Monsanto Co. (NYSE:MON)

Current Income Tax Expense

The current income tax expense showed an upward trend from 2012 to 2015, increasing from 660 million USD in 2012 to a peak of 1,152 million USD in 2015. However, from 2016 onward, there was a significant decline, with values dropping to 667 million USD in 2016 and further to 580 million USD in 2017.

Deferred Income Tax Expense

The deferred income tax expense exhibited considerable volatility throughout the period. It started at 241 million USD in 2012 and then decreased sharply to 126 million USD in 2013. Notably, the deferred tax values turned negative in 2014 and 2015, with -45 million USD and -288 million USD respectively, indicating deferred tax benefits or reversals. In 2016 and 2017, the deferred tax expense again became positive but at lower levels, 28 million USD and 46 million USD respectively.

Total Income Tax Provision from Continuing Operations

The overall income tax provision generally followed a pattern influenced by the trends in the current tax expense. It increased steadily from 901 million USD in 2012 to a high of 1,078 million USD in 2014. Following this peak, the provision declined over the next three years, reaching 864 million USD in 2015, 695 million USD in 2016, and 626 million USD in 2017. This decline corresponds with both the decrease in current tax expenses and the fluctuations in deferred tax.

Summary of Trends and Insights

From 2012 to 2015, the company experienced rising current income tax expenses, peaking in 2015, while the deferred tax showed a switch from positive to negative, suggesting recognition of deferred tax benefits during this period. The negative deferred taxes in 2014 and 2015 suggest adjustments or reversals that materially impacted the overall tax provision. From 2016 onwards, both current and total tax provisions decreased substantially, with deferred taxes returning to smaller positive amounts. This pattern may reflect changes in taxable income, tax rates, tax planning strategies, or timing differences related to deferred taxes during these years.

U.S. Federal Statutory Tax Rate

The statutory tax rate remained constant at 35% throughout the entire period from 2012 to 2017, indicating no changes in federal tax legislation affecting the company during these years.

Effective Tax Rate

The effective tax rate exhibited notable fluctuations over the six-year period. It started at 30.15% in 2012, decreased to a low of 26.68% in 2013, and then showed a moderate increase to 28.17% in 2014 and 27.33% in 2015. A significant rise occurred in 2016, reaching 34.91%, closely approaching the statutory rate. However, in 2017, the effective tax rate dropped sharply to 21.69%, representing the lowest point in the observed timeframe.

Overall, the effective tax rate consistently remained below the statutory rate, except in 2016 when it nearly matched the statutory rate. The variance suggests the company benefited from various tax strategies or incentives during most years, although these benefits diminished or altered notably in 2016 and 2017.

Net operating loss and other carryforwards

The value declined from 601 million USD in 2012 to a low of 323 million USD in 2015, followed by an increase to 608 million USD by 2017. This pattern indicates a period of reduction followed by a recovery or accumulation in the later years.

Employee fringe benefits

Employee related expenses decreased significantly from 412 million USD in 2012 to 259 million USD in 2014, then showed a moderate increase peaking at 331 million USD in 2016, before slightly declining to 311 million USD in 2017. This suggests initial cost-cutting measures that were partially reversed over time.

Royalties

Royalties exhibited a consistent upward trend, rising from 106 million USD in 2012 to 220 million USD in 2017. This steady increase may reflect growing licensing or intellectual property income.

Restructuring and impairment reserves

These reserves fluctuated over the period, starting at 148 million USD in 2012, peaking at 242 million USD in 2015, then declining to 127 million USD by 2017. The notable peak in 2015 may signify a period of significant restructuring or asset impairments.

Inventories

Inventory levels varied, with a low of 91 million USD in 2016 after peaking at 173 million USD in 2015. The decline after 2015 suggests efforts to manage or reduce stock levels.

Allowance for doubtful accounts

This allowance steadily increased from 45 million USD in 2012 to 85 million USD in 2017, indicating a growing expectation of credit losses or risk related to receivables.

