conditions which are customary for transactions ofthis nature involving publicly traded companies.  On July 15, 2004 the waitingperiod for the PLP merger under the Hart-Scott-Rodino Antitrust ImprovementsAct of 1976, as amended, was terminated.  Closing is anticipated in Septemberof 2004.  PLP will not distribute the definitive proxy statement/prospectusregarding the proposed transaction to the PLP unitholders until the SEC hascompleted its review of such Registration Statement and such RegistrationStatement has been declared effective by the SEC.

For further information regarding the transactionsreferred to in the prior two paragraphs, reference is made to Note 19 and *ActionsChallenging the PLP Unit Exchange* in Note 18 of Notes to ConsolidatedFinancial Statements in IMC's Annual Report on Form 10-K for the fiscal yearended December 31, 2003.

12.  CONDENSEDCONSOLIDATING FINANCIAL STATEMENTS

Payment of the IMC Senior Notes of the Company isfully and unconditionally guaranteed by certain of the Company's restrictedsubsidiaries (as defined in the IMC Senior Notes indenture) and is alsoguaranteed, on a limited basis, by IMC Phosphates Company (IMC Phosphates) and PLP.

The following tables present condensed consolidatingfinancial information for the guarantors of the IMC Senior Notes. The followingcondensed consolidating financial information has been prepared using theequity method of accounting in accordance with the requirements forpresentation of this information.

-13-

***CondensedConsolidating Statement of Operations***In millions

*  *

*IMC  Global Inc.  (Parent)*

*Phosphate  Resource  Partners  Limited  Partnership*

*IMC  Phosphates  Company*

*Wholly   owned  Subsidiary  Guarantors*

*Subsidiary  Non-  Guarantors*

*Eliminations*

*Consolidated*

**For the three months ended June  30, 2004**

Net sales

$       - 

$       - 

$ 409.5 

$ 303.7 

$   96.1 

$  (60.5)

$ 748.8 

Cost of goods sold

1.8 

- 

389.9 

234.7 

63.0 

(68.9)

620.5 

Gross margins

(1.8)

- 

19.6 

69.0 

33.1 

8.4 

128.3 

Selling, general and administrative expenses

0.1 

1.5 

10.4 

7.0 

0.9 

0.2 

20.1 

Operating earnings (loss)

(1.9)

(1.5)

9.2 

62.0 

32.2 

8.2 

108.2 

Equity in earnings of subsidiaries/affiliates

107.1 

3.7 

- 

24.6 

- 

(135.4)

- 

Interest expense

34.0 

7.6 

5.9 

0.5 

(0.7)

- 

47.3 

Other (income) expense, net

4.8 

0.7 

1.2 

(9.4)

(7.8)

4.9 

(5.6)

Minority interest

(4.3)

- 

- 

- 

- 

- 

(4.3)

Earnings (loss) before income taxes

70.7 

(6.1)

2.1 

95.5 

40.7 

(132.1)

70.8 

Provision for income taxes

28.0 

- 

- 

37.9 

16.1 

(53.9)

28.1 

Net earnings (loss)

$ 42.7 

$  (6.1)

$     2.1 

$   57.6 

$  24.6 

$  (78.2)

$   42.7 
 
-14-

***CondensedConsolidating Statement of Operations***In millions

* *

*IMC   Global Inc.  (Parent)*

*Phosphate   Resource   Partners  Limited   Partnership*

*IMC   Phosphates  Company*

*Wholly  owned  Subsidiary  Guarantors*

* Subsidiary   Non-  Guarantors*

*Eliminations*

*Consolidated*

**For the three months ended June 30, 2003**

Net  sales 

$            - 

$            - 

$    297.8 

$    272.9 

$      75.1 

$  (107.1)

$    538.7 

Cost  of goods sold 

1.5 

- 

312.2 

237.1 

51.3 

(107.2)

494.9 

Gross  margins 

(1.5)

- 

(14.4)

35.8 

23.8 

0.1 

43.8 

Selling,  general and administrative expenses

0.4 

2.4 

10.5 

10.8 

1.3 

(3.3)

22.1 

Gain  on sale of operating assets 

- 

- 

- 

(16.5)

- 

- 

(16.5)

Restructuring  charges 

- 

- 

- 

0.1 

0.2 

- 

0.3 

Operating  earnings (loss) 

(1.9)

(2.4)

(24.9)

41.4 

22.3 

3.4 

37.9 

Equity  in earnings (loss) of subsidiaries/affiliates

3.5 

(9.3)

- 

4.7 

- 

1.1 

- 

Interest  expense 

32.1 

7.6 

5.5 

1.4 

(0.2)

(0.4)

46.0 

Gain  on sale of securities 

(35.5)

- 

- 

- 

- 

- 

(35.5)

Other  (income) expense, net 

(2.8)

0.2 

(1.0)

6.3 

15.6 

6.2 

24.5 

Minority  interest 

(11.2)

- 

- 

0.1 

- 

- 

(11.1)

Earnings  (loss) from continuing operations  before income taxes 

  19.0 

  (19.5)

  (29.4)

  38.3 

  6.9 

  (1.3)

  14.0 

Provision  (benefit) for income taxes 

(2.8)

- 

- 

8.6 

2.2 

(16.1)

(8.1)

Earnings  (loss) from continuing operations

21.8 

(19.5)

(29.4)

29.7 

4.7 

14.8 

22.1 

Loss  from discontinued operations

(28.7)

- 

- 

- 

- 

(0.3)

(29.0)

Net  earnings (loss)

$       (6.9)

$     (19.5)

$     (29.4)

$      29.7 

$         4.7 

$      14.5 

$       (6.9)
                         
-15-

***CondensedConsolidating Statement of Operations***In millions

* *

*IMC   Global Inc.  (Parent)*

*Phosphate   Resource   Partners  Limited   Partnership*

*IMC   Phosphates  Company*

*Wholly  owned  Subsidiary  Guarantors*

* Subsidiary   Non-  Guarantors*

*Eliminations*

*Consolidated*

**For the six months ended June 30, 2004**

Net  sales 

$          - 

$          - 

$  756.9

$  583.5 

$  166.0 

$  (173.4)

$ 1,333.0 

Cost  of goods sold 

3.8 

- 

718.9

481.3 

104.6 

(182.7)

1,125.9 

Gross  margins 

(3.8)

- 

38.0

102.2 

61.4 

9.3 

207.1 

Selling,  general and administrative expenses

0.1 

2.8 

21.1

12.8 

2.4 

(2.3)

36.9 

Operating  earnings (loss) 

(3.9)

(2.8)

16.9

89.4 

59.0 

11.6 

170.2 

Equity  in earnings of subsidiaries/affiliates

152.9 

8.0 

-

41.4 

- 

(202.3)

- 

Interest  expense 

68.5 

15.1 

10.6

1.5 

(1.2)

(0.1)

94.4 

Other  (income) expense, net 

8.1 

10.8 

0.9

(18.0)

(8.4)

5.2 

(1.4)

Minority  interest 

(12.8)

- 

-

- 

- 

- 

(12.8)

Earnings  (loss) before income taxes 

85.2 

(20.7)

5.4

147.3 

68.6 

(195.8)

90.0 

Provision  for income taxes 

33.8 

- 

-

58.5 

27.2 

(83.8)

35.7 

Earnings  (loss) from continuing operations

51.4 

(20.7)

5.4

88.8 

41.4 

(112.0)

54.3 

Earnings  (loss) from discontinued operations

0.5 

- 

-

- 

- 

(2.9)

(2.4)

Net  earnings (loss)

$    51.9 

$   (20.7)

$      5.4

$    88.8 

$    41.4 

$  (114.9)

$      51.9 

  

  

  
 
-16-

***CondensedConsolidating Statement of Operations***In millions

* *

*IMC   Global Inc.  (Parent)*

*Phosphate   Resource   Partners  Limited   Partnership*

*IMC   Phosphates  Company*

*Wholly  owned  Subsidiary  Guarantors*

* Subsidiary   Non-  Guarantors*

*Eliminations*

*Consolidated*

**For the six months ended June 30, 2003**

Net  sales 

$            - 

$            - 

$    638.0 

$    524.7 

$    140.1 

$  (212.0)

