St. Louis, Missouri
October 12, 2005
Results in PDF format (67K):
-
http://www.monsanto.com/monsanto/content/investor/financial/reports/2005/Q42005EarningsRelease.pdf
Monsanto biotechnology trait acreage: fiscal years 1996 to 2004
in PDF format
(updated October 12, 2005: year-end 2005 actuals):
-
http://www.monsanto.com/monsanto/content/investor/financial/reports/2005/Q42005Acreage.pdf
Financial Summary
($ in millions, except per share) |
Fourth Quarter 2005 |
Fourth
Quarter 2004 |
%
Change |
Fiscal Year
2005 |
Fiscal Year
2004 |
% Change |
Net Sales |
$1,274 |
$1,233 |
3% |
$6,294 |
$5,423 |
16% |
Net Income (Loss)
|
$(125) |
$(42) |
NM |
$255 |
$267 |
(4)% |
Diluted Earnings (Loss) per Share |
$(0.47) |
$(0.16) |
NM |
$0.94 |
$0.99 |
(5)% |
NM = Not
Meaningful
-
Quarterly sales increased slightly as a
result of growth across the seeds and traits businesses,
including revenues from the acquired Seminis
business which were nearly offset
by decreased revenues of Roundup agricultural herbicides and
selective herbicides in the United States. For fiscal year
2005, sales increased 16 percent to $6.3 billion.
-
-
Monsanto increased growth projections for
fiscal year 2006, as the company now expects earnings per
share (EPS) to be in the range of $2.35 to $2.50, which
would reflect a growth rate of up to 20 percent from fiscal
year 2005 EPS ongoing base of $2.08 per share. (For a
reconciliation of ongoing EPS, see note 1.)
Comment from Monsanto Chairman, President and
Chief Executive Officer Hugh Grant:
Fourth-Quarter
and Fiscal-Year 2005 Performance Summary:
Net sales
increased 3 percent to $1.3 billion in the fourth quarter of
fiscal year 2005. Sales in the Seeds and Genomics segment
increased by 53 percent for the quarter driven by growth across
the seeds and traits businesses, including the addition of
revenues from the Seminis vegetable and fruit seed business.
However, higher revenues for this segment were largely offset by
lower sales of Roundup agricultural herbicides and selective
herbicides in the United States.
For fiscal year 2005, net sales were $6.3
billion, a 16 percent improvement compared with net sales for
fiscal year 2004. The sales increase for the 2005 fiscal year
was driven primarily by higher U.S. trait revenue, increased
corn seed sales, higher cotton trait revenues in Australia and
India, and stronger sales of Roundup agricultural herbicides in
Europe and Brazil. Revenues from the company’s 2005 acquisitions
also contributed to growth in the fiscal year. These gains were
slightly offset by lower sales of Roundup agricultural
herbicides and selective herbicides in the United States.
Net income (loss) and earnings (loss) per share:
Monsanto recorded a fourth-quarter fiscal year 2005 net loss of
$(125) million, or $(0.47) per share, compared with net loss of
$(42) million, or $(0.16) per share, for the fourth quarter of
fiscal year 2004.
Items
affecting comparability for fourth quarter fiscal year 2005
included:
· $0.01
per share income on discontinued operations.
· A
$0.02 per share tax benefit associated with certain liabilities
in connection with the Solutia bankruptcy (“Solutia-related
charge”).
Items
affecting comparability for fourth quarter fiscal year 2004
included:
· After-tax
charges of $(0.15) per share in continuing operations related 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.
For fiscal year 2005, Monsanto reported net
income of $255 million, or $0.94 per share, compared with net
income of $267 million, or $0.99 per share, for fiscal year
2004.
Items affecting comparability for
fiscal year 2005 included:
· A
charge of $(0.91) per share associated with the in-process R&D
write-off related to the Seminis and Emergent acquisitions.
· $(0.64)
per share for the Solutia-related charge.
