Document pp6pZkrvbxxMKwpedgVMajbM7

^YYooob i r< -c i 11 Monsanto intends to be the best, in whatever we choose to do -- it's that simple." 6L MAR 001656 Annual Repcr! 1983 J- PUINTIFPS exhibit f V 5-SHn I___ 253587 7 i [^!=( ^Express DCCUMENI^ W* TCTWARCHI , m. * v < r,' * ; 201?38-HOC LAWi017774 Monsanto at a Glance Monsanto < 'ompany's ohjeeti\.- e. to c onsistently increase shan-owner valor through market leadership in out lot) countries where we clo business. We do this by developing and mannl'actming products to meet growing customer needs in such areas ns chemicals and chemical products, agricultural produces, man-made fibers, electronic materials. J&health care, process controls, fahriealcii products and oil and gas -- the whole* linked by a strong technological heritage. And we earn the right to operate by acting as a responsible* citizen in our communities and creating a healthy climate for our employee's. MAR 001657 Iluli(\ lhwuf>liniif ihr Auiiwil l{r[ul nlrnh/y .\lnii\ttiiln\ hiuti mniks. 1--__ 2535d?a LAM017775 Operational Highlights (Dollars In millions, except per $hare) Net Sales Net Income Per Common Share: Net Income. . Dividends Shareowners' Equity 1983 $6,299 $ 402 $ 9.78 4.15 89.66 1082 S6.323 S 352 S 8.7!) . 3.95 . 85.97 HIM S6.9IS 5 4 15 SI 1.50 3.75 81.37 Property, Plant and Equipment Additions ' ' D epreciation and^ Obfsolesc>enc./e Research and Development $ 560 $ .673 $ 517; $ .139 $ 290 $ 264 $ 1568 $ 263 S 233 Net Income for 1995 Include* exirxordlniry lax benefits of $5) million, or $0.81 per slure, from the utlliutlon of ex-U.S. loss carryforwards. Net income for 1982 includes an extraordinary gain of $25 million, or $0.58 per share, from an exchange of debt for common shares Contents To Our Shareowners The Hanley Years The Best at What We Do Agriculture Construction and Home Furnishings Pharmaceuticals and Personal Products Capital Equipment Minor N'chitles Chemicals and 1 lydrocarlxnis Apparel Otliei Markets Financial Report Directors and Officers MAR 001658 1 7 8 t 11 17 IS 23 26 29 30 32 5.S | 2535 879~7 LAM017776 j ' 'w i m iy v y r ^ v--J ijjhi -h im 'humiiju. m ip <1.n^iuaw m i ir ?-;i^ y ! r-t y <'r,i ih w -* MAR 001661 Letter to Shjreov.mors (hi iiif i over o! 11;i>> v e.n s Anmi.il Repot t. we m.ik .i Ixild assertion: "Memis.iuui intends (o Ih1 t!ie Ixst in whatever we t house to do -- it's that simple." li is a goal ih.it we are conv inced we i.m reach. In many areas, we have already reached that level or excellence. In others, we are well along the path. That statement reflects the strategic tedircction Monsanto has pursued these past few years as it mov es j? away from a largely com- |y modity petrochctnical-bxscd company towards a company of higher value-added, higher profit specially products and processes. It also speaks to our role in society as a pn>ducer of safe ami reliable products, a good neighbor in our plant and location com munities worldwide, anti an active participant in shaping the dialogue on public policy. We are proud to report to you that, in 1983, we made signifi cant progress towards this goal of excellence and we are continuing to actively manage our assets, technolog)', people, market oppoi utilities, and products in the l>esi traditions of Monsanto. Your comjxmy in 1990 will look quite differ ent, but the strengths which make these changes possible President Richard J. Mahoney (toft) with Chair man Louie Fernandez LAM017779 will still lx: will) us, particular!) the creativity and dedication of our worldwide famih of emplovces. Fundamentally, we see die future Monsanto as a com pany with three roughly equal parts: a successful and profitable chemical products business; a major presence in the biological sciences includ ing agriculture, nutrition and health care; and expanded actiwucs in fabricated goods, process controls, electronic materials and oil and gas. In 1983 we took steps in many areas to forge our strategics into realities, and emerged from die worldwide recession better jjositioned for the coming years. In this past year, ourCompany: Earned $402 million, an increase over 1982 of 14 percent. Increased financial commit ment to research and development by 10 percent over 1982. W'c intend to continue that trend. Carefully managed our assets, eliminating busi nesses which drained profits with no hope of a turnaround. More than tripled our poly mers earnings and brought our libers business to profitahilitv with further improvements in band. Capablv managed our wav through reduced demand for fin in chemicals icmiIi- ing from jx>or weather and the governments Paymentin-Kind program, which iix>k unprecedented crop acres out of production. Made excellent progress towards developing new herbicides and new seeds from plant science. Our frst genetically engineered prrxluct -- designed to increase animal fixxl effi ciency -- moved to the ad vanced development stage. Established a Health Cate Division and dcvclojx.d a blueprint for market entry agreeing in principle to buy the Belgian company. Con tinental Pharma S.A., as an important first step. Took over full ownership of Fisher Controls Interna tional Inc. to permit us to accelerate this high-growth business. Started up the world's larg est maleic anhydride plant which uses a new low-cost Monsanto process. Began fresh initiatives for sales in China and the USSR with results rang ing from new levels of agricultural programs to expanded chemicals and mechanical gocxls. Fought oil infringements and strengthened patent protection for our most profitable product. nonwhip herbicide. Fancied a tcsc.uili agice ment with (Khud CimciMic. while c omiiming out bio logical dim i through major agreement-' with Washington I tmersits in St. l otus and other institu tions around tiie world. Added impmtantly to out Board of Directors through the election of Dr. John B. Slaughter, Chancellor of the University of Maryland at College Park and former director of the National Is Science Foundation. Completed a major cor } porate reorganization designed to lx.ua fixats our tecfinical strengths on worldwide market opportunities. There is still much to lxdone, and, in certain atcas, we were not as successful in 1983 as we would have liked. Although we have more new Iircxhuts entering the mar- c'.placc now- than at am other time in our recent his tory. wc need to -- and will -- shorten the elapseJ time from idea to commercialization. There continue to be parts of Monsanto that are nm oper ating at acceptable pi ofit levels, panic ul.trly in some ol out remaining commodity pet to chemicals. W'c- havre repaired parts ol these unitssand arec agg gressively wot king on the ic-st. The promise ol a highly pi < >(it - able silicon business remains MAR 001662 `2535883 1 LAM017780 mils a furctast. While longtctm |nus|K'Us ait' cm client, oui silicon business had unsatisfactory Financial icsults in UWli. Huildiiijr on and accelerating our stR-ngths and improving results on tJl of our assets \s ill remain our operating philosophy. ( lie Company's performance, of centime, hhi.m meet another, very iniportar .cst: our obli gation to society. In this cate gory, Moiis, nlo also intends to lie second to none. For example, the public lias a genuine .oiiterii at tool toxic wastes and dump sites. Monsanto aglet's with the need for effective manage ment of hazardous waste disposal, and we arc lcsponding. In 1081 we expect to spend $2f> million to clean up old dump sites -- a level ol extxnditiue likely to continue tor several years. Me are providing, strong leadership in mobilizing the i heuiical mdustry to seek positive solutions to the liazat dons waste problem. We think that is what the public would expect from a com pany like Monsanto. On another front, many iiti ciis are unecitain alxiut the new tcchnologv ol genetic t-ngiiii'cting. Sinet* this is an impnilam growth area b>r Monsanto, we intend to l>e a leader in coiiiimmii atiug vsiili the public alsnu the viletv iitlu'ieiit in piojK'ilv legiilaled biotei bnologv. Finally Motis.iuio |K'oplr throughout the vs odd will lxwot king Ibr open avenues ol Made lor mu products. I'iotectiotiism is not die avenue to internaiioual pros|x ritv. And consistent witlt a lice and fait nailing environment, nations must lx* cnntiiuiallv urged to protect ptnpcuy uglits. Me intend to defend tlx.-se rigiits, paiticularly in patents and product registration, wliii b are so crititel loom Com pany's lilt MIC. As n result of die new diteilions charted over the past lew years and the corporate reorganization designed to implement them, mu Com pany is much better able to mmmf'f its future. Me know where we want to go, and wli.it it will take to gel there. We hatlxir no illusions that the course ahead will lx- easy as we face swilily i hanging market demands, increasing com|X`tiliou, accelerating technological challenges, and escalating public expectations. Nevertheless, our aspiiation to excel selves a. a ,nil sing lone in a iiiiic of dnisive lomplexities. Our Compauv is astir with a tcitewed sense ol optimism. and indeed a spirit ol cM'itrmciii. As we move ahead, we .uc measiu ing mn selves i mi st.mils against mn vim-iis ol lilt Inline a- 'veil as mu li.idiiioiis Iioiii dll' p.isi - - li ,ii III ions w I in li base i mb cil nvi i tile dei .ides ol siiong leadership lrum John K Queens In |o|ui Mi i I.ink s -- traditions hom whit li compa nies dei ive iheir ideals and standards -- traditions n| ijuality in out prixlucts. ser vile to our (ustomers. laii ness in our shareowners, I>>\lln to mn c'ltplou'cs. and < oiiunitmeni in our plant ,u olliie comiiiuiiities. Our broad strategies are in place, and the task now is m carry them out elleitivelv. 5 low we intend to do tliis is desuilx'd in this Annual Ke|xnl. `Flic gmxl ve.u we enjoved in IdHll is a licaucnmg milestone along the was to Ixing the Ix st in whatcii i we i boose to do." Our plans Iirmide diediicitimi -- we amw what vie have to do. Rirhatd J. MaTimicv President and Chief Kxciniive OHicci / ( bailan.m o1 die bo.iul M.udi "i. I'.i.XI MAR 001663 ESg* fc' The Hanley Years |olm \V I l.mley u iiti d Manli I. IDS I. altrt 11 umia as Chief Kxecutiu Ollnei nl Monsanto. As the first Cf () U'i uiiiid from outside tin* Company's ranks, Mr. Hanley took ou r a $`2 billion multinational enterprise with a proud heri tage of achievement {kiting Ixtck to 1901. ami dim ted it through one of the most important transitions in its history. He moved Monsanto from a loosely knit group ol chemical businesses to a more broadly based, mai ketiugoriented oigani/ation with a highly professional manage ment team and a carefully defined strategy for the future. Under Mr. Hanleys leader ship, Monsanto dramatically expanded its highly profita ble agricultural chemical busitte'" He guided die cor poration into promising sc ientific Helds, in part through strong in-house capability, hut also by way of constructive ; partnerships with leading *'mic institutions. I lc : red an already strong r" of corporate responsi;.-imy within Monsanto. I his began with his own jx-rsonal con mitmcnl to his sulxirdinates and extended iluough<ini thecompam. In all 11 testarea-, his unpi ini on the organization was deep. ;md Ins jieuepthe insights enduring. A gi .< mI me.out e i ! ,:t u i < ! poraliott's ju t lot iii.iiu c w ' Ii.K 11.1111K'' I s to Its ( i 'llllllnli sti K k 11| ;; e I a cl a mini.nurd |K I ind. 1Ji:i iii^ (In 11.iiilcs lemur. Monsanto's stix k rn'i' 119 |m- ft fni. i intdistam ing the IVas |ones' '11 |xt ( ent rise as '.sell ,is l)ii,s<- nl tlie oiltei m.ijm (Itrmicul (oiupatties. 1 he notable pmgi css made under Mi. 11.ink s in Inlilding'stronger pioU-ssion.il ; management, cnltatK ing teiltniial e\]>eitisr. and des eloping a wi ll-b.tl.m< i-d piodiu t line ssill st.md Monsanto in good stead (Ini - ing the rest n! this dec ade and into the next. Hi' suite will <outiiuie to lx- heard 'sitli cl.it itv. attic tilatiug a leg.u s ol jK'opIc.planning,md put |>osr. j_______ 2535885~J MAR 001664 LAM017782 The Best At What We Do ... our market strengths in the late 1'J80s Ti> in-1iu1 Ix-st ;it vvhatevci c.e i boose in do ... in i iiMin- that Moms min is .1 Inisim-ss entci prise worths of the urntide live 11ut enthusiasm ot shaicowncis and inu'siois Ix'twccn now and the IWUs. MV are in tiansition -- awac I rum largely pet rex hemic alhused rniniiHKliiv chemicals toward a hroadet i.mgeof higlici-value spec uliv pnxlurts. By Itf.'o uc ex|x-et Monsanto to lx- involved in three broad <1:1.0: traditional chemicals and chemical prod ucts, innovative biological pnxlucts and high-growth engineered goods a. id systems. MV have the fundamental strengths with which to forge this three-part Monsanto. There is a solid base of lead ership businesses -- ranging from long-time leaders like rublier chemicals to premier glow tit products like Roumlufi heibidde. MV exjx-ct a strong arrav ofdevelopment.il busi nesses to hcgi/i to add substantial revenues to our earnings base within the next few years. Our research and technologi cal capability will not onlv produce new ptixliii [s lot the hmirc hut also supple ment existing pnxlucts. fot instance, signilieant inc teases in technologv sending loi our lilx'is busine sses ovei die past lice vears have ii-solicd in a bi(<ad lange ol new pnxlucts with gie.11 promise. Our linaiHi.il strength ena bles us to siippu.-t our gmwili piogiauis and to puisne a realistic acquisitions strategv. MV know what we must do to reach our goal. In the next lew pages, eve offer evidence that we ate turning >111 objri liv es into realities, through: new pnxlucts -- witness Rin>rfi,-I licrbic ide lot \ incvatcls and Sami herbicide lot rublx'i pi.ml.moils. Snulo/in nr thci lilt plastic rublxT and (.mltm engi neering thei tnoplasiic s. t'RilVOX instnii.ietnation and many othets. new markets and new appli cations -- as with liimmliifi hnhiride uses in con-eiv.ition tillage, or Siijlfx plastic interlayer in glass lor new aicliitectur.il uses solid maiketing -- demon strated bv the growing market strength of / it-.-u herbicide and the nlienomenai gtowth of \\,<ti-l).ilnl c at |K-t-. illtci 11.It l> III.il III.il k<t di e rl opine III -- I.iligl.lv; lloil, 1>mg c-st iblnhed Idc. 11 lc InI'inessev like pl.istii s :o die rapid mici ii.moii.il expansion nt grn.cth busi nesses like elec in mil Ilt.itt-i ials. strategic acquisitions -- including total ownership of Fisher (lontiols. pur chase of a sovlxxin seed company and an agree- ment iu principle to acqntw^ the Kuro|>ean phaimaccuii- tal firm C.onlinemal s Pharma S.A.. all in ihSii . T he fundamental pt maple to exc el translates into mat ket strengths in the late I'.ldlK and hcvnnd. 