Exhibit
Monsanto Company
800 North Lindbergh Blvd
St. Louis, Missouri 63167
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Release | Immediately |
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Contact | Media: Sara Miller (314-694-5824) |
| Analysts: Laura Meyer (314-694-8148) |
MONSANTO COMPANY DELIVERS BETTER THAN EXPECTED FIRST-QUARTER RESULTS
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• | With recent currency devaluation in Argentina, company points to lower half of full-year ongoing EPS guidance of $5.10 to $5.60; full year as-reported guidance improves modestly to $4.12 to $4.79 as a result of the anticipated timing of charges related to announced restructuring actions |
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• | Finalizes plans to reach previously outlined target of $500 million of annual savings by end of FY18 |
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• | Company targets ongoing and as-reported EPS CAGR in excess of 20% from end of FY16 to FY19 |
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• | Industry-leading R&D pipeline delivers more than 20 advancements for third-consecutive year |
ST. LOUIS, Jan. 6, 2016 - Monsanto Company (NYSE: MON) delivered earnings per share (EPS) for the first quarter ahead of expectations as operating expenses and soybean sales in Brazil both were better than original expectations for the first quarter of fiscal year 2016. In 2016, the company continues to execute on key initiatives within its core seeds and traits business led by new global corn hybrid portfolio introductions and continued significant Intacta RR2 PRO™ soybean adoption. Monsanto also remains disciplined in the execution of its Agricultural Productivity strategy, further optimization of spend and acceleration of progress toward its targeted capital structure. In its annual research and development (R&D) update today, the company will highlight more than 20 phase advancements across the industry’s broadest pipeline focused on helping farmers address current and future challenges.
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| | | | | | | | | | | | | | | | | | |
| First Quarter |
| 2016 | 2015 |
($ in millions, except per share amounts) | As Reported | Adjustments | Ongoing | As Reported | Adjustments | Ongoing |
Net Sales by Segment | | | | | | |
| | | | | | |
Corn seed and traits | $ | 745 |
| — |
| $ | 745 |
| $ | 928 |
| — |
| $ | 928 |
|
Soybean seed and traits | 438 |
| — |
| 438 |
| 396 |
| — |
| 396 |
|
Cotton seed and traits | 48 |
| — |
| 48 |
| 83 |
| — |
| 83 |
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Vegetable seeds | 138 |
| — |
| 138 |
| 155 |
| — |
| 155 |
|
All other crops seeds and traits | 30 |
| — |
| 30 |
| 59 |
| — |
| 59 |
|
TOTAL Seeds and Genomics | $ | 1,399 |
| — |
| $ | 1,399 |
| $ | 1,621 |
| — |
| $ | 1,621 |
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| | | | | | |
Agricultural productivity | $ | 820 |
| — |
| $ | 820 |
| $ | 1,249 |
| — |
| $ | 1,249 |
|
TOTAL Agricultural Productivity | $ | 820 |
| — |
| $ | 820 |
| $ | 1,249 |
| — |
| $ | 1,249 |
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| | | | | | |
TOTAL Net Sales | $ | 2,219 |
| $ | — |
| $ | 2,219 |
| $ | 2,870 |
| — |
| $ | 2,870 |
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| | | | | | |
Gross Profit | $ | 901 |
| $ | 52 |
| $ | 953 |
| $ | 1,411 |
| $ | — |
| $ | 1,411 |
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| | | | | | |
Operating Expenses | $ | 1,173 |
| $ | (271 | ) | $ | 902 |
| $ | 992 |
| $ | — |
| $ | 992 |
|
Interest Expense – Net | $ | 109 |
| — |
| $ | 109 |
| $ | 77 |
| — |
| $ | 77 |
|
Other Expense – Net | $ | 25 |
| — |
| $ | 25 |
| $ | 15 |
| — |
| $ | 15 |
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Net (Loss) Income Attributable to Monsanto Company | $ | (253 | ) | $ | 201 |
| $ | (52 | ) | $ | 243 |
| $ | (16 | ) | $ | 227 |
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| | | | | | |
Diluted Earnings per Share (See note 1.) | $ | (0.56 | ) | | | $ | 0.50 |
| | |
Items Affecting Comparability – EPS Impact | | | | | | |
Restructuring Charges | — |
| 0.46 |
| 0.46 |
| — |
| — |
| — |
|
Income on Discontinued Operations | — |
| (0.02 | ) | (0.02 | ) | — |
| (0.03 | ) | (0.03 | ) |
