EX-99 2 q4earnings.htm PRESS RELEASE q4earnings.htm
®
 
 
Monsanto Company
 
800 North Lindbergh Blvd
 
St. Louis, Missouri 63167
 
Release
Immediately
   
Contact       
Media – Kelli Powers (314-694-4003)
 
   Analysts – Bryan Hurley (314-694-8148)

MONSANTO COMPLETES FISCAL YEAR 2010 IN LINE WITH LATEST GUIDANCE

Cash Flow Beats Estimate; EPS is $2.41 on Ongoing Basis ($2.01 As Reported)

St. Louis – Oct. 6, 2010
($ in millions, except per share amounts)
 
  
Fourth  
Quarter  
2010  
   
Fourth  
Quarter  
2009  
   
Fiscal  
Year  
2010  
   
Fiscal  
Year  
2009  
 
Net Sales by Segment
                        
Corn seed and traits
   $ 424     $ 387     $ 4,260     $ 4,113  
Soybean seed and traits
     103       81       1,486       1,448  
Cotton seed and traits
     98       53       611       466  
Vegetable seeds
     235       236       835       808  
All other crops seeds and traits
     110       151       419       462  
TOTAL Seeds and Genomics
   $ 970     $ 908     $ 7,611     $ 7,297  
                                 
Roundup and other glyphosate-based herbicides
   $ 786     $ 778     $ 2,029     $ 3,527  
All other agricultural productivity products
     197       193       862       900  
TOTAL Agricultural Productivity
   $ 983     $ 971     $ 2,891     $ 4,427  
                                 
TOTAL Net Sales
   $ 1,953     $ 1,879     $ 10,502     $ 11,724  
                                 
Gross Profit
   $ 861     $ 857     $ 5,086     $ 6,762  
                                 
Operating Expenses
   $ 1,053     $ 1,109     $ 3,479     $ 3,659  
                                 
Interest Expense, Net
   $ 34     $ 34     $ 106     $ 58  
Other Expense, Net
   $ 10     $ 16     $ 7     $ 78  
                                 
Net (Loss) Income Attributable to Monsanto
Company
   $ (143 )   $ (233 )   $ 1,109     $ 2,109  
                                 
Diluted (Loss) Earnings Per Share (See note 1.)
   $ (0.26 )   $ (0.43 )   $ 2.01     $ 3.80  
Items Affecting Comparability – EPS Impact
                                
Income on Discontinued Operations
   $ --     $ --     $ (0.01 )   $ (0.02 )
Acquired In-Process R&D
   $ --     $ --     $ --     $ 0.19  
Sunflower Divestiture
   $ --     $ (0.08 )   $ --       (0.08 )
Restructuring1
   $ 0.17     $ 0.53     $ 0.41       0.52  
Diluted (Loss) Earnings per Share from Ongoing
Business (For the definition of ongoing EPS, see
note 1.)
   $ (0.09 )   $ 0.02     $ 2.41     $ 4.41  
Effective Tax Rate (Continuing Operations)
     (42% )     (26% )     25%       28%  
   ____________________________
    1Restructuring Charges consist of $361 million in operating expenses and $45 million in cost of goods sold for FY09 and $210
million in operating expenses and $114 million in cost of goods sold for FY10. 
 
 
 
-more-
 
 
 
 
 
Comparison as a Percent of Net Sales:
Fourth
Quarter
2010
Fourth
Quarter
2009
Fiscal
Year
2010
Fiscal 
Year 
2010 
Gross profit
44%
46%
48%
58%  
Selling, general and administrative expenses (SG&A)
29%
25%
20%
17%  
Research and development expenses (excluding
acquired in-process R&D)
18%
15%
11%
9%  
(Loss) Income before income taxes
(12)%
(16)%
14%
25%  
Net (Loss) Income Attributable to Monsanto Company
(7)%
(12)%
11%
18%  

Comment from Monsanto Chairman, President and Chief Executive Officer Hugh Grant:

“Our job is to help farmers be more profitable and more productive.  When we do that, future business opportunity follows.  What we do best is discover, develop and deliver products that matter to farmers.  We’re backing new innovation with actions ranging from expanding launches of product offerings to our revamped pricing approach.  On the heels of fiscal year 2010 and with this year’s harvest ongoing, there’s no doubt that we’re looking forward to seeing the result of expanding product choices and the changes that we’ve made take hold in a new fiscal year.  We believe in the opportunity of fiscal year 2011 as the launch point for mid-teens earnings growth.”

