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Monsanto Company reports fourth-quarter and fiscal year 2005 results
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.

  • Reported net loss for the fourth quarter was $(125) million. For fiscal year 2005, reported net income was $255 million, which included several items affecting comparability. The largest of these included the in-process R&D write-off of $248 million related to the Seminis and Emergent acquisitions, an aftertax charge of $175 million ($284 million pre-tax) primarily to establish a reserve associated with the Solutia Inc. bankruptcy proceedings, and a tax benefit of $106 million ($86 million in discontinued operations and $20 million in continuing operations) as a result of the loss incurred on the European wheat and barley business. A complete list of items affecting comparability is included in the performance summary section.

  • 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:

“Our strong financial results were delivered by a combination of growth in our core businesses and through our newly acquired Seminis vegetable and Emergent cotton seed businesses. For the fourth quarter, our results continue to reflect the growth of our seeds and traits businesses, as well as the proactive steps we’ve taken to reduce working capital across our herbicide business.”

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

Total Current Assets

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

28

23

Short-term debt proceeds

40

24

Short-term debt reductions

(52)

(20)

Long-term debt proceeds

503

117

Long-term debt reductions

(299)

(168)

Payment of premium to exchange notes payable

(53)

Payments on debt assumed in acquisitions

(495)

Debt issuance costs

(4)

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)

 

 

 

Net Increase (Decrease) in Cash and Cash Equivalents

(512)

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

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