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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-2516
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MONSANTO COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-0420020
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 NORTH LINDBERGH BLVD., ST. LOUIS, MO. 63167
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (314) 694-1000
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<TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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<S> <C>
COMMON STOCK $2 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH
SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90
DAYS. YES X NO
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INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE
CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY
OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS
FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [X]
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NONAFFILIATES OF THE REGISTRANT: APPROXIMATELY $9.1 BILLION AS OF THE
CLOSE OF BUSINESS ON FEBRUARY 28, 1994.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 118,614,871
SHARES OF COMMON STOCK, $2 PAR VALUE, OUTSTANDING AT FEBRUARY 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
1. PORTIONS OF MONSANTO COMPANY ANNUAL REPORT TO SECURITY HOLDERS FOR
THE YEAR ENDED DECEMBER 31, 1993. (PARTS I AND II OF FORM 10-K.)
2. PORTIONS OF MONSANTO COMPANY NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT DATED MARCH 14, 1994. (PART III OF FORM 10-K.)
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PART I
ITEM 1. BUSINESS.
Monsanto Company and its subsidiaries are engaged in the worldwide
manufacture and sale of a widely diversified line of agricultural
products; chemical products, including plastics and manufactured
fibers; pharmaceuticals; and food products, including low-calorie
sweeteners. Monsanto Company was incorporated in 1933 under Delaware
law and is the successor to a Missouri corporation, Monsanto Chemical
Works, organized in 1901. Unless otherwise indicated by the context,
"Monsanto" means Monsanto Company and consolidated subsidiaries, and
the "Company" means Monsanto Company only.
RECENT DEVELOPMENTS
In May, 1993, Monsanto purchased the assets, including working
capital, of the Ortho Consumer Products Division of Chevron Chemical
Company. See "Principal Acquisitions and Divestitures" on page 44 of
the 1993 Annual Report.
INDUSTRY SEGMENTS; PRINCIPAL PRODUCTS
For 1993, Monsanto reported its business under four industry
segments: The Agricultural Group, The Chemical Group, Searle, and
NutraSweet. The first two segments constitute, respectively, the
business of The Agricultural Group and The Chemical Group, both of
which are operating units of Monsanto. Searle reflects the consolidated
business of G. D. Searle & Co., and NutraSweet reflects the
consolidated business of The NutraSweet Company, both of which are
wholly owned subsidiaries of the Company. The tabular information
appearing under "Operating Unit Segment Data" and "Geographic Data" on
pages 27 and 34 of the 1993 Annual Report is incorporated herein by
reference.
<TABLE>
The following is a list of principal products categorized by major
end-use markets within each industry segment:
<CAPTION>
THE AGRICULTURAL GROUP
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
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<S> <C> <C> <C> <C>
Agriculture Roundup(R) herbicide Multipurpose, non- Alvin, TX; Antwerp, Belgium; Disodiumiminodiacetate;
and other glyphosate- selective agricultural Fayetteville, NC; Luling, Phosphorus Trichloride
based herbicides and industrial LA; Sao Jose dos Campos,
applications Brazil
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Lasso(R) herbicide and Corn, soybean, peanut Muscatine, IA Chloroacetyl Chloride;
other acetanilide-based and milo (sorghum) Diethylaniline
herbicides crops
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Avadex(R) BW herbicide; Wheat crops Antwerp, Belgium; Ammonium Thiocyanate;
Far-Go(R) herbicide Muscatine, IA Diisopropylamine;
Trichloropropane
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Residential Roundup herbicide; Herbicides, Fort Madison, IA Acephate; Chlorpyrifos;
applications Ortho(R) lawn-and- insecticides, Diazinon; Glyphosate;
garden products fungicides, and Malathion; Triforine
fertilizers
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<CAPTION>
THE CHEMICAL GROUP
Fibers
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Construction & Home Acrilan(R) acrylic Broadloom carpet Decatur, AL; Greenwood, SC; Acrylonitrile; Ammonia;
Furnishings fiber; nylon bulk Pensacola, FL Cyclohexane; Propylene
continuous filament;
nylon carpet staple
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Personal Products Acrilan acrylic fiber Sweaters; half-hose; Decatur, AL Acrylonitrile
active wear
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Vehicles Nylon filament; nylon Tires; molding resins Pensacola, FL Ammonia; Cyclohexane;
polymer for auto grilles, Propylene
bumpers and gears
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<CAPTION>
Performance Products
Personal Products Detergent builders; Laundry and dish Augusta, GA; Newport, United Benzene; Caustic Soda;
industrial phosphates; detergents; water Kingdom; Ruabon, United Phosphorus; Soda Ash
dental phosphates conditioners; non-gel Kingdom; St. Louis, MO; Sao
toothpaste Jose dos Campos, Brazil;
Soda Springs, ID; Trenton,
MI
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Chemicals Industrial phosphates; Metal treating, Augusta, GA; Luling, LA; St. Ammonia; Chlorine;
phosphoric acid; cleaning and etching; Louis, MO; Sauget, IL; Phosphorus; Soda Ash;
phosphorus plant food fertilizers; Trenton, MI Sulphur
pentasulfide; oil additives;
phosphorus trichloride herbicides
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Capital Equipment Diphenyl oxide; Heat transfer fluids Alvin, TX; Anniston, AL; Benzene; Phenol
polyphenyls Newport, United Kingdom
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Water treatment Scale inhibitors; oil Newport, United Kingdom Phosphorus Trichloride
chemicals field chemicals
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Food Food additives Bakery; dairy; meat St. Louis, MO; Sao Jose dos Caustic Soda; Lime;
Campos, Brazil; Trenton, MI Phosphorus
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Vehicles Hydraulic fluids and Hydraulic fluid for St. Louis, MO Phosphorus Oxychloride
lubricants commercial aircraft
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Construction & Home Ammonium polyphosphate Fire retardant coating; Phosphorus
Furnishings polymer additives
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<CAPTION>
Plastics
Personal Products Centrex(R) polymers; Toys; boats; tools; Addyston, OH; Antwerp, Acrylonitrile; Butadiene;
Lustran(R) ABS and SAN housewares; consumer Belgium; LaSalle, Quebec, Maleic Anhydride; Nylon
thermoplastics; electronics; business Canada; Muscatine, IA; Salt; Styrene
Triax(R) thermoplastic machines; cosmetic Pensacola, FL
alloys; Vydyne(R) nylon packaging; personal
molding resins care items; spas and
hot tubs; food
processing; medical
appliances
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Vehicles Lustran ABS and SAN Automotive interior and Addyston, OH; Antwerp, Acrylonitrile; Butadiene;
thermoplastics; Vydyne exterior molded parts; Belgium; LaSalle, Quebec, Maleic Anhydride; Nylon
nylon molding resins; under-the-hood Canada; Muscatine, IA; Salt; Styrene
Cadon(R) applications; Pensacola, FL
thermoplastics; Triax automotive aftermarket;
thermoplastic alloys; transportation
Centrex polymers
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Construction & Home Lustran ABS Drain pipe; Addyston, OH; Antwerp, Acrylonitrile; Butadiene;
Furnishings thermoplastics; Triax refrigeration; Belgium; LaSalle, Quebec, Maleic Anhydride; Styrene
thermoplastic alloys telecommunications Canada; Muscatine, IA
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<CAPTION>
THE CHEMICAL GROUP (CONT'D)
Resins
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
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Vehicles Saflex(R) plastic Windshields Ghent, Belgium; Indian Butyraldehyde; Ethanol;
interlayer Orchard, MA; Sao Jose dos Polyvinyl Alcohol; Vinyl
Campos, Brazil; Trenton, MI Acetate Monomer
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Specialty resins; Automotive coatings and Addyston, OH; Antwerp, Butanol; Chlorine;
polymer modifiers sealants Belgium; Bridgeport, NJ; Formaldehyde; Melamine;
Indian Orchard, MA; LaSalle, Methanol; Phthalic
Quebec, Canada Anhydride; Toluene
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Construction & Home Saflex plastic Architectural glass Ghent, Belgium; Indian Butyraldehyde; Ethanol;
Furnishings interlayer Orchard, MA; Sao Jose dos Polyvinyl Alcohol; Vinyl
Campos, Brazil; Trenton, MI Acetate Monomer
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Specialty resins Coatings and adhesives Addyston, OH; Alvin, TX; Acrylate Esters; Butanol;
Indian Orchard, MA; LaSalle, Formaldehyde; Melamine;
Quebec, Canada; Trenton, MI Methanol; Vinyl Acetate
Monomer
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Polymer modifiers Vinyl flooring; caulks Antwerp, Belgium; Butanol; Chlorine;
and sealants; Bridgeport, NJ; LaSalle, 2-Ethylhexanol; Phenol;
adhesives; coatings; Quebec, Canada Phthalic Anhydride; Toluene
wall covering; vinyl
upholstery; insulation;
furniture
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Personal Products Polymer modifiers Packaging Antwerp, Belgium; Butanol; Chlorine; Phthalic
Bridgeport, NJ; LaSalle, Anhydride; Toluene
Quebec, Canada
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Other A variety of resin Electronics; paper; Addyston, OH; Indian Acrylate Esters;
products graphics; coatings; Orchard, MA; LaSalle, Butyraldehyde; Ethanol;
medical devices; Quebec, Canada Formaldehyde; Maleic
packaging; solvents Anhydride; Melamine;
Methanol; Vinyl Acetate
Monomer
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<CAPTION>
Rubber and Process Chemicals
Vehicles Santocure(R) CBS, Tires; tubes; belts; Antwerp, Belgium; Newport, Aniline; Carbon Disulfide;
Santocure MOR, hoses; retreads; mats United Kingdom; Nitro, WV; Para-Nitrochlorobenzene;
Santocure NS, Ruabon, United Kingdom; Tertiary-Butylamine
Santocure TBSI, Sauget, IL
Santoflex(R) 13,
Santogard(R) PVI
rubber processing
chemicals (accelerators
and antidegradants)
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Construction & Home Flectol(R), Roofing; flooring; Antwerp, Belgium; Newport, Aniline; Carbon Disulfide;
Furnishings Santocure CBS, tape; industrial hose United Kingdom; Nitro, WV; Tertiary-Butylamine
Santocure MOR, Ruabon, United Kingdom;
Santocure NS, Sauget, IL
Santocure TBSI
rubber processing
chemicals (antioxidants
and accelerators)
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Chemicals Nitrochlorobenzene Dyes; pigments; rubber Anniston, AL; Newport, Benzene; Caustic Soda;
derivatives; Sodium MBT preservatives; United Kingdom; Nitro, WV; Chlorine
engineering Sauget, IL
thermoplastics;
pesticides; antifreeze;
water treatment
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<CAPTION>
THE CHEMICAL GROUP (CONT'D)
Rubber and Process Chemicals (Cont'd)
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Other Monochlorobenzene; Pesticides Anniston, AL; Sauget, IL Benzene; Caustic Soda;
Nitrochlorobenzene Chlorine
derivatives
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<CAPTION>
Engineered Products
Capital Equipment Sulfuric acid and Process plants On-Site Construction Various Construction
process plants (design Components
and construction); air
emission control
systems
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Construction & Home Doormats Doormats Ghent, Belgium; Polyethylene
Furnishings St. Louis, MO
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<CAPTION>
SEARLE
Pharmaceuticals Maxaquin(R) Anti-infective Augusta, GA; Caguas, Puerto Trifluoroaniline
(Lomefloxacin HCl) Rico; Evreux, France
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Daypro(R) (Oxaprozin); Anti-inflammatory Augusta, GA; Caguas,Puerto Benzoin;
Arthrotec(R) Rico; Morpeth, United Misoprostol/Diclofenac
(Misoprostol/Diclofenac) Kingdom
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Aldactone(R) Cardiovascular Augusta, GA; Caguas, Puerto Androstenedione/
(Spironolactone); Rico; Evreux, France; Hydrochlorothiazide;
Aldactazide(R) Morpeth, United Kingdom Verapamil HCl
(Spironolactone/
Hydrochlorothiazide);
Calan(R) formulations
(Verapamil HCl)
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Oral contraceptives Fertility control Caguas, Puerto Rico; Delta 4 (19-Norandro-
Morpeth, United Kingdom stenedione)
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Cytotec(R) Gastrointestinal Caguas, Puerto Rico; Coapa, Norprostol
(Misoprostol) Mexico; Morpeth, United
Kingdom
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Ambien(R) (Zolpidem Central nervous system Caguas, Puerto Rico Zolpidem
Tartrate)
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Food (ex-U.S. only) Canderel(R) tabletop Low-calorie tabletop Evreux, France; Morpeth, Aspartame
sweetener; Equal(R) sweetener United Kingdom
tabletop sweetener
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<CAPTION>
NUTRASWEET
Food NutraSweet(R) brand High-intensity Augusta, GA; Harbor Beach, Aspartic Acid;
sweetener sweetener available MI; University Park, IL L-Phenylalanine
primarily in beverages,
dessert products and
tabletop sweeteners
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Equal tabletop Low-calorie tabletop Manteno, IL Aspartame
sweetener; sweeteners
NutraSweet(R)
Spoonful(TM) tabletop
sweetener
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Simplesse(R) all All natural fat Whey protein concentrate
natural fat substitute substitute for use
primarily in dairy
products
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</TABLE>
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SALE OF PRODUCTS
Monsanto's products are sold directly to customers in various
industries, to wholesalers and other distributors and jobbers, to
retailers and to the ultimate consumer, principally by its own sales
force, or, in some cases, through third parties. With respect to
pharmaceuticals, such sales force concentrates on detailing to
physicians and managed health care providers. As indicated on page 35
of the 1993 Annual Report, Monsanto's net income is historically higher
during the first half of the year, primarily because of the
concentration of generally more profitable sales of The Agricultural
Group during that part of the year. Monsanto's marketing and
distribution practices do not result in unusual working capital
requirements on a consolidated basis, although the seasonality of sales
of The Agricultural Group segment sometimes results in short-term
borrowings to finance the customer accounts receivable and inventories.
Inventories of finished goods, goods in process and raw materials are
maintained to meet customer requirements and Monsanto's scheduled
production. In general, Monsanto does not manufacture its products
against a backlog of firm orders; production is geared primarily to the
level of incoming orders and to projections of future demand. Monsanto
generally is not dependent upon one or a group of customers. The
NutraSweet segment, however, makes a majority of its sales to a few
companies for use in carbonated soft drinks. Monsanto has no material
contracts with the government of the United States or any state, local
or foreign government. However, pursuant to contracts executed under
U.S. federal and state laws, Monsanto's Searle segment pays rebates to
state governments for pharmaceuticals sold under state Medicaid
programs and under state-funded programs for the indigent. The Searle
segment also grants discounts to certain managed health care providers.
Introduction of new products by The Agricultural Group, Searle and
NutraSweet segments is typically subject to prior review and approval
by the U.S. Food & Drug Administration, the U.S. Environmental
Protection Agency and/or the U.S. Department of Agriculture (or
comparable agencies of ex-U.S. governments) before they can be sold.
Such reviews are often time-consuming and costly. These agencies also
have continuing jurisdiction over many existing products of these
segments.
RAW MATERIALS AND ENERGY RESOURCES
Monsanto is both a producer and significant purchaser of a wide
spectrum of its basic and intermediate raw material requirements. Major
requirements for key raw materials and fuels are typically purchased
pursuant to long-term contracts. Monsanto is not dependent on any one
supplier for a material amount of its raw materials or fuel
requirements, but certain important raw materials are obtained from a
few major suppliers. In general, where Monsanto has limited sources of
raw materials, it has developed contingency plans to minimize the
effect of any interruption or reduction in supply. Information with
respect to specific raw materials is set forth in the table above under
"Industry Segments; Principal Products."
While temporary shortages of raw materials and fuels may occasionally
occur, these items are sufficiently available to cover current and
projected requirements. However, their continuing availability and
price are subject to unscheduled plant interruptions occurring during
periods of high demand, or due to domestic and world market and
political conditions, as well as to the direct or indirect effect of
U.S. and other countries' government regulations. The impact of any
future raw material and energy shortages on Monsanto's business as a
whole or in specific world areas cannot be accurately predicted.
Operations and products may, at times, be adversely affected by
legislation, shortages or international or domestic events.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES AND CONCESSIONS
Monsanto owns a large number of patents which relate to a wide
variety of products and processes, has pending a substantial number of
patent applications, and is licensed under a small number of patents of
others. Also, Monsanto owns a considerable number of established
trademarks in many countries under which it markets its products.
Monsanto's patents and trademarks in the aggregate are of material
importance in the operation of its business, particularly in The
Agricultural Group and Searle segments and with respect to
NutraSweet(R) brand sweetener. Certain proprietary products such as
Roundup(R)
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herbicide are covered by patents. Although patents protecting
Roundup(R) herbicide have now expired in most countries, compound per
se patent protection for the active ingredient in Roundup herbicide
continues in the United States into the year 2000. All patents covering
the use of aspartame as a sweetener have expired. NutraSweet(R) brand
sweetener is currently manufactured under several patents owned by The
NutraSweet Company and patented processes licensed from a third party
for the duration of the applicable patents. Calan(R) SR, an
antihypertensive pharmaceutical, is licensed through the year 2004 to
Searle by a third party, which has retained co-marketing rights. The
product no longer has patent protection nor non-patent market
exclusivity conferred by the Waxman-Hatch amendments to the U.S. Food,
Drug and Cosmetics Act.
The trademarks "Equal(R)," "Canderel(R)" and "NutraSweet" and the
NutraSweet symbol are protected by registration in the United States
and in other countries where the products are marketed.
Roundup herbicide, Calan SR antihypertensive and NutraSweet brand
sweetener are each substantial contributors to earnings.
Monsanto holds (directly or by assignment) numerous phosphate leases,
which were issued on behalf of or granted by the United States,
political subdivisions of various states, or private parties. None of
these leases taken individually is deemed by Monsanto to be material,
although Monsanto's phosphate leases in the aggregate are significant
to The Chemical Group segment of its business. Monsanto's phosphate
leases have varying terms, with leases obtained from the United States
being of indefinite duration subject to the modification of lease terms
at twenty-year intervals.
COMPETITION
Monsanto encounters substantial competition in each of its industry
segments. This competition, from other manufacturers of the same
products and from manufacturers of different products designed for the
same uses, is expected to continue in both U.S. and ex-U.S. markets.
Depending on the product involved, various types of competition are
encountered, including price, delivery, service, performance, product
innovation, product recognition and quality.
The number of Monsanto's principal competitors varies from product to
product. It is not practical to discuss Monsanto's numerous competitors
because of the large variety of Monsanto's products, the markets served
and the worldwide business interests of Monsanto. Overall, however,
Monsanto regards its principal product groups to be competitive with
many other products of other producers and believes that it is an
important producer of many of such product groups.
RESEARCH AND DEVELOPMENT
Research and development constitute an important part of Monsanto's
activities. See "Operating Unit Segment Data" on page 27 of the 1993
Annual Report, incorporated herein by reference.
ENVIRONMENTAL MATTERS
Monsanto is subject to various laws and government regulations
concerning environmental matters, employee safety and employee health
in the United States and other countries. It is anticipated that
increasingly stringent requirements will be imposed upon Monsanto, its
competitors and industry in general. U.S. federal environmental
legislation having particular impact on Monsanto includes the Toxic
Substances Control Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the Resource Conservation and Recovery Act; the Clean
Air Act; the Clean Water Act; the Safe Drinking Water Act; and the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA," commonly known as "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act ("SARA"). Monsanto is also subject
to the Occupational Safety and Health Act and regulations of the
Occupational Safety and Health Administration ("OSHA") concerning
employee safety and health matters. The Environmental Protection Agency
("EPA"), OSHA and other federal agencies have the authority to
promulgate regulations which have an impact on Monsanto's operations.
In addition to these federal activities, various states have been
delegated certain authority under the aforementioned federal
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statutes. Many state and local governments have adopted environmental
and employee safety and health laws and regulations, some of which are
similar to federal requirements. State and federal authorities may seek
fines and penalties for violation of these laws and regulations.
Monsanto is dedicated to a long-term environmental protection program
that reduces emissions of hazardous materials into the environment, as
well as to the remediation of identified existing environmental
concerns. In 1988, management committed to a 90 percent reduction in
toxic air emissions from worldwide operations by the end of 1992,
including emissions reportable in the U.S. under Title III of SARA. The
reduction achieved was 92 percent, based on 1992 year-end operating
rates. The cost to accomplish this target did not materially affect
operating results. In fact, some of the target capital projects lowered
operating costs and improved operating efficiency.
Expenditures in 1993 were approximately $53 million for environmental
capital projects and approximately $234 million for management of
environmental programs, including the operation and maintenance of
facilities for environmental control. Monsanto estimates that during
1994 and 1995 approximately $40 million-$70 million per year will be
spent on additional capital projects for environmental protection.
Monsanto periodically receives notices from the EPA that it is a
potentially responsible party ("PRP") under Superfund. The EPA has
designated Monsanto as a PRP at 89 Superfund sites. Monsanto has
resolved disputes, entered partial consent decrees, and executed
administrative orders between Monsanto and the EPA in 41 of these
cases, settling a portion or all of Monsanto's liability for these
Superfund cases. Six other matters involve sites where allegations are
predicated on tentative findings of reuse of drums by others that once
contained products sold by Monsanto. These six matters have been
inactive as to Monsanto for at least nine years. At one other site,
Monsanto has determined that it has no liability whatsoever.
Monsanto's policy is to accrue costs for remediation of waste
disposal sites in the accounting period in which the responsibility is
established and the cost is estimable. Monsanto's estimates of its
liabilities for Superfund sites are based on evaluations of currently
available facts with respect to each individual site and take into
consideration factors such as existing technology, presently enacted
laws and regulations, and prior experience in remediation of
contaminated sites. These liabilities have not been reduced for any
claims for recoveries from insurance or from third parties. However,
Monsanto is engaged in litigation with some of its insurance carriers
regarding both the applicability and the amount of its coverage
responsive to claims for damages at these sites. Monsanto has an
accrued liability of $102 million as of December 31, 1993, for
Superfund sites. As assessments and remediation activities progress at
individual sites, these liabilities are reviewed periodically and
adjusted to reflect additional technical, engineering and legal
information that becomes available. Major sites in this category
include the noncompany-owned Brio, Fike/Artel, Motco and Woburn sites
which account for $83 million of the accrued amount.
Monsanto's estimate of its Superfund liability is affected by several
uncertainties such as, but not limited to, the method and extent of
remediation, the percentage of material attributable to Monsanto at the
sites relative to that attributable to other parties, and the financial
capabilities of the other PRPs at most sites. Due to these
uncertainties, primarily related to the method and extent of
remediation, potential future expenses could be as much as $30 million
for these sites. These potential future expenses may be incurred over
the balance of the decade.
There are various other lawsuits, claims and proceedings that state
agencies and others have asserted against the Company seeking
remediation of alleged environmental impairments. Monsanto is in the
process of determining its involvement, if any, at 44 of these sites.
Monsanto has an accrued liability of $131 million as of December 31,
1993, for these matters and for environmental reserves at certain
former Monsanto plant sites. The Company's estimate of its liability
related to these sites is affected by several uncertainties such as,
but not limited to, the extent of Monsanto's involvement, and the
method and extent of remediation. Due to these uncertainties, potential
future expenses could be as much as $70 million for these sites. Four
sites in this category account for $63 million of the accrued amount
and for approximately $60 million of the potential future expenses.
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Monsanto spent $39 million in 1993 for remediation of Superfund and
other waste disposal sites. Most of these expenditures related to The
Chemical Group, and similar or greater amounts can be expected in
future years.
For operational facilities, Monsanto recognizes post-closure
environmental costs and site remediation costs over the estimated
remaining useful life of the related facilities, not to exceed 20
years. Monsanto spent $14 million in 1993 for remediation of these
facilities and has an accrued liability of $33 million as of December
31, 1993, for these sites. Uncertainties related to these costs are
evolving government regulations, the method and extent of remediation,
and future changes in technology. Monsanto's estimated closure costs
for these plant sites are approximately $150 million.
While the ultimate costs and results of remediation of waste disposal
sites cannot be predicted with certainty, management believes that
Monsanto's liquidity and profitability in any one year will not be
materially affected.
EMPLOYEE RELATIONS
As of December 31, 1993, Monsanto had approximately 30,000 employees
worldwide. Satisfactory relations have prevailed between Monsanto and
its employees.
