ST. LOUIS, Oct. 6 /PRNewswire-FirstCall/ --
Financial Summary*
($ in millions, except per share)
Fourth Fourth Fiscal Fiscal
Quarter Quarter % Year Year %
2004* 2003* Change 2004* 2003* Change
Net Sales $1,258 $1,303 (3)% $5,457 $4,910 11%
Net Income (Loss) $(42) $(188) NM $267 $68 293%
Diluted Earnings
(Loss) per Share $(0.16) $(0.72) NM $0.99 $0.26 281%
NM = Not Meaningful
* Effective Sept. 1, 2003, Monsanto's fiscal year begins Sept. 1 and ends
Aug. 31. In this release, all references to the fourth quarter and
fiscal year refer to the three-month and 12-month periods ended
Aug. 31, respectively.
-- Quarterly sales were slightly down as higher revenues for Monsanto's
cotton traits in the United States and India were offset by decreased
revenue from sales of Roundup herbicide in the United States. For
fiscal year 2004, sales increased 11 percent to $5.5 billion as a
result of higher U.S. trait revenues, increased corn seed sales in the
United States, Europe, and Brazil, and higher revenues for Roundup and
non-branded glyphosate herbicides in all world areas outside of the
United States.
-- Reported net loss for the fourth quarter was $(42) million, which
includes after-tax restructuring charges of $44 million (charges of
$41 million related to continuing operations and $3 million related to
discontinued operations) and a $5 million tax benefit associated with
a goodwill write-off of the global wheat business. For fiscal year
2004, reported net income was $267 million, including a $64 million
after-tax goodwill adjustment and after-tax restructuring charges of
$100 million (charges of $98 million related to continuing operations
and $2 million related to discontinued operations). (For a
reconciliation of restructuring, see note 3.)
-- Monsanto increased growth projections for fiscal years 2005 and 2006,
as the company now expects a compounded annual growth rate in fiscal
year 2005 of 10 to 18 percent, from the fiscal-year 2004 diluted
earnings per share (EPS) base of $1.61 per share on an ongoing basis.
From the higher fiscal year 2005 base, Monsanto expects a growth rate
of 10 percent for fiscal year 2006. (For a reconciliation of ongoing
EPS, see note 1).
Comment from Monsanto Chairman, President and Chief Executive Officer Hugh
Grant:
"At the beginning of this fiscal year, we set aggressive -- but achievable
-- targets to advance our business. We've not only delivered on those
targets, but we've raised and beat them. The success we've had this year --
especially in our seeds and traits business -- sets a foundation that allows
us to be more aggressive in our growth-rate expectations, and to set those
expectations from a higher starting point."
Fourth-Quarter and Fiscal-Year 2004 Performance Summary:
Net sales were slightly down at $1.3 billion in the fourth quarter of
fiscal year 2004. Sales in the overall Seeds and Genomics segment increased
by 39 percent for the quarter driven by higher cotton trait revenues in the
United States and India, and continued strong sales of branded corn seed in
the United States and Europe. However, higher revenues from seeds and traits
were offset by lower sales of Roundup in the United States. For the quarter,
sales of Roundup and other glyphosate-based herbicides within the Agricultural
Productivity segment decreased 17 percent, driven by the decreased revenue in
the United States.
For the full fiscal year 2004, net sales were $5.5 billion, an 11 percent
improvement compared with net sales for fiscal year 2003. The sales increase
for the fiscal year was primarily driven by solid performance across the
business, including increased sales of Monsanto's traits in the U.S. market,
higher revenues from corn seed sales in the United States, Europe and Brazil,
and higher sales of Roundup and non-branded glyphosate-based herbicides in all
world areas outside the United States.
Net income (loss) and earnings (loss) per share: Monsanto recorded a
fourth-quarter fiscal year 2004 net loss of $(42) million, or $(0.16) per
share, compared with a net loss of $(188) million, or $(0.72) per share for
the fourth quarter of fiscal year 2003.
Items affecting comparability for the fourth-quarter fiscal year 2004,
included:
-- After-tax charges of $(0.15) per share in continuing operations
relating to Monsanto's 2004 restructuring plan, net of reversals.
-- An after-tax loss of $(0.02) per share for discontinued operations and
related restructuring.
