3. Non-GAAP Financial Information
This presentation may use the non-GAAP financial measures of “free cash flow,” and earnings per share (EPS) on
an ongoing basis. 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 on-going 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. These
non-GAAP financial measures are not intended to replace net income (loss), cash flows, financial position, or
comprehensive income (loss), as determined in accordance with accounting principles generally accepted in the
United States. 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, which can be found at
the end of this presentation.
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.
3
4. OVERVIEW
Monsanto’s Success Is Rooted in Seeds and Traits, Creating
Platform for Future Growth
FOCUS: SEEDS & GENOMICS GROSS PROFIT FOCUS: ONGOING EPS PERFORMANCE
The EPS performance of the overall business reflects
Higher margins in the seed-and-trait business focus
the growth trajectory of the seeds-and-traits
Monsanto’s opportunity on accelerating gross profit
business, Monsanto’s leadership in the industry, and
growth
the commercial potential of our proven R&D pipeline
$3,000 2007 ONGOING EPS GUIDANCE:
$1.60
15-20% GROWTH
SEEDS & GENOMICS
ANNUAL GROSS PROFIT
$2,500
CAGR 2003-2006: 32% $1.50-$1.57
$1.40
($ IN MILLIONS)
$2,000
$1.31
$1.20
$1,500
$1.00 $1.04
$1,000
AGRICULTURAL
PRODUCTIVITY $0.80
CAGR 2003-2006:
$500 $0.80
(3)%
$0.72
$0.60
$0
20031 2004 2005 2006 2007F 2003 2004 2005 2006 2007F
11% GROWTH 30% GROWTH 26% GROWTH
4
5. OVERVIEW
Six Building Blocks Extend Leadership and Elevate Gross
Margin Opportunity Through 2010
MONSANTO’S OPPORTUNITY
GROSS MARGIN OPPORTUNITY
Delta between 2006 gross margin and
GROSS PROFIT AS A PERCENT OF SALES
a 51-53% trajectory reflects continued
54%
growth opportunity for seeds and
traits
FACTOR VALUE1
GROSS MARGIN ‘PULL’
52%
HIGH
U.S. corn
International
MEDIUM
50% corn
Global biotech
MEDIUM
traits
48%
LOW
CURRENT LEVEL Cotton platform
MEDIUM
Seminis
46%
HIGH
R&D pipeline
44%
2003 2004 2005 2006 2007F 2008F 2009F 2010F
1. Increment to total gross profit in the period 2006-2010; Some growth factors will overlap.
MEDIUM LOW
HIGH >$250M $100M - $250M <$100M
5
6. OVERVIEW
“Rising Tide Lifts All Boats” Across Corn Industry, But
Performance Will Still Determine Long-Term Winners
GROWTH AVENUES IN A
STRONG CORN MARKET
FOCUS: HISTORICAL U.S. PLANTED CORN ACRES
Growth from additional acres
Additional acres provide a “rising tide” that
PLANTED ACRES (IN MILLIONS)
90 benefits most ag companies
Depending on source of incremental acre, there
can be a trade-off in profit opportunity. For
80
example, within Monsanto that trade-off is:
Favors corn, but a trade-off because of
SOYBEANS
70 high Roundup Ready penetration
Essentially indifferent as both crops are
COTTON highly penetrated with higher-priced
60
stacked traits
WHEAT OR
Additive
50 OTHER
81
83
85
87
89
91
93
95
97
99
01
03
05
Growth from performance
19
19
19
19
19
19
19
19
19
19
20
20
20
Farmers want to maximize productivity in high-
return environment – creating opportunity for
seed companies who deliver total performance
Average swing of corn acres over the last decade is Key Factors:
roughly 1 percent; Last significant acre swing
GERMPLASM Ultimate yield potential is reflected
occurred in mid-1980s PERFORMANCE in the core seed
2007 could represent the largest acreage swing in With yield focus, stacks – and
TRAIT
decades because of the new dynamic of ethanol on triples especially – are the trait
AVAILABILITY
package of choice
top of the established export demand
6
7. U.S. CORN GROWTH
Pre-Planting Indicators Continue to Suggest Performance Sets
