FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15(d) of THE SECURITIES
EXCHANGE ACT OF 1934
DEKALB Genetics Corporation
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report for 1993 on Form
10-K as set forth in the pages attached hereto:
Item 7. Management's Discussion And Analysis of Financial Condition and
Results of Operations
Exhibit 28 - Additional Exhibit
Form 11-K
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
DEKALB Genetics Corporation
(Registrant)
By: Bruce P. Bickner
Bruce P. Bickner
Chairman and Chief Executive
Officer
Date: January 10, 1995
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SUMMARY
Fiscal 1994 net earnings of $10.6 million ($2.02 per share) were $8.9 million
more than the prior year when earnings were $1.7 million ($.33 per share).
Operating results for each segment except poultry increased from the prior
year. North American seed earnings improved largely due to higher corn and
soybean sales volumes and swine segment earnings also improved due to volume
increases. While Argentine earnings were lower in fiscal 1994 due to
unfavorable planting conditions, the international seed segment experienced
improved results over fiscal 1993 when significant losses were incurred in
Spain and Australia. Poultry's loss of $0.3 million represented a $1.3
million decline from prior year while corporate and interest expenses were
$2.6 million less than in fiscal 1993.
Earnings for fiscal 1994 included a $2.3 million ($.45 per share) after-tax
benefit related to the suspension of the defined benefit portion of the
Company's retirement program. The after-tax earnings effects (in millions),
by segment were $1.7 for North American seed and $0.2 each for swine, poultry
and corporate. In the first quarter of fiscal 1994, the Company adopted
financial accounting standard No.109 (SFAS), "Accounting for Income Taxes".
The adoption of SFAS No. 109 resulted in the recognition of $0.4 million, or
$.09 per share, of deferred tax expense.
Also, in order to achieve a better matching of inventory costs with revenues,
the Company changed from the last-in, first-out (LIFO) to the average cost
inventory method. The appropriate restatements of all periods have been made.
Compared with 1992, North American seed profitability was higher due to lower
operating expenses partially offset by lower total margins. International
earnings were lower, largely due to the decline in earnings from DEKALB
Argentina. Swine earnings were higher than in fiscal 1992 resulting from
increases in breeding stock and market animal sales volumes. Profit
contribution from the poultry segment was lower as the result of declines in
export sales and U.S. commercial chicks earnings.
Compared with fiscal 1993, operating revenues increased seven percent in
fiscal 1994 following a four percent decrease from 1992 to 1993. Consolidated
revenues of $320.0 million in 1994 included a 13 percent increase in North
American seed, an eight percent decline in international seed, a 17 percent
increase in swine and a 10 percent reduction in poultry revenues.
FOURTH QUARTER
Fourth quarter net earnings of $1.2 million compared favorably with the
fourth quarter loss of $2.8 million in 1993. North American seed experienced
a loss in the fourth quarter of fiscal 1993 when product returns were higher
than expected because of continual rains in key corn and soybean producing
states. In the fourth quarter of fiscal 1994 the North American seed segment
earned $0.6 million due to a higher average corn price, higher soybean volume
and lower operating expenses. International seed earnings improved by $1.8
million over the prior year because of the absence of fourth quarter losses in
Spain and Australia. Swine results were $0.5 million lower than the prior
year due to lower market hog prices and higher feed costs. Poultry results
were $0.6 million less than last year because of lower export sales.
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INDUSTRY SEGMENT REVENUES AND PRE-TAX EARNINGS
(In Millions)
Years Ended August 31
Revenues 1994 1993 1992
Seed $247.5 $232.3 $241.4
Swine 52.7 45.1 44.5
Poultry 19.8 21.9 21.9
$320.0 $299.3 $307.8
Pre-Tax Earnings
Seed $ 19.5 $ 7.0 $ 20.0
Swine 5.7 3.0 4.6
Poultry (0.3) 1.0 0.9
General Corporate Expenses (2.5) (4.4) (3.4)
Interest Expense, Net (7.5) (8.2) (7.3)
$ 14.9 $ (1.6) $ 14.8
SEED
Combined North American and international seed segment earnings were $12.5
million above fiscal 1993. In North America, sales volume increased for corn,
soybeans, sunflowers and sorghum and market share increased for all but
sorghum, whose share remained flat with the prior year. Internationally, the
absence of losses in Spain and Australia were the principal contributors to
the improvement. These were partially offset by a decline in Argentine
profitability.
North American seed segment earnings were approximately $2.0 million higher
than those of fiscal 1992, largely because of lower operating expenses.