-- A $0.02 per share tax benefit associated with the goodwill write-off
of the global wheat business
Items affecting comparability for the fourth-quarter fiscal year 2003,
included:
-- A $(0.96) per share after-tax charge associated with Monsanto's
contribution to the settlement of Solutia's PCB litigation in
Anniston, Alabama.
-- A $0.02 per share after-tax benefit from the reversal of restructuring
charges.
-- An after-tax loss on discontinued operations of $(0.02) per share.
For fiscal year 2004, Monsanto reported net income of $267 million, or
$0.99 per share, compared with net income of $68 million, or $0.26 per share,
in fiscal year 2003.
Items affecting comparability for fiscal year 2004 included:
-- After-tax charges of $(0.36) per share in continuing operations
relating to Monsanto's 2004 restructuring plan, net of reversals.
-- An after-tax loss on discontinued operations of $(0.02) per share for
discontinued operations and related restructuring.
-- Write-off of goodwill, net of tax, associated with the global wheat
business of $(0.24) per share.
Items affecting comparability for fiscal year 2003 included:
-- A $(0.96) per share after-tax charge associated with Monsanto's
contribution to the settlement of Solutia's PCB litigation in
Anniston, Alabama.
-- After-tax charges of $(0.10) per share associated with the 2000 and
2002 restructuring plans, net of reversals.
-- A $(0.05) per share after-tax charge associated with an accounting
change related to asset retirement obligations.
-- An after-tax loss on discontinued operations of $(0.05) per share.
Operating costs: Research-and-development (R&D) expenses increased
14 percent to $141 million for the fourth quarter of fiscal year 2004 and
increased 6 percent to $511 million for fiscal year 2004 when compared with
the same periods in 2003. As a percent of sales, R&D expenses for fourth
quarter of fiscal year 2004 increased to 11 percent, up from 10 percent in the
comparable 2003 period. For fiscal year 2004, R&D expenses as a percent of
sales have decreased to 9 percent of sales compared to 10 percent for fiscal
year 2003.
Selling, general and administrative (SG&A) expenses, including bad-debt
expense, increased 8 percent to $336 million for the fourth quarter of fiscal
year 2004, while increasing by 13 percent to $1,254 million for fiscal year
2004. The significant factors affecting the SG&A increase for the full fiscal
year were higher accruals for employee incentives, expenses to implement the
Brazilian value-capture program, and expenses associated with U.S.
marketing-related spending.
For the fourth quarter of fiscal year 2004, bad-debt expense increased
$1 million, or 3 percent, compared with bad-debt expense in the fourth quarter
of fiscal year 2003. For the full fiscal year 2004, bad-debt expense
increased $37 million, or 51 percent, as the company continued to change its
business model and monitor unfavorable economic and business conditions in
Argentina. The increase in bad-debt expense primarily reflects an increase in
the allowance for estimated uncollectible receivables in Argentina.
For fiscal year 2004, Monsanto set a target for SG&A as a percent of sales
of 22 percent. SG&A as a percent of sales for the completed fiscal year is
23 percent, including the higher-than-anticipated bad-debt expense.
Other expenses: In the fourth quarter of fiscal year 2004, Monsanto
reported other expense of $38 million compared with $431 million for the same
period in 2003. The fourth quarter of fiscal year 2003 included $396 million
in expenses associated with the settlement of the Solutia PCB litigation. For
fiscal year 2004, reported other expense was $152 million, compared with the
fiscal year 2003 total of $471 million, which also included $396 million
associated with the Solutia PCB settlement. Other expense for fiscal year
2004 includes $58 million associated with Solutia-related liabilities and
expenses. Monsanto intends to file claims to recover some of these expenses
through Solutia's bankruptcy proceedings.
Cash flow: For fiscal year 2004, net cash provided by operations was
$1,261 million, compared with $1,128 million for fiscal year 2003. Net cash
required by investing activities was $262 million for fiscal year 2004. For
fiscal year 2003, net cash required by investing activities was $482 million.
As a result, free cash flow increased from $646 million in fiscal year 2003 to
$999 million in fiscal year 2004. The increase in free cash flow was driven
by working capital improvements for the U.S. Roundup business and better
collections globally, somewhat offset by payments related to the Solutia PCB
litigation settlement and higher voluntary pension contributions in fiscal
year 2004. (For reconciliation of free cash flow, see note 1.)
