Document rBQgkqJG72p8eeVajme7XQQOE

DIRECTORS AND OFFICERS OF BOARD OF DIRECTORS EDGAR M. QUEENY, Chairman............................................ St. Louts CHARLES S. CHESTON......................................................... Philadelphia ROBERT R. COLE........................................................................... St. Louis FRANCIS J. CURTIS...........................................................................St. Louis FREDRICK M. EATON...................................................................Veu, York CARROLL A. HOCHWALT.............................................................. St. Louts WILLIAM W. SCHNEIDER.............................................................. St. Louis CHARLES ALLEN THOMAS........................................................ St. Louts FELIX N. WILLIAMS.....................................................................St. Louts EXECUTIVE COMMITTEE CHARLES ALLEN THOMAS, Chairman ROBERT R. COLE CARROLL A. HOCHWALT EDGAR M. QUEENY FELIX N. WILLIAMS FINANCE COMMITTEE CHARLES S. CHESTON, Chairman FREDRICK M. EATON EDGAR M. QUEENY WILLIAM W. SCHNEIDER CHARLES ALLEN THOMAS TRANSFER AGENT Common and Preference Stocks GUARANTY TRUST COMPANY OF NEW YORK REGISTRAR Common and Preference Stocks THE CHASE NATIONAL BANK OF THE CITY OF NEW YORK HONS 351474 TOWOLDMONO013970 3 MONSANTO CHEMICAL COMPANY at December 31, 19S4 EDGAR M. QUEENY.............................. Chairman, Board of Directors CHARLES ALLEN THOMAS................................................ President ROBERT R. COLE...........................................Executive Vice President FRANCIS J. CURTIS............................................................Vice President JOHN L. GILLIS..................................................................Vice President CARROLL A. HOCHWALT................................................Vice President FELIX N. WILLIAMS............................................................Vice President WILLIAM W. SCHNEIDER .... Vice President and Treasurer ROY L. BRANDENBURGER...........................................Vice President; General Manager, Merchandising Division J. L. CHRISTIAN.................................................................................... VicePresident; General Manager, Inorganic Chemicals Division R. K. MUELLER.................................................................................... VicePresident; General Manager, Plastics Division EDWARD A. O'NEAL JR......................................................................... VicePresident; General Manager, Overseas Division CHARLES H. SOMMER.................................................Vice President; General Manager, Organic Chemicals Division J. RUSSELL WILSON.................................... Vice President; General Manager, Research and Engineering Division DANIEL M. SHEEHAN.........................Vice President and Controller EDWIN J. PUTZELL JR.............................................................. Secretary JOHN F. MARTIN............................................................Assistant Treasurer J. ROBERT MATLOCK............................................... Assistant Treasurer ROLLA H. STOCKE......................................................Assistant Treasurer EDWARD D. TOLAND JR...............................................Assistant Treasurer EDWIN J. CUNNINGHAM......................................... Assistant Controller ALFRED W. LONG......................................................Assistant Controller WALTER C. THILKING............................................... Assistant Controller EARL J. WIPFLER......................................................Assistant Controller CHARLES E. CASPARI JR..........................................Assistant Secretary EDWARD W. GAMBLE JR. VICTOR E. WILLIAMS HONS 351475 TOWOLDMONO013971 7 WORKING CAPITAL Reflecting the substantial investment in new plants, working capital decreased from $109,143,910 to $92,144,492, and the ratio of current assets to current liabilities decreased from 4.9 to 1 to 3.7 to 1. Hence, to restore liquidity, the company has executed an agree ment dated December 1, 1954, for the sale in 1955 of a maximum of $25,000,000 of 3% per cent Income Debentures due January 1, 2002, second series. INVENTORIES Inventories amounted to $58,293,366 at the year's end, a decrease of $3,208,980. The rate of inventory turnover was 4.1 times a year in 1954 compared with 4.2 times in 1953. INVESTMENTS Unconsolidated Subsidiaries -- Monsanto's principal unconsolidated companies include Monsanto Chemicals Limited of England and that company's Australian and other subsidiary companies; Monsanto Mexi cans, S. A.; and Monsanto Overseas, S. A., at Panama. M0NS 351479 TOWOLDMONO013975 Sales of unconsolidated subsidiaries for 1954 were $48,048,154, an increase of $9,742,022 over those for 1953, Unaudited net income of these companies for the year, applicable to Monsanto Chemical Com pany's interests, amounted to $1,177,715. The payment of dividends from these companies is subject to currency restrictions in the country of incorporation and such dividends, if and when paid, are subject to some U. S. income tax. Dividends received from Monsanto Chemicals Limited amounted to $554,400 after U. S. income taxes. Monsanto's equity in unconsolidated subsidiaries at the year end, as shown by their unaudited financial statements, was $13,243,840, an increase of $1,486,176. These investments are carried in our balance sheet at $2,407,322. Associated Companies -- Monsanto's principal associated companies are The Chemstrand Corporation, owned jointly with American Viscose Corporation; Shawinigan Resins Corporation, owned jointly with Shawinigan Products Corporation; and the newly-formed Mobay Chemical Company, owned jointly with Farbenfabriken Bayer, A.G. Comments on these associated companies will be found on page 15. During 1954 Monsanto invested $5,000,000 in The Chemstrand Corporation, raising our investment to $27,500,000. American Viscose Corporation has an equal investment in Chemstrand. HONS 3514>80 10 Repair and maintenance charges totaling 320,101.121 were charged to current operating expenses in 1954. EMPLOYE BONUS AND STOCK OPTION PLANS On No vember 11, 1954, options on 18,500 shares at the then market were granted to 36 key junior executives. But 15.000 shares of 150,000 shares which stockholders on March 27. 