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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, 1995
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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. [ ]
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES
OF THE REGISTRANT: APPROXIMATELY $15.8 BILLION AS OF THE CLOSE OF BUSINESS ON
FEBRUARY 29, 1996.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 117,814,610 SHARES
OF COMMON STOCK, $2 PAR VALUE, OUTSTANDING AT FEBRUARY 29, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
1. PORTIONS OF MONSANTO COMPANY ANNUAL REPORT TO SECURITY HOLDERS FOR THE YEAR
ENDED DECEMBER 31, 1995. (PARTS I AND II OF FORM 10-K.)
2. PORTIONS OF MONSANTO COMPANY NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
DATED MARCH 14, 1996. (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 diversified line of agricultural products; chemical
products; pharmaceuticals; and food ingredients. 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
On March 8, 1996, Monsanto and DEKALB Genetics Corp. finalized a long-term
research and development collaboration in agricultural biotechnology. In
addition, Monsanto acquired approximately 40 percent of the total outstanding
common stock of DEKALB for approximately $152 million. This includes
approximately 10 percent of DEKALB's Class A voting shares and approximately
45 percent of the Class B non-voting shares.
In December 1995, the Company's Board of Directors approved a restructuring
plan as part of an overall strategy to reduce costs and eliminate redundant
functions. The pretax charge of $169 million ($125 million aftertax, or $1.08
per share) associated with this action is intended to cover the costs of work
force reductions, business consolidations, facility closures and the exit from
nonstrategic businesses and facilities. See ``Review of Consolidated Results of
Operations'' and ``Restructuring and Other Actions'' on pages 29 and 51,
respectively, of the Company's Annual Report to shareowners for the year ended
December 31, 1995 (the ``1995 Annual Report'').
In December 1995, Monsanto sold its worldwide styrenics plastics business
for $580 million. In a separate but related transaction, Monsanto has reached an
agreement to sell its shares in Monsanto Premier Kasei Co. Ltd., a styrenics
plastics manufacturing joint venture in Thailand, to one of its joint venture
partners. See ``Review of Consolidated Results of Operations'' and ``Principal
Acquisitions and Divestitures'' on pages 29 and 53, respectively, of the 1995
Annual Report.
In June 1995, Monsanto announced that it had signed a letter of intent to
acquire a 49.9 percent interest in Calgene, Inc. for approximately $30 million
in cash, certain intellectual property, and 100 percent of the partnership
interests in Gargiulo L. P. and Gargiulo G. P. (jointly ``Gargiulo''). In
addition, Monsanto will provide long-term credit facilities for the general
business needs of Calgene and Gargiulo. The Calgene transaction is subject to
the approval of the shareowners of Calgene and is anticipated to close in early
1996. See ``Review of Changes in Financial Position'' and ``Principal
Acquisitions and Divestitures'' on pages 45 and 53, respectively, of the 1995
Annual Report.
INDUSTRY SEGMENTS; PRINCIPAL PRODUCTS
For 1995, Monsanto reported its business under four industry segments:
Agricultural Products, Chemicals, Pharmaceuticals, and Food Ingredients. The
tabular and narrative information appearing under ``Segment Data'' and
``Geographic Data'' on pages 34, 35 and 43 of the 1995 Annual Report is
incorporated herein by reference.
The following is a list of principal products categorized by major end-use
markets, within the industry segments in which they were reported for 1995.