Seeds and Genomics Segment Detail
Product sales
($ in millions) Fourth Fourth Fiscal Fiscal
Quarter Quarter % Year Year %
2004 2003 Change 2004 2003 Change
Corn seed
and traits $168 $160 5% $1,124 $942 19%
Soybean seed
and traits $44 $10 340% $680 $571 19%
All other crops
seeds and traits $142 $85 67% $473 $366 29%
TOTAL Seeds
and Genomics $354 $255 39% $2,277 $1,879 21%
The Seeds and Genomics segment consists of the global seeds and related
traits business, and genetic technology platforms.
Fourth-quarter net sales of $354 million for the Seeds and Genomics
segment were 39 percent higher than sales recorded in the same period in 2003.
Within the segment, sales of all other crops seeds and traits increased
67 percent to $142 million, driven by higher revenue for Monsanto's cotton
traits in the United States and India.
The higher penetration of Monsanto's germplasm and traits, and increased
revenues for corn, soybean and other crop traits drove the improvements for
fiscal year 2004, with overall sales increasing 21 percent in the segment to
$2.3 billion for fiscal year 2004 from $1.9 billion for fiscal year 2003.
EBIT (earnings (loss) from continuing operations before cumulative effect
of accounting change, interest, and income taxes) for the Seeds and Genomics
segment in the fourth quarter was $(131) million, compared to $(137) million
in the same period in 2003. For the full fiscal year, EBIT for the Seeds and
Genomics segment was $210 million, an increase of $4 million compared with the
fiscal year 2003 total Seeds and Genomics segment EBIT of $206 million. The
major factor for the improvement in both periods was the higher overall sales
of seeds and traits, somewhat offset by higher operating expenses. (For a
reconciliation of EBIT, see note 1.)
Agricultural Productivity Segment Detail
Product sales
($ in millions) Fourth Fourth Fiscal Fiscal
Quarter Quarter % Year Year %
2004 2003 Change 2004 2003 Change
Roundup and other
glyphosate-based
agricultural
herbicides $590 $708 (17)% $1,970 $1,804 9%
All other
agricultural
productivity
products $314 $340 (8)% $1,210 $1,227 (1)%
TOTAL
Agricultural
Productivity $904 $1,048 (14)% $3,180 $3,031 5%
The Agricultural Productivity segment consists primarily of crop
protection products, the lawn-and-garden herbicide business, and the company's
animal agricultural business.
Net sales in the Agricultural Productivity segment for the quarter
decreased 14 percent to $904 million in fiscal year 2004, reflecting decreased
revenues from sales of Roundup herbicide in the United States.
For fiscal year 2004, Agricultural Productivity sales increased 5 percent
to $3.2 billion, primarily driven by increased sales of Roundup and other
glyphosate-based herbicides in markets outside of the United States.
EBIT (earnings (loss) from continuing operations before cumulative effect
of accounting change, interest, and income taxes) for the segment was
$82 million for the fourth quarter of fiscal year 2004, compared with
$(137) million in the same period last year. For fiscal year 2004, EBIT for
this segment was $259 million. For fiscal year 2003, EBIT for the
Agricultural Productivity segment included the costs associated with the
settlement of the Solutia PCB litigation, which reduced EBIT for this segment
to breakeven. Excluding the Solutia PCB litigation from fiscal year 2003,
EBIT for fiscal year 2004 declined as a result of decreased sales of Roundup
in the United States, restructuring charges, and assumed liabilities and
expenses associated with Solutia. (For a reconciliation of EBIT, see note 1.)
Other Items of Note:
In early October, Monsanto announced it won a key patent battle regarding
biotech-gene technology for the transformation of dicot plants, such as
cotton. The decision, issued by U.S. Patent and Trademark Office, recounts
the basis for finding that Monsanto was the first company to invent
agrobacterium transformation in dicot plants.
In mid-September, Monsanto announced separate technology collaborations
with Divergence, Inc. and Devgen N.V. The company intends to work with
Divergence in a collaborative relationship to develop nematode-resistant
soybeans. Monsanto's research-and-development agreement with Devgen is
intended to develop varieties of crop plants with improved resistance against
insects.