· A
$0.39 per share tax benefit as a result of the loss incurred on
the European wheat and barley business.
· Net
restructuring charges of $(0.02) per share.
· $0.04
per share income on discontinued operations.
Items
affecting comparability for fiscal year 2004 included:
· After-tax
charges of $(0.36) per share in continuing operations related to
Monsanto’s 2004 restructuring plan, net of reversals.
· Write-off
of goodwill, net of tax, associated with the global wheat
business of $(0.24) per share.
For fourth quarter and fiscal year 2005,
Monsanto’s results also included two offsetting items. The first
item was a $(0.05) per share charge for an asset impairment
related to an acrylonitrile (AN)
facility closure at Sterling Chemical. (A by-product of
AN is used to produce a raw material
for Roundup agricultural herbicides.) Although Monsanto has not
recently activated the contract for raw materials supplied from
Sterling, Monsanto did have assets at the Sterling facility that
now will no longer be in-service and were required to be
impaired.
This expense
was roughly offset by a tax benefit from the completion of an
audit related to a Monsanto subsidiary.
Operating costs:
Research-and-development (R&D) expenses increased by 34 percent
to $187 million for the fourth quarter of fiscal year 2005, an
increase of $47 million compared with last year’s fourth
quarter, primarily driven by R&D related to the Seminis and
Emergent businesses. For fiscal year 2005, R&D expenses were
$588 million compared with R&D expenses of $509 million for
fiscal year 2004. For both fiscal years, R&D expenses as a
percent of sales were 9 percent. Additionally, Monsanto recorded
in-process R&D expenses of $266 million in fiscal year 2005
related to all acquisitions.
Selling, general and administrative (SG&A)
expenses for fourth quarter 2005 were $423 million, or 41
percent higher, compared with SG&A expenses for fourth quarter
2004. The fourth quarter increase was driven by expenses
related to the businesses Monsanto acquired and higher accruals
for potential incentive payments to employees. For fiscal year
2005, SG&A expenses increased to $1.3 billion, or 18 percent
higher, compared with the prior-year SG&A expenses of $1.1
billion. The SG&A expense increase in the fiscal year 2005 was
driven by the businesses Monsanto acquired in fiscal year 2005
and higher accruals for potential incentive payments to
employees. For fiscal year 2005, SG&A as a percent of net sales
including bad-debt expense was 22 percent compared with 23
percent for this metric in fiscal year 2004.
Bad-debt expense for fourth quarter 2005 was
relatively flat at $31 million compared with bad-debt expense of
$30 million for fourth quarter 2004. Bad-debt expense for fiscal
year 2005 was $67 million, or $39 million lower, compared with
bad-debt expense of $106 million for fiscal year 2004. Fiscal
year 2004 included a higher level of bad-debt expense in
Argentina.
Other expenses:
In the fourth quarter of 2005, Monsanto reported other expense
of $33 million compared with other expense of $39 million for
the same period in 2004. For fiscal year 2005, Monsanto reported
other expenses of $406 million, or $254 million higher than
fiscal year 2004 results, driven by the $284 million
Solutia-related charge.
Cash flow:
For fiscal
year 2005, net cash provided by operations was $1.7 billion,
compared with $1.3 billion for fiscal year 2004. Net cash
required by investing activities was $1.7 billion for fiscal
year 2005, and $262 million for the same period in 2004. As a
result, free cash flow decreased from $999 million in fiscal
year 2004 to $70 million in fiscal year 2005. The decrease in
free cash flow was driven by cash used for acquisitions totaling
$1.5 billion. In fiscal year 2004, the company’s free cash flow
also reflected payments related to the Solutia PCB litigation
settlement. Net cash required by financing activities was $582
million for fiscal year 2005, and $243 million for the same
period in 2004. (For reconciliation of free cash flow, see note
1.)