Monsanto Seed and Traits Apart from the Pack in 2007
2007 MONSANTO FORECAST
U.S. Corn FARMER’S DECISION EQUATION INITIAL PROJECTIONS STATUS UPDATE
SEED
SITUATION:
• Farmers buy “yield” – a 60% of farmers indicate Grow national Asgrow and
function of the genetic germplasm selection is brand market share DEKALB brands
potential of seed and the first priority 1-2 points expected to gain at
the upper end of 1 - 2
percent of that potential
+ share points
protected by technology
ASI companies
• Across three commercial
expected to gain up
channels, Monsanto is
to 0.5 share points
uniquely positioned to
through organic
deliver “yield” to farmers growth
OUTLOOK:
TECHNOLOGY
• A pre-planting view shows
+
62% of farmers prefer 35% triple stacks in
Monsanto’s seed and access to a full line of national brands Triple-stack traits are
technology performance biotech traits over a sold out in Asgrow
30% triple stacks in
is translating to favorite seed brand and DEKALB brands
ASI brands
commercial opportunity
MAXIMUM YIELD POTENTIAL
38% of farmers’ acres Seeds & Genomics
are planted to “home- Gross Profit
=
EPS guidance raised
run” hybrids, 54% are expected to
to upper end of
planted to “proven” increase to $2.8B
$1.50-$1.57 range at
hybrids from $2.4B in 2006,
Q1 earnings report
in part reflecting the
strength of U.S.
Corn
7
8. U.S. CORN GROWTH
Breeding Strength Translates to Commercial Growth
Opportunity
2006 TESTING: YIELD DIFFERENCE VERSUS COMPETITIVE CHECKS BY CHANNEL1
U.S. Corn 12.00
SITUATION:
10.00
• In 2006, yield data across all
BUSHELS PER ACRE
three channels and essentially 8.00
across all maturity zones
indicates a yield advantage 6.00
over best-in-class
competitors1 4.00
OUTLOOK:
2.00
• Gains in the 110-day market
are most significant, both
0.00
from a breeding perspective
110
2
and a sales growth 95 100 105 110 115
perspective RELATIVE MATURITIES (DAYS)
2006-TO-2007 CHANGE IN ORDERS BY MATURITY ZONE IN EACH CHANNEL
LICENSED BRANDS
1. For purposes of this
testing, the competitive
REGIONAL BRANDS
checks excluded any
Monsanto or Monsanto
licensed germplasm
NATIONAL BRANDS
2. In the 100 day
maturity zone, ASI’s
bushels per acre are
statistically indifferent
when compared to best
Increased orders Flat orders Decreased orders
competitive checks
8
9. U.S. CORN GROWTH
With Higher Demand for Stacks, the “Average” DEKALB Acre
Now Contains More Than Two Traits
TRAIT PENETRATION TRENDS
U.S. Corn ACROSS KEY COMMERCIAL CHANNELS
SITUATION:
DEKALB/ASGROW
2.5 2007F TRAIT
• With increased stacking,
(AVERAGE NUMBER OF TRAITS PER
INTENSITY: > 2.0
TRAIT INTESITY INDEX
there is a positive mix effect
2
across the portfolio
TRAIT ACRE)
2007F TOTAL
1.5
OUTLOOK:
MARKET TRAIT
INTENSITY LESS
• In 2007, the trait intensity for BRANDED: 1.7
1
DEKALB and Asgrow will
surpass 2.0 for the first time
0.5
– reflecting that the average
corn acre now contains more
0
than 2 biotech traits
2003 2004 2005 2006 2007F
• With an infusion of
technology, ASI’s trait TRIPLE STACKED
TRAIT PENETRATION STACKED PENETRATION
PENETRATION
penetration levels are closing
in on DEKALB and Asgrow
2006 2007F 2006 2007F 2006 2007F
LICENSED BRANDS
55% 60 - 65% 43% 55 - 60% 7% 10 - 15%
REGIONAL BRANDS
75% 80 - 85% 55% 65 - 70% 15% >30%
NATIONAL BRANDS
90% 90 - 95% 69% 70 - 75% 20% >35%
9
10. U.S. CORN GROWTH
Projected Demand From Ethanol in U.S. Provides Positive Pull
for Monsanto Corn Technology
U.S. ETHANOL AND CORN TRAITS
CORRELATION OF ETHANOL SITES AND TRAIT PENETRATION
U.S. Corn
SITUATION:
• Assumption that by 2010,
ethanol is MTBE replacement – NON-
representing 10% of U.S. fuel DRAW
AREA
ETHANOL
supply DRAW AREA
• Ethanol demand could require
equivalent of up to 25M U.S.