Environmental and litigation reserves

The reserves showed slight variability but an overall increase from 73 million USD in 2012 to 82 million USD in 2017, reflecting heightened or sustained provisions for such contingencies.

Intangibles (assets)

Intangible assets saw a decline from 122 million USD in 2012 to 71 million USD in 2013, with minor fluctuations afterward. Data for years after 2014 is missing, limiting a full trend analysis.

Other assets

Other assets increased significantly from 225 million USD in 2012 to 407 million USD in 2016 before falling to 318 million USD in 2017, indicating variable investment or recognition of miscellaneous asset categories.

Deferred tax assets, gross

Gross deferred tax assets displayed a gradual decline from 1864 million USD in 2012 to 1607 million USD in 2013, followed by stability and a modest increase to 1844 million USD in 2017, implying fluctuations in timing differences or future tax benefit recognition.

Valuation allowance

The valuation allowance increased in magnitude (more negative) substantially over the period, from -50 million USD in 2012 to -394 million USD in 2017. This significant increase suggests growing uncertainty about the realizability of deferred tax assets.

Deferred tax assets (net of valuation allowance)

Net deferred tax assets decreased overall from 1814 million USD in 2012 to 1450 million USD by 2017, reflecting the combined impact of gross deferred tax asset trends and increased valuation allowances.

Property, plant and equipment

These assets, recorded as negative values, increased in absolute terms from -546 million USD in 2012 to -667 million USD in 2017, suggesting an increase in net property, plant, and equipment holdings or valuation changes on the balance sheet.

Intangibles (liabilities or amortization)

Negative intangible amounts rose in magnitude from -407 million USD in 2012 to -411 million USD in 2017 with a gradual decline in between, possibly reflecting amortization or impairment of intangible assets over the years.

Other liabilities or deductions

Other negative balances showed a decline in magnitude from -119 million USD in 2012 to -60 million USD in 2013, then fluctuated. Data after 2014 is incomplete.

Deferred tax liabilities

Deferred tax liabilities decreased from -1072 million USD in 2012 to -867 million USD in 2016, followed by an increase to -1078 million USD in 2017. This pattern shows variable timing of tax obligations.

Net deferred tax assets (liabilities)

Net deferred tax assets showed a general downward trend, going from 742 million USD in 2012 to 372 million USD in 2017, with some fluctuation in interim years. This suggests a reduction in net future tax benefits or increasing net tax liabilities over time.

Over the analyzed periods, the data reveals distinct trends in deferred tax assets and liabilities.

Current Deferred Tax Assets

The values increased steadily from 534 million US dollars in 2012 to 743 million in 2015, showing consistent growth during this period. However, after 2015, the data for this item is missing, preventing further analysis beyond that year.

Noncurrent Deferred Tax Assets

This item showed a declining trend from 551 million in 2012 to 277 million by 2015, indicating a reduction in longer-term deferred tax assets over these years. A significant recovery occurred in 2016, with the value rising sharply to 613 million, followed by a slight decrease to 564 million in 2017.

Current Deferred Tax Liabilities

The current deferred tax liabilities were relatively low and somewhat inconsistent. After a gradual increase from 30 million in 2012 to 70 million in 2014, the figure fell sharply to just 3 million in 2015, and no data is available for subsequent years.

Noncurrent Deferred Tax Liabilities

Noncurrent deferred tax liabilities exhibited considerable volatility. The values increased from 313 million in 2012 to a peak of 509 million in 2014, before sharply declining to 340 million in 2015 and further to 68 million in 2016. In 2017, there was a moderate rise to 192 million.

Overall, the deferred tax assets indicated a shift from noncurrent to current classifications amid fluctuations. Conversely, deferred tax liabilities, particularly noncurrent, displayed marked variability with an initial upward trend followed by significant reductions. Data gaps for some items after 2015 limit full longitudinal assessment but the available data implies active management or changes in tax position impacting the deferred tax accounts.