Operations Update
Monsanto reported net sales of $1.95 billion for the fourth quarter of fiscal year 2010, a 4 percent increase over the same period in fiscal year 2009.

The seeds and genomics segment represented more than 70 percent of the company’s net sales for the year, which helped to offset the lower sales for the agricultural productivity segment.  Net sales for seeds and genomics increased 4 percent, boosted by higher corn and cotton revenues in the United States.  Pricing actions for Roundup® and other glyphosate-based herbicides had a significant effect on overall net sales and gross profit.  Net sales for the company decreased 10 percent in fiscal year 2010 to $10.5 billion as a result of a 35 percent decline in net sales for the agricultural productivity segment.  Gross profit increased 1 percent for the quarter as compared to the prior year period, reaching $861 million for the quarter and $5.1 billion for the year.

Monsanto reported a net loss of $143 million in the fourth quarter of fiscal year 2010 compared with a net loss of $233 million in the same period last year.  Net income for fiscal year 2010 was $1.1 billion, a decline from last year’s net income of $2.1 billion.

The company’s fiscal year 2010 earnings per share (EPS) was $2.41 on an ongoing basis ($2.01 on an as-reported basis).  For the fourth quarter, the company reported a loss per share of $(0.09) on an ongoing basis (and $(0.26) on an as-reported basis).  As-reported EPS results for the fourth quarter and fiscal year 2010 reflect the effects of restructuring and discontinued operations.  (For a reconciliation of ongoing EPS, see note 1.)

Cash Flow
For fiscal year 2010, net cash provided by operating activities was $1.4 billion, down from $2.2 billion the prior year.  Net cash required by investing activities was $834 million in fiscal year 2010, compared with net cash required of $723 million for the prior year. As a result, free cash flow was a source of $564 million for fiscal year 2010, compared with a source of $1.5 billion in fiscal year 2009. (For a reconciliation of free cash flow, see note 1.)  Net cash required by financing activities was more than $1 billion for fiscal year 2010, even with last year’s requirement of $1 billion.

Outlook
In fiscal year 2011, Monsanto expects 13 to 17 percent earnings growth off the $2.41 ongoing EPS base for a range of $2.72 to $2.82 EPS on an ongoing basis and $2.67 to $2.77 on an as-reported basis.  (For a reconciliation of 2011 EPS guidance, see note 1.)  The company projects free cash flow in the range of $800 million to $900 million, which reflects an investment of $600 to $700 million in capital expenditures.  The company expects net cash provided by operating activities to be $1.7 billion to $1.9 billion, and net 
 
2
 

cash required by investing activities to be approximately $900 million to $1 billion for fiscal year 2011.  (For a reconciliation of free cash flow, see note 1.)
 
The seeds and genomics segment, which will account for the bulk of Monsanto’s business in fiscal year 2011 and beyond, is expected to deliver both single digit unit volume growth and mix improvement.  The company expects global seed-and-trait unit volume growth in the single digits in 2011, with a mix benefit primarily driven by the U.S. corn product strategy, the expanded availability of Genuity® Roundup Ready 2 Yield® soybeans and the corn market in Latin America.

In Latin America, the company sees opportunity in both Brazil as more traits become available, and Argentina, where there has been an uptick in acreage as more growers move to double stacks.

In the United States, the company has newly positioned Genuity Roundup Ready 2 Yield soybeans to promote broader adoption and expects the on-farm experience base to increase from the six million acres planted in 2010 to mid-teens millions of acres in 2011.  In corn, the company will execute on its plan to offer farmers more choices of products at more price points and expects to earn the farmer’s business on mid-teens millions of acres total for Genuity® SmartStax®, Genuity® VT Triple PROTM and Genuity® VT Double PROTM in 2011.  Together, the upcoming year’s choices, which encompass trait upgrade potential and the continued enhancement of improved germplasm in Monsanto products, are expected to increase both corn gross profit and unit volume growth.

The company also expects steady growth in cotton and vegetables at a global level.  In cotton, Monsanto will continue to upgrade its germplasm mix improvement and promote penetration of second generation stacked traits in the United States and move to second-generation traits in India.