AGRICULTURAL PRODUCTS
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Agricultural, industrial, Roundup(R) herbicide Multipurpose, non- Alvin, TX; Antwerp, Disodiumiminodiacetate;
turf and ornamental and other glyphosate- selective agricultural and Belgium; Fayetteville, NC; Phosphorus Trichloride
applications based herbicides industrial applications Luling, LA; Sao Jose dos
Campos, Brazil
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AGRICULTURAL PRODUCTS (CONT'D)
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Lasso(R) and Corn, soybean, peanut and Muscatine, IA Chloroacetyl Chloride;
Harness(R) herbi- milo (sorghum) crops Diethylaniline
cides and other
acetanilide-based
herbicides
corn only
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Avadex(R) BW Wheat crops Antwerp, Belgium; Ammonium Thiocyanate;
herbicide; Far-Go(R) Muscatine, IA Diisopropylamine;
herbicide Trichloropropane
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Permit(R) herbicide Postemergence control of Manufactured by third Halosulfuron
sedges and broadleaf weeds party
in corn and grain sorghum
crops
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Residential applications Roundup(R) herbicide; Herbicides; insecticides; Fort Madison, IA Acephate; Chlorpyrifos;
Ortho(R) lawn-and- fungicides; fertilizers Diazinon; Glyphosate;
garden products Malathion
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Animal agricultural Posilac(R) bovine Increase efficiency of Manufactured by third No major raw materials
applications somatotropin milk production in dairy party
cows
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CHEMICALS
Construction & Home Nylon carpet staple; Broadloom carpet; Decatur, AL; Greenwood, SC; Acrylonitrile; Ammonia;
Furnishings nylon bulk continuous upholstery; blankets Pensacola, FL Cyclohexane; Propylene
filament; Acrilan(R)
acrylic fiber
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Polymer modifiers Vinyl flooring; caulks and Antwerp, Belgium; Butanol; Chlorine;
sealants; adhesives; Bridgeport, NJ; LaSalle, 2-Ethylhexanol; Phenol;
coatings; wall covering; Quebec, Canada Phthalic Anhydride;
vinyl upholstery; Toluene
insulation; furniture
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Saflex(R) plastic Architectural glass Ghent, Belgium; Sao Butyraldehyde; Ethanol;
interlayer Jose dos Campos, Brazil; Polyvinyl Alcohol; Vinyl
Springfield, MA; Acetate Monomer
Trenton, MI
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Specialty resins Coatings and adhesives Alvin, TX; LaSalle, Acrylate Esters; Butanol;
Quebec, Canada; Formaldehyde; Melamine;
Springfield, MA; Methanol; Vinyl Acetate
Trenton, MI Monomer
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Ammonium Fire retardant coatings; Camden, NJ Phosphorus
polyphosphate polymer additives
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Doormats Doormats Ghent, Belgium; Polyethylene
St. Louis, MO
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Vehicles Saflex(R) plastic Windshields Ghent, Belgium; Sao Jose Butyraldehyde; Ethanol;
interlayer dos Campos, Brazil; Polyvinyl Alcohol; Vinyl
Springfield, MA; Trenton, Acetate Monomer
MI
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Vydyne(R) nylon Automotive exterior and Pensacola, FL Acrylonitrile; Ammonia;
molding resins interior molded parts; Cyclohexane; Propylene
under-the-hood
applications
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CHEMICALS (CONT'D)
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Nylon filament; nylon Tires; molding resins for Pensacola, FL Acrylonitrile; Ammonia;
polymer auto grilles, bumpers and Cyclohexane; Propylene
gears
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Specialty resins; Automotive coatings and Antwerp, Belgium; Butanol; Chlorine;
polymer modifiers sealants Bridgeport, NJ; LaSalle, Formaldehyde; Melamine;
Quebec, Canada; Methanol; Phthalic
Springfield, MA Anhydride; Toluene
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Skydrol(R) aviation Hydraulic fluids for St. Louis, MO Phosphorus Oxychloride
hydraulic fluids; commercial aircraft
lubricants
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Personal Products Acrilan(R) acrylic Sweaters; half-hose; Decatur, AL Acrylonitrile
fiber active wear; hand-knit
yarns; craft yarns
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Vydyne(R) nylon Consumer electronics; Pensacola, FL Acrylonitrile; Ammonia;
molding resins medical devices Cyclohexane; Propylene
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Dental phosphates; Dentifrices; dish Augusta, GA; Newport, Benzene; Caustic Soda;
industrial phosphates detergents; water United Kingdom; Ruabon, Phosphorus; Soda Ash
conditioners United Kingdom; St. Louis,
MO; Sao Jose dos Campos,
Brazil; Soda Springs, ID;
Trenton, MI
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Chemicals Industrial phosphates; Metal treating, cleaning Augusta, GA; Luling, LA; Ammonia; Chlorine;
phosphoric acid; and etching; plant food St. Louis, MO; Sauget, IL; Phosphorus; Soda Ash;