INTERNATIONAL OPERATIONS
Monsanto and affiliated companies are engaged in manufacturing, sales
and/or research and development in the United States, Europe, Canada,
Latin America, Australia, Asia and Africa. A large number of products
are manufactured abroad. Monsanto's ex-U.S. operations are subject to a
number of potential risks and limitations, such as: fluctuations in
currency values; exchange control regulations; wage and price controls;
approvals of therapeutic claims and pricing for pharmaceutical and
other products; governmental regulation of food ingredients,
agricultural and pharmaceutical products and biotechnology; employment
regulations; import, export and trade restrictions, including
embargoes; raw material supply constraints; governmental instability,
civil disorders, civil wars and other hostilities; and other
potentially detrimental domestic and foreign governmental practices or
policies affecting U.S. companies doing business abroad. See
"Geographic Data" on page 34 of the 1993 Annual Report, incorporated
herein by reference.
LEGAL PROCEEDINGS
Because of the size and nature of its business, Monsanto is a party
to numerous legal proceedings. Most of these proceedings have arisen in
the ordinary course of business and involve claims for money damages.
While the results of litigation cannot be predicted with certainty,
Monsanto does not believe these matters or their ultimate disposition
will have a material adverse effect on Monsanto's financial position.
On April 12, 1985, the Company was named as a defendant in the first
of a number of lawsuits in which plaintiffs claim injuries resulting
from alleged exposure to substances present at or emanating from the
Brio Superfund site near Houston, Texas. The Company is one of a number
of companies that had sold materials to the chemical reprocessor at
that site. Currently pending against the Company are the following
matters: (a) The Company is one of a number of defendants in 14 cases
brought in Harris County District Court on behalf of 751 plaintiffs who
own homes or live in the Southbend or Sageglen subdivisions, attended
school in the Southbend subdivision, or used nearby recreational
baseball fields. Plaintiffs claim to have suffered various personal
injuries and fear future disease; the need for medical monitoring; and,
in the case of the homeowners, property damage. In addition to their
claims of personal injury, four plaintiffs in one of these cases allege
business losses. Plaintiffs seek compensatory and punitive damages in
an unspecified amount. (b) The Company is also a defendant in two
additional cases brought in Harris County District Court. The first
case is brought by two recreational baseball leagues which claim to
have suffered property damage and consequential damages. Plaintiffs
seek compensatory and punitive damages in an unspecified amount. The
second case is brought on behalf of the Clear Creek Independent School
District for property damage and consequential damages. Plaintiff seeks
8
<PAGE> 10
compensatory and punitive damages in an unspecified amount. (c) The
Company is one of a number of defendants in two additional actions
brought in Harris County District Court by 407 plaintiffs, who are
former employees of the owners/operators of the Brio site, persons who
worked near the Brio site, Sageglen subdivision residents, and members
of the employees' and residents' families. Plaintiffs claim physical
and emotional injury and seek compensatory and punitive damages in an
unspecified amount. The Company believes that it has meritorious
defenses to all of these lawsuits including lack of proximate cause,
lack of negligent or other improper conduct on the part of the Company,
and negligence of plaintiffs (or their parents) and/or of builders and
developers of the Southbend subdivision. The Company is vigorously
defending these actions.
In 1974, Searle introduced in the United States an intrauterine
contraceptive product, commonly referred to as an intrauterine device
("IUD"), under the name Cu-7(R). Following extensive testing by Searle
and review by the FDA, the Cu-7 was approved for sale as a prescription
drug. Searle has been named a defendant in a number of product
liability lawsuits alleging that the Cu-7 caused personal injury
resulting from pelvic inflammatory disease, perforation, pregnancy or
ectopic pregnancy. As of March 1, 1994, there were approximately 124
cases pending in various U.S. state and federal courts and
approximately 361 cases filed outside the United States (the vast
majority in Australia). The lawsuits seek damages in varying amounts,
including compensatory and punitive damages, with most suits seeking at
least $50,000 in damages. Searle believes it has meritorious defenses
and is vigorously defending each of these lawsuits. On January 31,
1986, Searle voluntarily discontinued the sale of the Cu-7 in the
United States, citing the cost of defending such litigation.
The Company registered, on June 27, 1991, for the Compliance Audit
Program ("CAP") administered by the EPA under the authority of Section
8(e) of the Toxic Substances Control Act ("TSCA"). It has been reported
that over 120 companies in the United States registered for the CAP.
The CAP requires registrants to audit health and environmental effect
information in order to determine whether information in the
registrant's possession is reportable to the EPA under TSCA Section
8(e). A registrant's liability, under the CAP, for late reporting of
information under TSCA 8(e), will be assessed on the basis of a set
amount per study submitted with the total liability not to exceed
$1,000,000. The Company voluntarily entered into a similar Consent
Agreement with the EPA before the CAP, and under that Agreement
performed a more limited audit than is required by the CAP and paid a
settlement of $648,000. This settlement amount has been credited to the
Company under the CAP. It has now been determined that the Company's
remaining liability under the CAP will be $352,000.
RISK MANAGEMENT
Monsanto continually evaluates risk retention and insurance levels
for product liability, property damage and other potential areas of
risk. Monsanto devotes significant effort to maintaining and improving
safety and internal control programs, which reduce its exposure to
certain risks. Based on the cost and availability of insurance and the
likelihood of a loss, management determines the amount of insurance
coverage to be purchased from unaffiliated companies and the
appropriate amount of risk to retain. Since 1986, Monsanto's liability
insurance has been on the "claims made" policy form. Management
believes that the current levels of risk retention are consistent with
those of other companies in the various industries in which Monsanto
operates. There can be no assurance that Monsanto will not incur losses
beyond the limits of, or outside the coverage of, its insurance.
However, Monsanto's liquidity, financial position and profitability are
not expected to be affected materially by the levels of risk retention
that the Company accepts.
ITEM 2. PROPERTIES.
The General Offices of the Company are located on a 285-acre tract of
land in St. Louis County, Missouri. The Company also owns a 210-acre
tract in St. Louis County on which additional research facilities are
located. Monsanto also has research laboratories and technical centers
throughout the world. Information with respect to Monsanto's
manufacturing locations worldwide and the industry
9
<PAGE> 11
segments which use such plants as of January 1, 1994, is set forth under
"Business-Industry Segments; Principal Products" in Item 1 of this Report,
which is incorporated herein by reference.
Monsanto's principal plants are suitable and adequate for their use.
Utilization of these facilities may vary with seasonal, economic and
other business conditions, but none of the principal plants is
substantially idle. The facilities generally have sufficient capacity
for existing needs and expected near-term growth. Most of these plants
are owned in fee. However, the land at the Antwerp, Belgium plant is
leased. In addition, a portion of a plant at Augusta, Georgia is
currently leased with an option to purchase, pursuant to an industrial
revenue bond financing. The Company has granted leases, with options to
purchase, on approximately 366 acres of the 3,000 acres at the Alvin,
Texas plant site. In limited instances, Monsanto has granted leases on
portions of other plant sites not required for current operations.
ITEM 3. LEGAL PROCEEDINGS.
For information concerning certain legal proceedings involving
Monsanto, see "Business-Environmental Matters" and "Business-Legal
Proceedings" contained in Item 1 of this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to the security holders during the fourth
quarter of 1993.
EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding executive officers is contained in Item 10 of
Part III of this Report (General Instruction G) and is incorporated
herein by reference.
10
<PAGE> 12
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The narrative or tabular information regarding the market for the
Company's common equity and related stockholder matters appearing under
"Review of Cash Flow" on pages 39 through 41 and "Quarterly Data" on
page 35 of the 1993 Annual Report is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The tabular information under "Financial Summary-Operating Results,
Earnings per Share and Year-End Financial Position" and the amounts of
Dividends per Share, all appearing on page 52 of the 1993 Annual
Report, are incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
The tabular and narrative information appearing under "Review of
Consolidated Results of Operations" on pages 23 through 26, "Operating
Unit Segment Data" on pages 27 through 33, "Review of Changes in
Financial Position" on page 37, and "Review of Cash Flow" on pages 39
through 41 of the 1993 Annual Report is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of Monsanto appearing on pages
22, 36, 38, 42 and 43 through 51; the Independent Auditors' Opinion
appearing on page 21; and the tabular and narrative information
appearing under "Quarterly Data" on page 35 of the 1993 Annual Report
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
11
<PAGE> 13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
<TABLE>
Information regarding directors and executive officers appearing
under "Election of Directors" on pages 2 through 4 of the Monsanto
Company Notice of Annual Meeting and Proxy Statement (the "1994 Proxy
Statement") dated March 14, 1994, is incorporated herein by reference.
The following information with respect to the Executive Officers of the
Company on March 1, 1994, is included pursuant to Instruction 3 of Item
401(b) of Regulation S-K:
<CAPTION>
Year First
Became an
Executive
Name - Age Present Position with Registrant Officer Other Business Experience since January 1, 1989
- --------------------------- ---------------------------------- ---------- ---------------------------------------------------
<S> <C> <C> <C>
Richard W. Duesenberg, 63 Senior Vice President, 1977 Present position, 1982.
Secretary and General Counsel-
Monsanto Company
Robert E. Flynn, 60 Chairman and Chief Executive 1987 Chairman, Chief Executive Officer and President,
Officer, The NutraSweet Company Fisher Controls International, Inc. (a former
(a subsidiary of the Company); subsidiary of the Company), 1988; Chairman and Chief
Advisory Director-Monsanto Executive Officer, The NutraSweet Company, 1990; and
Company present position, 1993.
Sheldon G. Gilgore, 62 Chairman and Chief Executive 1987 Chairman, President and Chief Executive Officer, G. D.
Officer, G. D. Searle & Co. (a Searle & Co., 1986; Chairman and Chief Executive
subsidiary of the Company); Officer, G. D. Searle & Co., 1991; and present
Advisory Director-Monsanto position, 1993.
Company
Richard J. Mahoney, 60 Director; Chairman and Chief 1975 Present position, 1986.
Executive Officer-Monsanto
Company
Philip Needleman, 55 Senior Vice President, Research 1991 Professor and Head of the Department of Pharmacology,
and Development; Advisory Washington University School of Medicine, 1976; Vice
Director-Monsanto Company; President, Research and Development-Monsanto Company,
President, Research and 1989; Vice President, Research and Development;
Development, G. D. Searle & Co. Advisory Director-Monsanto Company, 1991; Vice
President, Research and Development; Advisory
Director-Monsanto Company; President, Research and
Development, G. D. Searle & Co., 1992; and present
position, 1993.
Robert G. Potter, 54 Executive Vice President and 1981 Group Vice President and Advisory Director-Monsanto
Advisory Director-Monsanto Company and President-Monsanto Chemical Company, 1986;
Company; President-The Chemical and present position, 1990.
Group
12
<PAGE> 14
<CAPTION>
Year First
Became an
Executive
Name - Age Present Position with Registrant Officer Other Business Experience since January 1, 1989
- --------------------------- ---------------------------------- ---------- ---------------------------------------------------
Nicholas L. Reding, 59 Director; Vice Chairman- 1976 Executive Vice President and Advisory Director-
Monsanto Company Monsanto Company and President-Monsanto
Agricultural Company, 1986; Executive Vice President,
Environment, Safety, Health and Manufacturing and
Advisory Director-Monsanto Company, 1990; and present
position, 1993.
Robert B. Shapiro, 55 Director; President and Chief 1987 Chairman and Chief Executive Officer, The NutraSweet
Operating Officer-Monsanto Company, 1986; Executive Vice President and Advisory
Company Director-Monsanto Company and President-The
Agricultural Group, 1990; and present position, 1993.
Francis A. Stroble, 63 Senior Vice President and Chief 1975 Present position, 1982.
Financial Officer; Advisory
Director-Monsanto Company
Hendrik A. Verfaillie, 48 Vice President and Advisory 1993 Vice President, Commercial Development-Monsanto
Director-Monsanto Company; Agricultural Company, 1986; Vice President and General
President-The Agricultural Manager, Roundup Division-The Agricultural Group,
Group 1990; and present position, 1993.
Virginia V. Weldon, 58 Senior Vice President, Public 1990 Professor of Pediatrics, Washington University School
Policy; Advisory Director- of Medicine, 1979-1989; Vice President, Washington
Monsanto Company University Medical Center, 1980-1989; Deputy Vice
Chancellor for Medical Affairs, Washington University
School of Medicine, 1983-1989; Vice President,
Scientific Affairs-Monsanto Company, 1989; Vice
President, Public Policy-Monsanto Company, 1989; Vice
President, Public Policy; Advisory Director-Monsanto
Company, 1990; and present position, 1993.
</TABLE>
The above-listed individuals are elected to the offices set opposite
their names to hold office until their successors are duly elected and
have qualified, or until their earlier death, resignation or removal.
ITEM 11. EXECUTIVE COMPENSATION.
Information appearing under "Directors' Fees and Other Arrangements"
on page 8 and under "Executive Compensation" on pages 12 through 16 of
the 1994 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information appearing under "Stock Ownership of Management and
Certain Beneficial Owners" on pages 5 and 6 of the 1994 Proxy Statement
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
13
<PAGE> 15
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this Report:
1. The financial statements set forth at pages 22, 36, 38, 42 and
43 through 51 of the 1993 Annual Report (See Exhibit 13 under
Paragraph (a)3 of this Item 14)
2. Financial Statement Schedules
The following supplemental schedules for the years ended December
31, 1993, 1992 and 1991:
V - Property, Plant and Equipment
VI - Accumulated Depreciation, Depletion, and Amortization of
Property, Plant and Equipment
VII - Guarantees of Securities of Other Issuers (December 31,
1993, only)
VIII - Valuation and Qualifying Accounts
IX - Short-Term Borrowings
X - Supplementary Income Statement Information
All other supplemental schedules are omitted because of the absence
of the conditions under which they are required.
3. Exhibits - See the Exhibit Index at page 24 of this Report. For
a listing of all management contracts and compensatory plans or
arrangements required to be filed as exhibits to this Form 10-K,
see the Exhibits listed under Exhibit No. 10(iii) on pages 24-27
of the Exhibit Index which were previously filed. The following
Exhibits listed in the Exhibit Index are filed with this Report:
13 The Company's 1993 Annual Report to shareowners
21 Subsidiaries of the registrant (See page 29)
23(ii) 1. Consent of Independent Auditors (See page 30)
2. Consent of Company Counsel (See page 30)
24 1. Powers of attorney submitted by Joan T. Bok, Robert
M. Heyssel, Gwendolyn S. King, Philip Leder, Howard
M. Love, Richard J. Mahoney, Frank A. Metz, Jr., Buck
Mickel, Jacobus F.M. Peters, Nicholas L. Reding, John
S. Reed, William D. Ruckelshaus, Bruce R. Sents,
Robert B. Shapiro, John B. Slaughter, Francis A.
Stroble and Stansfield Turner
2. Certified copy of Board resolution authorizing Form
10-K filing utilizing powers of attorney
99 1. Computation of the Ratio of Earnings to Fixed Charges
for Monsanto Company and Subsidiaries (See page 31)
(b) Reports on Form 8-K during the quarter ended December 31, 1993:
No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1993.
14
<PAGE> 16
OPINION OF INDEPENDENT AUDITORS
Uonsanto Company:
We have audited the statement of consolidated financial position of Monsanto
Company and Subsidiaries as of December 31, 1993 and 1992 and the related
statements of consolidated income, shareowners' equity and cash flow for each of
the three years in the period ended December 31, 1993 and have issued our
opinion thereon dated February 25, 1994; such financial statements and opinion
are included in your 1993 Annual Report to shareowners and are incorporated
herein by reference. Our audits also comprehended the schedules of Monsanto
Company and Subsidiaries, listed in Item 14(a)2. These schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information shown therein.
DELOITTE & TOUCHE
DELOITTE & TOUCHE
Saint Louis, Missouri
February 25, 1994
15
<PAGE> 17
<TABLE>
SCHEDULE V
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------------- ------------ --------- ----------- ----------------------------------- ----------
Foreign
Currency
Balance at Transfers Translation Balance at
Beginning of Additions Between Adjust- Other End of
Classification Year at Cost Retirements Accounts ments Changes Year
-------------- ------------ --------- ----------- -------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
Land............................ $ 106 $ 2 $ 2 $ - $ 1 (C) $ 107
Buildings....................... 1,240 33 78 (12) (36)(B) 1,237
Machinery and equipment......... 5,939 447 422 (54) (67)(B) 5,793
Construction in progress........ 317 $437(A) (502) (4) (3)(B) 245
------ ---- ---- ----- ----- ----- ------
Total......................... $7,602 $437 $482 $ - $ (70) $(105) $7,382
------ ---- ---- ----- ----- ----- ------
Year Ended December 31, 1992:
Land............................ $ 104 $ 1 $ 3 $ (1) $ 1 (C) $ 106
Buildings....................... 1,215 15 78 (27) (11)(B) 1,240
Machinery and equipment......... 5,772 240 590 (108) (75)(B) 5,939
Construction in progress........ 419 $586(A) (671) (14) (3)(C) 317
------ ---- ---- ----- ----- ----- ------
Total......................... $7,510 $586 $256 $ - $(150) $ (88) $7,602
------ ---- ---- ----- ----- ----- ------
Year Ended December 31, 1991:
Land............................ $ 103 $ - $ 1 $ - $ - $ 104
Buildings....................... 1,162 11 78 1 (15)(C) 1,215
Machinery and equipment......... 5,495 159 524 10 (78)(B) 5,772
(20)(C)
Construction in progress........ 466 $554(A) (603) 2 - 419
------ ---- ---- ----- ----- ----- ------
Total......................... $7,226 $554 $170 $ - $ 13 $(113) $7,510
------ ---- ---- ----- ----- ----- ------
<FN>
NOTES:
(A) Property additions generally are initially charged to construction in progress and subsequently transferred to their
appropriate asset classification when placed in service.
(B) Principally property related to divested operations.
(C) Transfers from (to) other accounts.
(D) Cost is depreciated using the straight-line method over weighted average periods of 22 years for buildings and 11 years
for machinery and equipment.
</TABLE>
16
<PAGE> 18
<TABLE>
SCHEDULE VI
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
----------- ------------ ---------- ----------- ---------------------- ----------
Foreign
Additions Currency
Balance at Charged to Translation Balance at
Beginning of Costs and Adjust- Other End of
Description Year Expenses Retirements ments Changes Year
----------- ------------ ---------- ----------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
Buildings............................... $ 608 $ 53 $ 17 $ (6) $(44)(A) $ 594
Machinery and equipment................. 3,981 417 445 (37) 64 (C) 3,980
Government grants....................... 8 (1)(D) - - (1)(E) 6
------ ---- ---- ---- ---- ------
Total............................... $4,597 $469 $462 $(43) $ 19 $4,580
------ ---- ---- ---- ---- ------
Year Ended December 31, 1992:
Buildings............................... $ 540 $ 51 $ 11 $(14) $ (7)(A) $ 608
49 (C)
(55)(A)
Machinery and equipment................. 3,768 424 227 (78) 21 (B) 3,981
128 (C)
Government grants....................... 11 (2)(D) - (1) - 8
------ ---- ---- ---- ---- ------
Total............................... $4,319 $473 $238 $(93) $136 $4,597
------ ---- ---- ---- ---- ------
Year Ended December 31, 1991:
Buildings............................... $ 496 $ 48 $ 8 $ 4 $ - $ 540
(40)(A)
Machinery and equipment................. 3,402 407 139 11 (14)(B) 3,768
141 (C)
Government grants....................... 12 (2)(D) - - 1 (E) 11
------ ---- ---- ---- ---- ------
Total............................... $3,910 $453 $147 $ 15 $ 88 $4,319
------ ---- ---- ---- ---- ------
<FN>
NOTES:
(A) Principally includes accumulated depreciation related to divested operations.
(B) Transfers from (to) other accounts.
(C) Includes reserves for asset impairment and for the restructuring program.
(D) Amortization of government grants credited to income.
(E) Government grant additions.
</TABLE>
17
<PAGE> 19
<TABLE>
SCHEDULE VII
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
GUARANTEES OF SECURITIES OF OTHER ISSUERS
AS OF DECEMBER 31, 1993
(Dollars in millions)
<CAPTION>
COLUMN A COLUMN B COLUMN C
------------------------------------------------- ------------------------------ ------------
Total Amount
Guaranteed
Name of Issuer of Securities Title of Issue of Each and
Guaranteed by Person for Which Statement is Filed Class of Securities Guaranteed Outstanding
------------------------------------------------- ------------------------------ -----------
<S> <C> <C>
Village of Sauget, Illinois................................... Pollution Control Revenue Bonds $ 12
(Term Bonds)
Various Export Financings..................................... Bank Loans 3
Rural Credit Financing (Brazil)............................... Bank Loans 31
Various Equity Affiliates..................................... Bank Loans 72
Various Bond Holders.......................................... Industrial Revenue Bonds 17
Government of Argentina....................................... External Bonds 5
First National Bank of Boston................................. Series A Trust Notes 36
Wilmington Trust Company...................................... Trust Notes 46
----
Total....................................................... $222
----
<FN>
NOTES:
(A) Columns D, E and G have been omitted as the answers thereto would have been "None."
(B) In answer to Column F, all guaranteed securities are guaranteed as to principal and interest. The annual aggregate
amount of interest guaranteed is approximately $13 million.
(C) Monsanto also has guaranteed $80 million of 7.09 percent amortizing notes and $100 million of 8.13 percent amortizing
debentures issued by its Employee Stock Ownership Plan (ESOP). The unpaid balances of the ESOP notes and debentures are
included in Short-term and Long-term Debt in Monsanto's Statement of Consolidated Financial Position at December 31, 1993.
</TABLE>
18
<PAGE> 20
<TABLE>
SCHEDULE VIII
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
----------- ---------- ---------- ---------- ----------
Additions
Balance at Charged to Balance at
Beginning Costs and End of
Description of Year Expenses Deductions Year
----------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
Reserves deducted from related assets in the Statement of
Consolidated Financial Position:
Doubtful receivables and returns and allowances.................. $ 33 $ 36 $ 18(A) $ 51
------ ---- ------ ------
Inventory and obsolescence losses................................ $ 23 $ 31 $ 9 $ 45
------ ---- ------ ------
Amortization of intangible assets................................ $ 383 $ 81 $ 14 $ 450
------ ---- ------ ------
Deferred tax asset valuation allowances(C)....................... $ 62 $ 34 $ 7 $ 89
------ ---- ------ ------
Year Ended December 31, 1992:
Reserves deducted from related assets in the Statement of
Consolidated Financial Position:
Doubtful receivables and returns and allowances.................. $ 36 $ 15 $ 18(A) $ 33
------ ---- ------ ------
Inventory and obsolescence losses................................ $ 31 $ 11 $ 19 $ 23
------ ---- ------ ------
Amortization of intangible assets................................ $1,422 $238 $1,277(B) $ 383
------ ---- ------ ------
Deferred tax asset valuation allowances(C)....................... $ 32 $ 33 $ 3 $ 62
------ ---- ------ ------
Year Ended December 31, 1991:
Reserves deducted from related assets in the Statement of
Consolidated Financial Position:
Doubtful receivables and returns and allowances.................. $ 34 $ 23 $ 21(A) $ 36
------ ---- ------ ------
Inventory and obsolescence losses................................ $ 20 $ 32 $ 21 $ 31
------ ---- ------ ------
Amortization of intangible assets................................ $1,203 $233 $ 14 $1,422
------ ---- ------ ------
<FN>
NOTES:
(A) Principally allowances granted.
(B) Includes $1,270 million related to NutraSweet's fully amortized aspartame-use patent.
(C) Monsanto adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," effective as of
January 1, 1992. Prior years were not restated for this adoption.
</TABLE>
19
<PAGE> 21
<TABLE>
SCHEDULE IX
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
------------ --------- -------- ----------- ----------- -------------
Maximum Average Weighted
Category of Weighted Amount Amount Average
Aggregate Balance Average Outstanding Outstanding Interest Rate
Short-Term at End of Interest During the During the During the
Borrowings(A) Year Rate Year Year(D) Year(D)
------------- --------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
Payable to banks(B)................................. $49 7% $189 $110 5%
Commercial paper(C)................................. $16 3% $523 $140 3%
Year Ended December 31, 1992:
Payable to banks(B)................................. $70 10% $168 $109 8%
Commercial paper(C)................................. $529 $222 4%
Year Ended December 31, 1991:
Payable to banks(B)................................. $75 14% $111 $ 78 15%
Commercial paper(C)................................. $66 5% $626 $276 6%
<FN>
NOTES:
(A) Excludes bank overdrafts of $67 million, $78 million and $125 million in 1993-1991, respectively. Generally, there is no
interest on these bank overdrafts.
