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R&D PIPELINE REVIEWTERRY CREWS CFO
STEVE PADGETTE, PH.D.VICE PRESIDENT, BIOTECHNOLOGY
January 8-9, 2008
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Forward-Looking Statements
Certain statements contained in this presentation are "forward-looking statements," such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
TrademarksTrademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other trademarks are the property of their respective owners.
© 2008 Monsanto Company
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Non-GAAP Financial Information
With respect to the time period prior to Sept. 1, 2000, references to Monsanto in this presentation also refer to the agricultural business of Pharmacia.
FISCAL YEAR:References to year, or to fiscal year, are on a fiscal year basis and refer to the 12-month period ending August 31.
This presentation may use the non-GAAP financial measures of “free cash flow,” earnings per share (EPS) on an ongoing basis and Return on Capital (ROC). We define free cash flow as the total of cash flows from operating activities and investing activities. A non-GAAP EPS financial measure, which we refer to as ongoing EPS, excludes certain after-tax items that we do not consider part of ongoing operations, which are identified in the reconciliation. ROC means net income (without the effect of certain items) exclusive of after-tax interest expenses, divided by the average of the beginning year and ending year net capital employed, as defined in the reconciliation. Our presentation of non-GAAP financial measures is intended to supplement investors’ understanding of our operating performance, not replace net income (loss), cash flows, financial position, or comprehensive income (loss), as determined in accordance with GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similar measures used by other companies. The non-GAAP financial measures used in this presentation are reconciled to the most directly comparable financial measures calculated and presented in accordance with GAAP. Monsanto is unable to provide a reconciliation of the 2008 ROC goal to projected net income and financial position for 2008 without unreasonable effort. As shown in the ROC reconciliation for the previous year, the calculation of ROC is complex, and Monsanto does not have sufficient information at this point in the fiscal year to reasonably estimate its operating profit after-tax and average capital for 2008 due to market and other conditions that are outside of Monsanto’s control.
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2008 Again Projects Double-Digit Earnings Growth, Strong Cash Generation and Improved Margins
FINANCIAL REVIEW
2007 2008FEARNINGS
ONGOING EARNINGS PER SHARE$2.00
54% GROWTH FROM 2006
$2.50-$2.6025-30% GROWTH
FROM 2007
Gross Profit as a Percent of Sales 50%Further progress on
trajectory toward 52-54% 2010 target
Seeds & Traits Gross Profit $3.0B ~$3.5BRoundup And All Other Glyphosate-based
Herbicides Gross Profit $854M Greater than $1B
All Other Ag Productivity Gross Profit $418M ~$350MCASH MANAGEMENT AND SPENDING
FREE CASH FLOW $(57)M $900M-$1BReturn on Capital 14.8% Consistent with 2007 levels
Capital Expenditures $509M Greater than $800MSG&A as a Percent of Sales 22% 20-21% Range
R&D as a Percent of Sales 9% 10% RangeReceivables as a Percent of Sales 18% Consistent with 2007 levelsInventories as a Percent of Sales 20% Consistent with 2007 levels
5
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2004 2007 2012
Given Growth Opportunities, Monsanto Has Potential to More Than Double Gross Profit Over Next Five Years
OVERVIEW
2012 GROWTH RANGE
Gross profit targeted to double from 2007 through 2012
STRATEGIC PLAYBOOK
All growth is organic, from base business and pipeline
U.S. CornInternational CornSoybeansCottonSeminisR&D Pipeline