On Sept. 9, Monsanto announced it acquired the North American canola seed
assets of Advanta Seeds from Advanta B.V., a company previously purchased by
Fox Paine Capital Fund II International, L.P., including the Advanta Seeds
brand in Canada and the Interstate Seed brand in the United States.
On Aug. 18, Monsanto announced that it has received written notification
that the U.S. Department of Justice, Antitrust Division, has concluded its
inquiry regarding possible anticompetitive conduct in the glyphosate-based
herbicide industry. The inquiry was closed with no actions required by
Monsanto.
On July 27, Monsanto Company expanded a breach-of-contract lawsuit against
Syngenta to seek damages and termination of the Roundup Ready soybean license
that Monsanto originally granted to Ciba-Geigy Corp., one of Syngenta's
corporate predecessors. On the same day, DEKALB, a Monsanto subsidiary,
initiated a new patent infringement lawsuit in Illinois federal court to
enjoin Syngenta Seeds, Inc., from developing, using and selling
herbicide-tolerant corn seed such as Monsanto's GA21 Roundup Ready corn
product.
On July 19, the European Commission approved the import, processing and
use in animal feed of Monsanto's NK603 Roundup Ready Corn grain in the
European Union (EU), conditional upon its pending approval under the EU Novel
Foods Regulation. The Council of Ag Ministers failed to reach a qualified
majority on the use of NK603 corn and its processed products as foods and food
ingredients under the Novel Foods Regulation. This decision will continue in
the regulatory process. The approval does not include the approval of NK603
Roundup Ready Corn for cultivation in the EU, which is the subject of a
separate submission.
On July 13, the Argentina government approved Monsanto's Roundup Ready
corn event, NK603, for planting. Roundup Ready corn will be available to
growers this fall in limited quantities of Monsanto's branded corn seed for
the 2004 planting season in Argentina and should be available more widely in
the 2005 and 2006 growing season.
On Dec. 17, 2003, Solutia Inc. and 14 of its U.S. subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Southern District of New York.
Subsequently, Solutia notified Pharmacia Corporation and Monsanto that it was
repudiating its obligation to defend certain litigation that Solutia had been
managing and to perform certain environmental remediation obligations under
its 1997 spinoff agreement. Monsanto believes Solutia remains obligated to
perform on its liabilities unless and until discharged from such obligations
by the Bankruptcy Court. Monsanto has reported $58 million in other expenses
for fiscal year 2004 associated with Solutia-related liabilities and expenses.
Monsanto intends to file claims to recover some of the expenses through
Solutia's bankruptcy proceedings.
Other supplemental data to this news release, including slides that
accompany the company's financial results conference call and estimated
acreage planted with Monsanto's biotech traits from 1996 to 2004, can also be
found in the Investor Information section on the company's web site at:
http://www.monsanto.com .
Outlook Comment from Monsanto Chairman, President and Chief Executive
Officer Hugh Grant:
"The success of our seeds and traits business to this point has set an
early standard in the industry. From that leadership platform, we believe our
next-generation of products advancing through the pipeline is going to raise
the bar again. And, as our seeds and traits business grows, we believe the
prospects for growth across our company are strong."
2005 and 2006 Guidance:
Monsanto management announced today it had raised its growth projections
for fiscal years 2005 and 2006. Monsanto now expects to achieve a compounded
annual growth rate in fiscal year 2005 of 10 to 18 percent, from the
fiscal-year 2004 EPS base of $1.61 per share on an ongoing basis. From the
higher fiscal year 2005 base, Monsanto expects a growth rate of 10 percent for
fiscal year 2006. (For a reconciliation of ongoing EPS, see note 1).
The company's EPS guidance for fiscal year 2005 is in the range of
$1.77 to $1.90 on a reported business basis.
Throughout fiscal year 2004, Monsanto management expected a 10 percent
compounded annual growth rate for fiscal years 2005 and 2006, which was based
on an anticipated 2004 fiscal year-end base of EPS of $1.55 to $1.60 on an
ongoing business basis.
Additionally, Monsanto established a target for SG&A as a percent of sales
for fiscal year 2005 of 21 percent. The company's fiscal-year 2004 SG&A
target was 22 percent of sales.
Free cash flow generation for fiscal year 2005 is expected to be in the
range of $600 million. The company expects net cash provided by operations to
be approximately $1 billion, and net cash required by investing activities to
be approximately $400 million. (For a reconciliation of free cash flow, see
note 1).