(B) Interest on these loans is principally related to various bank rates. The short-term facilities of ex-U.S. subsidiaries
include $5 million, $8 million and $15 million in 1993-1991, respectively, of loans of subsidiaries in hyperinflationary
countries.
(C) Interest on these borrowings is generally at money market rates determined by competitive bidding.
(D) Based on the average month-end amounts outstanding for payable to banks and based on the average daily balance for
commercial paper.
</TABLE>
20
<PAGE> 22
<TABLE>
SCHEDULE X
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
<CAPTION>
COLUMN A COLUMN B
-------- ----------------
Charged to Costs
Item and Expenses
-------- ----------------
<S> <C>
Year Ended December 31, 1993:
Maintenance and repairs........................................................................ $379
Taxes, other than payroll and income taxes(A).................................................. 93
Advertising costs.............................................................................. 297
Royalty costs.................................................................................. 54
Year Ended December 31, 1992:
Maintenance and repairs........................................................................ $412
Taxes, other than payroll and income taxes(A).................................................. 126
Advertising costs.............................................................................. 266
Royalty costs.................................................................................. 93
Year Ended December 31, 1991:
Maintenance and repairs........................................................................ $377
Taxes, other than payroll and income taxes(A).................................................. 114
Advertising costs.............................................................................. 278
Royalty costs.................................................................................. 105
<FN>
NOTES:
(A) Includes real estate, personal property, franchise, excise and other taxes, none of which exceeds 1 percent of net
sales.
(B) Preoperating costs and similar deferrals were each less than 1 percent of net sales. Depreciation and amortization of
intangible assets are included in the Statement of Consolidated Cash Flow.
</TABLE>
21
<PAGE> 23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MONSANTO COMPANY
................................................
(Registrant)
By BRUCE R. SENTS
.............................................
Bruce R. Sents
Vice President and Controller
(Principal Accounting Officer)
Date: March 15, 1994
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
RICHARD W. DUESENBERG Chairman and Director March 15, 1994
................................................................ (Principal Executive Officer)
(Richard J. Mahoney)*
RICHARD W. DUESENBERG President and Director March 15, 1994
................................................................
(Robert B. Shapiro)*
RICHARD W. DUESENBERG Vice Chairman and Director March 15, 1994
................................................................
(Nicholas L. Reding)*
RICHARD W. DUESENBERG Senior Vice President March 15, 1994
................................................................ (Principal Financial Officer)
(Francis A. Stroble)*
BRUCE R. SENTS Vice President and Controller March 15, 1994
................................................................ (Principal Accounting Officer)
(Bruce R. Sents)
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Joan T. Bok)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Robert M. Heyssel)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Gwendolyn S. King)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Philip Leder)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Howard M. Love)*
22
<PAGE> 24
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Frank A. Metz, Jr.)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Buck Mickel)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Jacobus F.M. Peters)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(John S. Reed)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(William D. Ruckelshaus)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(John B. Slaughter)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Stansfield Turner)*
<FN>
*Richard W. Duesenberg, by signing his name hereto, does sign this document on behalf of the above
noted individuals, pursuant to powers of attorney duly executed by such individuals which have been
filed as an Exhibit to this Report.
RICHARD W. DUESENBERG
........................................
Richard W. Duesenberg
Attorney-in-Fact
</TABLE>
23
<PAGE> 25
<TABLE>
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of
Item 601 of Regulation S-K.
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
2 Omitted - Inapplicable
3(i) Restated Certificate of Incorporation of the Company effective as of April 27, 1987
(incorporated herein by reference to Exhibit 19(ii)2 of the Company's Form 10-Q for the
quarter ended June 30, 1987)
3(ii) By-Laws of the Company, as amended effective September 1, 1993 (incorporated herein by
reference to Exhibit 99.1 of the Company's Form 10-Q for the quarter ended September 30,
1993)
4(i) Form of Rights Agreement, dated as of January 26, 1990 between the Company and The First
National Bank of Boston (incorporated herein by reference to Form 8-A filed on January 31,
1990)
4(iii) Registrant agrees to furnish to the Securities and Exchange Commission upon request copies
of instruments defining the rights of holders of certain long-term debt not being
registered of the registrant and all subsidiaries for which consolidated or unconsolidated
financial statements are required to be filed.
9 Omitted - Inapplicable
10(i) Acquisition Agreement dated as of September 11, 1992, between Emerson Electric Co. and
Monsanto Company relating to the purchase and sale of Fisher Controls International, Inc.
and related businesses, plus identification of contents of omitted schedules and agreement
to furnish supplementally a copy of any omitted schedule to the Securities and Exchange
Commission upon request (incorporated herein by reference to Form 8-K dated as of October
1, 1992 and filed on October 9, 1992)
10(iii) 1. Stock Compensation Arrangement for Non-Employee Directors adopted January 23, 1987 and
effective April 24, 1987 (incorporated herein by reference to Exhibit 19(i)1 of the
Company's Form 10-Q for the quarter ended March 31, 1987)
2. Non-Employee Directors Stock Plan, as amended in 1991 (incorporated herein by
reference to Exhibit 19(ii)1 of the Company's Form 10-Q for the quarter ended June 30,
1991)
3. Non-Employee Directors Retirement Plan, as amended in 1991 (incorporated herein by
reference to Exhibit 19(ii) of the Company's Form 10-Q for the quarter ended September
30, 1991)
4. Charitable Contribution Program effective April 1, 1992 (incorporated herein by
reference to Exhibit 19(i)1 of the Company's Form 10-K for the year ended December 31,
1991)
5. Deferred Compensation Plan for Non-Employee Directors, as amended in 1983 and 1991
(incorporated herein by reference to Exhibit 19(ii)1 of the Company's Form 10-K for
the year ended December 31, 1991)
6. Consulting Agreement between the Company and Philip Leder dated January 17, 1990
(incorporated herein by reference to Exhibit 19(i)3 of the Company's Form 10-K for the
year ended December 31, 1989)
24
<PAGE> 26
EXHIBIT INDEX (CONT'D)
<CAPTION>
Exhibit No. Description
----------- -----------
7. Financial Planning Services Program for Monsanto Management Council Members, as
amended in 1993 (incorporated herein by reference to Exhibit 10.1 of the Company's
Form 10-Q for the quarter ended March 31, 1993)
8. Monsanto Management Incentive Plan of 1984, as amended in 1987, 1988 and 1989
(incorporated herein by reference to Exhibit 19(ii)2 of the Company's Form 10-K for
the year ended December 31, 1989)
9. Monsanto Management Incentive Plan of 1988/I, as amended in 1988, 1989, 1991 and 1992
(incorporated herein by reference to Exhibit 99.1 of the Company's Form 10-K for the
year ended December 31, 1992)
10. Monsanto Management Incentive Plan of 1988/II, as amended in 1989, 1991 and 1992
(incorporated herein by reference to Exhibit 99.2 of the Company's Form 10-K for the
year ended December 31, 1992)
11. Split-dollar Life Insurance Plan (incorporated herein by reference to Exhibit
10(iii)19 of the Company's Form 10-K for the year ended December 31, 1987)
12. Executive Health Program (incorporated herein by reference to Exhibit 19(i) of the
Company's Form 10-Q for the quarter ended March 31, 1989)
13. Agreements between the Company and Richard J. Mahoney and Nicholas L. Reding entered
into as of May 16, 1988 (incorporated herein by reference to Exhibit 19(i)18 of the
Company's Form 10-Q for the quarter ended June 30, 1988)
14. Letter from the Company to Dr. Sheldon G. Gilgore dated February 12, 1986
(incorporated herein by reference to Exhibit 10(iii)14 of the Company's Form 10-K for
the year ended December 31, 1986)
15. Letter Agreement between G. D. Searle & Co. and Dr. Sheldon G. Gilgore, dated March 7,
1991, amending the Letter from the Company dated February 12, 1986 (incorporated
herein by reference to Exhibit 19(ii)1 of the Company's Form 10-Q for the quarter
ended March 31, 1991)
16. Agreement between the Company and Robert G. Potter entered into as of May 16, 1988
(incorporated herein by reference to Exhibit 19(i)5 of the Company's Form 10-K for the
year ended December 31, 1989)
17. Letter Agreement between the Company and Robert G. Potter entered into as of May 16,
1988 (incorporated herein by reference to Exhibit 19(i)6 of the Company's Form 10-K
for the year ended December 31, 1989)
18. Agreement between the Company and Robert B. Shapiro entered into as of July 23, 1990
(incorporated herein by reference to Exhibit 19(i)1 of the Company's Form 10-Q for the
quarter ended September 30, 1990)
25
<PAGE> 27
EXHIBIT INDEX (CONT'D)
<CAPTION>
Exhibit No. Description
----------- -----------
19. Letter Agreement between the Company and Robert B. Shapiro entered into as of July 23,
1990 (incorporated herein by reference to Exhibit 19(i)2 of the Company's Form 10-Q
for the quarter ended September 30, 1990)
20. Letter Agreement between the Company and Robert B. Shapiro entered into as of July 23,
1990 (incorporated herein by reference to Exhibit 19(i)3 of the Company's Form 10-Q
for the quarter ended September 30, 1990)
21. Searle Phantom Stock Option Plan of 1986, as amended in 1990, 1991 and 1992
(incorporated herein by reference to Exhibit 99.3 of the Company's Form 10-K for the
year ended December 31, 1992)
22. Searle Monsanto Stock Option Plan of 1986, as amended in 1988, 1989, 1990 and 1991
(incorporated herein by reference to Exhibit 19(ii)4 of the Company's Form 10-Q for
the quarter ended June 30, 1991)
23. G. D. Searle & Co. Management Incentive Plan (incorporated herein by reference to the
description on pages 19-20 of the Monsanto Company Notice of Annual Meeting and Proxy
Statement dated March 20, 1992)
24. G. D. Searle & Co. Executive Travel Accident Insurance Plan, as amended in 1989
(incorporated herein by reference to Exhibit 19(ii)4 of the Company's Form 10-Q for
the quarter ended June 30, 1989)
25. G. D. Searle & Co. Executive Supplemental Long Term Disability Plan (incorporated
herein by reference to Exhibit 19(i)7 of the Company's Form 10-Q for the quarter ended
June 30, 1988)
26. G. D. Searle & Co. Split Dollar Life Insurance Plan, as amended in 1989 (incorporated
herein by reference to Exhibit 19(ii)3 of the Company's Form 10-Q for the quarter
ended June 30, 1989)
27. G. D. Searle & Co. Legal/Tax/Financial Counseling Plan (incorporated herein by
reference to Exhibit 19(i)8 of the Company's Form 10-Q for the quarter ended June 30,
1988)
28. G. D. Searle & Co. Executive Relocation Plan (incorporated herein by reference to
Exhibit 19(i)9 of the Company's Form 10-Q for the quarter ended June 30, 1988)
29. G. D. Searle & Co. Supplemental Medical Reimbursement Plan (incorporated herein by
reference to Exhibit 19(i)10 of the Company's Form 10-Q for the quarter ended June 30,
1988)
30. G. D. Searle & Co. Deferred Compensation Plan, as amended in 1993 (incorporated herein
by reference to Exhibit 10.1 of the Company's Form 10-Q for the quarter ended June 30,
1993)
31. G. D. Searle & Co. Executive Physical Examinations Program, as amended in 1992
(incorporated herein by reference to Exhibit 99.1 of the Company's Form 10-Q for the
quarter ended June 30, 1992)
26
<PAGE> 28
EXHIBIT INDEX (CONT'D)
<CAPTION>
Exhibit No. Description
----------- -----------
32. NutraSweet/Monsanto Stock Plan of 1991 (incorporated herein by reference to Exhibit
19(i) of the Company's Form 10-Q for the quarter ended June 30, 1991)
33. The NutraSweet Company Deferred Compensation Plan (incorporated herein by reference to
Exhibit 19(i)11 of the Company's Form 10-Q for the quarter ended June 30, 1988)
34. The NutraSweet Company Executive Travel Accident Insurance Plan (incorporated herein
by reference to Exhibit 19(i)13 of the Company's Form 10-Q for the quarter ended June
30, 1988)
35. The NutraSweet Company Tax/Financial Services Plan (incorporated herein by reference
to Exhibit 19(i)14 of the Company's Form 10-Q for the quarter ended June 30, 1988)
36. The NutraSweet Company Supplemental Medical Reimbursement Plan (incorporated herein by
reference to Exhibit 19(i)15 of the Company's Form 10-Q for the quarter ended June 30,
1988)
37. The NutraSweet Company Executive Relocation Guidelines (incorporated herein by
reference to Exhibit 19(i)16 of the Company's Form 10-Q for the quarter ended June 30,
1988)
38. The NutraSweet Company Management Incentive Plan, as amended in 1990 and 1993
(incorporated herein by reference to Exhibit 10.2 of the Company's Form 10-Q for the
quarter ended March 31, 1993)
39. The NutraSweet Company Executive Disability Income Plan (incorporated herein by
reference to Exhibit 19(i)2 of the Company's Form 10-K for the year ended December 31,
1990)
40. The NutraSweet Company Executive Life Insurance Plan, as amended in 1990 (incorporated
herein by reference to Exhibit 19(ii)2 of the Company's Form 10-K for the year ended
December 31, 1990)
41. NutraSweet Long Term Incentive Plan (1991-1993) (incorporated herein by reference to
Exhibit 10(iii)44 of the Company's Form 10-K for the year ended December 31, 1991)
11 Omitted - Inapplicable; see "Earnings per Share" on page 50 of the 1993 Annual Report
12 Statement re Computation of the Ratio of Earnings to Fixed Charges - See Exhibit 99.1 below
13 The Company's 1993 Annual Report to shareowners. (The electronic submission includes only
the financial report section of the Annual Report, consisting of pages 20 through 52 of
that Report.) Only those portions expressly incorporated by reference into this Form 10-K
are deemed "filed"; other portions are furnished only for the information of the
Commission.
18 Omitted - Inapplicable
21 Subsidiaries of the registrant (See page 29)
27
<PAGE> 29
EXHIBIT INDEX (CONT'D)
<CAPTION>
Exhibit No. Description
----------- -----------
22 Omitted - Inapplicable
23(ii) 1. Consent of Independent Auditors (See page 30)
2. Consent of Company Counsel (See page 30)
24 1. Powers of attorney submitted by Joan T. Bok, Robert M. Heyssel, Gwendolyn S. King,
Philip Leder, Howard M. Love, Richard J. Mahoney, Frank A. Metz, Jr., Buck Mickel,
Jacobus F.M. Peters, Nicholas L. Reding, John S. Reed, William D. Ruckelshaus, Bruce R.
Sents, Robert B. Shapiro, John B. Slaughter, Francis A. Stroble and Stansfield Turner
2. Certified copy of Board resolution authorizing Form 10-K filing utilizing powers of
attorney
27 Not required
28 Omitted - Inapplicable
99 1. Computation of the Ratio of Earnings to Fixed Charges for Monsanto Company and
Subsidiaries (See page 31)
<FN>
- -----
Only Exhibits Nos. 13, 21, 23(ii) and 99.1 have been included in the printed copy of this Report.
</TABLE>
28
<PAGE> 30
APPENDIX
Throughout the printed Form 10-K, trademarks are initially designated on
each page by the superscript letter "R" in a circle or by the superscript
letters "TM."
<PAGE> 1
EXHIBIT 13
<TABLE>
<CAPTION>
FINANCIAL TABLE OF CONTENTS
<S> <C>
MANAGEMENT REPORT, 20
AUDIT COMMITTEE REPORT, 21
INDEPENDENT AUDITORS' OPINION 21
STATEMENT OF CONSOLIDATED INCOME 22
STATEMENT OF CONSOLIDATED FINANCIAL POSITION 36
STATEMENT OF CONSOLIDATED CASH FLOW 38
STATEMENT OF CONSOLIDATED SHAREOWNERS' EQUITY 42
NOTES TO FINANCIAL STATEMENTS 43
FINANCIAL SUMMARY 52
</TABLE>
MANAGEMENT REPORT
Monsanto Company's management is responsible for the fair presentation and
consistency, in accordance with generally accepted accounting principles,
of all the financial information included in this annual report. Where
necessary, the information reflects management's best estimates and
judgments.
Management is also responsible for maintaining a system of internal
accounting controls with the objectives of providing reasonable assurance
that Monsanto's assets are safeguarded against material loss from
unauthorized use or disposition and that authorized transactions are
properly recorded to permit the preparation of accurate financial
information. Cost/benefit judgments are an important consideration in this
regard. The effectiveness of internal controls is maintained by personnel
selection and training, division of responsibilities, establishment and
communication of policies, and ongoing internal review programs and audits.
Management believes that Monsanto's system of internal accounting controls
as of Dec. 31, 1993, is effective and adequate to accomplish the objectives
described above.
Richard J. Mahoney Francis A. Stroble
Chairman and Senior Vice President and
Chief Executive Officer Chief Financial Officer
Feb. 25, 1994
20
<PAGE> 2
AUDIT COMMITTEE REPORT
The audit committee is composed of six nonemployee members of the board of
directors and met five times during 1993. The committee reviews and
monitors Monsanto's internal accounting controls, financial reports,
accounting practices, and the scope and effectiveness of the audits performed
by the independent auditors and internal auditors. The committee
also recommends to the full board of directors the appointment of
Monsanto's principal independent auditors, and it approves in advance all
significant audit and nonaudit services provided by such auditors. As
ratified by shareowner vote at the 1993 annual meeting, Deloitte & Touche
were appointed independent auditors to examine, and to express an opinion
as to the fair presentation of, the consolidated financial statements.
This opinion follows.
The audit committee discusses audit and financial reporting matters with
representatives of the company's financial management, its internal
auditors and Deloitte & Touche. The internal auditors and Deloitte &
Touche meet with the committee, with and without management representatives
present, to discuss the results of their examinations, the adequacy of
Monsanto's internal accounting controls, and the quality of its financial
reporting. The committee encourages the internal auditors and Deloitte &
Touche to communicate directly with the committee.
The audit committee has reviewed the financial section of this annual
report. Pursuant to the recommendation of the committee, the board of
directors has approved the financial section.
Buck Mickel
Chairman, Audit Committee
Feb. 25, 1994
Unless otherwise indicated by the context, "Monsanto" means Monsanto
Company and consolidated subsidiaries, and "the company" means Monsanto
Company only. All dollars are in millions, except per share data.
INDEPENDENT AUDITORS' OPINION
To the Shareowners of Monsanto Company:
We have audited the accompanying statement of consolidated financial
position of Monsanto Company and Subsidiaries as of Dec. 31, 1993 and 1992,
and the related statements of consolidated income, shareowners' equity and
cash flow for each of the three years in the period ended Dec. 31, 1993.
These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly in
all material respects the financial position of Monsanto Company and
Subsidiaries at Dec. 31, 1993 and 1992, and the results of their operations
and their cash flows for each of the three years in the period ended
Dec. 31, 1993, in conformity with generally accepted accounting principles.
As discussed in the Notes to Financial Statements, in 1992 Monsanto changed
its methods of accounting for postretirement benefits other than pensions
and for income taxes.
DELOITTE & TOUCHE
Deloitte & Touche
St. Louis, Missouri
Feb. 25, 1994
21
<PAGE> 3
<TABLE>
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
(Dollars in millions, except per share) 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES $7,902 $7,763 $7,936
Cost of goods sold 4,564 4,710 4,519
- ----------------------------------------------------------------------------------------------------------
GROSS PROFIT 3,338 3,053 3,417
Marketing expenses 1,199 1,115 1,042
Administrative expenses 548 487 530
Technological expenses 695 720 680
Amortization of intangible assets 81 237 233
Restructuring expenses -- net 5 436 457
- ----------------------------------------------------------------------------------------------------------
OPERATING INCOME 810 58 475
Interest expense (129) (169) (166)
Interest income 40 43 64
Other income (expense) -- net 8 (106) (19)
- ----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 729 (174) 354
Income taxes 235 (48) 116
- ----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS 494 (126) 238
- ----------------------------------------------------------------------------------------------------------
DISCONTINUED OPERATIONS:
Income from Fisher Controls 24 58
Gain on sale of Fisher Controls 554
- ----------------------------------------------------------------------------------------------------------
INCOME FROM DISCONTINUED OPERATIONS 578 58
- ----------------------------------------------------------------------------------------------------------
INCOME BEFORE ACCOUNTING CHANGES 494 452 296
CUMULATIVE EFFECT OF ACCOUNTING CHANGES:
Postretirement Benefits Other Than Pensions (658)
Income Taxes 118
- ----------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 494 $ (88) $ 296
- ----------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE:
Income (Loss) from Continuing Operations $ 4.10 $(1.01) $ 1.87
Discontinued Operations 4.68 0.46
Accounting Changes (4.38)
- ----------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 4.10 $(0.71) $ 2.33
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The above statement should be read in conjunction with pages 43 through 51
of this report. Previously reported amounts have been reclassified to
present Fisher Controls as discontinued operations.
<TABLE>
<CAPTION>
KEY FINANCIAL STATISTICS 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AS A PERCENT OF NET SALES:
Gross Profit 42% 39% 43%
Marketing, Administrative
and Technological Expenses 31 30 28
Research and Development Expenses 8 8 8
Operating Income 10 1 6
Income (Loss) from Continuing Operations 6 (2) 3
Net Income (Loss) 6 (1) 4
EFFECTIVE INCOME TAX RATE 32 (28) 33
RETURN ON SHAREOWNERS' EQUITY 16.9 (2.6) 7.6
- ----------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 4
REVIEW OF CONSOLIDATED RESULTS OF OPERATIONS
OPERATING RESULTS IN 1993 WERE STRONG
In 1993, Monsanto Company's operating results improved substantially from
1992 earnings. The Agricultural Group continued its impressive growth,
fueled by record sales volumes for Roundup(R) herbicide. Savings from cost
reduction and working capital reduction efforts, coupled with slightly
higher sales volumes, led to increased earnings in The Chemical Group.
Searle's performance improved as sales from new products and significant
cost savings from restructuring more than offset new-product launch costs
and the effect of generic competition on sales of the Calan(R) family of
calcium channel blockers in the United States. The NutraSweet Company,
which completed its first postpatent year for NutraSweet(R) brand sweetener in
the United States, showed continued growth in sales volumes and improved
earnings in 1993.
Net income for 1993 was $494 million, or $4.10 per share, compared with a
net loss of $88 million, or $0.71 per share, in 1992. Results in both
years were significantly affected by numerous unusual events.
In December 1993, the board of directors approved a small reserve to cover
the sale or exit from certain nonstrategic products, the withdrawal from
the pyridine research program in The Agricultural Group, and the
consolidation of some manufacturing capacity. The net aftertax expense
related to these actions was $7 million, or $0.06 per share, and
principally affected The Agricultural and Chemical Groups. It is
anticipated that the effect of these actions will generate future pretax
cash inflows and benefit future operating income by approximately $25
million on an annual basis.
In March 1993, Monsanto received reimbursement from insurance companies of
various costs associated with damage to a manufacturing site of a raw
material for Roundup herbicide. The settlement resulted in a $22 million
aftertax gain, or $0.18 per share. These costs had been expensed in 1992
pending resolution of the claim.
A planned inventory reduction in The Chemical Group benefited 1993 net
income by $19 million, or $0.16 per share, as a result of last-in,
first-out (LIFO) accounting for those inventories.
In 1992, Monsanto continued its restructuring program, which primarily
affected Searle, and resulted in a one-time aftertax expense of $425
million, or $3.44 per share. The Fisher Controls business was sold in
1992, which resulted in an aftertax gain of $554 million, or $4.49 per
share. Net income in 1992 also included $24 million, or $0.19 per share,
in partial-year earnings from Fisher Controls' operations prior to the sale
of this subsidiary.
In addition, Monsanto implemented new accounting rules related to
postretirement benefits and income taxes in 1992, which resulted in a net
one-time aftertax charge of $540 million, or $4.38 per share.
Other unusual items in 1992 totaled an aftertax expense of $47 million, or
$0.38 per share. These items principally were costs incurred from damage
in January 1992 to a manufacturing unit that produces a raw material for
Roundup herbicide and the settlement in the second quarter of 1992 of
certain lawsuits related to the Brio Superfund site.
