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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-2516
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MONSANTO COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-0420020
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 NORTH LINDBERGH BLVD., ST. LOUIS, MO. 63167
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (314) 694-1000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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COMMON STOCK $2 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH
SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90
DAYS. YES X NO
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INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE
CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY
OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS
FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [X]
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NONAFFILIATES OF THE REGISTRANT: APPROXIMATELY $9.1 BILLION AS OF THE
CLOSE OF BUSINESS ON FEBRUARY 28, 1994.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 118,614,871
SHARES OF COMMON STOCK, $2 PAR VALUE, OUTSTANDING AT FEBRUARY 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
1. PORTIONS OF MONSANTO COMPANY ANNUAL REPORT TO SECURITY HOLDERS FOR
THE YEAR ENDED DECEMBER 31, 1993. (PARTS I AND II OF FORM 10-K.)
2. PORTIONS OF MONSANTO COMPANY NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT DATED MARCH 14, 1994. (PART III OF FORM 10-K.)
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PART I
ITEM 1. BUSINESS.
Monsanto Company and its subsidiaries are engaged in the worldwide
manufacture and sale of a widely diversified line of agricultural
products; chemical products, including plastics and manufactured
fibers; pharmaceuticals; and food products, including low-calorie
sweeteners. Monsanto Company was incorporated in 1933 under Delaware
law and is the successor to a Missouri corporation, Monsanto Chemical
Works, organized in 1901. Unless otherwise indicated by the context,
"Monsanto" means Monsanto Company and consolidated subsidiaries, and
the "Company" means Monsanto Company only.
RECENT DEVELOPMENTS
In May, 1993, Monsanto purchased the assets, including working
capital, of the Ortho Consumer Products Division of Chevron Chemical
Company. See "Principal Acquisitions and Divestitures" on page 44 of
the 1993 Annual Report.
INDUSTRY SEGMENTS; PRINCIPAL PRODUCTS
For 1993, Monsanto reported its business under four industry
segments: The Agricultural Group, The Chemical Group, Searle, and
NutraSweet. The first two segments constitute, respectively, the
business of The Agricultural Group and The Chemical Group, both of
which are operating units of Monsanto. Searle reflects the consolidated
business of G. D. Searle & Co., and NutraSweet reflects the
consolidated business of The NutraSweet Company, both of which are
wholly owned subsidiaries of the Company. The tabular information
appearing under "Operating Unit Segment Data" and "Geographic Data" on
pages 27 and 34 of the 1993 Annual Report is incorporated herein by
reference.
The following is a list of principal products categorized by major
end-use markets within each industry segment:
THE AGRICULTURAL GROUP
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Agriculture Roundup(R) herbicide Multipurpose, non- Alvin, TX; Antwerp, Belgium; Disodiumiminodiacetate;
and other glyphosate- selective agricultural Fayetteville, NC; Luling, Phosphorus Trichloride
based herbicides and industrial LA; Sao Jose dos Campos,
applications Brazil
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Lasso(R) herbicide and Corn, soybean, peanut Muscatine, IA Chloroacetyl Chloride;
other acetanilide-based and milo (sorghum) Diethylaniline
herbicides crops
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Avadex(R) BW herbicide; Wheat crops Antwerp, Belgium; Ammonium Thiocyanate;
Far-Go(R) herbicide Muscatine, IA Diisopropylamine;
Trichloropropane
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Residential Roundup herbicide; Herbicides, Fort Madison, IA Acephate; Chlorpyrifos;
applications Ortho(R) lawn-and- insecticides, Diazinon; Glyphosate;
garden products fungicides, and Malathion; Triforine
fertilizers
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THE CHEMICAL GROUP
Fibers
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Construction & Home Acrilan(R) acrylic Broadloom carpet Decatur, AL; Greenwood, SC; Acrylonitrile; Ammonia;
Furnishings fiber; nylon bulk Pensacola, FL Cyclohexane; Propylene
continuous filament;
nylon carpet staple
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Personal Products Acrilan acrylic fiber Sweaters; half-hose; Decatur, AL Acrylonitrile
active wear
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Vehicles Nylon filament; nylon Tires; molding resins Pensacola, FL Ammonia; Cyclohexane;
polymer for auto grilles, Propylene
bumpers and gears
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Performance Products
Personal Products Detergent builders; Laundry and dish Augusta, GA; Newport, United Benzene; Caustic Soda;
industrial phosphates; detergents; water Kingdom; Ruabon, United Phosphorus; Soda Ash
dental phosphates conditioners; non-gel Kingdom; St. Louis, MO; Sao
toothpaste Jose dos Campos, Brazil;
Soda Springs, ID; Trenton,
MI
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Chemicals Industrial phosphates; Metal treating, Augusta, GA; Luling, LA; St. Ammonia; Chlorine;
phosphoric acid; cleaning and etching; Louis, MO; Sauget, IL; Phosphorus; Soda Ash;
phosphorus plant food fertilizers; Trenton, MI Sulphur
pentasulfide; oil additives;
phosphorus trichloride herbicides
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Capital Equipment Diphenyl oxide; Heat transfer fluids Alvin, TX; Anniston, AL; Benzene; Phenol
polyphenyls Newport, United Kingdom
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Water treatment Scale inhibitors; oil Newport, United Kingdom Phosphorus Trichloride
chemicals field chemicals
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Food Food additives Bakery; dairy; meat St. Louis, MO; Sao Jose dos Caustic Soda; Lime;
Campos, Brazil; Trenton, MI Phosphorus
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Vehicles Hydraulic fluids and Hydraulic fluid for St. Louis, MO Phosphorus Oxychloride
lubricants commercial aircraft
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Construction & Home Ammonium polyphosphate Fire retardant coating; Phosphorus
Furnishings polymer additives
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Plastics
Personal Products Centrex(R) polymers; Toys; boats; tools; Addyston, OH; Antwerp, Acrylonitrile; Butadiene;
Lustran(R) ABS and SAN housewares; consumer Belgium; LaSalle, Quebec, Maleic Anhydride; Nylon
thermoplastics; electronics; business Canada; Muscatine, IA; Salt; Styrene
Triax(R) thermoplastic machines; cosmetic Pensacola, FL
alloys; Vydyne(R) nylon packaging; personal
molding resins care items; spas and
hot tubs; food
processing; medical
appliances
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Vehicles Lustran ABS and SAN Automotive interior and Addyston, OH; Antwerp, Acrylonitrile; Butadiene;
thermoplastics; Vydyne exterior molded parts; Belgium; LaSalle, Quebec, Maleic Anhydride; Nylon
nylon molding resins; under-the-hood Canada; Muscatine, IA; Salt; Styrene
Cadon(R) applications; Pensacola, FL
thermoplastics; Triax automotive aftermarket;
thermoplastic alloys; transportation
Centrex polymers
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Construction & Home Lustran ABS Drain pipe; Addyston, OH; Antwerp, Acrylonitrile; Butadiene;
Furnishings thermoplastics; Triax refrigeration; Belgium; LaSalle, Quebec, Maleic Anhydride; Styrene
thermoplastic alloys telecommunications Canada; Muscatine, IA
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THE CHEMICAL GROUP (CONT'D)
Resins
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Vehicles Saflex(R) plastic Windshields Ghent, Belgium; Indian Butyraldehyde; Ethanol;
interlayer Orchard, MA; Sao Jose dos Polyvinyl Alcohol; Vinyl
Campos, Brazil; Trenton, MI Acetate Monomer
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Specialty resins; Automotive coatings and Addyston, OH; Antwerp, Butanol; Chlorine;
polymer modifiers sealants Belgium; Bridgeport, NJ; Formaldehyde; Melamine;
Indian Orchard, MA; LaSalle, Methanol; Phthalic
Quebec, Canada Anhydride; Toluene
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Construction & Home Saflex plastic Architectural glass Ghent, Belgium; Indian Butyraldehyde; Ethanol;
Furnishings interlayer Orchard, MA; Sao Jose dos Polyvinyl Alcohol; Vinyl
Campos, Brazil; Trenton, MI Acetate Monomer
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Specialty resins Coatings and adhesives Addyston, OH; Alvin, TX; Acrylate Esters; Butanol;
Indian Orchard, MA; LaSalle, Formaldehyde; Melamine;
