EXHIBIT 99.1
[MONSATO LOGO]
MONSANTO COMPANY
800 NORTH LINDBERGH BLVD
ST. LOUIS, MISSOURI 63167
RELEASE Immediately
CONTACT Media: Bryan Hurley (314-694-8387)
Investors: Scarlett Lee Foster (314-694-8148)
MONSANTO COMPANY REPORTS THIRD-QUARTER 2005 RESULTS
St. Louis - June 29, 2005
<Table>
<Caption>
FINANCIAL SUMMARY THIRD THIRD NINE NINE
($ in millions, except per share) QUARTER QUARTER % MONTHS MONTHS %
2005 2004 CHANGE 2005 2004 CHANGE
- ----------------------------------------------------------------------------------------------------------------
NET SALES $2,042 $1,677 22% $5,027 $4,198 20%
- ----------------------------------------------------------------------------------------------------------------
NET INCOME $47 $252 (81)% $380 $309 23%
- ----------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE $0.17 $0.93 (82)% $1.40 $1.15 22%
- ----------------------------------------------------------------------------------------------------------------
</Table>
o Third-quarter sales increased 22 percent, with 12 percent of the growth
coming from the addition of revenues from Monsanto's fiscal year 2005
acquisitions and 10 percent from the company's core business. Within the
core business, the quarterly sales increase was driven by higher corn and
soybean trait revenues in the United States, increased corn seed sales in
the United States, increased cotton trait revenues in the United States and
India, and higher revenues for Roundup and other glyphosate-based
herbicides in the United States. For the first nine months of fiscal year
2005, total sales increased 20 percent, with 14 percent of the sales growth
from the core business and the remainder from the addition of revenues from
acquisitions. The sales increase in the core business was driven by strong
trait revenues, corn seed sales in the United States and the Europe-Africa
region, and revenues from Roundup and other glyphosate-based herbicides in
Europe and Brazil.
o Reported net income for the quarter was $47 million, which includes the
write-off of in-process research and development (R&D) related to the
Seminis and Emergent acquisitions of $248 million and income on
discontinued operations of $6 million. For the first nine months of 2005,
reported net income was $380 million, including the in-process R&D
write-off of $248 million related to the Seminis and Emergent acquisitions,
a pre-tax charge of $284 million ($181 million aftertax) to establish a
reserve associated with the Solutia Inc. bankruptcy proceedings, 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, $7 million in after-tax restructuring
charges, and income on discontinued operations of $8 million.
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EXHIBIT 99.1
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COMMENT FROM MONSANTO CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER HUGH
GRANT:
"Our strength in seeds and traits has been proven again this quarter, reflecting
the acceleration we're seeing in biotech trait adoption, the increased use of
stacked biotech traits, and the growth of our corn seed business. Our
acquisitions complement our core business, and the combination not only
translates to consistently strong business results, but also gives us a platform
for future earnings growth across the company."
THIRD-QUARTER AND NINE-MONTH 2005 PERFORMANCE SUMMARY:
NET SALES in the third quarter increased 22 percent to slightly more than $2
billion, with 12 percent of that growth coming from acquisitions and 10 percent
from organic growth of Monsanto's core business. The quarterly sales increase
from the core business was driven by higher corn and soybean trait revenues in
the United States, increased corn seed sales in the United States, increased
cotton trait revenues in the United States and India, and higher sales of
Roundup and other glyphosate-based herbicides in the United States.
For the first nine months of 2005, net sales were slightly more than $5 billion,
a 20 percent improvement compared with net sales in the same period last year.
Organic growth in the core business accounted for 14 percent of the sales growth
for the nine-month period, with 6 percent of growth coming from revenues from
acquisitions. The drivers for the first nine months of fiscal year 2005 included
increases in U.S. trait revenues, increased cotton-trait revenues in Australia
and India, increased corn seed sales in the United States and the Europe-Africa
region, and the addition of revenues from acquisitions. Additionally, sales of
Roundup and other glyphosate-based herbicides were higher for the first nine
months of 2005, particularly in Brazil and Europe, which offset decreased sales
in the United States for the nine-month period.
NET INCOME AND EARNINGS PER SHARE: Monsanto recorded third-quarter fiscal year
2005 net income of $47 million, or $0.17 per share, compared with net income of
$252 million, or $0.93 per share, in the third quarter of fiscal year 2004.