Environmental and Litigation Settlements | — |
| 0.01 |
| 0.01 |
| — |
| — |
| — |
|
Diluted Earnings per Share (For the definition of ongoing EPS, see note 1.) | $ | (0.56 | ) | $ | 0.45 |
| $ | (0.11 | ) | $ | 0.50 |
| $ | (0.03 | ) | $ | 0.47 |
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Effective Tax Rate | 34 | % | | | 31 | % | | |
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| | | |
| | First Quarter |
Comparison as a Percent of Net Sales: | 2016 | 2015 |
| Gross profit | 41% | 49% |
| Selling, general and administrative expenses | 24% | 20% |
| Research and development expenses | 16% | 14% |
| (Loss) Income from continuing operations before income taxes | (18)% | 11% |
| Net (loss) income attributable to Monsanto Company | (11)% | 8% |
“Through focus and discipline, we remain confident in our ability to deliver on the targets and milestones we’ve established for our company in both the near term and through the next decade,” said Hugh Grant, chairman and chief executive officer. “In a challenging agriculture environment, we remain in a position of strength. It's this strength that positions us to be a leading partner in an industry that will continue to change."
“This is an exciting time in agriculture and within our company as we continue to expand the breadth and pace of innovation," said Robb Fraley, Ph.D., executive vice president and chief technology officer, regarding this year’s annual pipeline update. “We've seen incredible progress across our core pipelines of breeding, biotechnology and chemistry, along with our growth platforms of data science and biologicals. Through a truly integrated approach to delivering solutions, we are uniquely positioned to support farmers in their efforts to improve yields and overall productivity in a sustainable way."
Results of Operations
Net sales for the quarter decreased over the prior year’s first quarter to $2.2 billion. Gross profit on an as-reported basis for the 2016 first quarter also decreased over the prior year period to $901 million. As expected, the decline in the quarter is due to weaker foreign currencies, glyphosate pricing and lower corn volumes in Latin America.
Selling, general and administrative (SG&A) costs were $543 million and R&D expenses were $364 million for the quarter. Total operating expenses for the quarter, excluding pre-tax restructuring charges of $266 million, were nine percent lower than the prior year, mostly driven by currency.
The company’s first quarter EPS was a loss of $0.11 on an ongoing basis, ahead of the company’s outlined guidance of a loss in the range of $0.23 to $0.33. This improvement was driven by lower than expected operating expenses and higher than expected Brazil Intacta RR2 PRO™ soybean results. The company’s first quarter EPS was a loss of $0.56 on an as-reported basis, which was better than its outlined guidance of a loss in the range of $0.86 to $1.13. As-reported results include $0.46 for restructuring charges, driven by the finalization of the company's plans to reach its previously outlined target of $500 million of annual savings by the end of fiscal year 2018. (For a reconciliation of ongoing EPS, see note 1.)
Cash Flow
Free cash flow was a source of more than $1.0 billion compared to a source of $969 million for the prior year first quarter, reflecting the disciplined reduction in inventory from the company's corn seed production plans and modest growth in its prepays in the United States. (For a reconciliation of free cash flow, see note 1.) Net cash provided by operating activities for the 2016 fiscal year first quarter was a source of $1.4 billion, compared to a source of $1.3 billion in the first quarter last year. Net cash required by investing activities for the first quarter of 2016 was $336 million, compared to $380 million for the same period of fiscal year 2015. Net cash required by financing activities for the first quarter of 2016 was $2.4 billion, compared to net cash required by financing activities of $107 million for the prior year’s first quarter. The increase in cash required by financing activities was driven by the initiation of the $3 billion accelerated share repurchase in the quarter. The program remains on track and is expected to close sometime in the next three months.