International earnings were $2.5 million lower compared with fiscal 1992 due
largely to lower earnings from DEKALB Argentina.
North American Seed
North American seed earnings increased $8.5 million in fiscal 1994 due to
higher sales volumes and lower operating expenses. Gross margin in the
North American seed segment was $3.7 million higher in fiscal 1994.
Revenues were $21.0 million above those in fiscal 1993 driven by increased
sales volumes in four product lines. Partially offsetting those revenue
increases were higher corn unit costs. North American operating expenses
were $1.7 million lower than in 1993, due to the suspension of the defined
benefit portion of the Company's retirement program.
Corn revenues were $13.1 million greater when compared with 1993. Corn
volume was 14 percent higher, but this was partially offset by a one
percent decline in average selling prices which was the result of a higher
portion of small-sized seed in the product mix sold at lower prices. Corn
unit costs were seven percent higher due to a smaller and below-target crop
in 1993.
Compared with fiscal 1992, corn unit gross margin decreased. Higher
average selling prices were more than offset by higher unit costs.
Profitability in fiscal 1994 was only slightly lower than in fiscal 1992
because of lower operating expenses in 1994.
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Soybean sales volume and gross margin were 13 percent higher than in fiscal
1993. Compared with fiscal 1992, soybean volume was 13 percent higher and
unit margin was four percent lower resulting in a gross margin increase of
eight percent.
Sorghum unit volume was two percent above 1993, but average selling prices
were three percent below the prior year due to a shift in the sales mix to
lower-priced products. Although unit costs were one percent below the
prior year, sorghum margin was four percent lower. Compared with 1992,
sorghum volume and margin are lower because of a 23 percent reduction in
planted acreage.
Other products contributed $1.9 million to 1994 earnings, a $1.4 million
increase over the prior year.
International Seed
International seed results in 1994 increased by $4.0 million over the prior
year, mainly due to the absence of the large losses in Spain and Australia.
Revenues were eight percent below the prior year largely due to lower sales
volumes in Argentina.
Results from Europe were $7.9 million above 1993 when large losses from
Spain were recognized. In 1994, earnings from France were $1.0 million
above 1993 due to increased royalty income partially offset by higher
research expenditures. Italian results also improved by $1.0 million when
compared to the prior year. Other European results were below the prior
year due to lower export income.
In Latin America, earnings were 43 percent below 1993. Argentine earnings
were 63 percent lower due to a reduction in planted acres resulting, in
part, from adverse weather conditions. Higher unit costs and lower average
selling prices also contributed to the decline in earnings. Nevertheless,
DEKALB Argentina maintained its dominant corn market share position.
Mexican earnings were 18 percent below the prior year, while royalty and
export income from other Latin American countries was improved.
Results from other international activity were $2.3 million above the prior
year due to increased export and royalty income and the absence of losses
in Australia.
Fiscal 1994 international seed segment results were 29 percent below fiscal
1992. Latin American earnings were below the record levels of 1992 while
earnings in Europe were higher.
Seed segment earnings will continue to be affected by many different forces in
the domestic and international markets. In the United States, future results
will be impacted by the Company's competitive positions, government export
policies, weather conditions, commodity prices and Department of Agriculture
programs. International seed earnings will depend on a broad array of
governmental policies as well as weather and competition.
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<PAGE>
DEKALB SWINE
Swine segment earnings for 1994 were $5.7 million, 90 percent above the 1993
level of $3.0 million. Revenues were 17 percent higher than in 1993 while
costs increased 16 percent. Breeding stock volume was 18 percent higher than
the prior year due to increased availability resulting from the expansion of
swine production facilities. The average price per head on breeding stock
increased by five percent. Revenues increased 35 percent, 23 percent and 10
percent on boars, gilts and royalty animals, respectively.
Market animal volumes were four percent above the previous year, but lower
fourth quarter prices resulted in only a small increase in market animal
revenues.
Swine segment cost of sales was 16 percent higher than during 1993 largely due
to a 10 percent increase in animal numbers. The additional costs were
associated with new facilities and higher feed costs per head. Operating
expenses were seven percent higher than in fiscal 1993.
Swine segment earnings for 1994 were 24 percent above those of 1992. Breeding
stock volumes and prices and market animal volumes were higher, partially
offset by higher production.
Three new production farms which were under construction during 1993 have
largely been completed, will reach full production capacity late in fiscal
1995.
Swine earnings will continue to be influenced by demand for its breeding
stock, market prices, feed costs, production efficiency and production
capacity.