The stabilized agricultural productivity segment is expected to deliver gross profit in the range of $550 million to $600 million in fiscal year 2011, reflecting the steady-state guidance for Roundup and other glyphosate-based herbicides as the company expects to sell between 250 million and 300 million gallons at an average gross profit contribution of $1 per gallon.

With the savings realized as part of Monsanto’s restructuring actions, the company expects 2011 selling, general and administrative expenses to be a flat to inflationary increase over the 2010 base of $2.06 billion, representing a range of $2.06 billion to $2.16 billion.  In 2011, the company projects a research and development spend of $1.25 billion to $1.3 billion as it continues to manage more products in the later phases of development.


Seeds and Genomics Segment Detail

 
($ in millions)
 
Net Sales
Gross Profit
Seeds and Genomics
Fourth
Quarter
2010
Fourth
Quarter
2009
Fiscal
Year
2010
Fiscal 
Year 
2009 
Fourth
Quarter
2010
Fourth
Quarter
2009
Fiscal
Year
2010
Fiscal 
Year 
2009 
 
Corn seed and traits
 
$424
$387
$4,260
$4,113 
$170
$161
$2,464
$2,606 
 
Soybean seed and traits
 
103
81
1,486
1,448 
88
15
905
871 
 
Cotton seed and traits
 
98
53
611
466 
78
48
454
344 
 
Vegetable seeds
 
235
236
835
808 
130
108
492
416 
 
All other crops seeds and traits
 
110
151
419
462 
57
90
223
267 
 
TOTAL Seeds and Genomics
 
$970
$908
$7,611
$7,297 
$523
$422
$4,538
$4,504 


 
3
 
 
($ in millions)
 
Earnings Before Interest & Taxes (EBIT)
Seeds and Genomics
Fourth
Quarter
2010
Fourth 
Quarter 
2009 
Fiscal
Year
2010
Fiscal 
Year 
2009 
EBIT (For a reconciliation of
EBIT, see note 1.)
$(412)
$(426) 
$1,597
$1,655 
Unusual Items Affecting EBIT
        
    Acquired In-Process R&D2
None
None 
None
$(162) 
Divestiture of sunflower
None
$59 
None
$59 
    Restructuring
$(102)
$(292) 
$(232)
$(292) 

The Seeds and Genomics segment consists of the company’s global seeds and related traits business, and genetic technology platforms.

Sales for Monsanto’s Seeds and Genomics segment were $970 million for the fourth quarter of fiscal year 2010, an increase of 7 percent over the same period last year.  This was driven by an increase in trait revenues for the company’s core crops, trait penetration in Latin America and the increase in cotton acres in the United States.

With the Seeds and Genomics segment driving the company’s growth, Monsanto realized record segment sales of $7.6 billion for the fiscal year 2010, representing a 4 percent increase over the prior fiscal year.

The year also marked significant product launches for the company, as farmers chose to conduct on-farm trials of Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans.  It’s early in the soybean harvest, and while corn harvest has run slightly ahead this year, there is not yet projectable data in all markets and Monsanto will release a final update on yield in November.

Harvest is just beginning in the core Corn Belt and full data will be provided upon completion.  The company shared some highlights of what the nation’s corn harvest has shown to date:
·  
Genuity VT Triple PRO, Monsanto’s lead reduced-refuge product in the South, has shown better than a nine bushel an acre advantage over the leading competitor stretching from the South to the South central Corn Belt with more than 75 percent of harvest complete.
·  
Roughly 60 percent of harvest data is available for Monsanto’s Genuity® VT Double PROTM, which is showing an eight bushel an acre advantage.
·  
Most hybrids containing Genuity SmartStax are planted in the northern Corn Belt, where harvest is still in early stages with data collected from just 15 percent of planted Genuity SmartStax acres. The company previously has indicated early hybrids containing Genuity SmartStax have not demonstrated yield advantages over the company’s hybrids containing YieldGard VT Triple®.

The company continues to provide regular harvest updates on its corn and soybean portfolio on its website at www.monsanto.com/productperformance.

