-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, hz0VLIKB64zY+SVJuc87jZTAxSiswivwqJchz6RnXm14suSBVo+8kN7yCi46Bwj2 MCKPRW9TlwSvsdIYmWsvHQ== 0000835015-95-000002.txt : 19950607 0000835015-95-000002.hdr.sgml : 19950607 ACCESSION NUMBER: 0000835015-95-000002 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940831 FILED AS OF DATE: 19950118 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEKALB GENETICS CORP CENTRAL INDEX KEY: 0000835015 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 363586793 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-17005 FILM NUMBER: 95501815 BUSINESS ADDRESS: STREET 1: 3100 SYCAMORE RD CITY: DEKALB STATE: IL ZIP: 60115 BUSINESS PHONE: 8157589196 MAIL ADDRESS: STREET 1: 3100 SYCAMORE ROAD CITY: DEKALB STATE: IL ZIP: 60115 10-K/A 1 FORM 10-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT TO APPLICATION OR REPORT Filed pursuant to Section 12, 13, or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934 DEKALB Genetics Corporation (Exact name of registrant as specified in charter) AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report for 1993 on Form 10-K as set forth in the pages attached hereto: Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations Exhibit 28 - Additional Exhibit Form 11-K Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. DEKALB Genetics Corporation (Registrant) By: Bruce P. Bickner Bruce P. Bickner Chairman and Chief Executive Officer Date: January 10, 1995 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SUMMARY Fiscal 1994 net earnings of $10.6 million ($2.02 per share) were $8.9 million more than the prior year when earnings were $1.7 million ($.33 per share). Operating results for each segment except poultry increased from the prior year. North American seed earnings improved largely due to higher corn and soybean sales volumes and swine segment earnings also improved due to volume increases. While Argentine earnings were lower in fiscal 1994 due to unfavorable planting conditions, the international seed segment experienced improved results over fiscal 1993 when significant losses were incurred in Spain and Australia. Poultry's loss of $0.3 million represented a $1.3 million decline from prior year while corporate and interest expenses were $2.6 million less than in fiscal 1993. Earnings for fiscal 1994 included a $2.3 million ($.45 per share) after-tax benefit related to the suspension of the defined benefit portion of the Company's retirement program. The after-tax earnings effects (in millions), by segment were $1.7 for North American seed and $0.2 each for swine, poultry and corporate. In the first quarter of fiscal 1994, the Company adopted financial accounting standard No.109 (SFAS), "Accounting for Income Taxes". The adoption of SFAS No. 109 resulted in the recognition of $0.4 million, or $.09 per share, of deferred tax expense. Also, in order to achieve a better matching of inventory costs with revenues, the Company changed from the last-in, first-out (LIFO) to the average cost inventory method. The appropriate restatements of all periods have been made. Compared with 1992, North American seed profitability was higher due to lower operating expenses partially offset by lower total margins. International earnings were lower, largely due to the decline in earnings from DEKALB Argentina. Swine earnings were higher than in fiscal 1992 resulting from increases in breeding stock and market animal sales volumes. Profit contribution from the poultry segment was lower as the result of declines in export sales and U.S. commercial chicks earnings. Compared with fiscal 1993, operating revenues increased seven percent in fiscal 1994 following a four percent decrease from 1992 to 1993. Consolidated revenues of $320.0 million in 1994 included a 13 percent increase in North American seed, an eight percent decline in international seed, a 17 percent increase in swine and a 10 percent reduction in poultry revenues. FOURTH QUARTER Fourth quarter net earnings of $1.2 million compared favorably with the fourth quarter loss of $2.8 million in 1993. North American seed experienced a loss in the fourth quarter of fiscal 1993 when product returns were higher than expected because of continual rains in key corn and soybean producing states. In the fourth quarter of fiscal 1994 the North American seed segment earned $0.6 million due to a higher average corn price, higher soybean volume and lower operating expenses. International seed earnings improved by $1.8 million over the prior year because of the absence of fourth quarter losses in Spain and Australia. Swine results were $0.5 million lower than the prior year due to lower market hog prices and higher feed costs. Poultry results were $0.6 million less than last year because of lower export sales. INDUSTRY SEGMENT REVENUES AND PRE-TAX EARNINGS (In Millions) Years Ended August 31 Revenues 1994 1993 1992 Seed $247.5 $232.3 $241.4 Swine 52.7 45.1 44.5 Poultry 19.8 21.9 21.9 $320.0 $299.3 $307.8 Pre-Tax Earnings Seed $ 19.5 $ 7.0 $ 20.0 Swine 5.7 3.0 4.6 Poultry (0.3) 1.0 0.9 General Corporate Expenses (2.5) (4.4) (3.4) Interest Expense, Net (7.5) (8.2) (7.3) $ 14.9 $ (1.6) $ 14.8 SEED Combined North American and international seed segment earnings were $12.5 million above fiscal 1993. In North America, sales volume increased for corn, soybeans, sunflowers and