Items affecting comparability for third quarter of 2005 included:
o A charge of $(0.91) per share associated with the in-process
R&D write-off related to the Seminis and Emergent
acquisitions.
o $0.02 per share income on discontinued operations.
Items affecting comparability for third quarter of 2004 included:
o Net restructuring charges of $(0.03) per share.
o $0.10 per share income on discontinued operations and
related restructuring charges.
For the company's first nine months of fiscal year 2005, reported net income was
$380 million, or $1.40 per share, compared with net income of $309 million, or
$1.15 per share, for the same period in 2004.
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EXHIBIT 99.1
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Items affecting comparability for the first nine months of fiscal year
2005 included:
o A charge of $(0.91) per share associated with the in-process
R&D write-off related to the Seminis and Emergent
acquisitions.
o A $(0.66) per share charge associated with certain
liabilities in connection with the Solutia bankruptcy
("Solutia-related charge").
o A $0.39 per share tax benefit as a result of the loss
incurred on the European wheat and barley business.
o Net restructuring charges of $(0.03) per share.
o $0.03 per share income on discontinued operations.
Items affecting comparability for the first nine months of fiscal year
2004 included:
o Write-off of goodwill associated with the global wheat
business of $(0.26) per share.
o Net restructuring charges of $(0.21) per share.
o $0.02 per share income on discontinued operations and
related restructuring charges.
OPERATING COSTS: R&D expenses were $409 million for the third quarter, an
increase of $281 million compared with those in third-quarter fiscal year 2004,
primarily driven by the in-process R&D write-off of $248 million related to the
Seminis and Emergent acquisitions. For the first nine months of fiscal year
2005, R&D expenses were $667 million, or $298 million higher than the first nine
months of fiscal year 2004. This increase was also driven by the in-process R&D
write-off of $248 million related to the Seminis and Emergent acquisitions.
Selling, general and administrative (SG&A) expenses for third quarter 2005 were
$352 million, compared with $285 million in the third quarter of 2004. The SG&A
expense increase in the third quarter was driven by expenses related to the
businesses Monsanto acquired in fiscal year 2005. For the first nine months of
fiscal year 2005, SG&A expenses were $911 million, compared to $829 million in
the same period in 2004. SG&A as a percent of net sales included the addition of
the acquisitions and remained flat at approximately 17 percent for the third
quarter compared to the same period in fiscal year 2004. For the first nine
months of 2005, SG&A as a percent of net sales also included the effect of the
acquisitions and decreased to approximately 18 percent versus approximately 20
percent in the first nine months of fiscal year 2004.
CASH FLOW: Year-to-date 2005 net cash provided by operations was $533 million,
compared with $112 million through the first nine months of fiscal year 2004.
Net cash provided (required) by investing activities was $(1.4) billion through
the first nine months of fiscal year 2005, and $60 million for the same period
in 2004. As a result, year-to-date free cash flow represented a use of cash of
$(838) million, compared with positive free cash flow of $172 million for the
first nine months of fiscal year 2004. The decrease in free cash flow for the
first nine months primarily reflects acquisitions made by Monsanto in fiscal
year 2005. Additionally, the final structure of the Seminis acquisition and the
retirement of debt associated with the transaction resulted in the use of cash
of $495 million recorded in financing activities instead of investing activities
in the cash flow statement. Free cash flow in fiscal year 2004 was affected by
payments of $400 million related to the Solutia PCB litigation settlement. (For
a reconciliation of free cash flow, see note 1.)
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EXHIBIT 99.1
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SEEDS AND GENOMICS SEGMENT DETAIL
<Table>
<Caption>
NET SALES THIRD THIRD NINE NINE
($ in millions) QUARTER QUARTER % MONTHS MONTHS %
2005 2004 CHANGE 2005 2004 CHANGE
- ----------------------------------------------------------------------------------------------------------------
CORN SEED AND TRAITS $431 $298 45% $1,305 $975 34%
- ----------------------------------------------------------------------------------------------------------------
SOYBEAN SEED AND TRAITS $204 $166 23% $827 $655 26%
- ----------------------------------------------------------------------------------------------------------------
VEGETABLE AND FRUIT SEED $87 - NM $87 - NM
- ----------------------------------------------------------------------------------------------------------------
ALL OTHER CROPS SEEDS AND TRAITS $336 $233 44% $489 $334 46%
- ----------------------------------------------------------------------------------------------------------------
TOTAL SEEDS AND GENOMICS $1,058 $697 52% $2,708 $1,964 38%
- ----------------------------------------------------------------------------------------------------------------
</Table>
NM= Not Meaningful
The Seeds and Genomics segment consists of the global seeds and related trait
business, and genetic technology platforms.