  ________________________
  2Acquisition of Aly Participacoes Ltda. in fiscal year 2009.
4
 


Agricultural Productivity Segment Detail

 
($ in millions)
 
Net Sales
Gross Profit
Agricultural Productivity
Fourth
Quarter
2010
Fourth
Quarter
2009
Fiscal
Year
2010
Fiscal 
Year 
2009 
Fourth
Quarter
2010
Fourth
Quarter
2009
Fiscal
Year
2010
Fiscal 
Year 
2009 
Roundup and other glyphosate-
based herbicides
$786
$   778
$2,029
$3,527 
$245
$322
$142
$1,836 
All other agricultural
productivity products
197
193
862
900 
93
113
406
422 
 
TOTAL Agricultural Productivity
 
$983
$971
$2,891
$4,427 
$338
$435
$548
$2,258 
 

 
($ in millions)
Earnings Before Interest & Taxes (EBIT)
Agricultural Productivity
Fourth
Quarter
2010
Fourth 
Quarter 
2009 
Fiscal
Year
2010
Fiscal 
Year 
2009 
EBIT (For a reconciliation of
EBIT, see note 1.)
$203
$142 
$(25)
$1,352 
Unusual Items Affecting EBIT
        
(Loss) Income on
Discontinued Operations
$(1)
None 
$4
$19 
Restructuring
$(38)
$(114) 
$(92)
$(114) 

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

Sales for Monsanto’s Agricultural Productivity segment were $983 million in the quarter, a slight increase over the prior year driven by the aggressive pricing actions Monsanto implemented for Roundup and other glyphosate-based herbicides.  The decreased price was offset by increased volumes in most markets.  Sales for the segment were $2.9 billion for fiscal year 2010, a 35 percent decrease over the prior year due to the supply and demand imbalance in the global glyphosate industry.

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.  The call may also 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/investor/.  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: http://www.monsanto.com.  Follow our business on Twitter at www.twitter.com/MonsantoCo, on Facebook at www.facebook.com/MonsantoCo, or subscribe to our News Release RSS Feed.
 
 
 
 
 
-oOo-
 

 
5
 


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; 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 reports on Forms 10-Q and 10-K. 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, SmartStax, Roundup Ready 2 Yield, VT Double PRO and VT Triple PRO are trademarks owned by Monsanto Technology LLC.



 
6
 


Monsanto Company
Selected Financial Information
(Dollars in millions, except per share amounts)
Unaudited

Statements of Consolidated Operations
  
Three Months
Ended
Aug. 31, 2010
    
Three Months
Ended
Aug. 31, 2009
    
12 Months
Ended
Aug. 31, 2010
    
12 Months
Ended
Aug. 31, 2009
  
Net Sales
   $ 1,953     $ 1,879     $ 10,502     $ 11,724  
Cost of Goods Sold
     1,092       1,022       5,416       4,962  
Gross Profit
     861       857       5,086       6,762  
Operating Expenses:
                                
Selling, General and Administrative Expenses
     564       461       2,064       2,037  
Research and Development Expenses
     357       286       1,205       1,098  
Acquired In-Process Research and Development
     —       1       —       163  
Restructuring Charges, Net
     132       361       210       361  
Total Operating Expenses
     1,053       1,109       3,479       3,659  
(Loss) Income From Operations
     (192 )     (252 )     1,607       3,103  
Interest Expense
     47       48       162       129  
Interest Income
     (13 )     (14 )     (56 )     (71 )
Other Expense – Net
     10       16       7       78  
Income from Continuing Operations Before (Loss)
Income Taxes
     (236 )     (302 )     1,494       2,967  
Income Tax (Benefit) Provision
     (98 )     (79 )     370       845  
(Loss) Income from Continuing Operations
Including Portion Attributable to Noncontrolling
Interest
     (138 )     (223 )     1,124       2,122  
Discontinued Operations:
                                
(Loss) Income From Operations of Discontinued
Businesses
     (1 )     —       4       19  
Income Tax Provision
     —       —       —       8  
(Loss) Income on Discontinued Operations
     (1 )     —       4       11  
                                 
Net (Loss) Income
   $ (139 )   $ (223 )   $ 1,128     $ 2,133  
Less: Net (Loss) Income Attributable to Noncontrolling
Interest
     3       10       19       24  
Net (Loss) Income Attributable to Monsanto
Company
   $ (143 )   $ (233 )   $ 1,109     $ 2,109  
 