$  1,090.8 

Cost  of goods sold 

3.2 

- 

667.6 

463.4 

93.0 

(216.3)

1,010.9 

Gross  margins 

(3.2)

- 

(29.6)

61.3 

47.1 

4.3 

79.9 

Selling,  general and administrative expenses

0.8 

5.0 

21.5 

17.5 

2.7 

(7.1)

40.4 

Gain  on sale of operating assets 

- 

- 

- 

(16.5)

- 

- 

(16.5)

Restructuring  charges 

- 

- 

2.4 

0.9 

0.4 

- 

3.7 

Operating  earnings (loss) 

(4.0)

(5.0)

(53.5)

59.4 

44.0 

11.4 

52.3 

Equity  in earnings (loss) of subsidiaries/affiliates

(60.0)

(19.7)

- 

14.4 

- 

65.3 

- 

Interest  expense 

64.7 

15.1 

10.4 

3.2 

(0.5)

(1.0)

91.9 

Gain  on sale of securities 

(35.5)

- 

- 

- 

- 

- 

(35.5)

Other  (income) expense, net 

2.7 

0.2 

(2.4)

14.7 

27.9 

8.1 

51.2 

Minority  interest 

(22.8)

- 

- 

0.1 

- 

- 

(22.7)

Earnings  (loss) from continuing operations before    income taxes 

  (73.1)

  (40.0)

  (61.5)

  55.8 

  16.6 

  69.6 

  (32.6)

Provision  (benefit) for income taxes 

(32.3)

- 

- 

14.2 

5.3 

(10.2)

(23.0)

Earnings  (loss) from continuing operations

(40.8)

(40.0)

(61.5)

41.6 

11.3 

79.8 

(9.6)

Loss  from discontinued operations

(28.7)

- 

- 

-

- 

(0.3)

(29.0)

Earnings  (loss) before cumulative effect of a change    in accounting principle

  (69.5)

  (40.0)

  (61.5)

41.6 

  11.3 

  79.5 

  (38.6)

Cumulative  effect of a change in accounting principle

26.0 

(13.6)

(32.7)

(1.3)

3.1 

13.6 

(4.9)

Net  earnings (loss)

$    (43.5)

$     (53.6)

$     (94.2)

$      40.3 

$      14.4 

$     93.1 

$     (43.5)

  

  

  
 
-17-

*** CondensedConsolidating Balance Sheet***In millions

*  *

*IMC  Global Inc.  (Parent)*

*Phosphate  Resource  Partners  Limited  Partnership*

*IMC  Phosphates  Company*

*IMC  Phosphates  Company  MP Inc.*

*Wholly   owned  Subsidiary  Guarantors*

*Subsidiary  Non-  Guarantors*

*Eliminations*

*Consolidated*

**As of June 30, 2004**

Assets

Current assets:

   Cash and  cash equivalents

$      28.8 

$            - 

$       2.8

$        0.1 

$     (15.2)

$     31.5 

$             - 

$      48.0 

   Receivables, net

2.1 

0.5 

129.3

122.9 

70.7 

29.6 

(122.2)

232.9 

   Due from  affiliates

136.9 

70.8 

-

0.7 

1,012.5 

185.3 

(1,406.2)

- 

   Inventories,  net

(2.2)

- 

240.1

- 

43.8 

11.8 

(0.6)

292.9 

   Other current assets

21.7 

- 

11.6

- 

10.4 

0.1 

- 

43.8 

       Total  current assets

187.3 

71.3 

383.8

123.7 

1,122.2 

258.3 

(1,529.0)

617.6 

Property,  plant and equipment, net

186.5 

- 

1,373.2

- 

504.5 

245.4 

0.4 

2,310.0 

Due from affiliates

868.4 

- 

9.4

- 

426.7 

90.3 

(1,394.8)

- 

Investment in subsidiaries/affiliates

1,460.8 

244.0 

-

- 

4,756.4 

(478.8)

(5,982.4)

- 

Other assets

529.0 

0.5 

57.4

9.4 

54.6 

58.3 

(4.8)

704.4 

       Total  assets

$ 3,232.0 

$     315.8 

$1,823.8

$     133.1 

$ 6,864.4 

$   173.5 

$ (8,910.6)

$ 3,632.0 

Liabilities  and Stockholders' Equity (Deficit)

Current liabilities:

   Accounts  payable

$            - 

$            - 

$145.9

$            - 

$      33.3 

$       7.9 

$      (27.0)

$    160.1 

   Accrued  liabilities

147.3 

14.9 

45.4

21.3 

28.4 

22.7 

5.3 

285.3 

   Due to  (from) affiliates

263.1 

51.5 

185.4

(0.1)

754.0 

(19.2)

(1,234.7)

- 

   Short-term  debt and current maturities of        long-term debt

39.1 

- 

4.3

- 

- 

- 

- 

43.4 

       Total  current liabilities

449.5 

66.4 

381.0

21.2 

815.7 

11.4 

(1,256.4)

488.8 

Due  to affiliates

348.1 

- 

131.5

- 

796.3 

60.4 

(1,336.3)

- 

Long-term debt, less  current maturities

1,863.8 

592.6 

397.4

- 

- 

- 

(806.1)

2,047.7 

Other noncurrent  liabilities

6.1 

96.1 

130.0

143.3 

109.0 

69.6 

(2.0)

552.1 

Stockholders' equity  (deficit)

564.5 

(439.3)

783.9

(31.4)

5,143.4 

32.1 

(5,509.8)

543.4 

       Total  liabilities and stockholders' equity (deficit)

$ 3,232.0 

$    315.8 

$1,823.8

$     133.1 

$ 6,864.4 

$   173.5 

$ (8,910.6)

$ 3,632.0 
                             
-18-

*** Condensed Consolidating Balance Sheet***In millions

*  *

*IMC   Global Inc.  (Parent)*

*Phosphate   Resource   Partners   Limited   Partnership*

*IMC   Phosphates   Company*

*IMC  Phosphates  Company  MP Inc.*

*Wholly   owned  Subsidiary Guarantors*

* Subsidiary   Non-  Guarantors*

*Eliminations*

*Consolidated*

**As  of December 31, 2003**

** **

** **

** **

** **

** **

** **

** **

** **

Assets

* *

* *

* *

* *

* *

* *

* *

* *

*Current assets:*

  Cash and cash equivalents

$       5.4

$          - 

$       0.6

$        0.1 

$    (11.0)

$     83.1 

$       (1.4)

$     76.8 

  Restricted cash

12.4

- 

-

- 

- 

- 

- 

12.4 

  Receivables, net

2.1

0.6 

123.3

122.6 

88.2 

18.8 

(160.8)

194.8 

  Due from affiliates

162.1

59.0 

-

0.7 

858.9 

167.1 

(1,247.8)

- 

  Inventories, net

(2.2)

- 

225.9

- 

119.0 

16.0 

(53.0)

305.7 

  Other current assets

17.8

- 

9.4

- 

13.3 

8.3 

1.1 

49.9 

     Total current assets

197.6

59.6 

359.2

123.4 

1,068.4 

293.3 

(1,461.9)

639.6 

Property,  plant and equipment, net

190.4

- 

1,390.7

- 

641.0 

135.3 

0.4 

2,357.8 

Due from affiliates

800.9

- 

9.4

- 

410.0 

28.4 

(1,248.7)

- 

Investment in subsidiaries/affiliates

1,307.6

246.1 

-

- 

4,896.8 

(103.0)

(6,347.5)

- 

Other assets

508.5

0.6 

49.8

9.4 

60.7 

55.9 

(11.6)

673.3 

    Total assets

$3,005.0

$   306.3 

$1,809.1

$   132.8 

$7,076.9 

$   409.9 

$(9,069.3)

$3,670.7 

Liabilities  and Stockholders' Equity (Deficit)