Without the unusual events in 1993 and 1992, net income for 1993 would have
been $460 million, compared with $346 million for the prior year, an
increase of 33 percent. Earnings per share in 1993 would have been $3.82,
a 36 percent increase from 1992 earnings per share.
NET SALES SLIGHTLY HIGHER
Net sales in 1993 were 2 percent higher than those in the prior year, led
by increases in net sales for The Agricultural Group and Searle. Net sales
for The Chemical Group declined slightly despite higher sales volumes, and
NutraSweet's net sales declined, as expected, due to lower average pricing
prompted by the expiration of the U.S. aspartame-use patent in December
1992. (Monsanto's brand name for aspartame is NutraSweet brand sweetener.)
Net sales for The Agricultural Group grew 17 percent from those in 1992,
due primarily to a 24 percent increase in worldwide sales volumes for
Roundup herbicide from last year. Rapid worldwide adoption of conservation
tillage techniques by farmers, the effects of the late, wet spring in the
United States, and pricing and new end-use strategies contributed to this
sales volume increase. Searle's net sales growth was led by new product
introductions in the United States, principally Daypro(R), a once-daily
arthritis treatment, and Ambien(R), a short-term treatment for insomnia.
Sales from these and other new product introductions more than offset lower
sales of Calan, which resulted from generic competition in the United
States. The Chemical Group's net sales for 1993 were slightly lower, as
sales volume increases in the United States were offset by lower worldwide
average selling prices. The lower selling prices were principally due to
the recessionary climate in Europe and Japan. In NutraSweet's first year
following expiration of its aspartame-use patent in the United States, net
sales declined, as expected, because of lower average selling prices.
23
<PAGE> 5
However, aspartame sales volumes grew 6 percent from volumes last year.
Net sales in markets outside the United States represented 40 percent of
Monsanto's 1993 net sales, about the same percentage as last year.
OPERATING RESULTS WERE HIGHER
Operating income was $810 million in 1993, compared with $58 million in
operating income in 1992. Excluding the $61 million in pretax unusual
items in 1993 and the $624 million in pretax restructuring and unusual
charges in 1992, operating income would have increased by approximately $67
million in 1993. Operating results in 1993 benefited from strong sales
volume gains from certain products, lower raw material prices, and the
effect of cost reduction efforts. These increases in operating income were
partially offset by the effect of lower selling prices in all units and by
substantial new product introduction costs at Searle.
Excluding the 1993 and 1992 restructuring charges and unusual items,
operating results improved for all business segments. The Agricultural
Group in 1993 benefited from significantly higher worldwide sales volumes
for Roundup(R) herbicide and from lower manufacturing costs. Operating
results for The Chemical Group benefited from lower raw material costs,
cost reduction efforts, and increased demand in the United States.
Operating results for Searle improved as a result of cost savings from
restructuring and from higher net sales. These factors more than offset
substantial costs of new product introductions and the effect of generic
competition on sales of Calan(R) calcium channel blocker in the United States.
NutraSweet's improved operating income in 1993 resulted from increased
aspartame sales volumes, and from reduced operating and amortization
expenses, which combined to offset lower postpatent prices in the United
States for NutraSweet(R) brand sweetener.
Marketing and administrative expenses increased in 1993, principally due to
the aforementioned product launch costs incurred by Searle, higher costs
associated with various employee incentive programs, and operating expenses
of the acquired Ortho lawn-and-garden products business. Amortization of
intangible assets declined because of the expiration of NutraSweet's U.S.
aspartame-use patent in December 1992. Interest expense in 1993 fell 24
percent, primarily due to lower average debt levels. "Other income
(expense) -- net" increased in 1993, principally because of lower currency
losses and higher income from equity affiliates. The 1992 amount included
a write-down of investments to market value.
PRINCIPAL FINANCIAL TARGET REMAINS 20 PERCENT RETURN ON EQUITY
Management's principal financial target is to reach and sustain a 20
percent return on shareowners' equity (ROE). The ROE for 1993 was 16.9
percent, compared with a negative ROE of 2.6 percent in 1992. The negative
1992 ROE was due to the previously discussed 1992 restructuring actions,
accounting changes and unusual events. The company is realizing benefits
from previous restructuring actions and continues to believe the 20 percent
ROE target is appropriate.
PRODUCT DEVELOPMENT AND COMMERCIALIZATION ARE TOP PRIORITIES
New product development and commercialization continue to be strategic
priorities for Monsanto. For example, Posilac(R) bovine somatotropin (BST)
was approved for sale in the United States by the Food and Drug
Administration in November 1993. Research and development (R&D)
expenditures were $626 million in 1993, or 8 percent of net sales, a level
that reflects management's strong, long-term commitment to R&D. The
discovery and development of pharmaceutical and agricultural products
continue to be the focus of much of these expenditures. Research in
existing product technologies and new product applications also continues
across all business units. Additionally, Monsanto's research program
includes acquisition of new technologies through licensing. The result is
that Monsanto has many potential products in the R&D pipeline, several of
which should be commercialized in the next few years.
PRIOR YEAR REVIEW
Monsanto recorded a net loss of $88 million, or $0.71 per share, in 1992
which was affected by several nonrecurring actions. Bright spots in 1992
were the completion of major NutraSweet customer contracts, and government
approval in important markets of several new Searle products. Successful
marketing programs and good
24
<PAGE> 6
weather conditions also led to strong growth in sales volumes for Roundup(R)
herbicide and for Lasso(R) herbicide and other acetanilide herbicides.
In November 1992, the board of directors approved a series of actions in
operating and staff units designed to make worldwide operations more
focused, productive and cost-effective. These actions resulted in a
one-time aftertax expense of $425 million, or $3.44 per share, in the
fourth quarter of 1992. Other unusual items in 1992 totaled an aftertax
expense of $47 million, or $0.38 per share. These items included costs
incurred from damage in January 1992 to a manufacturing unit that produces
a raw material for Roundup herbicide and the settlement in the second
quarter of 1992 of certain lawsuits related to the Brio Superfund site.
In October 1992, Monsanto sold Fisher Controls for $1,275 million in cash
and realized an aftertax gain of $554 million, or $4.49 per share.
Effective Jan. 1, 1992, Monsanto adopted Statement of Financial Accounting
Standards (SFAS) No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," for its retiree benefit plans, and SFAS No.
109, "Accounting for Income Taxes." The adoption of these rules resulted
in a net one-time aftertax expense of $540 million, or $4.38 per share.
The incremental effect of SFAS No. 106 during 1992 decreased operating
income by $45 million and income from continuing operations by $29 million,
or $0.23 per share.
Net sales in 1992 declined from those in 1991, as higher sales volumes from
continuing businesses did not offset the lack of sales from divested
businesses and lower selling prices in all operating units.
The Agricultural Group's 1992 net sales were 2 percent below the prior
year's net sales. However, net sales benefited from its pricing and new
end-use strategies; farmers' conversion to conservation tillage; and, on
balance, good weather conditions in many key markets, especially North
America. Glyphosate sales volumes increased 16 percent worldwide compared
with those in 1991. Sales volumes for Lasso herbicide grew 8 percent from
those in 1991.
The Chemical Group's net sales declined in 1992 compared with those in
1991, because of the lack of sales from divested businesses and lower
average selling prices worldwide, principally due to the poor economic
conditions in Western Europe, Japan and the former Soviet Union. Sales
volumes in the United States gradually improved in 1992 as North American
housing starts and automobile production levels increased from the
depressed 1991 levels.
Searle's net sales in 1992 were slightly below sales in the prior year.
Sales of Calan(R) declined 10 percent, primarily due to lower selling prices
resulting from higher rebates to state Medicaid programs and from the
continued shift in demand from retail pharmacies to managed health care
providers, coupled with the negative effect of generic competition for the
sustained-release form of Calan. However, sales of Canderel(R) tabletop
sweetener, made with NutraSweet(R) brand sweetener and sold outside the United
States, increased 7 percent compared with those in 1991. In addition,
Searle benefited from sales of new products.
NutraSweet's net sales declined 8 percent in 1992 due to lower average
selling prices, partially offset by slightly higher aspartame sales
volumes. NutraSweet's average aspartame selling price declined, as
expected, as NutraSweet approached the December 1992 expiration of its
aspartame-use patent in the United States.
Operating income was $58 million in 1992, a decline of 88 percent compared
with 1991 operating income. Excluding 1992 and 1991 restructuring and
unusual charges, operating results in 1992 declined for all business
segments except The Agricultural Group. The core businesses of The
Agricultural Group benefited from significantly higher sales volumes for
Roundup and Lasso herbicides, lower manufacturing costs and cost savings
from previous restructuring actions. Operating results in 1992 for The
Chemical Group were hurt by lower selling prices and $26 million of
incremental SFAS No. 106 costs. These factors were partially offset by
lower raw material costs and higher sales volumes. Operating income for
Searle decreased in 1992, primarily because of costs to launch Maxaquin(R)
quinolone anti-infective agent in the United States, expansion of the U.S.
sales force to support Maxaquin and other anticipated new product launches,
and lower selling prices. NutraSweet's operating income was adversely
affected by lower selling prices, but benefited from cost savings from the
1991 reorganization.
Marketing expenses increased 7 percent in 1992, principally from product
launch costs incurred by Searle. Administrative expenses decreased 8
percent due to cost savings resulting from restructuring programs in prior
years and from lower incentive compensation.
The loss in "Other income (expense) -- net" in 1992 was larger than in the
previous year, principally due to the 1992 write-down of investments to
market value and higher currency losses.
25
<PAGE> 7
<TABLE>
ANALYSIS OF CHANGE IN EARNINGS PER SHARE -- BETTER (WORSE)
<CAPTION>
1993 vs. 1992 1992 vs. 1991
------------- -------------
<S> <C> <C>
SALES-RELATED FACTORS:
Selling prices $(1.90) $(1.47)
Sales volumes and mix 1.33 0.66
- ------------------------------------------------------------------------------------------
Total Sales-Related Factors (0.57) (0.81)
- ------------------------------------------------------------------------------------------
COST-RELATED FACTORS:
Raw material costs 0.39 0.26
Manufacturing capacity utilization 0.01 0.15
Other manufacturing costs 0.23 (0.09)
Marketing, administrative
and technological expenses (0.43) (0.50)
Amortization of intangible assets 0.85 (0.02)
- ------------------------------------------------------------------------------------------
Total Cost-Related Factors 1.05 (0.20)
- ------------------------------------------------------------------------------------------
Interest expense 0.20 (0.02)
Interest income (0.02) (0.10)
Other income (expense) -- net 0.20 (0.06)
Change in income taxes 0.19 (0.34)
Change in shares outstanding 0.10 0.10
- ------------------------------------------------------------------------------------------
Change in Earnings per Share
Before Other Factors 1.15 (1.43)
- ------------------------------------------------------------------------------------------
OTHER FACTORS:
Restructuring and other unusual actions 4.10 (1.22)
Gain on sale of Fisher Controls (4.49) 4.49
Divestitures (0.33) (0.27)
Accounting change for postretirement
benefits 5.34 (5.57)
Accounting change for income taxes (0.96) 0.96
- ------------------------------------------------------------------------------------------
Total Other Factors 3.66 (1.61)
- ------------------------------------------------------------------------------------------
Change in Earnings per Share $ 4.81 $(3.04)
- ------------------------------------------------------------------------------------------
</TABLE>
[Selling Price Index Graph]
The index of selling prices declined in 1993. This was
primarily due to the effect of The NutraSweet Company's lower average
selling prices in its first full year following expiration of its
aspartame-use patent in the United States. Refer to the discussion of the
operating unit segment data for NutraSweet on pages 32 and 33.
[Sales Volume Index Graph]
The sales volume index increase in 1993 was led by a 24
percent increase in worldwide sales volumes for Roundup(R) herbicide from
those last year and from moderate sales volume increases at Searle. Refer
to the discussion of the operating unit segment data for The Agricultural
Group on pages 28 through 29, and for Searle on pages 31 through 32.
[Raw Material Cost Index Graph]
The Chemical Group primarily benefited from the lower raw
material cost index in 1993. Refer to the discussion of the operating unit
segment data for The Chemical Group on pages 29 through 30.
26
<PAGE> 8
<TABLE>
OPERATING UNIT SEGMENT DATA
<CAPTION>
Operating Research
Net Sales Income (Loss)(1) and Development
- ---------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
------ ------ ------ ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Agricultural Group $1,967 $1,676 $1,711 $ 400 $ 242 $ 394 $ 152 $ 152 $ 146
The Chemical Group 3,684 3,705 3,740 331 91 (157) 113 112 108
Searle 1,546 1,503 1,531 (13) (288) 122 305 332 307
The NutraSweet Company 705 879 954 145 72 173 42 44 41
Corporate (53) (59) (57) 14 11 8
- ---------------------------------------------------------------------------------------------------------------------------
Total $7,902 $7,763 $7,936 $ 810 $ 58 $ 475 $ 626 $ 651 $ 610
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Capital Depreciation
Total Assets Expenditures and Amortization
- -----------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
------ ------ ------ ----- ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Agricultural Group $2,166 $1,680 $1,598 $ 109 $ 136 $ 93 $ 129 $ 112 $ 105
The Chemical Group 3,146 3,236 3,164 224 290 300 263 301 272
Searle 2,145 2,435 2,385 72 110 101 119 116 102
The NutraSweet Company 910 934 1,155 30 49 58 59 234 233
Corporate 273 800 294 2 1 2 2 2 2
Fisher Controls 631
- -----------------------------------------------------------------------------------------------------------------------------
Total $8,640 $9,085 $9,227 $ 437 $ 586 $ 554 $ 572 $ 765 $ 714
- -----------------------------------------------------------------------------------------------------------------------------
Amounts for 1992 and 1991 have been restated from those previously reported
for the reclassification of expenses and assets estimated to be
attributable to biotechnology product discovery. In 1993, these expenses
and assets were charged to the respective business units to reflect the
current organizational structure.
<FN>
(1) Operating income was affected by the 1993, 1992 and 1991 restructurings
and other unusual items as follows:
Income (Expense)
-------------------------
Operating Unit: 1993 1992 1991
----- ----- -----
The Agricultural Group $ (3) $(135) $ 30
The Chemical Group 74 (148) (478)
Searle 3 (265)
The NutraSweet Company (12) (70)
Corporate (1) (6) (9)
----- ----- -----
Total $ 61 $(624) $(457)
----- ----- -----
</TABLE>
Although inflation is relatively low in most of Monsanto's major markets,
it continues to affect operating results. To mitigate the effect of
inflation, Monsanto has implemented measures to control costs, to improve
productivity, to manage new fixed and working capital, and to raise selling
prices where government regulations and competitive conditions permit. In
addition, it is estimated that the current cost of replacing certain assets
is greater than their historical cost presented in the financial
statements. Accordingly, the depreciation expense reported in the
Statement of Consolidated Income would be greater if the expense was stated
on a current cost basis.
Sales among operating units were not significant. Certain corporate
expenses, primarily those related to the overall management of Monsanto,
were not allocated to the operating units or geographic areas. Corporate
assets primarily include investments in affiliates and a portion of the
cash balance.
[1993 Net Sales Graph]
The principal factors that accounted for the operating units' performances
in 1993 and 1992, along with the factors that are expected to affect
operating results in the near term, are described on the following pages.
27
<PAGE> 9
<TABLE>
THE AGRICULTURAL GROUP
<CAPTION>
1993 1992 1991
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales:
Crop chemicals $1,936 $1,647 $1,551
Animal sciences 31 29 160
- -----------------------------------------------------------------------------------------------
Total $1,967 $1,676 $1,711
Operating Income 400 242 394
- -----------------------------------------------------------------------------------------------
</TABLE>
The Agricultural Group is a leading worldwide producer and marketer of
herbicides, including Roundup(R), Lasso(R), Bullet(R),
Harness(R), Micro-Tech(R), Far-Go(R), Avadex(R) and Machete(R)
herbicides. More than half of the unit's herbicide net
sales are made in markets outside the United States. Weather conditions in
the agricultural markets throughout the world affect sales volumes.
[Agricultural Group Net Sales Graph]
The Agricultural Group's operating performance in 1993 was strong,
excluding the effect on operating income from the unusual items discussed
below.
Net sales for The Agricultural Group in 1993 were 17 percent higher than
those in 1992. Operating income increased $158 million, or 65 percent.
The increase in operating income was affected by unusual items occurring in
both 1993 and 1992. An unusual item included in 1993 operating income was
a $35 million pretax gain resulting from reimbursement by insurance
companies of various costs incurred in 1992 from damage to a
manufacturing site that produces a key raw material for Roundup herbicide.
These costs had been expensed in 1992 pending resolution of the claim. Other
unusual items in 1993 were $38 million in net charges primarily related to the
withdrawal from the pyridine research program. The unusual items included in
1992 operating income were $63 million in restructuring charges and other items,
principally related to employment reductions; a $42 million loss associated
with the above-mentioned costs incurred from damage to a manufacturing site
of a raw material for Roundup herbicide; and a $30 million charge for the
write-down of certain bovine somatotropin (BST) inventories because of
shelf-life expiration.
<TABLE>
The principal factors for the change in operating income were:
<CAPTION>
Better (Worse)
-----------------------
1993 vs. 1992 vs.
1992 1991
-------- --------
<S> <C> <C>
Selling prices $ (60) $ (64)
Sales volumes and mix 157 95
Raw material and other
manufacturing costs 24 38
Restructuring and other charges 25 (93)
Glyphosate plant damage costs 42 (42)
Insurance settlement 35
Inventory write-down 30 (30)
Divestitures (30)
Other (primarily
volume-related expenses) (95) (26)
----- -----
Change in operating income $ 158 $(152)
----- -----
</TABLE>
Worldwide sales volumes for Roundup glyphosate-based herbicide improved 24
percent from last year's sales volumes, reflecting strong demand in most
key worldwide markets. The rapid worldwide adoption of conservation
tillage techniques by farmers; the effects of the late, wet spring in the
United States; and good weather conditions, on balance, in many other key
markets contributed to this sales volume increase. The decline in selling
prices, principally in the ex-U.S. markets on certain glyphosate products,
continued to benefit glyphosate sales volumes by making the herbicide
cost-effective for weed control in a broader range of crop and industrial
uses. The effect on operating income of increased glyphosate sales volumes
exceeded the effect of lower selling prices.
While 1993 sales benefited from the Ortho lawn-and-garden products
business, operating income was hurt by the dilutive effect of that
acquisition. This business has a higher concentration of sales in the
first half of the year.
Expenditures in 1993 for Posilac(R) bovine somatotropin (BST), which was
approved for sale in the United States by the Food and Drug Administration
(FDA) in November 1993, continued to adversely affect financial results.
PRIOR YEAR REVIEW
The Agricultural Group's 1992 net sales were 2 percent below sales in the
prior year. However, excluding the 1991 sales of the subsequently divested
animal feed ingredients business, 1992 net sales for The Agricultural Group
would have been 6 percent higher than sales in 1991.
Operating income in 1992 was $242 million. Unusual items in 1992 operating
income were a $42 million loss associated with damage to a manufacturing
site of a raw material for Roundup herbicide; a $30 million charge for
28
<PAGE> 10
the write-down of certain BST inventories because of shelf-life expiration; and
$63 million in restructuring charges and other items, principally related
to employment reductions.
Worldwide sales volumes for glyphosate herbicides increased 16 percent and
benefited from pricing and new end-use strategies; farmers' conversion to
conservation tillage; and good weather conditions, on balance, in many key
markets, especially North America. The reductions in selling prices,
principally in the United States on certain glyphosate products, continued
to benefit glyphosate sales volumes by making the herbicide cost-effective
for weed control for a broader range of crop and industrial uses. The
effect on operating income of the increased glyphosate sales volumes
exceeded the effect of lower selling prices.
AGRICULTURAL GROUP OUTLOOK
Patents protecting glyphosate herbicide in various countries expired in
1991, while compound per se patent protection for the active ingredient in
Roundup(R) herbicide continues in the United States until the year 2000.
Management expects that manufacturing process patents that are important
to Monsanto's cost position will help maintain our competitive position
after the expiration of the other patents.
The Agricultural Group has a significant number of new products in the
research and development pipeline, some of which should be commercialized
in the next few years. The focus continues to be on a number of chemical
and biotechnology-related products.
Net sales and operating income in 1994 are expected to benefit from the May
1993 acquisition of the Ortho lawn-and-garden products business, which has
a higher concentration of sales in the first half of the year.
Posilac(R) bovine somatotropin was approved for sale in the United States by
the FDA in November 1993. Commercial sales of Posilac began Feb. 4, 1994,
after the expiration of a 90-day moratorium imposed by the U.S. Congress.
Posilac offers significant value to the dairy industry through the
reduction of milk production costs, but it continues to meet opposition
from certain groups.
<TABLE>
THE CHEMICAL GROUP
<CAPTION>
1993 1992 1991
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales:
Fibers $1,121 $1,065 $ 974
Performance products 565 619 648
Plastics 635 661 710
Resins 673 686 683
Rubber and process chemicals 469 471 482
Engineered products 221 203 145
Discontinued products 98
- ---------------------------------------------------------------------------------------------
Total $3,684 $3,705 $3,740
Operating Income (Loss) 331 91 (157)
- ---------------------------------------------------------------------------------------------
</TABLE>
The Chemical Group produces a wide range of chemicals, plastics, fibers and
other products listed in the table above. The unit's principal strengths
are nylon fibers, high-performance plastics, Saflex(R) plastic interlayer,
phosphorus and its derivatives, and rubber chemicals.
[Chemical Group Net Sales Graph]
In 1993, The Chemical Group benefited from lower raw material prices, cost
reduction efforts, and an improved U.S. economy. However, The Chemical
Group was adversely affected by the recession in Europe and Japan, which
continued to constrict demand for chemical products.
The Chemical Group's 1993 net sales were slightly lower than net sales last
year. Sales volumes increased 3 percent from sales volumes in 1992. This
increase was offset by lower selling prices, principally in the Plastics
and Resins Divisions. The sales volume increase in 1993 was primarily in
the United States, and benefited from a stronger U.S. market for
replacement carpet. Sales volumes also benefited from increased U.S.
automobile production, which rebounded from 1992 levels. Various product
sales volumes in Europe, Japan and the former Soviet Union declined as a
result of weak demand.
Operating income in 1993 more than tripled when compared with operating
income in the prior year. However, there were a number of unusual items
affecting profitability in both years. Specifically, 1993 operating income
benefited by $43 million in gains from the sale of several nonstrategic
businesses, partially offset by expenses
29
<PAGE> 11
related to facility rationalization and other costs. Operating income in 1993
also benefited by $31 million from a planned reduction in last-in, first-out
(LIFO) inventories. In 1992, operating income was adversely affected by $77
million in restructuring expenses associated with implementing further
cost-cutting actions; $41 million in costs associated with the settlement
of certain litigation related to the Brio Superfund site; and $30 million
in expenses related to a facility asset impairment.
<TABLE>
An analysis of the change in operating income is provided below:
<CAPTION>
Better (Worse)
-----------------------
1993 vs. 1992 vs.
1992 1991
-------- --------
<S> <C> <C>
Selling prices $ (85) $ (83)
Sales volumes and mix 11 25
Capacity utilization and other
manufacturing costs 21 (31)
Raw material costs 71 46
Restructuring 120 401
Asset impairment 30 (30)
Brio litigation settlement 41 (41)
Effect of inventory reduction 31
Other -- (39)
----- -----
Change in operating income $ 240 $ 248
----- -----
</TABLE>
Favorable raw material costs partially offset lower average selling prices.
Capacity utilization, an important factor for The Chemical Group's
profitability, was 77 percent in 1993, versus 78 percent in 1992.
The Fibers Division's net sales in 1993 were 5 percent higher than those in
1992. This strong performance was primarily due to increased nylon sales
in the United States to carpet manufacturers for the home replacement
carpet market and to tire producers for tire reinforcement.
The Performance Products Division's net sales were lower than those in the
prior year, principally due to weak economies outside the United States.
The Plastics Division's net sales in 1993 were lower than those in 1992,
primarily because of lower selling prices throughout the world. Sales
volumes increased modestly from those in 1992, principally in North America
and Brazil.
Worldwide sales volumes in 1993 of Saflex(R) plastic interlayer, the largest
product of the Resins Division, improved slightly from 1992 sales volumes.