Seeds and
Genomics Segment Detail
Net Sales
($ in millions) |
Fourth Quarter 2005 |
Fourth Quarter 2004 |
% Change |
Fiscal Year 2005 |
Fiscal Year 2004 |
% Change |
Corn seed and traits |
$190 |
$171 |
11% |
$1,494 |
$1,145 |
30% |
Soybean seed and traits |
$62 |
$44 |
41% |
$889 |
$699 |
27% |
Vegetable and fruit seed |
$139 |
– |
NM |
$226 |
– |
NM |
All other crops seeds and traits |
$154 |
$142 |
8% |
$643 |
$476 |
35% |
TOTAL Seeds and Genomics |
$545 |
$357 |
53% |
$3,252 |
$2,320 |
40% |
NM= Not Meaningful
The Seeds and Genomics segment consists of the
global seeds and related trait business, and genetic technology
platforms.
Fourth quarter 2005 net sales of $545 million for
the Seeds and Genomics segment improved 53 percent compared with
sales of $357 million recorded in the fourth quarter of fiscal
year 2004. The strong results for the quarter reflected strength
across the seeds and traits portfolio, including increased
revenues from corn and soybean trait sales in the United States
and cotton trait sales in India. Revenues from the company’s
2005 acquisitions also contributed to the growth.
For fiscal year 2005, sales for the Seeds and
Genomics segment increased by 40 percent to approximately $3.3
billion, compared with sales of $2.3 billion recorded in fiscal
year 2004. This increase was largely driven by growth across the
seeds and traits businesses, and
partially by the addition of revenue from acquisitions.
EBIT (net income (loss) before interest and
taxes) for the Seeds and Genomics segment was $(136) million for
the fourth quarter of fiscal year 2005, compared with $(135)
million for the same period last year. For fiscal year 2005,
EBIT for the segment was $374 million compared with $196 million
for the same period in fiscal year 2004. A major factor for
improvement in EBIT for fiscal year 2005 was increased revenues
from corn, cotton and soybean traits. Gains in global corn seed
market share also contributed to the EBIT improvement for the
year. (For a reconciliation of EBIT, see note 1.)
Agricultural
Productivity Segment Detail
Net Sales
($ in millions) |
Fourth Quarter 2005 |
Fourth Quarter 2004 |
%
Change |
Fiscal
Year 2005 |
Fiscal Year
2004 |
%
Change |
Roundup and other glyphosate-based herbicides |
$508 |
$602 |
(16)% |
$2,049 |
$2,005 |
2% |
All
other agricultural productivity products
|
$221 |
$274 |
(19)% |
$993 |
$1,098 |
(10)% |
TOTAL
Agricultural Productivity |
$729 |
$876 |
(17)% |
$3,042 |
$3,103 |
(2)% |
The Agricultural Productivity segment consists of
crop protection products, lawn-and-garden herbicide products,
and the company’s animal agricultural businesses.
Net sales in the Agricultural Productivity
segment for fourth quarter 2005 decreased 17 percent to $729
million, compared with $876 million for fourth quarter 2004.
Lower sales of Roundup and other glyphosate-based herbicides and
selective herbicides in the United States were the primary
reason for the decrease.
For fiscal year 2005, Agricultural Productivity
sales decreased 2 percent to $3 billion, primarily driven by
decreased sales of Roundup agricultural herbicides and selective
herbicides in the United States. Lower sales for the fiscal year
2005 were partially offset by increased sales of Roundup and
other glyphosate-based herbicides in Europe and Brazil.
EBIT for the Agricultural Productivity segment
was $(39) million for the fourth quarter of fiscal year 2005,
compared with $79 million for fourth quarter 2004 primarily
because of working capital reductions for Roundup agricultural
herbicides and selective herbicides in the United States. For
fiscal year 2005, EBIT for the segment was $(27) million,
compared with $249 million for fiscal year 2004. The major
factor for the decrease in EBIT for fiscal year 2005 was the
Solutia-related charge of $284 million, which was somewhat
offset by lower operating expenses. (For a reconciliation of
EBIT, see note 1.)