Quebec, Canada; Trenton, MI Methanol; Vinyl Acetate
Monomer
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Polymer modifiers Vinyl flooring; caulks Antwerp, Belgium; Butanol; Chlorine;
and sealants; Bridgeport, NJ; LaSalle, 2-Ethylhexanol; Phenol;
adhesives; coatings; Quebec, Canada Phthalic Anhydride; Toluene
wall covering; vinyl
upholstery; insulation;
furniture
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Personal Products Polymer modifiers Packaging Antwerp, Belgium; Butanol; Chlorine; Phthalic
Bridgeport, NJ; LaSalle, Anhydride; Toluene
Quebec, Canada
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Other A variety of resin Electronics; paper; Addyston, OH; Indian Acrylate Esters;
products graphics; coatings; Orchard, MA; LaSalle, Butyraldehyde; Ethanol;
medical devices; Quebec, Canada Formaldehyde; Maleic
packaging; solvents Anhydride; Melamine;
Methanol; Vinyl Acetate
Monomer
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Rubber and Process Chemicals
Vehicles Santocure(R) CBS, Tires; tubes; belts; Antwerp, Belgium; Newport, Aniline; Carbon Disulfide;
Santocure MOR, hoses; retreads; mats United Kingdom; Nitro, WV; Para-Nitrochlorobenzene;
Santocure NS, Ruabon, United Kingdom; Tertiary-Butylamine
Santocure TBSI, Sauget, IL
Santoflex(R) 13,
Santogard(R) PVI
rubber processing
chemicals (accelerators
and antidegradants)
- ---------------------------------------------------------------------------------------------------------------------------------
Construction & Home Flectol(R), Roofing; flooring; Antwerp, Belgium; Newport, Aniline; Carbon Disulfide;
Furnishings Santocure CBS, tape; industrial hose United Kingdom; Nitro, WV; Tertiary-Butylamine
Santocure MOR, Ruabon, United Kingdom;
Santocure NS, Sauget, IL
Santocure TBSI
rubber processing
chemicals (antioxidants
and accelerators)
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals Nitrochlorobenzene Dyes; pigments; rubber Anniston, AL; Newport, Benzene; Caustic Soda;
derivatives; Sodium MBT preservatives; United Kingdom; Nitro, WV; Chlorine
engineering Sauget, IL
thermoplastics;
pesticides; antifreeze;
water treatment
- ---------------------------------------------------------------------------------------------------------------------------------
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THE CHEMICAL GROUP (CONT'D)
Rubber and Process Chemicals (Cont'd)
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Other Monochlorobenzene; Pesticides Anniston, AL; Sauget, IL Benzene; Caustic Soda;
Nitrochlorobenzene Chlorine
derivatives
- ---------------------------------------------------------------------------------------------------------------------------------
Engineered Products
Capital Equipment Sulfuric acid and Process plants On-Site Construction Various Construction
process plants (design Components
and construction); air
emission control
systems
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Construction & Home Doormats Doormats Ghent, Belgium; Polyethylene
Furnishings St. Louis, MO
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SEARLE
Pharmaceuticals Maxaquin(R) Anti-infective Augusta, GA; Caguas, Puerto Trifluoroaniline
(Lomefloxacin HCl) Rico; Evreux, France
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Daypro(R) (Oxaprozin); Anti-inflammatory Augusta, GA; Caguas,Puerto Benzoin;
Arthrotec(R) Rico; Morpeth, United Misoprostol/Diclofenac
(Misoprostol/Diclofenac) Kingdom
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Aldactone(R) Cardiovascular Augusta, GA; Caguas, Puerto Androstenedione/
(Spironolactone); Rico; Evreux, France; Hydrochlorothiazide;
Aldactazide(R) Morpeth, United Kingdom Verapamil HCl
(Spironolactone/
Hydrochlorothiazide);
Calan(R) formulations
(Verapamil HCl)
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Oral contraceptives Fertility control Caguas, Puerto Rico; Delta 4 (19-Norandro-
Morpeth, United Kingdom stenedione)
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Cytotec(R) Gastrointestinal Caguas, Puerto Rico; Coapa, Norprostol
(Misoprostol) Mexico; Morpeth, United
Kingdom
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Ambien(R) (Zolpidem Central nervous system Caguas, Puerto Rico Zolpidem
Tartrate)
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Food (ex-U.S. only) Canderel(R) tabletop Low-calorie tabletop Evreux, France; Morpeth, Aspartame
sweetener; Equal(R) sweetener United Kingdom
tabletop sweetener
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NUTRASWEET
Food NutraSweet(R) brand High-intensity Augusta, GA; Harbor Beach, Aspartic Acid;
sweetener sweetener available MI; University Park, IL L-Phenylalanine
primarily in beverages,
dessert products and
tabletop sweeteners
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Equal tabletop Low-calorie tabletop Manteno, IL Aspartame
sweetener; sweeteners
NutraSweet(R)
Spoonful(TM) tabletop
sweetener
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Simplesse(R) all All natural fat Whey protein concentrate
natural fat substitute substitute for use
primarily in dairy
products
- ---------------------------------------------------------------------------------------------------------------------------------
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SALE OF PRODUCTS
Monsanto's products are sold directly to customers in various
industries, to wholesalers and other distributors and jobbers, to
retailers and to the ultimate consumer, principally by its own sales
force, or, in some cases, through third parties. With respect to
pharmaceuticals, such sales force concentrates on detailing to
physicians and managed health care providers. As indicated on page 35
of the 1993 Annual Report, Monsanto's net income is historically higher
during the first half of the year, primarily because of the
concentration of generally more profitable sales of The Agricultural
Group during that part of the year. Monsanto's marketing and
distribution practices do not result in unusual working capital
requirements on a consolidated basis, although the seasonality of sales
of The Agricultural Group segment sometimes results in short-term
borrowings to finance the customer accounts receivable and inventories.
Inventories of finished goods, goods in process and raw materials are
maintained to meet customer requirements and Monsanto's scheduled
production. In general, Monsanto does not manufacture its products
against a backlog of firm orders; production is geared primarily to the
level of incoming orders and to projections of future demand. Monsanto
generally is not dependent upon one or a group of customers. The
NutraSweet segment, however, makes a majority of its sales to a few
companies for use in carbonated soft drinks. Monsanto has no material
contracts with the government of the United States or any state, local
or foreign government. However, pursuant to contracts executed under
U.S. federal and state laws, Monsanto's Searle segment pays rebates to
state governments for pharmaceuticals sold under state Medicaid
programs and under state-funded programs for the indigent. The Searle
segment also grants discounts to certain managed health care providers.
Introduction of new products by The Agricultural Group, Searle and
NutraSweet segments is typically subject to prior review and approval
by the U.S. Food & Drug Administration, the U.S. Environmental
Protection Agency and/or the U.S. Department of Agriculture (or
comparable agencies of ex-U.S. governments) before they can be sold.
Such reviews are often time-consuming and costly. These agencies also
have continuing jurisdiction over many existing products of these
segments.
RAW MATERIALS AND ENERGY RESOURCES
Monsanto is both a producer and significant purchaser of a wide
spectrum of its basic and intermediate raw material requirements. Major
requirements for key raw materials and fuels are typically purchased
pursuant to long-term contracts. Monsanto is not dependent on any one
supplier for a material amount of its raw materials or fuel
requirements, but certain important raw materials are obtained from a
few major suppliers. In general, where Monsanto has limited sources of
raw materials, it has developed contingency plans to minimize the
effect of any interruption or reduction in supply. Information with
respect to specific raw materials is set forth in the table above under
"Industry Segments; Principal Products."
While temporary shortages of raw materials and fuels may occasionally
occur, these items are sufficiently available to cover current and
projected requirements. However, their continuing availability and
price are subject to unscheduled plant interruptions occurring during
periods of high demand, or due to domestic and world market and
political conditions, as well as to the direct or indirect effect of
U.S. and other countries' government regulations. The impact of any
future raw material and energy shortages on Monsanto's business as a
whole or in specific world areas cannot be accurately predicted.