Third-quarter 2005 net sales of roughly $1.1 billion for the Seeds and Genomics
segment improved more than 50 percent compared to sales of $697 million recorded
in the third quarter of fiscal year 2004. This improvement was largely driven by
the fiscal year 2005 acquisitions, increased revenues from corn and soybean
trait sales in the United States, increased corn seed sales in the United
States, and increased cotton trait revenues in the United States and India.
Additionally, Monsanto completed the acquisitions of Seminis' vegetable and
fruit seed business and Emergent Genetics' cotton business in March and April,
respectively. As such, the revenues from these businesses are reflected in the
Seeds and Genomics segment. Sales from the Emergent Genetics' cotton business
have been incorporated into the "All other crops seeds and traits" category.
Sales from the Seminis vegetable and fruit business are included in a new
category of the Seeds and Genomics segment titled "Vegetable and fruit seed."
For the first nine months of fiscal year 2005, sales for the Seeds and Genomics
segment increased by more than one-third to approximately $2.7 billion, driven
by the increased revenues in corn seeds and traits, soybean traits, cotton
traits, and the inclusion of sales from the companies in Monsanto's American
Seeds, Inc. subsidiary, the Seminis vegetable and fruit business, and Emergent's
cotton business.
EBIT (net income (loss) before interest and taxes) for the Seeds and Genomics
segment was $4 million for the third quarter of fiscal year 2005, compared to
$183 million for third quarter 2004. The decrease in EBIT for the quarter was
driven by the write-off of $248 million of in-process R&D costs associated with
the Seminis and Emergent acquisitions. For the first nine months of fiscal year
2005, EBIT for the segment was $511 million, including the in-process R&D
write-off, compared to $332 million for the same period in fiscal year 2004. The
improvement in EBIT for the first nine months of 2005 was driven primarily by
increased revenue for traits, which reflects increased penetration, pricing
flexibility and the value of stacking more than one trait in a single seed. (For
a reconciliation of EBIT, see note 1.)
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EXHIBIT 99.1
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AGRICULTURAL PRODUCTIVITY SEGMENT DETAIL
<Table>
<Caption>
NET SALES THIRD THIRD NINE NINE
($ in millions) QUARTER QUARTER % MONTHS MONTHS %
2005 2004 CHANGE 2005 2004 CHANGE
- ----------------------------------------------------------------------------------------------------------------
ROUNDUP AND OTHER GLYPHOSATE- $628 $600 5% $1,547 $1,407 10%
BASED HERBICIDES
- ----------------------------------------------------------------------------------------------------------------
ALL OTHER AGRICULTURAL $356 $380 (6)% $772 $827 (7)%
PRODUCTIVITY PRODUCTS
- ----------------------------------------------------------------------------------------------------------------
TOTAL AGRICULTURAL PRODUCTIVITY $984 $980 0% $2,319 $2,234 4%
- ----------------------------------------------------------------------------------------------------------------
</Table>
The Agricultural Productivity segment consists primarily of crop protection
products, the lawn-and-garden herbicide products, and the company's animal
agricultural businesses.
Net sales in the Agricultural Productivity segment for the quarter were flat
compared to the same period in fiscal year 2004. For the quarter, overall sales
of branded Roundup and other glyphosate-based herbicides increased 5 percent,
driven by increased revenues associated with earlier-than-expected sales,
especially in the United States. The increase in sales for Roundup and other
glyphosate-based herbicides was offset by a decline in revenues from all other
agricultural products.
Compared with the first nine months of fiscal year 2004, the Agricultural
Productivity segment recorded an increase in sales of 4 percent in the first
nine months of fiscal year 2005, driven by increased revenues for Roundup and
other glyphosate-based herbicides. Sales of branded Roundup herbicide were down
modestly for the first nine months of the fiscal year as higher sales outside
the United States were offset by decreased U.S. sales as a result of a shift in
sales to Monsanto's lower-priced branded and non-branded products. Additionally,
higher non-branded glyphosate sales also contributed to the overall increase in
sales for the first nine months of fiscal year 2005.