phosphorus fertilizers; oil additives Trenton, MI Sulphur
pentasulfide;
phosphorus trichloride
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Nitrochlorobenzene Dyes; pigments; rubber Anniston, AL; Nitro, WV; Benzene; Caustic Soda;
derivatives; Sodium preservatives; Ruabon, United Kingdom; Chlorine
MBT engineering; Sauget, IL
thermoplastics;
antifreeze; water
treatment
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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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Therminol(R) heat Heat transfer fluids Alvin, TX; Anniston, AL; Benzene; Phenol
transfer fluids; Newport, United Kingdom
diphenyl oxide
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Dequest(R) water Scale inhibitors; oil Newport, United Kingdom Phosphorus Trichloride
treatment chemicals field chemicals
- ------------------------------------------------------------------------------------------------------------------------------------
Food Food additives Bakery; dairy; meat St. Louis, MO; Sao Jose dos Caustic Soda; Lime;
Campos, Brazil; Trenton, MI Phosphorus
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PHARMACEUTICALS
Pharmaceuticals 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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PHARMACEUTICALS (CONT'D)
Major End-Use Manufacturing Major Raw Materials
Major End-Use Markets Major Products Products & Applications Locations & Components
--------------------- -------------- ----------------------- ------------- -------------------
Daypro(R) (oxaprozin); Anti-inflammatory Augusta, GA; Caguas, Benzoin; Diclofenac;
Arthrotec(R) Puerto Rico; Morpeth, Misoprostol
(misoprostol/ United Kingdom
diclofenac)
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Ambien(R) (zolpidem Central nervous system Caguas, Puerto Rico Zolpidem
tartrate) (Sleep)
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Cytotec(R) Gastrointestinal Caguas, Puerto Rico; Coapa, Norprostol
(misoprostol) Mexico; Morpeth, United
Kingdom
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Demulen(R) (ethynodiol Women's health Caguas, Puerto Rico; Ethinyl Estradiol;
diacetate); Tri- Morpeth, United Kingdom Ethynodiol Diacetate;
Norinyl(R) Synarel(R) Nefarelin Acetate;
Norethindrone
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FOOD INGREDIENTS
Food NutraSweet(R) brand High-intensity sweetener Augusta, GA; University Aspartic Acid;
sweetener available primarily in Park, IL L-Phenylalanine
beverages and dessert
products
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Equal(R), Canderel(R), Tabletop sweeteners Manteno, IL; Evreux, Aspartame
NutraSweet(R) and France; Morpeth, United
other tabletop Kingdom
sweeteners
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Keltone(R) and Soups; sauces; gravies; Girvan, United Kingdom; Corn Syrup; Seaweed
Manugel(R) sodium dressings; beverages; Okmulgee, OK; San Diego, CA
alginates; snack foods; breadings;
Kelcoloid(R) propylene batters; bakery products;
glycol alginate; dairy products; pet foods
Keltrol(R) SF and Kel-
lite(R) xanthan gums;
Kelcogel(R) gellan gum
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Oil Field Production Kelzan(R) X, Kelzan(R) Oil and gas well drilling Knowsley, United Kingdom; Corn Syrup
XCD, Xanvis(R) xanthan applications Okmulgee, OK; San Diego, CA
gums; Biozan(R) welan
gum
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Applications Manutex(R) and Cleaners; textile Barcaldine, United Kingdom; Corn Syrup; Seaweed
Kelgin(R) sodium printing; paper sizings Girvan, United Kingdom;
alginates; Kelzan(R) and coatings; firefighting Knowsley, United Kingdom;
AR xanthan gum foams Okmulgee, OK; San Diego, CA
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Pharmaceuticals Kelacid(R) alginic Tablets; liquid Girvan, United Kingdom; Corn Syrup; Seaweed
acid; Keltrol(R) CR suspensions; controlled Okmulgee, OK; San Diego, CA
xanthan gum; Kelmar(R) release medications;
potassium alginate; dental impression
Gelrite(R) gellan gum materials
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PRINCIPAL EQUITY AFFILIATES
Monsanto participates in a number of joint ventures in which it shares
management control with other companies. Principal joint ventures in which
Monsanto has a fifty percent ownership interest include: Flexsys L.P.,
headquartered in Belgium, which produces and sells rubber chemicals and rubber
test instruments; Advanced Elastomer Systems, L.P., headquartered in the United
States, which produces and sells thermoplastic elastomers; and Companhia
Brasileira de Estireno, headquartered in Brazil, which produces and sells
styrene monomer. In addition, aspartame is manufactured and sold in Europe by
fifty percent-owned joint ventures. See ``Geographic Data'' on page 43 of the
1995 Annual Report.
Monsanto also has investments in a number of other equity affiliates. The
Company has recently taken a significant equity position in DEKALB Genetics
Corp., and expects to take a significant equity position in Calgene, Inc.
during the first quarter of 1996. See ``Recent Developments,'' above.
