Name: Monsanto Co. (NYSE:MON) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Monsanto Co., consolidated cash flow statement

US$ in millions

12 months ended:	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
Net income	2,273)	1,313)	2,325)	2,762)	2,525)	2,093)
Depreciation and amortization	748)	727)	716)	691)	615)	622)
Bad-debt expense	69)	152)	45)	41)	27)	3)
Stock-based compensation expense	126)	111)	111)	120)	100)	128)
Excess tax benefits from stock-based compensation	—)	(16)	(44)	(72)	(79)	(50)
Deferred income taxes	98)	97)	(271)	12)	176)	242)
Restructuring impairments	46)	147)	276)	—)	—)	(10)
Equity affiliate (income) loss, net	15)	15)	7)	4)	(17)	(19)
Net gain on sales of a business or other assets	(163)	(181)	(2)	(11)	(17)	(4)
Other items, net	103)	181)	118)	139)	(77)	158)
Items that did not require (provide) cash	1,042)	1,233)	956)	924)	728)	1,070)
Trade receivables	(262)	(498)	68)	(172)	222)	89)
Inventory, net	(74)	181)	(425)	(650)	(192)	(422)
Deferred revenues	220)	189)	32)	(163)	50)	(43)
Accounts payable and other accrued liabilities	458)	176)	235)	709)	(104)	430)
Restructuring reserves	(198)	25)	217)	—)	—)	(12)
Pension contributions	(35)	(78)	(27)	(64)	(75)	(83)
Other items, net	(198)	47)	(273)	(292)	(414)	(71)
Changes in assets and liabilities that provided (required) cash, net of acquisitions	(89)	42)	(173)	(632)	(513)	(112)
Adjustments to reconcile cash provided by operating activities	953)	1,275)	783)	292)	215)	958)
Net cash provided by operating activities	3,226)	2,588)	3,108)	3,054)	2,740)	3,051)
Purchases of short-term investments	—)	(50)	(63)	(145)	(716)	(746)
Maturities of short-term investments	50)	35)	56)	359)	764)	746)
Capital expenditures	(1,240)	(923)	(967)	(1,005)	(741)	(646)
Acquisition of businesses, net of cash acquired	(11)	(2)	(8)	(922)	(165)	(322)
Purchases of long-term debt and equity securities	—)	—)	(30)	(12)	—)	—)
Technology and other investments	(71)	(69)	(48)	(403)	(88)	(77)
Other investments and property disposal proceeds	165)	145)	41)	33)	169)	11)
Net cash required by investing activities	(1,107)	(864)	(1,019)	(2,095)	(777)	(1,034)
Net change in financing with less than 90-day maturities	(695)	676)	45)	38)	104)	(116)
Short-term debt proceeds	72)	49)	57)	50)	22)	30)
Short-term debt reductions	(54)	(272)	(36)	(24)	(29)	(42)
Long-term debt proceeds	601)	9)	1,279)	5,479)	32)	499)
Long-term debt reductions	(1,019)	(306)	(107)	(7)	(2)	(629)
Payments on other financing	—)	—)	—)	(39)	—)	—)
Debt issuance costs	(2)	—)	(12)	(53)	—)	(5)
Treasury stock purchases	—)	(3,001)	(835)	(7,082)	(1,095)	(432)
Stock option exercises	103)	81)	137)	248)	257)	117)
Excess tax benefits from stock-based compensation	—)	16)	44)	72)	79)	50)
Tax withholding on restricted stock and restricted stock units	(19)	(24)	(36)	(9)	(10)	(19)
Dividend payments	(948)	(964)	(938)	(904)	(802)	(642)
Proceeds from noncontrolling interest	—)	—)	—)	—)	133)	101)
Payments to noncontrolling interests	(5)	(6)	(28)	(28)	(174)	(77)
Net cash required by financing activities	(1,966)	(3,742)	(430)	(2,259)	(1,485)	(1,165)
Effect of exchange rate changes on cash and cash equivalents	27)	(7)	(325)	(1)	(93)	(141)
Net increase (decrease) in cash and cash equivalents	180)	(2,025)	1,334)	(1,301)	385)	711)
Cash and cash equivalents at beginning of period	1,676)	3,701)	2,367)	3,668)	3,283)	2,572)
Cash and cash equivalents at end of period	1,856)	1,676)	3,701)	2,367)	3,668)	3,283)

Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).

The cash flow profile reveals a company with strong, consistent operational cash generation used primarily to fund capital expenditures and aggressive shareholder returns. Net cash provided by operating activities remained robust throughout the period, ranging from 2,588 million in 2016 to a peak of 3,226 million in 2017, despite fluctuations in net income.

Operating Cash Flow Dynamics: Net income exhibited volatility, peaking at 2,762 million in 2014 and dipping to 1,313 million in 2016. However, operating cash flow remained more stable, bolstered by steady depreciation and amortization charges that rose from 622 million in 2012 to 748 million in 2017. Changes in working capital presented periodic headwinds, particularly in 2013 and 2014, where assets and liabilities required significant cash outflows, though this trend reversed in 2016.
Investing Activities and Capital Deployment: Investing activities consistently required cash, with an upward trend in capital expenditures, which increased from 646 million in 2012 to 1,240 million in 2017. A significant spike in investing outflows occurred in 2014, totaling 2,095 million, driven largely by the acquisition of businesses amounting to 922 million and increased technology investments of 403 million. In later years, investing outflows stabilized between 864 million and 1,107 million.
Financing Strategy and Shareholder Returns: Financing activities were characterized by a heavy emphasis on returning capital to shareholders. Dividend payments grew steadily from 642 million in 2012 to 948 million in 2017. Share repurchases were executed aggressively, with massive outflows of 7,082 million in 2014 and 3,001 million in 2016. To fund these activities and acquisitions, the company utilized long-term debt, most notably in 2014 with proceeds of 5,479 million, indicating a strategy of leveraging the balance sheet to support equity reductions.
Liquidity and Cash Position: The net change in cash and cash equivalents fluctuated significantly due to the timing of debt issuance and treasury stock purchases. The cash balance ended the period at 1,856 million in 2017, down from a high of 3,701 million in 2015. This volatility reflects a management approach that prioritizes the immediate redistribution of excess cash to shareholders over the accumulation of large cash reserves.

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