UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended November 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number : 0-7908
PIONEER HI-BRED INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Iowa 42-0470520
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation organization)
800 Capital Square, 400 Locust Street, Des Moines, Iowa 50309
-------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (515) 248-4800
- --------------------------------------------------- --------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at December 29, 1998
----- --------------------------------
Common Stock ($1.00 par value) 190,116,845
Class B Common Stock ($1.00 stated value) 49,333,758
<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
INDEX
<TABLE>
PAGE
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -- November 30, 1998,
<S> <C> <C> <C> <C> <C>
August 31, 1998, and November 30, 1997......................... 3-4
Consolidated Condensed Statements Of Operations-- Three Months
Ended November 30, 1998 and 1997............................... 5
Consolidated Condensed Statements Of Cash Flows-- Three Months
Ended November 30, 1998 and 1997............................... 6
Notes to Consolidated Condensed Financial Statements............. 7-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................... 9-12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................. 13
Signatures................................................................ 14
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
( In millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
November 30, August 31, November 30,
ASSETS 1998 1998 1997
---- ---- ----
(Unaudited) (Unaudited)
CURRENT ASSETS
Cash and cash equivalents........... $ 77 $ 86 $ 76
Accounts and notes receivable, net.. 261 400 237
Inventories:
Finished seed..................... 435 273 429
Unfinished seed................... 407 201 372
Other............................. 12 7 11
Income taxes receivable............. 12 -- --
Deferred income taxes............... 61 69 63
Prepaid expenses and other
current assets.................. 11 3 11
Total current assets.................... $ 1,276 $ 1,039 $ 1,199
LONG-TERM ASSETS........................ 51 47 79
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and allowances
November 30, 1998- $536
August 31, 1998- $520
November 30, 1997 - $509............ 598 576 554
INTANGIBLES............................. 65 55 65
-- -- --
$ 1,990 $ 1,717 $ 1,897
======== ======== ========
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
3
<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' November 30, August 31, November 30,
EQUITY 1998 1998 1997
---- ---- ----
(Unaudited) (Unaudited)
CURRENT LIABILITIES
<S> <C> <C> <C>
Short-term borrowings................. $ 289 $ 76 $ 85
Current maturities of long-term debt.. 11 14 6
Accounts payable, trade............... 344 81 340
Accrued compensation.................. 34 61 33
Income taxes payable.................. -- 46 9
Other accruals........................ 40 67 51
-- -- --
Total current liabilities........... $ 718 $ 345 $ 524
--- --- ---
LONG-TERM DEBT............................ $ 5 $ 5 $ 19
--- --- --
DEFERRED ITEMS,
Retirement benefits................... $ 96 $ 94 $ 84
Income taxes.......................... 19 19 19
--- --- ---
$ 115 $ 113 $ 103
--- --- ---
MINORITY INTEREST IN SUBSIDIARIES......... $ 7 $ 7 $ 6
--- --- ---
SHAREHOLDERS' EQUITY
Preferred stock, $100 stated value.. $ -- $ -- $ 16
Common stock, $1 par value.......... 230 230 76
Class B common, $1 stated value..... 49 49 --
Additional paid-in capital.......... 246 246 227
Retained earnings................... 1,329 1,428 1,360
Accumulated other comprehensive
loss, net......................... (36) (46) (19)
----- ----- -----
$ 1,818 $ 1,907 $ 1,660
Less: Cost of common shares
acquired for the treasury........... (647) (631) (393)
Unearned compensation............... (26) (29) (22)
----- ----- ------
$ 1,145 $ 1,247 $ 1,245
----- ----- -----
$ 1,990 $ 1,717 $ 1,897
===== ===== =====
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
4
<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in millions)
<TABLE>
<CAPTION>
Three Months Ended
November 30,
<S> <C> <C>
1998 1997
---- ----
Net sales.......................................... $ 76 $ 79
-------- --------
Operating costs and expenses:
Cost of goods sold............................... $ 56 $ 51
Research and product development................. 40 34
Selling.......................................... 54 55
General and administrative....................... 35 28
-------- --------
$ 185 $ 168
-------- --------
Operating loss................................... $ (109) $ (89)
Investment income.................................. 5 18
Interest expense................................... (5) (2)
Net exchange loss.................................. (5) (5)
-------- --------
Loss before items shown below.................... $ (114) $ (78)
Provision for income taxes......................... 39 27
Minority interest and other........................ -- --
-------- --------
Net loss......................................... $ (75) $ (51)
======== ========
Preferred stock dividend........................... $ -- $ 4
Net loss attributable to common shareholders..... $ (75) $ (55)
Basic and diluted net loss per common share*....... $ (.31) $ (.24)
Dividends per common share*........................ $ .10 $ .087
Average common shares outstanding.................. 240.0 226.0
</TABLE>
* Not in millions
See Notes to Consolidated Condensed Financial Statements.