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
63 of the 1995 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 Products segment 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 Products segment sometimes results in
short-term borrowings to finance 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 Food Ingredients segment, however, makes significant
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, the Pharmaceuticals segment pays rebates to state
governments for pharmaceuticals sold under state Medicaid programs and under
state-funded programs for the indigent. The Pharmaceuticals segment also grants
discounts to certain managed health care providers. Sales through managed health
care providers constitute an increasing percentage of that segment's sales.
Introduction of new products by the Agricultural Products, Pharmaceuticals
and Food Ingredients 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. Governmental actions may also affect the pricing of
certain products, particularly in the Pharmaceuticals segment.
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 generally 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
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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 Products and Pharmaceuticals segments and with respect to
NutraSweet(R) brand sweetener. Certain proprietary products such as Roundup(R)
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(R) 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 or licensed by The NutraSweet Company, a subsidiary of the
Company. 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 regulatory
exclusivity conferred by the Waxman-Hatch amendments to the U.S. Food, Drug and
Cosmetics Act. Cytotec(R) ulcer preventive drug is protected by a U.S. compound
patent to March 26, 1996 and a U.S. composition patent until July 29, 2000.
Ambien(R) short-term treatment for insomnia is licensed to a joint venture, of
which Searle is a general partner and holds a controlling interest, for the
duration of the venture. This product is protected by a U.S. patent to October
21, 2006, and by non-patent regulatory exclusivity until December 16, 1997.
Daypro(R) once-a-day arthritis treatment is licensed to Searle until January 5,
2003 in the U.S. and varying dates in other countries. This product is protected
by a U.S. process patent that expires on February 26, 1999, and by non-patent
regulatory exclusivity extending to October 29, 1997.
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 Chemicals segment. 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.
Monsanto leases or subleases a number of kelp beds off the coast of
California from the State of California and several private parties. Monsanto
also has leases to harvest seaweed off the coasts of Scotland and (through a
joint venture) Ireland. None of these leases taken individually is deemed by
Monsanto to be material, although the leases to harvest seaweed in the aggregate
are significant to the Food Ingredients segment. The leases have varying terms.
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.
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RESEARCH AND DEVELOPMENT; NEW PRODUCTS
Research and development constitute an important part of Monsanto's
activities. The discovery and development of pharmaceutical and agricultural
products continue to be the focus of most research and development expenditures.
Roundup Ready(TM) soybeans and cotton, NewLeaf(R) insect-protected
potatoes, and Bollgard(TM) insect-protected cotton, all developed through
biotechnology, received regulatory approvals in 1995 and early 1996.
See ``Review of Consolidated Results of Operations'' and ``Supplemental Data''
on pages 32 and 61, respectively, of the 1995 Annual Report, incorporated
herein by reference.
ENVIRONMENTAL MATTERS
Monsanto continues to make a strong commitment to comply with various laws
and government regulations concerning environmental matters and employee safety
and health in the United States and other countries. Compliance with stringent
requirements will continue to be an obligation of 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 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 long-term environmental protection and compliance
programs that reduce and monitor emissions of hazardous materials into the
environment, as well as to the remediation of identified existing environmental
concerns.
Expenditures in 1995 were approximately $47 million for environmental
capital projects and approximately $210 million for the management of
environmental programs, including the operation and maintenance of facilities
for environmental control. Monsanto estimates that during 1996 and 1997
approximately $30 million to $40 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 93 Superfund sites. Monsanto has resolved disputes, entered partial
consent decrees, and executed administrative orders between Monsanto and the EPA
in 58 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 ten years. At one other site, Monsanto has determined that it has
no liability whatsoever.
Monsanto's policy is to accrue costs for remediation of contaminated 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. Monsanto does not discount these liabilities, and they have
not been reduced for any claims for recoveries from insurance or from third
parties. Monsanto has an accrued liability of $71 million as of December 31,
1995, 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 Superfund sites in this category include the noncompany-owned
Brio, Fike/Artel, MOTCO and Woburn sites, which account for $44 million of the
accrued amount.
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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. Because of these uncertainties, primarily related to the
method and extent of remediation, potential future expenses could be as much as
$10 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 41 of these sites. Monsanto has an accrued liability of
$90 million as of December 31, 1995, 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. Because of these uncertainties, potential expenses could
be as much as $20 million for these sites. Four sites in this category account
for $58 million of the accrued amount and for approximately all of the potential
future expenses.
Monsanto spent $60 million in 1995 for remediation of Superfund and other
contaminated sites. Most of these expenditures were related to the Chemicals
segment, and similar or lesser amounts can be expected in future years.