DEKALB POULTRY
The poultry segment loss of $0.3 million reflects a $1.3 million decline from
the prior year. A depressed U.S. egg market, the lack of hard currency in
China and an embargo on U.S.-sourced chickens in Venezuela were all
contributors to the decline. The result was lower domestic parent, export
parent and grandparent revenue combined with increased cost of sales due to
higher feed costs. Compared with 1992, poultry earnings were $1.2 million
lower for the same reasons.
Poultry segment earnings will continue to fluctuate from year to year based on
egg prices and demand for its breeding stock. Changing feed costs and
production efficiency will also have an impact. Internationally, the Company
faces the risk of embargoes and the uncertainty of foreign currency
fluctuations.
GENERAL
Corporate expenses in fiscal 1994 were $1.9 million below the prior year due
to restructuring savings and the suspension of the defined benefit portion of
the Company's benefit program. Compared with fiscal 1992, corporate expenses
were $0.9 million lower because of restructuring savings.
Net interest expense was $0.7 million below 1993, but $0.2 million above 1992.
The larger seed crop produced for fiscal 1993 required higher levels of
borrowing.
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<PAGE>
In April and July of 1993, the Company prepaid the $50.0 million outstanding
principal balance and $13.1 million of amortized interest on zero coupon notes
held by Pfizer, Inc. The financing for the prepayment was provided by a
consortium of lending institutions. By substituting other financing for the
convertible notes, DEKALB lowered the effective interest rate and eliminated
the shareholder dilution that would have resulted from conversion of the
notes.
Income taxes increased from a $3.3 million benefit in fiscal 1993 to a $4.3
million expense in fiscal 1994. In 1993, there was a large benefit associated
with international seed losses realized in prior years, and utilized in 1993.
In 1994, tax expense reflected additional benefits from these international
seed losses but they were partially offset by the effects of adopting SFAS No.
109.
Statement of Financial Accounting Standards No. 112 (SFAS No. 112) "Employers
Accounting for Post Employment Benefits" is not required to be adopted until
fiscal 1995. The Company does not believe that adoption will have any impact
on its financial statements.
FINANCIAL POSITION
Management believes its operating cash flow and existing credit facilities are
sufficient to cover normal and expected working capital needs, dividends,
capital expenditures and debt maturities.
CASH FLOW
In fiscal 1994, the net cash flow from operations of $33.2 million compared
favorably with the $20.4 million of cash outflow in the prior year. Fiscal
1993 included $13.1 million of cash interest related to the prepayment of the
zero coupon notes. In addition, significant cash was required to build seed
inventory levels in the United States and Argentina. Fiscal 1994 cash flow
benefited from increased earnings resulting from higher sales volumes.
Cash requirements for investing activities were slightly higher in fiscal 1994
due to increased capital expenditures related to upgrading seed plants.
Net cash outflow from financial activities included $10.1 million of debt
repayment; whereas, the prior year required additional borrowings to finance
increased inventory levels.
CREDIT FACILITIES
Genetics has various credit facilities and available lines of credit with
several commercial banks, both domestic and foreign. Committed credit lines
include a $50 million revolving credit facility available through December 31,
1996 and a $15 million facility available through November 29, 1994.
<PAGE>
<PAGE>
The revolving credit agreement provides credit for general corporate purposes
and is committed through December 31, 1996, but may be extended annually for
successive one year periods with the consent of the lending banks. The line
of credit requires a step-down to $20.0 million for any one day during each
year. The agreement contains various restrictions on the activities of the
Company as to maintenance of working capital and tangible net worth, amount
and type of indebtedness, and the acquisition or disposition of capital shares
or assets of the Company and its subsidiaries. At August 31, 1994, tangible
net worth was approximately $15 million in excess of the required minimum
under the most restrictive of these covenants.
Genetics also has numerous uncommitted short term credit facilities available
and draws upon them periodically, including during twelve months ended August
31, 1994.
CAPITAL EXPENDITURES
Capital expenditures in 1994 were $2.3 million higher than the prior year and
were financed with cash generated from operations and short term financing.
Capital spending in 1994 included seed plant expansions in Argentina and the
United States and additional swine production facilities. Fiscal 1993
expenditures were related to new swine production farms and machinery and
equipment replacements in the seed business.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
X Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended August 31, 1994
OR
Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
Commission file number 33-33305
DEKALB Genetics Corporation Savings and Investment Plan
(Full title of the plan)
DEKALB GENETICS CORPORATION
3100 Sycamore Road
DeKalb, Illinois 60115
(Name of Issuer of the securities held pursuant to the plan
and address of its principal executive office.)
