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Strength Across Monsanto Company Business Portfolio Drives First Quarter Results And Momentum As Company Increases Full Year



   Strength Across Monsanto Company Business Portfolio Drives First Quarter
         Results And Momentum As Company Increases Full Year Guidance

- Company Raises Full-Year Ongoing Earnings Per Share Guidance to $4.30 to
$4.40, or $4.31 to $4.41 As-Reported, Increases Free Cash Flow Guidance

- Positive Early Order Book in U.S. Shows Strong Business Momentum

- Record Number of Projects Advance in R&D Platforms, Reinforcing
Industry-Leading Pipeline

PR Newswire

ST. LOUIS, Jan. 8, 2013

ST. LOUIS, Jan. 8, 2013 /PRNewswire/ -- Monsanto Company (NYSE: MON) delivered
strong results for the first quarter of its fiscal year 2013, reflecting
contributions from the continued expansion of its Latin American corn
business, early momentum in its U.S. seeds and traits business and performance
of its agricultural productivity segment. Executives said the cumulative
strength of the company's broad business portfolio translated to an increase
in full-year earnings per share and free cash flow guidance, even at this
early point in the company's fiscal year. Monsanto also highlighted 18 phase
advancements across its integrated yield pipeline, a record for its annual
research and development update.

($ in millions)                         First Quarter 2013  First Quarter 2012
Net Sales By Segment
         Corn seed and traits           $      1,139        $       895
         Soybean seed and traits               231                  242
         Cotton seed and traits                185                  194
         Vegetable seeds                       156                  157
         All other crops seeds and             44                   46
         traits
TOTAL Seeds and Genomics                $      1,755        $       1,534
         Agricultural Productivity             1,184                905
TOTAL Agricultural Productivity         $      1,184        $       905
TOTAL Net Sales                         $      2,939        $       2,439
Gross Profit                            $      1,397        $       1,096
Operating Expenses                      $      888          $       851
Interest Expense – Net                  $      28           $       35
Other Expense – Net                     $      17           $       6
Net Income Attributable to Monsanto     $      339          $       126
Company
Diluted Earnings per Share (See note    $      0.63         $       0.23
1.)
Items Affecting Comparability – EPS
Impact
         Income on discontinued         $      (0.01)       $       —
         operations
Diluted Earnings per Share from Ongoing
Business (For the definition of ongoing $      0.62         $       0.23
EPS, see note 1.)
Effective Tax Rate                             26%                  34%

 

Comparison as a Percent of Net Sales:   First Quarter 2013  First Quarter 2012
  Gross profit                          48        %         45        %
  Selling, general and administrative   18        %         21        %
  expenses
  Research and development expenses     12        %         14        %
  Income before income taxes            16        %         8         %
  Net Income Attributable to Monsanto   12        %         5         %
  Company

"We've achieved a successful start to the year, with contributions from
multiple areas that speaks to the strength of our global business and provides
confidence in our ability to realize a third consecutive year of significant
growth," said Hugh Grant, chairman and chief executive officer for Monsanto. 
"The momentum in our business is also seen in our record research and
development progress.  Through continued innovation in our integrated yield
pipeline, we remain committed to delivering cutting-edge solutions that will
bring additional value to our customers."

Results of Operations

The company achieved strong first quarter results that reflect the strength
and growth of its business. Net sales for the quarter increased 21 percent
over the prior year's first quarter to $2.9 billion, with significant
contribution from the corn seed and traits business, led by the corn
opportunity acceleration in Latin America and strong shipments in the United
States reflective of a positive order book. Gross profit for the 2013 first
quarter increased 27 percent over the prior year period to $1.4 billion.  

Selling, general and administrative (SG&A) costs were $542 million in the
first quarter. Research and development (R&D) expenses decreased
year-over-year to $346 million for the quarter.

The company's first quarter earnings per share (EPS) was $0.62 on an ongoing
and $0.63 on an as-reported basis. (For a reconciliation of ongoing EPS, see
note 1.)