sorghum and market share increased for all but sorghum, whose share remained flat with the prior year. Internationally, the absence of losses in Spain and Australia were the principal contributors to the improvement. These were partially offset by a decline in Argentine profitability. North American seed segment earnings were approximately $2.0 million higher than those of fiscal 1992, largely because of lower operating expenses. International earnings were $2.5 million lower compared with fiscal 1992 due largely to lower earnings from DEKALB Argentina. North American Seed North American seed earnings increased $8.5 million in fiscal 1994 due to higher sales volumes and lower operating expenses. Gross margin in the North American seed segment was $3.7 million higher in fiscal 1994. Revenues were $21.0 million above those in fiscal 1993 driven by increased sales volumes in four product lines. Partially offsetting those revenue increases were higher corn unit costs. North American operating expenses were $1.7 million lower than in 1993, due to the suspension of the defined benefit portion of the Company's retirement program. Corn revenues were $13.1 million greater when compared with 1993. Corn volume was 14 percent higher, but this was partially offset by a one percent decline in average selling prices which was the result of a higher portion of small-sized seed in the product mix sold at lower prices. Corn unit costs were seven percent higher due to a smaller and below-target crop in 1993. Compared with fiscal 1992, corn unit gross margin decreased. Higher average selling prices were more than offset by higher unit costs. Profitability in fiscal 1994 was only slightly lower than in fiscal 1992 because of lower operating expenses in 1994. Soybean sales volume and gross margin were 13 percent higher than in fiscal 1993. Compared with fiscal 1992, soybean volume was 13 percent higher and unit margin was four percent lower resulting in a gross margin increase of eight percent. Sorghum unit volume was two percent above 1993, but average selling prices were three percent below the prior year due to a shift in the sales mix to lower-priced products. Although unit costs were one percent below the prior year, sorghum margin was four percent lower. Compared with 1992, sorghum volume and margin are lower because of a 23 percent reduction in planted acreage. Other products contributed $1.9 million to 1994 earnings, a $1.4 million increase over the prior year. International Seed International seed results in 1994 increased by $4.0 million over the prior year, mainly due to the absence of the large losses in Spain and Australia. Revenues were eight percent below the prior year largely due to lower sales volumes in Argentina. Results from Europe were $7.9 million above 1993 when large losses from Spain were recognized. In 1994, earnings from France were $1.0 million above 1993 due to increased royalty income partially offset by higher research expenditures. Italian results also improved by $1.0 million when compared to the prior year. Other European results were below the prior year due to lower export income. In Latin America, earnings were 43 percent below 1993. Argentine earnings were 63 percent lower due to a reduction in planted acres resulting, in part, from adverse weather conditions. Higher unit costs and lower average selling prices also contributed to the decline in earnings. Nevertheless, DEKALB Argentina maintained its dominant corn market share position. Mexican earnings were 18 percent below the prior year, while royalty and export income from other Latin American countries was improved. Results from other international activity were $2.3 million above the prior year due to increased export and royalty income and the absence of losses in Australia. Fiscal 1994 international seed segment results were 29 percent below fiscal 1992. Latin American earnings were below the record levels of 1992 while earnings in Europe were higher. Seed segment earnings will continue to be affected by many different forces in the domestic and international markets. In the United States, future results will be impacted by the Company's competitive positions, government export policies, weather conditions, commodity prices and Department of Agriculture programs. International seed earnings will depend on a broad array of governmental policies as well as weather and competition. DEKALB SWINE Swine segment earnings for 1994 were $5.7 million, 90 percent above the 1993 level of $3.0 million. Revenues were 17 percent higher than in 1993 while costs increased 16 percent. Breeding stock volume was 18 percent higher than the prior year due to increased availability resulting from the expansion of swine production facilities. The average price per head on breeding stock increased by five percent. Revenues increased 35 percent, 23 percent and 10 percent on boars, gilts and royalty animals, respectively. Market animal volumes were four percent above the previous year, but lower fourth quarter prices resulted in only a small increase in market animal revenues. Swine segment cost of sales was 16 percent higher than during 1993 largely due to a 10 percent increase in animal numbers. The additional costs were associated with new facilities and higher feed costs per head. Operating expenses were seven percent higher than in fiscal 1993. Swine segment earnings for 1994 were 24 percent above those of 1992. Breeding stock volumes and prices and market animal volumes were higher, partially offset by higher production. Three new production farms which were under construction during 1993 have largely been completed, will reach full production capacity late in fiscal 1995. Swine earnings will continue to be influenced by demand for its breeding stock, market prices, feed costs, production efficiency and production capacity. DEKALB POULTRY The poultry segment loss of $0.3 million reflects a $1.3 million decline from the prior year. A depressed U.S. egg market, the lack of hard currency in China and an embargo on U.S.