Outlook Comment from Monsanto Chairman, President
and Chief Executive Officer Hugh Grant:
"In the last two years, we have led the
transformation of the agricultural industry with our seeds and
traits strategy. We believe we’re on a path not just to maintain
that leadership, but accelerate it. That’s why today, we raised
our growth prospects for fiscal year 2006."
2006 Guidance:
Monsanto management announced today it had raised
its growth projections for fiscal year 2006. Monsanto now
expects earnings per share (EPS) to be in the range of $2.35 to
$2.50, which would reflect a growth rate of up to 20 percent
from fiscal year 2005 EPS ongoing base of $2.08 per share.
(For a reconciliation of ongoing EPS, see note
1.)
Monsanto outlined its target for SG&A expense as
a percent of sales for fiscal year 2006 of 22 percent. The
company also indicated R&D expenses as a percent of sales are
expected to be in the range of 10 percent.
Free cash flow generation for fiscal year 2006 is
expected to be in the range of $825 million to $900 million. The
company expects net cash provided by operations to be
approximately $1.175 billion to $1.25 billion, and net cash
required by investing activities to be approximately $350
million. (For a reconciliation of free cash flow, see note 1.)
Other Items of Note:
On October 12,
Monsanto Company submitted in a Form 8-K with the Securities and
Exchange Commission unaudited pro forma financial information
for the company which reflects the pro forma impact of its
acquisitions of the Seminis and Emergent seed businesses on
fiscal years 2005 and 2004.
On September
20, Monsanto Company announced that it had signed separate
licensing agreements with Arcadia Biosciences and Targeted
Growth, Inc. for the development and commercialization of
technologies developed by these companies in applicable Monsanto
crops.
On September
2, Monsanto’s American Seeds, Inc. subsidiary announced it made
five key strategic additions to its family of regional seed
companies. Collectively, the acquired companies represent
approximately 1 percent of the U.S. corn seed market.
On August 8,
Monsanto Company announced that it had completed the sale of
Monsanto Enviro-Chem Systems Inc. to
a new company formed by the Enviro-Chem
management team and an outside investor.
On July 21,
Monsanto Company announced that it had completed its $500
million share repurchase program a year ahead of the authorized
expiration period. Announced in July 2003, the repurchase
program authorized the purchase of $500 million of the company's
common stock over a three-year period.
Other
supplemental data to this news release, including slides that
accompany the company’s financial results conference call, can
be found on the investor information page of the company’s web
site at: www.monsanto.com.
Monsanto
Company is a leading global provider of technology-based solutions
and agricultural products that improve farm productivity and
food quality.
Monsanto Company and Subsidiaries
Selected Financial
Information
(Dollars in millions, except per share amounts)
Unaudited
Condensed Statement of
Consolidated Operations |
Three Months
Ended
Aug. 31, 2005 |
Three Months
Ended
Aug.
31, 2004 |
12 Months
Ended
Aug. 31, 2005 |
12 Months
Ended
Aug.