Monsanto Company (NYSE: MON) is a leading global provider of technology-
based solutions and agricultural products that improve farm productivity and
food quality.
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are "forward-looking
statements," such forward-looking statements may include as statements
concerning the company's anticipated financial results, current and future
product performance, regulatory approvals, currency impact, business and
financial plans and other non-historical facts. These statements are based on
current expectations and currently available information. However, since
these statements are based on factors that involve risks and uncertainties,
the company's actual performance and results may differ materially from those
described or implied by such forward-looking statements. Factors that could
cause or contribute to such differences include, among others: the company's
exposure to various contingencies, including those related to Solutia Inc.,
litigation, intellectual property, regulatory compliance (including seed
quality), environmental contamination and antitrust; fluctuations in exchange
rates and other developments related to foreign currencies and economies;
increased generic and branded competition for the company's Roundup herbicide;
the accuracy of the company's estimates and projections, for example, those
with respect to product returns and grower use of the company's products and
related distribution inventory levels; the effect of weather conditions and
commodity markets on the agriculture business; the success of the company's
research and development activities and the speed with which regulatory
authorizations and product launches may be achieved; domestic and foreign
social, legal and political developments, especially those relating to
agricultural products developed through biotechnology; the company's ability
to continue to manage its costs; the company's ability to successfully market
new and existing products in new and existing domestic and international
markets; the company's ability to obtain payment for the products that it
sells; the company's ability to achieve and maintain protection for its
intellectual property; the effects of the company's accounting policies and
changes in generally accepted accounting principles; the company's ability to
fund its short-term financing needs; general economic and business conditions;
political and economic conditions due to threat of future terrorist activity
and related military action; and other risks and factors detailed in the
company's filings with the U.S. Securities and Exchange Commission. Undue
reliance should not be placed on these forward-looking statements, which are
current only as of the date of this release. The company disclaims any
current intention to revise or update any forward-looking statements or any of
the factors that may affect actual results, whether as a result of new
information, future events or otherwise.
References to "Roundup" herbicides mean Roundup branded and other branded
glyphosate-based herbicides, excluding all lawn-and-garden herbicides;
references to "Roundup and other glyphosate-based herbicides" mean both
branded and nonbranded glyphosate-based herbicides, excluding all
lawn-and-garden herbicide products.
Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
Condensed Statement of
Consolidated Operations
Three Three 12 12
Months Months Months Months
Ended Ended Ended Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2004 2003 2004 2003
Net Sales $1,258 $1,303 $5,457 $4,910
Cost of Goods Sold 746 716 2,890 2,608
Gross Profit 512 587 2,567 2,302
Operating Expenses:
Selling, General
and Administrative
Expenses 302 278 1,145 1,035
Bad-Debt Expense 34 33 109 72
Research and
Development Expenses 141 124 511 484
Adjustment of Goodwill - - 69 -
Restructuring
Charges - Net 46 (5) 112 34
Total Operating Expenses 523 430 1,946 1,625
Income (Loss)
From Operations (11) 157 621 677
Interest Expense - Net 14 17 67 69
PCB Litigation
Settlement Expense - Net - 396 - 396
Other Expense - Net 38 35 152 75
Income (Loss) From
Continuing Operations
Before Income Taxes (63) (291) 402 137
Income Tax Provision
(Benefit) (26) (109) 131 42
Income (Loss) From
Continuing Operations (37) (182) 271 95
Discontinued Operations:
Loss From Operations
of Discontinued
Businesses (4) (8) (13) (23)
Income Tax
Provision (Benefit) 1 (2) (9) (8)
Loss On Discontinued
Operations (5) (6) (4) (15)
Income (Loss) Before
Cumulative Effect of