EBIT (See note 1)
   $ (209 )   $ (284 )   $ 1,572     $ 3,007  
 
Basic Earnings per Share:
                                
(Loss) Income From Continuing Operations
   $ (0.26 )   $ (0.43 )   $ 2.03     $ 3.83  
Income on Discontinued Operations
     —       —       0.01       0.02  
Net (Loss) Income Attributable to Monsanto
Company
   $ (0.26 )   $ (0.43 )   $ 2.04     $ 3.85  
                                 
Diluted Earnings per Share:
                                
(Loss) Income From Continuing Operations
   $ (0.26 )   $ (0.43 )   $ 2.01     $ 3.78  
Income on Discontinued Operations
     —       —       —       0.02  
Net (Loss) Income Attributable to Monsanto
Company
   $ (0.26 )   $ (0.43 )   $ 2.01     $ 3.80  
                                 
Weighted Average Shares Outstanding:
                                
Basic
     540.6       546.0       543.7       547.1  
Diluted
     540.6       546.0       550.8       555.6  

 
7
 


Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited

Condensed Statements of Consolidated Financial Position
 
  
As of
Aug. 31, 2010
    
As of
Aug. 31, 2009
  
Assets
            
Current Assets:
            
Cash and Cash Equivalents
   $ 1,485     $ 1,956  
Trade Receivables, Net
     1,590       1,556  
Miscellaneous Receivables
     767       654  
Deferred Tax Assets
     511       662  
Inventory, Net
     2,739       2,934  
Other Current Assets
     80       121  
Total Current Assets
     7,172       7,883  
                 
Property, Plant and Equipment, Net
     4,227       3,609  
Goodwill
     3,204       3,218  
Other Intangible Assets, Net
     1,263       1,371  
Noncurrent Deferred Tax Assets
     1014       743  
Long-Term Receivables, Net
     513       557  
Other Assets
     524       496  
Total Assets
   $ 17,917     $ 17,877  
                 
Liabilities and Shareowners’ Equity
                
Current Liabilities:
                
Short-Term Debt, Including Current Portion of Long-Term Debt
   $ 241     $ 79  
Accounts Payable
     752       676  
Income Taxes Payable
     116       79  
Accrued Compensation and Benefits
     179       263  
Accrued Marketing Programs
     839       934  
Deferred Revenues
     215       219  
Grower Production Accruals
     130       139  
Dividends Payable
     151       145  
Customer Payable
     83       307  
Restructuring Reserves
     197       286  
Miscellaneous Short-Term Accruals
     684       629  
Total Current Liabilities
     3,587       3,756  
                 
Long-Term Debt
     1,862       1,724  
Postretirement Liabilities
     920       793  
Long-Term Deferred Revenue
     400       488  
Noncurrent Deferred Tax Liabilities
     137       153  
Long-Term Portion of Environmental and Litigation Reserves
     188       197  
Other Liabilities
     680       641  
Monsanto Shareowners’ Equity
     10,099       10,056  
Noncontrolling Interest
     44       69  
Total Shareowners’ Equity
     10,143       10,125  
Total Liabilities and Shareowners’ Equity
   $ 17,917     $ 17,877  
                 
Debt to Capital Ratio:
     17 %     15 %

 
8
 

Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited

Statements of Consolidated Cash Flows
 
  
12 Months
Ended
Aug. 31, 2010
    
12 Months
Ended
Aug. 31, 2009
  
Operating Activities:
            
Net Income
   $ 1,128     $ 2,133  
Adjustments to Reconcile Cash Provided by Operating Activities:
                
Items That Did Not Require (Provide) Cash:
                
Depreciation and Amortization
     602       548  
Bad-Debt Expense
     58       49  
Stock-Based Compensation Expense
     102       116  
Excess Tax Benefits from Stock-Based Compensation
     (43 )     (35 )
Deferred Income Taxes
     10       264  
Restructuring Charges, Net
     210       361  
Equity Affiliate Income, Net
     (29 )     (22 )
Acquired In-Process Research and Development
     —       163  
Net Gain on Sales of a Business or Other Assets
     (3 )     (66 )
Other Items
     65       (25 )
Changes in Assets and Liabilities that Provided (Required) Cash, Net of
Acquisitions:
                