31, 2004 |
Net Sales |
$1,274 |
$1,233 |
$6,294 |
$5,423 |
Cost of Goods Sold
|
781 |
731 |
3,290 |
2,896 |
Gross Profit
|
493 |
502 |
3,004 |
2,527 |
Operating Expenses: |
|
|
|
|
Selling, General and
Administrative Expenses |
423 |
299 |
1,334 |
1,128 |
Bad-Debt Expense |
31 |
30 |
67 |
106 |
Research and Development
Expenses |
187 |
140 |
588 |
509 |
Acquired In-Process
Research and Development |
— |
— |
266 |
— |
Impairment of Goodwill |
— |
— |
— |
69 |
Restructuring Charges – Net |
(1) |
46 |
7 |
112 |
Total Operating Expenses |
640 |
515 |
2,262 |
1,924 |
Income (Loss) From Operations |
(147) |
(13) |
742 |
603 |
Interest Expense – Net |
23 |
12 |
75 |
57 |
Solutia-Related Expenses |
9 |
15 |
309 |
58 |
Other Expense – Net
|
24 |
24 |
97 |
94 |
Income (Loss) From Continuing
Operations Before Income Taxes |
(203) |
(64) |
261 |
394 |
Income Tax Provision (Benefit) |
(74) |
(27) |
104 |
128 |
Income (Loss) From Continuing
Operations |
(129) |
(37) |
157 |
266 |
Discontinued Operations: |
|
|
|
|
Income (Loss) From
Operations of Discontinued Businesses
|
5 |
(4) |
11 |
(6) |
Income Tax Provision
(Benefit) |
1 |
1 |
(87) |
(7) |
Income (Loss) on Discontinued
Operations |
4 |
(5) |
98 |
1 |
Net Income (Loss) |
$ (125) |
$ (42) |
$ 255 |
$ 267 |
EBIT (1) |
$ (175) |
$ (56) |
$ 347 |
$ 445 |
Basic Earnings per Share: |
|
|
|
|
Income (Loss) From Continuing
Operations |
$ (0.48) |
$ (0.14) |
$ 0.59 |
$ 1.01 |
Income (Loss) on Discontinued
Operations |
0.01 |
(0.02) |
0.37 |
— |
Net Income
(Loss)
|
$ (0.47) |
$ (0.16) |
$ 0.96 |
$ 1.01 |
|
|
|
|
|
Diluted Earnings per Share: |
|
|
|
|
Income (Loss) From Continuing
Operations |
$ (0.48) |
$ (0.14) |
$ 0.58 |
$ 0.99 |
Income (Loss) on Discontinued
Operations |
0.01 |
(0.02) |
0.36 |
— |
Net Income (Loss) |
$ (0.47) |
$ (0.16) |
$ 0.94 |
$ 0.99 |
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
Basic Shares |
268.3 |
265.6 |
266.8 |
264.4 |
Diluted Shares |
268.3 |
265.6 |
272.7 |
269.2 |
Monsanto Company and
Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
Condensed
Statement of Consolidated Financial Position |
As
of
Aug. 31, 2005 |
As
of
Aug. 31, 2004 |
Assets |
|
|
|
|
|
Current Assets: |
|
|
Cash and Cash Equivalents |
$ 525 |
$1,037 |
Short-Term Investments |
150 |
300 |
Trade Receivables – Net of
Allowances of $275 and $250, respectively |
1,473 |
1,663 |
Miscellaneous
Receivables |
370 |
316 |
Deferred Tax Assets |
374 |
397 |
Inventories |
1,664 |
1,154 |
Assets of Discontinued
Operations |
15 |
— |
Other Current Assets |
73 |
64 |
|
4,644 |
4,931 |
|
|
|
Property, Plant and Equipment –
Net |
2,378 |
2,087 |
Goodwill – Net |
1,248 |
720 |
Other Intangible Assets – Net |
1,153 |
454 |
Noncurrent
Deferred Tax Assets |
699 |
475 |
Other Assets |
476 |
497 |
Total Assets |
$10,598 |
$9,164 |
|
|
|
Liabilities and Shareowners’
Equity |
|
|
|
|
|
Current Liabilities: |
|
|
Short-Term Debt |
$ 254 |
$ 433 |
Accounts Payable |
369 |
326 |
Income Taxes Payable |
227 |
122 |
Accrued Compensation and Benefits |
273 |
158 |
Accrued Marketing Programs |
457 |
419 |
Liabilities of Discontinued
Operations |
11 |
— |
Miscellaneous Short-Term
Accruals |
559 |
436 |
Total Current Liabilities |
2,150 |
1,894 |
|
|
|