<PAGE>
<PAGE>
DEKALB Genetics Corporation
Savings and Investment Plan
Report of Audits of Financial Statements
and Supplemental Schedules
For the years ended August 31, 1994 and 1993
<PAGE>
<PAGE>
DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
Page(s)
Report of Independent Accountants 4
Financial Statements:
Statement of Net Assets Available for
Plan Benefits, with Fund Information as of August 31, 1994 5
Statement of Net Assets Available for
Plan Benefits, with Fund Information as of August 31, 1993 6
Statement of Changes in Net Assets Available
for Plan Benefits, with Fund Information for the years ended
August 31, 1994 and 1993 7
Notes to Financial Statements 8 - 12
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes at August 31, 1994 13 - 14
Item 27d - Schedule of Reportable Transactions
for the year ended August 31, 1994 15
Notes: Supplemental schedules required by the Employee Retirement Income
Security Act that have not been included herein are not applicable
to the DEKALB Genetics Corporation Savings and Investment Plan.
<PAGE>
<PAGE>
<AUDIT-REPORT>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Administrative Committee
DEKALB Genetics Corporation Savings
and Investment Plan
We have audited the statements of net assets available for plan benefits of
the DEKALB Genetics Corporation Savings and Investment Plan (the "Plan") as of
August 31, 1994 and 1993, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan'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, the financial statements referred to above present fairly, in
all material respects, the net assets of the Plan as of August 31, 1994 and
1993, and changes in net assets available for plan benefits for the years then
ended in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying index on page 3, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to present net assets available for plan benefits and changes in
net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
December 9, 1994
</AUDIT-REPORT>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
as of August 31, 1994
Fund Information
MONEY FIXED CAPITAL COMPANY PFIZER
EQUITY MARKET INCOME PRESERVATION STOCK STOCK PARTICIPANT
FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair market
value or contract value:
DeKalb Genetics Corporation
common stock $1,459,058 $1,459,058
Common stocks $45,262,351 $58,149 45,320,500
Investment in common trust
funds 3,787,304 $11,405,250 $8,567,325 $4,043,802 5,866 $685 27,810,232
U.S. Treasury bonds and notes 8,115,033 8,115,033
Guaranteed investment account 16,367,136 16,367,136
Participant loans 1,183,688 1,183,688
Total Investments 49,049,655 11,405,250 16,682,358 20,410,938 1,459,058 64,015 1,184,373 100,255,647
Receivables:
Company contribution 66,846 18,221 18,046 6,797 8,257 118,167
Accrued interest and dividend 108,793 44,005 87,870 1,789 8,677 423 14 251,571
Fund transfers pending (403,632) 141,562 (513,455) 802,536 (27,011) -
(227,993) 203,788 (407,539) 811,122 (10,077) 423 14 369,738
Total Assets 48,821,662 11,609,038 16,274,819 21,222,060 1,448,981 64,438 1,184,387 100,625,385
LIABILITIES
Other liabilities 10,185 3,226 3,416 3,096 4,663 7,577 32,163
Total Liabilities 10,185 3,226 3,416 3,096 4,663 7,577 32,163
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $48,811,477 $11,605,812 $16,271,403 $21,218,964 $1,444,318 $64,438 $1,176,810 $100,593,222
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
as of August 31, 1993
Fund Information
MONEY FIXED CAPITAL COMPANY PFIZER
EQUITY MARKET INCOME PRESERVATION STOCK STOCK PARTICIPANT
FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair market
value or contract value:
DeKalb Genetics Corporation
common stock $923,111 $923,111
Common stocks $42,786,789 $53,676 42,840,465
Investment in common trust
funds 1,352,211 10,532,700 $7,351,090 $1,824,021 4,178 105 21,064,305
U.S. Treasury bonds and notes 12,520,128 12,520,128
Guaranteed investment account 17,727,605 17,727,605
Participant loans 1,255,046 1,255,046
Total Investments 44,139,000 10,532,700 19,871,218 19,551,626 923,111 57,854 1,255,151 96,330,660
Receivables:
Company contribution 1,531 6,506 1 1 (620) 18,600 26,019
Accrued interest and dividend 103,084 28,632 136,278 1,239 7,536 370 5,410 282,549
104,615 35,138 136,279 1,240 6,916 370 24,010 308,568
Total Assets 44,243,615 10,567,838 20,007,497 19,552,866 930,027 58,224 1,279,161 96,639,228
LIABILITIES
Other liabilities 15,767 7,202 6,604 6,408 5,054 8,032 49,067
Total Liabilities 15,767 7,202 6,604 6,408 5,054 8,032 49,067