*Current liabilities:*

  Accounts payable

$       0.1

$       1.5 

$   161.9

$          - 

$     62.6 

$     13.6 

$     (54.0)

$   185.7 

  Accrued liabilities

112.1

4.1 

54.3

19.5 

55.6 

49.4 

(52.1)

242.9 

  Due to (from) affiliates

92.0

45.4 

160.8

(0.1)

1,033.9 

(39.7)

(1,292.3)

- 

  Short-term debt and current maturities of      long-term debt

9.3

5.7 

4.0

- 

- 

6.4 

- 

25.4 

    Total current liabilities

213.5

56.7 

381.0

19.4 

1,152.1 

29.7 

(1,398.4)

454.0 

Due to  affiliates

355.1

- 

132.8

- 

365.3 

59.8 

(913.0)

- 

Long-term debt, less current maturities

1,904.3

568.3 

351.2

- 

0.1 

0.2 

(732.7)

2,091.4 

Other  noncurrent liabilities

25.8

101.6 

140.6

144.7 

123.9 

72.6 

(10.5)

598.7 

Stockholders' equity (deficit)

506.3

(420.3)

803.5

(31.3)

5,435.5 

247.6 

(6,014.7)

526.6 

    Total liabilities and stockholders' equity (deficit)

$3,005.0

$    306.3 

$1,809.1

$   132.8 

$7,076.9 

$   409.9 

$(9,069.3)

$3,670.7 
                            
-19-

***CondensedConsolidating Statement of Cash Flows***In millions

*IMC  Global Inc.  (Parent)*

*Phosphate  Resource  Partners  Limited  Partnership*

*IMC  Phosphates  Company*

*IMC  Phosphates  Company  MP Inc.*

*Wholly owned  Subsidiary  Guarantors*

*Subsidiary  Non-  Guarantors*

*Eliminations*

*Consolidated*

**For the six months ended June  30, 2004**

*Cash  Flows from Operating Activities*

Net cash provided by (used  in) operating activities

$    20.2 

$  (18.6)

$    (9.4)

$         -

$     16.1 

$   (38.0)

$    72.2 

$    42.5 

*Cash  Flows from Investing Activities*

Capital expenditures

- 

- 

(34.9)

-

(20.3)

(7.2)

2.5 

(59.9)

Proceeds from the sale of  assets

4.0 

- 

- 

-

0.1 

- 

- 

4.1 

Net cash provided by (used  in) investing activities

4.0 

- 

(34.9)

-

(20.2)

(7.2)

2.5 

(55.8)

Net cash provided (used)  before financing activities

24.2 

(18.6)

(44.3)

-

(4.1)

(45.2)

74.7 

(13.3)

*Cash  Flows from Financing Activities*

Payments of long-term debt

(83.6)

(2.6)

(2.4)

-

(110.1)

- 

3.1 

(195.6)

Proceeds from issuance of  long-term debt, net

82.4 

26.9 

48.9 

-

110.0

- 

(75.9)

192.3 

Changes in short-term debt,  net

(6.6)

(5.7)

- 

-

- 

(6.4)

(0.5)

(19.2)

Restricted cash

12.4 

- 

- 

-

- 

- 

- 

12.4 

Debt refinancing and  issuance costs

(2.0)

- 

- 

-

- 

- 

- 

(2.0)

Stock options exercised

1.8 

- 

- 

-

- 

- 

- 

1.8 

Cash dividends paid

(5.2)

- 

- 

-

- 

- 

- 

(5.2)

Net cash provided by (used  in) financing activities

(0.8)

18.6 

46.5 

-

(0.1)

(6.4)

(73.3)

(15.5)

Net  change in cash and cash equivalents

23.4 

- 

2.2 

-

(4.2)

(51.6)

1.4 

(28.8)

Cash and cash equivalents -  beginning of period

5.4 

- 

0.6 

0.1

(11.0)

83.1 

(1.4)

76.8 

Cash and cash equivalents -  end of period

$    28.8 

  $        - 

$      2.8 

$     0.1

$   (15.2)

$     31.5 

$         - 

$    48.0 
                            
-20-

***CondensedConsolidating Statement of Cash Flows***In millions

** **

*IMC   Global Inc.  (Parent)*

*Phosphate   Resource   Partners  Limited   Partnership*

*IMC   Phosphates Company*

*IMC Phosphates  Company  MP Inc.*

*Wholly  owned  Subsidiary Guarantors*

* Subsidiary   Non-  Guarantors*

*Eliminations*

*Consolidated*

**For the six months ended June  30, 2003** 

*Cash  Flows from Operating Activities*

Net cash provided by (used  in) operating activities

$   (25.2)

$   (17.3)

$   (28.7)

$          - 

$         - 

$    (2.9)

$    79.0 

$      4.9 

*Cash  Flows from Investing Activities*

Capital expenditures 

- 

- 

(35.1)

- 

(12.7)

(5.4)

4.6 

(48.6)

Proceeds from the sale of  assets 

56.6 

- 

- 

- 

21.0 

- 

- 

77.6 

Net cash provided by (used  in) investing activities 

56.6 

- 

(35.1)

- 

8.3 

(5.4)

4.6 

29.0 

Net cash provided (used)  before financing activities 

31.4 

(17.3)

(63.8)

- 

8.3 

(8.3)

83.6 

33.9 

*Cash  Flows from Financing Activities*

Payments of long-term debt 

(737.3)

- 

(6.8)

- 

- 

- 

4.6 

(739.5)

Proceeds from issuance of  long-term debt 

737.1 

17.3  

70.9 

- 

- 

- 

(88.2)

737.1 

Changes in short-term debt,  net 

(98.3)

- 

- 

- 

- 

1.9 

- 

(96.4)

Restricted cash

103.9 

- 

- 

- 

1.6 

- 

- 

105.5 

Issuance of preferred  shares

133.4 

- 

- 

- 

- 

- 

- 

133.4 

Debt refinancing and  issuance costs

(2.4)

- 

- 

- 

- 

- 

- 

(2.4)

Cash dividends paid 

(4.6)

- 

- 

- 

- 

- 

- 

(4.6)

Net cash provided by  financing activities 

131.8 

17.3  

64.1 

- 

1.6 

1.9 

(83.6)

133.1 

Net change in cash and cash  equivalents 

163.2 

- 

0.3 

- 

9.9 

(6.4)

- 

167.0 

Cash and cash equivalents -  beginning of period

1.8 

- 

0.1 

0.2 

(6.1)

21.7 

- 

17.7 

Cash  and cash equivalents - end of period 

$   165.0 

$          - 

$       0.4 

$       0.2 

$      3.8 

$    15.3 

$         - 

$   184.7 
                           
-21-

Item2.  Management's Discussion and Analysis of Financial Condition andResults of Operations.[1]

**Results ofOperations**

Three months ended June 30, 2004 vs. three monthsended June 30, 2003 

*Overview*Net sales for the second quarter of2004 were $748.8 million and gross margins were $128.3 million.  Net earnings inthe current quarter were $42.7 million, or $0.32 per diluted share.  Net salesfor the second quarter of 2003 were $538.7 million and Gross margins were $43.8million.  Earnings from continuing operations in the prior period were $22.1million, or $0.19 per share including a restructuring charge of $0.3 million,$0.2 million after tax, (see Note 1 of Notes to CondensedConsolidated Financial Statements).  The net loss in the prior period was $6.9million, or $0.06 per share including a loss from discontinued operations of$29.0 million, or $0.25 per share (see Note 2 of Notes toCondensed Consolidated Financial Statements).

Net sales for the second quarter of 2004 increased$210.1 million or 39 percent from the prior year period while Gross marginsincreased $84.5 million.  The increase in Net sales was the result of higherconcentrated phosphate sales volumes of $63.0 million, higher potash salesprices and volumes of $46.5 million and $43.2 million, respectively, higher concentratedphosphate sales prices of $40.8 million and an increase in the amount offreight costs billed to customers of $15.2 million as a result of the increasein sales volumes.  Margins increased as a result of the higher concentratedphosphate sales prices and potash sales prices and volumes, previouslydiscussed, as well as favorable idle plant costs of $7.0 million, partially offsetby higher Canadian provincial levies of $14.9 million as well as higherphosphate operating costs of $7.7 million.