Long-Term Debt |
1,486 |
1,075 |
Postretirement Liabilities |
732 |
687 |
Solutia-Related Reserve |
184 |
— |
Other Liabilities |
433 |
250 |
Shareowners’ Equity
|
5,613 |
5,258 |
Total
Liabilities and Shareowners’ Equity
|
$10,598 |
$9,164 |
|
|
|
Debt to Capital Ratio: |
24% |
22% |
Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
Statement of Consolidated Cash
Flows |
12 Months Ended
Aug. 31, 2005 |
12 Months Ended
Aug. 31, 2004 |
Operating Activities: |
|
|
Net Income
|
$ 255 |
$ 267 |
Adjustments to reconcile cash
provided (required) by operations: |
|
|
Items that did not require
(provide) cash: |
|
|
Depreciation and
amortization expense |
488 |
452 |
Impairment of goodwill |
— |
69 |
Bad-debt expense |
67 |
109 |
Noncash restructuring |
7 |
51 |
Deferred income taxes |
(104) |
88 |
Gain on disposal of
investments and property – net |
(21) |
(10) |
Equity affiliate expense
– net |
31 |
36 |
Acquired in-process
research and development |
266 |
— |
Solutia-related charge
|
284 |
— |
Net loss on retirements
and impairments of property |
36 |
8 |
Other items that did not
require (provide) cash |
48 |
(4) |
Changes in assets and
liabilities that provided (required) cash, net
of acquisitions: |
|
|
Trade receivables |
394 |
486 |
Inventories |
6 |
70 |
Accounts payable and
accrued liabilities |
(26) |
110 |
PCB litigation settlement
insurance proceeds (payments) |
14 |
(328) |
Solutia-related reserve |
(49) |
— |
Pension contributions |
(60) |
(215) |
Tax benefit on employee
stock options |
94 |
37 |
Net investment hedge
proceeds (loss) |
(48) |
(17) |
Other Items |
55 |
52 |
Net Cash Provided by Operations |
1,737 |
1,261 |
|
|
|
Cash Flows Provided (Required) by
Investing Activities: |
|
|
Purchases of short-term
investments |
(150) |
(550) |
Maturities of short-term
investments |
300 |
480 |
Acquisitions of businesses, net
of cash acquired |
(1,541) |
— |
Technology and other investments |
(65) |
(58) |
Capital expenditures |
(281) |
(210) |
Other investment and property
disposal proceeds |
70 |
76 |
Net Cash Required by Investing
Activities |
(1,667) |
(262) |
|
|
|
Cash Flows Provided (Required) by
Financing Activities: |
|
|
Net change in financing with less
than 90-day maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of premium to exchange
notes payable |
|
— |
Payments on debt assumed in
acquisitions |
|
— |
Debt issuance costs |
|
— |
Payments on other financing |
(15) |
(12) |
Treasury stock purchases |
(234) |
(266) |
Stock option exercises |
173 |
200 |
Dividend payments |
(174) |
(141) |
Net Cash Required by Financing
Activities |
(582) |
(243) |
|
|
|
|
|
756 |
Cash and Cash Equivalents at
Beginning of Period |
1,037 |
281 |
Cash and Cash Equivalents at End
of Period |
$ 525 |
$ 1,037 |
Monsanto
Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
1. EBIT,
Ongoing EPS, and Free Cash Flow:
The presentations of 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
(GAAP) in the United States. The following tables reconcile
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:
EBIT is defined as net income (loss) before interest and
taxes. The following table reconciles EBIT to the most
directly comparable financial measure, which is net income.