Outlook
With the anticipated continuation of several global and industry headwinds that include the recent currency devaluation in Argentina, Monsanto expects full-year ongoing EPS guidance to be at the lower half of the range of $5.10 to $5.60. Ongoing EPS guidance reflects in part an estimated $0.60 to $0.70 of headwinds from currency, greater than previous estimates of $0.35 to $0.40. Full-year EPS guidance on as as-reported basis improved modestly to $4.12 to $4.79 as a result of the anticipated timing of charges related to announced restructuring
actions. With a focus on disciplined cash management, the company continues to project free cash flow in the range of $1.6 billion to $1.8 billion for fiscal year 2016. The company expects net cash provided by operating activities to be $2.6 billion to $3 billion, and net cash required by investing activities to be approximately $1 billion to $1.2 billion. (For a reconciliation of EPS and free cash flow, see note 1.)
The company now expects five to seven percent gross profit growth from its core Seeds and Genomics segment in fiscal year 2016. This growth is expected to be led by new global corn hybrid portfolio introductions, continued significant Intacta RR2 PRO™ soybean adoption and additional licensing opportunities in the range of $275 million. The company also expects the Agricultural Productivity segment to continue to deliver $900 million to $1.1 billion of gross profit in fiscal year 2016 as the company stays consistent with its strategy to maintain a slight premium over generics.
The company expects operating expenses for fiscal year 2016, exclusive of restructuring expense and environmental and litigation settlements, to be flat versus fiscal year 2015. This expectation is inclusive of new platform spend to support the long-term growth prospects for these opportunities.
Company executives reinforced today that a focus on key priorities and milestones in fiscal year 2016 is expected to set the foundation for rapid future growth. The company’s expanding core growth drivers and R&D leadership advantage, emergence of new platforms and financial discipline all underpin confidence in its growth target. The company expects innovation to drive 80 percent of the expected $3.5 billion in gross profit growth from the end of fiscal year 2016 to fiscal year 2019.
Seeds and Genomics Segment Detail
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($ in millions) | Net Sales | Gross Profit(A) |
| First Quarter | First Quarter |
Seeds and Genomics | 2016 | 2015 | 2016 | 2015 |
Corn seed and traits | $ | 745 |
| $ | 928 |
| $ | 366 |
| $ | 525 |
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Soybean seed and traits | 438 |
| 396 |
| 302 |
| 277 |
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Cotton seed and traits | 48 |
| 83 |
| 25 |
| 58 |
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Vegetable seeds | 138 |
| 155 |
| 40 |
| 64 |
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All other crops seeds and traits | 30 |
| 59 |
| (5 | ) | 17 |
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TOTAL Seeds and Genomics | $ | 1,399 |
| $ | 1,621 |
| $ | 728 |
| $ | 941 |
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(A) Fiscal first quarter 2016 seeds and genomics gross profit includes a pretax restructuring charge totaling $52 million related to certain asset impairment charges, primarily in the corn business, which is included in cost of goods sold.
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| ($ in millions) | Earnings Before Interest & Taxes (EBIT) | |
| | First Quarter | |
| Seeds and Genomics | 2016 | 2015 | |
| EBIT (For a reconciliation of EBIT, see note 1.) | $ | (333 | ) | $ | 43 |
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| Unusual Items Affecting EBIT: | | | |
| EBIT from Restructuring Charges | (289 | ) | — |
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The Seeds and Genomics segment consists of the global seeds and related traits business, biotechnology platforms and digital agriculture.
Sales for Monsanto’s Seeds and Genomics segment in the first quarter were $1.4 billion. The company continues to build on the momentum of Intacta RR2 PRO™ soybeans in South America as the company remains on track to reach its target of 30 million acres in fiscal year 2016. With its greater than four bushel per acre yield advantage and ability to reduce insecticide use, grower interest and adoption of the technology continues to grow.
