Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
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 FINANCIAL RESULTS FOR PERIODS ENDED
DEC. 31, 2003 AND 2002
ST. LOUIS (Feb. 4, 2004) - To fulfill the company's commitment to report its
calendar-year results following its change to an Aug. 31 fiscal year end,
Monsanto Company (NYSE: MON) today reported results for the 12 months of 2003.
In July 2003, Monsanto's board of directors changed Monsanto's fiscal year end
from Dec. 31 to Aug. 31. As a result, Monsanto reported results for its new
fiscal year-end in October, including results from the eight-month "transition"
period ended Aug. 31, 2003.
The results reported today include the eight-month transition period as well as
the four-months ended Dec. 31, 2003, that completes the company's results for
the 12 calendar months of 2003. For comparability, the company also provided
previously reported calendar-year 2002 results. The results for the eight-month
transition period in 2003 and the 12 months of 2002 have not been restated to
reflect discontinued operations recorded in the final four months of 2003. The
restatements would not be expected to have a material impact on the results. As
the company provides future earnings reports, Monsanto will restate the results
for fiscal-year 2003, calendar years 2001 and 2002, and the transition period.
Based on these results, Monsanto met or exceeded its guidance on the key
financial targets - including earnings per share (EPS) on an ongoing basis in
the range of $1.30 to $1.40 and free cash flow of approximately $200 million -
established for calendar-year 2003.
Net sales: Net sales for the four months ended Dec. 31, 2003, were $1,682
million and $3,373 million for the eight months ended Aug. 31, 2003. For the 12
months of 2002, Monsanto reported net sales of $4,673 million.
Net sales for the four months ended Dec. 31, 2003, were $806 million for the
Seeds and Genomics segment and $876 million for the Agricultural Productivity
segment. For the eight months ended Aug. 31, 2003, net sales for the Seeds and
Genomics segment were $1,165 million and $2,208 million for the Agricultural
Productivity segment. For the 12 months of 2002, Monsanto reported net sales of
$1,585 for the Seeds and Genomics segment and $3,088 for the Agricultural
Productivity segment.
Sales performance improved primarily because of increased sales of Monsanto's
seeds and traits and improvements in the sales of Roundup herbicide in Brazil.
Combined, these sales improvements more than offset expected decreases in
overall sales revenues associated with the company's U.S. Roundup herbicide
business.
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Net income and earnings per share results: Monsanto recorded net income of $34
million, or 13 cents per share, for the four months ended Dec. 31, 2003, and a
net loss of $23 million, or a loss of 9 cents per share, for the eight months
ended Aug. 31, 2003. This compares with a $1,693 million loss, or a loss of
$6.45 per share, for 2002.
EPS guidance on an as reported basis for calendar year 2003 had been expected to
be in the range of a net loss of 13 cents to a net loss of 3 cents per share.
Items affecting comparability for the four-month period ending Dec 31, 2003
include:
o Net restructuring charges of $(0.09) per share.
o A $(0.07) per share charge for discontinued operations and related
restructuring.
o Write-off of goodwill associated with the global wheat business of
$(0.26) per share.
Items affecting comparability for the eight-month period ending Aug 31,
2003 include:
o Restructuring reversals of $0.02 per share.
o Asset retirement charges of $(0.05) per share.
o Monsanto's contribution to the settlement of litigation in Anniston,
Alabama of $(0.96) per share.
Items affecting comparability for 2002 calendar year include:
o Net restructuring charges of $(0.31) per share.
o Goodwill impairment charges of $(6.94) per share.
o Establishment of Argentine bad-debt reserve of $(0.38) per share.
o A gain of $0.08 per share related to certain asset sales.
Cash flow: Free cash flow represents the total of cash flows from operations and
investing activities for the 12 months of 2003. For the 12 months of 2003, net
cash provided by operations was $521 million, compared with $1,108 million in
calendar year 2002. Net cash required by investing activities was $238 million,
compared with $469 million in 2002. As a result, free cash flow for the 12
months of 2003 was $283 million, compared with $639 million in 2002. In
addition, net cash provided (required) by financing activities for the 12 months
of 2003 was $182 million, compared with $(518) million in 2002. (For a
reconciliation of free cash flow, see note 1.)
Comment from Monsanto Chairman, President and Chief Executive Officer
Hugh Grant:
"In 2003, we stressed focus and financial discipline. We set commitments that we
believed were realistic and achievable, but that would also provide us a
platform for growth in the mid-term. We delivered on those commitments. This is
another milestone that underscores our ability as a company to deliver on our
promises and to guide our company through our transition to a
seeds-and-traits-based business."