2535886 1 MAR 001665 LAM017783 'm m t j ; \ ) % ^ Agriculture- 'V I'i e>\ '_>() |K-nont nl our (ni.il sales, work! agriculture is Monsanto's iiimm pinlii.ilillmarket. Ntniisauin is the larg est international manufacturer m and marketer of h i hit ides, with Lns\o and Roundup her bicides continuing to lead the industry. Agricultuie will l>c an even more im|K>riant market ina^ the ruturc, and we are invfs|. ing heavily in reseat eh antf" Jr dcvclopmcnt for new prodb . ucts and technologies, such as plant sciences and feed addi tives. We are also inct easing worldwide investments in local manufacture of herbicides. During 1983, our sales in this market were down, largely because of the L'.S. govern ment's Payment-In-Kind (PIK) program, which paid fanners to leave an planted MAR 001666 Many now reduced-tib (age practices rety on Roundup herb!eMe. Here, capeweod crowds out clover in on Austra lian pasture. Roundup appftc i at low rates when capeweed Is In flower klOs tf*e we* < before it sets seed, thereby reducing infesta tion in the next crop. 2535887 I LAIVI017784 "^001667 Scout herbicide controls troublesome weeds among rubber trees on this Malaysian plantati; n. Scout complements the use of Roundup herbicide in the total weed manage* ment system for plants* tlon crops in tropical Asia. 2535888 I LA A/1017785 One IktiicHi of I'lK for Monsanto was increased sales of Roundup liei bicitle for weed control on idle PIK acres. Nevertheless, worldwit le sales of Roundup in 1983, tip 11 percent over 1982. were less than \vc had exacted because of die depressed international economy, a strong dollar and unusually bad weather primarily in western K.uropc. We expect Rnundup to return to histori cally higher growth rates in tlie seats ahead. Future Products from Incre .jed Research It the future. Monsanto's greatly incteased reseault efforts in agrit ultore and bio logical sciences will icsnlt in new pioducts for Imth exist ing and new agiicultmetelated markets. We Ixilstered our already first-rate research capabilities during 1988. as wc neared comple tion of two major research centers -- one neat "Ibkyo and another near St. I amis. Wc also purchased another leading seed company in 1983. providing ns with a southern l1. S. soy I tea u genepool. Considerable research attention is being focused on plant sciences, a long-term effort with enormous potential. The challenge for the near term, however, is to maintain and enhance the markets of huso and Roundup herbicides as patents in some countries begin to expire in the late 1980s and early 1990s. While there are a number of options available. Monsanto will use a three-pronged approach: continuing to price to value; ties eloping new use* and applications; MAR 001668 and ucating new lot muta tions, based on eat b hci bit ides at the ingit dtrnt. that can seise sjH.-tilit. welldefined market segments. Maintaining basso Herbicide Market Position Im.wo herhitide is the mot e mature product with dearly defined markets.,'ib mbancc Lfisw'i- position and prepal for patent expiration in late 1987, we will Imild on its t several strengths: well-estab lished reputation lm tpialitt. snong brand identity and the largest anti l>est Held -.ales and technical support team in the agricultural themital business. In addition, we expet t to have new and lK.net Itetbicities available in the market before expiration of the pat ent on hisso. Furthermore, there will Ik new su|k riot formulations and new mixes with other bet hit ides. We are confident that hu\o anti related herbicides will main tain a strong market position in the late 1980s and iKyond. Patent expiration is not <|tiitr the same loiuetn lot Roundup herbiiide lor two 1" "2535a89_| LAM017786 reasons. ] i; s|. III tin- l 'imol Si.Hfi a ifii-iiiU issued |uu iit gives |)l dil l ll< III Ii I till- \ I'.ll 2001), l U'll though jMlellls in oilier pai i' ol On uni hi licgin lo espite f.n hi t Sei oml. Roundup is still \ u \ much a growth piodiut. Roundup Herbicide: A Multiplicity of Applications , Roundup is so versatile thai iu;i) be i onsidered not otfe but several products. A nftil- liplicit) of new markets ate being identified, and with reformulations and new applicat'ons. Roundup is spreading lo new markets throughout the world. Measuring milk yields is. pert of rtoariy completed experiments? studies on methlony bovine tomatotropin (MB3). a compound which Improves the effi ciency t.' come slon of feed to milk in dairy cat tle. To be Introduced In the late 1930a, MBS should help reduce the cost of milk production. 2535890 l LAM017787 L*j ii^ iii h' .hihi ihW )WcrrT '7, ~-^ ,- l i i |n '-t-h s w p ;i ---^s***1w For example, as a pre-harvest herbicide, applied to a Held with matured crops. Roundup destroys weeds, thus permit ting a cleaner harvest, aiul prepares the field for the planting of a second crop almost immediately. After only two years, it is the stan dard in the United Kingdom and continental Europe, and we intend to establish preharvest application in the United States. continues to find favor as an integral tool in ever-expanding reduced til lage agriculture. For instance, low rainfall in some wheat growing areas in the United States and Australia rc-'.|uiivs that fields lie fallow one year out of even' three or four in order to build up moisture for the next c rop. Chemical fallowing conserves soil. time. lalx.>r. and energy by replac ing ten to twelve plowings a year with a one-pass applica tion o! Roundup. In another reduced tillage practice in Australia, Roundup herbicide, applied at low rates, effec tively controls (ajtcweetl, which has taken over broad expanses of Australian pas ture land. New Products for New World Markets We arc developing several new products for loner cost and more effective control ol both |M.'rennial and annual weeds, linmro herbicide, a social formulation of the ac tive ingredients in /..(> and Roundup imroduc ed in 1081, has grown in reduced tillage uses in corn and soy (scans. Within the Iasi few mouths we have also introduced Ricodirl herbicide for v ine yard use in France and in other grape-growing coun tries. Also just introduced. Seoul herbicide controls trou blesome weeds in rublscr plantations in Malaysia. It has potential for other crops throughout (topical Asia. Through these new formula tions and new uses, products based on glypbosate. the active ingredient in Roundup. are lieing introduced into new maikets worldwide-. While we enhance the markets ol our herbicides, we will also move rapidlv ahead on products for (he animal feed industry. We have com pleted and suecesslullv started up a lOtl-inilliun- pouud-jx'r-year facility in Texas for producing Aim,it feed supplement, licjuid methionine hydroxy analog. SantiKjuin antioxidant contin ues to be tlie leading antioxidant used in the poultry Iced industry. = Wc expect to market a new 1 product for animal agricul- * turc within the near term. i Metliionyl bovine summon n- pin. an experimental product made through genetic engi neering lechnic|tic s. impmvo the efficiency of milk prodtu tion in dairy rows, h is showing attractive test u-s-.ilts. mar 001610 2535891 I LAM017788 m in iw TT--nmniii Construction and Home furnishings oorv............... -- . -- ----- The remsinirtinn and home furnishings matket is i m . _. ............. _ . Monsanto's second largest market. accounting tor l`.l percent of local sales in 198:1. It will continue to lx: one ol our largest as wc enhance the position of strong established products and new pnxhu is through quality, value and increased technological support. This is a highly cyclical market, heavily d<:|)ciuleni on the volume of residential construction. Depressed fm three years, construction and Sal** to ConstruetJon nd Homo Market (In Millions) home furnishings icbmindcd strongly in 1983, and Monsanto's salts were up 13 pet cent. Sales of Sanlirnrr plasticizers, which impait flexibility to vinyl materials used in ilooring and wall cov erings, followed the strong surge in construction during the vear. as did sales of resins used in paints and industrial coatings. Sales ol l.irtran ABS plastiis did well in small appliances, a growing new market for this product. l.uUran l.'ltra .MIS plastic, a higher quality new plastic, gained increasing acceptance for consumer elet ironies and teleiommuni- tiologi< al commitment to develop new prixlucts and modify existing piodiitis in act s lit: lilv. s. Nfonsnutn intends to lietonte a larger supplier to these- markets, raiiicularlv strong during 11)8:1 and projected as large growth products for the next several years are two wellestablished Monsanto products-- Litton nylon lilxts for ear[>ct and Safin polyvinyl hutyral plastic interlaver lot laminated glass. Both muted well ahead ol market tec osc ry during 1983. < at ions uses. Sales of Aaili/u .k relic filters, used in uplmlstei \. dr.qxi tes and wall meetings. also giew in MIKA. With a ma|or tec li- Strong Growth for Wear-Dated Carpets The suicess ol l hum nylon filx-i tests on it - sitong jx i Inimalice ch.irac lei i-ait s liac ked up lit our wanaiity (or U/vo hnU il carpets. i his is the liest-knowu pioduet warranty in the tiusiness and has lieeu in use for more than two decades in the appaiel industry. It stands today Ix'iiiiul Whn-lhlrtl carjgp |x-ts made with out luaiulecf.^ fillers. 1 lie symlxil lot Uiw^ Lhilrtl cat |xts assures the con sumer that the rar|x*l Ix ing pin t based lias passed mu rigorous testing standaid' and w ill provide ext c lient |x:rroriiiance in the home. Sales of Vltmn libels li.ee grown dramatically since Wcar-Dnhtl eat pel was intro duced in 11)80. Today more than (iO percent of out ns Ion carpel fiix*r is sold as branded lilxTs, and met DO |x-ueiu ol all retail c-.n |xt stores cat r> ll}w-Drt/rt/(ar|x-ls. At the January 11)81 carjxt trade shows, Monsanto had the majority of all the new ns Ion staple car|x'ts introdiued. | 2535892 l MAR 001671 Expanded Uses for Sa/tex Interlayer Sa/h-\ pol\\in\l Imtsral ititer- l.iyu lot laminated has Ix.'cn .1 maik.ii leadei inr lout decades in automobile safety glass. It also lias wide acceptance for safety iru'ons as skyliglu glass in buildings and in .strucunes where stiffly glass is required by the Consumer I'uxhtct Safely Commission. Liruinated glass made with SaJIrx plastic intetlaver meets today's aulii- teclural designs for a versatile, high-|>ei lot mancc glazing product that ollets safety and secttrin as well its solat and sound loutiol. :i> Consumers esn bo sure of quall'y and value In MfearOafod carnets made with Uttron nylon. Since Monsanto began offering a five-year warranty for Mfea/dOated carpets in I960, sales of Monsanto's branded premium carpet fibers have increased by 28 percent. J 2535893 j Ih.mutu e\id<u<i ii| the (|iialiiie\ dI Lumn.ited im windows oatu ml liming August 1*.>S!t, wlu'ii llurti- onc Alicia hit 'innlic.wi 'Iexas. Many buildings wi'.li ordinal glass sufieml .weather damage and inter ruption of business. However, those with lami nated gins' were protes ted from such damage anti disruption. This demonstration of the qualities of laminated glass lor arrhitertural use will help promote the rapid grow th of this older Monsanto puxlurt. whose stiles grew by more than 25 percent worldwide during 1983. Ait oM product finds new use*. The market for Strife* pcdyvtnyl btrtyraS irrtsrlayer, for 40 years an essential part of laminated safety glass in automobttss, has grown wHh .he use of laminated architec tural glass, as in the exterior walls of Pepper* olns UnJvarsfty Plaza in Los Angelss. L/xW\0^791 Pharmaceuticals and Personal Products -? M<<n<un[<> will broaden its jK>si:ion in pharmaceuticals and jxrsonal products thinugh new product and market development, intcrnaiional expansion and acquisitions. . Markets for pharmaceuticals, determents, and |H*rsonal [ r'V;- KlHX^ provided 13 percent of . Monsanto's total sales in 1983. These markets tend to lx less cyclical than others, but they benefited front the general ; mover) in 1983. anti Monsanto's sales increased 7 percent over 1982. Sales of Monsanto's plastic bottle's, most of which ltccome packaging for pnxlucts in these markets, were particularly healthy in 1983. . Wc intend to strengthen our position in this market T through a continuing empha sis on higher value-added products. During 1983. detergent products Irenelited from the recovery in the U. S. econ omy, where we have for years been the largest maker of raw materials for the^H|)i and detergent industry. Now Detergent Product* in Global Markets Monsanto is poised to lakeadvantage of op|>ortiinitics in worldwide detergents m kets (dr the u-st of this decade. We ate working to devrlii|) new sut I,id.mis. **** 7T KM Stitt to PhormocoutlcaU and Ptuontl Product Market (In Mflfions) builders and bleaches. For example. Monsanto is devel oping a potential new bleach product with characteristics particularly attractive for lowtemperature laundering, the prevalent practice in the United States and a growing one in F'.utope. We exjrcct to market this prcxluu within the next lew years. Traditionally, Monsanto Ijs i on U.S. detergents cts, even though we a}pkly suppl) NTA (niirilotjgea^ic uckI) and other fngrtdlcnLs to non-L'.S. matkets. Our developments, products, however, have equally great ;>tetitij| in utli' i wtM Id mat keiN. w In i< we ,'te in< leasing our olloiiv Wc ,ie piiisuiiig plans In lest die | Ktcniial Idr mvrstinciil in the local m.mulai lure ol (Ictogcni prcxluds not only in Ku -o|x` but also in South east Asia. China. Japan and Brazil. Moving Into Prascrlptlon Drug Markets Monsanto intends to Ixx nine a major narticip.mt in the glohal pi esc ription pharma ceutical market. Our newly created Health Care Division experts to liegin marketing Monsanto-discovered prod ucts in the late 1980s. During 1983. the Health Care Divi sion built its nrgani/uiion through the appointment of several top managers with extensive exjxn -nee in the pharmaceutical business. We also negotiated an agreement in principle during 1983 to acquire Continental Pharma S.A., a Belgian pharmaceuti cal company, w hich has lirstclass rcscandi and devel<)|>MiCiiL capabuin MAR 001674 i_____ 2535095 i LAM017792 Copitn! f ncepr ert I .VV1JHJILWVJ Our move iiuo health care markets is based on a careful consideration of Muusanto's strengths and market oppor tunities. For instance, we have technological and research skills relevant to the pharmaceutical field, particu larly with our strong position in biotechnology. Another strength is our series of rela tionships with major scientific research universities, includ ing Washington University in St. Iritis, Harvard University and Oxford University. Sup plementing these is equity interest in two biotechnology companies, Biogen N.V. and Collagen Corporation. Aside from our technological and research strengths, phar maceuticals arc attractive to Monsanto for other reasons. It is an international business with no dominant world leader. !t is also a high valueadded business, consistent with Monsanto's move toward proprietary products. Finally itisalargeandgrowiugniarket. We expect pharmaceutical sates io the nott-Cqffqpunist world to grow to mure than * billion by 11190. mure than double 1983 sales. Monsanto is alvi involved in oilier pharmaceutical mar kets, primarily as a supplier to Rnal fotmulators. We are the world's leading supplier to the over-the-counter anal gesic* market, with strong positions in aspirin aird acet aminophen. During 1983, we maintained our position in wor ld aspirin markets, while we increased our participa tion in the higher-growtn acetaminophen market. We arc also die only U. S. manufacturer of L-Dopa, a prescription drug used in the treatment of Parkinson's Dis ease. The hulk manufacture of this dre I based on chemistry ; < >neercd by Monsanto \ilists. MAR 001675 J, -'SHit, r- Sat** to Capital Kquipmatlt I (In Millions) Currently providing It jxmcent of our sales, capital equipment markets should lie the arena of some of Monsanto's greatest growth during the next decade. Superior technology, worldclass products and excellent service give ils a strong |H>sition from which to expand. Most segments of the capital equipment market remained depressed during 1983. and our overall sales dioptxcl In a percent. Sal's of Fisher Controls International. Inc. manufacture! <'l tontrol valves, field measurement instrumentation and distr9>uted digital control svstems lor industrial processes, wendown bv 10 permit. Hint is a 2535896 ] LAM017793 I.ir IxMtei jK'i iorm.mi e than mu ronijielitors. Iiimnn. wlui averaged .1 sales do line of more than 30 permit. 