The operating results of the Company's significantbusiness units are discussed in more detail below.

*IMC PhosFeed*

IMC PhosFeed's (PhosFeed) Net sales for the secondquarter of 2004 increased 33 percent to $424.2 million compared to $318.6 millionfor the same period last year largely as a result of higher concentratedphosphate sales volumes and prices of $63.0 million and $40.8 million,respectively.  The increase in concentrated phosphate sales volumes wasprimarily a result of higher international sales of diammonium phosphate (DAP)of $48.5 million, granular monoammonium phosphate (GMAP) of $8.6 million andgranular triple superphosphate (GTSP) of $4.4 million.  International DAPvolumes were higher mainly as a result of increased volumes to 
 
[1]   All statements, other than statements of historicalfact, appearing under Part I, Item 2, "Management's Discussion andAnalysis of Financial Condition and Results of Operations," constitute "forward-lookingstatements" within the meaning of the Private Securities Litigation ReformAct of 1995.  In particular, forward-looking statements may include words suchas "except," "anticipate," "believe," "may,""should," "could" or "estimate."  Thesestatements involve certain risks and uncertainties that may cause actualresults to differ materially from expectations as of the date of this filing.

Factors that could cause actual results to differmaterially from those expressed or implied by the forward-looking statementsinclude, but are not limited to, the following: general business and economicconditions and governmental policies affecting the agricultural industry inlocalities where the Company or its customers operate; weather conditions; theimpact of competitive products; pressure on prices realized by the Company forits products; constraints on supplies of raw materials used in manufacturingcertain of the Company's products; capacity constraints limiting the productionof certain products; difficulties or delays in the development, production,testing and marketing of products; difficulties or delays in receiving, orincreased costs of obtaining or satisfying conditions of, required governmentaland regulatory approvals; market acceptance issues, including the failure ofproducts to generate anticipated sales levels; the effects of and change intrade, monetary, environmental and fiscal policies, laws and regulations;foreign exchange rates and fluctuations in those rates; the costs and effectsof legal proceedings, including environmental and administrative proceedingsinvolving the Company; success in implementing the Company's variousinitiatives; the uncertain effects upon the global and domestic economies andfinancial markets of the terrorist attacks in New York City and Washington,D.C. on September 11, 2001 and their aftermaths; and other risk factorsreported from time to time in the Company's Securities and Exchange Commissionreports.  The Company has entered into a business combination agreement withCargill.  If the transactions contemplated thereby are consummated, the Company'sbusiness would be operated by a newly-formed public company going forward.  TheBoard of Directors and management of the new public company will not be thesame as exists on the date hereof for the Company, and they may operate thebusinesses of the Company in a manner that differs from the Company's currentoperations.  The factors listed above do not account for any such possiblechange in the Company's operations.

 

-22-

China, Turkey, Pakistan, Mexico, Peru, New Zealand,Chile, Venezuela and Thailand, partially offset by decreased sales to Japan. International GMAP volumes were higher primarily as a result of increased salesto Brazil and Chile, partially offset by decreased sales to Japan. International GTSP volumes increased primarily as a result of higher volumes toBrazil, Chile and Japan, partially offset by decreased sales to Bangladesh. Average DAP prices increased 15 percent to $182 per short ton in the secondquarter of 2004 from $158 per short ton in the second quarter of 2003.  

Gross margins improved to $19.1 million for the secondquarter of 2004 compared to a negative $13.4 million for the second quarter oflast year.  Margins were favorable as a result of higher concentrated salesprices of $40.8 million and lower idle plant costs of $7.0 million, partiallyoffset by higher phosphate operating costs of $7.7 million.  The favorable idleplant costs resulted from a rock mine being shutdown during April of 2003 andthe Louisiana concentrate plants being shutdown in June of 2003.  All of thesefacilities were operating for the entire second quarter of 2004.  Phosphateoperating costs were unfavorable primarily as a result of increased electricity,maintenance, payroll, permitting and legal costs, partially offset by higherproduction volumes.

*IMC Potash*

IMC Potash's (Potash) Net sales for the second quarterof 2004 increased 44 percent to $343.5 million compared to $239.1 million forthe same period last year.  The increase in Net sales was primarily the resultof increased sales prices of $46.5 million, higher sales volumes of $43.2million and an increase in the amount of freight costs billed to customers of$14.9 million as a result of the increase in sales volumes.  The averageselling price, including all potash products, of $88 per short ton compared to$74 per short ton in the prior year period.  Potash's sales volumes were highermainly as a result of higher domestic and international shipments of muriate ofpotash (MOP) of $26.7 million and $15.2 million, respectively.  The increase indomestic MOP volumes was primarily a result of the timing of shipments as the2004 summer sales have been pulled forward because customers wanted to avoidthe announced July 2004 price increase as well as a general increase in demandas the outlook for commodity prices is very positive.  The increase in internationalMOP volumes was primarily a result of the timing of shipments as well as highershipments to Brazil, Southeast Asia and Latin America.  Additionally, in thecurrent year, international volumes were higher in the second quarter than thefirst quarter as a result of railcar shortages in the first quarter of 2004. The railcar problem has improved resulting in increased sales volumes in thecurrent quarter.** **

Gross margins increased 81 percent to $113.4 millionfor the second quarter of 2004 compared to $62.7 million for the same period in2003.  Gross margins increased primarily as a result of higher sales prices andvolumes of $46.5 million and $16.2 million, respectively, partially offset byincreased Canadian provincial levies of $14.9 million.  The increase in theprovincial levies resulted from the increase in earnings for the quarter.

*Key statistics*

The following tablesummarizes the Company's significant sales volumes and average selling pricesfor the three months ended June 30:

 

* *

*2004*

*2003*

*Sales  volumes (in thousands of short tons)a:*

* *

* *

      Phosphates

1,681

1,267

      Potash

3,042

2,410

*Average price per tonb:*

* *

* *

      DAP

$   182

$   158

      Potash

$     88

$     74

a   Salesvolumes include tons sold captively. Phosphates' volumes represent dry producttons, primarily DAP.b    Averageprices represent sales made FOB plant/mine.

-23-

 

*Selling,general and administrative expenses*

Selling, general and administrative expenses in thesecond quarter of 2004 decreased $2.0 million to $20.1 million from $22.1million in the prior year period.  This decrease was primarily the result ofthe absence of $1.8 million of expense in the prior year related to the 2003efficiency improvement program.

 

*Gainon sale of operating assets/securities*

In the second quarter of 2003, the Company receivedcash proceeds of $57.0 million from two transactions with Compass MineralsInternational, Inc. (Compass).  The transactions included the sale of about 15percentage points out of the Company's 19.9 percentage point minority economicinterest in Compass, and the sale of the sulphate of potash (SOP) business linein Carlsbad, New Mexico.  The Company recognized a gain of $16.5 millionrecorded in Operating earnings on the Consolidated Statement of Operations, anda gain of $35.5 million, in non-operating earnings on the ConsolidatedStatement of Operations, respectively from these transactions.

* *

*Foreign currency transaction (gain) loss*

Foreign currency transaction (gain) loss for the secondquarter of 2004 changed $40.5 million to a gain of $11.7 million from a loss of$28.8 million in the prior year period.  This was primarily caused by a strengtheningof approximately three percent in the United States dollar against the Canadiandollar in the second quarter of 2004 compared to a strengthening ofapproximately nine****percent of the Canadian dollar against the UnitedStates dollar in the prior year period.  This impacts the carrying value ofUnited States dollar denominated net assets of Potash, for which the Canadiandollar is its functional currency.