The company also is making progress on pre-commercial activities for its Roundup Ready 2 Xtend™ Crop System in soybeans, which is expected to be the largest biotech trait launch on more than three million acres in fiscal year 2016. In cotton, Bollgard II® XtendFlex™ is expected to reach 1.5 million acres in just the technology’s second year of commercialization.
Through new hybrid portfolio introductions across key corn growing regions, Monsanto affirmed its intent to hold or grow share in every major corn market again in 2016, with germplasm price mix lift in the low single digit range in local currency.
Moving beyond seeds, as grower interest grows, Monsanto continues to expect the Climate platform to expand to more than 90 million acres in 2016 with more than 12 million of these acres using its premium offerings.
Agricultural Productivity Segment Detail
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($ in millions) | Net Sales | Gross Profit |
| First Quarter | First Quarter |
| 2016 | 2015 | 2016 | 2015 |
Agricultural productivity | $ | 820 |
| $ | 1,249 |
| $ | 173 |
| $ | 470 |
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TOTAL Agricultural Productivity | $ | 820 |
| $ | 1,249 |
| $ | 173 |
| $ | 470 |
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| ($ in millions) | Earnings Before Interest & Taxes (EBIT) | |
| | First Quarter | |
| Agricultural Productivity | 2016 | 2015 | |
| EBIT (For a reconciliation of EBIT, see note 1.) | $ | 59 |
| $ | 384 |
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| Unusual Item Affecting EBIT: | | | |
| EBIT from Discontinued Operations | 20 |
| 26 |
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| EBIT from Restructuring Charges | (29 | ) | — |
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| EBIT from Environmental and Litigation Settlements | (5 | ) | — |
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The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products.
Segment sales for the first quarter reached $820 million. Monsanto continues to expect Agricultural Productivity segment gross profit to be in the range of $900 million to $1.1 billion in fiscal year 2016 with the expectation that timing related declines in volumes from the first quarter will be recovered in the latter half of the year. The company continues to expect to sell approximately 300 million gallons of glyphosate for the full year at a premium close to that of generics.
Webcast Information
In conjunction with this announcement, Monsanto will hold a conference call at 8:30 a.m. central time (9:30 a.m. eastern time) today. The call will focus on these results and future expectations, product performance, and an annual update of projects within the company’s R&D pipeline. The call will include a discussion of strategic initiatives and other matters related to the company’s business.
Presentation slides and a simultaneous audio webcast of the conference call may be accessed by visiting the company's website at www.monsanto.com/investors or http://edge.media-server.com/m/p/tvuoeyra/lan/en. Visitors may need to download Windows Media Player™ prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto website for three weeks. Monsanto publishes details on upcoming webcasts on this website in both the Presentation and Financial Reports section and the Calendar of Events section. Investors should look to this site as the source of information on future investor conference webcasts. The site includes a calendar of upcoming investor events, details on accessing scheduled webcasts and information from previous investor events.
About Monsanto Company
Monsanto is committed to bringing a broad range of solutions to help nourish our growing world. We produce seeds for fruits, vegetables and key crops - such as corn, soybeans, and cotton - that help farmers have better harvests while using water and other important resources more efficiently. We work to find sustainable solutions for soil health, help farmers use data to improve farming practices and conserve natural resources, and provide crop protection products to minimize damage from pests and disease. Through programs and partnerships, we collaborate with farmers, researchers, nonprofit organizations, universities and others to help tackle some of the world’s biggest challenges. To learn more about Monsanto, our commitments and our more than 20,000 dedicated employees, please visit: discover.monsanto.com and monsanto.com. Follow our business on Twitter® at twitter.com/MonsantoCo, on the company blog, Beyond the Rows® at monsantoblog.com or subscribe to our News Release RSS Feed.
