Monsanto Company's Global Business Performance Drives Increased Full-Year Earnings Outlook Full-Year Ongoing Earnings Per Share Guidance Raised to $4.40 to $4.50, or $4.42 to $4.52 As-Reported PR Newswire ST. LOUIS, April 3, 2013 ST. LOUIS, April 3, 2013 /PRNewswire/ -- With half of its fiscal year complete, Monsanto Company (NYSE: MON) announced today that the continued strength of its growing global business delivered another strong quarter for its fiscal year 2013 and translated to a second consecutive quarterly increase in full-year ongoing and as-reported earnings per share guidance. In reporting earnings results for the second quarter and first half of the year, executives noted results were driven by contributions from across the company's business portfolio, including continued growth of its global corn business and positive performance of its agricultural productivity segment. Second Quarter Six Months ($ in millions) 2013 2012 2013 2012 Net Sales By Segment Corn seed and traits $ 3,280 $ 2,816 $ 4,419 $ 3,711 Soybean seed and traits 677 689 908 931 Vegetable seeds 199 215 355 372 Cotton seed and traits 60 66 245 260 All other crops seeds and traits 130 138 174 184 TOTAL Seeds and Genomics $ 4,346 $ 3,924 $ 6,101 $ 5,458 Agricultural productivity $ 1,126 $ 824 $ 2,310 $ 1,729 TOTAL Agricultural Productivity $ 1,126 $ 824 $ 2,310 $ 1,729 TOTAL Net Sales $ 5,472 $ 4,748 $ 8,411 $ 7,187 Gross Profit $ 3,070 $ 2,705 $ 4,467 $ 3,801 Operating Expenses $ 958 $ 896 $ 1,846 $ 1,747 Interest Expense – Net $ 8 $ 27 $ 36 $ 62 Other Expense – Net $ 22 $ 37 $ 39 $ 43 Net Income Attributable to $ 1,483 $ 1,211 $ 1,822 $ 1,337 Monsanto Company Diluted Earnings per Share (See $ 2.74 $ 2.24 $ 3.37 $ 2.47 note 1.) Items Affecting Comparability – EPS Impact Income on discontinued operations (0.01) (0.01) (0.02) (0.01) Nitro Claims Settlement — 0.05 — 0.05 Diluted Earnings per Share from Ongoing Business (For the $ 2.73 $ 2.28 $ 3.35 $ 2.51 definition of ongoing EPS, see note 1.) Effective Tax Rate 29 % 31 % 28 % 31 % Second Quarter Six Months Comparison as a Percent of Net Sales: 2013 2012 2013 2012 Gross profit 56 % 57 % 53 % 53 % Selling, general and administrative expenses 11 % 11 % 14 % 15 % Research and development expenses 7 % 7 % 8 % 10 % Income from continuing operations before income 38 % 37 % 30 % 27 % taxes Net income attributable to Monsanto Company 27 % 26 % 22 % 19 % "Our commitment to serving our farmer customers around the world is at the core of everything we do," said HughGrant, chairman and chief executive officer for Monsanto. "By understanding their needs and finding new ways to work with them to meet growing demand, we've achieved momentum in our business and strong results across our global portfolio. Our performance underscores our expectation for a third consecutive year of strong earnings growth and reinforces our opportunities for the future as well. As we move into the second half of the year, we are thankful for the opportunity to serve our customers and continue to earn their business as a leader in this dynamic industry." Results of Operations The company achieved strong second quarter and first half results that reflect the continued growth of its global business. Net sales for the quarter increased $724 million or 15 percent to $5.5 billion in the three-month comparison driven in part by 16 percent sales growth from its global corn business. For the first six months, net sales increased $1.2 billion or 17 percent. Operating expenses were up $62 million in the second quarter compared to the prior year. In the three-month comparison, selling, general and administrative (SG&A) expenses increased 10 percent to $598 million. Quarterly research and development (R&D) expenses were up 2 percent to $360 million compared to the prior year period. The company's second quarter earnings per share (EPS) was $2.73 on an ongoing and $2.74 on an as-reported basis, compared to an EPS of $2.28 on an ongoing and $2.24 on an as-reported basis in the same quarter last year. EPS for the first six months of fiscal year 2013 was $3.35 on an ongoing and $3.37 on an as-reported basis. (For a reconciliation of EPS to ongoing EPS see page 1). Cash Flow For the first half of fiscal year 2013, cash flow from operations was a source of nearly $1.9 billion compared to$1.7 billion for the same period last year. Net cash required by investing activities for the first half of fiscal year 2013 was $301 million, compared to $402million for the same period of fiscal year 2012. Net cash required by financing activities for the first half of 2013 was $422 million, compared to net cash required of $672 million for the same period of fiscal year 2012. Free cash flow was a source of nearly $1.6 billion for the first half of fiscal year 2013, compared to a source of$1.3 billion for the first half of fiscal year 2012. (For a reconciliation of free cash flow, see note 1.) Outlook The company raised its full year ongoing EPS guidance to $4.40 to $4.50 per share. Full year 2013 EPS guidance on an as-reported basis is expected in the range of $4.42 to $4.52 per share. (For a reconciliation of EPS, see note 1.) The company affirmed its previously announced full year free cash flow guidance of $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 $1.3 billion for fiscal year 2013. (For a reconciliation of free cash flow, see note 1.) Seeds and Genomics Segment Detail ($ in Net Sales Gross Profit millions) Second Quarter Six Months Second Quarter Six Months Seeds and 2013 2012 2013 2012 2013 2012 2013 2012 Genomics Corn Seed and $ 3,280 $ 2,816 $ 4,419 $ 3,711 $ 2,083 $ 1,847 $ 2,769 $ 2,378 Traits Soybean Seed and 677 689 908 931 395 443 513 616 Traits Vegetable 199 215 355 372 106 85 189 166 Seeds Cotton Seed and 60 66 245 260 44 47 171 182 Traits All Other Crops 130 138 174 184 71 69 82 65 Seeds and Traits TOTAL Seeds and $ 4,346 $ 3,924 $ 6,101 $ 5,458 $ 2,699 $ 2,491 $ 3,724 $ 3,407 Genomics ($ in millions) Earnings Before Interest & Taxes (EBIT) Second Quarter Six Months Seeds and Genomics 2013 2012 2013 2012 EBIT (For a reconciliation of EBIT, $ 1,840 $ 1,699 $ 2,060 $ 1,846 see note 1.) The Seeds and Genomics segment consists of the company's global seeds and related traits business. Sales in the Seeds and Genomics segment for the second quarter were $4.3 billion, an increase of $422 million over the same period last year. For the first six months, sales for the segment are up $643 million over the same period last year. Monsanto's global corn business led the Seeds and Genomics segment performance, as it expects to hit record total corn volumes in 2013. The second quarter results were driven in part by the conclusion of a successful and record second season in Brazil where the company continued to achieve strong demand for its latest corn products. The U.S. corn business also drove the results for the quarter, with the company projecting another year of strong performance from the business driven by the positive mix improvement across its corn portfolio. The company is on track to reach the high end of its 36 million to 38 million acre target range for its Genuity^® reduced refuge family. The current and emerging opportunities in the company's global soybean business complement the global corn business. In the United States, the company has achieved strong results year-to-date, with the positive order book and shipments positioning the company well to deliver to the high end of its 39 million to 41million acre target range for its Genuity^® Roundup Ready 2 Yield^® platform. This performance comes as the company prepares to enter the next phase of innovation in its soybean platform, including the addition of both Roundup Ready 2 Xtend^™ and Intacta RR2 PRO^™ soybeans. ^ The company noted that new results from its second year of Intacta RR2 PRO^™ Ground Breakers^® on-farm field trials in Brazil have demonstrated a better than 4 bushel per acre yield advantage against first-generation Roundup Ready^® soybeans at more than 1,000 locations, double the number of locations from its 2012 Ground Breakers^® on-farm field trials in Brazil. Agricultural Productivity Segment Detail ($ in Net Sales Gross Profit millions) Second Quarter Six Months Second Quarter Six Months 2013 2012 2013 2012 2013 2012 2013 2012 Agricultural $ 1,126 $ 824 $ 2,310 $ 1,729 $ 371 $ 214 $ 743 $ 394 Productivity TOTAL Agricultural $ 1,126 $ 824 $ 2,310 $ 1,729 $ 371 $ 214 $ 743 $ 394 Productivity ($ in millions) Earnings Before Interest & Taxes (EBIT) Second Quarter Six Months Agricultural Productivity 2013 2012 2013 2012 EBIT (For a reconciliation of EBIT, $ 256 $ 82 $ 526 $ 164 see note 1.) Unusual Items Affecting EBIT: EBIT from Discontinued Operations $ 6 $ 11 $ 17 $ 11 Nitro Claims Settlement $ — $ (44) $ — $ (44) The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products. Net sales in the second quarter of