'I he electronics industiv resumed giuwth in 1083, ,u:d our sales of silicon-wafer firoducts used in the manu- acture of integrated c irenit-* rose 36 percent. We exjx'ct our eletuonic materials income to turn positive after several years of heavy investment. In engineered products and facilities, results varied. Sales Initially developed to fio>jvir nyvoQin YrOfn waato w PRISM wiw< raters m rxnanded appH* cationa now Mpcrato othargatM, including nitrogen, oxygen, cton dtoxlde and methane. At Mi Warren Pitnltun Installation In CdWomh, a PRISM separator remove* carbon dioxide from a natural gas stream, making it surtatM for safe. I of sulfuric at id plains In Monsanto F.nviio-Chem Sv 'terns. Itu\. and /W-S.'J hollow-liber gas separators were directh a Heeled be depressed capital equipment s|>cmliug- However, KtiviroChem introduced an imjtortant energy-savin); technology in m$. Monsanto also com mercialized four new applications for OIUSM sepa rators, which found growing international favor during the past vear with sales in Bra/il. Japan. Norway and the United States For the remainder ol the 198(h. Monsanto expects significant revenues Irnm developments in the apit.il equipment markets. Fisher Controls Builds on technological Leadership Fisher Controls will continue to build on its leadership in the global protess-iontiol industrv toward Itecoining the m.unlxT-one worldwide manufacturer of tomplete process-control systems, lb reach that goal Monsanto purchased the on&i&id share of Fisher Controls I by the C.eneral F.lectric Com- ' nar.- 11 .of the I 'oiled lk,.a ..I. , :rl 'i.ll*. I- i >. ... iu d sub-:i tr Fisher has long Urn the piemier mamil.n lint i ol Minimi valves and regnlatm s. 1 he introduction of a unique high-|crfnrinaiice lotaiv valve in l`.W l. coupled with the recent intriKluction of a severe service valve, will fur ther strengthen Fishers leadership in this area. The field measurement seg ment of the business, which is the largest market, is frag mented. 'In enhance its |>ositiou. Fisher Control', has iieen a leader in adapting rleiironii technology to proc ess control. hist sear, Fisher introduced a unique, pro prietary vortex flow transmitter for more reliable and ac t unite flow measure ment. Fisher also brought out a new series of quit k-rcarting valve positioners dial not only "line tune" perfor mance. but oHer tremendous customer flexibility as well. In conii'ol loom msiniii.eiit.ilion. Fisher established ilsell among the n>|) iluee m.mu lacturers vvilli the I`JS(I inlnxliic tion of l'Ri~>\'()\ instrumentation. /*/I'O.Y establishes Fisher as a leading supplier ol distributed digital com ml. which is the pre ferred form of instrumen tation todav. Such control means that a series of tnirmprocessor "brains" are distributed throughout tlic< pmccss. instead of ah conrruF emanating from a central source, The result is more secure, efficient and flexible process control. Electronic Materials Poised tor Market Growth Monsanto in 1D8;$ reaffirmed its commitment to die silicon wafer newness by forming the Monsanto Electronic Materials Company' as ail o|>crating unit. Monsanto is the largest supplier of silicon to the United Slates market and is a leader in world markets. Monsanto has mov ed away from largely commodity sili con toward differentiated silicon-water prodm '> which 7 2535898 \ MAR 001677 LAM017795 mw - .V`44mI* . - y-:..^-VJmKS.L\T-JV'v''-r*c*Cr>-<5 -V*'rS-c*s*.-.:->' ~ * -a - ' 'jj'V , /w* offer greater Value 1(1 Cll>turners and thus o mi maud highci pi iicN. Alic e .1 ismiand-a-hall year slump, we V expect the industry in return ^ to a high growth ran:, and ' Monsanto belies es it is I tetter li poised^than any to take advantage of thiscxpansion. -? By the H)90s. Monsanto's goal *>. for its electronic materials .| .^ba*upspinroeasschisinagntnhuraeles-qtilueastrriers | ivbf a billion dollars. This I'r-growth will lx: based on several strengths. 5pSl -* % iv-t- MAR 001678 PR6V0X procMcontrcl fciatmmantatlon has b cowsc c Isadsr tn a vwepMfrg growfcHiMrtwtWslI sstab- Hshad for continuous* procosv control, PR6VQX Is new racognbad fer superior quantise In batch-proc--s control, at at tMs rasins plant in LAM017796 * Motor Vehicles m Fourth, we are producing high-technologv value-aclcied RDl. Inc., a wholly owned sulzsidiary acquired in 1980, silicon products permitting produces the worlds most chip manufacturers to pro duce higher yields of more , complex integrated circuits ' on smaller chips. Currently, these account For 37 percent, powerful and highest quality election beam accelerators, used io strengthen plastic, ... sterilize disposable medical devices and vulcanize rubber Vof our total salcs/or inte- ^without the use of sulfur. grated archils, dp froni 'V V. ; RDI. Inc., is also moving into' 11 percent, in 1981. -i ' Commercial Development . Strengthens Envlro-Chem -= . Monsanto Enviro-Ghem an expanded serv ice role Tor its customers, with a new - V eastern U. S. center expected to be operational by 1985. ^Systems. Inc.; is the worlds .. leader in design anil coii- struction of sulfuric acid plants. In 1983 that division introduced a new technology to recover the tremendous heat generated by producing acid and to tum it into elec tricity that can he sold to public utilities. A plant using this technology was com pleted in Florida last year. Monsanto is also the world wide technological and sales leader in membrane gas sep aration New applications, such as enhanced 6fl.mnV-_ cry, natural gas reftjig^ landfill-gas recovery and ? nitrogen separation appear promising. MAR 001680 Several Monsanto pioduct lines have long Ixrn leaders in world motor vehicle mar kets, where we made 9 pci cent <>r total 1983 sales, ib extend our successes in these mar kets, we w ill rely on our established market positions, a well-developed interna tional presence, and stqierior technology to customize products to meet, special customer needs. Virtually all Monsanto products in this market had robust sales in 1983. primar-'? ily liecattse of a vigorous 30 percent increase ir. North American automobile pro duction. The outlook is even more encouraging, since the histc-ically hign seven-) ear age of the average automo bile in the United States indicates continuing con sumer demand. Established Products Will Have Strong Growth Sales of Saflrx polyvinyl butyrai interlayer for lami nated automobile saf ety glass should have strong growth for the rest of the decade as governments and manufac turers increasingly s|>ecil> laminated safety glass lor automobiles. Monsanto will benefit from this market J 253590i_ LAM017798 "00 ------ 900 _ A product with significant opportunity in tire markets pt.Mii s ollei exielleut Ih mi am! chemical rrsisianic ,i\ to is low-i>vist nylon tire cord. well as the ability to whilst -ml This producl, made wiili our imparl. Rapid at i cpi.im c > >1 nylon yams, provides tire Cwlun during 19811 icsultcd manufacture!* with a new , it\ significant sales gains in range of tire design and just its second full year of geometry options, which ran commercialization. During lead to lighter-weight tires \ the year, Ciuton gained "with reduced rolling resist-^ ' * acceptance in'wheel covers, ance ami. therefore, . ' mirrors, consoles and interior improved fuel economy nncl t:Mi jxirts in many 198-1 w - to - m -. a 19. -*V "hi y- better handling and ride \ characteristics. models. This pnxhia growing Ixyond autoinojgC MmIo Mo'.jr VvhlclM Market (tn Millions). - Monsanto plastics have many applicau ms into other nf|; automotive uses, both Tor' ' kets such as appliances atub body trim and tinder-tlic- electrical equipment. hoixl components. Among A unique miss lietweeu rul>- the most successful has been' ber and plastic, Saniojamt l.usirau ABS plastic, two thermoplastic rublxr is gain ?;rowth, with manufacturing netv grades of which were ing wide acceptance in high- arilides in die three largest launched during the year. performance rublxa applica markets: the United States, One Ixuter withstands weath tions such as hose, rack-and- Europe and Japan. Safin is ering in various components piniott steering Ixxits and also becoming less subject to atul ihe other provides lower vacuum connectors lor emis the cycles of the automobile gloss for interior trims. sion control systems. industry with its rapidly Monsanto opened a lalxira- growing popularity for non- Innovative Plastics Gain lory in 1983 to support the resklential architectural uses. Acceptance design and development ol We also intend to extend the Two other new Monsanto position of our rubber cliem- plastic products are grim ing teals, in whichd0||fC.t^^K^' ^raptdly in automotive uses, wo-ld leader, today -Motion engineering thermo- two-thirds of our total sale} --^ arc outside the United Stat6_!^ New prixlmts in the late . advanced automotive compo nents made from Sanloprrnt. In addition, we Ixtgau to build a plant in Newport. Wales, to supply the growing F.umjieaii demand lor Sanloprrnt. 1980s will strengthen our lead aud maintain our preeminence in this market. 2535902 I New Products for Motor Vehicles Other new products also promise market growth during the 1980s. :\!t;ntac structural adhesive will sec its first commercial use in 198d-;-:. on a French vehicle. As auto-' mobile makers increasingly use plastics to help improv durability, lower maintenance costs anti achieve fleet-mileage targets, we expect ' ; adhesive bonding to grow * rapidly in lire assembly of body panels. Mvnlrw should meet many needs in this changing market. Offarinp th* qpMttfM ofiublM ingaaaaot Santoprana rubbar wfltfvfva in fTwnltlS TIOW by conventional tharmost rubber material* such as tiaoprana. Kara, TWM quafity Inapactor etiaefcs rack*an<H>Mon stoarfng gaars mada wtth dust bat* lows of SturtoprvM. M' Chemicals and Hydrocarbons ---&>* < A new high-performance silicon-wafer prexhut that allows higher circuit density in microprixcssor-basod emission and engine controls Ifr'- - will go into production in 198d. Monsanto has strongly ~ positioned iLsclf to be a major 5 supplier to the totally integral- .ed control and information \ - '''systems nc-xlcd in the motor vehicles of the future, t Other Monsanto products in ' : / the automotive markets arc ^ . gaining favor. Spray-control : Haps continue to win wide acceptance with major truck Mm to Ctwmlc*U and Hydrocarbons Marfcat (In Millions) . - V;' and trailer manufacturers in V'both die United States and j the United Kingdom. Ft>mr- ^ : Cor polystyrene foam board laminate is used in automo. bile headliners because of its light weight, economy and ' durability. Responding to changed economic and industrial con ditions, Monsanto is moving away from commodity petro chemicals toward proprietary products with greater added value wheie we can distin guish our products by their excellence. However, we remain in certain basic chern- icil businesses where we hold premier technological and tnarkcl positions. We also >^Wivc a sutjsidiary engaged in '0# and gas exploration and production. 'Ibgethcr. they MAR 001683 accounted for 8 percent of our total sides in 1083. During the year commodity chemicals markets in the United States recovered from the recession, growing In mmc than 10 iKTcei:' Imiih|>cum markets remained weak, showing signs r>! reco\er\ only in early 1081. In all mar kets, however, Monsanto's acetic acid, maleic anlndride and other comnulit\ chemi cals outpaced economic recovery. . Despite a reduced demand for nydrocatlions during 1083, Monsanto Oil Com pany extended its record to live years of sustained prolitablc growth. Both pro^ duction volumes and ' revenues were greater than in 1982. Combined hydrocarlxin reserve additions again exceeded the rate of with drawal. Although natural gas reserves were down by 3 jxrt ccm at the end of the ycai. the oil company's emphasis on finding and developing crude oil resulted in an II percent increase in nil reserves. Bv various measures these petroleum and commodity chemicals businesses are leaders in their industry segments. They will retain and increase their leadership positions throughout the 1980s. providing sulistanti.il revenues to the Com|ianv. 2535904 | S IW !W LAM017801 m Leaders:iip in Maleic Anhydride, Acetic Acid Maleic anhydride lus l>t<ud uses in uiiMiim aled puhesur resins lor boats, mntoi vehi cles atid building-., a^ well as uses in luhriiating oil. agri cultural (hemicals and IcuxI additives. Not only is Monsanto the world's largest . producer of this ini|>ortuni < intermediate, we also have i technological leadership through our proprietary butane feedstock process Injj maleic anhydride. Iucrcas- hi An oil strike was tnrifled by tha saml submerslbia rig 'Ocean Rover'' which dribsd appraisal walls on Qrean Canyon Block 18, about 90 milas offshore from Louisiana. Monsanto Oil Company holds a 2fl-parcant {ntarest in this Mock* which has considarabis potential. I 2535905 MAR 001684 LAW1017802 ingly, butane will Ixxomc cheaper and more plentiful than lienzenc, the traditional feedstock For maleic anhydride. Building upon our marketElacc and technological :adcrship. we brought into full nnxhiclion in 1983 the worlds hugest maleic anhy dride plant, located in Pensacola, Florida. This increased ilic company* capacity from 170 million to 300 million pounds annually. Overall, our maleic sales were greater than general ccoInomic recovery in 1983. Monsanto is also the world technology leader in acetic. acid, which is used in a broad range of pnxlucts, including pharmaceuticals, ir.an-made filters, safety glass and agri cultural chemicals. In 1983, Monsanto announced plans to increase acetic acid pro duction by some 73 million pounds through a dehottlc- necking program at our .Texas City plant. This addi. tional capacity will allow us to strengthen our ovjqg||i!' ness by serving more ctist>mers. We expect most if not all acetic acid plants ol the future to employ Monsanto's proprietary technology through licensing arrange ments. Since its introduction in 1971, Monsanto's process has accounted for 90 percent of the world's new acetic acid capacity. High Potential for Oil Company Monsanto's w holly ow ned oil and gas sulwidiary may lx: sntall in si/e by major oil company standards, but it makes strong contributions to our jx.rformatice. Monsanto Oil Company's cost of finding and dcvoiopmg oil and gas is IjcIow industry averages, largely as a result of a drilling success rate of 79 percent. Monsanto Oil Company lias positioned itself well for the future. Following a strategy of balancing exploration and development in higher-risk, higher-potential areas with that in lower-risk, mature areas, the oil comjxmy has been able to acquire several aitive jm>s|)cm. One p.uikill.ul\ sigiiilk.mt discovers' was toulii mol dur ing 1983 by Monsanto Oil Companv and ii i partner'.. How tests on wells drilled in Ultxk 18 of the Orccn ( anyon area of the Culf of Mexko base verified the existence of significant oil reserves. Should this pros|x.*ct r.ove to l>e commercially fea sible. Monsanto's `23-}H.'neiii share could prexiuce consid erable revenues Lv the end or the 1980s. Monsanto Oil Company was also successful in the ITS. governments offshoiv lease stile in May. We leased several high-potential properties with characteristics similar to those of Creen Canyon Block 18. These additional !;!