For hazardous and other waste facilities at operating locations, Monsanto
recognizes postclosure environmental costs and remediation costs over the
estimated remaining useful life of the related facilities, not to exceed 20
years. Monsanto spent $14 million in 1995 for remediation of these facilities
and has an accrued liability of $49 million as of December 31, 1995, 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 facilities are approximately $120
million.
While the ultimate costs and results of remediation of contaminated sites
cannot be predicted with certainty, Monsanto's liquidity, financial position and
profitability are not expected to be materially affected.
EMPLOYEE RELATIONS
As of December 31, 1995, Monsanto had approximately 28,500 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.
Ex-U.S. operations are potentially subject to a number of unique risks and
limitations, including: fluctuations in currency values; exchange control
regulations; import and trade restrictions, including embargoes; governmental
instability; and other potentially detrimental domestic and foreign governmental
practices or policies affecting U.S. companies doing business abroad. See
``Geographic Data'' on page 43 of the 1995 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, profitability or liquidity in any one
year, as applicable.
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 has 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 11 cases brought in Harris County District Court or the United
8
10
States District Court for the Southern District of Texas on behalf of 936
plaintiffs who owned homes or lived in the Southbend, Sageglen or other
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; they assert the need for medical monitoring;
and, in the case of the homeowners, claim 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 one of a number of defendants in two actions brought
in Harris County District Court by 417 plaintiffs, who are former employees of
the owners/operators of the Brio site, and members of the employees' families or
persons who worked near the Brio site. Plaintiffs in one of these actions also
owned homes or lived in subdivisions near the site, attended school in the
Southbend subdivision, or used nearby recreational ball fields. 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, G. D. Searle & Co., a subsidiary of the Company (``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(R) 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(R) caused personal
injury resulting from pelvic inflammatory disease, perforation, pregnancy or
ectopic pregnancy. As of March 1, 1996, there were approximately 35 cases
pending in various U.S. state and federal courts and approximately 345 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(R) in the
United States, citing the cost of defending such litigation.
Searle has been named, together with numerous other prescription
pharmaceutical manufacturers and in some cases wholesalers or distributors, as a
defendant in a large number of related actions brought in federal and/or state
court, based on the practice of providing discounts or rebates to managed-care
organizations and certain other large purchasers. The federal cases have been
consolidated for pre-trial proceedings in the Northern District of Illinois. The
federal suits include a certified class action on behalf of retail pharmacies
representing the majority of retail pharmacy sales in the United States. The
class plaintiffs allege an industry-wide agreement in violation of the Sherman
Act to deny favorable pricing on sales of brand-name prescription
pharmaceuticals to certain retail pharmacies in the United States. The other
federal suits, brought as individual claims by several thousand pharmacies,
allege price discrimination in violation of the Robinson-Patman Act as well as
Sherman Act claims. Certain defendants, not including Searle, have reached
tentative agreement to settle the class action. Searle has entered into an
agreement that would significantly limit its liability (based generally on its
share of the relevant market) should the federal class action result in an
adverse judgment. In addition, consumers and a number of retail pharmacies have
filed suit in various state courts throughout the country alleging violations of
state antitrust and pricing laws. Searle believes it has meritorious defenses
and is vigorously defending each of these lawsuits.
On September 30, 1994, the U.S. Environmental Protection Agency (``EPA'')
issued an administrative Complaint and Proposed Compliance Order alleging
violations by the Company of certain sections of the Resource Conservation and
Recovery Act. The alleged violations relate to the disposal of certain wastes at
the Company's formerly owned facility in Addyston, Ohio. The EPA has proposed
penalties in the amount of $555,900. The Company has denied the allegations and
is vigorously defending itself in the proceedings.
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
9
11
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 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. 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 segments which use such plants as of January 1, 1996, 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, and major portions of the San Diego, California
plant, are 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 1995.