Current Assets

Reported current assets show an overall increase from 9,658 million US$ in 2012 to a peak of 10,625 million US$ in 2015, followed by a decline to 8,651 million US$ in 2017. Adjusted current assets follow a similar pattern, though figures are consistently slightly lower than reported values, evidencing a peak in 2015 and subsequent decline through 2017.

Total Assets

Reported total assets increased from 20,224 million US$ in 2012 to a high of 21,981 million US$ in 2014, then remained relatively stable in 2015 before declining to 19,736 million US$ in 2016 and rising again to 21,333 million US$ in 2017. Adjusted total assets show a parallel trend with consistent slight reductions relative to reported values, peaking in 2014 and stabilizing thereafter.

Current Liabilities

Reported current liabilities steadily increased over the period, starting at 4,221 million US$ in 2012 and rising to a peak of 6,729 million US$ in 2016, before a slight decrease to 6,398 million US$ in 2017. Adjusted current liabilities closely mirror this trajectory with marginally lower values.

Total Liabilities

Reported total liabilities exhibit a marked increase from 8,188 million US$ in 2012 to 14,067 million US$ in 2014, continuing to grow to 15,191 million US$ in 2016 and slightly decreasing to 14,875 million US$ in 2017. Adjusted total liabilities follow a similar increasing pattern with consistent downward adjustments across years.

Shareowners’ Equity

Reported equity displays a declining trend from 11,833 million US$ in 2012 to a low of 4,534 million US$ in 2016, with a partial recovery to 6,438 million US$ in 2017. Adjusted equity similarly decreases over this period, falling from 11,091 million US$ in 2012 to 3,989 million US$ in 2016 before improving to 6,066 million US$ in 2017, reflecting the adjustments made reduce equity relative to reported values.

Net Income Attributable to Monsanto Company

Reported net income experienced growth from 2,045 million US$ in 2012, peaking at 2,740 million US$ in 2014, then declined to 1,336 million US$ in 2016 before recovering somewhat to 2,260 million US$ in 2017. Adjusted net income generally exceeds reported figures in the early years but reverses in later years, displaying a peak in 2013 and a trough in 2016 followed by a recovery in 2017, though with more volatility and sharper declines at certain points.

Overall Analysis

The data depicts a period of asset growth followed by some contraction, particularly from 2015 to 2016, then partial recovery. Liabilities increased substantially, more than doubling from 2012 to 2016, contributing to an erosion of equity which saw a significant decline over the period, only partially reversed in 2017. Net income trends are consistent with this pattern, showing volatility with a peak in mid-period and a notable drop thereafter before recovery. Adjusted figures consistently present lower asset and equity values than reported amounts and show smoother but still significant variations, indicating the effects of income tax adjustments impacting the company's financial positioning and profitability trends across the years analyzed.

Current Ratio

The reported current ratio displayed a generally declining trend from 2.29 in 2012 to 1.35 in 2017, with a notable dip in 2016 to 1.21. The adjusted current ratio mirrors this pattern closely, also decreasing over the period and matching reported figures exactly in 2016 and 2017. This suggests a gradual reduction in short-term liquidity over the years.

Net Profit Margin

The reported net profit margin showed an initial increase from 15.14% in 2012 to a peak of 17.28% in 2014, followed by a decline to 9.89% in 2016, and then a recovery to 15.44% in 2017. The adjusted net profit margin is consistently higher than the reported figures, exhibiting a similar trend but with more pronounced declines in 2015 and 2016. The lower margins in the mid-period suggest temporary profitability challenges.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios remained relatively stable, fluctuating slightly between 0.67 and 0.72 from 2012 to 2017 in reported data, and between 0.7 and 0.76 in adjusted data. The adjusted ratios are consistently higher, indicating better asset utilization when considering deferred income tax adjustments.