Acquisitions to be pursued, but are not included in this growth projectionEarnings continue to translate into operating cash, and value created for shareowners through combination of acquisitions, share repurchases and dividends
MONSANTO GROSS PROFITGROWTH TARGET
GR
OS
S P
RO
FIT
(IN
MIL
LIO
NS
)
MIL
ES
TO
NE
S
2007Base Gross Profit:
$4,286M
2010Gross margin target: 52-54%
ONGOING EPS GROWTH: MID-TO-HIGH TEENS
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OVERVIEW
Our Biotech and Breeding Pipeline Is Accelerating, With Progress in Projects and Widening Yield Advantages
MILESTONES:Biotech pipeline is accelerating
10 projects either advanced phases or were added to the pipeline – among the most in any annual updateFirst time transitioned 4 projects from Phase 2 to Phase 3First multi-generational advancement as 2 generations of corn drought family advanceSmartStax enters the pipeline as the platform for corn, complementing Roundup RReady2Yield as the soybean platform
Breeding programs yields impressive
DEKALB germplasm maintains impressive 8.4 bu/ac advantage; gap widens to 14.6 bu/ac when protected with YieldGard VT Triple stackAsgrow germplasm yield advantage improves to average 1.27 bu/ac; Roundup RReady2Yield to provide 7-11% boost
Q1 Q4
Q3Q2
ANNUAL R&D CYCLE: SEEDS & TRAITSWHAT CHANGED 2007-2008?• 5 projects advanced phases• 5 products added• Vistive II removed in favor of Vistive III• “Water-use efficiency” soybeans reclassified as
“2nd-Gen Higher-Yielding soybeans”• Two former Renessen projects rolled into the Monsanto
pipeline
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Pipeline Leverages Power of Breeding and Biotech for Current Commercial Growth and New Platforms in Next Decade
OVERVIEW
MONSANTO’S R&D PIPELINE
Pipeline Priorities Through 2012BREEDING
Continue to Drive Breeding Gains Across Crop Platforms
► Ensure momentum in corn breeding continues► Accelerate ramp up of soybean breeding► Continue application of proven tools to cotton and
vegetables
Pipeline Priorities Through 2012BIOTECHNOLOGY
Deliver the Value in Monsanto’s Established Trait Pipeline
Unlock the Opportunity in Yield and Stress Through the BASF Collaboration
► Deliver the industry’s first traits in the emerging yield-and-stress arena
► Change the trait-value opportunity with “product families”
PHASE II PHASE III PHASE IVPHASE IDISCOVERY LAUNCH
ELI
TE
G
ER
MP
LAS
M
GE
NO
MIC
S
MA
RK
ER
S
ITP
LAT
FOR
M
AN
ALY
TIC
S
CO
MM
ER
CIA
L
BREEDING
BIOTECHNOLOGYGGermplasm
RSEED SOLD TO FARMERS
R&D PHASE: PHASE II PHASE III PHASE IVPHASE IDISCOVERY LAUNCH
ELI
TE
G
ER
MP
LAS
ME
LIT
E
GE
RM
PLA
SM
GE
NO
MIC
SG
EN
OM
ICS
MA
RK
ER
SM
AR
KE
RS
ITP
LAT
FOR
MIT
PLA
TFO
RM
AN
ALY
TIC
SA
NA
LYT
ICS
CO
MM
ER
CIA
LC
OM
ME
RC
IAL
TR
AIT
INT
EG
RA
TIO
N
BREEDING
BIOTECHNOLOGYGGermplasm
RSEED SOLD TO FARMERS
R&D PHASE:
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Final Yield Trial Results Reinforce Yield Advantage of DEKALB Seed in U.S.
GEOGRAPHY: U.S.OBJECTIVE: Grow footprint2007 PERFORMANCE UPDATE
• In > 14,000 comparisons, Monsanto out-yields competitive best by 8.4 bu/ac
• In 110-day RM, Monsanto’s lead remains a strong 12 bu/ac advantage
2007 FINAL U.S. COMPETITIVE CORN YIELD COMPARISON: DEKALB
FINAL:
190
205
195 197
179
186
193189 188
163
191
155150
155
160
165
170
175
180
185
190
195
200
205
210
COMPETITORS
DEKALB
BU
SH
ELS
/AC
RE
(AP
PR
OX
IMA
TE
DIF
FER
EN
CE
S)
7.8
>480
95 RM
8.4
>14,000
Overall
5.512.05.110.4APPROXIMATE BU/AC
>5,270>5,220>1,820>1,220COMPARISONS:
115 RM110 RM105 RM100 RMRELATIVE MATURITIES (DAYS)►
ADVANTAGE:
Source: 2007 Monsanto and third party trials through November 15, 2007. Weighted average, calculated to 15% moisture. DEKALBproducts are compared with national competitive products that contain similar crop protection traits.
CORN BREEDING
9
211.6
197.0
190
194
198
202
206
210
MONSANTO PioneerDEKALB Hybrids with YieldGard VT
Triple
AV
E. B
US
HE
LS P
ER
AC
RE
Nearly 1,700 comparisons in 17 states: DEKALBseed, protected by YieldGard VT Triple,