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are "forward-looking statements," such as statements concerning the company’s anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company’s actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company’s exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public understanding and acceptance of our biotechnology and other agricultural products; the success of the company’s research and development activities; the outcomes of major lawsuits and the previously-announced SEC investigation; developments related to foreign currencies and economies; pursuit of acquisitions or other transactions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company’s estimates related to distribution inventory levels; the recent increases in and expected higher levels of indebtedness; the company’s ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters, accidents, and security breaches, including cybersecurity incidents, on the agriculture business or the company’s facilities; and other risks and factors detailed in the company’s most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
Notes to editors: Monsanto and the Vine Design, Beyond the Rows, Intacta RR2 PRO, Roundup Ready 2 Xtend and Bollgard II XtendFlex are trademarks of Monsanto Company and its wholly-owned subsidiaries. All other trademarks are the property of their respective owners.
-oOo-
Monsanto Company
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
|
| | | | | | |
Statements of Consolidated Operations | Three Months Ended |
| Nov. 30, 2015 | Nov. 30, 2014 |
Net Sales | $ | 2,219 |
| $ | 2,870 |
|
Cost of goods sold | 1,318 |
| 1,459 |
|
Gross Profit | 901 |
| 1,411 |
|
Operating Expenses: | | |
Selling, general and administrative expenses | 543 |
| 580 |
|
Research and development expenses | 364 |
| 412 |
|
Restructuring charges | 266 |
| — |
|
Total Operating Expenses | 1,173 |
| 992 |
|
(Loss) Income from Operations | (272 | ) | 419 |
|
Interest expense | 129 |
| 115 |
|
Interest income | (20 | ) | (38 | ) |
Other expense, net | 25 |
| 15 |
|
(Loss) Income from Continuing Operations Before Income Taxes | (406 | ) | 327 |
|
Income tax (benefit) provision | (137 | ) | 100 |
|
(Loss) Income from Continuing Operations Including Portion Attributable to Noncontrolling Interest | $ | (269 | ) | $ | 227 |
|
Discontinued Operations: | | |
Income from operations of discontinued businesses | 20 |
| 26 |
|
Income tax provision | 8 |
| 10 |
|
Income from Discontinued Operations | 12 |
| 16 |
|
Net (Loss) Income | $ | (257 | ) | $ | 243 |
|
Less: Net loss attributable to noncontrolling interest | (4 | ) | — |
|
Net (Loss) Income Attributable to Monsanto Company | $ | (253 | ) | $ | 243 |
|
| | |
EBIT (see note 1) | $ | (274 | ) | $ | 427 |
|
| | |
Basic Earnings per Share Attributable to Monsanto Company: | | |
(Loss) income from continuing operations | $ | (0.58 | ) | $ | 0.47 |
|
Income from discontinued operations | 0.02 |
| 0.03 |
|
Net (Loss) Income Attributable to Monsanto Company | $ | (0.56 | ) | $ | 0.50 |
|
| | |
Diluted Earnings per Share Attributable to Monsanto Company: | | |
(Loss) income from continuing operations | $ | (0.58 | ) | $ | 0.47 |
|
Income from discontinued operations | 0.02 |
| 0.03 |
|
Net (Loss) Income Attributable to Monsanto Company | $ | (0.56 | ) | $ | 0.50 |
|
| | |
Weighted Average Shares Outstanding: | | |
Basic | 454.1 |
| 484.4 |
|
Diluted | 454.1 |
| 489.4 |
|
Monsanto Company
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
|
| | | | | | |
Statements of Consolidated Financial Position | As of | As of |
| Nov. 30, 2015 | Aug. 31, 2015 |
Assets | | |
Current Assets: | | |
Cash and cash equivalents (variable interest entity restricted - 2016: $27 and 2015: $112) | $ | 2,277 |
| $ | 3,701 |
|
Short-term investments | 47 |
| 47 |
|