-sourced chickens in Venezuela were all contributors to the decline. The result was lower domestic parent, export parent and grandparent revenue combined with increased cost of sales due to higher feed costs. Compared with 1992, poultry earnings were $1.2 million lower for the same reasons. Poultry segment earnings will continue to fluctuate from year to year based on egg prices and demand for its breeding stock. Changing feed costs and production efficiency will also have an impact. Internationally, the Company faces the risk of embargoes and the uncertainty of foreign currency fluctuations. GENERAL Corporate expenses in fiscal 1994 were $1.9 million below the prior year due to restructuring savings and the suspension of the defined benefit portion of the Company's benefit program. Compared with fiscal 1992, corporate expenses were $0.9 million lower because of restructuring savings. Net interest expense was $0.7 million below 1993, but $0.2 million above 1992. The larger seed crop produced for fiscal 1993 required higher levels of borrowing. In April and July of 1993, the Company prepaid the $50.0 million outstanding principal balance and $13.1 million of amortized interest on zero coupon notes held by Pfizer, Inc. The financing for the prepayment was provided by a consortium of lending institutions. By substituting other financing for the convertible notes, DEKALB lowered the effective interest rate and eliminated the shareholder dilution that would have resulted from conversion of the notes. Income taxes increased from a $3.3 million benefit in fiscal 1993 to a $4.3 million expense in fiscal 1994. In 1993, there was a large benefit associated with international seed losses realized in prior years, and utilized in 1993. In 1994, tax expense reflected additional benefits from these international seed losses but they were partially offset by the effects of adopting SFAS No. 109. Statement of Financial Accounting Standards No. 112 (SFAS No. 112) "Employers Accounting for Post Employment Benefits" is not required to be adopted until fiscal 1995. The Company does not believe that adoption will have any impact on its financial statements. FINANCIAL POSITION Management believes its operating cash flow and existing credit facilities are sufficient to cover normal and expected working capital needs, dividends, capital expenditures and debt maturities. CASH FLOW In fiscal 1994, the net cash flow from operations of $33.2 million compared favorably with the $20.4 million of cash outflow in the prior year. Fiscal 1993 included $13.1 million of cash interest related to the prepayment of the zero coupon notes. In addition, significant cash was required to build seed inventory levels in the United States and Argentina. Fiscal 1994 cash flow benefited from increased earnings resulting from higher sales volumes. Cash requirements for investing activities were slightly higher in fiscal 1994 due to increased capital expenditures related to upgrading seed plants. Net cash outflow from financial activities included $10.1 million of debt repayment; whereas, the prior year required additional borrowings to finance increased inventory levels. CREDIT FACILITIES Genetics has various credit facilities and available lines of credit with several commercial banks, both domestic and foreign. Committed credit lines include a $50 million revolving credit facility available through December 31, 1996 and a $15 million facility available through November 29, 1994. The revolving credit agreement provides credit for general corporate purposes and is committed through December 31, 1996, but may be extended annually for successive one year periods with the consent of the lending banks. The line of credit requires a step-down to $20.0 million for any one day during each year. The agreement contains various restrictions on the activities of the Company as to maintenance of working capital and tangible net worth, amount and type of indebtedness, and the acquisition or disposition of capital shares or assets of the Company and its subsidiaries. At August 31, 1994, tangible net worth was approximately $15 million in excess of the required minimum under the most restrictive of these covenants. Genetics also has numerous uncommitted short term credit facilities available and draws upon them periodically, including during twelve months ended August 31, 1994. CAPITAL EXPENDITURES Capital expenditures in 1994 were $2.3 million higher than the prior year and were financed with cash generated from operations and short term financing. Capital spending in 1994 included seed plant expansions in Argentina and the United States and additional swine production facilities. Fiscal 1993 expenditures were related to new swine production farms and machinery and equipment replacements in the seed business. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) X Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended August 31, 1994 OR Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from to Commission file number 33-33305 DEKALB Genetics Corporation Savings and Investment Plan (Full title of the plan) DEKALB GENETICS CORPORATION 3100 Sycamore Road DeKalb, Illinois 60115 (Name of Issuer of the securities held pursuant to the plan and address of its principal executive office.) DEKALB Genetics Corporation Savings and Investment Plan Report of Audits of Financial Statements and Supplemental Schedules For the years ended August 31, 1994 and 1993 DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS Page(s) Report of Independent Accountants 4 Financial Statements: Statement of Net Assets Available for Plan Benefits, with Fund Information as of August 31, 1994 5 Statement of Net Assets Available for Plan Benefits, with Fund Information as of August 31, 1993 6 Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information for the years ended August 31, 1994 and 1993 7 Notes to Financial Statements 8 - 12 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes at August 31, 1994 13 - 14 Item 27d - Schedule of Reportable Transactions for the year ended August 31, 1994 15 Notes: Supplemental schedules required by the Employee Retirement Income Security Act that have not been included herein are not applicable to the DEKALB Genetics Corporation Savings and Investment Plan. REPORT OF INDEPENDENT ACCOUNTANTS To the Administrative Committee DEKALB Genetics Corporation Savings and Investment Plan We have audited the statements of net assets available for plan benefits of the DEKALB Genetics Corporation Savings and Investment Plan (the "Plan") as of August 31, 1994 and 1993, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets of the Plan as of August 31, 1994 and 1993, and changes in net assets available for plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules, as listed in the accompanying index on page 3, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for plan benefits and changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. COOPERS & LYBRAND L.L.P. Chicago, Illinois December 9, 1994
DEKALB Genetics Corporation Savings and Investment Plan Statement of Net Assets Available for Plan Benefits, with Fund Information as of August 31, 1994 Fund Information MONEY FIXED CAPITAL COMPANY PFIZER EQUITY MARKET INCOME PRESERVATION STOCK STOCK PARTICIPANT FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL ASSETS Investments, at fair market value or contract value: DeKalb Genetics Corporation common stock $1,459,058 $1,459,058 Common stocks $45,262,351 $58,149 45,320,500 Investment in common trust funds 3,787,304 $11,405,250 $8,567,325 $4,043,802 5,866 $685 27,810,232 U.S. Treasury bonds and notes 8,115,033 8,115,033 Guaranteed investment account 16,367,136 16,367,136 Participant loans 1,183,688 1,183,688 Total Investments 49,049,655 11,405,250 16,682,358 20,410,938 1,459,058 64,015 1,184,373 100,255,647 Receivables: Company contribution 66,846 18,221 18,046 6,797 8,257 118,167 Accrued interest and dividend 108,793 44,005 87,870 1,789 8,677 423 14 251,571 Fund transfers pending (403,632) 141,562 (513,455) 802,536 (27,011) - (227,993) 203,788 (407,539) 811,122 (10,077) 423 14 369,738 Total Assets 48,821,662 11,609,038 16,274,819 21,222,060 1,448,981 64,438 1,184,387 100,625,385 LIABILITIES Other liabilities 10,185 3,226 3,416 3,096 4,663 7,577 32,163 Total Liabilities 10,185 3,226 3,416 3,096 4,663 7,577 32,163 NET ASSETS AVAILABLE FOR PLAN BENEFITS $48,811,477 $11,605,812 $16,271,403 $21,218,964 $1,444,318 $64,438 $1,176,810 $100,593,222 The accompanying notes are an integral part of these financial statements.
DEKALB Genetics Corporation Savings and Investment Plan Statement of Net Assets Available for Plan Benefits, with Fund Information as of August 31, 1993 Fund Information MONEY FIXED CAPITAL COMPANY PFIZER EQUITY MARKET INCOME PRESERVATION STOCK STOCK PARTICIPANT FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL ASSETS Investments, at fair market value or contract value: DeKalb Genetics Corporation common stock $923,111 $923,111 Common stocks $42,786,789 $53,676 42,840,465 Investment in common trust funds 1,352,211 10,532,700 $7,351,090 $1,824,021 4,178 105 21,064,305 U.S. Treasury bonds and notes 12,520,128 12,520,128 Guaranteed investment account 17,727,605 17,727,605 Participant loans 1,255,046 1,255,046 Total Investments 44,139,000 10,532,700 19,871,218 19,551,626 923,111 57,854 1,255,151 96,330,660 Receivables: Company contribution 1,531 6,506 1 1 (620) 18,600 26,019 Accrued interest and dividend 103,084 28,632 136,278 1,239 7,536 370 5,410 282,549 104,615 35,138 136,279 1,240 6,916 370 24,010 308,568 Total Assets 44,243,615 10,567,838 20,007,497 19,552,866 930,027 58,224 1,279,161 96,639,228 LIABILITIES Other liabilities 15,767 7,202 6,604 6,408 5,054 8,032 49,067 Total Liabilities 15,767 7,202 6,604 6,408 5,054 8,032 49,067 NET ASSETS AVAILABLE FOR PLAN BENEFITS $44,227,848 $10,560,636 $20,000,893 $19,546,458 $924,973 $58,224 $1,271,129 $96,590,161 The accompanying notes are an integral part of these financial statements.