Accounting Change (42) (188) 267 80
Cumulative Effect of a
Change in Accounting
Principle- Net of
Tax Benefit of $7 (2) - - - (12)
Net Income (Loss) $(42) $(188) $267 $68
EBIT (1) $(49) $(274) $469 $206
Basic Earnings
Per Share:
Income (Loss) From
Continuing Operations $(0.14) $(0.70) $1.03 $0.36
Loss On Discontinued
Operations (0.02) (0.02) (0.02) (0.05)
Cumulative Effect of a
Change in Accounting
Principle - - - (0.05)
Net Income (Loss) $(0.16) $(0.72) $1.01 $0.26
Diluted Earnings
Per Share:
Income (Loss) From
Continuing Operations $(0.14) $(0.70) $1.01 $0.36
Loss On Discontinued
Operations (0.02) (0.02) (0.02) (0.05)
Cumulative Effect of a
Change in Accounting
Principle - - - (0.05)
Net Income (Loss) $(0.16) $(0.72) $0.99 $0.26
Weighted Average
Shares Outstanding:
Basic Shares 265.6 262.1 264.4 261.6
Diluted Shares 265.6 262.1 269.2 261.8
Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
Condensed Statement of
Consolidated Financial Position
As of As of
Aug. 31, Aug. 31,
2004 2003
Assets
Current Assets:
Cash and Cash Equivalents $1,037 $281
Short-Term Investments 300 230
Trade Receivables - Net of Allowances
of $250 and $254, respectively 1,684 2,296
Inventories 1,154 1,207
Other Current Assets 756 925
Total Current Assets 4,931 4,939
Property, Plant and Equipment - Net 2,087 2,280
Goodwill - Net 720 768
Other Intangible Assets - Net 454 571
Other Assets 972 978
Total Assets $9,164 $9,536
Liabilities and Shareowners' Equity
Current Liabilities:
Short-Term Debt $433 $269
Accounts Payable 326 290
PCB Litigation Settlement Liability - 400
Accrued Marketing Programs 419 396
Other Accrued Liabilities 716 664
Total Current Liabilities 1,894 2,019
Long-Term Debt 1,075 1,258
Postretirement and Other Liabilities 937 1,103
Shareowners' Equity 5,258 5,156
Total Liabilities and Shareowners' Equity $9,164 $9,536
Debt to Capital Ratio: 22% 23%
Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
Statement of Consolidated Cash Flows
12 Months 12 Months
Ended Ended
Aug. 31, Aug. 31,
2004 2003
Operating Activities:
Net Income $267 $68
Adjustments to reconcile cash provided
(required) by operations:
Items that did not require (provide) cash:
Pretax cumulative effect of a change
in accounting principle - 19
Depreciation and amortization expense 452 453
Adjustment of goodwill 69 -
Impairment of assets included in
discontinued operations 2 -
Bad-debt expense 109 72
Noncash restructuring 51 16
Deferred income taxes 88 (194)
Gain on disposal of investments
and property - net (10) (7)
Equity affiliate expense - net 36 41
Write-off of retired assets 8 22
Other items that did not provide cash (6) (36)
Changes in assets and liabilities that
provided (required) cash:
Trade receivables 486 286
Inventories 70 98
Accounts payable and accrued liabilities 110 188
PCB litigation settlement (accrued
liability net of insurance receivable) (328) 245
Pension contributions (215) (131)
Related-party transactions - 10
Tax benefit on employee stock options 39 2
Net investment hedge loss (17) (4)
Other Items 50 (20)
Net Cash Provided by Operations 1,261 1,128
Cash Flows Provided (Required)
by Investing Activities:
Purchases of short-term investments (550) (480)
Maturities of short-term investments 480 250
Capital expenditures (210) (206)
Technology and other investments (58) (61)
Investment and property disposal proceeds 76 14
Loans with related party - 1
Net Cash Required by Investing Activities (262) (482)
Cash Flows Provided (Required)
by Financing Activities:
Net change in short-term financing 27 (540)
Long-term debt proceeds 117 267
Long-term debt reductions (168) (110)
Debt issuance costs - (2)
Payments on other financing (12) (13)
Treasury stock purchases (266) -
Stock option exercises 200 24
Dividend payments (141) (128)
Net Cash Required by Financing Activities (243) (502)
Net Increase in Cash and Cash Equivalents 756 144
Cash and Cash Equivalents at Beginning of Period 281 137
Cash and Cash Equivalents at End of Period $1,037 $281
Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
1. EBIT, Ongoing EPS, and Free Cash Flow: The presentations of earnings
(loss) from continuing operations before cumulative effect of
accounting change, interest and income taxes (EBIT), ongoing EPS and
free cash flow are not intended to replace net income (loss), cash
flows, financial position or comprehensive income (loss), and they
are not measures of financial performance as determined in accordance
with generally accepted accounting principles in the United States.