Trade receivables, net (variable interest entity restricted - 2016: $87 and 2015: $0) | 2,106 |
| 1,636 |
|
Miscellaneous receivables | 1,000 |
| 803 |
|
Deferred tax assets | 772 |
| 743 |
|
Inventory, net | 3,872 |
| 3,496 |
|
Other current assets | 393 |
| 199 |
|
Total Current Assets | 10,467 |
| 10,625 |
|
Property, Plant and Equipment, Net (variable interest entity restricted - 2016: $1 and 2015: $2) | 4,870 |
| 4,973 |
|
Goodwill | 3,985 |
| 4,061 |
|
Other Intangible Assets, Net | 1,205 |
| 1,332 |
|
Noncurrent Deferred Tax Assets | 260 |
| 277 |
|
Long-Term Receivables, Net | 35 |
| 42 |
|
Other Assets | 624 |
| 610 |
|
Total Assets | $ | 21,446 |
| $ | 21,920 |
|
Liabilities and Shareowners’ Equity | |
| |
|
Current Liabilities: | |
| |
|
Short-term debt, including current portion of long-term debt (variable interest entity restricted - 2016: $94 and 2015: $0) | $ | 1,788 |
| $ | 615 |
|
Accounts payable (variable interest entity restricted - 2016: $7 and 2015: $6) | 818 |
| 836 |
|
Income taxes payable | 46 |
| 234 |
|
Accrued compensation and benefits (variable interest entity restricted - 2016: $2 and 2015: $2) | 212 |
| 304 |
|
Accrued marketing programs | 781 |
| 1,492 |
|
Deferred revenues | 3,146 |
| 370 |
|
Grower production accruals | 333 |
| 39 |
|
Dividends payable | — |
| 254 |
|
Customer payable | 16 |
| 72 |
|
Restructuring reserves | 283 |
| 170 |
|
Miscellaneous short-term accruals (variable interest entity restricted - 2016: $7 and 2015: $7) | 1,078 |
| 791 |
|
Total Current Liabilities | 8,501 |
| 5,177 |
|
Long-Term Debt (variable interest entity restricted - 2016: $0 and 2015: $96) | 7,939 |
| 8,429 |
|
Postretirement Liabilities | 330 |
| 336 |
|
Long-Term Deferred Revenue | 45 |
| 47 |
|
Noncurrent Deferred Tax Liabilities | 380 |
| 340 |
|
Long-Term Portion of Environmental and Litigation Liabilities | 192 |
| 194 |
|
Long-Term Restructuring Reserves | 133 |
| 47 |
|
Other Liabilities | 358 |
| 345 |
|
Monsanto Shareowners’ Equity | 3,559 |
| 6,990 |
|
Noncontrolling Interest | 9 |
| 15 |
|
Total Shareowners’ Equity | 3,568 |
| 7,005 |
|
Total Liabilities and Shareowners’ Equity | $ | 21,446 |
| $ | 21,920 |
|
Debt to Capital Ratio: | 73 | % | 56 | % |
Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited |
| | | | | | |
Statements of Consolidated Cash Flows | Three Months Ended |
| Nov. 30, 2015 | Nov. 30, 2014 |
Operating Activities: | | |
Net (Loss) Income | $ | (257 | ) | $ | 243 |
|
Adjustments to reconcile cash provided by operating activities: | |
| |
|
Items that did not require (provide) cash: | |
| |
|
Depreciation and amortization | 181 |
| 182 |
|
Bad-debt expense | 12 |
| 13 |
|
Stock-based compensation expense | 37 |
| 31 |
|
Excess tax benefits from stock-based compensation | (6 | ) | (16 | ) |
Deferred income taxes | 6 |
| 42 |
|
Restructuring impairments | 99 |
| — |
|
Equity affiliate expense, net | 2 |
| 3 |
|
Net gain on sales of a business or other assets | — |
| (1 | ) |
Other items | 18 |
| 6 |
|
Changes in assets and liabilities that (required) provided cash, net of acquisitions: | | |
Trade receivables, net | (515 | ) | (249 | ) |
Inventory, net | (528 | ) | (827 | ) |
Deferred revenues | 2,787 |
| 2,114 |
|
Accounts payable and other accrued liabilities | (423 | ) | (111 | ) |
Restructuring, net | 208 |
| — |
|
Pension contributions | (3 | ) | (6 | ) |
Other items | (255 | ) | (75 | ) |
Net Cash Provided by Operating Activities | 1,363 |
| 1,349 |
|
Cash Flows (Required) Provided by Investing Activities: | |
| |
|
Capital expenditures | (326 | ) | (347 | ) |
Purchases of long-term debt and equity securities | — |
| (30 | ) |
Technology and other investments | (12 | ) | (5 | ) |
Other proceeds | 2 |
| 2 |
|
Net Cash Required by Investing Activities | (336 | ) | (380 | ) |
Cash Flows Provided (Required) by Financing Activities: | |
| |
|
Net change in financing with less than 90-day maturities | 839 |
