SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 15, 2004
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(Date of Report - Date of earliest event reported)
KERR-McGEE CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-16619 73-1612389
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
Kerr-McGee Center
Oklahoma City, Oklahoma 73125
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(Address of principal executive offices) (Zip Code)
(405) 270-1313
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(Registrant's telephone number)
Item 2.05 Costs Associated with Exit or Disposal of Activities
On September 14, 2004, Kerr-McGee Corporation approved plans to shut
down its titanium dioxide pigment sulfate production at its
Savannah, Georgia facility by the end of September 2004. The company
also plans to end production at the Savannah gypsum plant that uses
by-product from the sulfate process to manufacture gypsum. The
Savannah facility's workforce of 410 will be reduced by
approximately 100 positions. In addition, the facility will decrease
its daily contractor workforce by approximately 40 positions.
Demand and prices for sulfate anatase pigments, particularly in the
paper market, have declined in North America consistently during the
past several years. The decreasing volumes, along with unanticipated
environmental and infrastructure issues discovered when Kerr-McGee
acquired the facility in 2000, created unacceptable financial
returns for the Savannah sulfate facility and contributed to the
decision.
Kerr-McGee expects to recognize the following charges related to its
Savannah pigment facilities, which include charges related to the
shut down of the sulfate facility as well as charges unrelated to
the shut down:
Third Total
Quarter Expected
Description 2004 Charges
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Charges associated with shut down: $ in millions
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Write-down of property, plant and
equipment and intangible assets $ 67 - $ 70 $ 67 - $ 70
Asset retirement obligation 13 - 14 15 - 16
Inventory adjustment for estimated reduction
in net realizable value 11 - 12 11 - 12
Termination benefits 7 - 8 7 - 8
Contract termination costs 7 - 8 7 - 8
Demolition costs - 0 - 10
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Total costs associated with shut down 105 - 112 107 - 124
Charges not related to shut down:
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Write-down of property, plant and equipment 10 - 18 10 - 18
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Total charges $115 - $130 $117 - $142
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After-tax charge $ 75 - $ 85 $ 76 - $ 92
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Future cash expenditures related to the shut down are expected to be
between $6 million and $13 million net of taxes.
Item 7.01 Regulation FD
A copy of the September 15, 2004 press release announcing the
shutdown is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated September 15, 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KERR-MCGEE CORPORATION
By: (John M. Rauh)
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John M. Rauh
Vice President and Controller
Dated: September 15, 2004