The following tables reconcile historical EBIT, ongoing EPS and free
cash flow to the respective most directly comparable financial
measure calculated in accordance with GAAP.
Reconciliation of EBIT to Net Income: The following table reconciles
EBIT to the most directly comparable financial measure, which is net
income.
Total Monsanto Company
and Subsidiaries:
Three Three
Months Months 12 Months 12 Months
Ended Ended Ended Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2004 2003 2004 2003
EBIT - Seeds and
Genomics Segment $(131) $(137) $210 $206
EBIT - Agricultural
Productivity Segment 82 (137) 259 -
EBIT - Total Monsanto
Company and Subsidiaries (49) (274) 469 206
Interest Expense - Net 14 17 67 69
Income Tax
Provision (Benefit) (26) (109) 131 42
Income (Loss) From
Continuing Operations (37) (182) 271 95
Discontinued Operations:
Loss From Operations
of Discontinued
Businesses (4) (8) (13) (23)
Income Tax Provision
(Benefit) 1 (2) (9) (8)
Loss On Discontinued
Operations (5) (6) (4) (15)
Income (Loss) Before
Cumulative Effect of
Accounting Change (42) (188) 267 80
Cumulative Effect of
a Change in Accounting
Principle - Net of
Tax Benefit of $7 - - - (12)
Net Income (Loss) $(42) $(188) $267 $68
Reconciliation of EPS to Ongoing EPS: Ongoing EPS is calculated
excluding certain after-tax items which Monsanto does not consider
part of ongoing operations.
Total Monsanto Company and Subsidiaries:
12 Months 12 Months
Ended Ended
Aug. 31, 2004 Aug. 31, 2003
Diluted Earnings per Share $0.99 $0.26
Restructuring Charges - Net 0.36 0.10
Loss On Discontinued Operations 0.02 0.05
Adjustment of Goodwill 0.24 -
PCB Litigation Settlement Expense - Net - 0.96
Cumulative Effect of a Change
in Accounting Principle - 0.05
Diluted Earnings per Share from Ongoing Business $1.61 $1.42
Reconciliation of Free Cash Flow: Free cash flow represents the total
of cash flows from operations and investing activities, as reflected
in Monsanto's Statement of Consolidated Cash Flows presented in this
release. With respect to the projected free cash flow guidance
provided under the caption "2005 and 2006 Guidance," Monsanto does
not include any estimates of projections of Net Cash Provided
(Required) by Financing Activities because in order to prepare any
such estimate or projection, Monsanto would need to rely on market
factors and conditions that are outside of its control.
Total Monsanto Company
and Subsidiaries:
Fiscal Year 12 Months 12 Months
2005 Ended Ended
Target Aug. 31, 2004 Aug. 31, 2003
Net Cash Provided by Operations $1,000 $1,261 $1,128
Net Cash Required by
Investing Activities (400) (262) (482)
Free Cash Flow $600 $999 $646
Net Cash Required by
Financing Activities N/A (243) (502)
Net Increase in Cash
and Cash Equivalents N/A $756 $144
2. Adjustment for New Accounting Standard No. 143: On Jan. 1, 2003,
Monsanto adopted Statement of Financial Accounting Standards No. 143,
Accounting for Asset Retirement Obligations (SFAS 143). SFAS 143
addresses financial accounting for and reporting of costs and
obligations associated with the retirement of tangible long-lived
assets. Upon adopting this standard, Monsanto recorded a pretax
cumulative effect of accounting change of $19 million ($12 million
aftertax, or $0.05 per share) effective Jan. 1, 2003. In addition to
this noncash charge, property, plant and equipment was increased
approximately $10 million, and asset retirement obligations were
increased approximately $30 million.
3. Restructuring: In October 2003, Monsanto announced plans to continue
to reduce the costs associated with its agricultural chemistry
business as that segment matures globally. The company has further
concentrated its resources on its core seeds and traits businesses.
These plans included: (1) reducing costs associated with the
company's Roundup herbicide business, (2) exiting the European
breeding and seed business for wheat and barley; and (3)
discontinuing the plant-made pharmaceuticals program. Total charges
related to these actions were $105 million aftertax in fiscal year
2004. Additionally, the plans included the impairment of goodwill in
the global wheat business of $69 million ($64 million aftertax).