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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Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release, such as statements concerning the
company's anticipated financial results, current and future product performance,
regulatory approvals, currency impact, business and financial plans and other
non-historical facts are "forward-looking statements." These statements are
based on current expectations and currently available information. However,
since these statements are based on factors that involve risks and
uncertainties, the company's actual performance and results may differ
materially from those described or implied by such forward-looking statements.
Factors that could cause or contribute to such differences include, among
others: the company's exposure to various contingencies, including those related
to Solutia, Inc., litigation, intellectual property, regulatory compliance
(including seed quality), environmental contamination and antitrust;
fluctuations in exchange rates and other developments related to foreign
currencies and economies; increased generic and branded competition for the
company's Roundup herbicide; the accuracy of the company's estimates and
projections, for example, those with respect to product returns and grower use
of our products and related distribution inventory levels; the effect of weather
conditions and commodity markets on the agriculture business; the success of the
company's research and development activities and the speed with which
regulatory authorizations and product launches may be achieved; domestic and
foreign social, legal and political developments, especially those relating to
agricultural products developed through biotechnology; the company's ability to
continue to manage its costs; the company's ability to successfully market new
and existing products in new and existing domestic and international markets;
the company's ability to obtain payment for the products that it sells; the
company's ability to achieve and maintain protection for its intellectual
property; the effects of the company's accounting policies and changes in
generally accepted accounting principles; the company's ability to fund its
short-term financing needs; general economic and business conditions; political
and economic conditions due to threat of future terrorist activity and related
military action; and other risks and factors detailed in the company's filings
with the U.S. Securities and Exchange Commission. Undue reliance should not be
placed on these forward-looking statements, which are current only as of the
date of this release. The company disclaims any current intention to revise or
update any forward-looking statements or any of the factors that may affect
actual results, whether as a result of new information, future events or
otherwise.
Notes to editors: Roundup is a trademark owned by Monsanto Company and its
wholly owned subsidiaries.
References to Roundup products in this release mean Roundup branded and other
glyphosate-based herbicides, excluding lawn-and-garden products.
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
- --------------------------------------------------------------------------------
Four Months
Condensed Statement of Ended
Consolidated Operations Dec. 31, 2003
- --------------------------------------------------------------------------------
Net Sales $1,682
Cost of Goods Sold 836
-------------
Gross Profit 846
Operating Expenses:
Selling, General and Administrative Expenses 369
Bad-Debt Expense 39
Research and Development Expenses 163
Adjustments of Goodwill 69
Restructuring Charges - Net (4) 36
-------------
Total Operating Expenses 676
Income From Operations 170
Interest Expense - Net 22
Other Expense - Net 38
-------------
Income From Continuing Operations Before Income Taxes 110
Income Tax Provision 57
-------------
Income From Continuing Operations 53
Discontinued Operations:
Loss From Operations of Discontinued Businesses (Including
Estimated Loss on Disposal of $29 in
Fiscal Year 2004) (27)
Income Tax Benefit (8)
-------------
Loss On Discontinued Operations (19)
-------------
Net Income $ 34
=============
Basic Earnings (Loss) Per Share:
Income From Continuing Operations $ 0.20
Loss On Discontinued Operations (0.07)
-------------
Net Income $ 0.13
=============
Diluted Earnings (Loss) Per Share:
Income From Continuing Operations $ 0.20
Loss On Discontinued Operations (0.07)
-------------
Net Income $ 0.13
=============
Shares Outstanding:
Basic Shares 262.3
Diluted Shares 266.2
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
- --------------------------------------------------------------------------------
Eight Months
Condensed Statement of Ended
Consolidated Operations Aug. 31, 2003
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Net Sales $ 3,373
Cost of Goods Sold 1,796
-------------
Gross Profit 1,577
Operating Expenses:
Selling, General and Administrative Expenses 741
Bad-Debt Expense 40
Research and Development Expenses 330
Restructuring Reversals (4) (5)
-------------
Total Operating Expenses 1,106
Income From Operations 471
Interest Expense - Net 46
PCB Litigation Settlement Expense - Net 396
Other Expense - Net 67
-------------
Loss Before Income Taxes and Cumulative Effect of Accounting
Change (38)
Income Tax Benefit (27)
-------------
Loss Before Cumulative Effect of Accounting Change (11)
Cumulative Effect of a Change in Accounting Principle (2) (12)
-------------
Net Loss $ (23)
=============
Basic and Diluted Loss per Share:
Loss Before Cumulative Effect of Accounting Change $(0.04)
Cumulative Effect of Accounting Change - Net of Tax (0.05)
-------------
Net Loss $(0.09)
=============
Shares Outstanding:
Basic and Diluted Shares 261.7
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
- --------------------------------------------------------------------------------
Condensed Statement of 12 Months Ended
Consolidated Operations Dec. 31, 2002