5
<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
<TABLE>
<CAPTION>
Three Months Ended
November 30,
<S> <C> <C>
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)....................................... $ (75) $ (51)
Noncash items included in net (loss):
Depreciation and amortization.................. 27 22
Other.......................................... (4) (12)
Net change in assets and liabilities............. (84) (104)
-------- --------
Net cash used in operating activities.......... $ (136) $ (145)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................. $ (37) $ (30)
Other............................................ (14) 8
-------- --------
Net cash used in investing activities.......... $ (51) $ (22)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) proceeds on short-term borrowings. $ 220 $ (4)
Purchase of common stock......................... (16) (1,525)
Dividends paid................................... (24) (26)
Net proceeds from issuance of preferred stock.... -- 1,701
Net (payments) proceeds on longterm debt......... (3) --
-------- --------
Net cash provided by financing activities...... $ 177 $ 146
-------- --------
Net decrease in cash and cash equivalents...... $ (9) $ (21)
Cash and cash equivalents, beginning............... 86 97
-------- --------
CASH AND CASH EQUIVALENTS, ENDING.................. $ 77 $ 76
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid for:
Interest....................................... $ 5 $ 1
======== ========
Income taxes................................... $ 10 $ 9
======== ========
NONCASH FINANCING ACTIVITIES:
Retirement of 16,466,045 shares of treasury stock:
Common stock................................... $ -- $ 16
Additional paidin capital...................... -- 1,509
-------- --------
Treasury stock................................. $ -- $ 1,525
======== ========
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PIONEER HI-BRED INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to fairly present the financial
position as of November 30, 1998 and 1997, and the results of operations and
cash flows for the three months ended November 30, 1998 and 1997. Because of
the seasonal nature of the Company's business, the results of operations for
the three months ended November 30, 1998, may not be indicative of the
results to be expected for the full year.
2. Pioneer has guaranteed the repayment of principal and interest on certain
obligations of Village Court Associates, an affiliated real estate venture.
Such guarantees totaled approximately $23 million at November 30, 1998 and
1997.
3. Since April, 1996, DeKalb Genetics Corporation ("DeKalb") has filed six
lawsuits against Pioneer. The lawsuits allege that insect resistant corn
products that use a Bt gene, and corn products resistant to a glufosinate
herbicide, infringe on certain DeKalb patents. On November 10, 1998, two of
the six lawsuits filed were dismissed with prejudice. These two lawsuits
alleged the Company had infringed on Dekalb patents by using glufosinate
resistant products in developing corn hybrids.
After reviewing the Company's intellectual property position, DeKalb's
patent filings, DeKalb's lawsuits, and conducting extensive discovery,
Pioneer continues to believe all DeKalb's claims are without merit. Pioneer
has denied DeKalb's allegations and raised defenses that, if successful,
would render DeKalb's patents invalid. Pioneer believes that disposition of
the lawsuits will not have a materially adverse effect on the consolidated
financial position and results of operations of the Company. Pioneer also
does not expect delays in the introductions of advanced corn hybrids with
insect and herbicide resistance because of these lawsuits
4. The following table summarizes the computation of weighted average shares
outstanding:
Period Ended November 30, 1998 1997
(in millions)
Number of shares of common stock
outstanding at beginning of the period..... 240.3 246.7
Weighted average number of shares of
common stock issued during the period...... -- --
Weighted average number of shares of
common stock purchased for the treasury.... (0.3) (20.7)
Weighted average number of shares of
common stock outstanding during the period. 240.0 226.0
7
<PAGE>
5. The following table provides a reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations for
the periods presented:
<TABLE>
<CAPTION>
November 30, 1998 November 30, 1997
------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income/ Shares Income/ Shares
(Loss) Denom- Per-Share (Loss) Denom- Per-Share
Three Months Ended Numerator inator Amount Numerator inator Amount
(in millions, except
per share amounts)
Net (loss) .............. $ (75) $ (51)
Less: Preferred
stock dividends...... -- 4
----- -----
Basic earnings (loss) per share:
(Loss) attributable to
common shareholders.. $ (75) 240.0 $ (.31) $ (55) 226.0 $ (.24)
====== ======
Effect of dilutive securities:
Convertible preferred stock -- -- -- --
Stock options............ -- -- -- --
------ ------ ------ -----
Diluted earnings (loss) per share:
(Loss) attributable to
common shareholders.. $ (75) 240.0 $ (.31) $ (55) 226.0 $ (.24)
===== ===== ====== ===== ===== ======
</TABLE>
The periods presented reflect a loss attributable to common shareholders. As
a result, the effect of convertible preferred stock and stock options are
not included in the calculation of diluted earnings per share as their
effects are anti-dilutive.