fiscal 2013 for Monsanto's Agricultural Productivity segment increased $302 million over the same period last year, reflecting the continued benefit of a favorable marketplace environment. The company remains focused on its established Roundup^® strategy. Webcast Information In conjunction with this announcement, Monsanto will hold a conference call at 8:30 a.m. central time (9:30a.m. eastern time) today.The call will focus on these results and future expectations and 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 website at www.monsanto.com/investors or by visiting http://edge.media-server.com/m/p/pbzn6osi/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 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, Genuity, Roundup, Roundup Ready 2 Yield, Roundup Ready 2 Xtend, Intacta RR2 PRO and Ground Breakers are trademarks of Monsanto Company and its wholly-owned subsidiaries. Monsanto Company 800 North Lindbergh Blvd St. Louis, Missouri 63167 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 Three Months Ended Six Months Ended Operations February28, February29, February28, February29, 2013 2012 2013 2012 Net Sales $ 5,472 $ 4,748 $ 8,411 $ 7,187 Cost of Goods Sold 2,402 2,043 3,944 3,386 Gross Profit 3,070 2,705 4,467 3,801 Operating Expenses: Selling, general and administrative 598 543 1,140 1,043 expenses Research and 360 353 706 704 development expenses Total Operating 958 896 1,846 1,747 Expenses Income From Operations 2,112 1,809 2,621 2,054 Interest Expense 35 47 86 100 Interest Income (27) (20) (50) (38) Other Expense, Net 22 37 39 43 Income from Continuing Operations Before 2,082 1,745 2,546 1,949 Income Taxes Income Tax Provision 603 540 725 610 Income from Continuing Operations Including Portion Attributable $ 1,479 $ 1,205 $ 1,821 $ 1,339 to Noncontrolling Interest Discontinued Operations: Income from Operations of Discontinued 6 11 17 11 Businesses Income Tax Provision 2 4 6 4 Income on Discontinued 4 7 11 7 Operations Net Income $ 1,483 $ 1,212 $ 1,832 $ 1,346 Less: Net Income Attributable to — 1 10 9 Noncontrolling Interest Net Income Attributable to $ 1,483 $ 1,211 $ 1,822 $ 1,337 Monsanto Company EBIT (see note 1) $ 2,096 $ 1,781 $ 2,586 $ 2,010 Basic Earnings per Share Attributable to Monsanto Company: Income from Continuing $ 2.77 $ 2.25 $ 3.39 $ 2.49 Operations Income on Discontinued 0.01 0.02 0.02 0.01 Operations Net Income Attributable to $ 2.78 $ 2.27 $ 3.41 $ 2.50 Monsanto Company Diluted Earnings per Share Attributable to Monsanto Company: Income from Continuing $ 2.73 $ 2.23 $ 3.35 $ 2.46 Operations Income on Discontinued 0.01 0.01 0.02 0.01 Operations Net Income Attributable to $ 2.74 $ 2.24 $ 3.37 $ 2.47 Monsanto Company Weighted Average Shares Outstanding: Basic 534.8 534.4 534.8 534.9 Diluted 540.9 540.5 540.9 540.9 Monsanto Company Selected Financial Information (Dollars in millions, except per share amounts) Unaudited Condensed Statements of Consolidated Financial As of As of Position Feb. 28, 2013 Aug. 31, 2012 Assets Current Assets: Cash and cash equivalents (variable interest $ 4,443 $ 3,283 entity restricted - 2013: $58 and 2012: $120) Short-term investments 310 302 Trade receivables, net (variable interest entity 2,219 1,897 restricted - 2013: $132 and 2012: $52) Miscellaneous receivables 638 620 Deferred tax assets 658 534 Inventory, net 3,095 2,839 Other current assets 171 183 Total Current Assets 11,534 9,658 Property, Plant and Equipment, Net 4,400 4,365 Goodwill 3,519 3,435 Other Intangible Assets, Net 1,220 1,237 Noncurrent Deferred Tax Assets 542 551 Long-Term Receivables, Net 255 376 Other Assets 609 602 Total Assets $ 22,079 $ 20,224 Liabilities and Shareowners' Equity Current Liabilities: Short-term debt, including current portion of 152 36 long-term debt Accounts payable 751 794 Income taxes payable 430 75 Accrued compensation and benefits 372 546 Accrued marketing programs 1,020 1,281 Deferred revenues 756 396 Grower production accruals 239 194 Dividends payable 201 200 Customer payable 7 14 Miscellaneous short-term accruals 781 685 Total Current Liabilities 4,709 4,221 Long-Term Debt 2,054 2,038 Postretirement Liabilities 526 543 Long-Term Deferred Revenue 187 245 Noncurrent Deferred Tax Liabilities 410 313 Long-Term Portion of Environmental and 217 213 Litigation Reserves Other Liabilities 518 615 Monsanto Shareowners' Equity 13,240 11,833 Noncontrolling Interest 218 203 Total Shareowners' Equity 13,458 12,036 Total