 

*Other (income) expense, net*

Other (income) expense, net for the second quarter of2004 changed $10.4 million to $6.1 million of expense from income of $4.3million in the second quarter of 2003.  This variance was primarily a result ofa $4.9 million reduction in distributions from Compass as a result of selling amajority of the investment in the prior year, $1.9 million of expenses relatedto the merger between the Company and Cargill Crop Nutrition (see Note 11 of Notes to the Condensed Consolidated FinancialStatements), $1.2 million related to the recording of a reserve for a notereceivable from non-operating activities related to the development of watertreatment technologies and $0.8 million of additional legal expense reservesrelated to the Pensacola, Florida site (see Note 10 ofNotes to the Condensed Consolidated Financial Statements).

 

*Minority interest*

Losses allocated to minority interest decreased $6.8million from the same period last year.  This decrease in losses allocated tominority interest was primarily the result of IMC Phosphates, a 78.9 percentowned subsidiary of the Company, generating earnings in the current quarter ascompared to a loss in the prior year period.

 

*Provision (benefit) for income taxes*

The provision for income taxes on earnings fromcontinuing operations for the second quarter was $28.1 million, for aneffective tax rate of 39.7 percent, versus a benefit of $8.1 million in thesecond quarter of 2003.  The recorded tax benefit in the prior year periodresulted from a tax benefit (at 32 percent) relating to a pre-tax loss fromcontinuing operations, excluding the pre-tax gains on the Compass asset sales,offset by a tax provision at a reduced rate principally due to availablecapital loss carryforward offsets related to the asset sales.  The increase in theeffective rate in the current year primarily reflects the effect of a UnitedStates Internal Revenue Service Notice issued during 2003 that adverselyimpacts the Company's ability to utilize foreign tax credits beginning in 2004.

 

*Loss from discontinued operations*

In the second quarter of 2003, the Company reviewedthe forecasted operating results of Chemicals through September 30, 2003 aswell as the estimated sales proceeds in light of a non-binding letter of intententered into in June 2003 and determined that an additional loss on disposal of$35.9 million, or $29.0 million after tax, as of June 30, 2003 was necessary.  On March 23, 2004 the Company sold substantiallyall of its remaining discontinued Chemicals entities (see Note2 of Notes to the Condensed Consolidated Financial Statements).

 

-24-

Sixmonths ended June 30, 2004 vs. six months ended June 30, 2003

*Overview*Net sales in the first half of 2004were $1,333.0 million and gross margins were $207.1 million.  Net earnings forthe first six months were $51.9 million, or $0.41 per diluted share, includinga Loss from discontinued operations of $2.4 million, or $0.02 per share.  Netsales for the first six months of 2003 were $1,090.8 million and Gross margins were$79.9 million.  The net loss for the first six months of 2003 was $43.5million, or $0.37 per share, including a loss from discontinued operations of$29.0 million, or $0.25 per share, (see Note 2 of Notes toCondensed Consolidated Financial Statements) and the Cumulative effect of achange in accounting principle of $4.9 million, net of minority interest andtaxes, or $0.04 per share.  

Net sales for the first six months of 2004 increased $242.2million or 22 percent from the prior year period while Gross margins increased$127.2 million.  The increase in Net sales was the result of higherconcentrated phosphate sales prices of $96.3 million, higher potash salesprices and volumes of $58.9 million and $49.0 million, respectively, higherconcentrated phosphate sales volumes of $30.3 million, and an increase in theamount of freight costs billed to customers of $18.0 million as a result of theincrease in sales volumes, partially offset by lower feed ingredient sales of $6.0 million.** **Margins increased as a result of the higherconcentrated phosphate and potash sales prices, previously discussed, higherpotash sales volumes of $17.8 million and favorable idle plant costs of $12.4million, partially offset by higher raw material costs of $20.2 million, higherphosphate operating costs of $19.7 million and higher Canadian provinciallevies of $16.3 million.

The operating results of the Company's significantbusiness units are discussed in more detail below.

*IMC PhosFeed*

PhosFeed's Net sales for the first half of 2004increased 16 percent to $787.5 million compared to $677.6 million for the sameperiod last year largely as a result of higher concentrated phosphate salesprices and volumes of $96.3 million and $30.3 million, respectively, partiallyoffset by lower feed ingredient sales of $6.0 million.  Average DAP pricesincreased 23 percent to $184 per short ton in the first half of 2004 from $149 pershort ton in the first half of 2003.** **The increase in concentratedphosphate sales volumes was primarily the result of higher internationalvolumes of $55.6 million, partially offset by lower domestic volumes of $25.3million.** **The increase in international volumes was primarily the resultof higher international sales of DAP of $34.5 million, GMAP of $15.6 million andGTSP of $4.3 million.  International DAP volumes were higher because ofincreased volumes to China, Turkey, Pakistan, Mexico, Peru, New Zealand, Chile,Venezuela, Nigeria, Guatemala, and Thailand, partially offset by decreasedsales to India, Japan, Vietnam, Australia and Ecuador.  International GMAP volumeswere higher primarily as a result of increased sales to Brazil, Australia,Venezuela and Chile, partially offset by decreased sales to Japan. International GTSP volumes increased primarily as a result of higher volumes toBrazil and Chile, partially offset by decreased sales to Bangladesh andAustralia.  The decrease in domestic volumes was primarily the result of lowersales of DAP of $15.2 million, GMAP of $6.9 million and GTSP of $4.5 million.  Thedecrease in domestic DAP and GMAP volumes was primarily the result of thetiming of sales in the fourth quarter of the prior year, increased competition,the loss of a warehouse contract and not participating in a leased rail carprogram in the Plains states which resulted in reduced railcar availability.  Thedecrease in domestic GTSP volumes was caused by weak demand for a majority ofthe first half as well as product committed to the international market.  Lowerfeed ingredient sales resulted from reduced volumes that occurred because ofthe timing of sales in the fourth quarter of the prior year that negativelyimpacted the current period and increased competitive pricing pressure.  

 

-25-

Gross margins improved to $37.5 million for the firstsix months of 2004 compared to a negative $28.2 million for the first sixmonths of last year. Margins increased as a result of the higher concentratedphosphate sales prices, previously discussed, and favorable idle plant costs of$12.4 million, partially offset by higher raw material costs of $20.6 millionand higher phosphate operating costs of $19.7 million.  The favorable idleplant costs resulted from a rock mine being shutdown during February, March andApril of 2003 and the Louisiana concentrate plants being shutdown in June of2003.  These facilities were operating for the entire first half of 2004.  Higherraw material costs were primarily the result of higher costs for ammonia of$13.4 million, sulphur of $3.9 million and natural gas of $3.2 million.** **Phosphateoperating costs were unfavorable primarily as a result of increasedelectricity, maintenance, payroll, contract services, permitting and legalcosts as well as using lower grade rock, partially offset by higher productionvolumes.

*IMC Potash*

Potash's Net sales for the first half of 2004increased 29 percent to $583.1 million compared to $453.3 million for the sameperiod last year.  The increase in Net sales was primarily the result ofincreased sales prices of $58.9 million, higher sales volumes of $49.0 millionand an increase in the amount of freight costs billed to customers of $22.6million as a result of higher sales volumes.  The average selling price, includingall potash products, of $83 per short ton compared to $74 per short ton in theprior year period.  Potash's sales volumes were higher mainly as a result of increaseddomestic and international shipments of MOP of $39.2 million and $12.2 million,respectively.  The increase in domestic MOP volumes was primarily a result of lowerthan average sales in the prior year period due to lower market share,customers having less available cash that resulted from increased nitrogen andphosphate prices as well as lower shipments to the southern United States.  Inaddition, the timing of shipments, as the 2004 summer sales have been pulledforward because customers want to avoid the announced July 2004 price increase,and a general increase in demand as the outlook for commodity prices is verypositive have also contributed to the favorable domestic MOP variance for firstsix months of 2004.  The increase in international MOP volumes was primarily aresult of higher shipments to Brazil, South East Asia and Latin America.  

Gross margins increased 51 percent to $178.6 millionfor the first six months of 2004 compared to $118.1 million for the same periodin 2003.  Gross margins increased primarily as a result of higher sales pricesand volumes of $58.9 million and $17.8 million, respectively, partially offsetby increased Canadian provincial levies of $16.3 million.  The increase in theprovincial levies was primarily the result of higher earnings for the first sixmonths of 2004.