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 page 49 and ``Quarterly Data'' (for the years 1994 and 1995) on page
62 of the 1995 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 for the years 1991 through 1995, appearing on page
64 of the 1995 Annual Report, is 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 29 through 33, ``Segment Data'' on
pages 34 through 42, ``Review of Changes in Financial Position'' on page 45, and
``Review of Cash Flow'' on pages 47 through 49 of the 1995 Annual Report is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of Monsanto appearing on pages 28, 44,
46, 50 and 51 through 61; the Independent Auditors' Opinion appearing on page
27; and the tabular and narrative information appearing under ``Quarterly Data''
on pages 62 and 63 of the 1995 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 and page 6 of the Monsanto
Company Notice of Annual Meeting and Proxy Statement (the ``1996 Proxy
Statement'') dated March 14, 1996, is incorporated herein by reference. The
following information with respect to the Executive Officers of the Company on
March 1, 1996, 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, 1991
--------- -------------------------------- ---------- -----------------------------------------------
Richard U. De Schutter, 55 Chairman, Chief Executive 1995 Chairman, International Operations, G. D. Searle & Co.,
Officer and President, G. 1989; President, G. D. Searle & Co., 1991; President
D. Searle & Co. (a and Chief Operating Officer, G. D. Searle & Co., 1993;
subsidiary of the and present position, 1995.
Company); Advisory
Director--Monsanto Company
Steven L. Engelberg, 53 Senior Vice President 1995 Partner, Keck, Mahin & Cate, 1986; Partner-in-Charge,
--Monsanto Company Keck, Mahin & Cate Washington, D.C. office, 1986; Chief
of Staff of Office of the United States Trade
Representative (on leave from Keck, Mahin & Cate
until May 1993), 1993; Vice President, Worldwide
Government Affairs--Monsanto Company, 1994; and present
position, 1996.
Pierre Hochuli, 48 Vice President--Monsanto 1995 Regional Director, Europe/Africa/Middle East--Monsanto
Company; President--Growth Europe, S.A., 1985; Vice President, Finance and
Enterprises Business Unit; Planning--The Agricultural Group, 1991; Vice President
Chairman, Monsanto and General Manager, New Products Division--The
Europe-Africa Agricultural Group, 1992; Group Vice President and
General Manager, New Products Division--The
Agricultural Group, 1993; Vice President, Corporate
Planning--Monsanto Company, 1993; Vice
President--Monsanto Company; President--Growth
Enterprises, 1995; and present position, 1996.
Robert B. Hoffman, 59 Senior Vice President and 1994 Vice President, FMC Corporation, 1990; and present
Chief Financial Officer; position, 1994.
Advisory Director--Monsanto
Company
Teresa E. McCaslin, 46 Vice President, Human 1994 Vice President, Human Resources, Avery Dennison
Resources--Monsanto Corporation, 1989; and present position, 1994.
Company
Philip Needleman, 57 Senior Vice President, 1991 Vice President, Research and Development--Monsanto
Research and Development Company, 1989; Vice President, Research and
and Chief Scientist; Development; Advisory Director--Monsanto Company, 1991;
Advisory Director--Monsanto Vice President, Research and Development; Advisory
Company; President, Director--Monsanto Company; President, Research and
Research and Development, Development, G. D. Searle & Co., 1992; and present
G. D. Searle & Co. position, 1993.
Robert G. Potter, 56 Executive Vice President 1981 Executive Vice President and Advisory
and Advisory Director-- Director--Monsanto Company; President--The Chemical
Monsanto Company Group, 1990; and present position, 1995.
12
14
Year First
Became an
Executive
Name--Age Present Position with Registrant Officer Other Business Experience since January 1, 1991
--------- -------------------------------- ---------- -----------------------------------------------
Nicholas L. Reding, 61 Director; Vice Chairman-- 1976 Executive Vice President, Environment, Safety, Health
Monsanto Company and Manufacturing and Advisory Director--Monsanto
Company, 1990; and present position, 1993.
Robert W. Reynolds, 52 Vice President, 1994 Vice President and General Manager, Crop Protection
International Operations Products Division--Monsanto Agricultural Company, 1990;
and Development-- Vice President and Managing Director, Latin America
Monsanto Company World Area--Monsanto Company, 1992; and present
position, 1994.
Robert B. Shapiro, 57 Director; Chairman, Chief 1987 Executive Vice President and Advisory
Executive Officer and Director--Monsanto Company and President--The
President--Monsanto Agricultural Group, 1990; Director; President and Chief
Company Operating Officer--Monsanto Company, 1993; and present
position, 1995.
Hendrik A. Verfaillie, 50 Executive Vice President 1993 Vice President and General Manager, Roundup
and Advisory Director-- Division--The Agricultural Group, 1990; Vice President
Monsanto Company and Advisory Director--Monsanto Company; President--The
Agricultural Group, 1993; Vice President and Advisory
Director--Monsanto Company, 1995; and present position,
1995.
Virginia V. Weldon, 60 Senior Vice President, 1990 Vice President, Public Policy; Advisory Director--
Public Policy; Advisory Monsanto Company, 1990; and present position, 1993.