outperformed the best competitive seed-and-trait package by >14.6 bu/ac on average
Seed & Trait: Head-to-Head
Again in 2007, Best in Class Germplasm and Trait Integration Delivers Best Yield
CORN BREEDING
FINAL TOTAL DEKALB SEED & TRAIT YIELD PERFORMANCE IN 2007
Competitive Hybrids with Herculex®
XTRA and Roundup Ready Corn 2
Performance in Key Corn Belt StatesNE IA IL
Comparisons: >70
210bu/ac
193bu/ac
>400Monsanto
Brands:214bu/ac
219bu/ac
Competitive Brand:
800
200bu/ac
202 bu/ac
14.6BU/AC
ADVANTAGE
®
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Roundup RReady2Yield and Molecular Breeding Rewrite Historic Soybean Yield Trends
SOYBEAN BREEDING
36
38
40
42
44
46
48
50
52
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2009-2010Roundup RReady2Yieldcontrolled commercial release + commercial launch
MAB-ROUNDUP RREADY2YIELDPLATFORM
2007Asgrow germplasm shows yield advantage in all zones based on
greater than 16,000 comparisons, with an average advantage of 1.27
bu/acre for groups 1 thru 5
Roundup RReady2Yield creates step change of 7-11% across portfolio
AV
ER
AG
E Y
IELD
(B
U/A
CR
E)
SOYBEAN YIELD PROGRESSION: 2000-2012
MAB gains set new trajectory on top of Roundup RReady2Yield step change
All breeding going forward is built on Roundup RReady2Yieldfoundation and uses applied MAB technology
HISTORIC GAIN: 0.50 BU/AC
SOYBEAN YIELD AT HISTORIC RATE GAIN
EXPECTED TREND WITH APPLIED MOLECULAR BREEDING (MAB)
USDA AVERAGE YIELD/AC1
TREND LINE OF USDA YIELD
1. USDA NASS: http://www.nass.usda.gov/QuickStats/
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Phase Advancements For Key Projects Reflect Progress and Strength Throughout Monsanto’s Industry-Leading Pipeline
BIOTECH PIPELINE
DPHASE
1PHASE
2PHASE
3PHASE
4AGRONOMIC TRAITS
EXTRAX™ CORN PROCESSING SYSTEM + MAVERA™ HIGH-VALUE
CORN WITH LYSINE2
VISTIVE III SOYBEANS
HIGH-STEARATE SOYBEANS(VIA BIOTECH)
HIGH-OIL CORN
2ND-GEN HIGH-OIL SOYBEANS
SMARTSTAX CORN
SOYBEAN DISEASE
VALUE-ADDED TRAITS
DICAMBA-TOLERANT COTTON
SOYBEAN NEMATODE-RESISTANCE
INSECT-PROTECTED + ROUNDUP RREADY2YIELD SOYBEANS
DICAMBA-TOLERANT SOYBEANS
YIELDGARD VT PRO2ND-GEN YIELDGARD CORN BORER
YIELDGARD ROOTWORM III
BOLLGARD III
COTTON LYGUS CONTROL
OMEGA-3 ENRICHED SOYBEANS
ROUNDUP RREADY2YIELD SOYBEANS
HIGH-OIL SOYBEANSHIGHER-YIELDING + ROUNDUP
RREADY2YIELD CANOLA1
BROAD-ACRE HIGHER-YIELDING CANOLA FAMILY
DROUGHT-TOLERANT COTTON
2ND-GEN HIGHER-YIELDING SOYBEANS
BROAD-ACRE HIGHER-YIELDING SOYBEAN FAMILY
HIGHER-YIELDING SOYBEANS
DROUGHT-TOLERANT COTTON FAMILY
BROAD-ACRE HIGHER-YIELDING CORN FAMILY
HIGHER-YIELDING CORN
YIELD AND STRESS PIPELINE
NITROGEN-UTILIZATION CORN
NITROGEN-UTILIZATION CORN FAMILY
2ND-GEN DROUGHT-TOLERANT CORN
DROUGHT-TOLERANT CORN
DROUGHT-TOLERANT CORN FAMILY
PHASE
4PHASE
3PHASE
2PHASE
1D
The colored bar associated with each project indicates which phase that project is in. It is not intended to represent the relative status of the project within a particular stage.
High Impact Technologies (HIT) project
Jan. 3, 2008 Advancements/Additions
1. For higher-yielding + Roundup RReady2Yield canola, only the value of the higher-yielding trait is incorporated into the Yield and Stress collaboration with BASF2. Value of licensing the EXTRAX™ technology is shared with Cargill as a part of Renessen joint venture
BIOTECH TRAIT PIPELINE: JANUARY 2008 UPDATE
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Lead Drought-Tolerant Corn Project Advances to Phase 3 With Fourth Year of Strong Field Results
NEW: FOURTH SEASON OF YIELD IMPROVEMENT UNDER DROUGHT STRESS
Drought-tolerant corn lead consistently delivering yield improvements under drought conditions in U.S. for fourth year in a row
Yiel
d D
iffer
ence
(bu/
acre
)
02468
10121416
2004 2005 2006 2007a b b b
13.4% 6.7% 10.6% 11.3%Percentage yield difference vs. control
Average Yield Improvement of Lead Event
a: data from two hybridsb: data from three hybrids
PRODUCT CONCEPT TARGET RANGE