Cash Flow

The higher first quarter business results are also reflected in the company's
free cash flow, which was a source of $1.5 billion compared with a source of
$856 million for the prior year first quarter. (For a reconciliation of free
cash flow, see note 1.) The raise reflects an increase in customer prepayments
in advance of the U.S. season combined with the translation of increased
earnings into cash.

Net cash provided by operating activities for the 2013 fiscal year first
quarter was a source of $1.6 billion, compared to a source of $1.1 billion in
the first quarter last year. Net cash required by investing activities for the
first quarter of 2013 was $96 million, compared with $254 million for the same
period of fiscal year 2012.  Net cash required by financing activities for the
first quarter of 2013 was $116 million, compared with $340 million for the
prior year's first quarter.

Outlook

The company raised its full year ongoing EPS guidance to $4.30 to $4.40 per
share, positioning the company for a third straight year of strong ongoing
earnings growth. Full-year 2013 EPS guidance on an as-reported basis is
expected in the range of $4.31 to $4.41 per share. (For a reconciliation of
EPS, see note 1.)

The company also raised full year free cash flow guidance to $1.8 billion to
$2 billion. The company expects net cash provided by operating activities to
be $2.9 billion to $3.3 billion, and net cash required by investing activities
to be $1.1 billion to $1.3 billion for fiscal year 2013. (For a reconciliation
of free cash flow, see note 1.)

The updated EPS and free cash flow guidance does not include an estimated
historical range of $0.20 to $0.25 of EPS contribution related to the Roundup
Ready soybean business in Brazil given uncertainty in timing of resolution of
ongoing business and legal developments.

Seeds and Genomics Segment Detail

 ($ in millions)         Net Sales                     Gross Profit
                         First          First          First          First
 Seeds and Genomics      Quarter 2013   Quarter 2012   Quarter 2013   Quarter
                                                                      2012
 Corn seed and traits  $ 1,139        $ 895          $ 686          $ 531
 Soybean seed and        231            242            118            173
 traits
 Cotton seed and         185            194            127            135
 traits
 Vegetable seeds         156            157            83             81
 All other crops seeds   44             46             11             (4)
 and traits
 TOTAL Seeds and       $ 1,755        $ 1,534        $ 1,025        $ 916
 Genomics

 

 ($ in millions)                      Earnings Before Interest & Taxes (EBIT)
 Seeds and Genomics                      First Quarter 2013     First Quarter
                                                                2012
 EBIT (For a reconciliation of EBIT,  $  220                 $  147
 see note 1.)

The Seeds and Genomics segment consists of the company's global seeds and
related traits business.

Sales for Monsanto's Seeds and Genomics segment increased 14 percent in the
first quarter to $1.8 billion, with corn seed and traits performance driving
the first quarter strength.

Corn seed and traits net sales increased 27 percent over last year's first
quarter to $1.1 billion, driven in part by the business strength in Brazil,
Argentina and Mexico. The trait upgrade and expansion is on track in both
Brazil and Argentina where the company is achieving strong demand for its corn
products. In Brazil, farmers continue to upgrade from single trait corn
products to the first double stack, VT PRO^™ 2. In its second year of
commercial sales, VT PRO^™ 2 is the second-highest volume trait in the
company's Brazil corn portfolio this year. Likewise, in Argentina, the company
has also seen strong adoption of its Genuity^® VT Triple PRO^® product. The
triple-stack corn product is on track to be 40 percent of the company's
Argentine corn portfolio in just its second year on the market.

Complementing the corn performance in Latin America is the early momentum in
the U.S. seeds and traits business. Backed by strong cash flow and customer
prepayments, the company noted a positive U.S. order book, with the order pace
ahead of the same point in time last year. With two years of strong
performance, company executives said the U.S. business is in position to grow
again in 2013. This includes another increase in acres for both its Genuity^®
Roundup Ready 2 Yield^® platform in soybeans and the Genuity^® reduced refuge
family in corn.