EBIT for the Agricultural Productivity segment was $193 million for the third
quarter of fiscal year 2005, compared with $163 million for third quarter 2004.
The increase in EBIT for the quarter was driven by primarily lower operating
expenses. For the first nine months of fiscal year 2005, EBIT for the segment
decreased $159 million to $18 million, compared with the first nine months of
2004. The decrease in EBIT for the first nine months of 2005 was driven
primarily by 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:
"With a strong U.S. agricultural season as a backbone, our results have been
very good. While those results are an important record of our performance, they
are equally important as an indicator of what we can achieve in 2006 and
beyond."
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EXHIBIT 99.1
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2005 EARNINGS AND FREE CASH FLOW OUTLOOK:
Monsanto's management confirmed the company's EPS guidance for fiscal year 2005,
with EPS on an ongoing business basis expected to be in the range of $2.00 to
$2.05. The ongoing EPS guidance excludes the write-off of $0.91 per share of
in-process R&D related to the Seminis and Emergent acquisitions, the $0.66
per-share Solutia-related charge, the tax benefit of $0.39 per share as a result
of the loss incurred on the European wheat and barley business, a $0.03
per-share charge for restructuring, and $0.03 per share income on discontinued
operations. On an as-reported basis, Monsanto expects EPS to be in the range of
$0.82 to $0.87. (For a reconciliation of ongoing EPS, see note 1.)
For the fourth quarter of fiscal year 2005, Monsanto management expects EPS on
an ongoing business basis to be in the range of $(0.55).
Additionally, management confirmed its previous EPS guidance for fiscal years
2006 and 2007, expecting 17 percent growth over the low end of 2005 EPS guidance
of $2.00 to $2.05 for fiscal year 2006, and 20 to 25 percent growth in EPS for
fiscal year 2007 from the growth expected in fiscal year 2006.
Monsanto also updated free cash flow guidance for fiscal year 2005. The final
structure of the Seminis transaction and the retirement of debt associated with
the transaction made it necessary for $495 million in debt repayments to be
recorded in financing activities instead of investing activities in the cash
flow statement. The economics of the Seminis transaction and the cash expected
from operations do not change. Therefore, Monsanto expects cash from operations
to be $1.2 billion, and net cash required by investing activities to be $1.6
billion. As a result, the company expects free cash flow to be within the range
of negative $400 million for the fiscal year as opposed to the negative $900
million previously provided. (For a reconciliation of free cash flow, see note
1.)
OTHER ITEMS OF NOTE:
On June 7, Monsanto Company, Solutia Inc. and the Official Committee of
Unsecured Creditors appointed in Solutia's bankruptcy case announced they
reached an agreement in principle for a proposal for Solutia's reorganization
that, if approved by the Bankruptcy Court and the respective company boards of
directors, could result in a confirmed reorganization plan allowing Solutia to
exit bankruptcy protection.
On April 18, the European Commission posted its official list of 26 products
that have been confirmed as being lawfully on the European Union (EU) market and
can continue to be used in processed feed products shipped to the EU. The EU's
confirmation included 15 Monsanto products. All of the products listed were
"grandfathered" under the EU's new regulations for food and feed, recognizing
these products were legally on the market when the new regulations took effect
last year.
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 in 2005, can also be found in the Financial
Reports section under 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.
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EXHIBIT 99.1
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION:
Certain statements contained in this release are "forward-looking statements,"
such as statements concerning the company's anticipated financial results,
current and future product performance, regulatory approvals, 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; successful completion and
operation of recent and proposed acquisitions; fluctuations in exchange rates
and other developments related to foreign currencies and economies; increased
generic and branded competition for the company's Roundup(R) agricultural
herbicides; 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
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 company's ability to fund its short-term financing
needs; 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 or obligation 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.
Notes to editors: Roundup is a registered trademark owned by Monsanto Company
and its wholly owned subsidiaries.
Unless otherwise indicated, references to "Roundup and other glyphosate-based
herbicides" exclude all lawn-and-garden herbicide products.