1951 authorized for option to employes remain available. These options have proved to he stimulating to those receiving them, and we are confident that these re wards will redound to the long-run benefit of Monsanto. On February 9, 1955, bonus awards totaling $648,904 were granted to 315 employes. The awards comprised $434,999 and 2.366 shares of stock. The amount approximated that reserved from the year's profits in accordance with the bonus plan. DIVIDENDS As in the previous year, the usual four quarterly dividends of 621 > cents each, amounting to $13,148,300, were paid on the common stock. The book value of each common share increased from $39.93 to $41.79. HONS 351482 TOWOLDMONOOI3978 DIVISIONAL REVIEW INORGANIC CHEMICALS DIVISION To meet the growing demand for phosphatic products which are consumed in detergents, plasticizers, insecticides, fertilizers, animal feeds, dentifrices and foods, the division's manufacturing facilities were expanded substantially in 1954. Late in the year another phosphorus furnace was placed in opera tion at Monsanto, Idaho, supplementing the world's largest furnace al ready in operation at that location and six furnaces in operation at Monsanto, Tenn. Facilities for preparation of phosphate ore also were enlarged at the Idaho plant. The increased availability of elemental phosphorus, keystone chemical of the phosphate industry, was related to other construction of this division. At Long Beach, Calif., a phosphoric acid plant to serve the broadening West Coast industrial area started operating. Construction began at Kearny, N. J., on a plant to produce phosphoric acid and sodium tripolyphosphate by mid-1955. Production of detergents and ammonium phosphates at Trenton, Mich., and of sodium phosphates at Carondelet, Mo., was increased. Another phosphoric acid unit was installed at Monsanto, 111., where facilities were expanded also for production of phosphorus oxychloride and phosphorus trichloride, both used as chlorinating agents and catalysts in preparation of intermediates, dyestuffs and medicinals. Production of phosphorus pentasulfide began at this plant. A 400-ton-per-day sulfuric acid plant and enlarged facilities for manufacture of dodecylbenzene were completed at this location. Sales of sodium phosphates to the soap and detergent industry in creased. Farmers consumed larger quantities of phosphatic fertilizer solution. Sodium meta-bisulfite, long used by the paper industry, wob marketed successfully as a silage preservative (Medo-Green). New products introduced included calcium phosphates for the dentifrice industry, a sodium acid pyrophosphate developed for prepared cake mixes and trichlorocyanuric acid, a high-chlorine-content powder for formulating solid bleaches. Cooperative work with Colorado Fuel and Iron Corporation resulted in proving the use of electric furnace phosphoric acid in the scrubbing of by-product gas from coke ovens to produce a concentrated fertilizer--diammonium phosphate. 11 MOMS 351*83 TOWOLDMONO013979 MERCHANDISING DIVISION Sales of the Merchandising Division increased substantially. A unique detergent for use in automatic washing machines, all is the largest volume product of the division. Monsanto developed all in 1947 at the request of a major appli ance manufacturer which had determined that a detergent with all's properties was essential for efficient performance of its automatic washing machines. Manufactured by Monsanto since its introduction, all was mer chandised by Detergents, Inc., of Columbus, Ohio until that firm was acquired by Monsanto in 1953. The Merchandising Division cooperates with the automatic washing machine manufacturers and appliance distributors who prescribe all. A spray-dried (or "fluffy") all was introduced successfully as a companion product for the original condensed form. Sales of Rez surface coatings, for interior and exterior wood finishing, and of Folium water-soluble fertilizer also increased. ORGANIC CHEMICALS DIVISION Sales of this division were approximately equal to those of the previous year. While floods, droughts and a resultantly low insect population caused reduced consumption of insecticides, sales of other agricultural chemicals, including herbicides, increased. Three new plasticizers were introduced for use in polyvinyl chlo ride for floor tile, garden hose, vinyl-coated fabrics and foams used in automotive arm-rests and shock-absorbent padding. Santicizer M l 7, another plasticizer, is being used as a bonding agent for cellulose acetate fiber in filter tips for cigarettes. Adipic acid, a raw material for polyester resins, was introduced. Other Monsanto products, such as monomeric styrene, maleic and phthalic anhydrides and fumaric acid, are important constituents of polyester resins, which, when reinforced with glass fiber, are finding increased applications because of strength and durability. Santolene C, a rust inhibitor, was the first such material to be used in military aviation gasoline and jet fuels. A major expansion of pilot plant and engineering research facilities was completed. These new facilities permit proving more processes on a pilot-plant scale and so provide small quantities of new chemicals for field testing. MONS 351484 TOWOLDMONOQ13980 I'M') 1-M(i I'M; I'MH 1'I.VI | I')1,! I')1,.-' I )!>.) I'M A paper chemicals laboratory for research and sales service was installed, as was a laboratory for nutritional studies involving prepara tion and handling of radioactive chemicals. At Nitro, W. Va., a chemical engineering research laboratory was nearing completion at year's end. The John F. Queeny plant's facilities for production of phthalic anhydride were enlarged. OVERSEAS DIVISION The Overseas Division is responsible for exports and for operation of plants outside the United States in which the company has a financial interest. Sales of Monsanto Chemicals Limited (England) and its subsidi aries, including Monsanto Chemicals (Australia) Limited, were 18 per cent greater than those for 1953. Sales of Monsanto Canada Limited were approximately the same as thosejor the previous year. While Monsanto Mexicana's volume of business exceeded that for 1953, its sales were affected adversely by the devaluation of the peso in March. A new, wholly-owned company, Monsanto Argentina, S. A. 1. C., was formed with headquarters in Buenos Aires to handle sales and pro duction. MONS 351485 TOWOLDMONOOI3981 16 PRODUCT NEWS Monsanto's all. a controllcd-suds detergent and its new companion, an extrafluffv (ill. arc the largest volume products of the Merchandising Division. MONS 351488 TOWOLDMONOOI3984 17 New Monsanto resins a n <1 p I a s ti r i i e r s a d d beauty to vinyl floor