Agricultural Productivity Segment Detail

 ($ in millions)                   Net Sales                Gross Profit
                                   First          First     First     First
 Agricultural Productivity         Quarter 2013   Quarter   Quarter   Quarter
                                                  2012      2013      2012
 TOTAL Agricultural Productivity $ 1,184        $ 905     $ 372     $ 180

 

 ($ in millions)                      Earnings Before Interest & Taxes (EBIT)
 Agricultural Productivity               First Quarter 2013     First Quarter
                                                                2012
 EBIT (For a reconciliation of EBIT,  $  270                  $ 82
 see note 1.)
 Unusual Items Affecting EBIT:        $  11                   $ —
 Discontinued Operations

The Agricultural Productivity segment consists of the crop protection products
and lawn-and-garden herbicide products.

Net sales in the first quarter of fiscal 2013 for Monsanto's Agricultural
Productivity segment increased $279 million, reflecting the benefit of a
favorable marketplace environment lifting the business in the near-term. The
company indicated it remains focused on its established strategy for Roundup^®
following the reset of that business in 2010.

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, future expectations and an update of projects within the
company's R&D pipeline. The call also may include a discussion of Monsanto's
strategic initiatives, product performance 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 web site at
www.monsanto.com/investors or by visiting
http://edge.media-server.com/m/p/5866v2f7/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
Web site for three weeks.

About Monsanto Company
Monsanto Company is a leading global provider of technology-based solutions
and agricultural products that improve farm productivity and food quality.
Monsanto remains focused on enabling both small-holder and large-scale farmers
to produce more from their land while conserving more of our world's natural
resources such as water and energy. To learn more about our business and our
commitments, please visit: www.monsanto.com.  Follow our business on Twitter^®
at www.twitter.com/MonsantoCo, on the company blog, Beyond the Rows^® at
www.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 acceptance of biotechnology 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; successful operation of recent
acquisitions; fluctuations in commodity prices; compliance with regulations
affecting our manufacturing; the accuracy of the company's estimates related
to distribution inventory levels; 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 and accidents on the
agriculture business or the company's facilities; and other risks and factors
detailed in the company's most recent Form 10-K 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, VT Triple PRO, VT PRO 2,
Genuity, Roundup and Roundup Ready 2 Yield are trademarks of Monsanto Company
and its wholly-owned subsidiaries.

Contact Media: Sara Miller (314-694-5824)
        Analysts: Bryan Hurley (314-694-8148)

 

Monsanto Company

Selected Financial Information

(Dollars in millions, except per share amounts)

Unaudited

 
Statements of Consolidated Operations                       Three Months Ended
                                                            Nov. 30,
                                                            2012        2011
Net Sales                                                 $ 2,939    $  2,439
Cost of Goods Sold                                          1,542       1,343
Gross Profit                                                1,397       1,096
Operating Expenses:
        Selling, General and Administrative Expenses        542         500
        Research and Development Expenses                   346         351
Total Operating Expenses                                    888         851
Income From Operations                                      509         245
Interest Expense                                            51          53
Interest Income                                             (23)        (18)
Other Expense, Net                                          17          6
Income Before Income Taxes                                  464         204
Income Tax Provision                                        122         70
Income from Continuing Operations Including Portion
Attributable                                              $ 342      $  134

to Noncontrolling Interest
Discontinued Operations:
Income from Operations of Discontinued Businesses           11          —
Income Tax Provision                                        4           —
Income on Discontinued Operations                           7           —
Net Income Including Portion Attributable to              $ 349      $  134
Noncontrolling Interest
Less: Net Income Attributable to Noncontrolling Interest    10          8
Net Income Attributable to Monsanto Company               $ 339      $  126
EBIT (see note 1)                                         $ 490      $  229
Basic Earnings per Share:
Income from Continuing Operations                         $ 0.62     $  0.24
Income on Discontinued Operations                           0.01        —
Basic Earnings per Share Attributable to Monsanto Company $ 0.63     $  0.24
Diluted Earnings per Share:
Income from Continuing Operations                         $ 0.62     $  0.23
Income on Discontinued Operations                           0.01        —
Diluted Earnings per Share Attributable to Monsanto       $ 0.63     $  0.23
Company
Weighted Average Shares Outstanding:
        Basic                                               534.8       535.4
        Diluted                                             540.4       541.4