DEKALB Genetics Corporation Savings and Investment Plan Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information for the years ended August 31, 1994 and 1993 Fund Information MONEY FIXED CAPITAL COMPANY PFIZER EQUITY MARKET INCOME PRESERVATION STOCK STOCK PARTICIPANT FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL Balance at August 31, 1992 $37,492,725 $11,408,406 $16,523,866 $18,359,672 $748,524 $68,858 $1,184,790 $85,786,841 Contributions: Company 656,397 162,277 227,422 171,514 105,152 1,322,762 Participant 2,052,103 533,306 797,360 450,790 281,907 4,115,466 Interest income 102,398 945,826 1,236,315 96,997 2,381,536 Dividend income 838,492 26,946 1,389 866,827 Net appreciation (depreciation) in fair value of investments 1,059,513 470,166 1,338 (128,169) (12,141) 1,390,707 Net investment gain on common trust funds 2,354,173 371,945 608,290 41,957 118 3,376,483 Distributions (1,176,551) (251,680) (381,763) (432,560) (48,647) (20,641) (2,311,842) Transfers 1,101,117 (1,659,447) 897,262 (251,128) (87,804) - Participant loan distributions (217,524) (37,941) (60,166) (93,436) 409,067 - Participant loan repayments 197,346 40,867 68,650 65,262 27,064 (399,189) - Fees and expenses (232,341) (7,097) (96,020) (3,266) 105 (338,619) Net additions (deductions) 6,735,123 (847,770) 3,477,027 1,186,786 176,449 (10,634) 86,339 10,803,320 Balance at August 31, 1993 $44,227,848 $10,560,636 $20,000,893 $19,546,458 $924,973 $58,224 $1,271,129 $96,590,161 Contributions: Company 725,328 135,268 244,195 164,453 109,774 1,379,018 Participant 2,784,481 1,799,659 880,292 904,992 263,034 6,632,458 Interest income 114,706 779,164 1,102,244 127,810 2,123,924 Dividend income 979,481 32,882 1,136 1,013,499 Net appreciation (depreciation) in fair value of investments 1,607,512 (915,080) (112,639) 318,788 4,472 903,053 Net investment gain on common trust funds 605,329 367,246 (157,362) 153,640 606 969,459 Distributions (3,671,661) (854,065) (1,486,289) (2,572,403) (65,126) (8,649,544) Transfers 1,530,139 (398,778) (2,970,903) 2,011,034 (171,492) - Participant loan distributions (137,020) (53,173) (84,137) (48,870) 323,200 - Participant loan repayments 306,412 55,645 78,633 73,641 31,485 (545,816) - Fees and expenses (261,078) (6,626) (98,003) (3,586) 487 (368,806) Net additions (deductions) 4,583,629 1,045,176 (3,729,490) 1,672,506 519,345 6,214 (94,319) 4,003,061 Balance at August 31, 1994 $48,811,477 $11,605,812 $16,271,403 $21,218,964 $1,444,318 $64,438 $1,176,810 $100,593,222 The accompanying notes are an integral part of these financial statements.
DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies: Contributions: Contributions to DEKALB Genetics Corporation Savings and Investment Plan (the Plan) from participants are recorded on an accrual basis and are deposited directly in the appropriate fund on a bi-weekly basis. Contributions made by DEKALB Genetics Corporation (the Company) are accrued on the basis of participants' contributions and are made quarterly. Investments Valuation: Investments in securities (U.S. treasury bonds and notes, corporate bond and bond investment funds, and common stocks) traded on a national securities exchange are valued at the last reported sales price on the last business day of the Plan's year; securities in collective short-term investment funds and money market funds are stated at fair value as determined by the Trustee of such funds. The capital preservation fund is valued at contract value. Withdrawals, Transfers and Forfeitures: Withdrawals of participant and employer contributions can be made subject to certain specified restrictions and tax consequences. Participants may elect to transfer all or part of their balance of funds to other funds as the Plan allows on a quarterly basis. Transfers between the capital preservation fund and the money market funds are prohibited as are transfers of participant balances to the company stock fund. Amounts forfeited by participants, as described in Note 2, are applied to reduce amounts that the Company is required to contribute to the Plan. Distributions: In accordance with guidance issued by the American Institute of Certified Public Accountants, the method of accounting for distributions is such that all amounts elected by participants to be withdrawn from the Plan are recorded when paid. This treatment results in a difference between the Plan's Form 5500 and the financial statements. Benefit obligations existing at August 31, 1994 and 1993 were $1,467,121 and $2,844,657, respectively. Other: Purchases and sales of securities are reflected on a trade-date basis. Dividend income is recorded on the ex-dividend date. Income from other investments are recorded as earned on an accrual basis. DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, Continued 1. Summary of Significant Accounting Policies, Continued: The Plan presents, in the statements of changes in net assets available for plan benefits, the net appreciation (depreciation) in fair value of its investments which consists of realized gains or losses and the unrealized appreciation (depreciation) on those investments. Trustee fees and investment management fees were paid by the Plan in 1994 and 1993. 2. Plan Description: The following brief description of the Plan is provided for general information purposes only. Participants should refer to the Plan document for more complete information. The Plan, which was established effective September 1, 1982, is a contributory defined contribution plan covering substantially all employees of the Company and its subsidiaries. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. All monies received by the Trustee of the Plan are invested at the direction of the participants in accordance with the terms of the Trust Agreement. Participant contributions (from 1% to 15% of base pay) are invested in the equity fund, money market fund, fixed income fund, capital preservation fund or Company common stock fund maintained by the Trustee. Company contributions (50% matching of participant contributions from 1% to 6% of base pay) are invested in the various funds in proportion to the participants' investment in such funds. The Company may elect to contribute an additional amount at the discretion of the Board of Directors. Contributions from participants are credited directly to their account in each fund. Employee contributions are invested in multiples of 10%. Transfers of account balances must be in whole percentages. Rollovers from prior qualified plans are invested at the employee's discretion. Company matching contributions and any discretionary Company matching contributions are invested in the investment funds in the same proportions as the participant's employee pre-tax contributions. A participant may change his investment direction with respect to his current account and future contributions no more than four times per year (March 1, June 1, September 1 and December 1 of each year) by giving the Plan's administrative committee written notice in the prescribed form. Changes in investment direction of the current account balance will become effective as of the first day in the next Plan quarter. Changes in investment direction of future contributions become effective as of the first payroll pay date in the next Plan quarter. DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, Continued 2. Plan Description, Continued: There are currently five investment funds available to participants. These five funds are described briefly below: (a) Equity fund. The equity fund is a pooled fund invested primarily in common stocks. There are no guarantees with respect to principal or investment return. (b) Money market fund. The