6. Accounting Pronouncements
As of September 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income". SFAS
No. 130 establishes new rules for the reporting and display of comprehensive
income and its components; however, the adoption of this statement has no
impact on a company's net income (loss) or shareholders' equity. SFAS No.
130 requires other comprehensive income to include foreign currency
translation adjustments and unrealized gains and losses on certain
investments in debt and equity securities classified as available-for-sale
securities, which prior to adoption were reported separately in
shareholders' equity. The November 30, 1997, and August 31, 1998, financial
statements have been reclassified to conform to the requirements of SFAS No.
130.
During the first quarter of 1999 and 1998, total comprehensive loss, which
includes net loss and other comprehensive income (loss), amounted to $65
million and $53 million, respectively.
8
<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached
unaudited condensed consolidated financial statements and notes, and with the
Company's audited financial statements and notes for the fiscal year ended
August 31, 1998.
MATERIAL CHANGES IN FINANCIAL CONDITION:
Due to the seasonal nature of the agricultural seed business, the Company
generates most of its cash from operations during the second and third quarters
of the fiscal year. Cash generated during this time is used to meet the cash
needs of the period and to pay the commercial paper and accounts payable which
are the Company's primary sources of financing during the first and fourth
quarters of the fiscal year. Any excess funds are invested, primarily in
short-term commercial paper.
Most of the Company's financing is done through the issuance of commercial
paper in the U.S., backed by revolving and seasonal lines of credit. In
addition, foreign lines of credit and direct borrowing agreements are relied
upon to support overseas financing needs. Short-term debt at November 30, 1998,
consisted of $208 million in domestic commercial paper and $81 million in direct
short-term borrowings from foreign banks.
During fiscal 1999 the Company has the following domestic lines of credit
available: (in millions) Revolving Seasonal Total
First quarter $200 $100 $300
Second quarter $200 $100 $300
Third quarter $200 $ -- $200
Fourth quarter $200 $ -- $200
During the fiscal year ended August 31, 1998, the Company finalized an
agreement with DuPont that created one of the world's largest private
agricultural research and development collaborations. The Company and DuPont
also formed a joint venture, Optimum Quality Grains, L.L.C. that markets
improved quality traits.
In connection with the above agreement, the Company issued convertible
preferred stock to DuPont, which was converted to Class B common stock during
fiscal year 1998. As required by the agreement, Pioneer used a majority of the
proceeds to purchase shares of the Company's outstanding common stock through a
Dutch auction self-tender. The excess proceeds from these transactions of
approximately $170 million were used for 1998 operations and to purchase
additional shares of Pioneer common stock on the open market through the
Company's stock repurchase program.
Current year short-term borrowings are not comparable to November 30, 1997
amounts due to the DuPont transactions which reduced the need for short-term
borrowing. However, current year short-term debt is comparable to historical
levels.
The growth in receivables at November 30, 1998, when compared to November
30, 1997, was primarily due to increased participation in the Company's credit
programs.
9
<PAGE>
MATERIAL CHANGES IN RESULTS OF OPERATIONS:
Net loss for the three months ended November 30, 1998, was $75 million, or
$.31 per share, on sales of $76 million. In the first three months of the prior
fiscal year, the Company recorded a loss of $51 million on sales of $79 million.
After the payment of preferred dividends the net loss attributable to common
shareholders for November 30, 1997 totaled $55 million or $.24 per share.
Due to the seasonality of the seed business, partial-year results and
quarter-to-quarter comparisons are not always meaningful. Accordingly, such
quarterly comparisons are not emphasized. Typically, most of the Company's
revenue and operating profit are generated in the third quarter. Revenues during
the Company's first quarter are generated mostly from Southern Hemisphere
operations, North American wheat sales, and worldwide microbial product sales
and generally represents less than 5 percent of the Company's annual sales.