- --------------------------------------------------------------------------------
Net Sales $ 4,673
Cost of Goods Sold 2,493
-----------------
Gross Profit 2,180
Operating Expenses:
Selling, General and Administrative Expenses 1,023
Bad-Debt Expense 208
Research and Development Expenses 527
Restructuring Charges - Net 103
-----------------
Total Operating Expenses 1,861
Income from Operations 319
Interest Expense - Net 59
Other Expense - Net 58
-----------------
Income Before Taxes and Cumulative
Effect of Accounting Change 202
Income Tax Provision 73
-----------------
Income Before Cumulative Effect of Accounting Change 129
Cumulative Effect of Change in Accounting Principle(3) (1,822)
-----------------
Net Loss $ (1,693)
=================
Basic Earnings (Loss) Per Share
Income Before Cumulative Effect
of Accounting Change $ 0.49
Cumulative Effect of Accounting Change - Net of Tax (6.99)
-----------------
Net Loss $ (6.50)
=================
Diluted Earnings (Loss) Per Share
Income Before Cumulative Effect
of Accounting Change $ 0.49
Cumulative Effect of Accounting Change - Net of Tax (6.94)
-----------------
Net Loss $ (6.45)
=================
Shares Outstanding:
Basic Shares 260.7
Diluted Shares 262.6
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
- ----------------------------------------------------------------------- ----------------- ------------------
As of As of
Condensed Statement of Consolidated Financial Position Dec. 31, 2003 Dec. 31, 2002
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Assets
Current Assets:
Cash and Cash Equivalents $ 893 $ 428
Short-Term Investments 250 250
Trade Receivables - Net of Allowances of $285 in 2003
and $247 in 2002 1,690 1,752
Inventories 1,354 1,272
Assets of Discontinued Operations 27 --
Other Current Assets 783 722
----------------- ------------------
Total Current Assets 4,997 4,424
----------------- ------------------
Property, Plant and Equipment - Net 2,242 2,339
Goodwill - Net 723 757
Other Intangible Assets - Net 523 643
Other Assets 807 727
----------------- ------------------
Total Assets $9,292 $8,890
================= ==================
Liabilities and Shareowners' Equity
Current Liabilities:
Short-Term Debt $ 409 $ 393
Accounts Payable 314 275
Liabilities of Discontinued Operations 5 --
Accrued Liabilities 1,195 1,142
----------------- ------------------
Total Current Liabilities 1,923 1,810
----------------- ------------------
Long-Term Debt 1,158 851
Postretirement and Other Liabilities 963 1,049
Shareowners' Equity 5,248 5,180
----------------- ------------------
Total Liabilities and Shareowners' Equity $9,292 $8,890
================= ==================
Debt to Capital Ratio: 23% 19%
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
- -------------------------------------------------------------------------- ------------------ -----------------
12 Months Ended 12 Months Ended
Statement of Consolidated Cash Flows Dec. 31, 2003 Dec. 31, 2002
- -------------------------------------------------------------------------- ------------------ -----------------
Operating Activities:
Net Income (Loss) $ 11 $(1,693)
Adjustments to reconcile cash provided (required) by operations:
Items that did not require (provide) cash:
Pretax cumulative effect of change in accounting principle 19 1,984
Depreciation and amortization expense 455 460
Adjustments of goodwill 69 --
Impairment of assets included in discontinued operations 29 --
Bad-debt expense 79 208
Noncash restructuring 13 50
Deferred income taxes 120 (258)
Gain on disposal of investments and property - net -- (59)
Equity affiliate expense - net 40 43
Write-off of retired assets 27 28
Other items that did not provide cash (20) --
Changes in assets and liabilities that provided (required) cash:
Trade receivables 324 221
Inventories (5) 74
Accounts payable and accrued liabilities (221) (3)
PCB litigation settlement insurance receivables (155) --
Pension contributions (261) (20)
Related-party transactions 2 (46)
Tax benefit on employee stock options 6 11
Deferred revenue on supply agreements -- 42
Net investment hedge proceeds (loss) (35) 20
Other Items 24 46
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Net Cash Provided by Operations 521 1,108
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Cash Flows Provided (Required) by Investing Activities:
Purchases of short-term investments (480) (250)
Maturities of short-term investments 480 --
Technology and other investments (58) (97)
Capital expenditures (193) (224)
Property disposal proceeds 13 72
Loans with related party -- 30
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Net Cash Required by Investing Activities (238) (469)
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Cash Flows Provided (Required) by Financing Activities:
Net change in short-term financing 88 (934)
Loans from related party -- (254)
Long-term debt proceeds 332 856
Long-term debt reductions (115) (104)
Debt issuance costs (2) (10)
Payments on other financing (9) (10)
Treasury stock purchases (55) --
Stock option exercises 73 63
Dividend payments (130) (125)
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Net Cash Provided (Required) by Financing Activities 182 (518)
- -------------------------------------------------------------------------- ------------------ -----------------
Net Increase in Cash and Cash Equivalents 465 121
Cash and Cash Equivalents at Beginning of Period 428 307
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Cash and Cash Equivalents at End of Period $893 $ 428
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
1. 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. The presentation of
free cash flow is not intended to replace cash flows, and it is not a
measure of financial performance as determined in accordance with generally
accepted accounting principles (GAAP) in the United States. The following
table reconciles historical free cash flow to the respective most directly
comparable financial measure calculated in accordance with GAAP.