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineDrought-Tolerant Corn Family: Lead Project
HIT ProjectADVANCED:Phase 3
SOURCES OF VALUE:
1Improved yieldTargeting 8-10% yield improvement in water-stress environments
PROJECT CONCEPT:
Drought-tolerance family aimed at providing consistent yield and buffering against effects of water limitationsVALUE:
LAUNCH-COUNTRY ACRES1: 55M
2020 VALUE2: $300-$500M
8 TOTAL LOCATIONS
15 TOTAL LOCATIONS
9 TOTAL LOCATIONS
11 TOTAL LOCATIONS
BIOTECH PIPELINE
13
CONTROL HYBRID(76 BU/AC)
WITH GENE(94 BU/AC)
SUPERIOR, NE - FIELD TRIALS – 2007
2007 Dryland Field Tests of Lead Drought Event Offers Visual Evidence of Increased Yield In Stressed Conditions
NEW: 2007 FIELD TESTING SHOWS VISUAL PROOF OF YIELD IMPROVEMENT
Water stress exposure during different stages of development can have significant effect on corn yield; Monsanto’s lead drought-tolerance trait shows a significant yield advantage compared with controls under drought stress
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineDrought-Tolerant Corn Family: Lead Project
HIT ProjectADVANCED:Phase 3
SOURCES OF VALUE:
1Improved yieldTargeting 8-10% yield improvement in water-stress environments
PROJECT CONCEPT:
Drought-tolerance family aimed at providing consistent yield and buffering against effects of water limitationsVALUE:
LAUNCH-COUNTRY ACRES1: 55M
2020 VALUE2: $300-$500M
BIOTECH PIPELINE
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Second-Generation Drought-Tolerant Corn Advances to Phase 2 With Multi-Year Performance in Field Testing
NEW: SECOND-GEN DROUGHT CORN EVENTS PROVIDE CONSISTENT YIELD ADVANTAGE
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineDrought-Tolerant Corn Family: Second-Generation Project
STATUS: ADVANCED:Phase 2
SOURCES OF VALUE:
1Improved yieldTargeting 8-10% yield improvement in water-stress environments
2Water substitutionVariable costs in pumped irrigation of >$100/ acre
PROJECT CONCEPT:
Drought-tolerance family aimed at providing consistent yield and buffering against effects of water limitationsVALUE:
LAUNCH-COUNTRY ACRES1: 55M
2020 VALUE2: $300-$500M
• Performance demonstrated in 2 different test hybrids and over a broad range of drought-stress conditions in both lower-yielding and higher-yielding environments (52-188 bu/ac)
Consistent drought yield performance of top 3 events over 2 years (5 locations/year)
(All three events significant @ p≤0.10); Statistical significance determined by ANOVA (2006) or nonparametric test (2007)
Drought Efficacy for Second-Gen Events
PRODUCT CONCEPT TARGET RANGE
Yiel
d D
iffer
ence
Ove
r Con
trol
s (%
)
0
2
4
6
8
10
12
14
16
EVENT 1 EVENT 2 EVENT 3 EVENT 1 EVENT 2 EVENT 3
2006 2007
HIGHER-YIELDING ENVIRONMENT
AVERAGE YIELD: 166 BU/AC
LOWER-YIELDING ENVIRONMENT
AVERAGE YIELD: 53 BU/AC
BIOTECH PIPELINE
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In Continued Field Testing, Nitrogen Utilization Leads Show Yield Improvement Under Normal Nitrogen
NEW: LEAD PERFORMANCE UNDER NORMAL NITROGEN CONDITIONS
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineNitrogen-Utilization Corn Family: Lead Project
STATUS: Phase 1PROJECT CONCEPT:
Targets ways to use nitrogen more efficiently, exploring potential to boost yield under normal nitrogen conditions or stabilize it in low nitrogen environmentsVALUE:
LAUNCH-COUNTRY ACRES1: 55M
2020 VALUE2: $300-$500MSOURCES OF VALUE:
1Improved yieldYield improvement in normal nitrogen environments
2Nitrogen reductionImproving yield in low nitrogen environments
Under normal nitrogen conditions, lead Nitrogen-Utilization trait has demonstrated yield advantages in multiple backgrounds over multiple years
Yiel
d In
crea
se (b
u/A
c)
TRIALS IN MULTIPLE HYBRID BACKGROUNDS
(16 LOC)
Bar color correlates with the specific hybrid background tested. Same bar color in different tests and different years indicates same hybrid was used.All trials conducted under sufficient nitrogen application levels.