-oOo-
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EXHIBIT 99.1
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MONSANTO COMPANY AND SUBSIDIARIES
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
<Table>
<Caption>
CONDENSED STATEMENT OF CONSOLIDATED OPERATIONS THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
NET SALES $2,042 $1,677 $5,027 $4,198
Cost of Goods Sold 1,035 848 2,509 2,165
------------------------------------------------------------------
GROSS PROFIT 1,007 829 2,518 2,033
OPERATING EXPENSES:
Selling, General and Administrative Expenses 352 285 911 829
Bad-Debt Expense 15 36 36 76
Research and Development Expenses 155 128 401 369
Acquired In-Process Research and Development 254 -- 266 --
Impairment of Goodwill -- -- -- 69
Restructuring Charges - Net -- 9 8 66
------------------------------------------------------------------
TOTAL OPERATING EXPENSES 776 458 1,622 1,409
INCOME FROM OPERATIONS 231 371 896 624
Interest Expense - Net 24 21 59 53
Solutia-Related Expenses 7 29 300 43
Other Expense - Net 31 22 73 70
------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 169 299 464 458
Income Tax Provision 128 73 178 155
------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 41 226 286 303
DISCONTINUED OPERATIONS:
Income (Loss) From Operations of Discontinued Businesses 4 26 6 (2)
Income Tax Benefit (2) -- (88) (8)
------------------------------------------------------------------
INCOME ON DISCONTINUED OPERATIONS 6 26 94 6
------------------------------------------------------------------
NET INCOME $ 47 $ 252 $ 380 $ 309
==================================================================
EBIT (1)
$197 $ 346 $ 529 $ 509
==================================================================
BASIC EARNINGS PER SHARE:
Income From Continuing Operations $ 0.16 $ 0.85 $1.08 $ 1.15
Income on Discontinued Operations 0.02 0.10 0.35 0.02
------------------------------------------------------------------
NET INCOME $ 0.18 $ 0.95 $1.43 $ 1.17
==================================================================
DILUTED EARNINGS PER SHARE:
Income From Continuing Operations $ 0.15 $ 0.83 $1.05 $ 1.13
Income on Discontinued Operations 0.02 0.10 0.35 0.02
------------------------------------------------------------------
NET INCOME $ 0.17 $ 0.93 $1.40 $ 1.15
==================================================================
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic Shares 268.0 265.8 266.4 264.0
Diluted Shares 273.8 270.7 272.3 268.7
</Table>
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EXHIBIT 99.1
-9-
MONSANTO COMPANY AND SUBSIDIARIES
Selected Financial Information
(Dollars in millions)
Unaudited
<Table>
<Caption>
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS OF AS OF
MAY 31, 2005 AUG. 31, 2004
- ----------------------------------------------------------------------- ----------------- ------------------
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $ 467 $1,037
Short-Term Investments -- 300
Trade Receivables - Net of Allowances of $264 and $250,
respectively 2,776 1,663
Miscellaneous Receivables 412 316
Deferred Tax Assets 388 397
Inventories 1,683 1,154
Assets of Discontinued Operations 72 --
Other Current Assets 64 64
----------------- ------------------
TOTAL CURRENT ASSETS 5,862 4,931
----------------- ------------------
Property, Plant and Equipment - Net 2,367 2,087
Goodwill - Net 1,241 720
Other Intangible Assets - Net 1,189 454
Noncurrent Deferred Tax Assets 515 475
Other Assets 503 497
----------------- ------------------
TOTAL ASSETS $11,677 $9,164
================= ==================
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES:
Short-Term Debt $ 1,412 $ 433
Accounts Payable 392 326
Income Taxes Payable 343 122
Accrued Compensation and Benefits 201 158
Accrued Marketing Programs 502 419
Deferred Revenues 40 16
Grower Accruals 22 1
Liabilities of Discontinued Operations 40 --
Miscellaneous Short-Term Accruals 592 419
----------------- ------------------
TOTAL CURRENT LIABILITIES 3,544 1,894
----------------- ------------------
Long-Term Debt 1,062 1,075
Postretirement Liabilities 722 687
Solutia-Related Reserve 203 --
Other Liabilities 301 250
Shareowners' Equity 5,845 5,258
----------------- ------------------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $11,677 $9,164
================= ==================