Sales volume gains from the economic recovery in North America were offset
by the depressed economic conditions in Western Europe and Japan. Market
share increased in North America, led by gains in the U.S. automotive
market.
Net sales for the Rubber and Process Chemicals Division showed growth in
North America, Latin America and Asia. This growth was offset by the
depressed economic conditions in Europe and in the former Soviet Union.
PRIOR YEAR REVIEW
In 1992, The Chemical Group was affected by the poor economic conditions in
Western Europe, Japan and the former Soviet Union, and by the slow economic
recovery in the United States.
The Chemical Group's net sales from continuing products for 1992 were 2
percent higher than those in 1991, as a result of a 4 percent increase in
sales volumes. These volume gains were partially offset by lower selling
prices, principally in the Fibers and Plastics Divisions. The sales volume
increase in 1992 was primarily in the Fibers Division as U.S. housing
starts rebounded from 1991 levels. However, various product sales volumes
in Europe, Japan and the former Soviet Union declined as a result of weak
demand.
In 1992, The Chemical Group had operating income of $91 million compared
with an operating loss of $157 million in 1991. However, there were a
number of unusual items affecting profitability in both years.
Specifically, 1992 operating income was adversely affected by $77 million
in restructuring expenses associated with implementing further cost-cutting
actions; $41 million in costs associated with the settlement of certain
litigation related to the Brio Superfund site; $30 million in expenses
related to a facility asset impairment; and $26 million in incremental SFAS
No. 106 costs. In 1991, The Chemical Group had a $478 million expense
associated with the 1991 restructuring program.
CHEMICAL GROUP OUTLOOK
The Chemical Group's outlook for 1994 is for continued improvement; but the
degree is difficult to predict, because the timing of the economic recovery
in Western Europe and Japan is unknown, and the pace of the U.S. economic
recovery is uncertain. The Chemical Group will focus on continuing cost
reduction efforts and maintaining market share for strategic products with
good cost positions. Sound management of environmental compliance
activities is also a major focus.
30
<PAGE> 12
<TABLE>
SEARLE
<CAPTION>
1993 1992 1991
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $1,546 $1,503 $1,531
Operating Income (Loss) (13) (288) 122
- ------------------------------------------------------------------------------
</TABLE>
Searle is a research-based, worldwide pharmaceutical business that
concentrates on drugs for the treatment of cardiovascular,
gastrointestinal, immuno-inflammatory and sleep disorders, and infectious
diseases.
[Searle Net Sales Graph]
Searle's 1993 net sales were 3 percent higher compared with net sales last
year. The 3 percent overall increase in net sales was driven primarily by
5 percent higher volumes, partially offset by lower net selling prices.
Sales growth from new product introductions more than offset a decline in
sales of the Calan(R) family of calcium channel blockers. New product
introductions included Daypro(R), a once-daily arthritis treatment, in the
United States; Ambien(R), a short-term treatment for insomnia, in the United
States; and Arthrotec(R), a combination of Cytotec(R) ulcer preventive drug with
the nonsteroidal anti-inflammatory drug diclofenac, in the United Kingdom,
Canada, Sweden and Portugal. In total, these products contributed $159
million to 1993 net sales. Net sales of Calan, sold primarily in the North
American market, were $350 million, 23 percent lower than those of the
prior year. This decline primarily reflected the effect of generic
competition in the United States. Sales in 1993 of Maxaquin(R) quinolone
anti-infective agent were almost 50 percent higher than those in 1992, the
year the product was launched in the United States. But 1993 sales of
Maxaquin were short of expectations because of photosensitivity issues.
Net sales of Canderel(R) tabletop sweetener, made with NutraSweet(R) brand
sweetener and marketed by Searle outside the United States, were $151
million in 1993, down 4 percent from net sales in 1992. This decline was
due solely to the negative effects of translating these sales into a
stronger U.S. dollar.
Searle's 1993 operating loss was $13 million compared with an operating
loss of $288 million in 1992. Operating results in 1993 benefited from
cost savings, primarily from restructuring actions initiated in 1992.
However, results were negatively affected by substantial new product
introduction costs and global health care reforms. The 1992 operating loss
included a $265 million pretax restructuring charge.
<TABLE>
The principal factors for the change in operating income were:
<CAPTION>
Better (Worse)
-----------------------
1993 vs. 1992 vs.
1992 1991
-------- --------
<S> <C> <C>
Selling prices $ (34) $ (30)
Sales volumes and mix 94 39
Product rights sales 2 (49)
Restructuring 268 (265)
Marketing, administrative and
technological expenses (31) (97)
Other (24) (8)
----- -----
Change in operating income $ 275 $(410)
----- -----
</TABLE>
Searle's investment in research and development (R&D) continues to be
significant. R&D expenditures were 20 percent and 22 percent of the unit's
net sales in 1993 and 1992, respectively. Future R&D spending is also
expected to be significant. This level of investment reflects the
commitment to product discovery and development that is aimed at securing a
continuing stream of new products for Searle.
PRIOR YEAR REVIEW
Searle's net sales declined 2 percent in 1992 compared with 1991 sales.
Net sales of Calan, sold primarily in the North American market, were $456
million, 10 percent lower than sales in the prior year. This decline was
due to lower selling prices and the introduction of generic competition for
the sustained-release form of Calan. Continued growth of Canderel and new
products, such as Maxaquin, partially offset the sales decline. Net sales
of Canderel were $157 million in 1992, up 7 percent from those in 1991.
Sales of new products were $93 million, led by Maxaquin, which was launched
in the United States in mid-1992. Sales volumes for Cytotec increased 2
percent in 1992. However, net sales of Cytotec were approximately the same
as net sales in 1991 due to increased sales of the lower dosage form.
Average selling prices for Searle were moderately lower, resulting from
increased rebates to state Medicaid programs, principally for Calan, and a
continued shift in demand from retail pharmacies to managed health care
providers in the United States.
A significant part of the November 1992 restructuring affected Searle. The
restructuring steps included reductions in employment, plant closings and
consolidations,
31
<PAGE> 13
a rationalization of research investments, and sales of nonstrategic businesses.
A pretax restructuring charge of $265 million resulted in a 1992 operating loss
for Searle.
In addition to the restructuring charges, costs to introduce Maxaquin(R) in
the United States, the expansion of the U.S. sales force to support
Maxaquin and other anticipated new product introductions, and lower selling
prices negatively affected 1992 results.
SEARLE OUTLOOK
In 1993, Searle launched Daypro(R), a once-daily arthritis treatment, and
Ambien(R), a short-term treatment for insomnia, in the United States.
Arthrotec(R), a combination of Cytotec(R) ulcer preventive drug and diclofenac
for the treatment of arthritis, was launched in the United Kingdom, Canada,
Sweden and Portugal in 1993. Arthrotec has also been approved in France.
Cytotec was approved and launched in Japan. Cytotec has now been approved
in all major markets. Recent clinical developments related to Cytotec and
Maxaquin are believed to represent opportunities to enhance future sales
performance of these products.
Calan(R) participates in an increasingly competitive market for
antihypertensive drugs and now faces generic competition. This increased
competition is likely to adversely affect the future sales and profits of
Calan. Searle, in conjunction with ALZA Corp., is developing a formulation
of verapamil hydrochloride (the active ingredient in Calan) with
proprietary delayed-release technology that could eventually enhance
Searle's competitive position for such hypertension products.
Products currently in various stages of development include potential
treatments for hypertension, inflammation, abnormal heart rhythms, AIDS,
stroke, thrombosis and septic shock, and a chemotherapy adjunct.
<TABLE>
THE NUTRASWEET COMPANY
<CAPTION>
1993 1992 1991
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $705 $879 $954
Operating Income 145 72 173
- ---------------------------------------------------------------------------------------------
</TABLE>
The NutraSweet Company manufactures and markets NutraSweet(R) brand sweetener,
NutraSweet's brand name for aspartame; NutraSweet(R) Spoonful(TM) and Equal(R)
tabletop sweeteners; and Simplesse(R) all natural fat substitute. Sales and
manufacturing of NutraSweet brand sweetener in the European market are made
by 50 percent-owned European joint ventures and are not included in
NutraSweet's net sales and operating income. NutraSweet's share of the
European joint ventures' earnings is reflected in "Other income (expense)
- -- net" in the Statement of Consolidated Income. About 90 percent of
NutraSweet's net sales were in the U.S. market.
In 1993, NutraSweet's net sales decreased 20 percent compared with 1992 net
sales as the result of lower average selling prices of NutraSweet brand
sweetener. This decline was expected, and resulted from lower postpatent
prices in the United States for that product. Sales volumes for NutraSweet
brand sweetener increased 6 percent compared with those in 1992 led by
growth in the private label and specialty flavor segments of diet
soft-drink beverages.
Sales volumes for NutraSweet Spoonful and Equal tabletop sweeteners
increased 7 percent in 1993 compared with those in 1992. Despite the
expiration of its aspartame-use patent, NutraSweet increased its 1993
market share in the U.S. tabletop market, as the result of successfully
launching NutraSweet Spoonful in mid-1992.
NutraSweet's 1993 operating income increased 101 percent compared with 1992
operating income. However, 1993 operating income included a small pretax
restructuring charge of $12 million, and 1992 operating income was also
reduced by a $46 million inventory write-down and by restructuring actions
totaling $24 million. The improvement in 1993 resulted from reduced
operating expenses and from lower amortization expense, as the U.S.
aspartame-use patent was fully amortized in 1992. These lower expenses
more than offset the lower average selling prices.
32
<PAGE> 14
<TABLE>
An analysis of the change in operating income is provided below:
<CAPTION>
Better (Worse)
-----------------------
1993 vs. 1992 vs.
1992 1991
-------- --------
<S> <C> <C>
Sales decline (selling prices
offset by sales volumes) $(177) $ (96)
Restructuring charge 12 (24)
Inventory adjustment 46 (46)
Patent amortization 173
Other, principally lower
operating costs 19 65
----- -----
Change in operating income $ 73 $(101)
----- -----
</TABLE>
PRIOR YEAR REVIEW
NutraSweet's net sales and operating income in 1992 decreased 8 percent and
58 percent, respectively, compared with the 1991 amounts. Worldwide,
aspartame sales volumes were slightly higher, while average selling prices
were lower on planned price decreases. Operating income in 1992 was also
reduced by a $46 million inventory write-down, discussed below, and by
restructuring actions totaling $24 million associated with plant
consolidations, employment reductions and other actions. Operating income
benefited from lower operating expenses from the 1991 reorganization.
NutraSweet's inventories are valued using the last-in, first-out (LIFO)
method. Lower selling prices in post-patent contracts with customers
necessitated a lower of cost or market adjustment to the LIFO value of
inventories in the fourth quarter of 1992, concurrent with the patent
expiration.
NUTRASWEET OUTLOOK
The prospects for NutraSweet(R) brand sweetener remain strong worldwide.
NutraSweet has built important competitive advantages, including technical
expertise; proprietary, low-cost manufacturing processes; state-of-the-art
manufacturing facilities; and brand name identity and logo recognition.
NutraSweet also has the reputation as a superior quality, highly reliable
supplier. NutraSweet brand sweetener potentially offers an economical
replacement for sugar in certain markets.
Competition from generic aspartame producers and others is expected to
lower selling prices in the future. These lower prices could adversely
affect operating income and cash flow.
The United States will remain the principal market for NutraSweet brand
sweetener in 1994, but international markets offer significant growth
potential. NutraSweet has invested in a new manufacturing facility in
France, through a European joint venture. The plant became fully
operational in 1993.
NutraSweet is developing a next-generation, high-potency sweetener and
expects to file a food additive petition with the U.S. Food and Drug
Administration in the second half of this decade.
Simplesse(R), the unit's all natural fat substitute, is expected to be more
broadly marketed for use in multiple food categories. However, Simplesse
faces a challenging market in which competition continues to intensify.
33
<PAGE> 15
<TABLE>
GEOGRAPHIC DATA
<CAPTION>
Net Sales to Operating
Unaffiliated Customers Income (Loss)(1) Total Assets
----------------------------- ----------------------------- ---------------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United States $5,162 $4,964 $5,100 $ 656 $ 181 $ 440 $5,928 $5,641 $5,655
Europe-Africa 1,559 1,652 1,708 129 (168) 74 1,801 2,046 2,088
Asia-Pacific 533 566 530 (2) 50 19 502 533 526
Canada 311 290 305 28 18 13 121 147 129
Latin America 337 291 293 43 29 (38) 261 242 208
Interarea
Eliminations 9 7 24 (246) (324) (304)
Corporate (53) (59) (57) 273 800 294
Fisher Controls 631
- ------------------------------------------------------------------------------------------------------------------------------
Total $7,902 $7,763 $7,936 $ 810 $ 58 $ 475 $8,640 $9,085 $9,227
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The data above are prepared on an "entity basis," which means that net
sales, operating income and assets of a legal entity are assigned to the
geographic area where the legal entity is located. For example, a sale
from the United States to Latin America is reported as a U.S. sale.
Interarea sales, which are sales between Monsanto locations in different
world areas, were made on a market price basis. Interarea sales have been
excluded from the above table and were:
<TABLE>
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
World area shipped from:
United States $ 625 $ 683 $ 716
Europe-Africa 133 105 80
Asia-Pacific 2 5 4
Canada 38 33 14
Latin America 4 2 2
Interarea Eliminations (802) (828) (816)
----- ----- -----
TOTAL $ -- $ -- $ --
----- ----- -----
</TABLE>
<TABLE>
Following is a reconciliation of ex-U.S. operating income and total assets
to the net income and net assets of consolidated ex-U.S. subsidiaries.
<CAPTION>
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Operating income (loss) $ 198 $ (71) $ 68
Interest and other income
(expense) -- net (16) (89) 17
Income taxes (67) 54 (35)
------ ------ ------
NET INCOME (LOSS) OF CONSOLIDATED
EX-U.S. SUBSIDIARIES $ 115 $ (106) $ 50
------ ------ ------
Total operating assets $2,685 $2,968 $2,951
Total liabilities 1,080 1,416 1,154
------ ------ ------
NET ASSETS OF CONSOLIDATED
EX-U.S. SUBSIDIARIES $1,605 $1,552 $1,797
------ ------ ------
</TABLE>
The reported operating income for the individual geographic areas does not
include the full profitability generated by sales of Monsanto products
imported from other locations, principally from the United States. Direct
export sales from the United States to non-U.S. third-party customers were
$435 million for 1993, $393 million for 1992 and $473 million for 1991.
The 1992 decline was principally in The Agricultural Group due to the lack
of sales from the divested animal feed ingredients business.
Sales and operating income for the geographic segments do not include the
financial results from those joint venture companies in which Monsanto does
not have management control. Monsanto's share of the income or loss of
these companies is reflected in "Other income (expense) -- net" in the
Statement of Consolidated Income. Monsanto's share of the unconsolidated
net sales and income or loss of these companies for 1993 follows:
<TABLE>
<CAPTION>
Monsanto's Share
------------------------
Net Income
Sales (Expense)
------------------------
<S> <C> <C>
United States $ 123 $ 19
Europe-Africa 61 5
Asia-Pacific 115 (6)
Latin America 96 2
<FN>
(1) Geographic area operating income was affected by the 1993, 1992 and
1991 restructurings and other unusual items as follows:
Income (Expense)
-------------------------------
1993 1992 1991
----- ----- -----
United States $ 109 $(327) $(296)
Europe-Africa (26) (295) (95)
Asia-Pacific (15) 13 (4)
Canada (4) (8) (6)
Latin America (2) (1) (47)
Corporate (1) (6) (9)
----- ----- -----
Total $ 61 $(624) $(457)
----- ----- -----
</TABLE>
34
<PAGE> 16
<TABLE>
QUARTERLY DATA
<CAPTION>
- --------------------------------------------------------------------------
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Sales 1993 $1,941 $2,230 $1,849 $1,882 $7,902
1992 1,973 2,045 1,880 1,865 7,763
- --------------------------------------------------------------------------
Gross Profit 1993 835 959 768 776 3,338
1992 853 831 766 603 3,053
- --------------------------------------------------------------------------
Operating Income (Loss) 1993 231 326 152 101 810
1992 259 185 119 (505) 58
- --------------------------------------------------------------------------
Income (Loss) from
Continuing Operations 1993 141 200 95 58 494
1992 146 95 46 (413) (126)
- --------------------------------------------------------------------------
Net Income (Loss) 1993 141 200 95 58 494
1992 (388) 105 54 141 (88)
- --------------------------------------------------------------------------
Earnings (Loss) per Share:
Income (Loss) from
Continuing Operations 1993 1.17 1.66 0.78 0.49 4.10
1992 1.17 0.78 0.39 (3.35) (1.01)
- --------------------------------------------------------------------------
Net Income (Loss) 1993 1.17 1.66 0.78 0.49 4.10
1992 (3.16) 0.86 0.45 1.14 (0.71)
- --------------------------------------------------------------------------
Dividends per Share 1993 0.56 0.58 0.58 0.58 2.30
1992 0.52 0.56 0.56 0.56 2.20
- --------------------------------------------------------------------------
Common Stock Price
1993 High 57 5/8 60 1/8 66 1/4 75 75
Low 49 3/4 48 7/8 56 1/8 65 3/8 48 7/8
- --------------------------------------------------------------------------
1992 High 71 1/4 68 3/4 57 1/2 58 5/8 71 1/4
Low 62 3/4 53 52 3/8 49 3/4 49 3/4
- --------------------------------------------------------------------------
</TABLE>
Monsanto's net income is historically higher during the first half of the
year, primarily because of the concentration of generally more profitable
sales of The Agricultural Group during that part of the year.
Net income in the first quarter of 1993 included a $22 million aftertax
gain resulting from reimbursement from insurance companies of various costs
associated with damage to a manufacturing site of a raw material for
Roundup(R) herbicide. Costs associated with the damage had been expensed in
1992 pending resolution of the claim.
The fourth quarter of 1993 included an aftertax expense of $7 million, or
$0.06 per share, for a restructuring program and other actions approved by
the board of directors. Also included in the quarter was an aftertax gain
of $19 million, or $0.16 per share, from a planned reduction of last-in,
first-out (LIFO) inventories in The Chemical Group.
The net loss for the first quarter of 1992 included the net aftertax
cumulative effect of accounting changes of $540 million, or $4.38 per
share, and $9 million in net aftertax expenses, principally associated with
the aforementioned damage to a herbicide manufacturing unit. The effect of
retroactively adopting the new accounting rules as of Jan. 1, 1992,
decreased originally reported first-quarter net income by $549 million, or
$4.44 per share. Originally reported second- and third-quarter net incomes
were each reduced by $8 million, or $0.06 per share, from the effect of
adopting the new accounting rules.
The second quarter of 1992 included $26 million in aftertax expense
associated with the settlement of certain litigation relating to the Brio
Superfund site, and $12 million in aftertax expense related to the damaged
herbicide manufacturing unit.
The fourth quarter of 1992 included pretax expense of $625 million, $425
million aftertax, or $3.44 per share, for the restructuring program and
other actions approved by the board of directors. The 1992 total pretax
expense related to restructuring and other actions was $699 million, $472
million aftertax, or $3.82 per share. The fourth quarter also included an
aftertax gain of $554 million, or $4.49 per share, from the sale of Fisher
Controls.
35
<PAGE> 17
<TABLE>
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
<CAPTION>
(Dollars in millions, except per share) At Dec. 31,
- ----------------------------------------------------------------------------------------------------------
ASSETS 1993 1992
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 273 $ 729
Trade receivables, net of allowances of $51 in
1993 and $33 in 1992 1,445 1,405
Miscellaneous receivables and prepaid expenses 388 375
Deferred income tax benefit 342 395
Inventories 1,224 1,156
- ----------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 3,672 4,060
- ----------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT:
Land 107 106
Buildings 1,237 1,240
Machinery and equipment 5,793 5,939
Construction in progress 245 317
- ----------------------------------------------------------------------------------------------------------
Total property, plant and equipment 7,382 7,602
Less accumulated depreciation 4,580 4,597
- ----------------------------------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 2,802 3,005
- ----------------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATES 227 248
INTANGIBLE ASSETS, net of accumulated amortization
of $450 in 1993 and $383 in 1992 1,189 1,066
OTHER ASSETS 750 706
- ----------------------------------------------------------------------------------------------------------
TOTAL ASSETS $8,640 $9,085
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
LIABILITIES AND SHAREOWNERS' EQUITY
- ----------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 538 $ 525
Wages and benefits 299 191
Income and other taxes 140 477
Restructuring reserves 255 377
Miscellaneous accruals 840 721
Short-term debt 223 257
- ----------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 2,295 2,548
- ----------------------------------------------------------------------------------------------------------
LONG-TERM DEBT 1,502 1,423
DEFERRED INCOME TAXES 54 65
POSTRETIREMENT LIABILITIES 1,256 1,252
OTHER LIABILITIES 678 792
SHAREOWNERS' EQUITY:
Common stock (authorized, 200,000,000 shares,
par value $2)
Issued, 164,394,194 shares in 1993 and 1992 329 329
Additional contributed capital 826 820
Treasury stock, at cost (48,418,545 shares
in 1993 and 43,929,827 shares in 1992) (2,348) (2,029)
Reserve for ESOP debt retirement (218) (233)
Accumulated currency adjustment (59) 15
Reinvested earnings 4,325 4,103
- ----------------------------------------------------------------------------------------------------------
TOTAL SHAREOWNERS' EQUITY 2,855 3,005
- ----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $8,640 $9,085
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The above statement should be read in conjunction with pages 43 through 51
of this report.
ESOP stands for Employee Stock Ownership Plan.
36
<PAGE> 18
REVIEW OF CHANGES IN FINANCIAL POSITION
FINANCIAL POSITION REMAINED STRONG
Monsanto's financial position remained strong in 1993, as evidenced by
Monsanto's current "A" or better debt rating. Financial resources were
adequate to support existing businesses and to fund new business
opportunities, including the acquisition of the Ortho lawn-and-garden
products business in the second quarter of 1993.
Working capital was lower at year-end 1993, principally due to lower cash
and cash equivalent balances, and smaller income tax liabilities.
Inventories and trade receivables at year-end 1993 increased slightly
compared with those at the prior year-end, solely because of the
acquisition of the Ortho lawn-and-garden products business.
The amount of net property, plant and equipment was lower than at year-end
1992, as $437 million in capital additions was exceeded by depreciation
expense and the write-down of property divested or to be divested under the
restructuring actions. Intangible assets increased in 1993, due mainly to
goodwill associated with the acquisition of the Ortho lawn-and-garden
products business.
Total deferred tax benefits, both current and noncurrent, of $454 million
at year-end 1993 are primarily related to U.S. operations, which generally
have a strong earnings history.
Long-term debt at year-end 1993 was higher than that at the prior year-end.
Monsanto retired $299 million in outstanding long-term debt and incurred
$379 million in new long-term debt in 1993.
Monsanto uses financial markets worldwide for its financing needs and has
available various short- and medium-term bank credit facilities, which are
discussed in the Notes to Financial Statements (page 46). These credit
facilities provide the financing flexibility to take advantage of
investment opportunities that may arise and to satisfy future funding
requirements. To maintain adequate financial flexibility and access to
debt markets worldwide, Monsanto management intends to maintain an "A" debt
rating. An important factor in establishing that rating is the ratio of
total debt to total capitalization, which was 38 percent in 1993.
In October 1991, Monsanto's board of directors approved the establishment
of an Employee Stock Ownership Plan (ESOP). In January 1992, the ESOP
purchased from Monsanto $250 million in common stock that will be used to
match employee contributions under the company's existing savings and
investment plan. A more detailed description of the ESOP is provided in
the Notes to Financial Statements on page 49.
In February 1994, Monsanto established a grantor trust which had been
approved by the board of directors. A more detailed description of the
grantor trust is provided in the Notes to Financial Statements on page 50.
Monsanto's commitments and contingencies are described in the Notes to
Financial Statements on page 51.
Monsanto's return on shareowners' equity (ROE) was 16.9 percent in 1993.
Monsanto's principal financial target is a sustained ROE of 20 percent or
greater. The ROE and other key financial statistics are presented in the
table below.