Operations and products may, at times, be adversely affected by
legislation, shortages or international or domestic events.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES AND CONCESSIONS
Monsanto owns a large number of patents which relate to a wide
variety of products and processes, has pending a substantial number of
patent applications, and is licensed under a small number of patents of
others. Also, Monsanto owns a considerable number of established
trademarks in many countries under which it markets its products.
Monsanto's patents and trademarks in the aggregate are of material
importance in the operation of its business, particularly in The
Agricultural Group and Searle segments and with respect to
NutraSweet(R) brand sweetener. Certain proprietary products such as
Roundup(R)
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herbicide are covered by patents. Although patents protecting
Roundup(R) herbicide have now expired in most countries, compound per
se patent protection for the active ingredient in Roundup herbicide
continues in the United States into the year 2000. All patents covering
the use of aspartame as a sweetener have expired. NutraSweet(R) brand
sweetener is currently manufactured under several patents owned by The
NutraSweet Company and patented processes licensed from a third party
for the duration of the applicable patents. Calan(R) SR, an
antihypertensive pharmaceutical, is licensed through the year 2004 to
Searle by a third party, which has retained co-marketing rights. The
product no longer has patent protection nor non-patent market
exclusivity conferred by the Waxman-Hatch amendments to the U.S. Food,
Drug and Cosmetics Act.
The trademarks "Equal(R)," "Canderel(R)" and "NutraSweet" and the
NutraSweet symbol are protected by registration in the United States
and in other countries where the products are marketed.
Roundup herbicide, Calan SR antihypertensive and NutraSweet brand
sweetener are each substantial contributors to earnings.
Monsanto holds (directly or by assignment) numerous phosphate leases,
which were issued on behalf of or granted by the United States,
political subdivisions of various states, or private parties. None of
these leases taken individually is deemed by Monsanto to be material,
although Monsanto's phosphate leases in the aggregate are significant
to The Chemical Group segment of its business. Monsanto's phosphate
leases have varying terms, with leases obtained from the United States
being of indefinite duration subject to the modification of lease terms
at twenty-year intervals.
COMPETITION
Monsanto encounters substantial competition in each of its industry
segments. This competition, from other manufacturers of the same
products and from manufacturers of different products designed for the
same uses, is expected to continue in both U.S. and ex-U.S. markets.
Depending on the product involved, various types of competition are
encountered, including price, delivery, service, performance, product
innovation, product recognition and quality.
The number of Monsanto's principal competitors varies from product to
product. It is not practical to discuss Monsanto's numerous competitors
because of the large variety of Monsanto's products, the markets served
and the worldwide business interests of Monsanto. Overall, however,
Monsanto regards its principal product groups to be competitive with
many other products of other producers and believes that it is an
important producer of many of such product groups.
RESEARCH AND DEVELOPMENT
Research and development constitute an important part of Monsanto's
activities. See "Operating Unit Segment Data" on page 27 of the 1993
Annual Report, incorporated herein by reference.
ENVIRONMENTAL MATTERS
Monsanto is subject to various laws and government regulations
concerning environmental matters, employee safety and employee health
in the United States and other countries. It is anticipated that
increasingly stringent requirements will be imposed upon Monsanto, its
competitors and industry in general. U.S. federal environmental
legislation having particular impact on Monsanto includes the Toxic
Substances Control Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the Resource Conservation and Recovery Act; the Clean
Air Act; the Clean Water Act; the Safe Drinking Water Act; and the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA," commonly known as "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act ("SARA"). Monsanto is also subject
to the Occupational Safety and Health Act and regulations of the
Occupational Safety and Health Administration ("OSHA") concerning
employee safety and health matters. The Environmental Protection Agency
("EPA"), OSHA and other federal agencies have the authority to
promulgate regulations which have an impact on Monsanto's operations.
In addition to these federal activities, various states have been
delegated certain authority under the aforementioned federal
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statutes. Many state and local governments have adopted environmental
and employee safety and health laws and regulations, some of which are
similar to federal requirements. State and federal authorities may seek
fines and penalties for violation of these laws and regulations.
Monsanto is dedicated to a long-term environmental protection program
that reduces emissions of hazardous materials into the environment, as
well as to the remediation of identified existing environmental
concerns. In 1988, management committed to a 90 percent reduction in
toxic air emissions from worldwide operations by the end of 1992,
including emissions reportable in the U.S. under Title III of SARA. The
reduction achieved was 92 percent, based on 1992 year-end operating
rates. The cost to accomplish this target did not materially affect
operating results. In fact, some of the target capital projects lowered
operating costs and improved operating efficiency.
Expenditures in 1993 were approximately $53 million for environmental
capital projects and approximately $234 million for management of
environmental programs, including the operation and maintenance of
facilities for environmental control. Monsanto estimates that during
1994 and 1995 approximately $40 million-$70 million per year will be
spent on additional capital projects for environmental protection.
Monsanto periodically receives notices from the EPA that it is a
potentially responsible party ("PRP") under Superfund. The EPA has
designated Monsanto as a PRP at 89 Superfund sites. Monsanto has
resolved disputes, entered partial consent decrees, and executed
administrative orders between Monsanto and the EPA in 41 of these
cases, settling a portion or all of Monsanto's liability for these
Superfund cases. Six other matters involve sites where allegations are
predicated on tentative findings of reuse of drums by others that once
contained products sold by Monsanto. These six matters have been
inactive as to Monsanto for at least nine years. At one other site,
Monsanto has determined that it has no liability whatsoever.
Monsanto's policy is to accrue costs for remediation of waste
disposal sites in the accounting period in which the responsibility is
established and the cost is estimable. Monsanto's estimates of its
liabilities for Superfund sites are based on evaluations of currently
available facts with respect to each individual site and take into
consideration factors such as existing technology, presently enacted
laws and regulations, and prior experience in remediation of
contaminated sites. These liabilities have not been reduced for any
claims for recoveries from insurance or from third parties. However,
Monsanto is engaged in litigation with some of its insurance carriers
regarding both the applicability and the amount of its coverage
responsive to claims for damages at these sites. Monsanto has an
accrued liability of $102 million as of December 31, 1993, for
Superfund sites. As assessments and remediation activities progress at
individual sites, these liabilities are reviewed periodically and
adjusted to reflect additional technical, engineering and legal
information that becomes available. Major sites in this category
include the noncompany-owned Brio, Fike/Artel, Motco and Woburn sites
which account for $83 million of the accrued amount.
Monsanto's estimate of its Superfund liability is affected by several
uncertainties such as, but not limited to, the method and extent of
remediation, the percentage of material attributable to Monsanto at the
sites relative to that attributable to other parties, and the financial
capabilities of the other PRPs at most sites. Due to these
uncertainties, primarily related to the method and extent of
remediation, potential future expenses could be as much as $30 million
for these sites. These potential future expenses may be incurred over
the balance of the decade.
There are various other lawsuits, claims and proceedings that state
agencies and others have asserted against the Company seeking
remediation of alleged environmental impairments. Monsanto is in the
process of determining its involvement, if any, at 44 of these sites.
Monsanto has an accrued liability of $131 million as of December 31,
1993, for these matters and for environmental reserves at certain
former Monsanto plant sites. The Company's estimate of its liability
related to these sites is affected by several uncertainties such as,
but not limited to, the extent of Monsanto's involvement, and the
method and extent of remediation. Due to these uncertainties, potential
future expenses could be as much as $70 million for these sites. Four
sites in this category account for $63 million of the accrued amount
and for approximately $60 million of the potential future expenses.
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Monsanto spent $39 million in 1993 for remediation of Superfund and
other waste disposal sites. Most of these expenditures related to The
Chemical Group, and similar or greater amounts can be expected in
future years.
For operational facilities, Monsanto recognizes post-closure
environmental costs and site remediation costs over the estimated
remaining useful life of the related facilities, not to exceed 20
years. Monsanto spent $14 million in 1993 for remediation of these
facilities and has an accrued liability of $33 million as of December
31, 1993, for these sites. Uncertainties related to these costs are
evolving government regulations, the method and extent of remediation,
and future changes in technology. Monsanto's estimated closure costs
for these plant sites are approximately $150 million.