**. could also increase reserves and revene 'he late 1980s. Initial test res u s on a well drilled in the North Sea off the United Kingdom vw highly encouraging. We con tinue to conduct studies to determine the size and com mercial potential of this find. MAR 001685 2535906 Apparel m wo---------------------------- ------------wo- - the apparel industiy plo dded 7 |K-iveni ol urn tot.il stiles in 1983. research Leads to Innova tive Apparel Fibers We arc combining our low cost position in the United States with increased let Imi- oil support lor our An Unit acry lic fillers to develop the products desired by our cuv turners and by consumers. A atM to Apporot MaHcot (In Millions) huiuIkt of new and modified jnoduct.s to Ik" commercial ized in the next one to three years will provide Monsanto with an increased share ol' markets such as sweater and half-hose. We have devclojied rapid Monsanto has strong U.S. color change technology that manufacturing, technical and provides Monsanto with the market positions in acrylic and nylon Hirers for die capability to deliver to our customers an ex[xmded apparel industiy. including range of colored acrylic the worltlV largest acrylic fillers. plant in Decatur. Alabama. In nylon libers ivc commer 'ITirough aggressive market cialized a new product that ing and innovative research, allows texturi/ers to use we are moving to a volume higher speed equipment, sig business in branded, pre-. nificantly improving their mium fibers. ' ^ - productivity. We also inlro- In tnid-1983, Monsanto conr*t jfjfttjjxd Xu-Shock conductive plcted the sale of its aery lie iil*er business in Euro[>e, *tojE>ii in 11)83. lor use iti garmwms that are worn in where we had small plants in -~W*fitfrgs where static elei 11 i< - a ticket with severe overca- ity is ;i problem. jxirity. This enabled us to redirect resources to our nylon and acrylic .businesses in the I'nited States. Sales to We ate making the m<>m ol our stioin; lei him al ami uiarkeiing positions bv build ing on our program lor Wan Ihilnl .ipp.u el. Monsanto ofier* t!ie most successful and highly recognized unisumer warranty in the textiles industry for D)Dotal apparel, and billions of dollars worth of clothing items have carried out war ranty lag in the 22 years sintc such apjxii el was first intro duced. Id provide for the introduction of new products for the apparel industiy. we have increased merchandis ing resources in support o| Wan-Dalai products. MAR 001686 2535907 | hadttJfMMHBiifBiiil Other Markets MUitN Other Memento (In Millions; Monsanto also sells a wide range of products to a variety of markets not discussed abuse, ranging from food processing to industrial water treatment. Most of these industries benefited from the 6 percent rise in U.S. indus trial pmductioit during 1983 and taken together accounted for 12 percent of our sales last yeaivA We are a major suppWP many of these markets, with significant raw material advantages. In others, we arewell positioned lo take advan tage of new product opportu nities and to supply fastgrowing market segments. Developing New Market Niches We are ready to move im fpowth opportunities offered >y selected segments of the food industry, where we are actively pursuing new com mercial developments. As the worlds leading producer of sorbate food preservatives, we ate developing new mar ket niches, as with Smtinrl food preservative for the fast-growing tortilla market. Monsanto also is the leading nuinufaclurer of lactic acid, supplied to the dough condi tioner market to keep bread smooth and homogeneous. We are working with custo. tners and consumers on the development of hot-fiHable lightweight polyethylene terephthalale (PET) bottles for use in the fruit juice and c-ther markets. This technol ogy was cross-licensed from Voshino Kogyosho G>., Ltd., ofJapan and should lx: fully commercialized within two years. Monsanto is aggi c'sivclv expanding the uses lor /C.nr |x)lvsiymtc foam lioard laminate. Original!) dcvclo|x`d for the p.u kaging industry. Fiiu--('.,ir trxlav is used in autos, manufactured housing and the graphic ails industry. Our tiew framing product, at id-lrec Ftmr-C.tn IxKtrtl, protects keepsake items such as diplomas and marriage licenses for years. We are developing new use* fur our C.rrrx spunbonded nylon fabric, which has long been used in carpet under pads and various industrial applications. In I`.IRS we gained new customers in medical applications, where C.rrrx is increasingly used >> make high-t]ualiiy disposable surgical governs and drajxs. Monsanto has strong market jxisitions itt the paper indus try with our rosin sizes, surface sizes and wet st length resins. During 1983 wc testmarketed a new' product. GRASP 111 fiber-bonding pa|>er resin. This resin, with cost efficiencies compared to comjxrtilive prtxlutts, will lx: commercialized in 198-1. MAR 001687 | 2535908__l_ LAW1017805 Irf ffimm aii- * - dT. IU* Monsanto is a majm supplm of Ixah cnnunoditv and -jx'daily chemicals to the industrial water tieatmeui market. For example, sales of De<ptrst pliosplionate.x, used to reduce die buildup ot silt and calcimn-based st ales in ccxiling and Ixiiler water systems, were up 8 percent in 1983. Our market leadership, based on technical innova tions and a fully integrated raw material position, will generate continued stiles gains in the years ahead. MAR 001688 Soctato-feMd Sentinel food preeervattve, being doltvorod hr, te a new product to keep tortlltas from spotting. K flM* a niche In the rapfcRy grow ing market tor Mexican foods. 1 2535909 | UAN1017806 a Financial Report Contents Management Report Review of the Results of Operations Responsibility For Financial Data _ Consolidated Sales_____ ______________ _____________ Consolidated Net Income_____ ___________________ Quarterly Data________________________________ __ Researc1 and Development______________________ Foreign Currency________________________________________ Raw Material and Selling Price Indexes_________ ______ Operating Unit Segment Data Oil and Gee Activities___________________ ________ ________ World Area Basis Data Inflation-Adjusted Data Review of UquWty end Capital Resouroes________ Short-term Liquidity and Capital Resources Long-term Liquidity and Capital Resources Financial Statements Independent Auditors' Opinion__________________________ Summary of Significant Accounting Policies Statement of Consolidated Income Statement of Consolidated Financial Position____________ Statement of Changes In Consolidated Financial - > Jtlon Statement of ConsoHdMsd Shareowners' Equity_________ Notes to Financial Statement? Principal Acquisitions and Divestitures Supplemental Incorm and Expense Data Person Plans __________ Income Taxes________________________ ____________________ Earnings per Share Inventories_______ ___ ____ _______________ Shod Term Debt and Credit Arrangements___________________ Long-Term Defat_________________________________________ Commitments and Contingencies__________________________ -**1*- 43afte*jCapital Stock________ ____________________________________ ^T-'JfSStock Opton Plan -Segment Information ________ Financial Summery_________ ____ ______ 3.1 U 5 36 j' 3> 3/ 38 40 41 42 44 <7 * 48 50 51 52 52 52 53 S3 53 53 54 54 54 54 55 56 Lniess t.'l'vrvt^e '-'riiuiicd ny me ra<`^.a Wonsanro mwi Moniar-.;y Con-cany jrd consoWret/ taivikwes <tml t*> Gsroany means Monsent; CL--rcd', only M dollars are mi.'/ions. e.'no! pt.. injre data i I | l \ I J t t I I LAM017807 *Vr3 ~a' * j ^ Mri>gamnt Report. . . . is respcrutle for the fair presentation and . RaaasppoonnaalbibJlNlltyy For :^4rMfiorsistency'o( d__l_fi_n_a_n_c_i_al_d_a__ta_In_c_l_u_d_e_d__in__f_as__A__n_n_u_a_lHReeopoorrvt.wWneerreenneecceessssary. ' F~inancial D~ ata ntoi86emeot;e66rrates .v, ,.JV,,. bi ' alsp responsiblejor maintaining a systenvoi internal accoui <uflg k riegjonablqj^rarice tbatassels ^safeguarded against mate- =.. l^wfu^'or'd^^Bon'/ind thus! ajthbrized nansactfons'a&S??:: - ..1' - tto^Srmit g>ejxeparatipn cJ ac(SjrSe,financa! data, Cost-bereft j- ' : ' larwii^ntcSn^de^tionkVtfiisreoi'CL.The^tedivenessof^ !f . iS^ trains: (2)Syisto t; mu shftfeO^nef Vote^tbb.-IQRS Ariuiat Mntfiriof. rWnittR Haskins a-'-.-c' q&z - ^C;*t .:^-rr>. * c fc'v:' "ftesUetfa| fjvl?' V '' '*v - SentofV8 Pr^-stcJen* df# ` .- . ?-*CKefRnanciaLOfticarV .: .'m? - : .Vv*^ (&z `V-v.v- SC-': :; h:v :.v ' %. -V-* >:~ h: ;: ;> ' : | 2535911 __l MAR 001690 LAM017808 U-*M3 Vtr 'a^lgY *" T' V . Sf .. * - *... \ > . s > .*^'r*f>~->~i \it *j i: `Z /- " ,,.'Tvi.*` * '1^,^"*v>,-,0? ; '". '.'. <--; /'j ' ''.1 .' ';* Review of the Results of Operations .' ConsotfdaUd Sctor*-^' *-,' . ` Sates by Product Group .1983 .'l iaoi . ~x? ^orpJ^wbdLCtk^ . ^-' ' * wwi "'Nuft3ihnibak.,ic^' 'r>>, *1,167 - 152 1962 1961 i'.cxn 125 -* Ife^'imE *6X3 3B~4"EvtC~- f '* - > .is-/'*!&* - mycwwr^nr resUted from the strengthened United States 5A:*ecJafy In housing and ateomodv^reiated businesses. OH and JJSrto chemicals' volumes also tncrecsedin1983. m addition, 'sate; strongly rebounded in the last halt of 1983, Wowing the tt-ln- I stafamante). ' tresuftedfrgrrt ihewor^Jwide recession, especially ^JOpdrt Vie automotive and housing Industries -- 8 cfierolcite, and fibers Seles lor 1962 were also ' '' t and Divestitures" note to the L. y_.^ *; ' MAR 001691 I 2535912 J LAM017809 -*,:wi'V5.-.V: *..; r /s*i<j':/*.>* SA .J , ~ '?* >'?' .T:_'._.____* __*_ _________*_* ' fifetr|c6re for 1993 sndeased 14 percent from ir>e peer year. reacting me second ' .H^eal level.in Monsanto^ history Higher sates volume v-ch related improvement m' v capacity utSzaiion. along with tower manufacturing costs, increased 1983 results " Gross profit margin improved to 25 percent qUateSVersus 24 percent (or the prof ... year. The Company's comprehensive fyogrSmisV asset management and cost ^y*. f redxtibrt over the past tew years positioned Monsanto to fake advantage of the 1933 economic upturn. . . - , ; i- 3 i 'in 1962. net income declined 21 percent irom 1981. refiec'ing the recessionary ' conditions, excess manufacturing capacity and depiessed sates volume m the . :< worldwide chemtofl industry. - - V.'. , In corr.partng the tast trxee years'net income, nonreuimng items are signueani [ ,,..4. > Extraordinary tax benefits Irom prior years' operating loss carryforwards increased 1 y' ' 1983 nelpcorhe by $33 m&on, as operating results of anexll.S. subsidiary -improved substantiaty.Vi 1982, neTinccme benefited fiom a S23 million extraorefr WtstarxJipo<?efct. fdt*oorrirncr| s vares.' . / i*-'.. jflu- ISfilT a restuit oi netjneeme \*" -i^l^jjbraas^^JiCi'nfSoo and 21 rhaiiori, respectively, tom ncrvreptacement o< tow! CCronsolidated Net Income 3^.jir. w*lifA3iv.*.PM5V*9y7 *vi v-'* i n'wwov ,/ t , r r ---------- rs ' r ^>?'^';affect year-to-year f .^Aftertax gr^n currency gains and fosses inJ983ana 1932, reported under a now ^ " ' I was sBghrty higher than :redSs The 1982 effec- ri^Vje tax rateVbefore theextrac*dinary item, v/as towo< than the poor year -f the. resU ^highier lrivestnient tax: credits ;... ..;/=. U* '.-V >/ Earrtngsper^ere W9fe..$978 in 1983,'versus S8TSVidSlI 50ln 1982 andl981.'^. Iv^t'j^^especttvefy.'The eamfings per share tor each of the last three years have been' > ` |jf. I MeiW b^NQhs: tev^s of hw-ouisiandig ,>.:$!..> &:. i v- . * ^ t . . . ' SSf^AnWysrs ofChange In tamings par that 1983 ", .-1962 BaK*r(Woc*a) -' ?' v*. 1982 ->vS 1981 ;%:iS^ea;;; '.`v Salesyoume and rm. Raw riiaterial prices v ' ' ._ " '*&''x ^r: rTM . L 8(1-25) !^SZX 122 . (3 96) ' 022 ' 277 ^'.'' CXhaimaaifacturngcosts. ' J. 0.22 ('31) T Overtures ... (0JO) (201) `V Norynanufsctrnj expenses- . OparaUngIncama .-lu - 1 (0-33) ' (U3) 0.88 - (334) higher volumes and M/- InUrMtllcdme ExtraorrSnary tens * Share* outstandng Changa In aamlngs par shara (023) . - 031 ft 017 * (008) 0.31 ',(028) -V- (0.09) 040 023 058 (0.28) (030) S 0.99 $(271) 001692 | 2535913 I Quarterly Data > -* > Net Salee Oroee Profit' n -- Income Before Extraordinary Itema Nat Income ?. ' Pint ' QuirtM 1983 1982 Second Third Quarter Quarter St412 SI 453 5 623 1 06 Fourth Quarter SI.651 t iC>5 72 Earnings per Share Bcfcre Edidordrdry Hems 1903 ..... 1982 * IMieMrWyMM* av. *.' Alar Extraordinary Karra DMdanda per Share. . Kv-. 1983 2.47 - 1982>71 1983 ,i` rae?."1''. . -i :. Common Stock Price,.v t- i93 Si.:, n*. 94: L 118% 68*'*- 79% K:*?.7 :V>.i.f y 74v5- ^ 79% : - ' " % . i- y -..->.t 60 r-";-66S/' * c3sC_'>-'.*. . ;* 'V-<-. /f'r'':'-. /Ouarirfy safe'iid>nc6me typically exhibit die'seasonality etheagricultural 3 **f,v TV- ,"ip / 7 ~^-t . r'nosa. Agflcufoii^Y*bducts' safes are heady concentrated rt the first halt of thl U.O.ft- ; r - eccxpmy anQ ;V and have greater pcoraabfity thari other W>jo of business in 1983. agricuSuraf P\l( nrrvnrarriaffev^f V-1*' 00*3* sales and Income were loner In (he first hart as a result of the United Sia "jrN jJl uyi cai y ai Icv/L ,..y,; ocr,^fnfr,ent>s paybwrt-ln-Ktnd (piK) program, which reduced planted acres. %-%: - quarterly results \> 1983businesses' results reflect !he quarter-to-quarter improvement n general ,t?vp-r econorjilcconditions.-esperiatyintheUrttodJBtafts.ascenv^odto 1982 i ' 'V. Major nonrecurring anchor inusual Hems increase >g (decreasing) 1983 a<xi 1962 `V , T; ~~7' '^7-: - earwigs per sharo are as Mows;,.-v >' vYi * ,7>' ^ Th/rd Fourth 351^V'; Quarter' Quarter Quarter Quarter (uflbeMf] from'iosa Nonrecurring'items r _ __j'TV ,. include .1963 tax less carryforward benefits Ttatat $(0.07) _>spy -ina .. ... :.r Edraordbuty path on exchange of ; debt ter commonshares l TV $ .r Gain ftoit ncmiplacemeri irf tow oostY-. ' j^erUFOmetiod . - .006 ^ ipesodmaWBfcn Q25 increment program cost l (toes) from taoKes slut down or sold $ 031 $042 $0.38 (0.18) (0.14) aiO) 040 (0.04) 8 0.64 .s'v-.V $ 0.13 002 (022) $(007) 013 io is; (0U5) 003 $1007; $0.18 (0.28) $(0.12) S 058 0 76 (0 37) (U2I, (0071 $ u^9 $0.81 (0.48) $0.35 $ 058 toe (018) (026) (OX) I 2535914 2S3 mar 001693 LAIW017811 Research ard ot-.ticprTeri i.--po --sc-s rci.-ia tho tests of a-sechufr.,-) rw.'i'dce o wseop new fyodurfs o (/'or- ^ <.cy v jrjvr-p ouxu/jt.- of (Whses ix udnj tu-1-> r > o' .'< ` '/'.v.ieovjo `'u .v -.: (.m''3 Cutnot rclv.rt.rQ ;om.;'e\;ia ue-v'ormtf.! n :>53, ;W5Wysennp'ueoto "'C'-.isf' :o rc-jt/d .e'.'-is ,vx: Av*t' i (vcc: of so'esosoomparno :o i percent in '^'2 arc 3 percent i< '96'. Th-v rc: ea.se 6 a cctrfcifVTftcfi of be:' x ^ gsveh ax tv/w costs of ongoing programs Thp't^vfJ reffocis Morw-ios strategy Roscarch and Development __ v>o _ *a*4_ ____ ___ >->*?____ ^7" ic ccvefop new -tarVers from e'norj'f'g tech'X.'togios. to expfct tr.ia w j ' nyrxet CC-JJOrV.t-C'* *; rv* prodjCC, VO OCW 'pnVCJ.Vjf.S HTC to nVl 'teiO CCrtrCtihVe .K,KVtac;rt. -VOughcortfKxW S..ff)Crt UTfi S-V.-COtO (5Xij! rX| rrwl S ~he p-.riCi- p.-V 'j'O.-.tr- r. research rv'd Jocf-C: rv-r,t ifOi OVl1' tee iOV three .CXS has ft v: "le-e t'fofts i^ccatcd createv; ew besL'vyss <jpp<ofunr-es Vi.wh as / :o' sr.e ar i :r ?.vr q RXD p-~.;'ams si pw: befog.-. a:vat rut*; ton. etecffoo-c rras?nafc boiAChtofogy no'ccUa' bofogy. ant) hunur hearth care. Fey 1963 cee !nird o< "re d&D cu;er Karo i wrro drecled towuras ;> cse wv-ro.ng l;v.nr<..^-es In 1983 Cc',v> `armed 3 nf.itn Care Ov.sior. to ccordir'a'c txmeuicai resea'ce a:\f devexpo-err prograrns Research agreement:. with - several leading t/iivers-ties. both in. rx Unfed States and Ejmoo. sugpfomont n- r\xre ef`orrs ,n tiea'th caio and plant biology fiVncanto has an agreerrvni m prino- gto to acqu'e Cofix'ientai Pnarrra SA, a Bu'gvii. phamnaceutcal company This' planned at.ciL-s.'O' y an mportcirv. step in Vocsa- itqs_dove!cprr.eoi of growth. . 