*Key statistics*

The following tablesummarizes the Company's significant sales volumes and average selling pricesfor the six months ended June 30:

 

* *

*2004*

*2003*

*Sales  volumes (in thousands of short tons)a:*

* *

* *

      Phosphates

3,058

2,903

      Potash

5,317

4,563

*Average price per tonb:*

* *

* *

      DAP

$   184

$   149

      Potash

$     83

$     74

a   Salesvolumes include tons sold captively. Phosphates' volumes represent dry producttons, primarily DAP.b    Averageprices represent sales made FOB plant/mine.

-26-
*Selling,general and administrative expenses

Selling, general and administrative expenses in thefirst six months of 2004 decreased $3.5 million to $36.9 million from $40.4million in the prior year period.  This decrease was primarily the result ofthe absence of $3.6 million of expense in the prior year related to the 2003efficiency improvement program.

 

*Gainon sale of operating assets/securities*

In the second quarter of 2003, the Company receivedcash proceeds of $57.0 million from two transactions with Compass.  Thetransactions included the sale of about 15 percentage points out of the Company's19.9 percentage point minority economic interest in Compass, and the sale ofthe SOP business line in Carlsbad, New Mexico.   The Company recognized a gainof $16.5 million recorded in Operating earnings on the Consolidated Statementof Operations, and a gain of $35.5 million, in non-operating earnings on theConsolidated Statement of Operations, respectively from these transactions.

* *

*Restructuringcharges*

In January 2003, the Company announced anorganizational restructuring program (Program) to meet current businesschallenges and as part of the Company's drive to be the industry's low-costproducer.  The Company incurred charges of $3.7 million during the first halfof 2003 associated with severance and related costs for the Program.  

 

*Foreign currency transaction (gain) loss*

Foreign currency transaction (gain) loss for the firstsix months of 2004 changed $67.0 million to a gain of $16.3 million from a lossof $50.7 million in the prior year period.  This was primarily caused by a strengtheningof approximately four percent in the United States dollar against the Canadiandollar in the first half of 2004 compared to a strengthening of approximately 15****percent of the Canadian dollar against the United States dollar in theprior year period.  This impacts the carrying value of United States dollardenominated net assets of Potash, for which the Canadian dollar is itsfunctional currency.

* *

*Debt refinancing expense*

This change was the result of a $2.9 million chargerelated to debt retirement costs in the first quarter of 2003 from the earlyretirement of the 6.50 percent senior notes due August 1, 2003.

 

*Other (income) expense, net*

Other (income) expense, net for the first six monthsof 2004 changed $17.3 million to $14.9 million of expense from $2.4 million ofincome in the first half of 2003.  This variance was primarily a result of the$6.8 million Pensacola, Florida proposed settlement and legal expenses, net ofpreviously established reserves (see Note 10 of Notes tothe Condensed Consolidated Financial Statements), a $4.7 million reduction indistributions from Compass as a result of selling a majority of the investment duringthe prior year, $3.5 million of expenses related to the merger between theCompany and Cargill Crop Nutrition (see Note 11 of Notesto the Condensed Consolidated Financial Statements), and $1.2 related to therecording of a reserve for a note receivable from non-operating activitiesrelated to the development of water treatment technologies.

 

*Minority interest*

Losses allocated to minority interest decreased $9.9million from the same period last year.  This decrease in losses allocated tominority interest was primarily the result of IMC Phosphates, a 78.9 percentowned subsidiary of the Company, generating earnings in the current year ascompared to a loss in the prior year period, partially offset by the PLPunitholders' portion of the Pensacola proposed settlement (see Note10****of Notes to the Condensed Consolidated Financial Statements).

 

-27-

 

*Provision (benefit) for income taxes*

The provision for income taxes on earnings fromcontinuing operations for the first six months of 2004 was $35.7 million, foran effective tax rate of 39.7 percent, versus a benefit of $23.0 million in2003.  The recorded tax benefit in the prior year period resulted from a taxbenefit (at 32 percent) relating to a pre-tax loss from continuing operations,excluding the pre-tax gains on the Compass asset sales, offset by a taxprovision at a reduced rate principally due to available capital losscarryforward offsets related to the asset sales.  The increase in the effectiverate in the current year primarily reflects the effect of a United StatesInternal Revenue Service Notice issued during 2003 that adversely impacts theCompany's ability to utilize foreign tax credits beginning in 2004.

 

*Loss from discontinued operations*

In the first quarter of 2004, an additional loss of$2.4 million was recorded to reflect the impact of the sale of the remainingChemicals businesses on March 23, 2004.  In the second quarter of 2003, the Company reviewed the forecasted operating resultsof Chemicals through September 30, 2003 as well as the estimated sales proceedsin light of a non-binding letter of intent entered into in June 2003 anddetermined that an additional loss on disposal of $35.9 million, or $29.0million after tax, as of June 30, 2003 was necessary (see Note 2****of Notes tothe Condensed Consolidated Financial Statements).

* *

*Cumulative effect of a change in accounting principle*

On January 1, 2003 the Company adopted SFAS No. 143, *Accountingfor Asset Retirement Obligations*.  Under the new rules, legal obligationsassociated with the retirement of long-lived assets are required to berecognized at theirfair value at the time that the obligations are incurred.  In the first quarterof 2003, the Company recorded a net charge of $4.9 million representing thedifference between the Company recording its obligations pursuant to the newrequirements and amounts previously recorded.

 

**Capital Resources and Liquidity**

 

The Company's ability to make payments on and torefinance its indebtedness and to fund planned capital expenditures andexpansion efforts in the future, if any, will depend on the Company's abilityto generate cash in the future.  This, to a certain extent, is subject togeneral economic, financial, competitive and other factors that are beyond theCompany's control.  The Company believes that its cash, other liquid assets andoperating cash flow, together with available borrowings and potential access tocredit and capital markets, will be sufficient to meet the Company's operatingexpenses and capital expenditures and to service its debt requirements andother contractual obligations as they become due.

The Company's credit facilities require it to maintaincertain financial ratios, including a leverage ratio test and an interestcoverage test.  In addition, the credit facilities contain certain covenantsand events of default.  Most of the Company's various material debt instrumentshave cross default provisions.  In general, pursuant to these provisions, theinstruments governing such debt arrangements each provide that a failure to payprincipal or interest under other indebtedness in excess of a specifiedthreshold amount will result in a cross-default.  Of the Company's materialdebt instruments, the Credit Facility has the lowest specified thresholdamount, $20.0 million.  The Company's access to funds is dependent upon itsproduct prices, input costs and market conditions.  During periods in whichproduct prices or volumes; raw material prices or availability; or otherconditions reflect the adverse impact of cyclical market trends or otherfactors; there can be no assurance that the Company would be able to complywith applicable financial covenants or meet its liquidity needs.  The Companycannot assure that its business will generate sufficient cash flow fromoperations in the future; that its currently anticipated growth in net salesand cash flow will be realized; or that future borrowings will be availablewhen needed or in an amount sufficient to enable the Company to repayindebtedness or to fund other liquidity needs.   

-28-

There can be no assurance that the Company will beable to obtain any necessary waivers or amendments from the requisite lenders. Any failure to comply with the restrictions of the credit facilities or anyagreement governing its indebtedness may result in an event of default underthose agreements.  Such default may allow the creditors to accelerate therelated debt, which may trigger cross-acceleration or cross-default provisionsin other debt.  In addition, lenders may be able to terminate any commitmentsthey had made to supply the Company with further funds (including periodicrollovers of existing borrowings).  The Company has been in compliance with allof its debt and other covenants during all periods presented.  No waivers havebeen necessary.