<TABLE>
<CAPTION>
KEY FINANCIAL STATISTICS 1993 1992 1991
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Return on Shareowners' Equity (ROE) 16.9% (2.6)% 7.6%
(Net income divided by average shareowners' equity)
Current Ratio 1.6 1.6 1.7
(Current assets divided by current liabilities)
Trade Receivables-Days Sales Outstanding 71 67 68
(Fourth-quarter trade receivables divided
by fourth-quarter net sales times 30 days)
Inventory Turnover Ratio 3.7 4.1 3.7
(Cost of goods sold divided by inventory)
Interest Coverage 6.1 -- 2.7
(Income before interest expense and income taxes
divided by total interest cost)
Cash Provided by Operations/Total Debt 42% 54% 53%
Total Debt/Total Capitalization * 38% 36% 38%
- ------------------------------------------------------------------------------------------------
<FN>
* Total capitalization is the sum of short-term debt, long-term debt and shareowners'
equity.
</TABLE>
37
<PAGE> 19
<TABLE>
STATEMENT OF CONSOLIDATED CASH FLOW
<CAPTION>
(Dollars in millions) 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Income (loss) from continuing operations $ 494 $ (126) $ 238
Add income taxes -- continuing operations 235 (48) 116
- ----------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations
before income taxes 729 (174) 354
Adjustments to reconcile to Cash Provided
by Continuing Operations:
Income tax payments (166) (162) (201)
Items that did not use cash:
Depreciation and amortization 572 765 714
Restructuring expenses -- net 5 436 457
Incremental SFAS No. 106 expenses 48 45
Other (19) 157 37
Working capital changes that provided (used) cash:
Accounts receivable 62 21 (101)
Inventories (31) (30) (141)
Accounts payable and accrued liabilities (202) (107) (40)
Other 34 (125) 7
Other items (10) 22 26
- ----------------------------------------------------------------------------------------------------------
CASH PROVIDED BY CONTINUING OPERATIONS 1,022 848 1,112
CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS (291) 64 68
- ----------------------------------------------------------------------------------------------------------
TOTAL CASH PROVIDED BY OPERATIONS 731 912 1,180
- ----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Property, plant and equipment purchases (437) (586) (554)
Acquisition and investment payments (510) (259) (225)
Investment and property disposal proceeds 298 177 324
Proceeds from sale of Fisher Controls 1,275
Discontinued operations -- other (30) 10
- ----------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (649) 577 (445)
- ----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Net change in short-term financing (31) (78) (245)
Long-term debt proceeds 379 120 317
Long-term debt reductions (299) (565) (291)
Treasury stock purchases (380) (417) (296)
Dividend payments (275) (270) (258)
Common stock issued to ESOP 250
Other financing activities 68 11 23
- ----------------------------------------------------------------------------------------------------------
CASH USED IN FINANCING ACTIVITIES (538) (949) (750)
- ----------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (456) 540 (15)
CASH AND CASH EQUIVALENTS:
Beginning of year 729 189 204
- ----------------------------------------------------------------------------------------------------------
End of year $ 273 $ 729 $ 189
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The above statement should be read in conjunction with pages 43 through 51 of
this report. Previously reported amounts have been reclassified to present
Fisher Controls as discontinued operations.
The effect of exchange rate changes on cash and cash equivalents was not
material.
Cash payments for interest (net of amounts capitalized) were $133 million,
$176 million and $169 million for the years 1993, 1992 and 1991, respectively.
During 1991, Monsanto established an Employee Stock Ownership Plan (ESOP).
Monsanto was guarantor of $80 million of ESOP notes and $100 million of ESOP
debentures as of Dec. 31, 1993.
38
<PAGE> 20
REVIEW OF CASH FLOW
Monsanto's cash flow for 1993, 1992 and 1991 is shown in the Statement of
Consolidated Cash Flow on the preceding page.
CASH FLOW REMAINED STRONG
Cash provided by continuing operations of $1,022 million was strong in
1993, 21 percent higher than that in 1992. This was due to increased sales
volumes and lower raw material costs, which more than offset reduced
selling prices and higher marketing expenses. Cash from operations was
generated primarily by The Chemical Group, The Agricultural Group and The
NutraSweet Company. Cash used by discontinued operations was for income
taxes related to the sale of Fisher Controls.
Monsanto's operations have historically generated sufficient cash to fund
existing businesses and growth-related research and investments.
Management expects cash provided by operations, supplemented by periodic
borrowings, to be adequate to fund future requirements.
[Cash Provided By Continuing Operations Graph]
Other investment and property disposals in 1993 generated $298 million in
cash. The principal proceeds in 1993, 1992 and 1991 were related to the
sale of various businesses associated with restructuring actions, including
in 1991 the animal feed ingredients business.
In 1992, Monsanto received $1,275 million in cash from the sale of Fisher
Controls. A portion of the cash proceeds was used to reduce debt and to
purchase Monsanto common stock.
Major uses of cash for 1993, 1992 and 1991 included capital expenditures,
treasury stock purchases and dividends. The acquisition of the Ortho
lawn-and-garden products business in 1993, investment in various 1992
acquisitions, and purchase of an interest in a Japanese pharmaceuticals
firm in 1991 were also major uses of cash. Monsanto's 1993 capital
expenditures focused on improved technology, capacity expansions and
environmental projects, and totaled $437 million.
Long-term debt proceeds in 1993 included $150 million in 6 percent notes.
The proceeds from these notes were used to fund Monsanto's contribution of
its common stock to a grantor trust. A more detailed description of the
grantor trust is provided in the Notes to Financial Statements on page 50.
Long-term debt repayments in 1993 included $150 million in 9 3/8 percent
debentures. Long-term debt repayments in 1992 included $145 million in
11 3/8 percent debentures; $141 million in 8 3/4 debentures; $104 million in
8 1/2 debentures; and $51 million in industrial revenue bonds. In 1991,
long-term debt proceeds included $100 million in 30-year fixed-rate
debentures and $194 million from the issuance of medium-term notes.
Monsanto continually evaluates risk retention and insurance levels for
product liability, property damage and other potential areas of risk.
Monsanto devotes significant effort to maintaining and improving safety and
internal control programs, which reduce its exposure to certain risks.
Based on the cost and availability of insurance and the likelihood of a
loss, management decides the amount of insurance coverage to purchase from
unaffiliated companies and the appropriate amount of risk to retain. Since
1986, Monsanto's liability insurance has been on the "claims made" policy
form. Management believes that the current levels of risk retention are
consistent with those of other companies in the various industries in which
Monsanto operates. Monsanto's liquidity, financial position and
profitability are not expected to be affected materially by the levels of
risk retention that the company accepts.
39
<PAGE> 21
MONSANTO MAINTAINS STRONG ENVIRONMENTAL COMMITMENT
Monsanto is subject to various laws and government regulations concerning
environmental matters, employee safety and employee health. It is
anticipated that increasingly stringent requirements will be imposed upon
Monsanto, its competitors and industry in general. Monsanto is dedicated
to a long-term environmental protection program that reduces emissions of
hazardous materials into the environment, as well as to the remediation of
identified existing environmental concerns. In 1988, management committed
to a 90 percent reduction in toxic air emissions from worldwide operations
by the end of 1992. The reduction achieved was 92 percent, based on 1992
year-end operating rates. The cost to accomplish this target did not
materially affect operating results. In fact, some of the target capital
projects lowered operating costs and improved operating efficiency.
Expenditures in 1993 were approximately $53 million for environmental
capital projects and approximately $233 million for management of
environmental programs, including the operation and maintenance of
facilities for environmental control. Monsanto estimates that during 1994
and 1995 approximately $40 million to $70 million per year will be spent on
additional capital projects for environmental protection.
Monsanto periodically receives notices from the U.S. Environmental
Protection Agency (EPA) that it is a potentially responsible party (PRP)
under the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA), commonly known as Superfund. The EPA has designated Monsanto
as a PRP at 89 Superfund sites. Monsanto has resolved disputes, entered
partial consent decrees, and executed administrative orders between
Monsanto and the EPA in 41 of these cases, settling a portion or all of
Monsanto's liability for these Superfund cases. Six other matters involve
sites where allegations are predicated on tentative findings of reuse of
drums by others that once contained products sold by Monsanto. These six
matters have been inactive as to Monsanto for at least nine years. At one
other site, Monsanto has determined that it has no liability whatsoever.
Monsanto's policy is to accrue costs for remediation of waste disposal
sites in the accounting period in which the responsibility is established
and the cost is estimable. Monsanto's estimates of its liabilities for
Superfund sites are based on evaluations of currently available facts with
respect to each individual site and take into consideration factors such as
existing technology, presently enacted laws and regulations, and prior
experience in remediation of contaminated sites. These liabilities have
not been reduced for any claims for recoveries from insurance or from third
parties. However, Monsanto is engaged in litigation with some of its
insurance carriers regarding both the applicability and the amount of its
coverage responsive to claims for damages at these sites. Monsanto has an
accrued liability of $102 million as of Dec. 31, 1993, for Superfund sites.
As assessments and remediation activities progress at individual sites,
these liabilities are reviewed periodically and adjusted to reflect
additional technical, engineering and legal information that becomes
available. Major sites in this category include the noncompany-owned Brio,
Fike/Artel, Motco and Woburn sites, which account for $83 million of the
accrued amount.
Monsanto's estimate of its Superfund liability is affected by several
uncertainties such as, but not limited to, the method and extent of
remediation, the percentage of material attributable to Monsanto at the
sites relative to that attributable to other parties, and the financial
capabilities of the other PRPs at most sites. Due to these uncertainties,
primarily related to the method and extent of remediation, potential future
expenses could be as much as $30 million for these sites. These potential
future expenses may be incurred over the balance of the decade.
There are various other lawsuits, claims and proceedings that state
agencies and others have asserted against the company seeking remediation
of alleged environmental impairments. Monsanto is in the process of
determining its involvement, if any, at 44 of these sites. Monsanto has an
accrued liability of $131 million as of Dec. 31, 1993, for these matters
and for environmental reserves at certain former Monsanto plant sites. The
company's estimate of its liability related to these sites is affected by
several uncertainties such as, but not limited to, the extent of Monsanto's
involvement, and the method and extent of remediation. Due to these
uncertainties,
40
<PAGE> 22
potential future expenses could be as much as $70 million for these sites. Four
sites in this category account for $63 million of the accrued amount and for
approximately $60 million of the potential future expenses.
Monsanto spent $39 million in 1993 for remediation of Superfund and other
waste disposal sites. Most of these expenditures related to The Chemical
Group, and similar or greater amounts can be expected in future years.
For operational facilities, Monsanto recognizes post-closure environmental
costs and site remediation costs over the estimated remaining useful life
of the related facilities, not to exceed 20 years. Monsanto spent
$14 million in 1993 for remediation of these facilities and has an accrued
liability of $33 million as of Dec. 31, 1993, for these sites.
Uncertainties related to these costs are evolving government regulations,
the method and extent of remediation, and future changes in technology.
Monsanto's estimated closure costs for these plant sites are approximately
$150 million.
While the ultimate costs and results of remediation of waste disposal sites
cannot be predicted with certainty, management believes that Monsanto's
liquidity and profitability in any one year will not be materially
affected.
COMMON STOCK PURCHASE PROGRAM CONTINUED
In April 1992, Monsanto's board of directors authorized the purchase of 5
million shares of Monsanto common stock. In October 1992, the board
authorized the purchase of an additional 12 million shares. In 1993,
Monsanto purchased 5.8 million shares at a cost of $380 million. Since
June 1987, Monsanto has purchased 49.6 million shares at a cost of $2,550
million. Management believes the stock purchase program represents a sound
economic investment for Monsanto's shareowners.
DIVIDENDS INCREASE FOR THE 21ST CONSECUTIVE YEAR
Monsanto has paid quarterly dividends on its common shares without
interruption or reduction since 1928, and has increased the dividend per
share in each of the past 21 years. Dividend payout for 1993 was
38 percent of cash provided by operations. Monsanto's dividend policy
reflects a desired long-term payout percentage based on Monsanto's
expectations of future growth and profitability levels. In any individual
year, additional consideration is given to expected financial position and
results, working and fixed capital needs, scheduled debt repayments, and
economic conditions, including inflation.
Monsanto's common stock is traded principally on the New York Stock
Exchange and is listed on other exchanges worldwide. The number of
shareowners of record as of Feb. 25, 1994, was 56,044; and the high and low
common stock prices on that date were $77 7/8 and $77 5/8.
[Dividends Per Share Graph]
Monsanto's dividend per share has increased 122 percent since 1983.
41
<PAGE> 23
<TABLE>
STATEMENT OF CONSOLIDATED SHAREOWNERS' EQUITY
<CAPTION>
(Dollars in millions, except per share) 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK:
BALANCE, JAN. 1 AND DEC. 31 $ 329 $ 329 $ 329
- ----------------------------------------------------------------------------------------------------------
ADDITIONAL CONTRIBUTED CAPITAL:
Balance, Jan. 1 $ 820 $ 726 $ 714
Employee stock plans and ESOP 6 94 12
- ----------------------------------------------------------------------------------------------------------
BALANCE, DEC. 31 $ 826 $ 820 $ 726
- ----------------------------------------------------------------------------------------------------------
TREASURY STOCK:
Balance, Jan. 1 $(2,029) $(1,797) $(1,563)
Shares purchased (5,795,600; 6,732,300;
and 4,395,900 shares in 1993, 1992
and 1991, respectively) (380) (417) (296)
Shares issued under employee stock plans
and ESOP (1,306,882; 4,269,180; and
1,545,333 shares in 1993, 1992
and 1991, respectively) 61 185 62
- ----------------------------------------------------------------------------------------------------------
BALANCE, DEC. 31 $(2,348) $(2,029) $(1,797)
- ----------------------------------------------------------------------------------------------------------
RESERVE FOR ESOP DEBT RETIREMENT:
Balance, Jan. 1 $ (233) $ (250)
ESOP formation $ (250)
Allocation of ESOP shares 15 17
- ----------------------------------------------------------------------------------------------------------
BALANCE, DEC. 31 $ (218) $ (233) $ (250)
- ----------------------------------------------------------------------------------------------------------
ACCUMULATED CURRENCY ADJUSTMENT:
Balance, Jan. 1 $ 15 $ 187 $ 188
Translation adjustments (74) (172) (3)
Income taxes 2
- ----------------------------------------------------------------------------------------------------------
BALANCE, DEC. 31 $ (59) $ 15 $ 187
- ----------------------------------------------------------------------------------------------------------
REINVESTED EARNINGS:
Balance, Jan. 1 $ 4,103 $ 4,459 $ 4,421
Net income (loss) 494 (88) 296
Dividends (net of ESOP tax benefits) (272) (268) (258)
- ----------------------------------------------------------------------------------------------------------
BALANCE, DEC. 31 $ 4,325 $ 4,103 $ 4,459
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The above statement should be read in conjunction with pages 43 through 51
of this report.
ESOP stands for Employee Stock Ownership Plan.
<TABLE>
<CAPTION>
KEY FINANCIAL STATISTICS 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Stock Price * High $75 $71 1/4 $76
Low 48 7/8 49 3/4 46
Year-End 73 3/8 57 5/8 67 7/8
- ----------------------------------------------------------------------------------------------------------
Per Share Dividends 2.30 2.20 2.045
Shareowners' Equity 24.62 24.95 29.72
- ----------------------------------------------------------------------------------------------------------
Average Daily Share Trading Volume
(thousands of shares) 335 392 359
- ----------------------------------------------------------------------------------------------------------
<FN>
* Based on daily reported high and low stock prices.
</TABLE>
42
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES
Monsanto's significant accounting policies are capitalized in the following
Notes to Financial Statements. The financial statements present the
results of Fisher Controls as discontinued operations. Previously reported
amounts have been reclassified consistent with the 1993 presentation.
BASIS OF CONSOLIDATION
THE CONSOLIDATED FINANCIAL STATEMENTS INCLUDE THE COMPANY AND ITS
MAJORITY-OWNED SUBSIDIARIES. INTERCOMPANY TRANSACTIONS HAVE BEEN
ELIMINATED IN CONSOLIDATION. OTHER COMPANIES IN WHICH MONSANTO HAS A
SIGNIFICANT OWNERSHIP INTEREST (GENERALLY GREATER THAN 20 PERCENT) ARE
INCLUDED IN "INVESTMENTS IN AFFILIATES" IN THE STATEMENT OF CONSOLIDATED
FINANCIAL POSITION. MONSANTO'S SHARE OF THESE COMPANIES' INCOME OR LOSS IS
INCLUDED IN "OTHER INCOME (EXPENSE) -- NET" IN THE STATEMENT OF
CONSOLIDATED INCOME.
CURRENCY TRANSLATION
THE FINANCIAL STATEMENTS FOR MOST OF MONSANTO'S EX-U.S. ENTITIES ARE
TRANSLATED INTO U.S. DOLLARS AT CURRENT EXCHANGE RATES. UNREALIZED
CURRENCY ADJUSTMENTS IN THE STATEMENT OF CONSOLIDATED FINANCIAL POSITION
ARE ACCUMULATED IN SHAREOWNERS' EQUITY. THE FINANCIAL STATEMENTS OF
EX-U.S. ENTITIES THAT OPERATE IN HYPERINFLATIONARY ECONOMIES, PRINCIPALLY
BRAZIL, ARE TRANSLATED AT EITHER CURRENT OR HISTORICAL EXCHANGE RATES, AS
APPROPRIATE. THESE CURRENCY ADJUSTMENTS ARE INCLUDED IN NET INCOME.
Major currencies are the U.S. dollar, British pound sterling, Belgian franc
and Japanese yen. Other important currencies include the Brazilian
cruzeiro real, Canadian dollar, French franc, German mark and Italian
lira. Currency restrictions are not expected to have a significant effect
on Monsanto's cash flow, liquidity or capital resources.
Currency option contracts are purchased to manage currency exposure for
anticipated transactions (for example, export sales for the following
year). Currency option and forward contracts are used to manage other
currency exposures. As of Dec. 31, 1993 and 1992, Monsanto had currency
forward and option contracts to purchase $159 million and $53 million,
respectively, and to sell $404 million and $597 million, respectively, of
other currencies, principally the British pound sterling, French franc,
Japanese yen and German mark. GAINS AND LOSSES ON CONTRACTS THAT ARE
DESIGNATED AND EFFECTIVE AS HEDGES ARE DEFERRED AND INCLUDED IN THE
RECORDED VALUE OF THE TRANSACTION BEING HEDGED. GAINS AND LOSSES ON OTHER
CURRENCY FORWARD AND OPTION CONTRACTS ARE INCLUDED IN NET INCOME
IMMEDIATELY. Monsanto is subject to loss if the counterparties to these
contracts do not perform.
RESTRUCTURING AND OTHER ACTIONS
In December 1993, the board of directors approved a small reserve to cover
the sale or exit from some nonstrategic products, the withdrawal from the
pyridine research program in The Agricultural Group, and the consolidation
of some manufacturing capacity. The net pretax expense related to these
actions was $5 million ($7 million aftertax) and principally affected The
Agricultural and Chemical Groups.
In the first quarter of 1993, Monsanto recognized a $35 million pretax gain
resulting from reimbursement from insurance companies of various costs
associated with damage to a manufacturing unit that produces a key raw
material for Roundup(R) herbicide in January 1992. These costs had been
expensed in 1992 pending resolution of the claim.
In November 1992, the board of directors approved a series of actions
designed to make Monsanto's worldwide operations more focused, productive
and cost-effective. Major elements included reductions in employment; a
realignment of selected research investments; a number of consolidations,
closings and asset write-downs; and sales of nonstrategic businesses and
facilities. These actions principally affected Searle, but also included a
reduction in corporate staff and additional fine-tuning of other operating
units.
Other unusual items in 1992 included the above-mentioned costs incurred
from damage to a Roundup herbicide facility in January 1992 and from the
settlement in the second quarter of 1992 of certain lawsuits related to the
Brio Superfund site.
In June 1991, the board of directors approved several restructuring steps,
principally to strengthen The Chemical Group. Corporate staff reductions
were also approved. The 1991 actions included the shutdown and
consolidation of various facilities and the sale of certain businesses,
including the animal feed ingredients business, that were inconsistent with
Monsanto's long-term strategic direction.
43
<PAGE> 25
<TABLE>
The components of the pretax expense (income) related to the restructuring
programs and the other unusual items were:
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cost of employee reductions $ 5 $224 $ 215
Shutdown and consolidation of
various facilities and departments 51 164 417
Asset write-downs 188
Glyphosate plant damage costs (settlement) (35) 42
Brio litigation settlement 41
Other costs 16 111 64
Gains on business sales (98) (71) (239)
---- ---- -----
Total $(61) $699 $ 457
---- ---- -----
</TABLE>
The net pretax expense (income) was recorded based on estimates prepared at
the time the restructuring actions were approved by the board of directors.
The cost of completing the restructuring program is expected to
approximate the original estimates. Gains on business sales have exceeded
the original estimates by approximately $40 million, and site closing costs
will exceed the original estimates by a similar amount.
<TABLE>
The pretax expenses (income) related to the restructuring programs and the
other unusual items were recorded in the Statement of Consolidated Income
in the following categories:
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cost of goods sold $(66) $188
Restructuring expense -- net 5 436 $457
---- ---- ----
Decrease (increase) in operating income (61) 624 457
Other expense 75
---- ---- ----
Total decrease (increase) in income
from continuing operations
before income taxes $(61) $699 $457
---- ---- ----
</TABLE>
Income from continuing operations was increased by $34 million aftertax, or
$0.28 per share, for 1993; reduced by $472 million aftertax, or $3.82 per
share, for 1992; and reduced by $332 million aftertax, or $2.60 per share,
for 1991 from the effect of these restructurings and unusual items.
Product sales of businesses targeted for divestiture in these
restructurings were excluded from Monsanto's net sales after the board of
directors approved the divestiture. Product sales by these businesses in
1993, 1992 and 1991, included in Monsanto's net sales were $230 million,
$316 million and $536 million, respectively.
PRINCIPAL ACQUISITIONS AND DIVESTITURES
In May 1993, Monsanto purchased the assets, including a seasonally high
amount of working capital, of the Ortho Consumer Products Division of
Chevron Chemical Co. for $412 million. The acquisition included total
assets with a fair market value of $327 million and liabilities of $51
million. The financial results of the Ortho business were included in the
Statement of Consolidated Income from the date of acquisition.
On an unaudited pro forma basis, assuming the Ortho acquisition had
occurred at the beginning of 1993 and 1992, Monsanto's net sales in each of
those years would have been approximately $8 billion. Net income (loss)
and earnings per share for those years would not have been significantly
different from the reported amounts.
<TABLE>
In October 1992, Monsanto sold the worldwide Fisher Controls business.
Monsanto received $1,275 million in cash, which resulted in an aftertax
gain of $554 million (net of applicable income taxes of $371 million).
Financial data for Fisher Controls were:
<CAPTION>
1992* 1991
----- ----
<S> <C> <C>
Net sales $679 $928
---- ----
Income before income taxes $ 37 $ 88
Income taxes 13 30
---- ----
Net income $ 24 $ 58
---- ----
<FN>
*For the nine months ended Sept. 30, 1992.
</TABLE>
In 1991, Monsanto purchased 12.25 percent of the shares of Hokuriku Seiyaku
Co., a Japanese pharmaceuticals firm. This investment is included in
"Other Assets."
44
<PAGE> 26
<TABLE>
DEPRECIATION AND AMORTIZATION
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Depreciation $469 $473 $453
Amortization of intangible assets 81 237 233
Obsolescence 22 55 28
---- ---- ----
TOTAL $572 $765 $714
---- ---- ----
</TABLE>
PROPERTY, PLANT AND EQUIPMENT IS RECORDED AT COST. THE COST OF PLANT AND
EQUIPMENT IS DEPRECIATED OVER WEIGHTED AVERAGE PERIODS OF 22 YEARS FOR
BUILDINGS AND 11 YEARS FOR MACHINERY AND EQUIPMENT, BY THE STRAIGHT-LINE
METHOD.
<TABLE>
INTANGIBLE ASSETS ARE RECORDED AT COST LESS ACCUMULATED AMORTIZATION. The
components of intangible assets and their estimated remaining useful lives
were:
<CAPTION>
Estimated
Remaining Life* 1993 1992
--------------- ---- ----
<S> <C> <C> <C>
Goodwill 28 $ 798 $ 692
Patents 6 62 85
Other intangible assets 15 329 289
------ ------
TOTAL $1,189 $1,066
------ ------
<FN>
*Weighted average, in years, as of Dec. 31, 1993.
</TABLE>
Goodwill increased in 1993 primarily as a result of the acquisition of the
Ortho lawn-and-garden products business.