| 410 |
|
Short-term debt proceeds | — |
| 14 |
|
Short-term debt reductions | (3 | ) | — |
|
Long-term debt proceeds | 4 |
| 3 |
|
Long-term debt reductions | (3 | ) | (3 | ) |
Treasury stock purchases | (3,000 | ) | (296 | ) |
Stock option exercises | 16 |
| 27 |
|
Excess tax benefits from stock-based compensation | 6 |
| 16 |
|
Tax withholding on restricted stock and restricted stock units | (18 | ) | (24 | ) |
Dividend payments | (254 | ) | (238 | ) |
Payments to noncontrolling interests | (1 | ) | (16 | ) |
Net Cash Required by Financing Activities | (2,414 | ) | (107 | ) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (37 | ) | (93 | ) |
Net (Decrease) Increase in Cash and Cash Equivalents | (1,424 | ) | 769 |
|
Cash and Cash Equivalents at Beginning of Period | 3,701 |
| 2,367 |
|
Cash and Cash Equivalents at End of Period | $ | 2,277 |
| $ | 3,136 |
|
Monsanto Company
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited
| |
1. | The presentations of EBIT, ongoing EPS, ongoing gross profit, ongoing operating expenses, ongoing net (loss) income attributable to Monsanto Company, and free cash flow are not intended to replace gross profit, operating expenses, net income (loss) attributable to Monsanto Company, as reported EPS, cash flows, financial position or comprehensive income (loss), and they are not measures of financial performance as determined in accordance with generally accepted accounting principles (GAAP) in the United States. The presentation of non-GAAP financial measures is intended to supplement investor understanding of our operating performance. Furthermore, these non-GAAP financial measures may not be comparable to similar measures used by other companies. The following tables reconcile those measures to the respective most directly comparable financial measure calculated in accordance with GAAP. |
Reconciliation of EBIT to Net Income (Loss): EBIT is defined as earnings (loss) before interest and taxes. Earnings (loss) is intended to mean net income (loss) attributable to Monsanto Company as presented in the Statements of Consolidated Operations under GAAP. The following table reconciles EBIT to the most directly comparable financial measure, which is net income (loss) attributable to Monsanto Company.
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| | | | | | |
| Three Months Ended |
(in millions) | Nov. 30, 2015 | Nov. 30, 2014 |
EBIT – Seeds and Genomics Segment | $ | (333 | ) | $ | 43 |
|
EBIT – Agricultural Productivity Segment | 59 |
| 384 |
|
EBIT– Total | (274 | ) | 427 |
|
Interest Expense – Net | 109 |
| 77 |
|
Income Tax Provision(A) | (130 | ) | 107 |
|
Net (Loss) Income Attributable to Monsanto Company | $ | (253 | ) | $ | 243 |
|
(A) Includes the income tax provision from continuing operations, the income tax benefit on noncontrolling interest, and the income tax provision on discontinued operations.
Reconciliation of EPS to Ongoing EPS: Ongoing EPS is calculated excluding certain after-tax items which Monsanto does not consider part of ongoing operations.
|
| | | | | | | |
| Fiscal Year 2016 | Three Months Ended |
| Guidance | Nov. 30, 2015 | Nov. 30, 2014 |
Diluted Earnings per Share | $4.12-$4.79 | $ | (0.56 | ) | $ | 0.50 |
|
Restructuring Charges | 0.82-0.99 | 0.46 |
| — |
|
Income from Discontinued Operations | (0.02) | (0.02 | ) | (0.03 | ) |
Environmental and Litigation Settlements | 0.01 | 0.01 |
| — |
|
Diluted Earnings per Share from Ongoing Business | $5.10-$5.60 | $ | (0.11 | ) | $ | 0.47 |
|
Reconciliation of Ongoing and As-Reported EPS CAGR: No separate reconciliation of ongoing and as-reported EPS CAGR for the period from the end of fiscal year 2016 to fiscal year 2019 is included because a reconciliation of ongoing and as-reported EPS guidance for fiscal year 2016 is provided above and no reconciling items are expected in fiscal year 2019.