1. R&D efforts expand . cpporuni.esinf,leailhcdrfrpwocts - - -i ; ;4' ^ .%* to support new FU'seatrh in (radtidraJ areas of strength soch as catafysis. potyrrtK ^c*'nce, ' ?`t;' ind-rst'iai chcmtcaia, agecuHi-ra! cnemisuy. cfiemical engincaffig svstents and . business direction aiTidafion research, is aisd ang&rg Construe:on ccntroes on the new re-search : v cornpie* if k Sr Lnus County. fAasoe/C whose pr ocipal focas wfl be buAryioa! and \\- -ir- ... wyneJSutl rese.ifch ihiM' orc'vp-vey ts planned, ior Clasatilcatlon ot Gains (Uosaea) -. - '; 1983 . '962 ' 1*v Foreign Currency (SfASNo 57) ISfV-`-. -fs 'fc ai income Statement: Attc-fUw g tuns (Ocses | j e S (C> a, Balance Sh^et: Aco/roafctl curency adcstnef*. rei charge J22L sro5) The 1963 aftertax gain refects tro genera/ stnngihening of the. U S do1far ayavist several currencies in 1982, ttie foreign, currei cy lews was dia principa->y to the'. Mexican peso rievafuaton The ;t'engthoni:'g of thb U S do8ar over P o last two yea'safsoaccounts for tho net charge in the accumulated currency adiustmeni an ount Ex-U.S entits genera^y use tne local currency as the functional currency since wor'-o. q vid fixed capital needs are met through local operatons. supplemented by additional tunamg from tho Comoany when appropriate. Monsanto has operations n Argentina. Brazil and Mexico, for which the U S dorar was desigr sted rhe functforvii cunrycy because ot hypennf-ationarv n-oneftons Map' currency exposures fee trie United Kingdom pound stertmq and Belgian franc. Other urifxyiant currorv . c-es irciude the French franc, Canacxan dollar Australian dollar, Japanese yen ar.d ' Mexican peso ..Currency restrictions are. not expected to have a signiticart impact on the Company^ foMl(^j||e^^i^9c:eapital resources rtytii Minimal foreign currency impact on income Ccfi-podte Urare-J States indexes for wjhSar'-tos selling prices and raw 'roienai r c-.'t rj,ve venzea dowt'warc n :983^^.1982 because of wohdwde 'ecesson ri'y r.r^ssu'-rs a-"<J the resiJtrq ovyhSpaavin the chenroca: industry Raw Materiel end Selling Price Indexes l-y v-<i<v; pree; the 1983 pr/c- < ry;i oec-re lsed by I prycon: tollown-rj a 1982 ' ; i.u.- of 2 cxircenl Sv-itf'j pree Jec.ro.ises wore nor ix'itorn: across prtxluct .: i i!'-'; .3 "x vo upward UK) negm rhe `ast haf of 1983 The raw materials pr-ce -. |... w/c.i-iyj -t r i r-ert u '38:': j'd 9 px.-rcorit m 1982 During |i%e last tiatf oI ' vj.1 r.iw myn-.yi p.t.y gir. *o ncrejse jg.vn Selling prices and raw material costs declined MAR 001694 2535915 . 4* >!* WPv ' ;' 'j-'> /=s- ff m --.;. r'' Operating Until Segment Data Net Sales Operating Income (Loss) 1983 987 '961 1983 '96.- '08' AQnaAurat and Nur.crgt Prodixls Fibers and Irtermeriales . indrstrial Chemicals ,, .. ... Wymeir Prodiris'' ' i - ^' Engineered Products and CXhe B<nesies Fisher Ccnlrois Corporaio expenses and eirmnaiions $1,319 .1,170 <S5? 156 '. 1,830,. S96 528 *1 31' 1 257 810 ; 1.786 573 588 $1234 1.432 898 2.147 600 637 $375 48 85 89 (29) 37 (50) $126 (251 100 23 (JO. S2 M5l $114 36 140 77 5 68 (381 pjy; Tbtal conaoBdated $8,299 $6325 $6948 Depreciation and Obsolescence $555 $501 $702 Research and Development . 1M3 ' 1*32 1981 1983 1962 1961 Mj AgrcJljral and Nutritional Products Wj?2.Fibers and Irteffnedates ,,,, MB 7''^ VxXBt/WChemicals V7 7;.. ' v; Polymer Products Vr- Vi Engineered Products and Other Businesses - lusher Ccrtrcb^:v\;. Corporateexparto'andefehinatibre $84 $ 7t . 117 136 . ^ 76 ' 56 1 99 : 76 85 ;*\ 13 '-('.i.- . 3 S*':'. 2 $ 55 96 .. - 68 r (25). 54 13 . ?- , "total eon*o8cJatad!'r - $ 517 v$ 439 $ 263 ' |B `Co.'portM R40 naaniM r l4_Moeild > optirg unitejo drfwmrtrg optrKwv) mean* foul -/ Tbtal Assets' . U,:.'' - .. 1993 V J962 ' 1981 v/i ' $ 92 41 22 40 24 10 be $ 76 39 . 13 44 23 14 : 48* $290 -V* S2C4 $ S3 .32 18 49 21 12 - 38*. $233 ' 1983 Capital Expenditures 1982 : m y^mr i: -. Aorfcdtixaf and Nutritional Products <Fbers arxl Mermediatcs - : ; * moLstriaf Chemcafs* .:* . ;*:A,: Rolyrrof Products .; ' Engineered Products and Other Businesses .V --J, f',-X\ ."*;-'-; fistyr Controls.. /'; Noncjairating assets '1 l **>. -'' - '______ ' *- -- ,$1,401 .-j- $1,180 < 1.090 ^ -c !.i2 r -0/.% ' 779 i. 1,177 ? v' : 1.138 - 940;; 968 '407 : *'490 418 425 $1.0U 1.300 . 670 1,390. . 653 i 435: 410 - $157 87 67 72 143 27 7 $125 . 91 163 73 188 . 27 6 M-"' Tbtal contoMated . $6,427 ' $6077 $6,069 $560 Tb# itorf/Mt choA) t* **04 to conpuftrton i r*'Segmant MgriMdorrMi to ftnancxl xaMnwitt cn peat A4. $673 $068 *5h- : Ci*j~ H\" Agricultural products results lower; hurt by PIK program.in first '5'v.:'^ " > * - '. AgricuttureTwid Nutritional Product*. Sales ton 1983 increasod slightly Operahng ixorne decSned 12 percent, principally due to the United Slates govern ment Payinenf-ln-Wnd (PIK) program early in the yuar. which reduced planted acres, and to increased R&D expenditures.' tor both agricultural and nut/tfcnal prod ucts. Second half, 1963 volume improvement was not sufficient to offset income lost eerier in the year, Aouidbp hertxide sales grew cr.vraB The United Stales experi enced good growth. Certain areas outside the United Sates were impacted by adverse economic and weather conditions, especially Europe Nutrition cherrvcate' . half; rebounds^in :;i/M'- second halC^^ k 1963 sales improved, but operating results were tower due to MHA (Methcnme Hydroxy AnatogVAirnetlacWy start-up costs and research expenditures. Agricuitural and Nutritional Products'1962 sates gained 6 percent and operatng income 3'f5ernf as seling prices and wortcKvide volume improved over the -s?iiVf/'.;" . *' < ' .'*4c^;sv- ' . .7* ' .. ... LAM017813 scswm? " ST:'C- - >V~ "*" '.% Flbart and Intermediates. The significant yea/ toyear tumarcxmd m piofitabHy A'-' *! \'was due to fxgher nylon sates vokare tower rmrvjf.xtur'ng raw material arc* other costs, and the eBminaiion of losses from divtstc-d bus-nesses lower seilng pr-ces, prindpify exports, went a parfiai offset to the favorable lootera Sales lor I96J were A 7 percent towef due to dritested businesses and tower selling prices improved -v . i nylon operating results in 1983 were ted bv higher carpet staple shipments, reliedy 'Irig the economic recovery to housing. The worldwide marVet kx acrylonitrile also . ; v improved during 1963. In 1982. sates were 12 percent lower due to recessionary : conditions and the third quarter divestiture of pc-ycster staple The 1982 operating 7 ;t loss refected sgnificapt reduction in tr,n made Mer denvaxl and S3u rnllior. Fibers operations improve substantially - 7 obsolescence charges kx the polyester staple ana Eumpean acrylic libera iHesli- . i : tures. Favorably impacting 1982 was an $18 mitt:on 'eduction in costs rotated to ' prior year shutetowns and a $20 rmiion impact Irom ttx-) non-re(5taceiT'ent c-i lower cost LfFO inventories. 7 / Industrial Chemlctt*. Sates increased to 1983 by 6 porceni pcncipaHy to detergent materials. Operating income for 1S63 was off 15 percent as compared _ to the pnpr year, entirely from nonrecurring gains to 1982. Sates to 1982 declined *3^10 perceni as compared to 1981 due to the depressed activity in several worldwide -markets,Operating rcome was towered 29 percent in'1982 frem reduced sales votuirne. somewhat cteet by a $27 miibcn favorable ntpact ot non-replacement of cost UFO mverixies and a Si 1 nvffion net gam from dxested faciUhos Industrial chemicals sales improve but income lower [ Polymer Froduct*.'3ates tor .1983 were up over 2 percent on the strength ot _. : hi|^r_ltojDrTie, especially to toe housing and automotive industries, aftheugh selling' Stronger automotive . prices were lower [effecting tower raw material costs Marxifaclumg performance . ^-.rvr'overalt reflectedlsigrificant year-to-year improvement, in 1983. toe improved resUts and housing markets were offset partially by net charges of $24 mitSon relating to various divestments help polymer -shutdowns of faefcies. Sales tor 1982 wera down 17 percent because of the. ; T'^-.^.'^recessioa .Operating income for 1982 was reduced 70 percent bom toe prer yeor. products'; '^. y^J&lmpactjoQ the compar&on of 1962 operating income with toe poor year was a .' gin in 1981 from toe sale of net assets related to a pint venture. Open ? * performance; ; .^^.r^-attogilncome in1982 induded a $35 million lavorabte impact from non-replacement ` tower cost UFOJr^^nbries. ' \ ' T&S ^ Engineered Products and Oth#e Businesses. This segment includes fabricated , Selected volumes! itefe products, electronic materials.' chemical and environmental systems and Monsanto ' r . i-'t' ^OI Company a subsidiary Saies.for 1963 were up 4 percent, with volume gams to ; improve; weak iMonsanto Oi Company efkfronfcs and fabricated products otfeet somewhat by IT-^^a ciecfeased level of construction project activity to Monsanto EnviroChem capital goods I'ly^SSysfernS. tot (EnvtojCtiemj. a subsidiary. Operating resyfts rt 1983 were substan- market impacts i* ;'^5*tiaBytoe same as the prior year. The depressed capital gioods market in 1983 jsrS' fcrited Enviro-Chem activities and offset improved tabricaled products. Monsanto Enviro-Chem Ot Company and electronics results. Sates deaeased 4 percent in 1982 from toe '.' Via year due to fewaf Enviro-Chem construction projects. Operating results 'decreased n 1982 because of higher idle plant costs m toe eteciron.es business, v\' ;' ' Fisher Controls! During 1983, Monsanto acquired toe outstanding one-third nmnor- Fisher's markets' ;^riyintere6ttotoeFi8her.Cortrol9Subsidiary{see 'FTireipai Acquisitions and i;<- f.ynotejotte finarteialStefarierte). Sates tor 1363 were down 10 percent as improved remained, depressed "' ' - : Operating Income to 1983 was tower by SB&29 percent reflectiw|J|g|B5^illt^WM goods-Ttarkets worldwide. Sales and r'operating tocome 24 percent, respectively, m 1982 versus the prior year as the capital gooemfinets were smrfarfy depressed last year. MAR 001696 1--------253*2*1 LAW1017814 Monsanto continues to'pursue &'p<OHton na de.eioivrc:'' j* reserves through a who.'ty-ov.'n-d $'jr<sarv 10 O [ .v , C- aung data regarding Monsanto O Company frKw. > 1983 J241 Aur,".ticji $ 55 5 it t I.' f<p<0ry<f< 55 rVNOiC-i^Cr: 32 ProiLtlcr; i? $204 ' 0H(t) ; :*W \ ..Tv; .Beginnrpot year -:-rt n?? BeiSfchs bl previous estmatoc, \<i . / . % Purchases o mrerate-r-piare ' " ~ 1- Exienaons and cforoveries : r . . T" vV ---- . . ".* j Pt-jCucforv. End of year 38 34 12 t '7 9 w (4) 42 - 38 Natural Oes (2) .. . Begmng'y year S-. *- Revisions ol devious esunate^ : : ~jePurchases of mnerals^viXaco f . "T'V-Extensions and diseow'f'es V , * ,, 1 t 4, r ,> . ' PrcouCXn 607 () 599 28 CKj (44) CvM 619 i?f.i 1 lr. t40> ,i. ' "4 -"IxT r>* End ot year .. 587 eor 5S ^^^pbsfHori"maintained combined - on egtrtvatsnt w End of 140 ;j9 134 (li otWfldfwnaom sUwrrlt p> 5aM n Mora al cutn: <nt I8dl Pi 9ta(d .ru&coi ot beratm tin rousind cutx ten o< g. Mum an 6*ri o> >1 Estimated future rash initewrs data related to proved resets Wow The data was compiled as prescribed by Statement ot Francoi Accounting Standards Mo 69. "Otsctostres about 0 . and Gas Producing Activities." Accordingly future soiling prices and costs were determined by using the actual 1983 yearerxi tev^rs. wiin a 10 percent interest rate used tor discounting Standardized Measure of Discounted Future Net Cash Flows Wows o' e-prod-cfcon and deveiopmenr costs. e reeme ta- expenses______ netcasn Vxvs _____ 9gxrt lor eamdied tmmq ot cost. ivjiv^ Standardized measure ot discounted future net cash flows 1983 $3722 761 1.047 1,414 926 $ 485 196? Vj '. ) t i 1 IX r : -3 t 1961 910U3 5.0 \ *A U`) i- '.1 2535918 1 LAMO 17815 I -liate. ( As required by generally accepted accountoig principles world area segment aata n (be financial statement notes (page 561 are prepared on an 'entity bas-s ' U-s rnearis sales and income of the lega1 entry are ass-gned to the area wf ere ttc entity ' located (e g. a sale from the U S. to Brazilreponec as a U S sate) However, Monsanto normally views its results on an `area basis' wbcrcm sates and mcorre are assigned to the customer locator (e.g, a sate from U S to Brazil .s reported as a Brazifian sale). The tabio and dt^k&aipn '.vhich fotlow summarize Monsanto's "area basis" results. v r'Ar*:`*'s ' ' m World Area Basis Data (MM SLHn ^ CMMteUtw fiximea MAR World Arta Basis Salas and Operating Incoma 1983 trer- :96i Ex-US endes sacs U S eipon sates Less < .tor-sea ehrnatov. $1,926 879 (749) $ 97u 9G.I (001) $2213 ' 0-1? (606) Ex-U 3 sea bass sacs U S sea basis sales 2,056 4.243 2239 4 060 2/62 4.386 Consolidated sales $6,299 $6 325 $0`>48 ~/5- Ex US enMies'operarngincome. . i 2 $ 208 $ BO ' $ 104 Less s-U S, eotfces'operating income on sates to U S. US export operating mccroe. net of aflpcateU ats (56f - ' (10) -.2 A . 35 (13) 1MJ Md4 lm tda ttxorw 76 Ex-US affiliates ecMtyncome (toss) 15 V. (it) 31 Ex-U.S area bktsoperadro Income Y ... U6 Koaba6(KratiridteCorn;-.,,ci''. v.': Urvaiocated corporate fwpensas.-'", ,-t- 167 94 - 201 / f-i:: 453 ^ . .577' (50) - (45) (38) Conaottdatad operating Income ptua equity Income $ 870' V:- $ 490" $ 740 ; 5< --v ....... v& t ^ United State*. Sates ter 1983.woreup 4 percent to $4,243 mifliph. pnncipafly 1" '; because of a aronger economy. Automotive and housing markets rebounded in V -f 1963,, bU the capital goocte market remained depressed. Operating income n 1963 . s 7 , nerved 3 percent to $453 mifoon Ate to fewer raw melerial C06ts and betler utir- ' . nation of production taeffities as a result of the higher votaries. partiaSy offset by the 11 f . P1K program. For 1962, sates decreased 7 percent from 1901 to $4,066 rmftcn due Ty 1lo the recession, and operating Income was 24 percent tower.tean tee prior year ? .' at $441 mtlliorL Operating income in 1962 inducted an $83 minion gain from norv v replacement o( tew ccet LIFO Inventories in 1981, operating income inducted :->! ; ;' * $124 rntfengate from tee sate d assets rdateo to a joint;venlufe. ~ : 'm-jjJ Europa-Africa. Sates decreased 14 percent to $943 mSfan te 1953. reflecting the ; vVV dKres&jre d the acr/c fibers business, reduced agricultural sates due te drought ': ard adverse ecxxvyrfc oondition&..Ope^inQ income improved in 1963 to $44 rniflioa y The Improvement in operating Income wasdueprincipalty to the eftvestiture d acryfic fibers. For 1962, safes decreased 14 percent from the prior year to $1,092 mitton. Operating income was dcim 33 percent to $33 mitton, due to a $20 rryfton charge tor tee acrylic fibers dvestture Comparison di96t results with 1962 a affected by tee change in accounting principtes lor foreign currency transla tion (see "Sunmary d Significant Accounting Pofcies" on page 46). Improved econom; boosts U.S. sales and income Acrylic fibers divestiture helps Europe operating results ' Canada-Latln America. Sates in'1963 decreased sfightly to $579 miKoa as Brazil ,, . continues to sdfer from raotf^.incfoced ccndBfons. However, there was a good ' : . increase in Canadian safed'vpjurhe;: Operafing neeme In 1963 was up 129 percent .