Financial Leverage

There was a marked increase in financial leverage from 1.71 (reported) and 1.73 (adjusted) in 2012 to peaks around 4.35 (reported) and 4.79 (adjusted) in 2016, indicating an increase in the use of debt or liabilities relative to equity. This was followed by a reduction in 2017. Adjusted figures tend to be higher, suggesting deferred tax considerations lead to slightly more pronounced leverage assessment.

Return on Equity (ROE)

Reported ROE experienced significant growth, rising from 17.28% in 2012 to a high of 35.1% in 2017, despite minor fluctuations. Adjusted ROE figures are higher throughout, peaking at 38.02% in 2017. This reflects improved profitability and efficient equity utilization, even taking tax adjustments into account.

Return on Assets (ROA)

The reported ROA rose from 10.11% in 2012 to a peak of 12.47% in 2014, then declined to 6.77% in 2016 before rebounding to 10.59% in 2017. Adjusted ROA figures are consistently higher but follow the same general pattern. The dip in the mid-period suggests reduced efficiency in asset utilization during those years, which partially recovered by the end of the observation period.

The data demonstrates the financial position of the company over a six-year period, focusing on current assets, current liabilities, and current ratios, both reported and adjusted for deferred income tax.

Current Assets

Reported current assets fluctuated mildly from 2012 through 2017, starting at 9,658 million US dollars in 2012, peaking at 10,625 million in 2015, and then declining to 8,651 million by 2017. Adjusted current assets followed a similar trend but were consistently lower than reported values. Notably, there was a significant decrease in both reported and adjusted current assets starting in 2016, dropping from previous highs to lower levels maintained through 2017.

Current Liabilities

Reported current liabilities showed a consistent upward trend from 4,221 million in 2012 to 6,729 million in 2016, before slightly decreasing to 6,398 million in 2017. Adjusted current liabilities closely matched the reported figures throughout the period, maintaining nearly identical values, indicating stability in the adjustment process related to deferred income tax.

Current Ratio

Reported current ratio started relatively strong at 2.29 in 2012 and remained above 2.0 until 2015. However, it declined sharply to 1.21 in 2016 before showing a slight recovery to 1.35 in 2017. Adjusted current ratios exhibited a similar pattern but were marginally lower each year, reflecting the impact of deferred income tax adjustments. The decline in current ratios corresponds with the increase in current liabilities and the decrease in current assets observed in the later years, indicating a weakening short-term liquidity position.

Overall, the data suggest that the company experienced stable liquidity conditions up to 2015, followed by a period of deteriorating liquidity marked by decreasing current assets and increasing current liabilities. The adjustments for deferred income tax, although affecting the absolute figures, did not significantly alter the overall trends or the liquidity assessment derived from the reported data.

Net Income Trends

The reported net income attributable to the company demonstrated an overall fluctuating pattern during the period examined. Starting at 2,045 million US dollars in 2012, net income increased steadily to reach a peak of 2,740 million in 2014. However, a notable decline occurred in 2015 and 2016, with figures dropping to 2,314 million and further down to 1,336 million respectively. The income rebounded significantly in 2017 to 2,260 million. The adjusted net income, which accounts for reported and deferred income tax adjustments, followed a similar trajectory. It began at 2,286 million in 2012, peaked slightly earlier at 2,695 million in 2014, and then experienced a downward trend reaching a low of 1,364 million in 2016 before recovering to 2,306 million in 2017.

Profit Margin Analysis

The reported net profit margin showed an improving trend from 15.14% in 2012 to 17.28% in 2014, indicating increasing profitability relative to revenue. There was a decline starting in 2015, where the margin decreased to 15.43%, followed by a significant drop to 9.89% in 2016. The margin saw a recovery in 2017, improving to 15.44%. The adjusted net profit margin, which removes the effects of income tax adjustments, displayed a slightly higher profitability range overall but mirrored the same pattern. It increased from 16.93% in 2012 to 17.55% in 2013, declined gradually to 13.51% in 2015, dropped further to 10.10% in 2016, and rebounded to 15.75% in 2017.