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $44,227,848 $10,560,636 $20,000,893 $19,546,458 $924,973 $58,224 $1,271,129 $96,590,161
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information
for the years ended August 31, 1994 and 1993
Fund Information
MONEY FIXED CAPITAL COMPANY PFIZER
EQUITY MARKET INCOME PRESERVATION STOCK STOCK PARTICIPANT
FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at August 31, 1992 $37,492,725 $11,408,406 $16,523,866 $18,359,672 $748,524 $68,858 $1,184,790 $85,786,841
Contributions:
Company 656,397 162,277 227,422 171,514 105,152 1,322,762
Participant 2,052,103 533,306 797,360 450,790 281,907 4,115,466
Interest income 102,398 945,826 1,236,315 96,997 2,381,536
Dividend income 838,492 26,946 1,389 866,827
Net appreciation
(depreciation) in fair
value of investments 1,059,513 470,166 1,338 (128,169) (12,141) 1,390,707
Net investment gain on
common trust funds 2,354,173 371,945 608,290 41,957 118 3,376,483
Distributions (1,176,551) (251,680) (381,763) (432,560) (48,647) (20,641) (2,311,842)
Transfers 1,101,117 (1,659,447) 897,262 (251,128) (87,804) -
Participant loan
distributions (217,524) (37,941) (60,166) (93,436) 409,067 -
Participant loan repayments 197,346 40,867 68,650 65,262 27,064 (399,189) -
Fees and expenses (232,341) (7,097) (96,020) (3,266) 105 (338,619)
Net additions (deductions) 6,735,123 (847,770) 3,477,027 1,186,786 176,449 (10,634) 86,339 10,803,320
Balance at August 31, 1993 $44,227,848 $10,560,636 $20,000,893 $19,546,458 $924,973 $58,224 $1,271,129 $96,590,161
Contributions:
Company 725,328 135,268 244,195 164,453 109,774 1,379,018
Participant 2,784,481 1,799,659 880,292 904,992 263,034 6,632,458
Interest income 114,706 779,164 1,102,244 127,810 2,123,924
Dividend income 979,481 32,882 1,136 1,013,499
Net appreciation
(depreciation) in fair
value of investments 1,607,512 (915,080) (112,639) 318,788 4,472 903,053
Net investment gain on
common trust funds 605,329 367,246 (157,362) 153,640 606 969,459
Distributions (3,671,661) (854,065) (1,486,289) (2,572,403) (65,126) (8,649,544)
Transfers 1,530,139 (398,778) (2,970,903) 2,011,034 (171,492) -
Participant loan
distributions (137,020) (53,173) (84,137) (48,870) 323,200 -
Participant loan
repayments 306,412 55,645 78,633 73,641 31,485 (545,816) -
Fees and expenses (261,078) (6,626) (98,003) (3,586) 487 (368,806)
Net additions
(deductions) 4,583,629 1,045,176 (3,729,490) 1,672,506 519,345 6,214 (94,319) 4,003,061
Balance at August 31, 1994 $48,811,477 $11,605,812 $16,271,403 $21,218,964 $1,444,318 $64,438 $1,176,810 $100,593,222
The accompanying notes are an integral part of these financial statements.
</TABLE>
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DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Contributions:
Contributions to DEKALB Genetics Corporation Savings and Investment Plan
(the Plan) from participants are recorded on an accrual basis and are
deposited directly in the appropriate fund on a bi-weekly basis.
Contributions made by DEKALB Genetics Corporation (the Company) are
accrued on the basis of participants' contributions and are made
quarterly.
Investments Valuation:
Investments in securities (U.S. treasury bonds and notes, corporate bond
and bond investment funds, and common stocks) traded on a national
securities exchange are valued at the last reported sales price on the
last business day of the Plan's year; securities in collective short-term
investment funds and money market funds are stated at fair value as
determined by the Trustee of such funds. The capital preservation fund is
valued at contract value.
Withdrawals, Transfers and Forfeitures:
Withdrawals of participant and employer contributions can be made subject
to certain specified restrictions and tax consequences. Participants may
elect to transfer all or part of their balance of funds to other funds as
the Plan allows on a quarterly basis. Transfers between the capital
preservation fund and the money market funds are prohibited as are
transfers of participant balances to the company stock fund. Amounts
forfeited by participants, as described in Note 2, are applied to reduce
amounts that the Company is required to contribute to the Plan.
Distributions:
In accordance with guidance issued by the American Institute of Certified
Public Accountants, the method of accounting for distributions is such
that all amounts elected by participants to be withdrawn from the Plan are
recorded when paid. This treatment results in a difference between the
Plan's Form 5500 and the financial statements. Benefit obligations
existing at August 31, 1994 and 1993 were $1,467,121 and $2,844,657,
respectively.