-- to $86 mitton as impijgii^ayggK|m^ significant better resute from a Metdcan equity atWl^oWra^Q^aOOp/esults in Brad, where a charge d $8 mflon la a taofity shutdown Wai^j^jayea For 1982. sales d $597 million and operating income d $42 m*on weraboterlown from 1981 due to tee Mexican peso oavafoation and tee recession in Qec/g&j' Canadian economy better; recession in Brazil; improvement by Mexican affiliate 001698 Aala-Paclflc. Sates wore ort 3 percent to $534 mTBon m 1963. principally due to oepres* ! U S exports resulting from a strong U S. dollar Operating income for 1983 wa' ip 42 percent to $27 nation due to improved results in Australia and rcreaseo ammgs from a Japanese equity affiliate, in t982 sates and operating name decs j from the prior year to $550 million and $19 million respectively, as U S. exports were adversely impacted by the stronger U S dollar. Asia-Pacific results benefit from Japanese affiliate and better Australian economy Ywr EndedCeeember 31.1963 V* Ga-. Oxi cl 20.ds ih'O prixi'gd-xr-v rX-cvoeaM' AH cue1 c corses - iu< inxmo la.es - r- Incoroa before extraordinary Horn Historical Cost $3,299 4 248 456 1,025 _ __ 201 $ 369 Current Cost $6,299 4.254 534 1.025 201 $ 267 Pie "cur'eifl cost' dsctosures which reltp-;: 3dx.Mmcr.i-; based cn ostrT.i,,.b c-< :tic current rxt'.f lo retrace iws&rg tssr*s in Kind. artvnpt lo meajtire #* 'mpac: o; rftjtco o cpec-td assets. Items ftj-uste.l ly inflation are /'veritor-es prcpe-ry pant ano equipment. cool of goads seta, am Jeprecia'jon Ohr r^ms j-c\xi r.;: ncome taxes a-v net adjusted 'or -nation Al: current cost ctjta .idcv.> ir. yaev m avo<ngo 1983 dollars using re'd S Consume: Price Index itho tm'^ite testate' method} The 1983 decrease m cu'ent cost of inventories and property plant at a i^imn stated naverage 1903 cioAvs. was ji'b rrv'ion At Decembers., 1983. t'*: c .ire- cost of iT'-enicy, and propoTy. olant and equipment (net of accumulated oer'u dafion) was Si,23i nutticn ctrd $3,830 mton. respectively, stated P yearend 1983dcflws .' n FIFO (tirst-m, first a-'*} uaris inventores were used vo approximate current cost UFO bass cost of g^yoa sod (after adjustment fry the impart of non-replacement n( icw cost irvet'ioriesVof snr4ar techniques were used to approximate current cost The ' current cosTo* property pianfand equipment was esfimeted gene'raity usng conslnxlion arid, equiprtien! ndoes Current cost accumulated depredated am teialed expenses were estimated using me same overall mettods and rates as used for historical cost.- . SsUcled Financial Data 1963 1362 1961 I960 HUtodcal coat, as reportad (1) (2): Me) sales .1 Inc. ne Betore exvaoccfi ry items - Per srwe > ,. TMi'assets - toftg-sen.i debt Dvdenos cor conmon mare 6J299 369 8.97 6,427 937 4.15 $6,325 $6918 32s 44$ 8?f '150 6077 6060 1 000 ` 1.110 396 37b $6,574 14a 4 10 5.796 '.371 3 55 $6 19^ 331 9 !. 5 539 I 203 3 J5 Current coat (average 1963 doflara): Net sales - : , -5 - 7 Income (loss) ' '' Before fiitrac'Onary 4ams t 6.299 267 -Per snare 6.S0 Pvrchasrg power gan on mcretary 46014 29 increase m specie pices ol rventory 3rd fxuperty war (under) . rcrease I'aueed t-y general rllarion (225) Aygiegate foreign curtency adjust- rrert, na 0! taxos (99) Mot assets 4,665 $6629 98 245 34 (226) (170) 4 833 $7 611 252 650 . 108 (13) - 5345 $7.95C (10| (0 28) 163 (310) 4915 Sd503 289 794 168 163 5 1i1 Olhar data (avaraga 1983 doftara): BI0S3rfceir common snare - $ 4.16 camcn sloo pnee 103.46 $ 409 77 82 S 4 14 /4 34 $ 434 79 27 $ -1 06 77 38 kmam conaumer prtca Index 296.4 289 1 272.4 246 8 217 J ir* txxC**t taocMd (2t rt (160 i*c nn Siatei'**'! d U Sr*r*"*rM Ol PnxrKiW Account*^ SrxrCard* No S2 Fo^^go Cuvenor tMnsid- ZOV* **tad to :cr'*frfeCNy>HA-progrJ4 iporaMvfn **% Ciptjtf/ea r* jcco*0- i StafOrOi f<o 3-i Cap**Ju*hc o> fntaf** Oov LAM017817 The Carviny rvis ateo used inflation adiut.teo aui-i to evaluate. on 3 broad imancal bass, the -nterretated qjes'KX'-s of real mvestnvot versus -.lecapi'.Vi.'ar and whetner current profitability tovets are proving suf'cent invecnwv tu-cis o' tuiimearnings growth. This perspective confirms the funding d future growth opixytu-aties beyond ;sw\j replacement requirements Management also beiieves Uvat Monsanto s generating cash fio* from operations to fund a significant portion d those mvestnv'its required Total tnvaatmant Cac'Ji expenoilives investments RAD expenditures Total (historical coat) TbtaJ (iverago 19*3 dollars) 1963 S 560 206 290 SI.058 Sf.058 1962 S 679 11 2&s s we $ 979 198) S 668 2 233 s 9<r $ 969 1980 5 7tl 01 208 SI 053 S'. 273 1979 5 f*6 1 161 i 728 S 999 Monsanto s total investment' level -- captai expenditures, inves'rrierts (acquisi tions. venture capital, etc.), and research and devetopmau expenditures -- continues high, but with a pronounced shift in the underlying components. Expendi tures for research and development and investment (prircipaBy acquisitions) are growing substantially compared to traditional capital expenditure levels, which tiavo moderated Thus s consistent with the strategy shift Irom certain commodity and captal intensive businesses to selected high technology, specialty prod cts with a higher value added component.' . This "total investment" Includes both that required to. (1) maintain the existing earn-. ings ease, ard (2) grow futtire income tevefs. Current ccsf depreciation and an estimate of "maintenance" research and development costs tor existing businesses are proxies for the investment needed to maintain existing earnings Ml Uminirt (** 1M) On Cart) JS U VMi 1 -uo 50 *Oj vio Investment Arvsb/tlt tovestmert to rr-vrtan existng earrings base New crowd 1 mvestmani "total (avenge 1963 dollars) 1983 1982 ' $ 646 S 665 i* 412' 314 S1.056 S 979 190) S 683 3C6 S 969 1960 '979 Investments suppoi S 663 610 - S - 63^3609 earnings growth Si 273 S 999 WtuJe nvestmert f^-ds are not afirays rewriresied in existing busiresses, they are berg invested in development and acquisition of those businesses and other opportunities whuch are expected to provide 'or an expanded future earwigs base Based cn a discretionary cash flow anayste, Monsanto is geoeo*ing sufficient cash to.v from ooerations to fund a significant portion of those investments made for toture earnings growth. Dtersttonary Cash Plow 1963 1962 196t 1960 1979 iHH-iT-o----n*-c---ii -c---o----n 9466 $245 S171 S206 S 17 Anrsga 1963 doBan I486 253 $187 $249 S 23 Dacrttontry cwft now m oMnoO m caft Row trom opnaom, tftw wottung captaJ cflftnpt*. rmurtwm to rrr4n irwirg ttrrwigi tm*. ^dooai jnd 0*M rtducfcoa but tttot fiwrcft andOomtepmantcoast. nca frw m mojdad r> frw Jaliaion of rHrtrrwn Monsaneos we# ingraii fssset management programs. coupled with the pruning 0? " asses have been significant cash (tow contributors Proceeds from the sale hve also contributed funds for growth In addition. Monsanto's sthriongfigpgsl posrton results m substantial unused aebt and equity capacity tor fi indiicnydueiB>tfwestmeni requirements F'cm ail of the above ihe Company nas demonstrated its ability to genera'e suffi cient earnmgs and cash flow to provide for real future growth beyond that required to maintain its existing earnings (mso. metubeg 'ntlafir/i-adjusted replacement captal requirements (Awcrce L HAR 001700 2535921 I Short-Term Liquidity and Capital Resource* Strong working capita! performance Short-term debt increases from Fisher acquisition Review of Liquidity and Capital Resources Vorsantos !%3-"98` sources <ra uses c< njxss riefnud as caw ' cc-f'^ca'^ of vposii and shcrverm socm.t.es aio yvjwt. j-. :rj Catcmei'.t c-i Cficnyirs .n Consmoaiec riranoa! Position or- page 50 Monsanto increased 'is cash and sw tenn sec jr t.es position tc $657 miiion at yeareno '.983. an increase o' 59 percent as .r/r.parea to the tyb2 :e.e< ot $414 million. Funds provided lrcn 0peratO.iS. tjc'oie viorking capital cnangv-s also increased, in 1903 A-. emphas's on asset managerrent continues to proctuce excellent work.ng capital performance levels Capita' experxM.jrf-s m 1963 nave oec>ed Trv$ decline reflects ade-cp,ate e'Strg productor copac.-y to absorb expected growth as well as a sri.fr o en.phu.-,,s Mi commccfiry to ies*. capital intensive hgr, technology products In 1983. $208 mifiicn was used tor occxjl->! ems and oroer nvestirents p'.nop.iHy to purchase the m nonty interest n the Fisner Controls subsidiary Substantial lurxt in 1981 were 'ovided by issuing common shares which proceeds Acre used to icuidale outsiand r.g debt ana from tfe sale ol assets reiatea to a pi vry-ture Tne Current rate (current assets divided by current liabilities), an rcucaton o' liquid ity. was 2 3 1 at yoarend 1983 The 1982 current rato was 2 6' compared to 2 4 i m 198t Management believes a current rata of at least 2 01 is desirable Woriurq capital (current assets less current liatxfities) * creased ;n 1983 to $1,535 million as compared to $1,503 'niii.qn m 1982. aa oasn and rece.vabkrs increased more rapidly than current liaolihes Inventories were again reduced in 1983. but were still appropriate for current and expected business levels. Tbarend 1983 receivable increased from 1982 due to better business levels. Good control over inventories and receivables is attributable to a we ngrained asset rryv agemen; program The Company has available various aftort-temn bank .acilrt>es, which are cSscu further n the "Short-Term Debt and Credit Arrangements" rote to the financial rrents When necessary, shod-term lines of creo.t and commercial paper are i lo finance working capital and provide 'bridge" financing tor capiat require until more attraefive rates prevail m long-term debt maikets Short-term debt increased to $253 million m 1983 as compared to $131 million in 1982. principally rcf.ectmg a $75 rmton note exchanged r the purenare o< tie Fsher Gunt'ols minority interest MAR 001701 2535922 J LAM017819 ' ; j**.. . i- V V-'.;'A< Ctecamber 31,1983. Wonsan-had j/ofchase orders and jets '. starxfing i' .of appoximatety Si36 million in connection wnij unccmpe^.!occf . -'ir-cns / ;, Caprtat equipment expenditures are typcJtvfrtancea rr,- <- a/* r. cl cash ' . (rpmcperations.and long-term'det<. LbhjwfrtftleW naAbe'n ^ea m each r-., - r aie 'last three y&rsjnclorfnQ'; fri 1982, by b 'defct'equify"- exchange and. In 1981. hy '' a new common shdrc teS^xe with the proceeds used toi deb-* reduction. As a Long-Term Liquidity and Capital Resources ' .. rea-Jt the long-term debt to captateaton ratio improved to 2^percent in 1963 as eorrvared to 22 and 25 percent in 1982 and 198)respectively. Smce over the tong term Motaamo beSeves U app'Opha.e tcng-terri geb! to.cn-xtafizatcn raid should bo approxfrnafefy 33 percent, t^c Companye avaledu Hr&rcing capacity has been considerably enhanced Toe interest coverage rato jimtsl. excluding ertrac/- : - cknarv items and th^ ted o) caprta&zsd interest, was b 3 in.1963. as compared to 4.6ir> 1982apd 55 nj98i; . ,,a;.. . g ' - ~The.b3fnca.-iy n^s made' exJen$ive.oseL<jc pofiubon control.and industrial devetop- :. meintljOr^ triiPrp^ciuaSfied projectSL Bec&sSfrie tax.'status of these obligations. .. ; makes the dssoo^ted Interest rates tety lawafc|e^the Ccxhpan>' wS pursue this _. ! ' tonrfoffcan<^3\v^avaaabte.'trxXisthaI development bond ofcSgarions cbmpriskl * .. .t'j u pointer 31i 198 Monsanto ooca- pl/rafen^'pAicipiwyitease artst^wwte.and joint.; jnanggm^miiftjS lak^-pt6nUiKfCiyii^^.e^five interest : * jrev&st.s Wcapitafprbject requires their use. }': . w stieT4nt$'irefreefromfenand ^abtfd^/iP^.dinpiy these a^ets 'rljxe^nt a source d adefr ' Lower, long-ter Sr f debt cop&KTttaWy IsWonsarto Ctt Cdmpary sub^cGary, the Company . bwTi6^w!f5wyghayrent.i ------------ -----i--a-m---o--u-n--t--r-e-flected in thei fccftwjs^g!^ gasieso1/? and the undeveloped and financingalternatives'erihe l ^T.. - coW dso be ed toThcrease total debt Tfeggp^tg&fip praefeot plans to (Njrsuje'ibow sources W (fencing.;* 1 OurfrfcweS ifK^srft.t^Comparyissued^'iearty 4.000000 rm cbrrimoo shares ' r^:Tv*1 rt*(d ^UacSqpfd^SJdbortJie Comp&y his conveiftlbte securities and , 1 ^ 'r stodtbpfeoiibuSancwgyvhi^.i?.<t inpedodc ieSuwces of common stock.^ 1. l.'t ^Mradgd prmci^/.on tho flew"fork Stock Exchange. el racorcraS o 1984, was 60225 . ft*.. ' .____ , ___ _____ __ _____ . tmtemupOon'or ::r: - reddbsjn -c skx I928.an0has.ihcreased.the dMdend in each"of the past eleven ' ; \ years OMCtjnd paydirtfef 1983 was 42 percent of netneome. The Company's ; cgvtdend pokq' KJfcctS adetfed tong-tatyri payou'percentage based cn ` Monsanat expec&5ohd kAregrowth ard profitabBy levels. In any indivlduat - Dividends increased for 11th consecutive year. yee. addtoiatcoraiiJeraieniagNen to expected Snancid position and results, wettang and Ixedcapitef needs, tchediiad debt repayments and economiu concJ- tons. nausea W* h9--d^ v *' -- a- '1 -,s.c , .* \ >* '' '* vri .Si=T4 MAR 001702 T------- 2535923j_ LAIV1017820 Financial Statements Independent Auditor** Opinion Summary ot Significant Accounting Policies lb ttw Shareowners of Monsanto Company;' Basis of Consolidation. rhe corsofrr`uu- cm, We nave examinea the itatement oTcofiSSfidaied finance paction o' Monsanto Company and Subsidiaries as of Df cembsr 31,1983 and 1982 and the related statements of consolidated income, shareowners' equity and dianges in hnanc:al position for each of the three years n Fie perdd ended December 3' 1983 Our examinations statements ncluoo tit Company aid ts mam-r-. v.-vo subsidanes. Intercompany trans.K.t'Ors t>x-'' o'*-, natod m ccrsd-qaton Invest,nents ,n .I"..w s ;r ,v- ch Wocsji'to has an ov.net shp inters; t 20 r ; iOpfveenj are accounted fix to !'? ociu'. Foreign Currency Translation. fo'err ' c,. were made in accordance with generally accepted audit transactions and financial st.ite',cr,t-> arc- t-.iiv.iv-j i ing stanoards and. accordingly, included such tests of the accordance with Statement d Fnarv un Acer*.' 'nj $\iu accounting records and such other auditing procedures . dards No 52 (Sf-AS No 52) The furxtonai cunt -cy d as we considered necessary in the circumstances Substantially all ex-U S sub-suleres. ecept ttosi ct>.w a' In outoptruco. such consolidated financial statements .. . ,, f'C ^ hyperrJiattonary comt.'ieo. s t'e oca) ci.r-t -cy ^present fairly the financial position of Monsanto Company . Intercompany advances to ex-US subsidiaries a> ? gervr- I -c r-v .' and Subsidiaries at December 31.1933 and 1982. ana the Presumed to be of a long-term investment nature The flSiv'*.. . results of their operations ano changes in thetf.financial'id':-.. \hypdnnflationary countries in which Morsanto or ,ts atf- l.v; . portion lor.each of the three years m the period ended.'ft .; - ?es have significant operations a"e Brazil. Mexico stxi nDecemiw^ 1963.inionfomiit/wilh genera^ accepqifll^-; wpentina.^ j'.v" ^accountingprricif^escpnsislerilVappliediduriigthe For. 1981," foreigncurrencytransactionsandfinancial stare- i..... -^period except tor tfb.chahge. with wKchWccrur1'.in^,.;"l;-lrnerts weed translated in accordance with Statement cf I < *: 1982 in (he method cil translating foreign Currency transact Financial Accounting Standards Nd 8. H was not practice -------- ----- .--o-^t* *:x .= ;|0'nwfato 1991 wider SPASNo,52."; "u. -- Deprectatton. QepreciaXn is computed by the: , Sne method over weighted average periods d 231 for bufldjnpa aQd.^2 years for machinery and equip Intangible Asset Amortortton. The"ecesspurc pries above the ret facets of acquired businesses is wrfttan off cn a straight-ltoe basis, over penods or 5 ; 20 "years. . \h . SSauinitt LLoouuiiss,; MMaisssGoutirrfi.. ' :- `7:-7~r;?x... -.