Reconciliation of Free Cash Flow:
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12 Months 12 Months
Ended Ended
Total Monsanto Company and Subsidiaries: Dec. 31, 2003 Dec. 31, 2002
- ----------------------------------------------------------------------------------------------------
Net Cash Provided by Operations $ 521 $1,108
Net Cash Required by Investing Activities (238) (469)
-----------------------------------
Free Cash Flow $ 283 $ 639
Net Cash Provided (Required) by Financing Activities 182 (518)
-----------------------------------
Net Increase in Cash and Cash Equivalents $ 465 $ 121
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2. Adjustment for New Accounting Standard No. 143: On Jan. 1, 2003, Monsanto
adopted Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations. SFAS No. 143 addresses
financial accounting for and reporting of costs and obligations associated
with the retirement of tangible long-lived assets. Upon adopting this
standard, Monsanto recorded a pretax cumulative effect of accounting change
of $19 million ($12 million aftertax, or $0.05 per share) effective Jan. 1,
2003. In addition to this noncash charge, property, plant and equipment was
increased approximately $10 million, and asset retirement obligations were
increased approximately $30 million.
3. Adjustment for New Accounting Standard No. 142: On Jan. 1, 2002, Monsanto
adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142
changed the accounting for goodwill from an amortization method to an
impairment-only method and eliminated goodwill amortization. As a result of
the transitional goodwill impairment test completed in 2002, goodwill was
reduced by $2 billion and net deferred tax assets increased by $162 million
as a result of the related tax effect. This resulted in a net loss and net
reduction of $1.8 billion to shareowners' equity for the year 2002.
4. Restructuring: In October 2003, Monsanto announced plans to continue to
reduce the costs associated with its agricultural chemistry business as
that segment matures globally. The company will further concentrate its
resources on its seeds and traits businesses. These plans include: (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. These actions
will require charges up to $155 million aftertax in fiscal year 2004; $49
million of these charges were recorded in the four months ended Dec. 31,
2003.
For the eight months ended Aug. 31, 2003, Monsanto reversed $8 million
pretax ($5 million aftertax) of restructuring charges taken in prior years.
The cost to carry out certain actions related to prior restructuring plans
was less than originally anticipated. Restructuring items in 2003 and 2002
were primarily associated with the 2000 and 2002 plans related to facility
rationalizations and work force reductions.
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Monsanto Company and Subsidiaries
Selected Financial Information
(Dollars in millions)
Unaudited
Income (loss/expense) related to these items were reported in the Condensed
Statement of Consolidated Operations in the following captions:
- -------------------------------------------------------------------------------------------------------------
Four Months Eight Months 12 Months
Ended Ended Ended
Dec. 31, 2003 Aug. 31, 2003 Dec. 31, 2002
- -------------------------------------------------------------------------------------------------------------
Cost of Goods Sold $ (2) $ 3 $ (21)
Restructuring (Charges) Reversals - Net(a) (36) 5 (103)
----------------- ---------------- ----------------
Income (Loss) From Continuing Operations Before Income (38) 8 (124)
Taxes
Income Tax (Provision) Benefit 13 (3) 43
----------------- ---------------- ----------------
Income (Loss) From Continuing Operations (25) 5 (81)
Loss From Operations of Discontinued
Businesses (34) -- --
Income Tax Benefit 10 -- --
----------------- ---------------- ----------------
Loss On Discontinued Operations (24) -- --
----------------- ---------------- ----------------
Net Income (Loss) $(49) $ 5 $ (81)
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(a) For the four month period ended Dec. 31, 2003, restructuring charges
were reduced by $2 million in restructuring reversals related to our past
restructuring plans. The company recorded the reversals because it was able
to carry out certain actions for less than originally anticipated.
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