 

Monsanto Company

Selected Financial Information

(Dollars in millions, except per share amounts)

Unaudited

 
Condensed Statements of Consolidated Financial    As of          As of
Position
                                                  Nov. 30, 2012  Aug. 31, 2012
Assets
Current Assets:
 Cash and cash equivalents (variable interest     $    4,637     $    3,283
 entity restricted - 2013: $30 and 2012: $120)
 Short-term investments                                310            302
 Trade Receivables, net (variable interest entity      2,168          1,897
 restricted - 2013: $140 and 2012: $52)
 Miscellaneous Receivables                             700            620
 Deferred Tax Assets                                   513            534
 Inventory, Net                                        3,571          2,839
 Other Current Assets (variable interest entity        161            183
 restricted - 2013: $2)
Total Current Assets                                   12,060         9,658
Property, Plant and Equipment, Net                     4,348          4,365
Goodwill                                               3,447          3,435
Other Intangible Assets, Net                           1,210          1,237
Noncurrent Deferred Tax Assets                         552            551
Long-Term Receivables, Net                             290            376
Other Assets                                           630            602
Total Assets                                      $    22,537    $    20,224
Liabilities and Shareowners' Equity
Current Liabilities:
 Short-Term Debt, Including Current Portion of    $    26        $    36
 Long-Term Debt
 Accounts Payable                                      785            794
 Income Taxes Payable                                  68             75
 Accrued Compensation and Benefits                     307            546
 Accrued Marketing Programs                            710            1,281
 Deferred Revenues                                     2,843          396
 Grower Production Accruals                            711            194
 Dividends Payable                                     —              200
 Customer Payable                                      8              14
 Miscellaneous Short-Term Accruals                     703            685
Total Current Liabilities                              6,161          4,221
Long-Term Debt                                         2,054          2,038
Postretirement Liabilities                             530            543
Long-Term Deferred Revenue                             218            245
Noncurrent Deferred Tax Liabilities                    314            313
Long-Term Portion of Environmental and Litigation      212            213
Reserves
Other Liabilities                                      583            615
Monsanto Shareowners' Equity                           12,259         11,833
Noncontrolling Interest                                206            203
Total Shareowners' Equity                              12,465         12,036
Total Liabilities and Shareowners' Equity         $    22,537    $    20,224
Debt to Capital Ratio:                                 15%            15%

 

Monsanto Company

Selected Financial Information

(Dollars in millions, except per share amounts)