money market fund is a pooled fund maintained and managed by the Trustee that is invested in short term debt securities such as commercial paper and certificates of deposit. There are no guarantees with respect to principal or investment return. (c) Fixed income fund. The fixed income fund is a pooled fund invested primarily in corporate and government bonds of intermediate, (e.g., five to seven year) term. There are no guarantees with respect to principal or investment return. (d) Capital preservation fund. The capital preservation fund is underwritten by the Aetna Insurance Company. There are no guarantees with respect to payment of income or principal. The investments in the fund are valued at contract value. (e) Company common stock fund. The Company common stock fund enables participants to purchase DEKALB Genetics Corporation Class A Common Stock. The per share purchase price equals the average of the per share closing price of Class B Common Stock as quoted on the National Association of Securities Dealers Automated Quotation System/National Market System (NASDAQ/NMS) on the last ten (10) trading days prior to the date of purchase. The Board of Directors has authorized up to 100,000 shares of Class A Common Stock as available for purchase by the Plan. There are no guarantees with respect to principal or investment return. A sixth fund, the Pfizer stock fund, was created solely for the purpose of holding common stock of Pfizer, Inc. received by the Plan through employee rollover contributions. No additional contributions may be made to this fund. A seventh fund, the participant loan fund, was created for the purpose of recording participant loans and related activity. Interest on these loans is accumulated at prime plus one percent, determined at the date the loan is granted. DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, Continued 2. Plan Description, Continued At August 31, 1994 and 1993, there were 1,475 and 1,516 participants, respectively some of whom elected to invest in more than one fund. Set forth below is the number of participants investing in each fund. August 31 1994 1993 Equity Fund 1,339 1,332 Money Market Fund 677 748 Fixed Income Fund 919 990 Capital Preservation Fund 608 634 Company Stock Fund 531 496 Pfizer Stock Fund 2 2 A participant is at all times fully vested in his employee contribution account. His employer contribution account vests at the rate of 20% per year. Termination of employment before the completion of five (5) years of service will result in forfeitures from the employer contribution account unless such termination is due to the participant's attainment of age 65 or death or disability. Distributions from the Plan are paid in cash as a lump sum; provided, however, that distributions from the Company common stock fund may, at the participant's election, be received in either whole shares of DEKALB Genetics Corporation Class A Common Stock or cash. If the Plan is terminated, the interests of all participants or their beneficiaries shall be fully vested and nonforfeitable and participants shall be entitled to a distribution of their accrual balances. Participants may apply for a loan from the Plan. The loan is limited to the lesser of $50,000 reduced by the largest outstanding loan balance over the preceding year or one half of the participant's vested account balance. Loan repayments are made by the participant through payroll deductions. DEKALB GENETICS CORPORATION SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, Continued 3. Investments: Individual investments (at fair value or contract value) representing five percent or more of net assets available for plan benefits in 1994 and 1993 are summarized as follows: Description 1994 1993 Harris Bank Common Stock Fund $9,792,613 $ 9,306,215 Harris Bank Collective Short Term Investment Fund $15,641,625 $12,755,980 Harris Bank Collective Marketable Bond Fund $ 8,170,191 $ 7,015,421 Aetna Guaranteed Investment Account $16,367,136 $17,727,605 4. Net Appreciation (Depreciation) in Fair Value of Investments: The Plan's investments (including investments bought and sold, as well as held, during the year) appreciated in value $903,053 and $1,390,707 for the years ended August 31, 1994 and 1993, respectively, summarized as follows: 1994 1993 DEKALB Genetics Corporation Common Stock $ 318,788 ($ 128,169) Common Stocks 1,611,984 1,047,372 U.S. Treasury bonds and notes (915,080) 470,166 Guaranteed Investment contract (112,639) 1,338 $ 903,053 $1,390,707 5. Tax Status: The Plan obtained its latest determination letter dated February 24, 1987, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements.