GOODWILL IS THE COST OF ACQUIRED BUSINESSES IN EXCESS OF THE FAIR VALUE OF
THEIR IDENTIFIABLE NET ASSETS AND IS AMORTIZED OVER THE ESTIMATED PERIODS
OF BENEFIT (FIVE TO 40 YEARS). PATENTS OBTAINED IN A BUSINESS ACQUISITION
ARE RECORDED AT THE PRESENT VALUE OF ESTIMATED FUTURE CASH FLOWS RESULTING
FROM PATENT OWNERSHIP. THE COST OF PATENTS IS AMORTIZED OVER THEIR LEGAL
LIVES. THE COST OF OTHER INTANGIBLE ASSETS (PRINCIPALLY PRODUCT RIGHTS AND
TRADEMARKS) IS AMORTIZED OVER THEIR ESTIMATED USEFUL LIVES.
INVENTORY VALUATION
INVENTORIES ARE STATED AT COST OR MARKET, WHICHEVER IS LESS. ACTUAL COST
IS USED TO VALUE RAW MATERIALS AND SUPPLIES. STANDARD COST, WHICH
APPROXIMATES ACTUAL COST, IS USED TO VALUE FINISHED GOODS AND GOODS IN
PROCESS. STANDARD COST INCLUDES DIRECT LABOR AND RAW MATERIALS, AND
MANUFACTURING OVERHEAD BASED ON PRACTICAL CAPACITY. THE COST OF CERTAIN
INVENTORIES (57 PERCENT AS OF DEC. 31, 1993) IS DETERMINED BY USING THE
LAST-IN, FIRST-OUT (LIFO) METHOD, WHICH GENERALLY REFLECTS THE EFFECTS OF
INFLATION OR DEFLATION ON COST OF GOODS SOLD SOONER THAN OTHER INVENTORY
COST METHODS. THE COST OF OTHER INVENTORIES GENERALLY IS DETERMINED BY
USING THE FIRST-IN, FIRST-OUT (FIFO) METHOD.
<TABLE>
The components of inventories were:
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Finished goods $ 734 $ 743
Goods in process 319 298
Raw materials and supplies 430 426
------ ------
Inventories, at FIFO cost 1,483 1,467
Excess of FIFO over LIFO cost (259) (311)
------ ------
TOTAL $1,224 $1,156
------ ------
</TABLE>
Inventories at FIFO cost approximate current cost.
INCOME TAXES
<TABLE>
The components of income (loss) from continuing operations before income
taxes were:
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
United States $ 547 $ (14) $ 269
Outside United States 182 (160) 85
----- ----- -----
TOTAL $ 729 $(174) $ 354
----- ----- -----
</TABLE>
<TABLE>
The components of income tax expense (benefit) charged to continuing
operations were:
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
Current:
U.S. federal $ 113 $ 56 $ 225
U.S. state 12 24 26
Outside United States 56 19 56
----- ----- -----
181 99 307
----- ----- -----
Deferred:
U.S. federal 35 (59) (149)
U.S. state 8 (15) (21)
Outside United States 11 (73) (21)
----- ----- -----
54 (147) (191)
----- ----- -----
TOTAL $ 235 $ (48) $ 116
----- ----- -----
</TABLE>
45
<PAGE> 27
<TABLE>
Factors causing Monsanto's effective tax rate for continuing operations to
differ from the U.S. federal statutory rate were:
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
U.S. federal statutory rate 35% (34)% 34%
Benefits attributable to:
U.S. export earnings (2) (9) (7)
Puerto Rico operations (1) (4) (3)
Sale of investments -- -- (3)
Higher (lower) ex-U.S. rates (3) (12) 4
Nondeductible goodwill 1 3 2
Valuation allowances 5 19
Effect of U.S. tax rate change (2)
State income taxes 2 2 1
Other (3) 7 5
--- --- ---
EFFECTIVE INCOME TAX RATE 32% (28)% 33%
--- --- ---
</TABLE>
In 1992, the income taxes netted against the gain on the sale of Fisher
Controls and the cumulative effect of adopting Statement of Financial
Accounting Standards (SFAS) No. 106 exceeded the 34 percent U.S. federal
statutory rate, primarily because of the effect of state income taxes.
Monsanto adopted SFAS No. 109, "Accounting for Income Taxes," effective
Jan. 1, 1992, and recognized a gain of $118 million, or $0.96 per share.
This gain has been reflected in the Statement of Consolidated Income as a
cumulative effect of an accounting change. Deferred income tax balances in
1992 reflect the effect of temporary differences between the amounts of
assets and liabilities for income tax purposes, compared with the
respective amounts for financial statement purposes.
<TABLE>
Deferred income tax balances were related to:
<CAPTION>
1993 1992
---------------------- ----------------------
Asset Liability Asset Liability
----- --------- ----- ---------
<S> <C> <C> <C> <C>
Property $(347) $ 49 $(301) $43
Postretirement benefits 480 2 458 12
Restructuring reserves 128 9 184
Environmental liabilities 93 83
Inventory 44 71 2
Other 145 (6) 81 10
Valuation allowances (89) (62)
----- ---- ----- ---
Total $ 454 $ 54 $ 514 $67
----- ---- ----- ---
</TABLE>
Under the income tax accounting rules prior to 1992, deferred income taxes
were provided for significant timing differences in the recognition of
revenue and expense for tax and financial statement purposes. The sources
of these timing differences and the tax effects in 1991 were: depreciation
and obsolescence $(14) million, restructuring $(146) million, state income
taxes $(21) million, and other $(10) million.
INCOME AND REMITTANCE TAXES HAVE NOT BEEN RECORDED ON $500 MILLION IN
UNDISTRIBUTED EARNINGS OF SUBSIDIARIES, EITHER BECAUSE ANY TAXES ON
DIVIDENDS WOULD BE OFFSET SUBSTANTIALLY BY FOREIGN TAX CREDITS OR BECAUSE
MONSANTO INTENDS TO REINVEST THOSE EARNINGS INDEFINITELY. The estimated
U.S. income tax if such earnings were paid as dividends would be $82
million.
SHORT-TERM DEBT AND CREDIT ARRANGEMENTS
<TABLE>
Short-term debt was:
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Notes payable to banks $ 49 $ 70
Commercial paper 16
Bank overdrafts 67 78
Current portion of long-term debt 91 109
---- ----
TOTAL $223 $257
---- ----
Weighted average interest rates of
notes payable as of Dec. 31:
Banks* 6.8% 9.8%
Commercial paper 3.1%
<FN>
*Includes the effect of notes in certain countries where local inflation results
in high interest rates.
</TABLE>
Monsanto has aggregate short-term loan facilities of $285 million, under
which loans totaling $49 million were outstanding as of Dec. 31, 1993.
Interest on these loans is related to various bank rates. Monsanto's
worldwide unused short-term loan facilities were $236 million as of
Dec. 31, 1993. In addition, Monsanto has a $750 million credit facility,
which expires in 1996. There were no borrowings under this facility as of
Dec. 31, 1993. The credit facility is used to support the issuance of
commercial paper. Interest on amounts borrowed under this agreement would
likely be at money market rates. Covenants under this credit facility
restrict maximum borrowings. It is not anticipated that future borrowings
will be limited by these restrictions.
46
<PAGE> 28
LONG-TERM DEBT
<TABLE>
Long-term debt (exclusive of current maturities) was:
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
Industrial revenue bond obligations,
average rate in 1993 of 4.9%,
due 1995 to 2028 $ 353 $ 363
Medium-term notes, rates in 1993 ranging from
8.4% to 9.0%, due 1995 to 2005 247 300
9 3/8% notes due 1996 150
Commercial paper, swapped to an effective
rate of 8.6% in 1993 187 43
6% notes due 2000 150
7.09% and 8.13% amortizing ESOP notes and
debentures due 2000 and 2006, guaranteed
by the company 170 180
8 7/8% debentures due 2009 99 99
8.7% debentures due 2021 100 100
Other 196 188
------ ------
Total $1,502 $1,423
------ ------
</TABLE>
Maturities and sinking fund requirements on long-term debt are
$91 million, $96 million, $284 million, $72 million and $68 million for
1994, 1995, 1996, 1997 and 1998, respectively.
Commercial paper balances of $187 million and $43 million as of Dec. 31,
1993 and 1992, respectively, have been classified as long-term debt.
Monsanto has the ability and intent to renew these obligations past 1994
and into future periods.
Interest rate swap options (interest options) are used to manage interest
expense. As of Dec. 31, 1993 and 1992, Monsanto had sold interest options
with aggregate notional principal amounts of $50 million and $395 million,
respectively, related to existing debt. An interest option would
effectively convert $50 million of the 7.09 percent amortizing Employee
Stock Ownership Plan (ESOP) notes to a variable rate from 1994 to 1996.
PREMIUMS FROM THE SALE OF INTEREST OPTIONS ARE AMORTIZED OVER THE RELATED
DEBT PERIOD. INTEREST DIFFERENTIALS TO BE PAID OR RECEIVED ARE ACCRUED AS
INTEREST RATES CHANGE OVER THE RELATED DEBT PERIOD.
FINANCIAL INSTRUMENTS FAIR VALUES
<TABLE>
The estimated fair values of Monsanto's financial instruments were:
<CAPTION>
1993 1992
------------------- -------------------
RECORDED FAIR RECORDED FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ----- -------- -----
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities
and other assets $ 233 $ 244 $ 239 $ 232
Foreign currency forward and
option contracts 6 3 7 21
LIABILITIES:
Currency swaps and interest options 6 32 11 26
Long-term debt 1,502 1,590 1,423 1,496
</TABLE>
The recorded amounts of cash, trade receivables, discounted receivables,
third-party guarantees, accounts payable and short-term debt approximate
their fair values. INVESTMENTS IN SECURITIES ARE RECORDED AT COST AND
REDUCED TO MARKET VALUE WHEN A DECLINE IS DEEMED OTHER THAN TEMPORARY.
Fair values are estimated using quoted market prices, estimates obtained
from brokers, and other appropriate valuation techniques based on
information available as of Dec. 31, 1993. The fair-value estimates do not
necessarily reflect the values Monsanto could realize in the current
market.
47
<PAGE> 29
POSTRETIREMENT BENEFITS -- PENSIONS
<TABLE>
Most Monsanto employees are covered by noncontributory pension plans. The
components of pension cost (income) were:
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Service cost for benefits earned
during the year $ 75 $ 65 $ 63
Interest cost on benefit obligation 285 272 259
Assumed return on plan assets* (342) (291) (269)
Amortization of unrecognized net gain (26) (41) (33)
----- ----- -----
TOTAL $ (8) $ 5 $ 20
----- ----- -----
<FN>
*Actual returns on plan assets were $550 million, $230 million and $689
million in 1993, 1992 and 1991, respectively.
</TABLE>
Pension benefits are based on the employee's years of service and/or
compensation level. Pension plans are funded in accordance with Monsanto's
long-range projections of the plans' financial conditions. These
projections take into account benefits earned and expected to be earned in
the future, anticipated future returns on pension plan assets, and income
tax and other regulations.
<TABLE>
Pension costs are determined by using the preceding year-end rate
assumptions. Assumptions used as of Dec. 31 for the principal plans were:
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
Discount rate 7.25% 8.5% 8.5%
Assumed long-term rate of
return on plan assets 9.50% 9.5% 8.5%
Annual rates of salary increase
(for plans that base benefits
on final compensation level) 4.25% 6.0% 6.5%
</TABLE>
<TABLE>
The funded status of Monsanto's pension plans at year-end was:
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
PLAN ASSETS AT FAIR VALUE $3,827 $3,751
------ ------
Actuarial present value of plan benefits:
Vested $3,266 $2,848
Nonvested 120 123
------ ------
Accumulated benefit obligation 3,386 2,971
Effect of projected future salary increases 373 426
------ ------
PROJECTED BENEFIT OBLIGATION $3,759 $3,397
------ ------
Excess of plan assets over projected benefit
obligation $ 68 $ 354
Less:
Unrecognized initial net gain 161 221
Unrecognized prior service costs (261) (216)
Unrecognized subsequent net gain 305 538
------ ------
ACCRUED NET PENSION LIABILITY $ 137 $ 189
------ ------
The accrued net pension liability was included in:
Postretirement liabilities $ 185 $ 232
Less: Other assets (48) (43)
------ ------
ACCRUED NET PENSION LIABILITY $ 137 $ 189
------ ------
</TABLE>
As a result of employment reductions from the 1992 restructuring program,
Monsanto settled a portion of its projected benefit obligation through
lump-sum payments to retirees in 1993. Accordingly, $30 million of accrued
net pension liability was transferred to restructuring reserves during
1993.
As of Dec. 31, 1993, the accrued net pension liability included $108
million for unfunded plans. Projected benefit obligations and plan assets
included in the above table for the principal U.S. plans were approximately
$3,343 million and $3,432 million, respectively, as of Dec. 31, 1993. The
assumptions used to compute the funded status of the principal U.S. plans
were changed as of Dec. 31, 1993. These changes in assumptions resulted in
an increase of $277 million in the projected benefit obligation.
Plan assets consist principally of common stocks and U.S. government and
corporate obligations. Because the company's principal pension plans are
well-funded, contributions to these plans were neither required nor made in
1993, 1992 and 1991.
48
<PAGE> 30
POSTRETIREMENT BENEFITS -- HEALTH CARE AND OTHER
Monsanto provides certain health care and life insurance benefits for
retired employees. Substantially all of Monsanto's regular, full-time U.S.
employees and certain employees in other countries may become eligible for
these benefits if they reach retirement age while employed by Monsanto.
These postretirement benefits are unfunded and are generally based on the
employee's years of service and/or compensation level.
Monsanto adopted Statement of Financial Accounting Standards (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," effective Jan. 1, 1992, and recognized an aftertax expense of
$658 million ($1,045 million pretax), or $5.34 per share for retiree
benefits earned through 1991. The expense was included in the Statement of
Consolidated Income as a cumulative effect of an accounting change. SFAS
No. 106 requires that the cost of other postretirement benefits be accrued
by the date the employees become eligible for the benefits. Under the
previous accounting rule, these postretirement benefits were expensed as
the benefits were paid.
<TABLE>
The components of the cost of these postretirement benefits, principally
health care and life insurance, were:
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Service cost for benefits earned
during the year $ 24 $ 26
Interest cost on benefit obligation 92 88
---- ----
TOTAL $116 $114
---- ----
</TABLE>
The 1991 expense for these postretirement benefits under the previous
accounting rule was $51 million.
<TABLE>
Postretirement costs are determined by using the preceding year-end rate
assumptions. Assumptions used as of Dec. 31 for the principal plans were:
<CAPTION>
1993 1992
----- ----
<S> <C> <C>
Discount rate 7.25% 8.5%
Initial health-care-cost trend rate* 12.00% 14.0%
Ultimate health-care-cost trend rate 5.00% 6.0%
<FN>
*Declining by 1 percent per year to 5 percent for years after the year 2000.
</TABLE>
A 1 percent increase in the assumed health-care-cost trend rate would have
increased the cost of 1993 postretirement health care benefits by $4
million and the accumulated benefit obligation as of Dec. 31, 1993, by $44
million.
<TABLE>
The status as of Dec. 31 of Monsanto's postretirement health care and life
insurance benefit plans, and employee disability benefit plans was:
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
ACCUMULATED BENEFIT OBLIGATION:
Retirees $ 870 $ 768
Eligible active employees 86 103
Other active employees 277 226
------ ------
TOTAL $1,233 $1,097
Less:
Unrecognized benefits from prior service 36
Unrecognized subsequent net loss (126)
------ ------
ACCRUED LIABILITY $1,143 $1,097
------ ------
The accrued liability was included in:
Miscellaneous accruals $ 72 $ 77
Postretirement liabilities 1,071 1,020
------ ------
ACCRUED LIABILITY $1,143 $1,097
------ ------
</TABLE>
The assumptions used to compute the accumulated benefit obligation of the
principal plans were changed as of Dec. 31, 1993, resulting in an increase
of $98 million in the obligation.
EMPLOYEE SAVINGS PLANS
For some employee savings plans, employee contributions are matched in part
by Monsanto. Matching contributions charged to expense for such plans were
$31 million in 1993, $33 million in 1992 and $34 million in 1991.
In October 1991, Monsanto established an Employee Stock Ownership Plan
(ESOP). In December 1991, the ESOP issued $100 million each of the 7.09
percent amortizing notes and the 8.13 percent amortizing debentures
guaranteed by Monsanto; and the ESOP borrowed $50 million from Monsanto.
The cost of unallocated ESOP shares is included in "Reserve for ESOP debt
retirement" under Shareowners' Equity. The unpaid balance of notes and
debentures guaranteed by Monsanto is included in "Long-Term Debt" in the
Statement of Consolidated Financial Position. In January 1992, the ESOP
used the proceeds of the loans to purchase 3.7 million shares of common
stock from Monsanto, a portion of which are being allocated each year to
employee savings accounts as matching contributions.
49
<PAGE> 31
The proceeds from the issuance of common stock to the ESOP were used primarily
for the purchase of an equivalent number of common shares under a treasury stock
purchase program. Dividends on the common stock owned by the ESOP are being
used to repay the ESOP borrowings.
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Total ESOP expense $ 25 $ 28
Interest portion of total ESOP expense $ 18 $ 19
Cash contribution $ 20 $ 19
Dividends paid on ESOP shares held $ 9 $ 8
</TABLE>
STOCK OPTION PLANS
<TABLE>
Key officers and employees have been granted Monsanto stock options under
the company's 1974, 1984 and 1988 Management Incentive Plans; the Searle
Monsanto Stock Option Plan (Searle Plan); and the NutraSweet/Monsanto Stock
Plan (NutraSweet Plan). Information about the status of such stock options
is presented below:
<CAPTION>
Outstanding
Exercisable -----------------------------------
Shares Shares Price per Share
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dec. 31, 1991 4,125,193 8,877,442 19.33 - 74.25
- -------------------------------------------------------------------------------------------
1992:
Granted 2,078,533 51.56 - 67.13
Exercised (485,094) 19.33 - 58.00
Expired (328,176) 34.50 - 73.56
- -------------------------------------------------------------------------------------------
Dec. 31, 1992 5,140,969 10,142,705 21.31 - 74.25
- -------------------------------------------------------------------------------------------
1993:
Granted 4,710,999 51.19 - 65.81
Exercised (1,253,869) 21.31 - 68.13
Expired (337,230) 41.13 - 73.56
- -------------------------------------------------------------------------------------------
DEC. 31, 1993 5,724,125 13,262,605 22.81 - 74.25
- -------------------------------------------------------------------------------------------
</TABLE>
Under the 1988 Management Incentive Plans, the Searle Plan and the
NutraSweet Plan, 2,005,899 shares remain available for grant.
In February 1994, Monsanto established a grantor trust and contributed 2.5
million shares of Monsanto common stock to be used to satisfy compensation
and benefit arrangements and obligations, including issuance of shares upon
the exercise of performance stock options. In August 1993, Monsanto issued
$150 million in 6 percent notes due in the year 2000. The net proceeds
from the sale of the notes were used to purchase the shares contributed to
the grantor trust.
EARNINGS PER SHARE
Earnings per share were computed using the weighted average number of
common shares and common share equivalents outstanding each year
(120,380,516 in 1993; 123,443,744 in 1992; and 127,126,216 in 1991).
Common share equivalents (1,314,921 in 1993; 1,041,096 in 1992; and
1,437,179 in 1991) consist primarily of common stock issuable upon exercise
of outstanding stock options. Earnings per share assuming full dilution
were not significantly different from the primary amounts.
CAPITAL STOCK
As of Dec. 31, 1993, there were 15,268,509 common shares reserved for
employee stock options.
In January 1990, the company's board of directors declared a dividend of
one preferred stock purchase right on each outstanding share of the
company's common stock. If a person or group acquires beneficial ownership
of 20 percent or more, or announces a tender offer that would result in
beneficial ownership of 20 percent or more, of the company's outstanding
common stock, the rights become exercisable and each right will then
entitle its holder to purchase one one-hundredth of a share of a new series
of preferred stock for $450. If Monsanto is acquired in a business
combination transaction while the rights are outstanding, each right will
entitle its holder to purchase, for $450, common shares of the acquiring
company having a market value of $900. In addition, if a person or group
acquires beneficial ownership of 20 percent or more of the company's
outstanding common stock, each right will entitle its holder (other than
such person or members of such group) to purchase, for $450, a number of
shares of the company's common stock having a market value of $900.
Furthermore, at any time after a person or group acquires beneficial
ownership of 20 percent or more (but less than 50 percent) of the company's
outstanding common stock, the board of directors may, at its option,
exchange part or all of the rights (other than rights held by the acquiring
person or group) for shares of the company's common stock on a one-for-one
basis. At any time prior to the acquisition of such a 20 percent position,
the company can redeem each right for 1 cent. The board of directors is
also authorized to reduce the 20 percent thresholds referred to above to
not less than 10 percent. The rights expire in the year 2000.
50
<PAGE> 32
COMMITMENTS AND CONTINGENCIES
Commitments, principally in connection with uncompleted additions to
property, were approximately $55 million as of Dec. 31, 1993. Excluding
the ESOP notes and debentures, Monsanto was contingently liable as a
guarantor for bank loans and for discounted customers' receivables totaling
approximately $316 million and $245 million as of Dec. 31, 1993 and 1992,
respectively. Future minimum payments under noncancellable operating
leases and unconditional inventory purchases are $105 million for 1994, $75
million for 1995, $51 million for 1996, $76 million for 1997, $19 million
for 1998, and $88 million thereafter.
<TABLE>
The more significant concentrations in Monsanto's trade receivables at
year-end were:
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
U.S. agricultural product distributors $294 $175
European agricultural product distributors 117 149
Pharmaceutical distributors worldwide 287 315
Customers in the former Soviet Union 78 75
</TABLE>
Management does not anticipate incurring losses on its trade receivables in
excess of established allowances.
COSTS FOR REMEDIATION OF WASTE DISPOSAL SITES ARE ACCRUED IN THE ACCOUNTING
PERIOD IN WHICH THE RESPONSIBILITY IS ESTABLISHED AND WHEN THE COST IS
ESTIMABLE. As of Dec. 31, 1993 and 1992, Monsanto's Statement of
Consolidated Financial Position included accrued liabilities of $266
million and $242 million, respectively, for the remediation of identified
waste disposal sites. Expenditures related to remediation activities were
$53 million in 1993, $46 million in 1992 and $35 million in 1991.
Monsanto's future remediation expenses for waste disposal sites are
affected by a number of uncertainties, including, but not limited to, the
method and extent of remediation, the percentage of material attributable
to Monsanto at the sites relative to that attributable to other parties,
and the financial capabilities of the other potentially responsible parties
(PRPs). Because of the uncertainties associated with remediation
activities, Monsanto's potential future expenses to remediate these sites
could approximate an additional $100 million.
POST-CLOSURE AND SITE REMEDIATION COSTS FOR OPERATING FACILITIES ARE
ACCRUED OVER THE ESTIMATED LIFE OF THE FACILITY AS PART OF THE ANTICIPATED
CLOSURE COSTS FOR SUCH SITES.
Monsanto's estimated closure costs for these sites could approximate $150
million. Uncertainties related to these costs are evolving government
standards, the method and extent of remediation, and future changes in
technology.
Monsanto is a party to a number of lawsuits and claims, which it is
vigorously defending. Such matters arise out of the normal course of
business and relate to product liability, government regulation, including
environmental issues, and other issues. Certain of the lawsuits and claims
seek damages in very large amounts. While the results of litigation cannot
be predicted with certainty, management believes, based upon the advice of
company counsel, that the final outcome of such litigation will not have a
material adverse effect on Monsanto's consolidated financial position,
profitability or liquidity in any one year.
SUPPLEMENTAL DATA
<TABLE>
Supplemental income statement data were:
<CAPTION>
1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Raw material and energy costs $2,258 $2,247 $2,283
Employee compensation and benefits 2,092 1,994 1,976
Current income and other taxes 442 393 580
Rent expense 129 138 130
- ------------------------------------------------------------------------------------------
Technological expenses:
Research and development 626 651 610
Engineering, commercial development
and patent 69 69 70
--- --- ---
TOTAL TECHNOLOGICAL EXPENSES 695 720 680
- ------------------------------------------------------------------------------------------
Interest expense:
Total interest cost 141 185 190
Less capitalized interest (12) (16) (24)
--- --- ---
NET INTEREST EXPENSE 129 169 166
- ------------------------------------------------------------------------------------------
Currency gains (losses) including
equity in affiliates' currency
gains and losses (6) (39) (10)
- ------------------------------------------------------------------------------------------
</TABLE>
SEGMENT INFORMATION
Certain operating unit segment data and geographic data for 1993, 1992 and
1991 appear on pages 27 and 34 and are integral parts of the accompanying
financial statements. The principal product lines included in each
operating unit are shown in the operating unit segment data.