Total Monsanto Company and
Subsidiaries: |
Three Months
Ended
Aug. 31, 2005 |
Three Months
Ended
Aug. 31, 2004 |
12 Months
Ended
Aug. 31, 2005 |
12 Months
Ended
Aug. 31, 2004 |
|
|
|
|
|
EBIT – Seeds and Genomics Segment
|
$ (136) |
$(135) |
$374 |
$196 |
EBIT –
Agricultural Productivity Segment
|
(39) |
79 |
(27) |
249 |
EBIT – Total Monsanto Company and
Subsidiaries |
(175) |
(56) |
347 |
445 |
Interest Expense – Net |
23 |
12 |
75 |
57 |
Income Tax Provision (Benefit)(1) |
(73) |
(26) |
17 |
121 |
Net Income (Loss) |
$(125) |
$ (42) |
$255 |
$267 |
(1)
Includes the
income tax provision (benefit) from continuing operations
and the income tax provision (benefit) from discontinued
operations.
Reconciliation of EPS to Ongoing EPS:
Ongoing EPS is calculated excluding certain after-tax items
which Monsanto does not consider part of ongoing
operations.
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 “2006 Guidance,”
Monsanto does not include any estimates or 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
2006
Target |
12 Months
Ended
Aug. 31, 2005 |
12 Months
Ended
Aug. 31, 2004 |
|
|
|
|
Net Cash Provided by Operations |
$1,175 - $1,250
|
$1,737 |
$1,261 |
Net Cash Provided (Required) by
Investing Activities |
(350) |
(1,667) |
(262) |
Free Cash Flow
|
$825 - $900 |
$70 |
$999 |
Net Cash
Provided (Required) by Financing Activities
|
N/A |
(582) |
(243) |
Net Increase
(Decrease) in Cash and Cash Equivalents
|
N/A |
(512) |
756 |
Cash and Cash
Equivalents at Beginning of Period
|
N/A |
1,037 |
281 |
Cash and Cash
Equivalents at End of Period
|
N/A |
$525 |
$1,037 |
2. Restructuring:
In October
2003, Monsanto announced plans to continue to reduce costs
primarily associated with its agricultural chemistry
business as that segment matures globally. 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. In
fiscal year 2004, total restructuring charges related to
these actions were $105 million
aftertax. Additionally, the approved plan included
the impairment of goodwill in the global wheat business of
$69 million pretax ($64 million
aftertax). In fiscal year 2005, the company incurred
charges of $6 million aftertax
in continuing operations to complete the restructuring
actions under this plan. No further actions are anticipated
related to this plan.
Activities
related to the restructuring plan items were recorded in the
Condensed Statement of Consolidated Operations in the
following categories:
Total Monsanto Company and
Subsidiaries: |
Three Months
Ended
Aug. 31, 2005 |
Three Months
Ended
Aug. 31, 2004 |
12 Months
Ended
Aug. 31, 2005 |
12 Months
Ended
Aug. 31, 2004 |
Cost of Goods Sold(1,2) |
$ 1 |
$ (16) |
$ 1 |
$ (35) |
Impairment of Goodwill |
— |
— |
— |
(69) |
Restructuring Charges
– Net(1,2) |
1 |
(46) |
(7) |
(112) |
Income (Loss) From Continuing
Operations Before Income Taxes |
2 |
(62) |
(6) |
(216) |
Income Tax Benefit
(Provision)(3)
|
(1) |
26 |
20 |
54 |
Income (Loss) From Continuing
Operations |
1 |
(36) |
14 |
(162) |
Loss From Operations of
Discontinued Businesses(4) |
— |
(2) |
— |
(11) |
Income Tax Benefit
(Provision) |
— |
(1) |
— |
9 |
Loss on Discontinued Operations |
— |
(3) |
— |
(2) |
Net Income (Loss) |
$ 1 |
$ (39) |
$ 14 |
$ (164) |
(1)
The
restructuring charges for the three months and 12 months
ended Aug. 31, 2005, included reversals related to the 2004
restructuring plan of $2 million (recorded in the
Agricultural Productivity segment). The restructuring
charges for the three months and 12 months ended Aug. 31,
2004, included prior plan restructuring reversals of $1
million (recorded in the Agricultural Productivity segment)
and $7 million ($6 million in Agricultural Productivity and
$1 million in Seeds and Genomics), respectively.