While the ultimate costs and results of remediation of waste disposal
sites cannot be predicted with certainty, management believes that
Monsanto's liquidity and profitability in any one year will not be
materially affected.
EMPLOYEE RELATIONS
As of December 31, 1993, Monsanto had approximately 30,000 employees
worldwide. Satisfactory relations have prevailed between Monsanto and
its employees.
INTERNATIONAL OPERATIONS
Monsanto and affiliated companies are engaged in manufacturing, sales
and/or research and development in the United States, Europe, Canada,
Latin America, Australia, Asia and Africa. A large number of products
are manufactured abroad. Monsanto's ex-U.S. operations are subject to a
number of potential risks and limitations, such as: fluctuations in
currency values; exchange control regulations; wage and price controls;
approvals of therapeutic claims and pricing for pharmaceutical and
other products; governmental regulation of food ingredients,
agricultural and pharmaceutical products and biotechnology; employment
regulations; import, export and trade restrictions, including
embargoes; raw material supply constraints; governmental instability,
civil disorders, civil wars and other hostilities; and other
potentially detrimental domestic and foreign governmental practices or
policies affecting U.S. companies doing business abroad. See
"Geographic Data" on page 34 of the 1993 Annual Report, incorporated
herein by reference.
LEGAL PROCEEDINGS
Because of the size and nature of its business, Monsanto is a party
to numerous legal proceedings. Most of these proceedings have arisen in
the ordinary course of business and involve claims for money damages.
While the results of litigation cannot be predicted with certainty,
Monsanto does not believe these matters or their ultimate disposition
will have a material adverse effect on Monsanto's financial position.
On April 12, 1985, the Company was named as a defendant in the first
of a number of lawsuits in which plaintiffs claim injuries resulting
from alleged exposure to substances present at or emanating from the
Brio Superfund site near Houston, Texas. The Company is one of a number
of companies that had sold materials to the chemical reprocessor at
that site. Currently pending against the Company are the following
matters: (a) The Company is one of a number of defendants in 14 cases
brought in Harris County District Court on behalf of 751 plaintiffs who
own homes or live in the Southbend or Sageglen subdivisions, attended
school in the Southbend subdivision, or used nearby recreational
baseball fields. Plaintiffs claim to have suffered various personal
injuries and fear future disease; the need for medical monitoring; and,
in the case of the homeowners, property damage. In addition to their
claims of personal injury, four plaintiffs in one of these cases allege
business losses. Plaintiffs seek compensatory and punitive damages in
an unspecified amount. (b) The Company is also a defendant in two
additional cases brought in Harris County District Court. The first
case is brought by two recreational baseball leagues which claim to
have suffered property damage and consequential damages. Plaintiffs
seek compensatory and punitive damages in an unspecified amount. The
second case is brought on behalf of the Clear Creek Independent School
District for property damage and consequential damages. Plaintiff seeks
8
10
compensatory and punitive damages in an unspecified amount. (c) The
Company is one of a number of defendants in two additional actions
brought in Harris County District Court by 407 plaintiffs, who are
former employees of the owners/operators of the Brio site, persons who
worked near the Brio site, Sageglen subdivision residents, and members
of the employees' and residents' families. Plaintiffs claim physical
and emotional injury and seek compensatory and punitive damages in an
unspecified amount. The Company believes that it has meritorious
defenses to all of these lawsuits including lack of proximate cause,
lack of negligent or other improper conduct on the part of the Company,
and negligence of plaintiffs (or their parents) and/or of builders and
developers of the Southbend subdivision. The Company is vigorously
defending these actions.
In 1974, Searle introduced in the United States an intrauterine
contraceptive product, commonly referred to as an intrauterine device
("IUD"), under the name Cu-7(R). Following extensive testing by Searle
and review by the FDA, the Cu-7 was approved for sale as a prescription
drug. Searle has been named a defendant in a number of product
liability lawsuits alleging that the Cu-7 caused personal injury
resulting from pelvic inflammatory disease, perforation, pregnancy or
ectopic pregnancy. As of March 1, 1994, there were approximately 124
cases pending in various U.S. state and federal courts and
approximately 361 cases filed outside the United States (the vast
majority in Australia). The lawsuits seek damages in varying amounts,
including compensatory and punitive damages, with most suits seeking at
least $50,000 in damages. Searle believes it has meritorious defenses
and is vigorously defending each of these lawsuits. On January 31,
1986, Searle voluntarily discontinued the sale of the Cu-7 in the
United States, citing the cost of defending such litigation.
The Company registered, on June 27, 1991, for the Compliance Audit
Program ("CAP") administered by the EPA under the authority of Section
8(e) of the Toxic Substances Control Act ("TSCA"). It has been reported
that over 120 companies in the United States registered for the CAP.
The CAP requires registrants to audit health and environmental effect
information in order to determine whether information in the
registrant's possession is reportable to the EPA under TSCA Section
8(e). A registrant's liability, under the CAP, for late reporting of
information under TSCA 8(e), will be assessed on the basis of a set
amount per study submitted with the total liability not to exceed
$1,000,000. The Company voluntarily entered into a similar Consent
Agreement with the EPA before the CAP, and under that Agreement
performed a more limited audit than is required by the CAP and paid a
settlement of $648,000. This settlement amount has been credited to the
Company under the CAP. It has now been determined that the Company's
remaining liability under the CAP will be $352,000.
RISK MANAGEMENT
Monsanto continually evaluates risk retention and insurance levels
for product liability, property damage and other potential areas of
risk. Monsanto devotes significant effort to maintaining and improving
safety and internal control programs, which reduce its exposure to
certain risks. Based on the cost and availability of insurance and the
likelihood of a loss, management determines the amount of insurance
coverage to be purchased from unaffiliated companies and the
appropriate amount of risk to retain. Since 1986, Monsanto's liability
insurance has been on the "claims made" policy form. Management
believes that the current levels of risk retention are consistent with
those of other companies in the various industries in which Monsanto
operates. There can be no assurance that Monsanto will not incur losses
beyond the limits of, or outside the coverage of, its insurance.
However, Monsanto's liquidity, financial position and profitability are
not expected to be affected materially by the levels of risk retention
that the Company accepts.
ITEM 2. PROPERTIES.
The General Offices of the Company are located on a 285-acre tract of
land in St. Louis County, Missouri. The Company also owns a 210-acre
tract in St. Louis County on which additional research facilities are
located. Monsanto also has research laboratories and technical centers
throughout the world. Information with respect to Monsanto's
manufacturing locations worldwide and the industry
9
11
segments which use such plants as of January 1, 1994, is set forth under
"Business-Industry Segments; Principal Products" in Item 1 of this Report,
which is incorporated herein by reference.
Monsanto's principal plants are suitable and adequate for their use.
Utilization of these facilities may vary with seasonal, economic and
other business conditions, but none of the principal plants is
substantially idle. The facilities generally have sufficient capacity
for existing needs and expected near-term growth. Most of these plants
are owned in fee. However, the land at the Antwerp, Belgium plant is
leased. In addition, a portion of a plant at Augusta, Georgia is
currently leased with an option to purchase, pursuant to an industrial
revenue bond financing. The Company has granted leases, with options to
purchase, on approximately 366 acres of the 3,000 acres at the Alvin,
Texas plant site. In limited instances, Monsanto has granted leases on
portions of other plant sites not required for current operations.
ITEM 3. LEGAL PROCEEDINGS.
For information concerning certain legal proceedings involving
Monsanto, see "Business-Environmental Matters" and "Business-Legal
Proceedings" contained in Item 1 of this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to the security holders during the fourth
quarter of 1993.
EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding executive officers is contained in Item 10 of
Part III of this Report (General Instruction G) and is incorporated
herein by reference.