^.. Innccome Ttass. investment ,*ax credits a-e recorded as a t-r.s- reduetjon of ncome tax, expense in the year t> e> of(set the Federal indome tax labfity : Income taxes have not beeti provided on u dotr-buted __ earnings of subsldtaries either because any taxes on dM- & donds wotid be sjbsfaniiaKy offset by foreign tax crecfts \ ; nr because Monsanto ntends to ndefirviety reinvest ttiose eorrvngs ' Inventory Vshistlon. Inventories are stated at cost or -market, whenever s less Actual cost s used for taw ,' materials and supplies, and standard cost, which appro* v mates actual cost, used lor finished goods and goods Sr n process. Standard cost includes direct labor, raw inate'-lirr - ,rial and manufacturing overhead based on practical ^capacity. The cost of substantially al L' S .'-veniores is detemimed by the last-m. first-out (LtFO) method The cost of other inventories & aenerally determined try tne tirq-n first out (FIFO) meihod Oil and Gm Activities. CW ard gas exploration and production activates are accounted for using re yuca.-ss ful efforts method Pension Plans. Pension costs are (untied as accrued and include current service and amortisation of u- fun >-j poor service costs generally over periods of 10 to 30 years Other postemployment benefits (puncpatiy rr^ca and i.te insurance) are expensed as * to inert I 2535924 j LAM017821 Statement of Consolidated Income (Defers v> rnftons except pc' ve e) !tonafntdnlt*o*t>e1df*rU* . Net Sale# Cos! ol floods sold ,f' /Qro#* Profit : . \ ' ' - '; ' Marketing and administrative expenses Technotofllcal expenses , .w*\ *V^ -r -.*** Operating Income ^*' 1983 $6,299 4,704 1,595 681 309 ': 1,040 ' ':7 ' - 555 I9G2 $6,325; 4.EHM 1.521 091 329 . 1.020 - .501 IfW S6 9-18 5.293 1 &S5 && 297 953 702 ., :; f-lV-;"-. v> w^;-. (96) 7&M62) InterestrcbmefSSB-v- * '*' \-' . t s. 73 ^Tv- 63'L 38 'f -19 v***Xv^--' 7* *.-7' ^ "7 ^Z7i7,'-\-15 -- Income Before Income>xe# and Extraordinary Heme -'.' - . '% 7 '570 bKonw'taixes'-^^^ ' 7/ r7:-:' 201 ">. 501 172 '^7|r-'Income Before Extraordinary Mehi*A-4;:'-&''?-; - '7 v - ->/ . 369 7|^CExtraonflnahfltemS;J^--^7..777^i7;;. <\ .`'.-ia .", r . ;. i-Tfax beneflto frdtquiilizaBon'of ek*U.S. loss'carryforwards; V 7^7v./-,-:!v33 [ v^fl^rGain frdmexcKsndebf debt facommon shares:- ' '>. . '. v.: .7 . 329 ' 23 Natlnco^'!^J^S^7; 7 > yr.;'>'? . v .* V V'-' $ 402 $ 352 . (101) r 68 24 m W&4S $ 445 > -.7- Before extraordinary Items -T,- 4K\--:*---*? . 1 'v-r, ExfraonffhanTftema .`r^ T*y>. ' After extraoreflnary hema , ; *..V'.-V' rx toy* unman t -;!> ' ,v . V V^,' ^ ' ' : ^ v -iJ:-' ' s 8.97 0,81 $ 9.78 S 821 058 $ 879 $11 50 SI 1 50 Key Huencifell air; Net Income as a Percent ol NatBal*% ' " - Percent Rearm on Average Shared Equity >. Percent Return on Average Caprtal Employed* Bekxe Extraordinary Items After Extraordnary Items 8ekxe ExtraonJnary Items After Extraorctnary Items 6% 6% 6% 10% 10% 15% 11% 10% 15% 9% 8% 11% 10% 9% "Cbou a^ciovad w fe turn of ifton-WH." d*bt ing-ttrm otfct and sJweow^i aomfy The o*gnnng of **/ and me and of me ya/ capitai ampoyao kb Mf>gM and frv*J*d rrw ^coma wv addng t*cA me ***> atfact of "taraai cota MAR 001704 I 2535925 | Statement of Consolidated Financial Position (Omars r rmiTcrs. evcegt per vox-' Assets Current Assets: Cash, time deposits and curtllicates ol deposit Short-term securities, <?' cost winch appT-onates mar*-el Trade receivables. r>at ot allowances ot $-' >o 3283 and $J8 n '582 Miscellaneous receivables and prepaid etpensos Inventories (nveetmsni* and Other Assata: Investments In affiliates Other assets Proparty, Plant and Equipment, at Cost: Lard Buildings Machinery and equipment Mineral rights and oil and gas properties Constructlon-in-progress Less accumulated depreciation " Total Assets Th# *> iftouW be r**a * paga 46 arti pages S2 mrougft W c* r* >sgort Kr Plnanckrf SUttetick working Capital (Curort as-e* 3 less Qcsr* baodesa) Current Ratio (Current ass..* dmded try Currert tabMes) Quck Ratio (Casn and equivalents pi.s tr.ioe 'ecervades omoa.. try cure*-' kaiMtiesi At Oeo r,r\v_r 3) 19';3 'Ot.' S 164 413 1.115 205 77b 2.755 5 MO <?7* * 0^ 1 40 6^4 2 454 113 157 275 i?p 363 !ff-'3'D 74 667 4.938 716 2-V4 6,619 3,353 3,234 $,427 fi 67' 4 970 625 249 6 530 3 21 ' 3 3'3 SCO. / SI.535 2.3 1.5 Si 503 26 '6  Monttnlo Company and Sultdtarla Liabilities and Shareowner*' Equity Current Liabilities' Accounts payable Wages and commissions Income and other taxes Miscellaneous accruals Short-term debt Long-Term Debt Deterred Credits and Other Liabilities: Deferred Income taxes Other liabilities Minority Interests In Subsidiaries Shareowners' Equity: Pielerred stock -- authorized. 13 003.000 shares, no par value issued and our,: ending. 54 2H si ares m 1983 and 9: .932 shares m 1982 Common slock -- authonzed \ 00 003 000 shares par value $2 issued 40 977.448 shares n 1983 and 40 966 159 shares in 1982 Additional contributed capital Accumulated currency adjustment Reinvested earnings Less treasury stock, at cost (ccmmcn shares of 56.152 n 1983 ano 368 549 n 1982) Tbtal Liabilities and Shareowner*' Equity At Decoinoef 31 1983 ''^2 S 500 108 104 255 253 1,220 937 J 3 r'9 "OT i;?3 _''6 951 1 CG3 558 493 32 31 590 524 13 nee ---- 82 938 (200) 2,853 3,671 4 3,687 58,427 82 93: (122) 2 6'M 3 5'2 22 3.490 $6077 Key Financial Statistics - Percent of Long-Term OeOt to Total Cao^kianon' Percent of Long-Term OetX to Total Shareowners' Equtty Shareowners' Equity Per Common Share *Tofet ccia^iaoon i trw Uir of tO"g mi oK<i ^x-fy MAR 001706 20". 28% $89.66 7?-, 29% Sh5V 2535927 | Statement of Changes in Consolidated Financial Position (Defers n TVlons) Uoeuel# Compeer *wl 3wble>i*rt Sources (Uses) of Funds Operations: Income before extraordinary items Charges not using (credits not providing) funds' Oepreciatcn and obsolescence Deferred income raxes Otfier Funds provided from operations, before changes In working capital and extraordinary Items Investment and Other Transactions: Extraordinary tax benefits from utilization ol ex-U.S. loss carryforwards Working capital change?: Trade receivables Inventories ' Other current assets Accounts payable and accrued nubilities Short term debt Property, plant and equipment additions Proceeds from properly disposals Foreign currency adjustments Acquisitions and investments Other Financial Transactions: Issuance of common, stock Long-term financing Long-term debt reduction Extraordinary gain from exchange o' debt lor common shares Dividends Increase (Decrease) in Funds Increase (Decrsass) In ElimuMa sf FUndr Cash, lime deposits and certificatfijfof deposit ^ - Short-term nacurltios ' Increase (Oecreaae) In Funds -r- - Tht tx**fr+r* vhoOd t* >t0 n cr>u',<hor *<tn pq 46 arc p*g*t M twcMjn *>} * tr< '^oC't -MA/? 001707 1983 S 369 5t7 71 (9) 948 33 (39) 46 (65) 147 122 (560) 39 (47) (206) 35 (497) -- 49 (87) (170) (206) $ 243 i ** 4 yj jt. r.vT Pi 49 38 tesi (441 (673) 3* (60) (") il 75 13 ('38) I'7') $ *' j i H; ? 44-j ii *5 606 33 (4!) (23) m <66e> 2S? '2) S3 (409) 206 32 (2H) C45) OB'i S 2'8 $ 21 222 5 243 S if*/ vi 5 60 ' -16 I 2535920*7 m Statement of Consolidated Shareowners' Equity (Oculars <. mJcri ecet< ex' sf a^i m Wonsenlo Corp*n| Bubiwium MAR 001708 1903 Common Stock: Balance, January 1 New shares Issued (i 1.289. respectively) 988.075 and 3000000 snares n i9i`8'98i. Balance, December 31 S 82 -- $ 82 i 6.' 3 - ' 00 $ b<i i 80 Additional Contributed Capital: Balance. January 1 New chares Issued Other Balance, Decambo' 31 S 931 5 $ 936 S 853 73 5 S 931 $ 853 199 2 3 853 Accumulated Currency Adjustment: Balance. January t Initial translation adjustment for SKAS No 52 Ttpnslation adjustments Income laxes Transferred lo net Income Balance, December 31 * $ (122) (84) 6 S (200) S (if.) (111) 8 (4) S (122) Reinvested Earning*: Balance. January 1 Deferred taxes adjustment lor SFAS No 52 Net Income Preferred dividends (S2 75 per share) Common dividends ($4 15. S3 95 and S3 75 per snare lor 1963 >981 'espoctivoV' Balance, December 31 $2,621 402 -- (170) $2,853 $2,423 4 352 (158, $2 62: $2 123. 4-15 -- (1451 $2 423 Common Stock In Ihesaury: Balance, January 1 Shares purchased (1S&&70. Vkftlftenrt TTH 'ihnrrn m 1983-198:. respecir/ety) Conversion of convertible securities***! issuances under employee slock plans (471.966. 313.192 and 320 275 shares WISfiMBBl. esrx^tivr'v, Balance, December 31 T>*4 tfiove uatamerrt sh&ja be r#<*j + ctxvi^ ton wtr c*y* 'S vxj trv joy IS <v $ (22) (14) 32 $ (4) $ (26; (13) :7 S (22, $ (41) (D !b 5 ;26> m_________________ Notes to Financial Statements Principal Acquisition* and Divestitures___ to June 1963 Mors yuo ccmptetec try sa:e of re European acrylic flturs business ;o Ltontetit/e a Si.cs uiary of Monieoison (itaty) A toss pr wson ol S'6 x '.on (SO 46 per snare) net of retateo trues was estjt-siyM n 1982 The 1982 pretax toss of S20 mtton was reflected m cbsotescerce expense m cosi of gooos solo The European acrylic fleers business was pan -;t re Frvis and intermediates operated and nad '982 sales c* approximately S'39 mition As part of xe above agreement. Moris, into acqu^c-a m June 1983 at underlying nei book vafle Vonteflbres 50 percent interest in Potyamice intermediates Limited (PiL). a nyton ntermeaotos |0<nt .ent^e .n the U'n.tea Kmgctom Th.s resulted m Monsanto nav'g sole owner ship in PiL. whose operations tre row .epened as pan of trn Fibers and intermediates operatng imt. In Jury 1983. the Company finalized an agreement with The General Etoctrc Company pic. (GEC) of ff to United Kmgdom whereby Monsanto ncreased its ownership of Fishor Controls International me. (FCii) to 100 percent from the previous 66'5 percent Monsantos purchase pnee was $178 million The excess purchase pnee above FCiis net assets anntutab>e to GECs merest was $81 rmHion as of the acquisition i date in August 1981. the Company seto -is assets re'ated to tre Monsanto Corxxo pnt venture The Ccmpary s gan on the sate was recorded as a reduction of obsolescence expense r cost ot goods sc.d m :98i ol S'24 rrniior. or $68 million ($1 75 per share) net of toiaied tax ejects Trv facilities were a part cf tt>e Ftaiymer Proou-:ts opwatuig unit m the United States and had '98t satos of approx,matefy $167 rrultor As of December 31.1963. the remaining accruals tor divestitures have been reducec to immaterial amounts through actual expenditures tor shutdown or withdrawal costs disposal of certain 'aolifles ano operating results subsequent to the recording ol Xe provisions The rema/ring accruals are expected to be sufficient to absorb any ti itu'e costs related to xese divestitures The effects o-' including the acqu.s/to s Q'scussed above x Mcosan'os 1983 cons&<dated t'nar ai statements as 1 xy occwed at the beginning of ** ma' wcmd r<' ne materia1 ^r.r - Supplemental Income and Expense Oz'i __ 1983 Depreciation and obsoletcence: ra vy. jt Obsowonce rnc -.ne* ; ms and toss-truer, juts' $456 61 V* Total depreciation and obsolescence $517 *' ' Rent expense $ 83 Technological expenses: (V-WMrrh .n1 O.-.e'CC'r,-- Engineer ng corrirofca' rVMkcpmen.i aryl D,Ye' $290 69 . Total technological expenses SJ59 Intareat expense: total ntercs CUT'S rcur'ed Less cac laved merest Net Interest expense $126 (30) $ 96 ' Equity Income (loss): Eouty m a't'aios reave and losses Equty n a^J-aies cvervry 5.1 rts aryl os'K Total equity Income (loss) $ 13 2 $ IS $ 1 f: $i'U Foreign currency gains and lostee (Including equity In affiliates' gains and losses) $5 j.'Sl >' 1 > : i " rV. S' ' J r.l.: S'0` s 22 S ."18 $ Penelon Plena_________________ _________ Most Monsanto employees a'e covered by rore.-yx ti lery pension plans Tf*e pen&on expciise tor alt pans was $131 mitten. $136 rr.nflon and St27 mutton in 1363- '981 respectively Estimated benefit ana asset information at ycarera tor Monsantos pension plans is presented betov/ Net a isets were measured at market value and accumulated tx-'vsts were estimated trom actuarial valuations maae euri:<:r ,n the year Actuarial presant value of accumulated plan benefits: .Wed `tor .wed Total Nat assets available lor benefits 1963 $1,463 178 $1,641 $1,968 "*KJ S ' fltVj :' V. ! 1 ` "> ' U S SJ'J'Od aid nourfl, employee', ,KC CnvO'OU t P'l'C-r-.li p-Ji.y A,.,.urTi(jio>'S 'O' tlv; r'j'i: r.n [. .r MAR 001709 W?Express [OOCUMtNTS-WATCH-RESEARCHI tccuid 1r 0 *4 r/0 51'ficcs 800-231-3222 ===== 301-138-1400 arwiiira ____________________________________ include an investment return of 7 5 percent used m amer rrvung the actuana) present values ana an overall average salary increase ol 6 5 percent lex a fnai pa-, plan Accumulated plan benefits -ncium-a -n tr*.- ahu.e tab'e tor these major U S plans were approximately $'.515 million at December 31. '963 Ttie actuar-a1 present value ol additional proieu'ed beneMo from future salary increases lor the U S Tinat pay'' plan at December 3! 1963 was approximately $260 mii'on Aodi'-onai *.ucs ha-.fi <-ul t* *-<( -c.j'f ur'd-S'r.buli.'d pjrn.rg:; o' suf.s-i l-.y - i, ;i {> ".Id! T.lcs I'M, t,t: p.i,.jt ; r ''v>, - ` : ; - ;! f Ex U S toss rv->rcr\vj:.t, .it Jeui.-mbn' P *.> ` ' < when no tar benefits tvi.o bo*.'*' reuxJe'i /.* * .it i - mateiy $73 *r ilon A s';bs!..vt'at porti.n r.' t. , *-.i. m unlimitta cj"ylo*vvarO iwr od Earnings per Share Income Taxes The components or income Detnre ncome taxes were Total US E-US 1943 $419 151 $570 1982 $-125 76 ibO' 196' 5-19 $69.3 The components o' income tax expense were 1983 1982 Current: Federal Slam Ex-U S $103 6 45 $ 53 8 39 154 mo 1981 $ 91 8 38 137 Ovferred: Federal State Ex-US 11 72 1(33 449 (D (4) H| 14 72 I 1 1 Thx etlect of k>a carryforward: Tbtaf Ex-US 33 $201 $172 $248 Earnings pe* rr.ve vvpre comWo* average run-bet Ol common and (-.! shares Outstano/'y each year M' '0'5'rt `-JI.* art! 38703 60-1 :n 1983-1981 respocl .e1,' C<v rt.n store equiva'et ts con.'.'St ol uc/'i'-ci' uV> -pun exercise of outstanding slock opicms (201 at i if;1.* 3:8 3rd 200 801 ni983 l98i respectively) aoo :.?< ol loan stock of Vr/isamo p ` u (99 >18 :0) 90-1 am; 144 632 -n 1963-1981. respectively) Eanm-gs pm snare assuming full dilution were no1 s-gnifcamty different trom the primary amounts Inventories______________________ _________ Inventores a; December 31.1983 and 1982 would nave been $453 muton and $447 million, respectively h-gr,er man reported il the F'FO basis ol inventory valuaton (which approximates current cost) had been used 'or an inventories The LIFO mventor, method makes it mpraciicat to identity inventories by oass *caiion (i e. timshed goods, goods o process, raw materials ana supp*-es) The liquidaiion of ewer cost inventory "tiers' under the LlFC melted ncreased 1982 earr-mgs approximate-,' $83 rm'tion before taxes Investment tax credits tor 1963-1961 were 26 mii'on, $53 million and $22 millon. respectively The sources ol timing deferences m the recogniton ol revenue and expense tor ta and financial statement purposes and the tax effect of each were Depreoaron and obsolescence intangible dnx* g ana development costs Merest cacriatutx-on Other tout 1943 $ 19 (3) 8 (10) $14 1962 $ 49 19 '8 f!4i % 12 1961 $ 66 23 l-l 8 S'n Factors causing the effective lax rate jo after tram the statutory rate were ----------- 1943 '98?-'7'-. ^8t- Federal statutory -j;c investment rax ana P40 ceck's Berets arr.Lx.tabio 'i OtSC earr-rqs `rr la> ""pciea * -, vuliSddrps '--A-.rs f'rifir 44%,. ' 46% (4)--, tit) (3) . Jl (2) / 46% '3) l_'f > ). i*) Effectlva Iniomt tax rata 35% vl if.% Short-Term Debt and Crsdlt Arrangements 1983 Notaa payabia: Banks Olhc's Currant portion of long-term dabt $154 75 24 Total $253 '902 $1C6 26 $'3i The Company las available a 6200 miiion oomesi-c Revofvng C'**ct( Agreemen' with fourteen banks The Agreemier.l provides lor rr/vok-rg credit through 1989 jr-e imprest rates on any borrowings unoer these domestic facilities wit generally bo ai or near p-avail-og pr*n raies The Company also has av2'iabie SiOO million ^n.der Eurocurrency Revolving Credii Agreements sub/eci io manOatory reductons beginning ,n 1985 and 'ci'i'-na: ng -n 1987 'merest rales under ihe*,e ag'oements -ve at a rrargn above me LOr-UOn rr Lu'CmtOury -ntt-'t.