Unaudited

 
Statements of Consolidated Cash Flows                       Three Months Ended
                                                            Nov. 30,
                                                               2012      2011
Operating Activities:
 Net Income                                                 $  349     $ 134
 Adjustments to Reconcile Cash Provided by Operating
 Activities:
 Items That Did Not Require (Provide) Cash:
        Depreciation and Amortization                          152       155
        Bad-Debt Expense                                       7         (1)
        Stock-Based Compensation Expense                       24        23
        Excess Tax Benefits from Stock-Based Compensation      (15)      (6)
        Deferred Income Taxes                                  10        (48)
        Equity Affiliate (Income) Expense, Net                 (2)       1
        Net Gain on Sales of a Business or Other Assets        (12)      (1)
        Other Items                                            (24)      (55)
 Changes in Assets and Liabilities that (Required) Provided
 Cash, Net of Acquisitions:
        Trade Receivables, Net                                 (219)     49
        Inventory, Net                                         (754)     (679)
        Deferred Revenues                                      2,422     1,624
        Accounts Payable and Other Accrued Liabilities         (398)     (127)
        Restructuring Cash Payments                            —         (4)
        Pension Contributions                                  (16)      (5)
        Other Items                                            45        50
Net Cash Provided by Operating Activities                      1,569     1,110
Cash Flows (Required) Provided by Investing Activities:
        Purchases of Short-Term Investments                    (118)     (142)
        Maturities of Short-Term Investments                   110       142
        Capital Expenditures                                   (133)     (138)
        Acquisitions of Businesses, Net of Cash Acquired       —         (113)
        Technology and Other Investments                       (23)      (5)
        Other Proceeds                                         68        2
Net Cash Required by Investing Activities                      (96)      (254)
Cash Flows Provided (Required) by Financing Activities:
        Net Change in Financing With Less Than 90-Day          60        (8)
        Maturities
        Short-Term Debt Reductions                             (7)       (17)
        Long-Term Debt Proceeds                                16        1
        Long-Term Debt Reductions                              —         (138)
        Treasury Stock Purchases                               (27)      (26)
        Stock Option Exercises                                 31        12
        Excess Tax Benefits from Stock-Based Compensation      16        6
        Tax Withholding on Restricted Stock and Restricted     (3)       (1)
        Stock Units
        Dividend Payments                                      (201)     (161)
        Dividend Payments to Noncontrolling Interests          (1)       (8)
Net Cash Required by Financing Activities                      (116)     (340)
Effect of Exchange Rate Changes on Cash and Cash               (3)       (81)
Equivalents
Net Increase in Cash and Cash Equivalents                      1,354     435
Cash and Cash Equivalents at Beginning of Period               3,283     2,572
Cash and Cash Equivalents at End of Period                  $  4,637   $ 3,007

 

^

Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited

 
   EBIT, Ongoing EPS and Free Cash Flow: The presentations of EBIT, ongoing
   EPS and free cash flow are not intended to replace net income attributable
   to Monsanto Company, cash flows, financial position or comprehensive
1. 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 following tables reconcile EBIT, ongoing
   EPS and free cash flow to the respective most directly comparable
   financial measure calculated in accordance with GAAP.
    

   Reconciliation of EBIT to Net Income: EBIT is defined as earnings before
   interest and taxes. Earnings is intended to mean net income 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 attributable to
   Monsanto.

 

                                              Three Months Ended
                                              Nov. 30,
                                              2012         2011
EBIT – Seeds and Genomics Segment           $ 220       $  147
EBIT – Agricultural Productivity Segment      270          82
EBIT– Total                                   490          229
Interest Expense, Net                         28           35
Income Tax Provision^(A)                      123          68
Net Income Attributable to Monsanto Company $ 339       $  126

^(A) Includes 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 Three months  Three months
                                       2013        ended         ended
                                       Guidance    Nov. 30, 2012 Nov. 30, 2011
Diluted Earnings per Share             $4.31-$4.41 $    0.63     $     0.23
Income on Discontinued Operations      (0.01)           (0.01)         —
Diluted Earnings per Share from        $4.30-$4.40 $    0.62     $     0.23
Ongoing Business

 

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 2013 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.

 

                                        Fiscal Year         Three Months Ended
                                        2013                Nov. 30,
                                        Guidance            2012        2011
Net Cash Provided by Operating          $ 2,900-3,300     $ 1,569   $   1,110
Activities
Net Cash Required by Investing            (1,100)-(1,300)   (96)        (254)
Activities
Free Cash Flow                          $ 1,800-2,000     $ 1,473   $   856
Net Cash Required by Financing            N/A               (116)       (340)
Activities
Effect of Exchange Rate Changes on Cash   N/A               (3)         (81)
and Cash Equivalents
Net Increase in Cash and Cash             N/A               1,354       435
Equivalents
Cash and Cash Equivalents at Beginning    N/A               3,283       2,572
of Period
Cash and Cash Equivalents at End of       N/A             $ 4,637   $   3,007
Period

SOURCE Monsanto Company

Website: http://www.monsanto.com
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