Pursuant to the Credit Facility, the Company andcertain of its domestic subsidiaries may borrow up to approximately $460.7million.  The Credit Facility consists of a Revolving Credit Facility of up to$210.0 million available for revolving credit loans and letters of credit aswell as a Term Loan Facility of approximately $250.7 million. The CreditFacility requires the Company to meet certain financial tests, including, butnot limited to, a maximum total leverage ratio, a maximum secured leverageratio, a minimum interest coverage ratio and a maximum ratio of the sum of certainsecured obligations as of any date to the collateral coverage amount (asdefined in the Credit Facility).

In March 2004, IMC announced that it had obtainedamendments to the Credit Agreement governing its Credit Facility.  Thedescriptions of the terms of the Credit Agreement below reflect thoseamendments.  

The interest expense coverage ratio is the ratio ofconsolidated Credit Agreement adjusted EBITDA to consolidated interest expense(as defined in the Credit Agreement governing IMC's credit facilities), andsuch ratio is required to equal or exceed the following ratios for the fourconsecutive fiscal quarters ended on any date during any period set forthbelow: (i) 1.70 to 1.00 for the period of January 1, 2004 to and includingDecember 31, 2004; and (ii) 2.50 to 1.00 after December 31, 2004.  For the fourfiscal quarters ended June 30, 2004, IMC's interest expense coverage ratio was2.26 to 1.00.

The total leverage ratio is the ratio of totalindebtedness to consolidated Credit Agreement adjusted EBITDA (each as definedin the Credit Agreement governing IMC's credit facilities) for the precedingfour fiscal quarters, and such ratio is required to be equal to or less thanthe ratios set forth below as of the last day of any fiscal quarter endingduring any period set forth below: (i) 6.50 to 1.00 for the period of January1, 2004 to and including December 31, 2004, and (ii) 4.00 to 1.00 afterDecember 31, 2004.  For the four fiscal quarters ended June 30, 2004, IMC'stotal leverage ratio was 4.55 to 1.00.

The secured leverage ratio is the ratio of the totalprincipal amount of the loans under the credit facilities to consolidatedCredit Agreement adjusted EBITDA (each as defined in the Credit Agreementgoverning IMC's credit facilities) for the preceding four fiscal quarters, andas of the period ended March 31, 2003 and the last day of any fiscal quarterthereafter, such ratio was required to be less than 2.00 to 1.00.  For the fourfiscal quarters ended June 30, 2004, IMC's secured leverage ratio was 0.60 to1.00.    

The collateral coverage ratio is the ratio of thetotal value of the collateral securing IMC's credit facilities to the sum ofthe total principal amount of the loans under IMC's credit facilities plus theamount of any outstanding letters of credit, and as of the date of the CreditFacility and any date thereafter, such ratio was required to be equal to orgreater than 1.00 to 1.00.  At June 30, 2004, IMC's collateral coverage ratiowas 1.64 to 1.00.

As part of the March 2004 amendments to the CreditAgreement, IMC amended the former provisions pursuant to which the CreditAgreement (which otherwise matures in May 2006 in the case of the RevolvingCredit Facility and November 2006 in the case of the Term Loan Facility) wouldhave matured on October 15, 2004 if IMC had not refinanced its 2005 Notes priorto October 15, 2004.  In 2003, IMC refinanced approximately $413.5 million ofthe $450.0 million 2005 Notes then outstanding.  Pursuant to the amendments,the Credit Agreement will not mature until the dates in 2006 referred to aboveas long as IMC repays approximately $10.0 million of the 2005 Notes at maturityin January 2005 and refinances the remaining approximately $27.0 millionbalance of the 2005 Notes by March 24, 2005 with the proceeds from an offeringof debt securities that do not mature or require any amortization or otherpayment prior to May 31, 2007 or with the proceeds from an offering of equitysecurities.  

-29-

On May 7, 2003, IMC USA entered into the Potash Facilitywhere it may borrow up to a maximum of $52.5 million subject to a borrowingbase calculation based on eligible inventory and accounts receivable.Borrowings under the facility bear an interest rate of LIBOR plus a spread(initially 275.0 basis points), and are secured by IMC USA's accountsreceivable and inventory.  The Potash Facility is available for the generalcorporate purposes of IMC USA. Borrowings under the Potash Facility areguaranteed on an unsecured basis by IMC USA Holdings Inc., a subsidiary of theCompany and the parent of IMC USA. Neither the Company nor any other subsidiaryis a guarantor for the borrowings under the Potash Facility. As of June 30,2004, the Potash Facility had a borrowing base that could support borrowings upto $21.9 million, under which IMC USA had no outstanding borrowings.

IMC and Cargill announced on January 27, 2004 thesigning of a definitive agreement to combine IMC and Cargill Crop Nutrition tocreate a new, publicly traded company.  See Note 11 ofNotes to Condensed Consolidated Financial Statements in Item 1 of Part I ofthis report.  IMC must obtain the consent of the lenders under the CreditFacility prior to completion of the transactions contemplated by the agreementwith Cargill.  While IMC intends to seek the consent of such lenders andanticipates that it will receive their consent, there can be no assurance thattheir consent will be obtained.

The indentures relating to IMC's outstanding IMCSenior Notes contain provisions requiring IMC to offer to purchase all of theoutstanding IMC Senior Notes upon a change of control of IMC at 101 percent ofthe principal amount thereof (plus accrued and unpaid interest).  Thecompletion of the combination with Cargill Crop Nutrition will constitute achange of control of IMC under the terms of IMC's indentures.  As of June 30,2004, $1.2 billion of IMC Senior Notes were outstanding and subject to thechange of control purchase offer requirements.  It is possible that IMC willnot have sufficient funds available at the time of the change of control tomake the required purchases of the IMC Senior Notes.  In such case, IMC may berequired to borrow additional funds in order to make the required purchases. However, IMC may not be able to borrow those additional funds or such borrowingmay not be available on terms favorable to IMC.  Failure to make the requiredpurchases after the change of control of IMC would cause IMC to be in defaultunder IMC's indentures, and would also constitute a default under IMC's creditfacilities.  Upon closing of the combination with Cargill Crop Nutrition anduntil expiration of the change of control purchase offer, IMC will reclassifythe IMC Senior Notes from long-term debt to current maturities of long-termdebt.  However, the Senior Notes are currently trading at a substantial premiumover par (15 - 20%).  It would be uneconomical for investors to put the SeniorNotes at 101% when they could be sold for a substantially higher price. Accordingly, IMC does not currently expect that the noteholders will exercisetheir put option.

The Company incurs liabilities for reclamationactivities and phosphogypsum stack (Gypstacks) closure, primarily in itsFlorida phosphate operations, where to obtain necessary permits, it must eitherpass a test of financial strength or provide credit support, typically suretybonds or financial guarantees.  As of June 30, 2004, the Company had $96.3million in surety bonds outstanding, which primarily mature over the next elevenmonths, and met the financial strength test for the remaining portion of suchadditional liabilities. In connection with the outstanding surety bonds, theCompany has posted $43.6 million of collateral in the form of letters ofcredit.  In the future, there can be no assurance that the Company will be ableto pass such tests of financial strength or to purchase surety bonds on thesame terms and conditions.  However, the Company anticipates that it will beable to satisfy applicable credit support requirements without disruptingnormal business operations.

The State of Florida has begun formulating newfinancial assurance rules for closure and long-term care of Gypstacks.  Suchrules may become effective in 2004 and are expected to include more stringentfinancial tests than the current rules, along with requirements that closurecost estimates include the cost of treating Gypstack water.  Until definitiveregulations or interpretations have been finalized, the Company is unable todetermine the nature of the new financial assurance obligations or to predictwith certainty the financial impact of these requirements on the Company;however, these impacts could be significant.  The Company currently recognizesboth Gypstack closure costs and Gypstack water treatment costs as liabilitiesin accordance with SFAS No.143.  

-30-

Operating activities provided $42.5 million of cash for the first six months of 2004compared to providing $4.9 million forthe same period in 2003.  The favorable variance from the prior year wasprimarily the result of an increase in operating earnings, partially offset byan increase in the amount invested in working capital.