tiles for a growing market. Sutitolvnv ('> a rust inhibitor developed by the Organic Chemicals Division, wan the first such product approved for use in military aviation gasoline and jet fuels. fJydraul a fire-resistant synthetic hydraulic fluid, provides added safety in mills using equipment such as this hydraulically-operated steel billet handling machine. HONS 351*89 TOWOLDMONO013985 lirz* a wood scaler for interior and exterior iiM's. in a w nlr r u^e of colors. is nat ionail v di-trihiitml for both construction trades arid do-it \ ourself ' home decorators. Lustret. Monsanto'* styrene plastic, adds color and appeal to the world's first massproduced iransislor (no tubes) pocket and purse radio, now nationally available. HONS 351490 TOWOLDMONO013986 Mrdo-Green. Monsanto's new grass silage |>rcserva(ive, made the silage sample on the right brighter green, indicating a higher carotene content, thus a better quality silage with higher livestock, feed value. f'olvester resins in combination with glass fibers make strong, light-weight, durable wall panels and jalousies wliirh give this bouse an attractive night-time exterior. 19 HONS 351491 TOWOLDMONO013987 20 BOARD OF DIRECTORS Eixjar M. Queeny, Chairman of the Board; member of Executive and Finance Conimitteea. Sou of John Francis Qucenv, founder of the company. Cornell Uni versity. Joined U. S. Navy in April, 1917, as Seaman, 2nd Class; discharged June, 1919, as Lieutenant (j.g.). Monsanto's first advertising manager, 1919. Entered export department in early 1920's; then the general sales department. In 1923 became assistant general manager of sales; the following year a sales manager and Vice President. Elected President in 1928. Member of board since 1919; became Chairman in 1943, a postion he has held continuously Bince. Charles Allem Thomas, President; Chairman of Executive Committee; member of Finance Committee. Transylvania College and Massachusetts Institute of Technology. With General Motors Research Corpora tion from 1923 to 1926, active in the development of tetraethyllead. President of Thomas & Hochwalt Labo ratories from 1926 to 1936. When that organization was acquired by Monsanto in latter year became director Central Research Department. Elected to board in 1942; Vice President and technical director and member Executive Committee in 1945. Executive Vice President in 1947; Vice Chairman of the Executive Committee in 1948, Chairman in 1949; elected President In 1951. Robert Rast Cole, Executive Vice President; member of Executive Committee. After various industrial posi tions, he joined Southern Manganese Corporation as chief engineer, becoming general superintendent in 1920. That company later was acquired by the Swann Corpo ration which was merged with Monsanto in 1935. Assistant to Vice President in 1935; general manager of Monsanto's former Phosphate Division in 1938; Vice President in 1941; member Board of Directors 1944; member of the Executive Committee 1918. Executive Vice President January 1, 1954. Chahi.es S. Cheston, Chairman of Finance Com mittee. University of Pennsylvania. Director of various industrial and financial institutions. Formerly senior partner in the investment banking firm of Smith Barney & Co. Served in World War II as Brigadier General in Army Specialists Corps and later as assistant director, O.S.S. Elected to Monsanto's Board of Directors in 1945. HONS 351*92 TOWOLDMONO013988 Francis J. Curtis, Vice President--Personnel. Harvard University. Joined Mcrriinac Chemical Company's research department in 1915; production department in 1920: sales department in 192S. Merrimac was acquired bv Monsanto in 1929. Director of development 1939; Vice President 1943; elected to board 1949. Served the government in several federal agencies while on leaves of absence from Monsanto. Functional Vice President -- Personnel January f, 1954. 21 I'nKOnlCK M. Eaton, member of Finance Committee. Harvard University. Partner in New York law firm of Shearman & Sterling Si WriglH. Director of various industrial, financial and chari table institutions. Fleeted to Monsanto's board in 1947. Carroll A. IJochwalt, Vice President-- Research, Development and Engineering; member of Executive Committee. University of Dayton. Joined General Motors Research Corporation in 1920, active in the develop ment of tetraethyl lead. In 1926 joined Dr. Thomas in formation of Thomas & Hochwalt Laboratories which Monsanto acquired in 1936. Director of Monsanto's Central Re search Department in 1945; a Vice President in 1947; in 1948 became coordinator of all re search. development and patent activities of the company; member of Board of Directors 1949; Executive Committee 1950. Functional Vice President--Research, Development and Engineering on January 1, 1954. William W. Schneider, Vice President -- General Counsel; member of Finance Commit tec; Treasurer. St. Louis University. Admitted to bar in 1920, joined Monsanto as an assistant in Law Department; served as Secretary from 1925 to 1951. Elected Vice President 1947; Board of Directors 1951. Elected Treasurer 1953; Functional Vice President -- Genera) Counsel January I, 1954. Member of the Finance Committee October 18. 1954. Felix N. Williams, Vice President--Manufacturing; member of Executive Committee. University of Virginia. Joined Swann Corporation 1923. After Swann merged with Monsanto, he supervised design and construction of the Columbia, Tcnn. elemental phosphorus plant; became its first plant manager. Production manager of former Phosphate Division 1941; general manager of the PlasticB Division and elected a Vice President 1944. Board of Directors 1947; sales coordinator and member Executive Com mittee 1950. Functional Vice President-- Manufacturing January I, 1954. HONS 351493 TOWOLDMONOQ13989 22 MONSANTO CHEMICAL COMPANY Statement of Consolidated Financial Condition ASSETS Current Asset*: Cash.................................................................................................... Marketable securities: United States Government............................................... Other...................................................................................... Receivables, IeB reserves of $1,144,007 in 1954 and $596,854 in 1953............................................................ Inventories...................................................................................... Total.............................................................................. 