Key Observations

Both net income and profit margins increased steadily in the initial years, reaching their highest levels around 2013-2014. Thereafter, the company exhibited a period of reduced profitability and income, bottoming out in 2016 before recovering in the final year observed. The declines in 2015 and 2016 are significant and suggest operational or market challenges impacting financial performance during those years. The recovery in 2017 points to a possible improvement in business conditions or the effectiveness of management actions to restore profitability.

Comparison of Reported vs. Adjusted Figures

Adjusted net income and adjusted net profit margin consistently record slightly higher values than the reported figures, reflecting the removal of the impact of income tax adjustments. This suggests the adjustments had a generally negative effect on reported earnings and margins, but the overall trends for both sets of figures remain consistent throughout the years.

The analysis of the annual financial data over the six-year period reveals several notable trends regarding the asset base and asset turnover ratios.

Total Assets

The reported total assets exhibited a general upward trend from 20,224 million US dollars in 2012 to a peak of 21,981 million in 2014, followed by a decline reaching 19,736 million in 2016 before rising again to 21,333 million in 2017. The adjusted total assets showed a very similar pattern, increasing from 19,139 million in 2012 to 20,896 million in 2014, dropping to 19,123 million in 2016, and subsequently rebounding to 20,769 million in 2017. This indicates some fluctuations in the asset base over the years, with a noticeable dip around 2015-2016 possibly attributable to divestitures, impairments, or other adjustments reflected in the deferred tax items.

Total Asset Turnover Ratios

The reported total asset turnover ratios remained fairly stable, starting at 0.67 in 2012, increasing to 0.72 from 2013 to 2014, then slightly decreasing and stabilizing around 0.68-0.69 in the last few years. The adjusted total asset turnover ratios were consistently higher than the reported ratios, beginning at 0.71 in 2012, peaking at 0.76 in 2013-2014, then gradually declining to 0.70 in 2017. This slight reduction in adjusted asset turnover suggests that the company’s efficiency in utilizing its asset base to generate sales has marginally decreased over time when taking into account the deferred tax adjustments.

Overall, the data reflects moderate growth in total assets with some volatility, coupled with relatively stable but slightly declining asset efficiency metrics after mid-period peaks. The adjusted figures, accounting for income tax effects, suggest that while the asset base experienced fluctuations, the operational efficiency in asset usage has thawed somewhat compared to the earlier years.

The analysis of the financial data over the six-year period reveals several notable trends in assets, equity, and financial leverage. Both reported and adjusted total assets exhibit a moderate increase from 2012 through 2014, peaking in 2014. Subsequently, there is a decline in 2016, followed by a moderate recovery in 2017. This pattern suggests some fluctuations in asset size, possibly due to operational adjustments or asset revaluations during the period.

Total shareowners’ equity, in both reported and adjusted terms, shows a contrasting trend. Initial growth is observed from 2012 to 2013; however, this is followed by a pronounced and continuous decline from 2013 onward until 2016. In 2017, equity figures slightly improve but remain considerably lower than in the early years. This decline in equity could indicate challenges affecting retained earnings or capital structure, including losses, dividend payments, or other equity-reducing activities.

Financial leverage, measured as a ratio, demonstrates a consistent upward trend from 2012 through 2016, with both reported and adjusted figures increasing notably. The leverage ratio more than doubles in adjusted terms, rising from approximately 1.63 in 2013 to 4.79 in 2016, before showing a decrease in 2017. The increasing financial leverage indicates a growing reliance on debt financing relative to equity, which aligns with the observed decline in equity values. The decrease in 2017 suggests some deleveraging efforts or equity enhancement during that year.

Overall, the data depict a financial structure transitioning from relatively balanced leverage and solid equity positions toward higher leverage and diminished equity, peaking in burden around 2016. The partial recovery in 2017 hints at possible corrective measures or improved financial management. Adjusted figures consistently align closely with reported data, affirming the reliability of the observed trends despite adjustments for income tax considerations.