10
12
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The narrative or tabular information regarding the market for the
Company's common equity and related stockholder matters appearing under
"Review of Cash Flow" on pages 39 through 41 and "Quarterly Data" on
page 35 of the 1993 Annual Report is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The tabular information under "Financial Summary-Operating Results,
Earnings per Share and Year-End Financial Position" and the amounts of
Dividends per Share, all appearing on page 52 of the 1993 Annual
Report, are incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
The tabular and narrative information appearing under "Review of
Consolidated Results of Operations" on pages 23 through 26, "Operating
Unit Segment Data" on pages 27 through 33, "Review of Changes in
Financial Position" on page 37, and "Review of Cash Flow" on pages 39
through 41 of the 1993 Annual Report is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of Monsanto appearing on pages
22, 36, 38, 42 and 43 through 51; the Independent Auditors' Opinion
appearing on page 21; and the tabular and narrative information
appearing under "Quarterly Data" on page 35 of the 1993 Annual Report
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
11
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding directors and executive officers appearing
under "Election of Directors" on pages 2 through 4 of the Monsanto
Company Notice of Annual Meeting and Proxy Statement (the "1994 Proxy
Statement") dated March 14, 1994, is incorporated herein by reference.
The following information with respect to the Executive Officers of the
Company on March 1, 1994, is included pursuant to Instruction 3 of Item
401(b) of Regulation S-K:
Year First
Became an
Executive
Name - Age Present Position with Registrant Officer Other Business Experience since January 1, 1989
- --------------------------- ---------------------------------- ---------- ---------------------------------------------------
Richard W. Duesenberg, 63 Senior Vice President, 1977 Present position, 1982.
Secretary and General Counsel-
Monsanto Company
Robert E. Flynn, 60 Chairman and Chief Executive 1987 Chairman, Chief Executive Officer and President,
Officer, The NutraSweet Company Fisher Controls International, Inc. (a former
(a subsidiary of the Company); subsidiary of the Company), 1988; Chairman and Chief
Advisory Director-Monsanto Executive Officer, The NutraSweet Company, 1990; and
Company present position, 1993.
Sheldon G. Gilgore, 62 Chairman and Chief Executive 1987 Chairman, President and Chief Executive Officer, G. D.
Officer, G. D. Searle & Co. (a Searle & Co., 1986; Chairman and Chief Executive
subsidiary of the Company); Officer, G. D. Searle & Co., 1991; and present
Advisory Director-Monsanto position, 1993.
Company
Richard J. Mahoney, 60 Director; Chairman and Chief 1975 Present position, 1986.
Executive Officer-Monsanto
Company
Philip Needleman, 55 Senior Vice President, Research 1991 Professor and Head of the Department of Pharmacology,
and Development; Advisory Washington University School of Medicine, 1976; Vice
Director-Monsanto Company; President, Research and Development-Monsanto Company,
President, Research and 1989; Vice President, Research and Development;
Development, G. D. Searle & Co. Advisory Director-Monsanto Company, 1991; Vice
President, Research and Development; Advisory
Director-Monsanto Company; President, Research and
Development, G. D. Searle & Co., 1992; and present
position, 1993.
Robert G. Potter, 54 Executive Vice President and 1981 Group Vice President and Advisory Director-Monsanto
Advisory Director-Monsanto Company and President-Monsanto Chemical Company, 1986;
Company; President-The Chemical and present position, 1990.
Group
12
14
Year First
Became an
Executive
Name - Age Present Position with Registrant Officer Other Business Experience since January 1, 1989
- --------------------------- ---------------------------------- ---------- ---------------------------------------------------
Nicholas L. Reding, 59 Director; Vice Chairman- 1976 Executive Vice President and Advisory Director-
Monsanto Company Monsanto Company and President-Monsanto
Agricultural Company, 1986; Executive Vice President,
Environment, Safety, Health and Manufacturing and
Advisory Director-Monsanto Company, 1990; and present
position, 1993.
Robert B. Shapiro, 55 Director; President and Chief 1987 Chairman and Chief Executive Officer, The NutraSweet
Operating Officer-Monsanto Company, 1986; Executive Vice President and Advisory
Company Director-Monsanto Company and President-The
Agricultural Group, 1990; and present position, 1993.
Francis A. Stroble, 63 Senior Vice President and Chief 1975 Present position, 1982.
Financial Officer; Advisory
Director-Monsanto Company
Hendrik A. Verfaillie, 48 Vice President and Advisory 1993 Vice President, Commercial Development-Monsanto
Director-Monsanto Company; Agricultural Company, 1986; Vice President and General
President-The Agricultural Manager, Roundup Division-The Agricultural Group,
Group 1990; and present position, 1993.
Virginia V. Weldon, 58 Senior Vice President, Public 1990 Professor of Pediatrics, Washington University School
Policy; Advisory Director- of Medicine, 1979-1989; Vice President, Washington
Monsanto Company University Medical Center, 1980-1989; Deputy Vice
Chancellor for Medical Affairs, Washington University
School of Medicine, 1983-1989; Vice President,
Scientific Affairs-Monsanto Company, 1989; Vice
President, Public Policy-Monsanto Company, 1989; Vice
President, Public Policy; Advisory Director-Monsanto
Company, 1990; and present position, 1993.
The above-listed individuals are elected to the offices set opposite
their names to hold office until their successors are duly elected and
have qualified, or until their earlier death, resignation or removal.
ITEM 11. EXECUTIVE COMPENSATION.
Information appearing under "Directors' Fees and Other Arrangements"
on page 8 and under "Executive Compensation" on pages 12 through 16 of
the 1994 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information appearing under "Stock Ownership of Management and
Certain Beneficial Owners" on pages 5 and 6 of the 1994 Proxy Statement
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
13
15
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this Report:
1. The financial statements set forth at pages 22, 36, 38, 42 and
43 through 51 of the 1993 Annual Report (See Exhibit 13 under
Paragraph (a)3 of this Item 14)
2. Financial Statement Schedules
The following supplemental schedules for the years ended December
31, 1993, 1992 and 1991:
V - Property, Plant and Equipment
VI - Accumulated Depreciation, Depletion, and Amortization of
Property, Plant and Equipment
VII - Guarantees of Securities of Other Issuers (December 31,
1993, only)
VIII - Valuation and Qualifying Accounts
IX - Short-Term Borrowings
X - Supplementary Income Statement Information
All other supplemental schedules are omitted because of the absence
of the conditions under which they are required.
3. Exhibits - See the Exhibit Index at page 24 of this Report. For
a listing of all management contracts and compensatory plans or
arrangements required to be filed as exhibits to this Form 10-K,
see the Exhibits listed under Exhibit No. 10(iii) on pages 24-27
of the Exhibit Index which were previously filed. The following
Exhibits listed in the Exhibit Index are filed with this Report:
13 The Company's 1993 Annual Report to shareowners
21 Subsidiaries of the registrant (See page 29)
23(ii) 1. Consent of Independent Auditors (See page 30)
2. Consent of Company Counsel (See page 30)
24 1. Powers of attorney submitted by Joan T. Bok, Robert
M. Heyssel, Gwendolyn S. King, Philip Leder, Howard
M. Love, Richard J. Mahoney, Frank A. Metz, Jr., Buck
Mickel, Jacobus F.M. Peters, Nicholas L. Reding, John
S. Reed, William D. Ruckelshaus, Bruce R. Sents,
Robert B. Shapiro, John B. Slaughter, Francis A.
Stroble and Stansfield Turner
2. Certified copy of Board resolution authorizing Form
10-K filing utilizing powers of attorney
99 1. Computation of the Ratio of Earnings to Fixed Charges
for Monsanto Company and Subsidiaries (See page 31)
(b) Reports on Form 8-K during the quarter ended December 31, 1993:
No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1993.
14
16
OPINION OF INDEPENDENT AUDITORS
Uonsanto Company:
We have audited the statement of consolidated financial position of Monsanto
Company and Subsidiaries as of December 31, 1993 and 1992 and the related
statements of consolidated income, shareowners' equity and cash flow for each of
the three years in the period ended December 31, 1993 and have issued our
opinion thereon dated February 25, 1994; such financial statements and opinion
are included in your 1993 Annual Report to shareowners and are incorporated
herein by reference. Our audits also comprehended the schedules of Monsanto
Company and Subsidiaries, listed in Item 14(a)2. These schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information shown therein.