Three Months Ended November 30, 1998 compared to the Three Months Ended November
30, 1997
The current operating loss increased $20 million to $109 million largely due
to decreased sales and increased fixed costs. Increased sales in seed corn were
more than offset by decreases in wheat and other products. The increase in fixed
costs of approximately 10 percent was expected due to planned expenditures in
research and product development, sales and marketing, information management
and other targeted areas. Increased investments in research and product
development of $6 million accounted for approximately 50 percent of the current
year increase in fixed costs.
Net Sales and Operating Loss
(Unaudited, in millions)
Quarter Ended
November 30 Increase/
1998 1997 (Decrease)
Net Sales:
Corn...................... $ 33 $ 23 $ 10
Other..................... 43 56 (13)
------ -------- -------
Total Net Sales............. $ 76 $ 79 $ (3)
====== ======== =======
Operating loss:
Corn...................... $ (76) $ (68) $ 8
Other..................... (10) (1) 9
------ -------- -------
Product line operating
loss................... $ (86) $ (69) $ 17
Indirect general and
administrative expenses.. (23) (20) 3
------ ------- -------
Operating Loss.............. $ (109) $ (89) $ 20
------ ------- -------
North American operations had the greatest impact on the current period. An
increase in seed corn sales due to timing of deliveries was more than offset by
a decrease in wheat sales. Wheat sales were down $9 million due to reduced acres
and a decrease in sales price due to low commodity prices resulting in a
decrease in operating profit of $6 million from the prior year. North America
corn operating results decreased $3 million from prior year first quarter
results. Current year results were impacted by additional costs from the
expanded introduction of new corn hybrids and increased investments in corn
research and product development. Corn research expenses increased $4 million
primarily due to increases in compensation costs and expenses associated with
technology acquisitions. Compensation
10
<PAGE>
costs were higher due to the hiring of additional research staff and increases
in base compensation as a result of the competitive environment.
Outside North America, operating results were $6 million lower in the
current period compared to a year earlier. The Latin America region accounted
for approximately $3 million of the decrease. Current period unit sales
increased approximately 100,000 units over the same period last year. However,
the operating profit from the increased sales was offset by inventory writedowns
of obsolete corn hybrids in Argentina. In addition, non-recurring cost savings
for the period ended November 30, 1997 contributed to the year-to-year change.
Current period net financial income decreased $16 million from previous year
results due to decreased investment income and increased interest expense.
Investment income decreased $13 million primarily due to fiscal 1998 results
including interest earned on proceeds from DuPont's investment in the Company.
The Company did not have excess cash to invest in the first quarter of the
current year. Typically the Company borrows money during its first quarter to
fund operations. The availability of the excess proceeds from the DuPont
transactions last year reduced borrowings, which reduced prior year interest
expense.
The estimated worldwide tax rate of 34 percent reflected in the first
quarter of fiscal 1999 is similar to the 33 percent effective tax rate reflected
on an annual basis for fiscal 1998. The worldwide effective tax rate for the
first quarter of fiscal 1998 was 35 percent. The lower current year first
quarter effective tax rate increased the current period loss by approximately $1
million compared to last year's first quarter. The effective tax rate reflected
for the first quarter is based on all information available to date. The
effective tax rate on an annual basis may vary from what is reflected in the
current period, in part as a result of any changes in the mix of earnings
between the Company's North American seed business and other worldwide
operations.
YEAR 2000
The Company's Year 2000 compliance program is on schedule. The following key
objectives were met during the first quarter of fiscal 1999: core infrastructure
and core application remediation efforts are estimated to be 95 to 97 percent
complete, the inventory of building systems was completed, the Company began
evaluating responses to inquiries of Year 2000 compliance by third party
suppliers, the network testing structure is complete, and the plans for testing
the remaining systems was completed. Over the next six months, future efforts
will focus on developing and executing test plans, assessment of legacy data,
completion of equipment assessments to include remediation plans, and completion
of initial supplier assessments to include developing formal contingency plans.
Total costs to address the Year 2000 issue are currently estimated not to
exceed $3 to $5 million, unchanged from original estimates.
Pioneer still believes that the Year 2000 challenge will not materially
impact the Company's ability to produce seed products or the ability to sell and
distribute these products to customers for planting in the spring of 2000.
EURO CONVERSION
The Company believes the euro conversion will not have a material impact on
the Company's ability to execute transactions during the transition period,
which began January 1, 1999, and ends December 31, 2001. The significant
requirement of companies during this period is the ability to invoice and accept
payment in euro at a customer's request. The Company has systems and processes
in place to manage euro denominated transactions if a customer makes this
request.
The Company continues to evaluate the impact the euro conversion will have
on its business, however, the Company believes it will not have a material
impact on its results of operations or financial condition. Several specific
areas have been analyzed as noted.