DEKALB Genetics Corporation Savings And Investment Plan ITEM 27a - Schedule of Assets Held for Investment Purposes August 31, 1994 DESCRIPTION OF INVESTMENT IDENTITY OF ISSUE, INCLUDING MATURITY DATE, BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL SIMILAR PARTY PAR OR MATURITY VALUE COST MARKET DEKALB Genetics Corporation Common Stock, 44,382 shares $1,413,102 $1,459,058 AMP Inc. Common Stock, 20,000 shares 990,784 1,452,500 Bausch & Lomb, Inc. Common Stock, 21,000 shares 800,022 821,625 Becton Dickinson & Company Common Stock, 12,000 shares 441,363 514,500 Bemis Company, Inc. Common Stock, 23,400 shares 523,516 573,300 Boeing Company Common Stock, 28,000 shares 1,011,739 1,274,000 Bristol Meyers & Co. Squibb Co. Common Stock, 10,000 shares 586,303 576,250 Cooper Industries, Inc. Common Stock, 27,000 shares 1,086,058 1,069,875 Cooper Tire & Rubber Company Common Stock, 23,000 shares 547,859 595,125 Corning, Incorporated Common Stock, 43,000 shares 1,226,454 1,327,625 Dover Corp. Common Stock, 24,000 shares 960,857 1,389,000 Dun & Bradstreet Common Stock, 11,500 shares 653,594 662,687 Exxon Corp. Common Stock, 26,000 shares 1,319,968 1,547,000 Genuine Parts Co. Common Stock, 26,000 shares 673,931 955,500 H & R Block, Inc. Common Stock, 17,000 shares 640,099 743,750 Hartford Steam Boiler Inspection Common Stock, 14,000 shares 769,413 633,500 International Flavors & Fragrances, Inc. Common Stock, 18,000 shares 645,199 789,750 Lubrizol Corporation Common Stock, 33,000 shares 1,087,562 1,031,250 Marsh & McLennan Co's Inc. Common Stock, 18,000 shares 1,287,954 1,532,250 McCormick & Co., Inc. Common Stock, 44,000 shares 914,461 869,000 Melville Corporation Common Stock, 23,000 shares 1,090,133 871,125 Pacific Telesis Group Common Stock, 32,000 shares 937,031 1,056,000 Pfizer, Inc. Common Stock, 16,852 shares 1,084,871 1,150,149 Philip Morris Companies Inc. Common Stock, 13,500 shares 650,814 823,500 Raytheon Company Common Stock, 26,200 shares 1,234,941 1,771,775 Readers Digest Assn., Inc. Common Stock, 25,000 shares 992,745 1,062,500 Royal Dutch Petroleum Co. N.Y. Common Stock, 13,000 shares 1,012,081 1,464,125 St. Paul Companies Common Stock, 22,000 shares 887,907 951,500 Schering-Plough Corp. Common Stock, 19,000 shares 939,574 1,327,625 Service Corp International Common Stock, 22,000 shares 572,638 583,000 Sherwin Williams Company Common Stock, 22,100 shares 677,075 732,063 Sigma Aldrich Corporation Common Stock, 7,000 shares 244,085 243,250 State Street Boston Corp. Common Stock, 23,500 shares 759,116 940,000 Tambrands, Inc. Common Stock, 9,300 shares 431,652 346,425 Union Camp Corp. Common Stock, 29,000 shares 1,185,471 1,460,876 Wachovia Corporation Common Stock, 20,100 shares 638,090 703,500 Harris Bank Common Stock Fund Common Stock, 38,562 shares 6,201,367 9,792,613 Harris Bank Special Capital Fund Common Stock, 6,725 shares 363,549 632,128 Harris Special Capital Liquidating Account Common Stock, 20,531 shares 3,109 4,211 Harris Bank Convertible Funds Common Stock, 2,641 shares 944,053 1,044,440 Harris Bank Convertible Liquidating Funds Common Stock, 3,573 shares - 1,208 Total Common Stocks $37,017,438 $45,320,500
DEKALB Genetics Corporation Savings And Investment Plan ITEM 27a - Schedule of Assets Held for Investment Purposes, Continued August 31, 1994 DESCRIPTION OF INVESTMENT IDENTITY OF ISSUE, INCLUDING MATURITY DATE, BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL SIMILAR PARTY PAR OR MATURITY VALUE COST MARKET Harris Trust & Savings Bank Collective Investment Funds: Enhanced Liquidity Fund Common Trust Fund, 11,782 shares $4,109,718 $3,998,416 Marketable Bond Fund Common Trust Fund, 9,443 shares 7,981,377 8,170,191 Total Collective Investment Funds 12,091,095 12,168,607 U.S. Treasury Bonds and Notes: U.S. Treasury note $300,000 par, 8.625%, due 1-15-95 300,844 303,843 U.S. Treasury note $600,000 par, 7.25%, due 11-15-96 546,720 612,372 U.S. Treasury note $650,000 par, 8.625%, due 8-15-97 666,655 687,778 U.S. Treasury note $300,000 par, 8.875%, due 11-15-97 303,000 320,250 U.S. Treasury note $400,000 par, 9.00%, due 5-15-98 405,656 430,876 U.S. Treasury note $200,000 par, 9.25%, due 8-15-98 199,312 217,668 U.S. Treasury note $200,000 par, 8.875%, due 2-15-99 195,000 216,250 U.S. Treasury note $500,000 par, 7.875%, due 11-15-99 509,375 522,890 U.S. Treasury note $500,000 par, 7.75%, due 2-15-2001 513,172 520,470 U.S. Treasury note $500,000 par, 7.5%, dur 5-15-2002 501,406 513,125 U.S. Treasury bond $750,000 par, 8.50%, due 2-15-2000 852,187 805,545 U.S. Treasury bond $600,000 par, 7.875%, due 2-15-2000 561,156 605,250 U.S. Treasury bond $600,000 par, 10.75%, due 2-15-2003 669,750 735,654 U.S. Treasury bond $400,000 par, 8.25%, due 5-15-2005 370,750 420,248 U.S. Treasury bond $600,000 par, 9.375%, due 2-15-2006 609,104 697,424 U.S. Treasury bond $500,000 par, 7.625%, due 12-15-2007 504,766 505,390 Total U.S. Treasury Bonds and Notes 7,708,853 8,115,033 Harris Bank Collective Short-Term Investment Fund Money Market 15,641,625 15,641,625 Aetna Guaranteed Investment Contract #01359 16,367,136 16,367,136 Plan participants Participant loans, 7% to 12.5% - 1,183,688
DEKALB Genetics Corporation Savings And Investment Plan ITEM 27d - Schedule of Reportable Transactions August 31, 1994 NUMBER OF PURCHASE SELLING COST OF CURRENT VALUE NET GAIN IDENTITY OF PARTY DESCRIPTION OF ASSET TRANSACTIONS PRICE PRICE ASSET OF ASSET OR LOSS Harris Trust & Savings Bank Mutual Fund 392 $39,282,921 $39,282,921 $39,282,921 - 244 $37,296,173 $37,296,173 $37,296,173 -
-----END PRIVACY-ENHANCED MESSAGE-----