Trade Receivables, Net
     (22 )     526  
Inventory, Net
     213       (638 )
Deferred Revenues
     (89 )     (700 )
Accounts Payable and Other Accrued Liabilities
     (391 )     (327 )
Restructuring Cash Payments
     (259 )     —  
Pension Contributions
     (128 )     (187 )
Net Investment Hedge Settlement
     (4 )     35  
Other Items
     (22 )     51  
Net Cash Provided by Operating Activities
     1,398       2,246  
                 
Cash Flows Provided (Required) by Investing Activities:
                
Maturities of Short-Term Investments
     —       132  
Capital Expenditures
     (755 )     (916 )
Acquisitions of Businesses, Net of Cash Acquired
     (57 )     (329 )
Purchases of Long-Term Equity Securities
     (39 )     (7 )
Technology and Other Investments
     (33 )     (72 )
Proceeds from Divestiture of a Business
     —       300  
Other Investments and Property Disposal Proceeds
     50       169  
Net Cash Required by Investing Activities
     (834 )     (723 )
                 
Cash Flows Provided (Required) by Financing Activities:
                
Net Change in Financing With Less Than 90-Day Maturities
     48       (142 )
Short-Term Debt Proceeds
     75       75  
Short-Term Debt Reductions
     (101 )     (45 )
Long-Term Debt Reductions
     (4 )     (71 )
Payments on Other Financing
     (1 )     (6 )
Treasury Stock Purchases
     (532 )     (398 )
Stock Option Exercises
     56       39  
Excess Tax Benefits from Stock-Based Compensation
     43       35  
Dividend Payments
     (577 )     (552 )
Dividend Payments to Noncontrolling Interests
     (45 )     (10 )
Net Cash Required by Financing Activities
     (1,038 )     (1,075 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents
     3       (105 )
Net (Decrease) Increase in Cash and Cash Equivalents
     (471 )     343  
Cash and Cash Equivalents at Beginning of Period
     1,956       1,613  
Cash and Cash Equivalents at End of Period
   $ 1,485     $ 1,956  

 
9
 

Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited

1.  
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), 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 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) 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).


   
Three Months Ended
    
12 Months Ended
  
 
Aug. 31,
    
Aug. 31,
    
Aug. 31,
    
Aug. 31,
  
 
2010  
   
2009  
   
2010  
   
2009  
 
EBIT – Seeds and Genomics Segment
     $     (412 )     $    (426 )     $     1,597       $     1,655  
EBIT – Agricultural Productivity Segment
     203       142       (25 )     1,352  
EBIT– Total
     (209 )     (284 )     1,572       3,007  
Interest Expense – Net
     34       34       106       58  
Income Tax (Benefit) Provision (A)
     (100 )     (85 )     357       840  
Net (Loss) Income Attributable to Monsanto
Company
     $     (143 )     $     (233 )     $     1,109       $     2,109  

(A)  
Includes the income tax provision from continuing operations, the income tax benefit (provision) 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
2011
Guidance
12 Months
Ended
Aug. 31, 2010
 
Diluted Earnings per Share
 
  
$2.67-$2.77
$2.01
Restructuring Charges
 
  
$0.05
$0.41
Income on Discontinued Operations
 
  
—
$(0.01)
Diluted Earnings per Share from Ongoing Business
 
  
$2.72-$2.82
$2.41













 
10
 


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 2011 free cash flow target, 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
2011
Guidance
12 Months Ended
Aug. 31,
2010
2009  
Net Cash Provided by Operating Activities
$
1,700-1,900
$1,398
$2,246
Net Cash (Required) Provided by Investing Activities
 
  (900-1,000)
     (834)
    (723)
Free Cash Flow
$
   800-900
 $  564
     $1,523
Net Cash Provided (Required) by Financing Activities
  
N/A
     (1,038)
      (1,075)
Effect of Exchange Rate Changes on Cash and Cash
Equivalents
  
 
N/A
 
3 
 
    (105)
Net (Decrease) Increase in Cash and Cash
Equivalents
  
N/A
$ (471)
   $  343
Cash and Cash Equivalents at Beginning of Period
  
N/A
$1,956
$1,613
Cash and Cash Equivalents at End of Period
  
N/A
$1,485
$1,956
 
 
11