-iiK ottered rales No borrow*-gs Aero maae jr-rier >!H- ibo-.e VIVI'I -I lies ll-rrx.gri I ..-r.n ia*y 24 '98-1 m (-id'ixm ..ena-ri e ij J suijs-rv-ir is n.r.** n/;).-- shr/i term oar. 'ac. it-es of $328 -t-.jix -ii a--! /. a- 'Olai.r-f| $r.9 -l.-X' .Vf-'O ix.loMr-d r-.j |>,- {- i -> '38) fe'''.' /- h-t-se vrs r- i.. - ,a*-- . ba-'r r^iit.*v 2535931 1 1 ilai nfc--< * s .drtii Long-Term Debt Long-term clei;t texClus-vP c1 : ''<'' 1983 Monaanto Company: So nores CK*o '9&5 .1 i.S promssory netl-s J..C '3 3 .*o sT-H-ng 'o.-u .'cw.'Oj Ch- 8 av smx.rg "unc rteberijies c- x' 20.'j 3 worry? oror-rure-, o..e In.'-' i .V. ncxrc iol OTIL'M CW -\0 8 ` v vm-fY) Viitl JV-1!''-I|?S a; > .'COll <'%"> % 'c d_.s:'M reve-cpme' txxv! roi'qd'crs due '965 202' Cat>tai-.-eo caw XMjatur; Monajnto (Sultae) S.A. (Swlaa aubatdlary): 6 -.-N wkrg *jrx) deter '. *.-> *onc Monaanto Europe, S.A. (Belgian aufca'dfsry): 9-.V14 fiA-'K kWhs d-<? '985 ''>31 other, pwcDaliy e< U S jutsd ares__ Total stoc 44 67 127 77 SO 169 247 7 $937 . % 1` ,y ,, 7 v -t! ' j, Other long term debt above a: December 31 1953 includes S3 million ol Monsanto intetnaional Finance Com,party 4s.nkjng fund oebeniures (due '986) convertible into Common Stock at >85 per share, ana S3 million o< Monsanto pic (UK st.bskj ag 1 fm-, loan stock (due '9851986) convenb'e nto Common Stocx a: a rale equivalent to S55 per share Maturities and Sinking fund requ''-_-mentS 00 long-term debl are S24 million $;3C md-cm s22 m-ilon S' 7 mi'Vxi and $23 million for the V.-e years end-ng Decent*.-' 3' 1984-1988 'espoctaety Covenants o* certain car, agreements 'es'nci mam -jr borrowings and daccenq pa/moms it is not anhc pa'ea that additional future borrowings wiH be affected by these restrictions and none of me Comp3nys reinvested oo" inqs were restreteo as to dv-aend payments at December 3' '983 Monsanto rvjs vanous cans payable to cr or compares where me agreements rxov-cto lor 'he eqa' '-ghf ol ettset o' 'elated Monsanto assets p'-r crpaify cans renewable Item the same ccmpa-trS or '.' etr a^i-ates Monsar 'os total txxrowmgs urcer mese agreemenis were $149 miiiixjn at D~cenber 3' '983 Since tom panm, to me agreements have trie lego: right c' of'se' -n case ol aelaufl. borrowings ana reared receivables ty oher assets are reflected net m me actwnBJMHV ~iinemeni cf Consolidated F nancai F*asitx.n TBp^^greemeois epre at various dates through 1986 Ox-cans*' nOfx/rency oenorr'ina'iot: and omor factors m1 rfo-st rafcrTx'cans pa,-abie are somewha' r-gne* "'an Mt'tq.on IT reiaieo 'eceivahies v jtr*y yv.i-rs Si.bsMnf-ai'v a1' c/ q V" 'r-ed 'hi.. Cry |,.i , . ; .r Commitments and Contingencies '.i r . i C:.' i a*/-? .1; W- 1C uV`. - " -/ 1 ',. , . f . sed f.` C< i:-'t.iw .; CCrih' *Juf r y - il V is j' .i' t- ' ' O. V ! (1 > d'SCOt.mi.vl -.jvl;w , r , ' . If . ,C! 1 r\) ; Ti'.>ry $56 at i:\\ *" hu' 3' ' k' Mrr.iu, itc a pare, v a numt.k.-r of 1, iw.-,. 1; a' ' : .s v,qc/'-vi..uy a'rfji-'g ansmg m tiv: ixxm.it.;U' .* f ` ne1^ C nr* j r, v-f these vic'inri see` `3 r 1 JPXt.r e '."i? lesults of ,it,i|U't r. '..H O A tv 1 with cc-ha.' ''a'-ajemeni t-.es t- % .0 aas'Ct-1rl C xi p-ii y cotmiry tn<it 1.1 ,, i/C'^W- , suer 'ii got or w 11 rot have a rrj!r'i.v ud.v' \i' k."` : ' Virs-ir tO 0 ' jPU'wl" Capital Stock Tne o>jt sDrdirg $2 75 Cunuiative Cmr. er r,ip P'efc Stork is staled at S3 24 pe* snore and s cor -.en ijt-- etc ' i2 snares or Common Stoc* Preferred stick o'd, 1 n redeemed soefy at the Corrvirys 1 pt.-jn at $79 pm sfiare 'trie .oiuntary i'qu'datO' weicrence) an, .vv, an mvoohtary liquidation preference ol >35 per sf-are At December 3'. 1983. there v.tre '96249 commor' sha'es reserved fix convt'scxi 01 crmeanie secu.stes and ' 424 598 common shares i-v employee stork CfllrjnS ^ Stock Option Plan______ ______ ___________ _______ Ai [vcetTiber 3' '983 there wee 1 0j3 778 snares unvje' optens ouistardmg for the Company's '974 Par- y n, 'angng Irom $48 50 to $"5 '9 Optons for 6t 7 7ft sna-es were eerosubie ai December 3' '983 D ;r,, '983 258 250 options were granted and 320 3-tS rt r 1 -r g'd''f.'-.J at pnees rangmg from $48 50 *0 $88 >9 p- ^ share were exercised SioO appreciation nghts (SARs) are auinordeo to\*? 9'anred unew me '974 Plan .hooding rc-t'oact..o c. i: 's lor u"e>erased opions At December 3' '983 SA1-'-- 'cotoo to rqt>oris ftx 257 233 snares w-r-'e outstar o r'] o'mes-r '45 0'Owereexetosat^e Dimra '983 SAPs 'elaifyJ to culms for Ct OCX' snares /<: q'ar tt.-d .mo 98 4't5 wPre crercsea ~2535932_1 MAR 001711 LAM017829 Segment Information Certain 'joerat'ng 0nrr srqmc-r; :s i' ><?_' appearing on page 30 are -negM' pans ot t'v aoci'n r.ifrying financial statements Tbe gnrc pa1 product 'ires included in eacn opcrat-ng unit a>o snow .n 11 o Sa <?>. by Product G'Ocp am cn frige 34 Unusual or r\/' recumng charges or credits were included .r. the opeu! ng umts a^a world areas as discussed m rt'e "Pnnc-p jl Acquisitions and Divestitures' rote The i,qi ,'dat.on c1 lover cost nvertury Pars' under tr-e L'FO Te'.t ixi icreastKt 1903 operat-ng income ty S30 m.H'on $37 million and S3S rmllc-i lor F-berS and 'nterrr-ocKVcrS Industnai Cnemcais ana Polymer Products respeutueiy Total sales between operating ar ts (made on a marvel pree basis) were $297 millon S311 m,il<yi and $393 million m 1983-1901 respectively Th`>se sales w`,-o .m J r;> i- " i ! , i Den ..I:S ij'-fl -i . i $' ; . ;.' - ') :90' r.'S, .e::-..-r,:.i-df t.---. ,-.i tS'C rniluri S9t m '!</- .iru $V,.' -i r :nw respocltv'i' "iter j'e I .1 A-, !' .r Mtr.san'o icr.'itori to a-v-t* *4on ti ti - - .r^r i 0't`erent wi.r'a .vea wm ma-u- c" a i'-i'-' . ! i Certain ccrpuKate et>.-'*es i 'n .i- , "..so v i1-- Cverai1 fTvyvigetfvn! ;t t e Coat p.y , wv.*; I tC tf-e OtXr'.Y-nq u-nitS :J' *. ' 0 .l'-'.i; J-: n< j , (e*censet as sro*n n e S:.it"r'iy t : r.: Income 'S it e on.'v'econciiir'g omAron ck nr v * i; income are ncu-me !>', < prvopaiiy .nciuoe casi: Urr^ r t-K1' Jf" j r- - 1 jr : wr Vl,,. s'vy* !o"T' f.r*'.,/'tr vm 1 Nei sa'os by world a*ea entities were Outside Customer Sales 1383 Itw .tH- lirstxj Sates Erotic AVc.l Carvv'a Liitm Ar-e'CJ Asa P.ic tc EnTw-atos S4J96 924 451 328 0 '. 4.^ I'S $t p : ' '' -Irt'. Total consolidated S8299 5*' V: Operating income ano tt/a. assets by Acr'd area e',l'tes were Operating Income (Lost) 1983 i'.r n-H' Oore Ai-ca Gr-ana Lore AievJ Aua Pac 'c Eirirvuo-s Cmxiar expenses tMvxvr'-vng assets S 434 137 54 IS (25) |50) S aE8 n - S n'-r yi .w * t' i Tit' Idol consolidated S 555 > *: * J \i.' 1983 $ 526 168 10 25 (749) t-- 1983 S5.122 696 272 203 (362) 496 J6.427 Ffyciwny -s a recc'iciliatiryi <" U S 'jiKj'a' ' Cj rrcri- ir^'o'd .;svis \j :* o >. fr'M* pef assets r/jr.vjua'td .u tj s .tuo<ir tr- Oten'iq i- -r-v ijrrfy rw.r/-*ncaT 'af*s ^c'-ua-rw; '" <v. ' v Nut Income ot consolidated ti-U S. subsidiaries '*V. y' l!l<| t Si:'.. W '.Vi- ' . i Net assets ot consolidattd ei-U.S. subsMtarles *. 1983 S 206 (35) i 49 f 12* . SI. 171 470 S 701 TH.' i f vr t ' e* ity) i i * r Inler-Aiea Sales "Jr> S -U - Cb 5 sf-i t. 4 60* 1 5 iBsi > Total Assets -J0- Si > *.! y.<j . S: `f rr" r-; y 9. i> [A=: r in'V rir-tl 2535933 J 001712 7830 >m\oa Financial Summary (Octin ri mBore. ncpt pt' 19830! 1982I2K3) 1981 Operating Results Net Sales Operating Income $6,299 555 $6,325 tot S6.9W 702 Net Income As a Percent o( Not Sales As a Percent ol Average Shareowners' Equity As a Percent ol Avorage Capital Employed - S 402 6 ' 11 10 $ .152 6 10 9 S 445 6 15 It Earnings i ; Per * S. h"ar"e, "-.t ' .h; \*':. Primary .-Fully Diluted .. $ 9.78 S 8 79 . 8.74 . 874 $11.50 1143 "CX . Yearen.jdr.'Fin'.an'ciajrl P*osition''X. >; Total Assets Working Capital *6,427. ' 1,535 V^T*-* ' -r- fr Property! Plant & Equipment: GroteVv*;' '$6,639 ' .,r Net ' 3,264 L&ng-Term Debt ' " ; !' / } $ 937 - f/iP'. '' : .... . Shareowners' Equity /.' 'x!. 'A,;.' 3.667 Current Ratio ..i x . -* 2.3 r4i>v*'.` :.:'. r*'' : .'*'?.. ^Percent ol Long-Term X Capitalization - Debt to Total h '20 . $5,077 ' .1,503 ? $6,069' X. 1,486 : $6,530 $6218 3213 ,: 3.184. - $1003 J x si.isd. 3.490 . 2.6 'J- 2+ Othar Oat* Property, Ptanl & Equipment : -*V r.. 5 T V, '\l<>.*>' ir,.^' Addfflons: . {': Depredation and Obsolescence Interest Expense . Research and Development j- y /_'; < * ; .-* .^Expense -C .-! ... Income Taxes' ,\ " - \` $ 560 : $ 673 617 4 ' - 439 , -96- -'r ' . 82 T ' 1 , ' 290 264 201 - - 172 $ 668 263 - lot 233 248 Stock Price: - - 7 PrkEambgs Rattq on Yeerond Stock Price rtgn Low s Vs. $ 116^ $ 69 74'/ . 561% 11 9 $ 8715 5959 6 Per Common Share: DNxSer'Cfi f ' Shareowners'Erurty $ 4.16 69.66 $ 3 S5. 85.97 $ 375 84 37 Shareownots: Common Preferred Common Shaw Outsiandng 69,787 _ 532 75.943 . 709 79 029 775 ' . "V-.' ` __ n INM ram t 19*3 Mudn MUatOrwy tot M6jM(#133 *6<S CII pw pnrMOf >** Iran tit iMnaon c U S lew tw^cr* n* (2) Nil noamt I 1802naudtt tntrtfIwr) yj&6rtmmmtct&tn*l*rtri**r, tun. tom in xntryt oleta Ipr tcntw iam (31 mt*t tr**.Tin 8llimml2ntnO-ilnaW#ffaid*n No Fm^iCunaner namamn. T------ 2535*3^J- 001713 LAM017831 UoRMRto CemfMy and Subsidiaries 1980(4) $6574 210 5 149 2 5 5 '-: $ 4 10 406 $5,796 , 1226 \ $6,074 1109 $1,371 2006 21 33 *979 $6'93 467 $ 331 5 12 10 $ 911 903 $5,539 1.323 SS.529 2.818 $1203 2.782 22 30 VJ.'fi $5019 6J2 $ 303 6 12 9 $ 829 821 $5,036 1298 $5,167 2.605 $1,224 2.579 25 32 1 i.V $4 596 O'O $ 25 6 6 '2 9 $ 7 46 737 $4 350 1.060 $4,745 2.40P $1.03! 2.401 26 30 :a.'o V4 370 6fc6 $ 36r> 9 17 tj $1005 9 T7 $3959 1.106 $1208 2.090 S 915 2253 29 29 >J.'o $3(i?h 54 ' S 306 8 16 13 $ 863 822 $3 45! 1.150 $3,620 1.660 $ 845 1.977 34 30 1 j.'irj, S3 .198 530 $ 323 9 20 15 $ 92G 873 $2,938 968 S3.157 1.312 $ 587 1.755 29 25 !'J7.J S2 '.4P i\X> $ 238 O 17 13 S 690 654 $2,545 855 $2,852 1.152 $ 579 1.484 31 28 $ 781 54? 112 206 57 $ 70'/. 42'A 17 $ 355 7763 82.441 871 36 61.836 $ 566 413 123 161 ISO S 62 45 7 S 135 7720 85,608 9f? 36 63.926 $ 480 288 103 $ 607 296 80 $ 647 226 80 136 274 $ 60% 44% 132 248 S 88 V 52 114 251 $ 100 76 R89 S 1175 $3025^.. _$ 2 75 ' 7126 ~a ^6179 06.775 1.156 &,02l m 1.404 1566 . **'> . - - 36 36 ' '" 36 62.851 61 519 G1.903 S 528 173 56 116 230 $ eo% 41 9 $ 2.55 5662 91.725 2.836 35 59.242 $ 313 172 43 87 251 S 69% 3SVa 4 $ 2.30 51 39 98.542 3.709 34 60.926 $ 206 170 39 71 173 $ 75' 43 8 $ 190 44 26 98.964 3.855 .33 58.277 M| W| 1900. r*mmi coats rutad to ecn*mjcttorv<ri pro^iM iiptn^n ** esplatjad * accordant* and. Stwirum o Fmaroal Accounting Standards No. J4 Pnor to I960. M Irtaratt coils war ian**d U ftarad Th* aftac! o *n# nra> accounting pr-nog** was to ncru< 1900 ^ -ncom* by S34 m*on or 30 70 par prwtary char* <51 in 1974 m Compaq arj cartam of rfs dooaanc audatoiana* changed tn*w momel c4 rvamory **JuA*<cn tor aubetanhaiy a* Urdad Sum <nvniorxtt trom 0* FIFO baa* to tna UFO ba**a Th# ailaci 0* ind change * )o -fecraaa# 1974 *xom# >y S?8 mAoo or S2 20 par pomary $nar# MAR 001 714 2535935 LAW1017832 Directors and Officers I'1 Board of Director* Committee* of the Board Dr. Louis Fernandez St. Lnuis Chairman of the Board Monsanto Company Dr. Donald C. Carroll Philadelphia Professor of Management University of tVmml vania C Raymond Dahl San Francisco Retired Chairman of the Board Crown Zellcrluch Corporation Buck Mickel (hcenvrllo. South Carolina Clubman of the boatd Daniel Inlet national Corporation (a sulrsidiary ol Fluor Corporation) Edward L. Palmer ' New York. Retired Chairman of the Executive ('.onimittcr Citicorp and Citibank. N.A. Francis E. Reese Audit Dl.Jean Mover Hoik Mickel Fduaid I.. Palinei Margaret bush Wilson Corporate Social Responsibility Dr. 1.011 is Fei naiide/ Dr. Jean Mayer Admiral St.insficld Turner Margaret Bush Wilson Executive Dr. lands Fernando/. . Richard I. Fricke Montpelier, Vermont President and Chief Executive St. Louis Senior Vice President Monsanto Cot-pany John W. Hanley Rirbaulj) Maiionc> T largaret Bush Wilson . Officer ./ Dr. John B. Slaughter Executive Compensation and National Life Insurance Company John W. Hanley North Palm Beach. Florida Retired Chairman of the Boatd and Chief Executive Officer Monsanto Company College Park. Marvland Chancellor University of Maryland at College Park Monte C. Throdahl St. Louis Senior Vice Pi evident Monsanto Company .'''v'liofujtnt Kich..',cl l Friike Howard Nt. Love Ruck Mickcl Finance Dr. Donald (iai roll C Ray uioiid Dahl John W. Hanley Howard M. Love . Admiral Stansfield TUnrer Pittsburgh U.S. Navv, Retired Chairman of the board anti - McL<DI?yg^iii.i ' ''' - Rii harri |. Mahoney Edward L. Palmer Nominating Chief Executive Officer National Intergroup. Ini'. Richard J. Mahoney St. Louis Consultant and EtjayrCT- Margaret Bush Wilson St. Louis'"-'\ Allornev C. Raymond Dahl Howard M. Love Buck Mickel Pension and Savings Funds President and Chid Executive Officer Monsanto (loin pans Dr. Jean Mayer Medford. Massai luisetts President lulls Cniversiiv Wilson. .Smith and M< Collin Advisory Directors Kolicri I.. ben a Francis |. Fii/gerald Earle III lai Insoii 11. Nil liolas L. Reding l)r. Houaid A. Si liueideiman Dr. Donald C. C.u roll Dr. Louis Fernando/ Rithard I. Fricke Admiral Slanslieli! lumer Francis A. .Nimble ___535936 I MAR 001715 LAM017833 Officer* President and Chief Executhe Officer Richard J. Mahuncv Chairman of the Board Dr. Louis Fei winder Executive Vice President* Francis J. I'tl/gerald Karlc 1L IlarbLsoti Jr. Nicholas l- Reding Senior Vice Presidents Kuljcrt L. Berra Francis K. Reese Dr. Howard A. Schncidcr/naii Monte C. Thuxlahl Senior Vice President and Chief Financial Officer Francis A. Sirohlc Senior Vice President, Secretary and General Counsel Richard W. Ducsonljcig Croup Vice Presidents Robert K. Rurkc Harold J. Corbett* Thomas L.. Gos-sagc Rnlxjil (.1. hitler Vice Presidents l)r. Constantine h. Anagiioslnpoulos Leonard A. Cr.hn Stewart 1). Daniels Richard l.L DeSchurtei ** Charles A. Fallen l)r. S. Allen Hciningrr Martin J. Kalleti Thomas II. ladL-ric Dr. Joseph T. Nolan Sum Pickard Janies II. Senger*** Donald H. Swan** Vice President and Treasurer Ijwrencc B. SkatolT Vice President and Controller Mic hael F. Mce Annual Meeting I lie lies! Minii.il Mi ft hi" id (lie shut cowiifi \ u| Mmis.iiilii Company will lx- held ai 1:1.1 pan.. Fridav. April '*7, 1984. in K Building at ihe (jmi|uin s C.eneral Olliers. 800 N. lindliergh Blsd.. St. Louis. Missouri. A loiin.il notice of the meeting, together with a proxy statement is Ix'ing mailed to each shareowner. 10-K Report, Corporate Data Book and Investor News A copy of Monsanto Company* Form |I>-K Rc|xoi filed with the Securities and Exchange Commission lor 1983; 1983 Corporate Data Rook, which contains additional information relating to Monsanto; and Investor New s can lx- obtained bv writing to: Investor Relations' Department Monsanto Company 800 V Lindbergh Blwl. St. l.ouis. Missouri (>31rt7 Stock Symbol: M JC Transfer Agent and Registrar The First National Ban!' ol Boston MAR 001716 * |tt lirt onif V*ni>t \ i r I'lC'itlrni uti April I l*i* I [ l*t t*mr ( if trip \ it v Pi ^Mtlrtii on \ j it il I. I'l.Ml (frt me April I. I'*** I T" 2M5 LAM017834 Monsanto \l< ns ttii" ( np| t ur- M'i \ | :: ti*1 i Ji Uk! m 1 < it' \11-m .i : 11 . I_____ 2535938 1 fire*Express ( DOCUMENTS-WATCH-RESEARCH / siCMifi mfonrntr i o i sftvicis 800-231-3282 ~~^ 301-738-1400