1954 $ 28,576,799 599,181 298,525 38,729,626 58,293,366 $126,497,497 IncmM 19S3 Dvcroan $ 29,426,611 t 049,812 5,983.923 5,277,277 5,384,742 4,978,752 34,739,471 61,502,346 $136,929,628 3,990,155 3,208,980 $10,432,131 Funds Restricted to Government Contracts .......................... $ 1,054,387 $ 1,257,808 t 203,421 Investments and Miscellaneous Assets: Investment in unconsolidated subsidiaries.......................... Investment in associated companies....................................... Common capital stock in treasury held for bonus awards . Miscellaneous investments, receivables and deposits . . . Total.............................................................................. $ 2,407,322 29,477,400 950,109 2,333,897 $ 35,168.728 $ 1,539,572 23,215,000 1,655,405 2,015,622 $ 28.425,599 $ 867,750 6,262,100 705,296 318,275 ) 6,743,129 Property: Land.................................................................................................... Buildings........................................................................................... Machinery and equipment........................................................ Phosphate deposit*, leas depletion........................................ Total.............................................................................. Leas--Reacrvea for depreciation, amortisation and oboole&cenc................................................................. Net property................................................................. $ 6,189.926 57,413,062 255,084,519 4,262,995 $322,950,502 113,435,467 $209,515,035 $ 5,961,436 51,176,860 226,769,662 3,910,447 $287,818,405 S 228.490 ,6,236,202 28,314,857 352,548 $35,132,097 95,966,244 17,469,223 $191,852,161 $17,662,874 Patents and Processes........................................................ $ 1$ 1 Deferred Charges............................................................................ 4,280,515 TOTAL ............................................................ $376,516,163 Set pages 26, 27 and 28 far note*. 3.359,034 $ 921,481 $361,824,231 $14,691,932 HONS 351494 TOWOLDMONOOI3990 and consolidated subsidiaries 23 -KNr1 oO AT DECEMBER 31, 1954 AND 1953 LIABILITIES Current Liabilities: Estimated income taxes............................................... Less-- L'nilod Slates Government securities................ Net estimated income lax liability........................ Accounts paxable and accruals ................ Preference dividend payable....................................... Total............................................................... 1954 $ 19,693,556 14,643,105 $ 5,050,451 29,158,179 144,375 Employes' Harms A Karris Payable Beyond One Year Advances on Government Contracts............................... $ 1,174.102 $ 1,054,387 I^rng Term Debt: 2.05% Debentures due November I, 1971................ 33i% Income Debentures due January 1, 2002 . . Canadian subsidiaries................................................... Total............................................................... $ 30,000,000 66,000,000 700,000 s 96,700,000 Reserves: Pensions.................... .................................................... Employes' bonus--unawarded........................................ Total ... ................................................ 8 5,095,766 698,368 8 5,794,134 Minority Interests in Subsidiary Companies................. 8 2,202,937 Capital Slock and Surplus: Preference stock -- authorized, 500,000 shares without par value, issuable in scries by Board of Directors; out standing in 1954 and 1953, 150,000 shares of Series C, 13.85 dividend --non-convertible--cumulative and re deemable; at $100 a share............................................ S 15,000,000 Common stock -- authorized, 6,000,000 shares, par value $5 each; reserved for stock options, 135,000 shares in 1954 and 94,500 shares in 1953; outstanding, 5,270,051 shares in 1954 and 1953 .................................................... 26,350,255 Surplus: Paid-in. ......................................................... . 93,620,099 Earned.................... .................................................... 100,267,244 Total . ............................................................ $235,237,598 TOTAL ............................................................ ,Set pities 26 27 and 28 Jar notes. $376,516,163 InrrcuHtf 1953 Olstenve 8 23,681,056 21,9*17,875 S 1,683,181 26,102.537 $ 27,785,718 S .3,987,.700 7,33/, 770 8 3,367,270 3,055,642 1 41.375 8 6.567.287 $ 1,573.691 S 399,-389 $ 1,257,808 S m'1,121 $ 30,000,000 66,000.000 977,500 $ 96,977,500 * 277,500 $ 5,979,575 8 883,809 725,803 27,/3.3 $ 6,705,378 $ 011,2 ti * 2.116.873 $ 86.064 8 15,000,000 26,350,255 93.620,099 90,436,909 $225,107,263 $361,824,231 $ 9,8.30,335 $ 9,830,335 $ 11,691,932 HONS 351495 TOWOLDMONO013991 u MONSANTO CHEMICAL COMPANY Statement of Consolidated Income for the years ended December 31, 1954 and 1953 / ncorne : 1954 Net salcB............................................................................ . $341,822,557 Dividends from subsidiary and associated companies . . 798,183 Other.................................................................................... . 2,534,202 1 rtCr'f'H&o 1953 Decrease $339,425,418 $2,397,139 697,015 101,468 2,723,807 189,605 Total............................................................................ $345,155,242 $342,846,240 $2,30*1,002 Deductions: Cost of goods sold............................................................ . $243,057,056 Selling and administrative expenses................................ Research expenses............................................................ Provision for employes' bonus........................................ IntercBt expense............................................................... .Net income applicable to minority interests................ Other.................................................................................... . 42,167,634 10,651,217 649,319 3,323,372 143,440 2,608,694 Total............................ ........................................ $302,600,732 Income Before Provision for Income Taxes................ . S 42,554,510 $240,736,297 $2,320,759 36,096,357 6,071,277 10,267,201 384,016 1,177,804 528,485 3,439,690 116,318 174,135 30,695 1,644,445 964,249 $293,535,929 $9,064,803 $ 49,310,311 t6,755,801 Provision for Income Taxes (Including 1247,000 of Excat Profits Tax in 195J)........................................ . 18,854,000 Net Income................................................................................ $ 23,700,510 $rr. /Faecal 2(if 27 and 2Q for notes. 23,027,106 4,173,106 $ 26,283,205 $2,582,695 HONS 351496 TOWOLDMONOOI3992 25 AND CONSOLIDATED SUBSIDIARIES Statement of Consolidated Surplus for the years ended December 31, 1954 and 1953 Earned Surplus I9S4 19S3 Paid-in Surplus 1954 1953 Balance at Beginning of Year..............I 90,436,909 $ 77,867,880 *93,620,099 *93,572.705 Additions: Net income for the year 23,700,510 Adjustment incident to acquisition of minority interest In subsidiary company 26,283.205 Total ............................................*114,137,419 *104,151,085 47,394 *93,620,099 *93,620,099 Deductions: Cash dividends on capital stock of parent company: Preference--Series C--at the annual rate of *3.85 a share (Including *144,375 in 1954 for the period December 1, 1954 to February 28, 1955)................................................ * 721,875 Common--at the rate of *2.50 a share 13,148,300 Total........................ ........................* 13,870,175 Balance at End of Year...........................*100,267,244 * 577,500 13,136,676 * 13,714,176 * 90,436,909 *93,620,099 *93,620,099 See pa#* 26, 27 and 28 jor note*. MONS 351497 TOWOLDMONO013993 26 NOTES TO FINANCIAL STATEMENTS Principle oj Consolidation The consolidated statements include the domestic and Cunudian com panies of which Monsanto Chemical Company owns more lhan 50% of the voting capital stock. Prior to 1954 the accounts of the Mexican and Brazilian subsidiaries were included in the consolidated statements. The 1953 consoli dated statements have been restated on the basis of the 1954 consolidation. The exclusion of these companies had no material effect on net income for either year. Inventories Inventories are valued at the lower of cost or market. The valuation of approximately one-third of the inventories at December 31, 1954 has been determined on a last-in, first-out basis. Equity in Affiliates The company's approximate equity applicable to its investments in afliliateB, us shown by their financial statements at December 31, 1954, was as follows: Unconsolidated subsidiaries.................................. $13,244,000 Associated companies, 50% owned.................... 24,344,000 Total.................................................................. $37,588,000 The principal associated company is The Chemstrand Corporation. Reference is made to Monsanto's investment in The Chcmstrana Corporation and to a description of the activities of that company on pages 8 and 15 of this report. Following are statements of The Chemstrand Corporation's financial position: Statement of Financial Condition at December 31, 1954: Cash, receivables, inventories and other current assets less current liabilities.. .......................................................... $ 18,372,332 Bond proceeds and contractor's advances not expended....... 5,970,408 Plant and equipment, less depreciation of $11,334,457.......... 123,505,136 Deferred bond expense................................................................ 511,956 Total.............................................................................. $140,359,832 Derived from: First mortgage 3J-% bonds due April 1, 1976.................. $110,000,000 Owners' investment: Subordinated notes with accrued interest.$44,929,929 Capital stock --10,000 shares without par value and other paid-in capital............ 11,000,000 Total................................................... $55,929,929 Less--Starting--up costs, deficit.................. 17,570,097 38,359,832 Total...................................................7.................. $148,359,832 MONS 391498 TOWOLDMONOOI3994 Statement of Income, Expenses and Deficit to December 31, 1954: Year Ended December 31, 1954: Sle....................................................................... .134,759.285 Coat of products sold..................................... .............. 121.755,430 Depreciation.........................'.................................................... 8,657.195 Total ............................................ $30,412,625 Groaa profit.................................................................................$ 4,346,660 Deduct: Research and product development................................. $ 2,575,134 Administrative, advertising and market development. 2,510,187 Interest expense..................................................................... 1,539,736 Total.................................................................................. > 6,625,057 Net loss for year 1954..............................................................) 2,278,397 Starting-up Costs, Deficit to December 31, 1953: Research and product development.. $ 4,045,745 Administrative, advertising and market development......................... 4,050,680 Experimental production and employe training................................................. 8,156,413 Depreciation..........................................,. 2,330,269 Interest and financing expense of $5,536,755, less interest of $4,108,776 charged to construction and bond expense of $519,939 deferred................................ 908,040 Total................................................. $19,491,147 Deduct--Sales of product....................... 4,199,447 Deficit--December 31, 1953................................................ 15,291,700 Deficit-December 31,1954............................................................$17,570,097 Depreciation, Amortisation and Obsolescence The property accounts at December 31, 1954 include facilities constructed under Certificates of Necessity, the certified portion of which amounts to approximately $48,962,000, or about 51% of the total cost of such facilities. Ttie certified portion is being amortized in the accounts at the rate of 20% annuailv, the same rate allowed for Federal income tax purposes, and the remainder of the total cost of such facilities is being depreciated! at lower rates. The total charge to income as provision for depreciation, amortization and obsolescence amounted to $23,218,833 for the year 1954 and $22,796,525 for the year 1953. Included in these amounts are $9,059,000 and $7,906,000, respectively, representing amortization at the 20% rate on facilities con structed under Certificates of Necessity. Prior to 1954, the company provided a general obsolescence reserve by continuing depreciation on fulfy depreciated assets still in use. The amount charged to operations for the year 1953 under this policy was approximately $1,900,000. The policy was discontinued as of January 1, 1954, since in the opinion of management, the 20% amortization rate on facilities constructed un der Certificates of Necessity was adequate to cover any probable obsolescence. The company has adopted the sum of the years' dints method for com puting depreciation on applicable property additions of the year 1954. As a result, the provision for depreciation for 1954 was approximately $216,000 greater than it would have been under the method previously followed; the difference in subsequent years will be significantly greater. 