11
<PAGE>
The Company has performed an analysis of applicable computer systems
readiness for the euro conversion. Plans are in place to upgrade existing
systems prior to 2001 to meet the needs of full euro conversion. The cost of
these upgrades is not expected to be material to the Company. In addition, the
Company has analyzed changing its hedging of foreign-currency-denominated
transactions in participating countries from their legacy currency to the euro.
Management expects hedging in the euro to reduce the number of hedging contracts
and associated administrative costs.
OUTLOOK
The company continues to validate the yield advantage of Pioneer products.
Pioneer has collected over 270,000 side-by-side corn performance comparisons
across it's North America market area. The Company's corn hybrids expected to be
the top ten sellers for 1999 on average posted a yield advantage of nearly 8
bushels an acre over the average of the top ten competitor hybrids in
side-by-side comparisons conducted by Pioneer. The program to hold the price of
most of our corn hybrids steady for the 1999 sales season and offer enhanced
credit for qualified customers has been positively received. This program, along
with high returns per acre from our strong product performance will be key in
the Company's effort to gain share in the North American market in 1999.
The same results were present with Pioneer brand soybeans. Based on 28,000
variety comparisons, Pioneer leader soybeans with the Roundup Ready(1) gene on
average held a 2 bushel-per-acre yield advantage over competitive Roundup Ready
products. With the addition of 20 new soybean varieties, management believes
that 1998's strong North American soybean operations should continue into 1999
as the Company's soybean products are performing well against the competition.
The demand for glyphosate-resistant products is expected to increase, and the
Company has adequate supplies of these products available for sale in 1999. As a
result, sales of glyphosate-resistant products are expected to represent a
larger percentage of overall soybean sales in 1999, and margins are expected to
improve because of their premium sales price over elite varieties.
On December 21, 1998, the Company announced the filing of a registration
statement to sell $200 million in debt securities. The sale of the debt
securities is expected to begin in January 1999 and the proceeds will be used
for general corporate purposes.
FORWARD-LOOKING STATEMENT
This report contains forward-looking statements relating to the Company's
operations that are based on management's current expectations, estimates, and
projections. Words such as "expects", "anticipates", "plans", "intends",
"projects", and similar expressions are used to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties, and assumptions that are difficult to
predict. In addition to other factors discussed in this report, some of the
important factors that could cause actual results to vary significantly from
management's expectations noted in forward-looking statements include the
weather, government programs/approvals, commodity prices, changes in corn
acreage, intellectual property positions, product performance, product returns,
customer preferences, currency fluctuations, the Year 2000 issue, the Euro
conversion, and industry consolidations.
(1) Registered trademark of, and used under license from, Monsanto Company.
12
<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
a.Exhibits
Financial Data Schedule (Exhibit 27).
b.Reports on Form 8-K
No reports on Form 8-K were filed with the Commission during the
three months ended November 30, 1998.
13
<PAGE>
>
PIONEER HI-BRED INTERNATIONAL, INC.
SIGNATURES
Pursuant to the requirements 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.
PIONEER HI-BRED INTERNATIONAL, INC.
-----------------------------------
(Registrant)
By /s/ JERRY L. CHICOINE
---------------------
JERRY L. CHICOINE
Executive Vice President and Chief
Operating Officer
By /s/ BRIAN G. HART
-----------------
BRIAN G. HART
Vice President and Chief
Financial Officer
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000078716
<NAME> Pioneer Hi-Bred International
<MULTIPLIER> 1,000,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Aug-31-1999
<PERIOD-START> Sep-01-1999
<PERIOD-END> Nov-30-1998
<EXCHANGE-RATE> 1.0
<CASH> 51
<SECURITIES> 26
<RECEIVABLES> 288
<ALLOWANCES> 27
<INVENTORY> 854
<CURRENT-ASSETS> 1,276
<PP&E> 1,134
<DEPRECIATION> 536
<TOTAL-ASSETS> 1,990
<CURRENT-LIABILITIES> 718
<BONDS> 0
0
0
<COMMON> 279
<OTHER-SE> 866
<TOTAL-LIABILITY-AND-EQUITY> 1,990
<SALES> 76
<TOTAL-REVENUES> 76
<CGS> 96
<TOTAL-COSTS> 96
<OTHER-EXPENSES> 89
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> (114)
<INCOME-TAX> (39)
<INCOME-CONTINUING> (75)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (75)
<EPS-PRIMARY> (0.31)
<EPS-DILUTED> (0.31)
</TABLE>