Other:
Purchases and sales of securities are reflected on a trade-date basis.
Dividend income is recorded on the ex-dividend date. Income from other
investments are recorded as earned on an accrual basis.
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DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Significant Accounting Policies, Continued:
The Plan presents, in the statements of changes in net assets available
for plan benefits, the net appreciation (depreciation) in fair value of
its investments which consists of realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Trustee fees and investment management fees were paid by the Plan in 1994
and 1993.
2. Plan Description:
The following brief description of the Plan is provided for general
information purposes only. Participants should refer to the Plan document
for more complete information.
The Plan, which was established effective September 1, 1982, is a
contributory defined contribution plan covering substantially all
employees of the Company and its subsidiaries. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974.
All monies received by the Trustee of the Plan are invested at the
direction of the participants in accordance with the terms of the Trust
Agreement. Participant contributions (from 1% to 15% of base pay) are
invested in the equity fund, money market fund, fixed income fund, capital
preservation fund or Company common stock fund maintained by the Trustee.
Company contributions (50% matching of participant contributions from 1%
to 6% of base pay) are invested in the various funds in proportion to the
participants' investment in such funds. The Company may elect to
contribute an additional amount at the discretion of the Board of
Directors.
Contributions from participants are credited directly to their account in
each fund. Employee contributions are invested in multiples of 10%.
Transfers of account balances must be in whole percentages. Rollovers
from prior qualified plans are invested at the employee's discretion.
Company matching contributions and any discretionary Company matching
contributions are invested in the investment funds in the same proportions
as the participant's employee pre-tax contributions. A participant may
change his investment direction with respect to his current account and
future contributions no more than four times per year (March 1, June 1,
September 1 and December 1 of each year) by giving the Plan's
administrative committee written notice in the prescribed form. Changes
in investment direction of the current account balance will become
effective as of the first day in the next Plan quarter. Changes in
investment direction of future contributions become effective as of the
first payroll pay date in the next Plan quarter.
<PAGE>
<PAGE>
DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
2. Plan Description, Continued:
There are currently five investment funds available to participants.
These five funds are described briefly below:
(a) Equity fund. The equity fund is a pooled fund invested primarily in
common stocks. There are no guarantees with respect to principal or
investment return.
(b) Money market fund. The money market fund is a pooled fund maintained
and managed by the Trustee that is invested in short term debt
securities such as commercial paper and certificates of deposit.
There are no guarantees with respect to principal or investment
return.
(c) Fixed income fund. The fixed income fund is a pooled fund invested
primarily in corporate and government bonds of intermediate, (e.g.,
five to seven year) term. There are no guarantees with respect to
principal or investment return.
(d) Capital preservation fund. The capital preservation fund is
underwritten by the Aetna Insurance Company. There are no guarantees
with respect to payment of income or principal. The investments in
the fund are valued at contract value.
(e) Company common stock fund. The Company common stock fund enables
participants to purchase DEKALB Genetics Corporation Class A Common
Stock. The per share purchase price equals the average of the per
share closing price of Class B Common Stock as quoted on the National
Association of Securities Dealers Automated Quotation System/National
Market System (NASDAQ/NMS) on the last ten (10) trading days prior to
the date of purchase. The Board of Directors has authorized up to
100,000 shares of Class A Common Stock as available for purchase by
the Plan. There are no guarantees with respect to principal or
investment return.
A sixth fund, the Pfizer stock fund, was created solely for the purpose of
holding common stock of Pfizer, Inc. received by the Plan through employee
rollover contributions. No additional contributions may be made to this
fund.
A seventh fund, the participant loan fund, was created for the purpose of
recording participant loans and related activity. Interest on these loans
is accumulated at prime plus one percent, determined at the date the loan
is granted.
<PAGE>
<PAGE>
DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
2. Plan Description, Continued
At August 31, 1994 and 1993, there were 1,475 and 1,516 participants,
respectively some of whom elected to invest in more than one fund. Set
forth below is the number of participants investing in each fund.
August 31
1994 1993
Equity Fund 1,339 1,332
Money Market Fund 677 748
Fixed Income Fund 919 990
Capital Preservation Fund 608 634
Company Stock Fund 531 496
Pfizer Stock Fund 2 2
A participant is at all times fully vested in his employee contribution
account. His employer contribution account vests at the rate of 20% per
year. Termination of employment before the completion of five (5) years
of service will result in forfeitures from the employer contribution
account unless such termination is due to the participant's attainment of
age 65 or death or disability. Distributions from the Plan are paid in
cash as a lump sum; provided, however, that distributions from the Company
common stock fund may, at the participant's election, be received in
either whole shares of DEKALB Genetics Corporation Class A Common Stock or
cash.