(2)
The $6 million
of restructuring charges for the 12 months ended Aug. 31,
2005, was split by segment as follows: $7 million in the
Seeds and Genomics segment offset by reversals of $1 million
in the Agricultural Productivity segment.
(3)
The $20 million
of income tax benefit for the 12 months ended Aug. 31, 2005,
is related to tax losses incurred on the sale of the
European wheat and barley business. See below for further
discussion.
(4)
The three months
and 12 months ended Aug. 31, 2004, contain restructuring
charges related to discontinued
businesses. These restructuring charges were recorded in
discontinued operations.
Total Monsanto Company and Subsidiaries:
|
Three Months
Ended
Aug. 31, 2005 |
Three Months
Ended
Aug. 31, 2004 |
12 Months
Ended
Aug. 31, 2005 |
12 Months
Ended
Aug. 31, 2004 |
|
|
|
|
|
Diluted Earnings (Loss) per Share |
$(0.47) |
$(0.16) |
$0.94 |
$0.99 |
In-Process R&D Write-Off Related to the Seminis and
Emergent Acquisitions |
— |
— |
0.91 |
— |
Solutia-Related Charge and Tax Benefit |
(0.02) |
— |
0.64 |
— |
Tax Benefit on Loss from European Wheat and
Barley Business |
— |
— |
(0.39) |
— |
Restructuring Charges – Net |
— |
0.15 |
0.02 |
0.36 |
(Income) Loss on Discontinued Operations and
Related Restructuring |
(0.01) |
0.02 |
(0.04) |
— |
Impairment of Goodwill |
— |
(0.02) |
— |
0.24 |
Diluted Earnings (Loss) per Share from
Ongoing Business
|
$(0.50) |
$(0.01) |
$2.08 |
$1.59 |
In first
quarter 2005, Monsanto recorded a deferred tax benefit of
$106 million, of which $20 million was recorded in
continuing operations, and the remaining $86 million was
recorded in discontinued operations. The $20 million tax
benefit recorded in continuing operations is related to the
impairment of goodwill in the global wheat business as part
of the fiscal year 2004 restructuring plan and thus is
included in the table above. The tax benefit of $86 million
recorded in discontinued operations was
primarily related to the goodwill impairment loss at
the date of adoption of SFAS 142, Goodwill and Other
Intangible Assets (SFAS 142), on Jan. 1, 2002, and thus
is not reflected in the table above.
Upon adoption of SFAS 142, the goodwill impairment
was recorded as a cumulative effect of a change in
accounting principle, and the impairment for the wheat
reporting unit was primarily related to the discontinued
European wheat and barley business.
3. Depreciation
and Amortization:
The following table displays the depreciation and
amortization expense by segment for the three months and 12
months ended Aug. 31, 2005, and 2004:
Depreciation and Amortization
Expense |
Three Months
Ended
Aug. 31, 2005 |
Three Months
Ended
Aug.
31, 2004 |
12 Months
Ended
Aug. 31, 2005 |
12 Months
Ended
Aug. 31, 2004 |
|
|
|
|
|
Seeds and Genomics(1) |
$ 93
|
$ 66 |
$302 |
$264 |
Agricultural Productivity |
47 |
46 |
186 |
188 |
Total Monsanto |
$140 |
$112 |
$488 |
$452 |
(1)
Does not include
the $69 million impairment of goodwill in fiscal year 2004.
Results in PDF format (67K):
-
http://www.monsanto.com/monsanto/content/investor/financial/reports/2005/Q42005EarningsRelease.pdf
Monsanto biotechnology trait acreage: fiscal years 1996 to
2004 in PDF format
(updated October 12, 2005: year-end 2005 actuals):
-
http://www.monsanto.com/monsanto/content/investor/financial/reports/2005/Q42005Acreage.pdf
|