2006
2006 YIELD TRIALS:SUFFICIENT N LEVELS
(37 LOC TOTAL)
2007
2007 YIELD TRIALS:SUFFICIENT N LEVELS
(20 LOC TOTAL)
Statistically significant @ p≤0.10*
-2TRIALS IN MULTIPLE
HYBRID BACKGROUNDS(15 LOC)
02468
1012
* * * * * *
2005
*
2005 YIELD
TRIALS: (23 LOC TOTAL)
BIOTECH PIPELINE
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NEW: YIELDGARD VT PRO IN FINAL REGULATORY PHASE
YieldGard VT PRO Will Provide Dual Mode of Action for Increased Product Durability and Broader Spectrum Control
R&D PipelineYieldGard VT PRO
STATUS: Phase 4
1Higher per-acre yield from improved spectrum and consistency of control
2Higher on-farm yield from potential for reduced refuge acre requirements
PROJECT CONCEPT:
YieldGard VT PRO is the second-generation of YieldGard Corn Borer and broadens the spectrum of insect control and increases the durability of the trait with the use of two proteins for dual modes of action for resistance managementVALUE:
LAUNCH-COUNTRY ACRES: 60-65M
2020 VALUE: SMARTSTAX COMPONENT
SOURCES OF VALUE:
0
2
4
6
8
10
12
0123456789
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YieldGard VT PROcontains two proteins for effective control of target insect pests:
European cornborer and southwestern cornborerCorn earworm and fall armyworm
Provides broader spectrum and greater consistencyAwaiting final regulatory import approvals in key countries, EPA registration and USDA deregulation
2007 YieldGard VT PRO Field TrialsCorn Earworm Damage Ratings
2007 & 2006 YieldGard VT Pro Field TrialsFall Armyworm Damage Ratings
# of
Dam
aged
Ker
nels
per
Ear
0-9
Dam
age
Rat
ing
Scal
e
2006; N=3
2007; N=5
2007; N=9
BIOTECH PIPELINE
Roundup ReadyCorn 2
YieldGard Corn Borer
with Roundup Ready Corn 2
YieldGard VT Pro with Roundup
Ready Corn 2
Herculex®with
Roundup Ready Corn 2
Herculex®Control YieldGard VT PRO
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Third-Generation Corn Rootworm Technology Shows Early Promise and Highlights Innovation in the Pipeline
NEW:RNAi AND NOVEL PROTEIN APPROACHES DEMONSTRATE EXCELLENT PROTECTION AGAINST CORN ROOTWORM FEEDING
RNAi technology is an innovative approach that uses targeted regulation of gene expression for rootworm control (Baum JA, et al. Nature Biotechnology; 2007,25, 1322-1325)
► Early yield trials demonstrate yield equivalency for both RNAiand novel protein constructs
YieldGardRootworm x
RNAiTechnology
RNAiTechnology
YieldGardRootworm
Negative Check
R&D PipelineYieldGard Rootworm III
STATUS: Phase 1PROJECT CONCEPT:
YieldGard Rootworm delivers effective and consistent in-plant protection against western, northern and Mexican corn rootworm. Third generation technology, namely RNAi technology, is targeted to provide an additional mode of action for improved spectrum and durability.
BIOTECH PIPELINE
Protein
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
YieldGardVT Rootworm/
Roundup Ready 2
RNAi 1 RNAi 2 New InsectControl
Negative
Roo
t Dam
age
(0-3
) Sca
le 2007 Field Efficacy Tests5 locations
High Pressure Greenhouse Test
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Roundup RReady2Yield Soybean Approaching Commercialization; Will Serve As Platform for Soybean Trait Pipeline
NEW: FOUR YEARS OF DATA CONTINUE TO VALIDATE 7-11% YIELD ADVANTAGE
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020 Roundup RReady2Yield soybeans yield 7 to 11 percent higher
than Roundup Ready soybeans based on 73 Monsanto field trials from 2004-2007
R&D PipelineRoundup RReady2Yield Soybeans
HIT Project Phase 4
SOURCES OF VALUE:
1 Improved yieldTargeting 7-11% yield increase
PROJECT CONCEPT:
Roundup RReady2Yield provides enhanced yield, with a target of 7-11% yield increase compared with Roundup Ready soybeansVALUE:
LAUNCH-COUNTRY ACRES1: 45M
2020 VALUE2: $300-$500M
9%
7%
9%
7%
11%
0%
2%
4%
6%
8%
10%
12%
2004 2005 2006 2007
% Y
ield
Incr
ease
ove
r R
ound
up R
eady
Near-Isoline Comparisons:Roundup RReady2Yield vs. Roundup Ready
4 YEAR AVERAGE
BIOTECH PIPELINE
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NEW: FIELD PERFORMANCE OF BT SOYBEANS