Director--Monsanto Company
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
pages 8 and 9 and under ``Executive Compensation'' on pages 13 through ``Certain
Agreements'' on page 17 of the 1996 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 1996 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 28, 44, 46, 50 and 51
through 61 of the 1995 Annual Report (See Exhibit 13 under Paragraph
(a)3 of this Item 14)
2. Financial Statement Schedules
The following supplemental schedule for the years ended December 31,
1995, 1994 and 1993:
V--Valuation and Qualifying Accounts
All other supplemental schedules are omitted because of the absence
of the conditions under which they are required.
3. Exhibits--See the Exhibit Index beginning at page 19 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 Nos. 10.1 through 10.23 on pages 19
through 21 of the Exhibit Index. The following Exhibits listed in the
Exhibit Index are filed with this Report:
10 20. Letter Agreement between the Company and Hendrik A.
Verfaillie entered into as of June 27, 1988
21. Agreement between the Company and Hendrik A. Verfaillie
entered into as of July 5, 1988
22. Agreement dated January 29, 1993 between the Company and
Hendrik A. Verfaillie, amending the Letter Agreement
entered into as of June 27, 1988, and amending the
Agreement entered into as of July 5, 1988
23. Amendment to Letter Agreement between the Company and
Robert B. Shapiro entered into as of July 23, 1990
13 The Company's 1995 Annual Report to shareowners
21 Subsidiaries of the registrant (See page 22)
23 1. Consent of Independent Auditors (See page 23)
2. Consent of Company Counsel (See page 23)
24 1. Powers of attorney submitted by Joan T. Bok, Robert M.
Heyssel, Robert B. Hoffman, Michael R. Hogan, 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, Robert B. Shapiro and John B. Slaughter.
2. Certified copy of Board resolution authorizing Form 10-K
filing utilizing powers of attorney
27 Financial Data Schedule (part of electronic submission only)
99 Computation of the Ratio of Earnings to Fixed Charges for
Monsanto Company and Subsidiaries (See page 24)
(b) Reports on Form 8-K during the quarter ended December 31, 1995:
No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1995.
14
16
OPINION OF INDEPENDENT AUDITORS
Monsanto Company:
We have audited the statement of consolidated financial position of Monsanto
Company and Subsidiaries as of December 31, 1995 and 1994 and the related
statements of consolidated income, shareowners' equity and cash flow for each of
the three years in the period ended December 31, 1995 and have issued our
opinion thereon dated February 23, 1996; such financial statements and opinion
are included in your 1995 Annual Report to shareowners and are incorporated
herein by reference. Our audits also comprehended the schedule of Monsanto
Company and Subsidiaries, listed in Item 14(a)2. This schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information shown therein.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Saint Louis, Missouri
February 23, 1996
15
17
SCHEDULE V
MONSANTO COMPANY AND SUBSIDIARIES
---------------------------------
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(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, 1995:
Reserves deducted from related assets in the Statement of Consolidated
Financial Position:
Doubtful receivables and returns and allowances...................... $ 57 $ 24 $ 24 $ 57
----- ---- ----- -----
Inventory and obsolescence losses.................................... $ 34 $ 6 $ 6 $ 34
----- ---- ----- -----
Amortization of intangible assets.................................... $ 522 $128 $ 12 $ 638
----- ---- ----- -----
Deferred tax asset valuation allowances.............................. $ 85 $ 15 $ 10 $ 90
----- ---- ----- -----
Year Ended December 31, 1994:
Reserves deducted from related assets in the Statement of Consolidated
Financial Position:
Doubtful receivables and returns and allowances...................... $ 51 $ 25 $ 19 $ 57
----- ---- ---- -----
Inventory and obsolescence losses.................................... $ 45 $ 12 $ 23 $ 34
----- ---- ---- -----
Amortization of intangible assets.................................... $ 450 $ 81 $ 9 $ 522
----- ---- ---- -----
Deferred tax asset valuation allowances.............................. $ 89 $ (9) $ (5) $ 85
----- ---- ---- -----
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 $ 51
----- ---- ---- -----
Inventory and obsolescence losses.................................... $ 23 $ 31 $ 9 $ 45
----- ---- ---- -----
Amortization of intangible assets.................................... $ 383 $ 81 $ 14 $ 450
----- ---- ---- -----
Deferred tax asset valuation allowances.............................. $ 62 $ 34 $ 7 $ 89
----- ---- ---- -----
NOTES:
Principally allowances granted.