Net Income Trends

The reported net income attributable to the company exhibited growth from 2012 to 2014, increasing from 2,045 million US dollars to a peak of 2,740 million US dollars. However, this was followed by a decline in 2015 and a sharp drop in 2016 to 1,336 million US dollars. In 2017, the net income partially recovered to 2,260 million US dollars. The adjusted net income followed a similar pattern, peaking in 2013 at 2,608 million US dollars, then decreasing notably in 2015 and 2016 before rebounding in 2017.

Equity Trends

Reported total shareowners’ equity showed a declining trend over the period, starting at 11,833 million US dollars in 2012, decreasing gradually with a significant drop in 2014, and reaching a low of 4,534 million US dollars in 2016. A recovery began in 2017, closing at 6,438 million US dollars. The adjusted equity values followed the same trajectory, with levels consistently slightly lower than reported figures, indicating adjustments reduced the equity base across all years.

Return on Equity (ROE) Trends

Reported ROE increased steadily from 17.28% in 2012 to its highest point of 34.79% in 2014. Following this peak, there was a minor decline in 2015 and 2016 but remained high relative to earlier years, with 35.1% reported in 2017. The adjusted ROE trends mimicked the reported ROE but were consistently higher each year, starting at 20.61% in 2012 and rising to 38.02% in 2017. This indicates that the adjustments tend to enhance the perceived profitability relative to equity.

Overall Insights

The data reveals that while net income experienced volatility with a notable dip in 2016, both reported and adjusted ROE indicators have remained comparatively strong, suggesting effective utilization of equity despite declining equity base values. The shrinkage in shareowners’ equity over the period raises concerns about capital structure changes or distributions that merit further investigation. The rebound in net income and equity in 2017 points to a potential recovery phase. Consistently higher adjusted metrics imply adjustments positively impact profitability and equity assessments, highlighting the importance of considering both reported and adjusted figures for a comprehensive evaluation.

Net Income Trends

Both reported and adjusted net income exhibit fluctuations over the period from 2012 to 2017. Reported net income increased from 2045 million USD in 2012 to a peak of 2740 million USD in 2014, followed by a decline to 1336 million USD in 2016, and a recovery to 2260 million USD in 2017. Adjusted net income mirrors this pattern, starting at 2286 million USD in 2012, rising to 2695 million USD in 2014, declining to a low of 1364 million USD in 2016, and increasing again to 2306 million USD in 2017. The adjusted figures are consistently slightly higher than the reported ones, indicating that adjustments generally increase the income reported.

Total Assets Patterns

Total assets, both reported and adjusted, show relatively stable values with minor variations. Reported total assets increased modestly from 20224 million USD in 2012 to 21981 million USD in 2014, then experienced a decrease to 19736 million USD in 2016 before increasing again to 21333 million USD in 2017. Adjusted total assets follow a similar trajectory but are consistently lower than reported totals, ranging from 19139 million USD in 2012 to 20769 million USD in 2017, reflecting adjustments that reduce asset valuations.

Return on Assets (ROA) Dynamics

The reported ROA indicates a rise from 10.11% in 2012 to a peak of 12.47% in 2014, followed by a decline to 6.77% in 2016 and a subsequent rise to 10.59% in 2017. Adjusted ROA shows a similar trend, starting at 11.94% in 2012, peaking at 13.29% in 2013, decreasing to a low of 7.13% in 2016, and increasing again to 11.1% in 2017. The adjusted ROA values are generally higher than the reported ones, suggesting that the adjustments result in a more favorable asset efficiency measurement.

Overall Insights

The data reflects that both net income and asset base experienced growth until around 2014, after which there was a noticeable decline culminating in 2016. The sharp decrease in net income and ROA in 2016 indicates a period of lower profitability and efficiency. However, the recovery in 2017 suggests a rebound in financial performance. The consistent difference between reported and adjusted figures indicates systematic adjustments, possibly related to deferred income taxes, that tend to enhance reported profitability and asset utilization metrics.