Reconciliation of Ongoing Gross Profit to Gross Profit: Ongoing gross profit is calculated excluding certain pre-tax items which Monsanto does not consider part of ongoing operations.
|
| | | | | | |
| Three Months Ended |
(in millions) | Nov. 30, 2015 | Nov. 30, 2014 |
Gross Profit – Seeds and Genomics Segment | $ | 728 |
| $ | 941 |
|
Gross Profit – Agricultural Productivity Segment | 173 |
| 470 |
|
Gross Profit– Total | 901 |
| 1,411 |
|
Restructuring Charges | 52 |
| — |
|
Ongoing Gross Profit | $ | 953 |
| $ | 1,411 |
|
Reconciliation of Ongoing Operating Expenses to Operating Expenses: Ongoing operating expenses is calculated excluding certain pre-tax items which Monsanto does not consider part of ongoing operations.
|
| | | | | | |
| Three Months Ended |
(in millions) | Nov. 30, 2015 | Nov. 30, 2014 |
Ongoing Operating Expenses | $ | 902 |
| $ | 992 |
|
Restructuring Charges | 266 |
| — |
|
Environmental and Litigation Settlements | 5 |
| — |
|
Operating Expenses | $ | 1,173 |
| $ | 992 |
|
Reconciliation of Ongoing Net (Loss) Income Attributable to Monsanto Company to Net Income Attributable to Monsanto Company: Ongoing net (loss) income attributable to Monsanto Company is defined as net (loss) income attributable to Monsanto Company excluding the cumulative after-tax impact of certain items we do not consider part of ongoing operations.
|
| | | | | | |
| Three Months Ended |
(in millions) | Nov. 30, 2015 | Nov. 30, 2014 |
Ongoing Net (Loss) Income Attributable to Monsanto Company | $ | (52 | ) | $ | 227 |
|
Restructuring Charges | 318 |
| — |
|
Environmental and Litigation Settlements | 5 |
| — |
|
Income Tax Benefit | (110 | ) | — |
|
Income on Discontinued Operations, Net of Tax | (12 | ) | (16 | ) |
Net (Loss) Income Attributable to Monsanto Company | $ | (253 | ) | $ | 243 |
|
Reconciliation of Free Cash Flow: Free cash flow represents the total of cash flows from operating activities and investing activities, as reflected in the Statements of Consolidated Cash Flows presented in this release. With respect to the fiscal year 2016 free cash flow guidance, Monsanto does not include any estimates or projections of Net Cash Provided (Required) by Financing Activities because in order to prepare any such estimate or projection, Monsanto would need to rely on market factors and conditions that are outside of its control.
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| | | | | | | | |
| | Fiscal Year 2016 | Three Months Ended |
| | Guidance | Nov. 30, 2015 | Nov. 30, 2014 |
Net Cash Provided by Operating Activities | $ | 2,600-3,000 | $ | 1,363 |
| $ | 1,349 |
|
Net Cash Required by Investing Activities | | (1,000)-(1,200) | (336 | ) | (380 | ) |
Free Cash Flow | $ | 1,600-1,800 | $ | 1,027 |
| $ | 969 |
|
Net Cash Required by Financing Activities | | N/A | (2,414 | ) | (107 | ) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | | N/A | (37 | ) | (93 | ) |
Net (Decrease) Increase in Cash and Cash Equivalents | | N/A | (1,424 | ) | 769 |
|
Cash and Cash Equivalents at Beginning of Period | | N/A | 3,701 |
| 2,367 |
|
Cash and Cash Equivalents at End of Period | | N/A | $ | 2,277 |
| $ | 3,136 |
|