DELOITTE & TOUCHE
DELOITTE & TOUCHE
Saint Louis, Missouri
February 25, 1994
15
17
SCHEDULE V
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------------- ------------ --------- ----------- ----------------------------------- ----------
Foreign
Currency
Balance at Transfers Translation Balance at
Beginning of Additions Between Adjust- Other End of
Classification Year at Cost Retirements Accounts ments Changes Year
-------------- ------------ --------- ----------- -------- ----------- ------- ----------
Year Ended December 31, 1993:
Land............................ $ 106 $ 2 $ 2 $ - $ 1 (C) $ 107
Buildings....................... 1,240 33 78 (12) (36)(B) 1,237
Machinery and equipment......... 5,939 447 422 (54) (67)(B) 5,793
Construction in progress........ 317 $437(A) (502) (4) (3)(B) 245
------ ---- ---- ----- ----- ----- ------
Total......................... $7,602 $437 $482 $ - $ (70) $(105) $7,382
------ ---- ---- ----- ----- ----- ------
Year Ended December 31, 1992:
Land............................ $ 104 $ 1 $ 3 $ (1) $ 1 (C) $ 106
Buildings....................... 1,215 15 78 (27) (11)(B) 1,240
Machinery and equipment......... 5,772 240 590 (108) (75)(B) 5,939
Construction in progress........ 419 $586(A) (671) (14) (3)(C) 317
------ ---- ---- ----- ----- ----- ------
Total......................... $7,510 $586 $256 $ - $(150) $ (88) $7,602
------ ---- ---- ----- ----- ----- ------
Year Ended December 31, 1991:
Land............................ $ 103 $ - $ 1 $ - $ - $ 104
Buildings....................... 1,162 11 78 1 (15)(C) 1,215
Machinery and equipment......... 5,495 159 524 10 (78)(B) 5,772
(20)(C)
Construction in progress........ 466 $554(A) (603) 2 - 419
------ ---- ---- ----- ----- ----- ------
Total......................... $7,226 $554 $170 $ - $ 13 $(113) $7,510
------ ---- ---- ----- ----- ----- ------
NOTES:
(A) Property additions generally are initially charged to construction in progress and subsequently transferred to their
appropriate asset classification when placed in service.
(B) Principally property related to divested operations.
(C) Transfers from (to) other accounts.
(D) Cost is depreciated using the straight-line method over weighted average periods of 22 years for buildings and 11 years
for machinery and equipment.
16
18
SCHEDULE VI
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
----------- ------------ ---------- ----------- ---------------------- ----------
Foreign
Additions Currency
Balance at Charged to Translation Balance at
Beginning of Costs and Adjust- Other End of
Description Year Expenses Retirements ments Changes Year
----------- ------------ ---------- ----------- ----------- ------- ----------
Year Ended December 31, 1993:
Buildings............................... $ 608 $ 53 $ 17 $ (6) $(44)(A) $ 594
Machinery and equipment................. 3,981 417 445 (37) 64 (C) 3,980
Government grants....................... 8 (1)(D) - - (1)(E) 6
------ ---- ---- ---- ---- ------
Total............................... $4,597 $469 $462 $(43) $ 19 $4,580
------ ---- ---- ---- ---- ------
Year Ended December 31, 1992:
Buildings............................... $ 540 $ 51 $ 11 $(14) $ (7)(A) $ 608
49 (C)
(55)(A)
Machinery and equipment................. 3,768 424 227 (78) 21 (B) 3,981
128 (C)
Government grants....................... 11 (2)(D) - (1) - 8
------ ---- ---- ---- ---- ------
Total............................... $4,319 $473 $238 $(93) $136 $4,597
------ ---- ---- ---- ---- ------
Year Ended December 31, 1991:
Buildings............................... $ 496 $ 48 $ 8 $ 4 $ - $ 540
(40)(A)
Machinery and equipment................. 3,402 407 139 11 (14)(B) 3,768
141 (C)
Government grants....................... 12 (2)(D) - - 1 (E) 11
------ ---- ---- ---- ---- ------
Total............................... $3,910 $453 $147 $ 15 $ 88 $4,319
------ ---- ---- ---- ---- ------
NOTES:
(A) Principally includes accumulated depreciation related to divested operations.
(B) Transfers from (to) other accounts.
(C) Includes reserves for asset impairment and for the restructuring program.
(D) Amortization of government grants credited to income.
(E) Government grant additions.
17
19
SCHEDULE VII
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
GUARANTEES OF SECURITIES OF OTHER ISSUERS
AS OF DECEMBER 31, 1993
(Dollars in millions)
COLUMN A COLUMN B COLUMN C
------------------------------------------------- ------------------------------ ------------
Total Amount
Guaranteed
Name of Issuer of Securities Title of Issue of Each and
Guaranteed by Person for Which Statement is Filed Class of Securities Guaranteed Outstanding
------------------------------------------------- ------------------------------ -----------
Village of Sauget, Illinois................................... Pollution Control Revenue Bonds $ 12
(Term Bonds)
Various Export Financings..................................... Bank Loans 3
Rural Credit Financing (Brazil)............................... Bank Loans 31
Various Equity Affiliates..................................... Bank Loans 72
Various Bond Holders.......................................... Industrial Revenue Bonds 17
Government of Argentina....................................... External Bonds 5
First National Bank of Boston................................. Series A Trust Notes 36
Wilmington Trust Company...................................... Trust Notes 46
----
Total....................................................... $222
----
NOTES:
(A) Columns D, E and G have been omitted as the answers thereto would have been "None."
(B) In answer to Column F, all guaranteed securities are guaranteed as to principal and interest. The annual aggregate
amount of interest guaranteed is approximately $13 million.
(C) Monsanto also has guaranteed $80 million of 7.09 percent amortizing notes and $100 million of 8.13 percent amortizing
debentures issued by its Employee Stock Ownership Plan (ESOP). The unpaid balances of the ESOP notes and debentures are
included in Short-term and Long-term Debt in Monsanto's Statement of Consolidated Financial Position at December 31, 1993.
18
20
SCHEDULE VIII
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
----------- ---------- ---------- ---------- ----------
Additions
Balance at Charged to Balance at
Beginning Costs and End of
Description of Year Expenses Deductions Year
----------- --------- ---------- ---------- ----------
Year Ended December 31, 1993:
Reserves deducted from related assets in the Statement of
Consolidated Financial Position:
Doubtful receivables and returns and allowances.................. $ 33 $ 36 $ 18(A) $ 51
------ ---- ------ ------
Inventory and obsolescence losses................................ $ 23 $ 31 $ 9 $ 45
------ ---- ------ ------
Amortization of intangible assets................................ $ 383 $ 81 $ 14 $ 450
------ ---- ------ ------
Deferred tax asset valuation allowances(C)....................... $ 62 $ 34 $ 7 $ 89
------ ---- ------ ------
Year Ended December 31, 1992:
Reserves deducted from related assets in the Statement of
Consolidated Financial Position:
Doubtful receivables and returns and allowances.................. $ 36 $ 15 $ 18(A) $ 33
------ ---- ------ ------
Inventory and obsolescence losses................................ $ 31 $ 11 $ 19 $ 23
------ ---- ------ ------
Amortization of intangible assets................................ $1,422 $238 $1,277(B) $ 383
------ ---- ------ ------
Deferred tax asset valuation allowances(C)....................... $ 32 $ 33 $ 3 $ 62
------ ---- ------ ------
Year Ended December 31, 1991:
Reserves deducted from related assets in the Statement of
Consolidated Financial Position:
Doubtful receivables and returns and allowances.................. $ 34 $ 23 $ 21(A) $ 36
------ ---- ------ ------
Inventory and obsolescence losses................................ $ 20 $ 32 $ 21 $ 31
------ ---- ------ ------
Amortization of intangible assets................................ $1,203 $233 $ 14 $1,422
------ ---- ------ ------
NOTES:
(A) Principally allowances granted.
(B) Includes $1,270 million related to NutraSweet's fully amortized aspartame-use patent.
(C) Monsanto adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," effective as of
January 1, 1992. Prior years were not restated for this adoption.