27 MOMS 351*99 TOWOLDMONO013995 j 28 Debentures Sinking fund payments of *1.000,000 annually on the 2.65% debentures begin May 1. 1957. The company executed an agreement dated December L. 1954 for the sale in 1955 of a maximum of $25,000,000 of 3?4% Income Debentures due January 1, 2002, second series. Stock Options Under a Stock Option Plan for officers and key employes, 46 options to purchase a total of 135,000 shares of the company's common stock are out standing. The option prices range from *86.50 to * 106.00 a share, representing the closing prices of the stock on the New York Stock Exchange on the dates of grant of the options. None of the options hat been exercised. Equity in Net Income of Unconsolidated Subsidiaries The equity of Monsanto Chemical Company in the unaudited net income of unconsolidated subsidiaries for the year ended December 31, 1954 was approximately *1,178,000. Dividends of *554,400 were received from the British subsidiary during the year 1954 and included in dividend income in the Statement o( Consolidated Income. Contingent Liabilities Under an agreement dated June 8, 1951, in connection with the construction and operation of plants of The Chemstrand Corporation, a company owned jointly with American Viscose Corporation, Monsanto Chemical Company has obligated itself to pay one-half of all amounts needed bv Chemstrand for completion of the Acrilan and Nylon plants over and above the lesaer of *110,000,000 or 80% of the total cost of such plants when completed. The Nylon plant was completed on January 31, 1955. HASKINS A SELLS CIMTirieQ HJUC ACCOUNTAN TV OATMIN * *AW* lUILDINI 0AINT LOU f 2 Accountants' Certificate Monsanto Chemical Company: We have examined the statement of consolidated financial condition of Monsanto Chemical Company and its consolidated subsidiaries ss of December 31, 1954 snd the related statements of consolidated income and surplus for the year then ended. Our examination waa made in accordance with generally accepted auditing standards, snd accordingly included such tests of the accounting records and such otheT auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying statement of consolidated financial condition and statements of consolidated income and surplus present fairly the financial condition of the companies at Decem ber 31,1954 and the results of their operations for the year then ended, in conformity with generally accepted accounting principlea applied (except for the changes, which we approve, in the methods of providing for depreciation and obsolescence, explained in the Notes to Financial Statements) on a basis consistent with that of the preceding year. February 14, 1955 HASKINS 4 SELLS KfeiHU* MONS 351500 TOWOLDMONOOI3996 29 MONSANTO CHEMICAL COMPANY AND CONSOLIDATED SUBSIDIARIES Source and Disposition of Funds by Years, for the five years ended December 31, 1954 (In Thousands of Dollars) Source oj Funds: Total Net income ............................................ . J122,585 Provision for: Depreciation, amortisation ami obsolescence. . . . Employ**' bonua, lew current liability.................. 82,190 1,873 Sale of Bocuritio*: income debentures due January l, 2002 . , 100,000 share* of common capital atock.................. 150,000 aharea of 3.85 Scriea C preference a lock. . Preference stock of Canadian subsidiary company . 60,000 38,000 15,000 765 Other --net.......................................................... . 962 Total.............................................................. 1327,375 1954 1953 1952 1951 1950 $23,700 $26,283 $ 23,190 $23,174 $26,238 23,219 427 22,797 194 13,150 436 11,032 1,605 11.992 1,325 66,000 38,000 15,000 765 962 $46,492 $48,886 $139,904 $35,811 $56,282 Disposition of Funds: Dividend* paid: Preference................................................................. Common .................................................................. $ 3,501 63,112 Total . . ................................................... $ 66,613 Plant addition* and replacements.................................... 192,415 Investment in associated companic*: The Chematraod Corporation.................................... Other ......................................................................... Investment in unoomolidatod subsidiaries...................... Increase - decreasa in workina capital (exclusive of cash and marketable *ocuritie*)........................................ 27,490 1*262 1,643 28,757 Other---net .................. ................. ... . . 5,920 Tout .. ...................... $324,100 [ 11crease - darrraM in cash and marketable securities . . . $ 3J75 $ 577 1 577 t 577 $ 577 $ 1,193 13,148 13.137 12.886 12.140 11.801 $13,725 $13,714 t 13.463 $12,717 $12,994 41,302 26^42 72,460 38268 13,743 5,000 1,262 868 7,500 5 6,500 7.500 239 110 990 121 5,641 1.189 7,557 2,526 37,271 32 8,7/5 2,173 IJI5 >57,705 >57,944 $129,965 >52,053 >26.431 #11.21J $ 9,053 $ 9.939 216.242 $29,849 HONS 351501 TOWOLDMONO013997 i uO ONSANTO CHEMICAL COMPANY AND SUBSIDIARY COMPANIES [Including All Foreign Subsidiary Companies/ Statomont of Coniolidatod Financial Condition at December 31, 1945 to 1954, inclusive (i rSou.ondi ot Dollar.) A SSKTS Cvrr*nf A*in Cu>l ood TMtuk<tfobi MKurhlst.......................................................................... ... IMI r*rviH.................................................................................... ItM 1 39,080 Toltrt........................................................................................................ ... 11 54,031 Torx* R+M>*4 h* Otnnmwiil CD|rdi............................. ,.......................... Iwv-- lWWl *** Mhwlt*II44IH AihBii MlK*flr*OV* H*V**H"**H, 4#pO>H, Hl............................................................ on dwtr*y4l pl*n4--................................................ rrw-w tofid. .................................................................................................................... Sv441**t................................................................................................................ w-~A ........... ....................................................................... PKtw^M>t* Ihi dupitkm...................................... .. ............................ fo**l,........... ................................... .......................................... _ N*t 048(1Tty.......... ............................................................................... Deterred CfcarfM.............................................................. ...................................... TOTA1..................................................... ..................................... ItM 1 47.851 40.) 1 0 >151,14? > 1.351 * 23.315 3J71 > 6,333 58,369 237,448 3,tl0 >327,4*0 104,8*1 >313,3?? f 3,633 *407,873 1982 * 33.999 4I,*7* 62,439 {158,336 t 1,506 1 13713 4,433 ^ U<> > 3.910 226778 3,800 >301,924 90.119 >211,*07 1 2,211 *394.410 1981 $ 41721 35.166 54,101 1)33,693 I 1,431 $ 9.213 3.250 > 4,?5 46,325 >73730 3J03 $230,455 79,518 $131,137 > 3.255 *301,190 19*0 $ 56,904 30.929 33,143 $120,974 > 1.634 $ 1713 2,349 I 4723 41,432 144.331 $192,283 70,4 88 $1217t7 $ 1.441 *249,833 1948 1 27,798 20,247 3J7U > 81758 $ 1,145 $ 725 3,268 1948 20.309 39.419 1 *0,379 $ 2.177 * 713 2,278 $ 4.229 39.419 132.896 $177,533 *0,410 $117,142 $ 1.612 *203730 --- 1 3.994 $1*3,400 54,247 $111,353 $ 1,119 1198784 1947 30.9SO t 75,029 $ 2,339 3,144 --it..r * 3.121 1132767 49779 f *2.938 * 1710 3148,213 1944 20,190 $ 74777 $ 2,008 .* 3.406 * 97,8*0 45,647 * 32.233 1 729 $137,040 It** ' 4,532 $41,230 t 1.857 f-ittLL' * 7.7 14 III $74,8)7 132,30* $ 349 $83.07* 1,1 AniI.ITIFfi CiHnwimI It*-**** t*...................................................... ................................. (h__u. V OmirnmN wnd IrfHA Tfi* Ri#rYB C*tMA*4*a . . . . ... iRW1+4 W>c-- l** DoWKfry....................................................... Nof> Hi >**+* Wrmln...................................................................... 17,271 ... > 40,872 Bmytay--' irh Aw* Fy4l| B*r**4 <>* Y*m. ................................... Arfv**w C4*4iM*a............................. -.................................... ... t*r Chm*........................................................................................................ ... % 1 ,034 >104.500 tifilB+ryw' TwUr* ............................................................................. ......................................................... ............................................ ToHrf......................................................................................................... C*HM *** **W UnOwi Mtnvrity >*** in lAiWIwr iwt^h^Ui......................................................... frafwMK* dwrw o4 *<*Mi ufeiMlWr............................................................... H*ck.................................................................................................... ToW-Vi KrpTw........................................................................................................ totnwJ K*p*U, ......................................................... ..................................... .... . 7o*o<......................................................................................................... TOTA1........................................................................................... w* WwWh* Cf*<................................................................................................ I 23,702 33.413 I 3.220 412 30,106 * 32738 1 1,374 1 1.738 *10*778 * 24.120 20.33* 3 3.884 637 33,078 8 37,399 > 1421 > 1^0* MTOl.270 > 3,7f 776 4,4*0 > 11.185 f 6.843 8*4 3.424 * 11,337 8 #,*02 10,230 15,000 26,330 100,467 93.493 >334,342 *407.873 3124,111 10,230 134)00 2*441 494 100417 79734 >2*1,070 >394,416 1120.937 * 43,000 U7i $ 34,622 843 25,245 * 60730 > 1,401 > 1.431 $ 30715 $ 7773 1.322 4,4 53 > 13,498 * *r*93 10,230 15,000 24741 4 94 64.409 70737 $193,404 *301,190 $ 72,943 $ 29,873 22,3*3 * 7720 U2J 19.249 3 *714 $ 1.037 * 1734 $ 30773 $ 8,493 289 2,432 > H733 * 8,075 6,030 24.412 23731 494 53,979 38,63* $17773# $249,832 92,462 $ 13772 970* * 4.067 175 17,792 * 1,843 $ 30,4)8 * 7737 452 $ 8,079 * 6,998 6,030 33,012 21,360 34.623 45,137 $147.496 $205750 $ 44.4*6 $ 14,934 *771 * 8,3jo83r > 92,425 $ 13.669 3735 $ 10.114 466 1 26.41 j $ 2,172 ) 30700 $ 4.890 $ 2739 * 30700 $ 6.06* 6,890 4.320 6,030 33,067 31.373 593 31,413 39,399 *134799 >198.7 8* $ 37.934 $ 6,095 * 4715 6,030 9.163 21.263 384 30,901 30.408 $102.8*6 168.213 > 41,416 $ 9727 7,534 * 2.16* 357 t 13,3oi > 2.008 1*30,000 $ 3,327 3,408 > 1.024 1.940 31.612 19,019 673 4.137 23.018 84,143 >137.060 $ 44,274 *' 9,OVT $ 1.857 t 4.829 4.966 1.940 21.000 12.679 1 2.931 19721 $69,154 $5,074 *39,131 HONS 351502 TOWOLDMONOOI3998 MONSANTO CHEMICAL COMPANY AND SUBSIDIARY COMPANIES (Including All Foreign Subsidiary Companies) Statement of Contolidaled Income for years ended ofcemrer ii, i45 TO iS4, INCLUSIVE <Jn ThouMonAa of Dollar*, Except Earning* a Share of Common Stock and Book Value of Common Stock) OtHac Inc--.................................................................................................................. W 13*4.175 2,131 Total............................................................................................................. $3*7,0 J3 Coi of *** aat*......................................................... -............................................. Sw+tHlE. a<4--W4--r*llv M* rr**r<A Kp4 ............................................................ prorkla* lor tww, . .......................... ......................................... .. iv<M.t ..................... ..................................................................................... SfiodO* provbb- for 0i*af*O............................................................................... Tanai Oty a--^taya raltaf....................................................................................... Nat Into--* appHtaW* 1* --barRy k#ar**H................................................................ Pravbb- for h*ca*a toa............................................................................................. $273,707 37,771 *47 6.773 71 22.27* 13*2/11 Tramiarra* to ooroa* Mr^M. .................................................................................... 1 24,322 far *r of to--awi6*k........................... ................ ......................................... Ca*i dhtjmdt on i**c*................... .............................................................. ftorWc* f< ajK*foHoA o--art!ratio* end <*oioc**c*....................................... 