• Also exhibits the glyphosate tolerance of Roundup RReady2Yield soybean varieties
Insect-protected soybeans with Roundup RReady2Yield technology provides effective protection against key lepidopteran pests, better than chemical insecticides
Insect-Protected Soybeans Are First-Ever Monsanto Trait Developed Exclusively for Non-U.S. Opportunity
Tifton, GA Loxley, AL St. Gabriel, LA Alexandria, LAMaturity Group V
2007 Insect Efficacy Trials - 4 Locations
05
101520253035404550
UNSPRAYED SPRAYED UNSPRAYED SPRAYEDMea
n La
rvae
per
Met
er R
ow(s
easo
ncu
mul
ativ
e) ±
sta
ndar
d er
ror
non-Bt Bt Non-Bt
1. Acre opportunity reflects acres where trait could have technological fit. Opportunity does not reflect acres that may be planted to a competitive trait or acres required for insect-resistance management (IRM) set-aside refuges
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineInsect-Protected Soybeans with Roundup RReady2Yield
STATUS: ADVANCED:Phase 3
2020 COMMERCIAL VALUE2: $150-$300M
SOURCES OF VALUE:
1Insecticide substitutionBased on 2 current sprays costing almost $6/acre total
2Improved yieldEarly indications of 4+% increase over chemical insecticides
PROJECT CONCEPT:
Insect-protected soybeans use Bt technology widely adopted in corn and cotton to control insect pests, especially economically important pests for Brazilian farmers. The Bt trait is combined with Roundup RReady2YieldVALUE:
LAUNCH-COUNTRY: BrazilLAUNCH-COUNTRY
ACRE OPPORTUNITY1: 50M
BIOTECH PIPELINE
20
1. Acre opportunity reflects acres where trait could have technological fit. Opportunity does not reflect acres that may be planted to a competitive trait or acres required for insect-resistance management (IRM) set-aside refuges
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineInsect-Protected Soybeans with Roundup RReady2Yield
STATUS: ADVANCED:Phase 3
2020 COMMERCIAL VALUE2: $150-$300M
SOURCES OF VALUE:
1Insecticide substitutionBased on 2 current sprays costing almost $6/acre total
2Improved yield4+% increase over chemical insecticides
PROJECT CONCEPT:
Insect-protected soybeans use Bt technology widely adopted in corn and cotton to control insect pests, especially economically important pests for Brazilian farmers. The Bt trait is combined with Roundup RReady2YieldVALUE:
LAUNCH-COUNTRY: BrazilLAUNCH-COUNTRY
ACRE OPPORTUNITY1: 50M
Insect-Protected Soybeans Are First-Ever Monsanto Trait Developed Exclusively for Non-U.S. Opportunity
TIPTON, GA - FIELD EFFICACY TRIAL – 2007
2007 FIELD TESTING SHOWS VISUAL PROOF OF CONTROLNEW:
Insect-protected soybeans with Roundup RReady2Yield technology demonstrated significant protection from key lepidopteran pests, including soybean looper, in 2007 tests
CONTROL(NO INSECTICIDE)
WITH GENE(NO INSECTICIDE)
BIOTECH PIPELINE
21
NEW: FIELD PERFORMANCE DEMONSTRATES EXCELLENT DICAMBA TOLERANCE
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
Agronomic trials in 28 locations showed comparable yields between dicamba treated plots and untreated controls, even at application 3X approved rates –indicating commercial tolerance and yield performance
R&D PipelineDicamba-Tolerant Soybeans
STATUS: ADVANCED:Phase 3
2020 COMMERCIAL VALUE2: <$150M
SOURCES OF VALUE:
1Increased FlexibilityImproved weed control options with two modes of action
PROJECT CONCEPT:
Provide new, unique mode of action, designed to provide soybean growers with most effective weed management system available when stacked with Roundup RReady2YieldVALUE:
LAUNCH-COUNTRY ACRE OPPORTUNITY1: 45M
Dicamba-Tolerant Soybeans Advance to Phase 3 With Excellent Tolerance and Yield Data From 2007 Field Trials
EVENT 1 EVENT 2 EVENT 3
Yiel
d (b
u/ac
)Untreated1x1 lb/ac, 2x
1x1x1 lb/ac, 3x2x2 lb/ac, 4x
0
20
40
60
802007 Efficacy Yield
BIOTECH PIPELINE
▼ DMO Enzyme Structure
22
NEW: VISTIVE III COMPOSITION TARGETS
Vistive III Advanced to Phase 3 After Meeting Compositional and Yield Targets
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineVistive III Soybeans
HIT ProjectADVANCED:
Phase 3PROJECT CONCEPT:
Vistive III trait is designed, by combining breeding and biotechnology, to lower linolenic and saturate content while boosting oleic content to produce an oil with the same preferable mono-unsaturated fat content as olive oil and the low saturated fat content found in canola oilVALUE:
LAUNCH-COUNTRY ACRES1: 15 - 20M
2020 VALUE2: <$150MSOURCES OF VALUE:
1
Oil replacement valueFor frying applications and oil blends for baking, roughly 15 -20M acres planted for oil used for food
8%56%20%15%COMMODITY SOYBEANS
≤ 3%12-25%55-80%<7%VISTIVE III TARGETS
18:3LINOLENIC
18:2LINOLEIC
18:1OLEIC
18:0 + 16:0SATURATES
CATEGORY►
Fatty
Aci
d (%
)7%
14%21%28%35%42%49%56%63%70%77%84%
Vistive III Low Lin – Mid Oleic – Low SatVistive Low Lin Alone
Mid Oleic – Low Sat Trait Alone
6%
77%
14%
3%
When breeding (green bar) and biotech (yellow bar) are combined, Vistive III (red bar) meets all product concept compositional targets
• Additionally, 3 years of biotech trait field data in the U.S. and Argentina indicate that yield is not statistically different from
BIOTECH PIPELINE
control
23
BIOTECH PIPELINE
NEW: SDA SOYBEAN OIL METS FOOD APPLICATION TARGETS
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
Food Prototypes Containing SDA Soybean Oil from Omega-3 SDA Enhanced Soybeans Meets Consumer Acceptability
R&D PipelineOmega-3 SDA Enhanced Soybeans
STATUS: Phase 3PROJECT CONCEPT:
Omega-3 SDA enhanced soybeans represent a land-based source of essential Omega-3 fatty acids. Targeting 20 percent stearidonic acid (SDA) with taste, shelf life and oil stability of soybean oil.VALUE:
LAUNCH-COUNTRY ACRES1: <1M
2020 VALUE2: $300-$500MSOURCES OF VALUE:
1
High Value OilProduct similar to soybean oil in taste, shelf-life and oil stability, but with the superior nutritional profile of fish oil
7.146.476.59 6.6
7.146.53
123456789
Margarine Yogurt Drink Granola Bar
Consumer Acceptability – Overall Liking
Recent results show comparable consumer acceptability between SDA soy oil and conventional soy oil in margarine spreads, yogurt, yogurt drinks and granola bars
► No significant yield differences between Omega-3 SDA enhanced lead event and the control over 5 growing seasons and 65 locations
1= D
islik
e ex
trem
ely
9=
Lik
e Ex
trem
ely
Control (Soy Oil ) SDA Soy Oil
a aaa
a a
Liki
ng R
atin
g
a Not Statistically Different
24
1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
• Higher-yielding trait will be stacked on top of Roundup RReady2Yield and other soybean-pipeline traits with an additive yield boost
More than 60 events were tested at 18 locations, with lead events showing strong yield advantages over conventional controls
Higher-Yielding Soybeans Continue to Demonstrate Improved Yield Over Conventional Controls
NEW: 2007 HIGHER-YIELDING SOYBEAN AGRONOMIC TESTING VERSUS CONTROLS
Ave
rage
Yie
ld A
dvan
tage
(Bu/
Ac
Incr
ease
Ove
r Con
trol
)
EVENT 1 EVENT 2 EVENT 3 EVENT 4 EVENT 5
Percent yield difference vs. control7.1%
6.2% 6.2% 6.2% 6.1%
18 Locations
PRODUCT CONCEPT TARGET RANGE
0.0
1.0
2.0
3.0
4.0
5.0
6.0
R&D PipelineHigher-Yielding Soybeans Family:Lead Project
STATUS: Phase 2
2020 VALUE2: $300-$500MSOURCES OF VALUE:
1Improved yieldTargeting additive yield to U.S. average of 42 bu/ac
PROJECT CONCEPT:
Higher-yielding soybeans aimed at boosting intrinsic yield potential of soybeans through insertion of key genesVALUE:
LAUNCH-COUNTRY ACRES1: 45M
BIOTECH PIPELINE
25
R&D PipelineDrought-Tolerant Cotton
STATUS: Phase 1
• Building a portfolio of genes that confer drought tolerance in cotton
• Initial field results show positive phenotypes for multiple genes in water-stressed conditions
PROJECT CONCEPT:
Drought-tolerant cotton is designed to minimize risk in cotton farming by providing yield stability in environments experiencing sporadic or consistent water stress and by reducing water needs on irrigated acres.PROJECT UPDATE:
U.S. Field Testing Identifies Drought-Tolerance Leads in Cotton
BIOTECH PIPELINE
NEW: EARLY RESULTS ON DROUGHT-TOLERANT COTTON TESTING IN THE U.S.