19
21
SCHEDULE IX
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
------------ --------- -------- ----------- ----------- -------------
Maximum Average Weighted
Category of Weighted Amount Amount Average
Aggregate Balance Average Outstanding Outstanding Interest Rate
Short-Term at End of Interest During the During the During the
Borrowings(A) Year Rate Year Year(D) Year(D)
------------- --------- -------- ----------- ----------- -------------
Year Ended December 31, 1993:
Payable to banks(B)................................. $49 7% $189 $110 5%
Commercial paper(C)................................. $16 3% $523 $140 3%
Year Ended December 31, 1992:
Payable to banks(B)................................. $70 10% $168 $109 8%
Commercial paper(C)................................. $529 $222 4%
Year Ended December 31, 1991:
Payable to banks(B)................................. $75 14% $111 $ 78 15%
Commercial paper(C)................................. $66 5% $626 $276 6%
NOTES:
(A) Excludes bank overdrafts of $67 million, $78 million and $125 million in 1993-1991, respectively. Generally, there is no
interest on these bank overdrafts.
(B) Interest on these loans is principally related to various bank rates. The short-term facilities of ex-U.S. subsidiaries
include $5 million, $8 million and $15 million in 1993-1991, respectively, of loans of subsidiaries in hyperinflationary
countries.
(C) Interest on these borrowings is generally at money market rates determined by competitive bidding.
(D) Based on the average month-end amounts outstanding for payable to banks and based on the average daily balance for
commercial paper.
20
22
SCHEDULE X
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in millions)
COLUMN A COLUMN B
-------- ----------------
Charged to Costs
Item and Expenses
-------- ----------------
Year Ended December 31, 1993:
Maintenance and repairs........................................................................ $379
Taxes, other than payroll and income taxes(A).................................................. 93
Advertising costs.............................................................................. 297
Royalty costs.................................................................................. 54
Year Ended December 31, 1992:
Maintenance and repairs........................................................................ $412
Taxes, other than payroll and income taxes(A).................................................. 126
Advertising costs.............................................................................. 266
Royalty costs.................................................................................. 93
Year Ended December 31, 1991:
Maintenance and repairs........................................................................ $377
Taxes, other than payroll and income taxes(A).................................................. 114
Advertising costs.............................................................................. 278
Royalty costs.................................................................................. 105
NOTES:
(A) Includes real estate, personal property, franchise, excise and other taxes, none of which exceeds 1 percent of net
sales.
(B) Preoperating costs and similar deferrals were each less than 1 percent of net sales. Depreciation and amortization of
intangible assets are included in the Statement of Consolidated Cash Flow.
21
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MONSANTO COMPANY
................................................
(Registrant)
By BRUCE R. SENTS
.............................................
Bruce R. Sents
Vice President and Controller
(Principal Accounting Officer)
Date: March 15, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
RICHARD W. DUESENBERG Chairman and Director March 15, 1994
................................................................ (Principal Executive Officer)
(Richard J. Mahoney)*
RICHARD W. DUESENBERG President and Director March 15, 1994
................................................................
(Robert B. Shapiro)*
RICHARD W. DUESENBERG Vice Chairman and Director March 15, 1994
................................................................
(Nicholas L. Reding)*
RICHARD W. DUESENBERG Senior Vice President March 15, 1994
................................................................ (Principal Financial Officer)
(Francis A. Stroble)*
BRUCE R. SENTS Vice President and Controller March 15, 1994
................................................................ (Principal Accounting Officer)
(Bruce R. Sents)
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Joan T. Bok)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Robert M. Heyssel)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Gwendolyn S. King)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Philip Leder)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Howard M. Love)*
22
24
SIGNATURE TITLE DATE
--------- ----- ----
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Frank A. Metz, Jr.)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Buck Mickel)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Jacobus F.M. Peters)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(John S. Reed)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(William D. Ruckelshaus)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(John B. Slaughter)*
RICHARD W. DUESENBERG Director March 15, 1994
................................................................
(Stansfield Turner)*
*Richard W. Duesenberg, by signing his name hereto, does sign this document on behalf of the above
noted individuals, pursuant to powers of attorney duly executed by such individuals which have been
filed as an Exhibit to this Report.
RICHARD W. DUESENBERG
........................................
Richard W. Duesenberg
Attorney-in-Fact
23
25
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit No. Description
----------- -----------
2 Omitted - Inapplicable
3(i) Restated Certificate of Incorporation of the Company effective as of April 27, 1987
(incorporated herein by reference to Exhibit 19(ii)2 of the Company's Form 10-Q for the
quarter ended June 30, 1987)
3(ii) By-Laws of the Company, as amended effective September 1, 1993 (incorporated herein by
reference to Exhibit 99.1 of the Company's Form 10-Q for the quarter ended September 30,
1993)
4(i) Form of Rights Agreement, dated as of January 26, 1990 between the Company and The First
National Bank of Boston (incorporated herein by reference to Form 8-A filed on January 31,
1990)
4(iii) Registrant agrees to furnish to the Securities and Exchange Commission upon request copies
of instruments defining the rights of holders of certain long-term debt not being
registered of the registrant and all subsidiaries for which consolidated or unconsolidated
financial statements are required to be filed.
9 Omitted - Inapplicable
10(i) Acquisition Agreement dated as of September 11, 1992, between Emerson Electric Co. and
Monsanto Company relating to the purchase and sale of Fisher Controls International, Inc.
and related businesses, plus identification of contents of omitted schedules and agreement
to furnish supplementally a copy of any omitted schedule to the Securities and Exchange
Commission upon request (incorporated herein by reference to Form 8-K dated as of October
1, 1992 and filed on October 9, 1992)
10(iii) 1. Stock Compensation Arrangement for Non-Employee Directors adopted January 23, 1987 and
effective April 24, 1987 (incorporated herein by reference to Exhibit 19(i)1 of the
Company's Form 10-Q for the quarter ended March 31, 1987)
2. Non-Employee Directors Stock Plan, as amended in 1991 (incorporated herein by
reference to Exhibit 19(ii)1 of the Company's Form 10-Q for the quarter ended June 30,
1991)
3. Non-Employee Directors Retirement Plan, as amended in 1991 (incorporated herein by
reference to Exhibit 19(ii) of the Company's Form 10-Q for the quarter ended September
30, 1991)
4. Charitable Contribution Program effective April 1, 1992 (incorporated herein by
reference to Exhibit 19(i)1 of the Company's Form 10-K for the year ended December 31,
1991)
5. Deferred Compensation Plan for Non-Employee Directors, as amended in 1983 and 1991
(incorporated herein by reference to Exhibit 19(ii)1 of the Company's Form 10-K for
the year ended December 31, 1991)
6. Consulting Agreement between the Company and Philip Leder dated January 17, 1990
(incorporated herein by reference to Exhibit 19(i)3 of the Company's Form 10-K for the
year ended December 31, 1989)
24
26
EXHIBIT INDEX (CONT'D)