Includes $9 million charged to cost of goods sold.
16
18
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 Michael R. Hogan
-----------------------------------
Michael R. Hogan
Vice President and Controller
(Principal Accounting Officer)
Date: March 15, 1996
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
--------- ----- ----
Karl R. Barnickol
- --------------------------------------------------- Chairman, President and Director March 15, 1996
(Robert B. Shapiro) (Principal Executive Officer)
Karl R. Barnickol
- --------------------------------------------------- Vice Chairman and Director March 15, 1996
(Nicholas L. Reding)
Karl R. Barnickol
- --------------------------------------------------- Senior Vice President March 15, 1996
(Robert B. Hoffman) (Principal Financial Officer)
Michael R. Hogan
- --------------------------------------------------- Vice President and Controller March 15, 1996
(Michael R. Hogan) (Principal Accounting Officer)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Joan T. Bok)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Robert M. Heyssel)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Gwendolyn S. King)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Philip Leder)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Howard M. Love)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Richard J. Mahoney)
17
19
SIGNATURE TITLE DATE
--------- ----- ----
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Frank A. Metz, Jr.)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Buck Mickel)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(Jacobus F.M. Peters)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(John S. Reed)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(William D. Ruckelshaus)
Karl R. Barnickol
- --------------------------------------------------- Director March 15, 1996
(John B. Slaughter)
Karl R. Barnickol, 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.
Karl R. Barnickol
--------------------------------------
Karl R. Barnickol
Attorney-in-Fact
18
20
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 1. 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)
2. 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 1. 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)
2. 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 1. 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)
2. 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)
3. 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)
4. 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)
5. 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)
6. 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)
7. 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)
8. 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)
19
21
Exhibit No. Description
- ----------- -----------
9. 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)
10. Monsanto Management Incentive Plan of 1994 (incorporated
herein by reference to Appendix A of the Monsanto Company Notice
of Annual Meeting and Proxy Statement dated March 14, 1994)
11. Annual Incentive Program for Executive Officers
(incorporated herein by reference to the description on pages
22-23 of the Monsanto Company Notice of Annual Meeting and
Proxy Statement dated March 14, 1994)
12. Long-Term Incentive Program for Executive Officers
(incorporated herein by reference to the description on page 23
of the Monsanto Company Notice of Annual Meeting and Proxy
Statement dated March 14, 1994)
13. 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)
14. 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)
15. 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)
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. 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)
18. 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)
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)3 of the Company's Form 10-Q for
the quarter ended September 30, 1990)
20. Letter Agreement between the Company and Hendrik A.
Verfaillie entered into as of June 27, 1988
21. Agreement between the Company and Hendrik A. Verfaillie
entered into as of July 5, 1988
22. Agreement dated January 29, 1993 between the Company and
Hendrik A. Verfaillie, amending the Letter Agreement entered
into as of June 27, 1988, and amending the Agreement entered
into as of July 5, 1988
20
22
EXHIBIT INDEX (CONT'D)
Exhibit No. Description
- ----------- -----------
23. Amendment to Letter Agreement between the Company and
Robert B. Shapiro entered into as of July 23, 1990
11 Omitted--Inapplicable; see ``Earnings per Share'' on page 60 of
the 1995 Annual Report
12 Statement re Computation of the Ratio of Earnings to Fixed
Charges--See Exhibit 99 below
13 The Company's 1995 Annual Report to shareowners. (The electronic
submission includes only the financial report section of the
Annual Report, consisting of pages 26 through 64 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 22)
22 Omitted--Inapplicable
23 1. Consent of Independent Auditors (See page 23)
2. Consent of Company Counsel (See page 23)
24 1. Powers of attorney submitted by Joan T. Bok, Robert M.
Heyssel, Robert B. Hoffman, Michael R. Hogan, 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, Robert B.
Shapiro and John B. Slaughter
2. Certified copy of Board resolution authorizing Form 10-K
filing utilizing powers of attorney
27 Financial Data Schedule (part of electronic submission only)
28 Omitted--Inapplicable
99 Computation of the Ratio of Earnings to Fixed Charges for
Monsanto Company and Subsidiaries (See page 24)
- -------
Only Exhibits Nos. 13, 21, 23.1, 23.2 and 99 have been included in the printed
copy of this Report.
21
23
APPENDIX
Throughout the printed Form 10-K, trademarks are designated by the
superscript letters "R" in a circle or "TM"; the EDGAR copy indicates
trademarks with the "R" or "TM" in parentheses.