If the Plan is terminated, the interests of all participants or their
beneficiaries shall be fully vested and nonforfeitable and participants
shall be entitled to a distribution of their accrual balances.
Participants may apply for a loan from the Plan. The loan is limited to
the lesser of $50,000 reduced by the largest outstanding loan balance over
the preceding year or one half of the participant's vested account
balance. Loan repayments are made by the participant through payroll
deductions.
<PAGE>
<PAGE>
DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments:
Individual investments (at fair value or contract value) representing five
percent or more of net assets available for plan benefits in 1994 and 1993
are summarized as follows:
Description 1994 1993
Harris Bank Common
Stock Fund $9,792,613 $ 9,306,215
Harris Bank Collective
Short Term Investment Fund $15,641,625 $12,755,980
Harris Bank Collective
Marketable Bond Fund $ 8,170,191 $ 7,015,421
Aetna Guaranteed
Investment Account $16,367,136 $17,727,605
4. Net Appreciation (Depreciation) in Fair Value of Investments:
The Plan's investments (including investments bought and sold, as well as
held, during the year) appreciated in value $903,053 and $1,390,707 for
the years ended August 31, 1994 and 1993, respectively, summarized as
follows:
1994 1993
DEKALB Genetics Corporation Common Stock $ 318,788 ($ 128,169)
Common Stocks 1,611,984 1,047,372
U.S. Treasury bonds and notes (915,080) 470,166
Guaranteed Investment contract (112,639) 1,338
$ 903,053 $1,390,707
5. Tax Status:
The Plan obtained its latest determination letter dated February 24, 1987,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the Plan administrator and the Plan's tax
counsel believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
<TABLE>
<CAPTION>
DEKALB Genetics Corporation Savings And Investment Plan
ITEM 27a - Schedule of Assets Held for Investment Purposes
August 31, 1994
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, INCLUDING MATURITY DATE,
BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL
SIMILAR PARTY PAR OR MATURITY VALUE COST MARKET
<S> <S> <C> <C>
DEKALB Genetics Corporation Common Stock, 44,382 shares $1,413,102 $1,459,058
AMP Inc. Common Stock, 20,000 shares 990,784 1,452,500
Bausch & Lomb, Inc. Common Stock, 21,000 shares 800,022 821,625
Becton Dickinson & Company Common Stock, 12,000 shares 441,363 514,500
Bemis Company, Inc. Common Stock, 23,400 shares 523,516 573,300
Boeing Company Common Stock, 28,000 shares 1,011,739 1,274,000
Bristol Meyers & Co. Squibb Co. Common Stock, 10,000 shares 586,303 576,250
Cooper Industries, Inc. Common Stock, 27,000 shares 1,086,058 1,069,875
Cooper Tire & Rubber Company Common Stock, 23,000 shares 547,859 595,125
Corning, Incorporated Common Stock, 43,000 shares 1,226,454 1,327,625
Dover Corp. Common Stock, 24,000 shares 960,857 1,389,000
Dun & Bradstreet Common Stock, 11,500 shares 653,594 662,687
Exxon Corp. Common Stock, 26,000 shares 1,319,968 1,547,000
Genuine Parts Co. Common Stock, 26,000 shares 673,931 955,500
H & R Block, Inc. Common Stock, 17,000 shares 640,099 743,750
Hartford Steam Boiler
Inspection Common Stock, 14,000 shares 769,413 633,500
International Flavors
& Fragrances, Inc. Common Stock, 18,000 shares 645,199 789,750
Lubrizol Corporation Common Stock, 33,000 shares 1,087,562 1,031,250
Marsh & McLennan Co's Inc. Common Stock, 18,000 shares 1,287,954 1,532,250
McCormick & Co., Inc. Common Stock, 44,000 shares 914,461 869,000
Melville Corporation Common Stock, 23,000 shares 1,090,133 871,125
Pacific Telesis Group Common Stock, 32,000 shares 937,031 1,056,000
Pfizer, Inc. Common Stock, 16,852 shares 1,084,871 1,150,149
Philip Morris Companies Inc. Common Stock, 13,500 shares 650,814 823,500