1 4.31 $ 13,14* > 25,6*1 34>a* ****** tnaapaay. rvaMoM*........... .................................... .....................................*........................... ..................................................................................................................................... Ii>c4 rotaa of w--tR................................................................................ .. 150.000 5,270,051 1 4377 NvnaW' of i*or**t4*oi CtWMR A--C*............................................................................................................. Pafaf*t*t* odi......................................................................... .............. .. *<kh mbabliacy, 24,222 21 471* Total.............................................................................................................. UrJta* Slot** OavarwniRwt........................................................................................ 31A1I 17,34* 17*1 15754*6 2.642 W7MJI J2*7,*14 50433 1,17* 3,3*7 742 23,43* $351,466 8 26,770 $ 5.01 $ 13,137 1 24714 ltl 1277.134 3,337 $307,475 $213,641 37.211 *20 7.1*1 47* 17^440 $279,615 $ 27,662 t 4.23 S 12,*** $ 13,112 1711 $305713 2,547 $30*7*4 $205,620 77,1*3 2791 2,606 1,145 42,614 $263,641 $ 24,376 $ 4.67 6 13.140 $ 12445 1750 $24*.7J7 2.251 2,411 $233,601 $1*77*2 23.35* 1714 1.67* 2,011 732 27731 $227,032 $ 26,36? $ 5.44 $ 1 1,600 $ 13,367 130,000 5770.031 $ 41.30 150,000 45,241,167 1 37.2* .150,000 *4,666.1 If $ 3276 1244,620 14704,21* 1 27.47 24.413 It 4.111 3747 31774 24,404 I* 4,023 37*1 3170* T4*7 17,527 17 3,436 3,307 2*4*t )7X>91 17/4 27 1/)** 7,7*5 '4*3 23,063 Tttf 11*3.751 4*J $1#5^U $130^07 732)14 2456 407 12,13* $16*424 1 17470 $ 3-73 $ *4*1 $ 10,126 1746 1160,033 2,336 1,077 $1 31,4*4 21407 2472 735 11773 $1*4773 1 16473 $ 4.0* 1 *431 S 7.U1 1*47 115*423 1,434 $137.17* 11077*4 17.9*0 146* 500 477 $1,412 1141,131 * 16,045 1 370 $ 7,773 1 5722 1746 11 11,424 7*2 $11340* 1 79,745 13,001 60 I9t *,491 110241* 10470 f 243 1 4.131 t 4410 330,116 4476,051 $ 23.77 330,649 *4474.745 * 21.60 771412 M4534I? } 17.60 $51 *,627 -3,603,671 1 13.01 15437 3424 3,006 1,5*4 23455 13437 13,1*6 3,147 7492 1,623 2244* 1*4*3 13,777 14/6 7472 1.644 17,671 11.61* 5,154 * 17,61 1541? 174* 1104.J55 1.941 1106476 1 76,79* 10.67* 664 111 '2402 1100477 1 3417 1 el-34 3.653 1 7.124 210,000 1,2*7.*4* 6. 1 1.73 10.622 3.357 m 14,725 13,63* TW 1TJ4 rtfvTM *K MvVIUE kw*i at fk* IkM* mnd Aw4raH -- iiAlKWrr frWJfW cf*06A l mmwrted hr me tolhnn, v 1*6,000,000 oi )U% b*6*a 0a*Rrf*aa tM4 a* K *3 0,000,000 a# 3.65% Oa6a4wa nM *** < AAar ohhe affart * 3 for I f afcRcfc b 10*6. * *00,000 * af muiMw t*art **M Hi wtfanvHlan at |M ahr, a 94,61 6 rketr* StrHt I prafa*mw Nm* txirarr** bra 1*3,773 wi ibr. f \ 30,000 6WM 3art* C prrfar*< back *eW t* 17 >arWiiRan o4 |100 <*'! 79/2* ifcaraa SwU* A ><*<area ack can*arta4 *++ 159,452 CI1WI4 A*ra> 155,0*0 i4mkm 6>riai I pr*farroa t*odk ocirroriod W* 2*671 5 rw *. 230,000 *<r $acl*t 6 jartfararxa *ocV voW I# v*6*<wY*ari at $79 *f(| 10,7*3 (`'n WUh A praf*ratea Hock ronvarla* Hit* 21,72* Kw k 22*4*4 Awh Satlaa A pcaAar--e> wtmk taf"art*6 M* *47,121 WM Airit. It 316,7*7 aWa* Sw)* A prehtt*ca itadi mM at $10130 (Mr* ta k4*ari of f*$*H pravlovaty HmnhI to co-mr iHKifceUorti 210,000 iWaa orutwrted <++tk iwla--A * If** mtWgoii 3 for 1, HONS 351503 TOWOLDMONO013999 32 MONSANTO CHEMICAL COMPANY AND CONSOLIDATED SUBSIDIARIES Classification of Sales by Product Groups FOR THE YEARS 1954, 1953 AND 194 1954 Plastic*, Synthetic Resine and Surface Coatings................ 1102,176,764 Phosphate Product* and Detergents..................................... 86,309,732 Intermediates, Plasticizers and Resins................................. 54,364,888 Rubber and Petroleum Chemical*......................................... 31,111,586 Pharmaceuticals, Flavor* and Condiment*......................... 19,737,271 Heavy Chemical*...................................................................... 18,963,961 Insecticides, Herbicide*, Wood Preservative* and Agricul tural Chemical*.................................................................. 14,448,842 Other Product*.......................................................................... 14,709,513 Total.................................................................. $341,822,557 1953 $109,309,652 72,119,506 52,546,780 35,475,927 19,952,413 18,236,991 13,455,074 18,329,075 $339,425,418 1948 $ 47,823,856 21,514,464 24,342,712 13,779,899 20,740,296 12,248,891 8,595,876 12,538,447 $161,584,441 MONSANTO CHEM 1 C A L COM P A N Y Per Cont of Chemical Sales by Malor Consuming Industries FOR YEARS ENDED DECEMBER 31, 1950 TO 1954, INCLUSIVE Plastics and Synthetic Resins................ . . Soap and Synthetic Detergent*................. . . Rubber.......................................................... . . Paint, Varnish and Printing Ink .... . . Petroleum...................................................... . . Stone, Glass and Vitreous Products . . . . Textile.......................................................... . . Food.............................................................. . . Metal Fabricating..................................... . . Paper and Printing..................................... . . Pharmaceutical*......................................... . . Lumber and Timber................................. . . Iron, Steel and Related Product* .... . . Color* and Dyestuff*................................. . . Explosive*...................................................... . . Other .............................................................. Total......................................... 1954 % 1 13.6 2 13.3 3 12.2 4 7.2 5 6.9 6 6.1 7 5.1 8 5.1 9 4.9 10 3.9 11 3.6 12 3.4 13 2.9 14 1.9 15 1.6 8.3 100.0 1953 % I 14.5 3 11.3 2 13.5 4 7.6 6 5.3 5 5.6 8 4.7 7 4.7 9 4.6 11 3.6 10 3.6 12 2.5 13 2.8 14 1.8 15 1.6 12.3 100.0 1952 % 1 12.8 3 10.6 2 12.6 5 6.8 7 5.6 4 6.9 9 4.3 8 5.3 to 4.2 11 3.5 6 6.6 12 3.0 13 2.9 14 1.6 15 1.1 12.2 100.0 1951 % 1 13.4 3 10.7 2 11.2 5 6.9 6 6.3 7 6.1 10 4.1 8 5.4 9 4.3 11 3.6 4 7.6 13 2.9 12 3.1 14 2.7 15 1.3 10.4 100.0 1950 % i 13.9 2 9.8 3 9.2 6 7.7 8 5.7 5 7.8 10 4.0 7 5.8 9 4.1 11 3.6 * 8.2 12 3.4 13 2.9 14 2.8 15 .9 10.2 100.0 NOTE--Numberi w italic* indicate order oj importance. MONS 351504 TOWOLDMONO014000 i i i MONSANTO CHEMICAL COMPANY St. Louis, Missouri Serving Industry. . . Which Serves Mankind "'i Monsanto Chemicals - Plastics n HONS 351505 TOWOLDMONO014001