CONTROLWITH GENECONTROLWITH GENE
Mid-SeasonHalfway, TX – September 2007
Late SeasonHalfway, TX – October 2007
02468101214161820
YIE
LD D
IFFE
RE
NC
E P
ER
CE
NT
(lbs
see
d co
tton
/AC
RE
)
Event 1Event 2
2006 – 4 locations2007 – 7-9 locations
2006 2007Water Stressed Non-Stressed
2006 2007
4.0% 10.1%6.7% 4.6%19% 4.7%8.5% 4.9%Percent yield difference vs. control – Across multiple locations
26
Strong Pipeline Reflects Growing Innovation, Opportunity in Latter-Stage Projects and Emerging Value in Yield and Stress
PHASE2020
COMMERCIAL VALUE
COUNTRY OF
LAUNCH
ADDITIONAL GEOGRAPHIC OPPORTUNITY
SOURCES OF VALUE
Drought-Tolerant Corn Family
Insect Protected + Roundup RReady2Yield Soybeans 3 MID Brazil ARGENTINA
• Improved yield• Improved insect protection
Vistive III Soybeans 3 LOW U.S. N/A • Food industry functionality
Dicamba-Tolerant Soybeans 3 LOW U.S. BRAZILARGENTINA • Durable weed control
Bollgard III Cotton 2 MID U.S.INDIA
AUSTRALIABRAZIL
• Improved insect protection
Roundup RReady2Yield Canola 2 LOW Canada U.S.EU 27 • Improved yield
3 LEAD HIGH U.S.BRAZIL
ARGENTINAEU 27
• Improved yield• Water replacement
Nitrogen-Utilization Corn Family 1 LEAD HIGH U.S.BRAZIL
ARGENTINAEU 27
• Improved yield• Nitrogen replacement
Broad-Acre, Higher-Yielding Corn Family 2 LEAD MEGA U.S.BRAZIL
ARGENTINAEU 27
• Improved yield
Broad-Acre, Higher-Yielding Soybean Family 2 LEAD HIGH U.S. BRAZIL
ARGENTINA • Improved yield
Roundup RReady2Yield Soybeans 4 HIGH U.S. BRAZILARGENTINA • Improved yield
YieldGard VT PRO 4 HIGH U.S.BRAZIL
ARGENTINAEU 27
• Improved yield• Improved insect protection
Improved-Protein Soybeans 4 LOW U.S. N/A • Food industry functionality
High-Oil Soybeans 3 LOW U.S. BRAZILARGENTINA • Food industry functionality
Omega-3 Soybeans 3 HIGH U.S. N/A • Food industry functionality
YE
ILD
& S
TR
ES
S
<$150MLOW $150-$300MMID $300-$500MHIGH >$1BMEGA
COMMERCIAL VALUE RANGES AT 2020:
BIOTECH PIPELINE
27
Our Biotech and Breeding Pipeline Is Accelerating, With Progress in Projects and Widening Yield Advantages
MILESTONES:Biotech pipeline is accelerating
10 projects either advanced phases or were added to the pipeline – among the most in any annual updateFirst time transitioned 4 projects from Phase 2 to Phase 3First multi-generational advancement as 2 generations of corn drought family advanceSmartStax enters the pipeline as the platform for corn, complementing Roundup RReady2Yield as the soybean platform
Breeding programs yields impressive
DEKALB germplasm maintains impressive 8.4 bu/ac advantage; gap widens to 14.6 bu/ac when protected with YieldGard VT Triple stackAsgrow germplasm yield advantage improves to average 1.27 bu/ac; Roundup RReady2Yield to provide 7-11% boost
Q1 Q4
Q3Q2
ANNUAL R&D CYCLE: SEEDS & TRAITSWHAT CHANGED 2007-2008?• 5 projects advanced phases• 5 products were added• Vistive II was removed in favor of Vistive III• “Water-use efficiency” soybeans reclassified as
“2nd-Gen Higher-yielding soybeans”• Two former Renessen projects were rolled into the
Monsanto pipeline
SUMMARY
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Reconciliation of Non-GAAP Financial Measures
Reconciliation of Free Cash FlowFiscal Year
2008Target
Fiscal Year2007
$1,950 - $2,050 $1,854
(1,911)
$(57)
(583)
46
$(594)
(1,050)
$900 - $1,000
N/A
Effect of Exchange Rate Changes on Cash and Cash Equivalents N/A 58 5
N/A
Three Months Ended
Nov. 30, 2007
Three Months Ended
Nov. 30, 2006
Net Cash Provided (Required) by Operations $996 $600
Net Cash Provided (Required) by Investing Activities (256) (67)
Free Cash Flow $740 $533
Net Cash Provided (Required) by Financing Activities (47) (156)
Net Increase (Decrease) in Cash and Cash Equivalents $751 $382
$ Millions
$ per share
Three Months Ended
Nov. 30, 2007 Fiscal Year 2007
Diluted Earnings per Share $0.46
--
--
--
--
$0.46
$1.79
Loss (Income) on Discontinued Operations $(0.13)
In-Process R&D Write-Off Related to the Delta & Pine Land (D&PL) Acquisition
$0.34
Tax Charge on Repatriated Earnings --
Cumulative Effect of Change in Accounting Principle
Diluted Earnings (Loss) per Share from Ongoing Business
--
$2.00
Reconciliation of Non-GAAP EPS
29
Reconciliation of Non-GAAP Financial Measures
Reconciliation of Return on Capital
Total Monsanto Company and Subsidiaries:12 Months
EndedAug. 31, 2007
Operating Profit After-tax (excluding certain items) $1,116
Average Capital $7,533
Return on Capital 14.8%
Operating Profit After-tax (excluding certain items):
Net Income $993
Adjustment for certain items, after-tax:
2007 In-Process R & D Related to the D&PL Acquisition
$186
Loss (Income) on Discontinued Operations ($71)
Interest Expense – Net of Taxes $8
Operating Profit After-tax (excluding certain items) $1,116
$ Millions
As of Aug. 31,
2007
Average Capital:
Short-Term and Long-Term Debt $1,420
Shareowners’ Equity $7,505
Cash and Cash Equivalents $(866)
Cash for Operations $150
Total Capital $8,209
Prior Period Capital $6,857
Average Capital $7,533
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