In 2002, Monsanto's management approved a restructuring plan to
further consolidate or shut down facilities and to reduce work force.
For the 12 months ended Aug. 31, 2003, Monsanto recorded a net charge
of $26 million aftertax as part of the 2002 restructuring plan, after
restructuring reversals of $20 million.
Activities related to the restructuring plan items were recorded in
the Condensed Statement of Consolidated Operations in the following
categories:
Three Three
Months Months 12 Months 12 Months
Ended Ended Ended Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2004 2003 2004 2003
Cost of Goods Sold(1) $(16) $3 $(35) $(7)
Restructuring Reversals
(Charges) - Net(1) (46) 5 (112) (34)
Income (Loss) From
Continuing Operations
Before Income Taxes (62) 8 (147) (41)
Income Tax Benefit
(Provision) 21 (3) 49 15
Income (Loss) From
Continuing Operations (41) 5 (98) (26)
Loss From Operations
of Discontinued
Businesses (2) - (11) -
Income Tax Benefit
(Provision) (1) - 9 -
Loss On Discontinued
Operations (3) - (2) -
Net Income (Loss) $(44) $5 $(100) $(26)
(1) The restructuring charges for the three months ended Aug. 31, 2004,
and Aug. 31, 2003, included prior plan restructuring reversals of
$1 million (recorded in the Agricultural Productivity segment) and
$8 million ($6 million in Agricultural Productivity and $2 million in
Seeds and Genomics), respectively. Restructuring charges for the
12 months ended Aug. 31, 2004, and Aug. 31, 2003, were offset by
prior plan reversals of $7 million ($6 million in Agricultural
Productivity and $1 million in Seeds and Genomics) and $20 million
($15 million in Agricultural Productivity and $5 million in Seeds and
Genomics), respectively.
For detail of the restructuring charges related to the fiscal year
2004 restructuring plan, and for charges included in continuing
operations and those in discontinued operations, refer to the
following tables.
The following table displays the net pretax charges incurred by
segment for the three months ended Aug. 31, 2004:
Work Force Facility Asset
Segment Reductions Closures Impairments Total
Continuing Operations:
Seeds and Genomics $13 $- $2 $15
Agricultural
Productivity 29 5 14 48
Total Continuing
Operations (1) 42 5 16 63
Discontinued Operations:
Seeds and Genomics 3 1 (2) 2
Agricultural
Productivity - - - -
Total Discontinued
Operations 3 1 (2) 2
Total Segment:
Seeds and Genomics 16 1 - 17
Agricultural
Productivity 29 5 14 48
Total Restructuring $45 $6 $14 $65
(1) Asset impairment charges of $15 million were recorded in cost of
goods sold.
The following table displays the net pretax charges incurred by
segment for the 12 months ended Aug. 31, 2004:
Work Force Facility Asset
Segment Reductions Closures Impairments Total
Continuing Operations:
Seeds and Genomics $27 $- $23 $50
Agricultural
Productivity 71 5 28 104
Total Continuing
Operations (1) 98 5 51 154
Discontinued Operations:
Seeds and Genomics 6 3 2 11
Agricultural
Productivity - - - -
Total Discontinued
Operations 6 3 2 11
Total Segment:
Seeds and Genomics 33 3 25 61
Agricultural
Productivity 71 5 28 104
Total Restructuring $104 $8 $ 53 $165
(1) Asset impairment charges of $9 million in Seeds and Genomics and
$25 million in Agricultural Productivity were recorded in cost of
goods sold.
4. Depreciation and Amortization: The following table displays the
depreciation and amortization expense by segment for the three months
and 12 months ended Aug. 31, 2004, and Aug. 31, 2003:
Depreciation and
Amortization Expense
Three Three
Months Months 12 Months 12 Months
Ended Ended Ended Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2004 2003 2004 2003
Seeds and Genomics $66 $56 $264 $217
Agricultural Productivity 46 60 188 236
Total Monsanto $112 $116 $452 $453
SOURCE Monsanto Company
 back to top
Related links:
http://www.monsanto.com
Company News On-Call:
http://www.prnewswire.com/comp/114341.html
CONTACT:
Media, Bryan Hurley, +1-314-694-8387, or
Investors, Scarlett Lee Foster, +1-314-694-8148, or Mark
Deadwyler, +1-314-694-7867, all of Monsanto Company
|