Liabilities and Shareowners' Equity $ 22,079 $ 20,224 Debt to Capital Ratio: 14 % 15 % Monsanto Company Selected Financial Information (Dollars in millions, except per share amounts) Unaudited Statements of Consolidated Cash Flows Six Months Ended Feb. 28, 2013 Feb. 29, 2012 Operating Activities: Net Income $ 1,832 $ 1,346 Adjustments to reconcile cash provided by operating activities: Items that did not require (provide) cash: Depreciation and amortization 305 311 Bad-debt expense 10 (8) Stock-based compensation expense 49 72 Excess tax benefits from stock-based (47) (26) compensation Deferred income taxes 52 (33) Equity affiliate income, net (2) (3) Net gain on sales of a business or other assets (14) (2) Other items 48 65 Changes in assets and liabilities that provided (required) cash, net of acquisitions: Trade receivables, net (196) (265) Inventory, net (261) (356) Deferred revenues 293 445 Accounts payable and other accrued liabilities (204) 142 Restructuring cash payments — (7) Pension contributions (24) (33) Other items 16 24 Net Cash Provided by Operating Activities 1,857 1,672 Cash Flows Provided (Required) by Investing Activities: Purchases of short-term investments (320) (429) Maturities of short-term investments 312 429 Capital expenditures (261) (239) Acquisitions of businesses, net of cash acquired (79) (113) Technology and other investments (48) (56) Other investments and property disposal proceeds 95 6 Net Cash Required by Investing Activities (301) (402) Cash Flows Provided (Required) by Financing Activities: Net change in financing with less than 90-day 142 (8) maturities Short-term debt proceeds 1 9 Short-term debt reductions (29) (17) Long-term debt proceeds 16 — Long-term debt reductions (2) (142) Treasury stock purchases (327) (299) Stock option exercises 136 52 Excess tax benefits from stock-based 47 26 compensation Tax withholding on restricted stock and (3) (1) restricted stock units Dividend payments (402) (322) Dividend payments to noncontrolling interests (1) (71) Proceeds from noncontrolling interests — 101 Net Cash Required by Financing Activities (422) (672) Effect of Exchange Rate Changes on Cash and Cash 26 (47) Equivalents Net Increase in Cash and Cash Equivalents 1,160 551 Cash and Cash Equivalents at Beginning of Period 3,283 2,572 Cash and Cash Equivalents at End of Period $ 4,443 $ 3,123 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 (loss) attributable to Monsanto Company, cash flows, financial position or 1. 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 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 (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. Three Months Ended Six Months Ended Feb. 28, 2013 Feb. 29, 2012 Feb. 28, 2013 Feb. 29, 2012 EBIT – Seeds and $ 1,840 $ 1,699 $ 2,060 $ 1,846 Genomics Segment EBIT – Agricultural 256 82 526 164 Productivity Segment EBIT– Total 2,096 1,781 2,586 2,010 Interest Expense, Net 8 27 36 62 Income Tax 605 543 728 611 Provision^(A) Net Income Attributable $ 1,483 $ 1,211 $ 1,822 $ 1,337 to Monsanto Company Includes the income tax provision from continuing operations, the income (A) tax benefit (provision) on noncontrolling interest, and the income tax 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 Three Six Months Six Months Months Months Ended Ended 2013 Ended Ended Feb. 28, Feb. 29, Guidance Feb. 28, Feb. 29, 2013 2012 2013 2012 Diluted Earnings per $4.42-$4.52 $ 2.74 $ 2.24 $ 3.37 $ 2.47 Share Income on Discontinued (0.02) (0.01) (0.01) (0.02) (0.01) Operations Nitro Claims — — 0.05 — 0.05 Settlement Diluted Earnings per Share from Ongoing $4.40-$4.50 $ 2.73 $ 2.28 $ 3.35 $ 2.51 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 Six Months Ended 2013 Guidance Feb. 28, 2013 Feb. 29, 2012 Net Cash Provided by Operating $ 2,900-3,300 $ 1,857 $ 1,672 Activities Net Cash Required by Investing (1,100)-(1,300) (301) (402) Activities Free Cash Flow $ 1,800-2,000 1,556 1,270 Net Cash Required by Financing N/A (422) (672) Activities Effect of Exchange Rate Changes on Cash and Cash N/A 26 (47) Equivalents Net Increase in Cash and Cash N/A 1,160 551 Equivalents Cash and Cash Equivalents at N/A 3,283 2,572 Beginning of Period Cash and Cash Equivalents at N/A $ 4,443 $ 3,123 End of Period SOURCE Monsanto Company Website: http://www.monsanto.com
Monsanto Company's Global Business Performance Drives Increased Full-Year Earnings Outlook
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