Raytheon Company Common Stock, 26,200 shares 1,234,941 1,771,775
Readers Digest Assn., Inc. Common Stock, 25,000 shares 992,745 1,062,500
Royal Dutch Petroleum Co. N.Y. Common Stock, 13,000 shares 1,012,081 1,464,125
St. Paul Companies Common Stock, 22,000 shares 887,907 951,500
Schering-Plough Corp. Common Stock, 19,000 shares 939,574 1,327,625
Service Corp International Common Stock, 22,000 shares 572,638 583,000
Sherwin Williams Company Common Stock, 22,100 shares 677,075 732,063
Sigma Aldrich Corporation Common Stock, 7,000 shares 244,085 243,250
State Street Boston Corp. Common Stock, 23,500 shares 759,116 940,000
Tambrands, Inc. Common Stock, 9,300 shares 431,652 346,425
Union Camp Corp. Common Stock, 29,000 shares 1,185,471 1,460,876
Wachovia Corporation Common Stock, 20,100 shares 638,090 703,500
Harris Bank Common Stock Fund Common Stock, 38,562 shares 6,201,367 9,792,613
Harris Bank Special
Capital Fund Common Stock, 6,725 shares 363,549 632,128
Harris Special Capital
Liquidating Account Common Stock, 20,531 shares 3,109 4,211
Harris Bank Convertible Funds Common Stock, 2,641 shares 944,053 1,044,440
Harris Bank Convertible
Liquidating Funds Common Stock, 3,573 shares - 1,208
Total Common Stocks $37,017,438 $45,320,500
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation Savings And Investment Plan
ITEM 27a - Schedule of Assets Held for Investment Purposes, Continued
August 31, 1994
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, INCLUDING MATURITY DATE,
BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL
SIMILAR PARTY PAR OR MATURITY VALUE COST MARKET
<S> <S> <C> <C>
Harris Trust & Savings Bank Collective Investment Funds:
Enhanced Liquidity Fund Common Trust Fund, 11,782 shares $4,109,718 $3,998,416
Marketable Bond Fund Common Trust Fund, 9,443 shares 7,981,377 8,170,191
Total Collective Investment Funds 12,091,095 12,168,607
U.S. Treasury Bonds and Notes:
U.S. Treasury note $300,000 par, 8.625%, due 1-15-95 300,844 303,843
U.S. Treasury note $600,000 par, 7.25%, due 11-15-96 546,720 612,372
U.S. Treasury note $650,000 par, 8.625%, due 8-15-97 666,655 687,778
U.S. Treasury note $300,000 par, 8.875%, due 11-15-97 303,000 320,250
U.S. Treasury note $400,000 par, 9.00%, due 5-15-98 405,656 430,876
U.S. Treasury note $200,000 par, 9.25%, due 8-15-98 199,312 217,668
U.S. Treasury note $200,000 par, 8.875%, due 2-15-99 195,000 216,250
U.S. Treasury note $500,000 par, 7.875%, due 11-15-99 509,375 522,890
U.S. Treasury note $500,000 par, 7.75%, due 2-15-2001 513,172 520,470
U.S. Treasury note $500,000 par, 7.5%, dur 5-15-2002 501,406 513,125
U.S. Treasury bond $750,000 par, 8.50%, due 2-15-2000 852,187 805,545
U.S. Treasury bond $600,000 par, 7.875%, due 2-15-2000 561,156 605,250
U.S. Treasury bond $600,000 par, 10.75%, due 2-15-2003 669,750 735,654
U.S. Treasury bond $400,000 par, 8.25%, due 5-15-2005 370,750 420,248
U.S. Treasury bond $600,000 par, 9.375%, due 2-15-2006 609,104 697,424
U.S. Treasury bond $500,000 par, 7.625%, due 12-15-2007 504,766 505,390
Total U.S. Treasury Bonds and Notes 7,708,853 8,115,033
Harris Bank Collective
Short-Term Investment Fund Money Market 15,641,625 15,641,625
Aetna Guaranteed Investment Contract #01359 16,367,136 16,367,136
Plan participants Participant loans, 7% to 12.5% - 1,183,688
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation Savings And Investment Plan
ITEM 27d - Schedule of Reportable Transactions
August 31, 1994
NUMBER OF PURCHASE SELLING COST OF CURRENT VALUE NET GAIN
IDENTITY OF PARTY DESCRIPTION OF ASSET TRANSACTIONS PRICE PRICE ASSET OF ASSET OR LOSS
<S> <S> <C> <C> <C> <C> <C> <C>
Harris Trust & Savings Bank Mutual Fund 392 $39,282,921 $39,282,921 $39,282,921 -
244 $37,296,173 $37,296,173 $37,296,173 -
</TABLE>