Debt to Capital Ratio: 30% 22%
================= ==================
</Table>
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EXHIBIT 99.1
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MONSANTO COMPANY AND SUBSIDIARIES
Selected Financial Information
(Dollars in millions)
Unaudited
<Table>
<Caption>
STATEMENT OF CONSOLIDATED CASH FLOWS NINE MONTHS NINE MONTHS
ENDED ENDED
MAY 31, 2005 MAY 31, 2004
- -------------------------------------------------------------------------- ------------------ ----------------
OPERATING ACTIVITIES:
Net Income $380 $309
Adjustments to reconcile cash provided (required) by operations:
Items that did not require (provide) cash:
Depreciation and amortization expense 348 340
Impairment of goodwill -- 69
Impairment of assets included in discontinued operations -- 4
Bad-debt expense 36 75
Noncash restructuring 7 35
Deferred income taxes (90) 213
Gain on disposal of investments and property - net (5) (13)
Equity affiliate expense - net 20 26
Acquired in-process research and development 266 --
Solutia-related charge 284 --
Other items that did not require cash 51 28
Changes in assets and liabilities that provided (required) cash, net of
acquisitions:
Trade receivables (917) (496)
Inventories (10) 23
Accounts payable and accrued liabilities 156 8
PCB litigation settlement insurance proceeds (payments) 9 (400)
Solutia-related reserve (36) --
Pension contributions (60) (150)
Tax benefit on employee stock options 67 28
Other Items 27 13
- -------------------------------------------------------------------------- ------------------ ----------------
NET CASH PROVIDED BY OPERATIONS 533 112
- -------------------------------------------------------------------------- ------------------ ----------------
CASH FLOWS PROVIDED (REQUIRED) BY INVESTING ACTIVITIES:
Purchases of short-term investments -- (250)
Maturities of short-term investments 300 480
Acquisitions of businesses, net of cash acquired (1,506) --
Technology and other investments (44) (46)
Capital expenditures (144) (148)
Other investment and property disposal proceeds 23 24
- -------------------------------------------------------------------------- ------------------ ----------------
NET CASH PROVIDED (REQUIRED) BY INVESTING ACTIVITIES (1,371) 60
- -------------------------------------------------------------------------- ------------------ ----------------
CASH FLOWS PROVIDED (REQUIRED) BY FINANCING ACTIVITIES:
Net change in financing with less than 90-day maturities 1,154 (58)
Short-term debt proceeds 38 18
Short-term debt reductions (18) (11)
Long-term debt proceeds 16 113
Long-term debt reductions (288) (111)
Payments on debt assumed in acquisitions (495) --
Payments on other financing (5) (4)
Treasury stock purchases (149) (133)
Stock option exercises 144 163
Dividend payments (129) (103)
- -------------------------------------------------------------------------- ------------------ ----------------
NET CASH PROVIDED (REQUIRED) BY FINANCING ACTIVITIES 268 (126)
- -------------------------------------------------------------------------- ------------------ ----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (570) 46
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,037 281
- -------------------------------------------------------------------------- ------------------ ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $467 $327
================== ================
</Table>
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EXHIBIT 99.1
-11-
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.
<Table>
<Caption>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
TOTAL MONSANTO COMPANY AND SUBSIDIARIES: ENDED ENDED ENDED ENDED
MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------
EBIT - Seeds and Genomics Segment $ 4 $183 $511 $332
EBIT - Agricultural Productivity Segment 193 163 18 177
-------------------------------------------------------------------
EBIT - TOTAL MONSANTO COMPANY AND
SUBSIDIARIES 197 346 529 509
Interest Expense - Net 24 21 59 53
Income Tax Provision(1) 126 73 90 147
-------------------------------------------------------------------
NET INCOME $ 47 $252 $380 $309
===================================================================
</Table>
(1) Includes the income tax provision from continuing operations and the
income tax 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.