Investing activities used $55.8 million for the first six months of 2004 compared to providing$29.0 million in the first six months of 2003.  This change was primarily theresult of the absence of the $57.0 million in proceeds from the transactionswith Compass, $20.6 million in proceeds from the sale of White River in 2003 (seeNote 2 of Notes to Condensed Consolidated FinancialStatements) as well as an increase in capital spending.  Capital expendituresfor the first six months of 2004 increased $11.3 million to $59.9 million from$48.6 million in the prior year period.  The increase in capital spending wasprimarily the result of increased spending on solution mining locations at theCompany's Belle Plaine, Saskatchewan location, increased water control spendingat the Company's Esterhazy, Saskatchewan location as well as production equipmentupgrades.

Cash used in financing activities for the first sixmonths of 2004 of $15.5 million fluctuated by $148.6 million from cash providedby financing activities of $133.1 million for the first six months of 2003. This change was primarily the result of the absence of the proceeds received in2003 from the issuance of the Preferred Shares as well as net debt paymentsincluding the use of restricted cash in the first half of 2004 of $10.1 millionversus net cash proceeds including the use of restricted cash of $6.7 in thefirst half of 2003.

Item3. Quantitative and Qualitative Disclosures About MarketRisk. 

The Company is exposed to the impact of interestrate changes on borrowings, fluctuations in the functional currency of foreignoperations and the impact of fluctuations in the purchase price of natural gas,ammonia and sulphur consumed in operations, as well as changes in the marketvalue of its financial instruments.  The Company periodically enters intoderivatives in order to minimize foreign currency risks, the effects ofchanging natural gas prices and interest rate changes, but not for tradingpurposes. 

The Company conducted sensitivity analyses of itsfixed rate long-term debt assuming a one percentage point decrease in interest ratesfrom their actual levels as of June 30, 2004.  Holding all other variablesconstant the hypothetical adverse change would increase the fair value of the Company'sfixed rate long-term debt by approximately $360.0 million. 

The Company has decreased the amount of its naturalgas forward purchase contracts since December 31, 2003 to a notional amount of $42.3million as of June 30, 2004.  The contracts extend through October 31, 2005 andhave an average price of $4.62 per mmbtu.  

As of June 30, 2004, none of the Company's exposureto the other risk factors discussed above had materially changed from December31, 2003.

Item 4. Controlsand Procedures. 

The Company maintains disclosure controls andprocedures and internal controls designed to ensure that information requiredto be disclosed in the Company's filings under the Securities Exchange Act of1934 is recorded, processed, summarized and reported within the time periodsspecified in the SEC's rules and forms.  The Company's management, with theparticipation of its principal executive and financial officers, have evaluatedthe effectiveness of the Company's disclosure controls and procedures as of theend of the period covered by this Quarterly Report on Form 10-Q.  The Company'sprincipal executive and financial officers have concluded, based on suchevaluation, that such disclosure controls and procedures were effective for thepurpose for which they were designed as of the end of such period.

There was no change in the Company's internal controlover financial reporting that was identified in connection with such evaluationthat occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likelyto materially affect, the Company's internal control over financial reporting.

-31-

**Part II. OTHER INFORMATION**

Item1.  Legal Proceedings.

Reference is made to Note 10 ofNotes to Condensed Consolidated Financial Statements in Item I of Part I ofthis quarterly report on Form 10-Q for a description of a proposed settlementof a previously reported legal proceeding.

Item 2.   Changes inSecurities and Use of Proceeds.

On August 26, 1997, the Company announced that itsBoard of Directors had authorized the Company to repurchase up to five millionadditional shares of its common stock.  Pursuant to this program subject to therestrictions of the Company's Credit Facility and IMC Senior Notes (see Note 4 of Notes to Condensed Consolidated FinancialStatements in Item 1 of Part 1 of this report) and the agreement related to IMC'scombination with Cargill Crop Nutrition which generally prohibits IMC frompurchasing its capital stock without the consent of Cargill except in limitedcircumstances, the Company is authorized as of June 30, 2004 to purchase up to4.5 million shares.  No shares were repurchased under such program during theperiod covered by this report.  In addition, pursuant to IMC's 1988 StockOption and Award Plan, as amended and restated, relating to the grant of up to17,400,000 shares of IMC common stock pursuant to employee stock options, stockappreciation rights and restricted stock awards, IMC has granted and may in thefuture grant employee stock options to purchase shares of common stock of IMC forwhich the purchase price may be paid by means of delivery to the company by theoptionee of shares of common stock of IMC that are already owned by theoptionee (at a value equal to market value on the date of the option exercise). During the period covered by this report, no options were exercised for whichthe purchase price was so paid.

Item 4.   Submissionof Matters to a Vote of Security Holders.

(a)   The2004 Annual Meeting of Stockholders was held on May 14, 2004.

(b)  Themeeting was held to consider and vote upon:  (i) the election of threedirectors (Donald F. Mazankowski, Douglas A. Pertz and Richard L. Thomas), eachfor a term of three years or until their respective successors have been dulyelected and qualified; and (ii) the ratification of the appointment of Ernst& Young LLP as independent auditors for the year ending December 31, 2004.

Thevotes cast with respect to each director are summarized as follows:

*Director Name*

*For*

*Withheld*

*Total Votes Present*

Donald F.   Mazankowski

107,864,444

1,059,276

108,923,720

Douglas A. Pertz

106,538,013

2,385,707

108,923,720

Richard L. Thomas

107,919,562

1,004,158

108,923,720

The votes cast forratifying the appointment of Ernst & Young LLP as the Company's independentauditors are summarized as follows:

*For*

*Against*

*Abstained*

*Broker Non-Votes*

*Total Votes Present*

 106,755,472

2,041,690

126,541

17

        108,923,720

 

-32-

Item 6.   Exhibits andReports on Form 8-K.

(a)

Exhibits.

Reference is made to the Exhibit Index on page E-1  hereof.

(b)

Reports  on Form 8-K.

A report under Item 5 dated April 8, 2004  A report under Items 5 and 7 dated April 1, 2004
** **
-33**-******
** ****************************

** SIGNATURES**

** **Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

**IMC GLOBAL INC.**

** **

by:**  **       Robert  M. Qualls                             **        Robert  M. Qualls          Vice President and Controller          (on behalf of the registrant and as chief accounting  officer)

** **

Date:  August 5,2004

S-1

**Exhibit Index**

*Exhibit No.*

*Description*

*Incorporated Herein   by Reference to*

*Filed with   Electronic   Submission*

2

Agreement  and Plan of Merger and Contribution, dated as of January 26, 2004, by and  among IMC Global Inc., Global Nutrition Solutions, Inc., GNS Acquisition  Corp., Cargill, Incorporated and Cargill Fertilizer, Inc., as amended by  Amendment No. 1 to Agreement and Plan of Merger and Contribution, dated as of  June 15, 2004

Annex A to the proxy  statement/prospectus forming part of Registration Statement No. 333-114300

4.1

Supplemental  Indenture, dated as of May 27, 2004, among Phosphate Acquisition Partners  L.P., IMC Global Inc. and The Bank of New York relating to the issuance of  10.875% Senior Notes due 2008 and 11.250% Senior Notes due 2011.

X

4.2

Supplemental  Indenture, dated as of May 27, 2004, among Phosphate Acquisition Partners  L.P., IMC Global Inc. and BNY Midwest Trust Company relating to the issuance  of 10.875% Senior Notes due 2013.

  X

10.iii.

Amendment  dated May 20, 2004 to Key Manager Severance Agreement, as amended, between  IMC Global Inc. and R. M. Qualls

X

31.1

Certification  Required by Rule 13a-14(a)

X

31.2

Certification  Required by Rule 13a-14(a)

X

32.1

Certification  Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the  United States Code

X

32.2

Certification  Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the  United States Code

X

99

Amendment,  dated as of June 23, 2004, to the Agreement between IMC Global Inc., Alpine  Capital, L.P., Keystone, Inc. and The Anne T. and Robert M. Bass Foundation  governing the granting of proxies to IMC Global Inc.

X

*SEC File No. 1-9759

E-1* |
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