Exhibit No. Description
----------- -----------
7. Financial Planning Services Program for Monsanto Management Council Members, as
amended in 1993 (incorporated herein by reference to Exhibit 10.1 of the Company's
Form 10-Q for the quarter ended March 31, 1993)
8. Monsanto Management Incentive Plan of 1984, as amended in 1987, 1988 and 1989
(incorporated herein by reference to Exhibit 19(ii)2 of the Company's Form 10-K for
the year ended December 31, 1989)
9. Monsanto Management Incentive Plan of 1988/I, as amended in 1988, 1989, 1991 and 1992
(incorporated herein by reference to Exhibit 99.1 of the Company's Form 10-K for the
year ended December 31, 1992)
10. Monsanto Management Incentive Plan of 1988/II, as amended in 1989, 1991 and 1992
(incorporated herein by reference to Exhibit 99.2 of the Company's Form 10-K for the
year ended December 31, 1992)
11. Split-dollar Life Insurance Plan (incorporated herein by reference to Exhibit
10(iii)19 of the Company's Form 10-K for the year ended December 31, 1987)
12. Executive Health Program (incorporated herein by reference to Exhibit 19(i) of the
Company's Form 10-Q for the quarter ended March 31, 1989)
13. Agreements between the Company and Richard J. Mahoney and Nicholas L. Reding entered
into as of May 16, 1988 (incorporated herein by reference to Exhibit 19(i)18 of the
Company's Form 10-Q for the quarter ended June 30, 1988)
14. Letter from the Company to Dr. Sheldon G. Gilgore dated February 12, 1986
(incorporated herein by reference to Exhibit 10(iii)14 of the Company's Form 10-K for
the year ended December 31, 1986)
15. Letter Agreement between G. D. Searle & Co. and Dr. Sheldon G. Gilgore, dated March 7,
1991, amending the Letter from the Company dated February 12, 1986 (incorporated
herein by reference to Exhibit 19(ii)1 of the Company's Form 10-Q for the quarter
ended March 31, 1991)
16. Agreement between the Company and Robert G. Potter entered into as of May 16, 1988
(incorporated herein by reference to Exhibit 19(i)5 of the Company's Form 10-K for the
year ended December 31, 1989)
17. Letter Agreement between the Company and Robert G. Potter entered into as of May 16,
1988 (incorporated herein by reference to Exhibit 19(i)6 of the Company's Form 10-K
for the year ended December 31, 1989)
18. Agreement between the Company and Robert B. Shapiro entered into as of July 23, 1990
(incorporated herein by reference to Exhibit 19(i)1 of the Company's Form 10-Q for the
quarter ended September 30, 1990)
25
27
EXHIBIT INDEX (CONT'D)
Exhibit No. Description
----------- -----------
19. Letter Agreement between the Company and Robert B. Shapiro entered into as of July 23,
1990 (incorporated herein by reference to Exhibit 19(i)2 of the Company's Form 10-Q
for the quarter ended September 30, 1990)
20. Letter Agreement between the Company and Robert B. Shapiro entered into as of July 23,
1990 (incorporated herein by reference to Exhibit 19(i)3 of the Company's Form 10-Q
for the quarter ended September 30, 1990)
21. Searle Phantom Stock Option Plan of 1986, as amended in 1990, 1991 and 1992
(incorporated herein by reference to Exhibit 99.3 of the Company's Form 10-K for the
year ended December 31, 1992)
22. Searle Monsanto Stock Option Plan of 1986, as amended in 1988, 1989, 1990 and 1991
(incorporated herein by reference to Exhibit 19(ii)4 of the Company's Form 10-Q for
the quarter ended June 30, 1991)
23. G. D. Searle & Co. Management Incentive Plan (incorporated herein by reference to the
description on pages 19-20 of the Monsanto Company Notice of Annual Meeting and Proxy
Statement dated March 20, 1992)
24. G. D. Searle & Co. Executive Travel Accident Insurance Plan, as amended in 1989
(incorporated herein by reference to Exhibit 19(ii)4 of the Company's Form 10-Q for
the quarter ended June 30, 1989)
25. G. D. Searle & Co. Executive Supplemental Long Term Disability Plan (incorporated
herein by reference to Exhibit 19(i)7 of the Company's Form 10-Q for the quarter ended
June 30, 1988)
26. G. D. Searle & Co. Split Dollar Life Insurance Plan, as amended in 1989 (incorporated
herein by reference to Exhibit 19(ii)3 of the Company's Form 10-Q for the quarter
ended June 30, 1989)
27. G. D. Searle & Co. Legal/Tax/Financial Counseling Plan (incorporated herein by
reference to Exhibit 19(i)8 of the Company's Form 10-Q for the quarter ended June 30,
1988)
28. G. D. Searle & Co. Executive Relocation Plan (incorporated herein by reference to
Exhibit 19(i)9 of the Company's Form 10-Q for the quarter ended June 30, 1988)
29. G. D. Searle & Co. Supplemental Medical Reimbursement Plan (incorporated herein by
reference to Exhibit 19(i)10 of the Company's Form 10-Q for the quarter ended June 30,
1988)
30. G. D. Searle & Co. Deferred Compensation Plan, as amended in 1993 (incorporated herein
by reference to Exhibit 10.1 of the Company's Form 10-Q for the quarter ended June 30,
1993)
31. G. D. Searle & Co. Executive Physical Examinations Program, as amended in 1992
(incorporated herein by reference to Exhibit 99.1 of the Company's Form 10-Q for the
quarter ended June 30, 1992)
26
28
EXHIBIT INDEX (CONT'D)
Exhibit No. Description
----------- -----------
32. NutraSweet/Monsanto Stock Plan of 1991 (incorporated herein by reference to Exhibit
19(i) of the Company's Form 10-Q for the quarter ended June 30, 1991)
33. The NutraSweet Company Deferred Compensation Plan (incorporated herein by reference to
Exhibit 19(i)11 of the Company's Form 10-Q for the quarter ended June 30, 1988)
34. The NutraSweet Company Executive Travel Accident Insurance Plan (incorporated herein
by reference to Exhibit 19(i)13 of the Company's Form 10-Q for the quarter ended June
30, 1988)
35. The NutraSweet Company Tax/Financial Services Plan (incorporated herein by reference
to Exhibit 19(i)14 of the Company's Form 10-Q for the quarter ended June 30, 1988)
36. The NutraSweet Company Supplemental Medical Reimbursement Plan (incorporated herein by
reference to Exhibit 19(i)15 of the Company's Form 10-Q for the quarter ended June 30,
1988)
37. The NutraSweet Company Executive Relocation Guidelines (incorporated herein by
reference to Exhibit 19(i)16 of the Company's Form 10-Q for the quarter ended June 30,
1988)
38. The NutraSweet Company Management Incentive Plan, as amended in 1990 and 1993
(incorporated herein by reference to Exhibit 10.2 of the Company's Form 10-Q for the
quarter ended March 31, 1993)
39. The NutraSweet Company Executive Disability Income Plan (incorporated herein by
reference to Exhibit 19(i)2 of the Company's Form 10-K for the year ended December 31,
1990)
40. The NutraSweet Company Executive Life Insurance Plan, as amended in 1990 (incorporated
herein by reference to Exhibit 19(ii)2 of the Company's Form 10-K for the year ended
December 31, 1990)
41. NutraSweet Long Term Incentive Plan (1991-1993) (incorporated herein by reference to
Exhibit 10(iii)44 of the Company's Form 10-K for the year ended December 31, 1991)
11 Omitted - Inapplicable; see "Earnings per Share" on page 50 of the 1993 Annual Report
12 Statement re Computation of the Ratio of Earnings to Fixed Charges - See Exhibit 99.1 below
13 The Company's 1993 Annual Report to shareowners. (The electronic submission includes only
the financial report section of the Annual Report, consisting of pages 20 through 52 of
that Report.) Only those portions expressly incorporated by reference into this Form 10-K
are deemed "filed"; other portions are furnished only for the information of the
Commission.
18 Omitted - Inapplicable
21 Subsidiaries of the registrant (See page 29)
27
29
EXHIBIT INDEX (CONT'D)
Exhibit No. Description
----------- -----------
22 Omitted - Inapplicable
23(ii) 1. Consent of Independent Auditors (See page 30)
2. Consent of Company Counsel (See page 30)
24 1. Powers of attorney submitted by Joan T. Bok, Robert M. Heyssel, Gwendolyn S. King,
Philip Leder, Howard M. Love, Richard J. Mahoney, Frank A. Metz, Jr., Buck Mickel,
Jacobus F.M. Peters, Nicholas L. Reding, John S. Reed, William D. Ruckelshaus, Bruce R.
Sents, Robert B. Shapiro, John B. Slaughter, Francis A. Stroble and Stansfield Turner
2. Certified copy of Board resolution authorizing Form 10-K filing utilizing powers of
attorney
27 Not required
28 Omitted - Inapplicable
99 1. Computation of the Ratio of Earnings to Fixed Charges for Monsanto Company and
Subsidiaries (See page 31)
- -----
Only Exhibits Nos. 13, 21, 23(ii) and 99.1 have been included in the printed copy of this Report.
28
30
APPENDIX
Throughout the printed Form 10-K, trademarks are initially designated on
each page by the superscript letter "R" in a circle or by the superscript
letters "TM."