51
<PAGE> 33
<TABLE>
FINANCIAL SUMMARY
<CAPTION>
(Dollars in millions, except per share) 1993(1) 1992(2) 1991(3) 1990(4) 1989(5) 1988
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net Sales $ 7,902 $ 7,763 $ 7,936 $ 8,068 $ 7,829 $ 7,453
Operating Income 810 58 475 808 1,006 919
As a Percent of Net Sales 10% 1% 6% 10% 13% 12%
Income (Loss) from
Continuing Operations 494 (126) 238 486 627 563
As a Percent of Net Sales 6% (2)% 3% 6% 8% 8%
Income from Discontinued
Operations 578 58 60 52 28
Cumulative Effect of Accounting
Changes (540)
Net Income (Loss) 494 (88) 296 546 679 591
Return on Shareowners' Equity 16.9% (2.6)% 7.6% 13.6% 17.6% 15.4%
- ---------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE
Income (Loss) from
Continuing Operations $ 4.10 $ (1.01) $ 1.87 $ 3.77 $ 4.63 $ 3.95
Net Income (Loss) 4.10 (0.71) 2.33 4.23 5.01 4.14
- ---------------------------------------------------------------------------------------------------------------------------
YEAR-END FINANCIAL POSITION
Total Assets $ 8,640 $ 9,085 $ 9,227 $ 9,236 $ 8,604 $ 8,461
Working Capital 1,377 1,512 1,536 1,323 1,326 1,117
- ---------------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment:
Gross $ 7,382 $ 7,602 $ 7,510 $ 7,226 $ 6,578 $ 6,577
Net 2,802 3,005 3,191 3,316 3,009 2,977
- ---------------------------------------------------------------------------------------------------------------------------
Long-Term Debt $ 1,502 $ 1,423 $ 1,871 $ 1,645 $ 1,464 $ 1,406
Shareowners' Equity 2,855 3,005 3,654 4,089 3,941 3,800
- ---------------------------------------------------------------------------------------------------------------------------
Current Ratio 1.6 1.6 1.7 1.6 1.7 1.6
Percent of Total Debt to
Total Capitalization 38% 36% 38% 35% 33% 34%
- ---------------------------------------------------------------------------------------------------------------------------
OTHER DATA
Property, Plant and Equipment
Purchases $ 437 $ 586 $ 554 $ 711 $ 578 $ 565
Depreciation and Amortization 572 765 714 704 659 666
Interest Expense 129 169 166 176 176 164
Research and Development Expenses 626 651 610 595 581 556
Income Taxes 235 (48) 116 230 327 292
Cash Provided by Operations 731 912 1,180 1,104 1,037 1,304
- ---------------------------------------------------------------------------------------------------------------------------
Stock Price:
High $75 $71 1/4 $76 $60 1/8 $62 1/8 $46 1/4
Low 48 7/8 49 3/4 46 38 3/4 40 1/4 36 3/4
Year-End 73 3/8 57 5/8 67 7/8 48 1/4 57 3/4 40 7/8
Price/Earnings Ratio on
Year-End Stock Price 18 -- 29 11 12 10
- ---------------------------------------------------------------------------------------------------------------------------
Per Share:
Dividends $ 2.30 $ 2.20 $ 2.045 $ 1.88 $ 1.65 $ 1.475
Shareowners' Equity 24.62 24.95 29.72 32.51 29.79 27.60
- ---------------------------------------------------------------------------------------------------------------------------
Shareowners (year-end) 56,601 60,074 60,152 62,230 61,942 66,066
- ---------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
(year-end, in millions) 116 120 123 126 132 138
- ---------------------------------------------------------------------------------------------------------------------------
Employees (year-end) 30,019 33,797 39,281 41,081 42,179 45,635
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Income from continuing operations and net income for 1993 include a net aftertax gain for
restructuring and other unusual items of $34 million, or $0.28 per share.
(2) Loss from continuing operations and net loss for 1992 include a net aftertax loss for
restructuring and other unusual items of $472 million, or $3.82 per share.
(3) Net income for 1991 includes net restructuring expense of $325 million, or $2.54 per share.
(4) Net income for 1990 includes $56 million, or $0.43 per share, in gains resulting from
divestitures, including the divestiture of certain assets of a joint venture in Japan.
(5) Net income for 1989 includes a $36 million, or $0.27 per share, gain on the sale of the
analgesics business.
</TABLE>
52
<PAGE> 34
APPENDIX
1. In Exhibit 13 to the printed Form 10-K, the following bar graphs appear,
all depicting data for 1991, 1992 and 1993: on page 26, "Selling
Price Index", "Sales Volume Index" and "Raw Material Cost Index"; on
page 28, "Agricultural Group Net Sales"; on page 29, "Chemical Group Net
Sales"; on page 31, "Searle Net Sales"; and on page 39, "Cash Provided
by Continuing Operations". On page 27, a pie-chart graph entitled "1993
Net Sales" appears, depicting a percentage breakdown of Monsanto's 1993
consolidated net sales by Operating Unit Segment. On page 41, a bar graph
entitled "Dividends Per Share" appears, depicting annual dividend per
share data for the years 1983 through 1993.
2. Throughout the electronic submission of Exhibit 13, trademarks are
initially designated on each page by the letter "R" in parentheses or
the letters "TM" in parentheses; whereas in the printed copy of the
Annual Report, all trademarks are italicized.
<PAGE> 1
EXHIBIT 21
<TABLE>
SUBSIDIARIES OF THE REGISTRANT
The following is a list of the Company's subsidiaries as of December
31, 1993, except for unnamed subsidiaries which, considered in the
aggregate as a single subsidiary, would not constitute a significant
subsidiary.
<CAPTION>
Percentage of
Voting Power
Owned by
Monsanto
-------------
<S> <C>
G. D. Searle & Co. (Delaware Corporation)......................................................... 100
Monsanto Europe, S.A. (Belgian Corporation)....................................................... 100
Monsanto International Holdings, Inc.
(Delaware Corporation).......................................................................... 100
Monsanto International Sales Company, Inc.
(Virgin Islands Corporation).................................................................... 100
Monsanto p.l.c. (United Kingdom Corporation)...................................................... 100
The NutraSweet Company (Delaware Corporation)..................................................... 100
</TABLE>
29
<PAGE> 1
EXHIBIT 23(ii)
CONSENT OF INDEPENDENT AUDITORS
MONSANTO COMPANY:
We consent to the incorporation by reference in Monsanto
Company's Registration Statements on Form S-8 (Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717) and on Form S-3 (No.
33-46845) of our opinions dated February 25, 1994, appearing in
and incorporated by reference in this annual report on Form
10-K of Monsanto Company for the year ended December 31, 1993.
DELOITTE & TOUCHE
DELOITTE & TOUCHE
Saint Louis, Missouri
March 15, 1994
-----------------
CONSENT OF COMPANY COUNSEL
I hereby consent to the reference to Company counsel in the
"Commitments and Contingencies" note to the financial
statements in the Company's 1993 Annual Report to shareowners
and incorporated in the Company's Registration Statements on
Form S-8 (Nos. 2-36636, 2-61107, 2-76696, 2-90152, 33-13197,
33-21030, 33-39704, 33-39705, 33-39706, 33-39707 and 33-49717)
and on Form S-3 (No. 33-46845). In giving this consent I do not
thereby admit that I am within the category of persons whose
consent is required under Section 7 of the Securities Act of
1933.
RICHARD W. DUESENBERG
RICHARD W. DUESENBERG
General Counsel
Monsanto Company
Saint Louis, Missouri
March 15, 1994
30
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Joan T. Bok, of Boston, Commonwealth of
Massachusetts, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 18th day of January, 1994.
JOAN T. BOK
-------------------------------
COMMONWEALTH OF MASSACHUSETTS )
) SS
COUNTY OF WORCESTER )
On this 18th day of January, 1994, before me
personally appeared Joan T. Bok, to me known to be the person
described in and who executed the foregoing instrument, and
acknowledged that she executed the same as her free act and
deed.
ROBERT KING WULFF
----------------------------
Notary Public
My Commission Expires: 25 March 1999
<PAGE> 2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Robert M. Heyssel, of Bethany Beach, State of
Delaware, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 20 day of January, 1994.
ROBERT M. HEYSSEL
-------------------------------
STATE OF DELAWARE )
) SS
COUNTY OF SUSSEX )
On this 20th day of January, 1994, before me
personally appeared Robert M. Heyssel, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
Crystal L. Hudson CRYSTAL L. HUDSON
Notary Public, State of Delaware ----------------------------
My Commission Expires July 10, 1995 Notary Public
My Commission Expires: July 10, 1995
<PAGE> 3
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Gwendolyn S. King, of Philadelphia, Commonwealth
of Pennsylvania, Director of Monsanto Company (the "Company"),
a Delaware corporation with its general offices in the County
of St. Louis, Missouri, do by these presents make, constitute
and appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and
J. RUSSELL BLEY, JR., all of St. Louis County, Missouri, or any
of them acting alone, to be my true and lawful attorneys for me
and in my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 10th day of January, 1994.
GWENDOLYN S. KING
-------------------------------
COMMONWEALTH OF PENNSYLVANIA )
) SS
COUNTY OF PHILADELPHIA )
On this 10 day of January, 1994, before me
personally appeared Gwendolyn S. King, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that she executed the same as her free act and
deed.
SUZANNE SCHWARTZ
----------------------------
Notary Public
My Commission Expires: June 12, 1995
Notarial Seal
Suzanne Schwartz, Notary Public
City of Philadelphia, Phila. County
My Commission Expires June 12, 1995
<PAGE> 4
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Philip Leder, of Chestnut Hill, Commonwealth of
Massachusetts, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 10th day of January, 1994.
PHILIP LEDER
-------------------------------
COMMONWEALTH OF MASSACHUSETTS )
) SS
COUNTY OF SUFFOLK )
On this 10th day of January, 1994, before me
personally appeared Philip Leder, to me known to be the person
described in and who executed the foregoing instrument, and
acknowledged that he executed the same as his free act and
deed.
TERRI BRODERICK
----------------------------
Notary Public
My Commission Expires: 6/21/96
<PAGE> 5
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Howard M. Love, of Pittsburgh, Commonwealth of
Pennsylvania, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 24th day of January, 1994.
HOWARD M. LOVE
-------------------------------
COMMONWEALTH OF PENNSYLVANIA )
) SS
COUNTY OF ALLEGHENY )
On this 24th day of January, 1994, before me
personally appeared Howard M. Love, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
JOAN M. ZAKOR
----------------------------
Notary Public
My Commission Expires: Notarial Seal
Joan M. Zakor, Notary Public
Pittsburgh, Allegheny County
My Commission Expires April 14, 1995
------------------------------------
Member, Pennsylvania Association of Notaries
<PAGE> 6
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Richard J. Mahoney, of St. Louis County, State of
Missouri, Principal Executive Officer and Director of Monsanto
Company (the "Company"), a Delaware corporation with its
general offices in the County of St. Louis, Missouri, do by
these presents make, constitute and appoint RICHARD W.
DUESENBERG, KARL R. BARNICKOL and J. RUSSELL BLEY, JR., all of
St. Louis County, Missouri, or any of them acting alone, to be
my true and lawful attorneys for me and in my name, place and
stead, to execute and sign: (i) the Registration Statements on
Form S-8 and any Amendments thereto to be filed with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), covering the
registration of the Company's securities to be issued under the
Monsanto Management Incentive Plan of 1994, the Searle/Monsanto
Stock Plan of 1994, and the NutraSweet/Monsanto Stock Plan of
1994; (ii) any Amendments to Registration Statement No.
33-46845 on Form S-3, which has previously been filed with the
Commission under the Act; and any Amendments to Registration
Statements Nos. 2-36636, 2-61107, 2-76696, 2-90152, 33-13197,
33-21030, 33-39704, 33-39705, 33-39706, 33-39707 and 33-49717,
all on Form S-8, which have previously been filed with the
Commission under the Act, covering the registration of shares
of Common Stock of the Company; and (iii) the Annual Report on
Form 10-K and any Amendments thereto to be filed with the
Commission under the Securities Exchange Act of 1934; giving
and granting unto said attorneys full power and authority to do
and perform such actions as fully as I might have done or could
do if personally present and executing any of said documents.
Witness my hand this 12th day of January, 1994.
R. J. MAHONEY
-------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this 12th day of January, 1994, before me
personally appeared Richard J. Mahoney, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
Mary K. Brady MARY K. BRADY
Notary Public State of Missouri ----------------------------
St. Louis County Notary Public
My Commission Exp. May 21, 1996
My Commission Expires: ---------------------------------------
<PAGE> 7
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Frank A. Metz, Jr., of Sloatsburg, State of
New York, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 15th day of January, 1994.
FRANK A. METZ, JR.
-------------------------------
STATE OF NEW YORK )
) SS
COUNTY OF ROCKLAND )
On this 15th day of January, 1994, before me
personally appeared Frank A. Metz, Jr., to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
T. F. BOLLATTO, JR.
----------------------------
Notary Public
My Commission Expires: January 31, 1994
THOMAS F. BOLLATO, JR.
Notary Public, State of New York
No. 0345945
Qualified in Rockland County
Commission Expires January 31, 1994
<PAGE> 8
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Buck Mickel, of Greenville, State of South
Carolina, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 13 day of January, 1994.
BUCK MICKEL
-------------------------------
STATE OF SOUTH CAROLINA )
) SS
COUNTY OF GREENVILLE )
On this 13th day of January, 1994, before me
personally appeared Buck Mickel, to me known to be the person
described in and who executed the foregoing instrument, and
acknowledged that he executed the same as his free act and
deed.
DOROTHY F. KING
----------------------------
Notary Public
My Commission Expires: ---------------------------------------
My Commission Expires February 13, 2000
<PAGE> 9
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Jacobus F. M. Peters, of Wassenaar, Country of The
Netherlands, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 11th day of January, 1994.
JACOBUS F. M. PETERS
-------------------------------
COUNTRY OF THE NETHERLANDS )
) SS
CITY OF WASSENAAR )
On this ----- day of ---------------, 1994, before me
personally appeared Jacobus F. M. Peters, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
Legalisation turn overleaf.
----------------------------
Notary Public
My Commission Expires: ---------------------------------------
<PAGE> 10
Seen for legalisation the signature of Mr. Jacobus Franciscus
Maria Peters, born on September the eight nineteenhundred
thirty one at Amsterdam, residing at (2244 AK) Wassenaar,
Dennenlaan 15, by me, Annemarie van Lonkhuijzen, solicitor
and notary at law, at The Hague, The Netherlands, on this
twelfth day of January nineteenhundred ninety four.
A. VAN LONKHUIJZEN
NOTARIS TE 's-GRAVENHAGE A. VAN LONKHUIJZEN
------------------------------
<PAGE> 11
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Nicholas L. Reding, of St. Louis County, State of
Missouri, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 6th day of January, 1994.
NICHOLAS L. REDING
-------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this 6th day of January, 1994, before me
personally appeared Nicholas L. Reding, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
BEVERLY OHM
----------------------------
Notary Public
My Commission Expires: Feb. 12, 1994
<PAGE> 12
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, John S. Reed, of Greenwich, State of Connecticut,
Director of Monsanto Company (the "Company"), a Delaware
corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 25th day of January, 1994.
JOHN S. REED
-------------------------------
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
On this 25th day of January, 1994, before me
personally appeared John S. Reed, to me known to be the person
described in and who executed the foregoing instrument, and
acknowledged that he executed the same as his free act and
deed.
MARY F. CHIODI
----------------------------
Notary Public
My Commission Expires: MARY F. CHIODI
Notary Public, State of New York
No. 4506585
Qualified in Nassau County
Commission Expires January 31, 1996
<PAGE> 13
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, William D. Ruckelshaus, of Houston, State of
Texas, Director of Monsanto Company (the "Company"), a Delaware
corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 12th day of January, 1994.
WILLIAM D. RUCKELSHAUS
-------------------------------
STATE OF TEXAS )
) SS
COUNTY OF HARRIS )
On this 12th day of January, 1994, before me
personally appeared William D. Ruckelshaus, to me known to be
the person described in and who executed the foregoing
instrument, and acknowledged that he executed the same as his
free act and deed.
DEBRA L. CASEY
----------------------------
Notary Public
My Commission Expires: 1-20-96
NOTARY PUBLIC DEBRA L. CASEY
STATE OF TEXAS MY COMMISSION EXPIRES
January 20, 1996
Bonded Thru Notary Public Underwriters Agency
<PAGE> 14
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Bruce R. Sents, of St. Louis County, State of
Missouri, Principal Accounting Officer of Monsanto Company (the
"Company"), a Delaware corporation with its general offices in
the County of St. Louis, Missouri, do by these presents make,
constitute and appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL
and J. RUSSELL BLEY, JR., all of St. Louis County, Missouri, or
any of them acting alone, to be my true and lawful attorneys
for me and in my name, place and stead, to execute and sign:
(i) the Registration Statements on Form S-8 and any Amendments
thereto to be filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Act"), covering the registration of the Company's
securities to be issued under the Monsanto Management Incentive
Plan of 1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 6th day of January, 1994.
BRUCE R. SENTS
-------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this 6th day of January, 1994, before me
personally appeared Bruce R. Sents, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
KATHY A. EHRHARD
----------------------------
Notary Public
My Commission Expires: 10-21-95
Kathy A. Ehrhard
Notary Public
State of Missouri
St. Louis County
My Commission Expires Oct. 21, 1995
<PAGE> 15
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Robert B. Shapiro, of St. Louis County, State of
Missouri, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 10th day of January, 1994.
ROBERT B. SHAPIRO
-------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this 10th day of January, 1994, before me
personally appeared Robert B. Shapiro, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
BEVERLY A. OHM
----------------------------
Notary Public
My Commission Expires: Feb. 12, 1994
<PAGE> 16
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, John B. Slaughter, of Pasadena, State of
California, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 20th day of January, 1994.
JOHN B. SLAUGHTER
-------------------------------
STATE OF CALIFORNIA )
) SS
COUNTY OF LOS ANGELES )
On this 20th day of January, 1994, before me
personally appeared John B. Slaughter to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
KAY LYNN FUJIWARA
----------------------------
Notary Public
My Commission Expires: ---------------------------------------
THE GREAT SEAL Kay Lynn Fujiwara
OF THE STATE OF Comm. # 995481
CALIFORNIA Notary Public - California
LOS ANGELES COUNTY
My Comm. Expires JUN 11, 1997
<PAGE> 17
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Francis A. Stroble, of St. Louis County, State of
Missouri, Principal Financial Officer of Monsanto Company (the
"Company"), a Delaware corporation with its general offices in
the County of St. Louis, Missouri, do by these presents make,
constitute and appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL
and J. RUSSELL BLEY, JR., all of St. Louis County, Missouri, or
any of them acting alone, to be my true and lawful attorneys
for me and in my name, place and stead, to execute and sign:
(i) the Registration Statements on Form S-8 and any Amendments
thereto to be filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Act"), covering the registration of the Company's
securities to be issued under the Monsanto Management Incentive
Plan of 1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 10th day of January, 1994.
FRANCIS A. STROBLE
-------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this 10th day of January, 1994, before me
personally appeared Francis A. Stroble, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
MARY HELEN MOSS
----------------------------
Notary Public
My Commission Expires: August 10, 1997
<PAGE> 18
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Stansfield Turner, of McLean, Commonwealth of
Virginia, Director of Monsanto Company (the "Company"), a
Delaware corporation with its general offices in the County of
St. Louis, Missouri, do by these presents make, constitute and
appoint RICHARD W. DUESENBERG, KARL R. BARNICKOL and J. RUSSELL
BLEY, JR., all of St. Louis County, Missouri, or any of them
acting alone, to be my true and lawful attorneys for me and in
my name, place and stead, to execute and sign: (i) the
Registration Statements on Form S-8 and any Amendments thereto
to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), covering the registration of the Company's securities
to be issued under the Monsanto Management Incentive Plan of
1994, the Searle/Monsanto Stock Plan of 1994, and the
NutraSweet/Monsanto Stock Plan of 1994; (ii) any Amendments to
Registration Statement No. 33-46845 on Form S-3, which has
previously been filed with the Commission under the Act; and
any Amendments to Registration Statements Nos. 2-36636,
2-61107, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704,
33-39705, 33-39706, 33-39707 and 33-49717, all on Form S-8,
which have previously been filed with the Commission under the
Act, covering the registration of shares of Common Stock of the
Company; and (iii) the Annual Report on Form 10-K and any
Amendments thereto to be filed with the Commission under the
Securities Exchange Act of 1934; giving and granting unto said
attorneys full power and authority to do and perform such
actions as fully as I might have done or could do if personally
present and executing any of said documents.
Witness my hand this 24th day of February, 1994.
STANSFIELD TURNER
-------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this 24th day of February, 1994, before me
personally appeared Stansfield Turner, to me known to be the
person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and
deed.
Mary Kay Brady
----------------------------
Notary Public
Mary K. Brady
Notary Public State of Missouri
ST. LOUIS COUNTY
My Commission Exp. May 21, 1996
<PAGE> 1
EXHIBIT 24.2
MONSANTO COMPANY
CERTIFICATE
-----------
I, J. Russell Bley, Jr., Assistant Secretary of Monsanto Company, hereby
certify that the following is a full, true and correct copy of a resolution
adopted by the Board of Directors of Monsanto Company on February 25, 1994,
at which meeting a quorum was present and acting throughout:
RESOLVED, that each officer and director who may be required to
sign and execute Form 10-K or any document in connection therewith
(whether for and on behalf of the Company, or as an officer or
director of the Company, or otherwise), be and hereby is authorized
to execute a power of attorney appointing Messrs. Richard W.
Duesenberg, Karl R. Barnickol and J. Russell Bley, Jr., or any
of them, severally, his true and lawful attorney or attorneys to
sign in his name, place and stead in any such capacity such Form 10-K
and any and all amendments thereto and documents in connection
therewith, and to file the same with the Commission or any other
governmental body, each of said attorneys to have power to act with
or without the others, and to have full power and authority to do and
perform, in the name and on behalf of each of said officers and
directors, every act whatsoever which such attorneys, or any one
of them, may deem necessary, appropriate or desirable to be done in
connection therewith as fully and to all intents and purposes as
such officers or directors might or could do in person.
IN WITNESS WHEREOF, I have hereunto set my hand in my official capacity
and affixed the corporate seal of Monsanto Company this 1st day of March, 1994.
/s/ J. RUSSELL BLEY, JR.
---------------------------------------
J. Russell Bley, Jr.
Assistant Secretary
SEAL
<PAGE> 1
EXHIBIT 99.1
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing operations before
provision for income taxes........................... $ 729* $(174)* $354* $716 $ 954
Add
Fixed charges..................................... 184 231 233 248 233
Less capitalized interest......................... (12) (16) (24) (29) (22)
Dividends from affiliated companies............... 5 5 5 6 7
Less equity income (add equity loss) of affiliated
companies.......................................... (20) (1) (3) 11 (1)
----- ----- ---- ---- ------
Income as adjusted.............................. $ 886 $ 45 $565 $952 $1,171
===== ===== ==== ==== ======
Fixed charges
Interest expense.................................... $ 129 $ 169 $166 $176 $ 176
Capitalized interest................................ 12 16 24 29 22
Portion of rents representative of interest factor.. 43 46 43 43 35
----- ----- ---- ---- ------
Fixed charges................................... $ 184 $ 231 $233 $248 $ 233
===== ===== ==== ==== ======
Ratio of earnings to fixed charges.................... 4.82 0.19 2.42 3.84 5.03
===== ===== ==== ==== ======
<FN>
*Includes restructuring expense and other unusual items of $(61)
million, $699 million and $457 million in 1993, 1992 and 1991,
respectively.
Excluding this restructuring expense and other unusual items, the
ratio of earnings to fixed charges would have been 4.48, 3.22 and
4.39, respectively.
</TABLE>
31