<Table>
<Caption>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
TOTAL MONSANTO COMPANY AND SUBSIDIARIES: ENDED ENDED ENDED ENDED
MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004
- -----------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE $0.17 $0.93 $ 1.40 $1.15
In-Process R&D Write-Off Related to the Seminis
and Emergent Acquisitions 0.91 -- 0.91 --
Solutia-Related Charge -- -- 0.66 --
Tax Benefit on Loss from European
Wheat and Barley Business -- -- (0.39) --
Restructuring Charges - Net -- 0.03 0.03 0.21
Income on Discontinued Operations
and Related Restructuring (0.02) (0.10) (0.03) (0.02)
Impairment of Goodwill -- -- -- 0.26
DILUTED EARNINGS PER SHARE FROM ONGOING
BUSINESS $1.06 $0.86 $ 2.58 $1.60
===============================================================
</Table>
-more-
EXHIBIT 99.1
-12-
RECONCILIATION OF EPS TO ONGOING EPS (CONTINUED):
<Table>
<Caption>
FISCAL YEAR FISCAL YEAR FISCAL YEAR FOURTH QUARTER
TOTAL MONSANTO COMPANY AND SUBSIDIARIES: 2007 2006 2005 2005
TARGET TARGET TARGET TARGET
- --------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE $2.81 - $2.93 $2.34 $0.82 - $0.87 $(0.52) - $(0.57)
In-Process R&D Write-Off Related to the
Seminis and Emergent Acquisitions -- -- 0.91 --
Solutia-Related Charge -- -- 0.66 --
Tax Benefit on Loss from European
Wheat and Barley Business -- -- (0.39) --
Restructuring Charges - Net -- -- 0.03 --
Income on Discontinued Operations and
Related Restructuring -- -- (0.03) --
----------------------------------------------------------------
DILUTED EARNINGS PER SHARE FROM ONGOING $2.81 - $2.93 $2.34 $2.00 - 2.05 $(0.52) - $(0.57)
BUSINESS
================================================================
</Table>
2. 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 Earnings and Free Cash Flow Outlook," 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.
<Table>
<Caption>
FISCAL YEAR NINE MONTHS NINE MONTHS
TOTAL MONSANTO COMPANY AND SUBSIDIARIES: 2005 ENDED ENDED
TARGET MAY 31, 2005 MAY 31, 2004
- -----------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operations $ 1,200 $ 533 $ 112
Net Cash Provided (Required) by Investing Activities (1,600) (1,371) 60
---------------------------------------------------
FREE CASH FLOW $ (400) $ (838) $ 172
Net Cash Provided (Required) by Financing Activities N/A 268 (126)
---------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS N/A $ (570) $ 46
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD N/A 1,037 281
---------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD N/A $ 467 $ 327
===================================================
</Table>
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. In fiscal year 2005, the company incurred charges of $8
million pretax ($7 million aftertax) in continuing operations to
complete the restructuring actions under this plan. No further actions
are planned in 2005 related to this plan.
-more-
EXHIBIT 99.1
-13-
Activities related to the restructuring plan items were recorded in the
Condensed Statement of Consolidated Operations in the following
categories:
<Table>
<Caption>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
TOTAL MONSANTO COMPANY AND SUBSIDIARIES: ENDED ENDED ENDED ENDED
MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004
- -------------------------------------------------------------------------------------------------------------------------------
Cost of Goods Sold $ -- $ (2) $ -- $ (19)
Impairment of Goodwill -- -- -- (69)
Restructuring Charges - Net(1,2) -- (9) (8) (66)
---------------------------------------------------------------------
Loss From Continuing Operations Before Income Taxes -- (11) (8) (154)
Income Tax Benefit(3) -- 4 21 28
---------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS -- (7) 13 (126)
Income (Loss) From Operations of Discontinued
Businesses(4) -- 25 -- (9)
Income Tax Benefit -- -- -- 10
---------------------------------------------------------------------
INCOME ON DISCONTINUED OPERATIONS -- 25 -- 1
---------------------------------------------------------------------
NET INCOME (LOSS) $ -- $ 18 $ 13 $ (125)
=====================================================================
</Table>
(1) The $8 million of restructuring charges for the nine months ended May 31,
2005, was split by segment as follows: $7 million in the Seeds and
Genomics segment and $1 million in the Agricultural Productivity segment.
(2) The restructuring charges for the three months and nine months ended
May 31, 2004, were offset by $4 million and $6 million, respectively, in
restructuring reversals related to the 2000 plan.
(3) The $21 million of income tax benefit for the nine months ended May 31,
2005, includes $20 million 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 nine months ended May 31, 2004, contain
restructuring charges related to discontinued businesses. These
restructuring charges were recorded in discontinued operations.
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 nine months ended May 31, 2005, and May 31, 2004:
<Table>
<Caption>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
DEPRECIATION AND AMORTIZATION EXPENSE ENDED ENDED ENDED ENDED
MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004
- --------------------------------------------------- ----------------- ------------------ ----------------- -----------------
Seeds and Genomics(1) $ 81 $ 64 $209 $198
Agricultural Productivity 46 48 139 142
----------------- ------------------ ----------------- -----------------
Total Monsanto $ 127 $ 112 $348 $340
================= ================== ================= =================
</Table>
(1) Does not include the $69 million impairment of goodwill in the first nine
months of fiscal year 2004.