acres by 2010
OUTLOOK:
• Ethanol demand creates pull
on corn that favors
technologies that enhance
yield, such as molecular
breeding and biotech
• The average trait penetration is
2.5 X greater in areas of
ethanol facilities
ETHANOL PLANTS IN
Average trait penetration was 2.5 X greater PRODUCTION
in areas with a high concentration of ETHANOL PLANTS UNDER
CONSTRUCTION
ethanol facilities compared with areas
without or having low concentrations of
ethanol facilities
10
11. INTERNATIONAL CORN GROWTH
Gross Profit Value of Seed Internationally Varies, Yet Still
Solid Contributor to Growth, Commercial Platform
TOTAL HYBRID SHARE GROSS
MONSANTO
MARKET MARKET POINT PROFIT
BRAND OUTLOOK
SIZE SIZE CHANGE VALUE PER
SHARE
(ACRES) (ACRES) (’04-’06) ACRE1
International Corn
EUROPE-AFRICA
SITUATION:
HIGH • Molecular
France 7.5M 7.5M 15% +5
• Primary value in breeding
HIGH
Italy 3.2M 3.2M 21% +7 application is
international corn markets
roughly 2 years
today is in the seed MEDIUM
Hungary 2.7M 2.7M 32% +6 behind U.S.
• Breeding gains that have • Corn Borer-
HIGH
Turkey 0.8M 0.7M 21% +4 Roundup Ready 2
been made in the U.S. set
stack approved in
pace for market share LOW January in South
South Africa 6.0M 6.0M 50% +12
growth in other Africa
international markets
LATIN AMERICA
OUTLOOK:
MEDIUM • Argentina is only
Mexico 17.3M 3.9M 61% +3
• Monsanto is targeting to country in region
LOW
Brazil 30.8M 20.6M 34% -1 with biotech traits
grow share in each of the
• Next priority for
most valuable corn-growing accelerated
LOW
Argentina 7.3M 7.0M 35% FLAT
countries molecular
breeding
ASIA-PACIFIC
• India is primary
market of longer-
LOW
India 15.6M 5.9M 35% +6 term value in
region
1. Average incremental value in gross profit opportunity for the seed value (excluding traits) of the addition of
an acre in a Monsanto brand:
MEDIUM
HIGH LOW
>$20 $10 - $20 <$10
11
12. INTERNATIONAL CORN GROWTH
Breeding Capability Is Creating Business Opportunities in
International Temperate Seed Markets
INTERNATIONAL OPPORTUNITY: TEMPERATE GERMPLASM
DEKALB STATUS AND OPPORTUNITY
International Corn EUROPE
SITUATION: TARGET HYBRID ACRES 27M
• Key to growth in STATUS
international corn seed • Largest temperate breeding program
markets is leveraging the outside U.S., using international
tools and knowledge crosses and molecular breeding
developed for the U.S. in • Two-year trends have shown share
TEMPERATE
gains in key European markets
other markets
SUB-TROPICAL
• Temperate germplasm can
be moved across countries
TROPICAL
to improve breeding
programs
OUTLOOK: SUB-TROPICAL
• Very strong international TEMPERATE
corn seed performance
over last two years is in
SOUTH AFRICA
ARGENTINA
Europe, where germplasm
with U.S. can be readily TARGET HYBRID ACRES
TARGET HYBRID ACRES 6M
7.5M
exchanged STATUS
STATUS
• With strong germplasm and • Established breeding program with strong
• Breeders have historically brought in
breeding programs, other genetics for local market
germplasm from other temperate
regions, including U.S. • In 2007 season, acres are increasing
temperate markets are also
because of an overall market recovery, and
• Projected market share gains of 2-3
on positive upswings DEKALB seed is poised to gain market share
points in 2006-2007
12
13. GLOBAL BIOTECH TRAIT GROWTH
Roundup Ready Soybean Strategy in Brazil Emphasizes
Acreage Penetration
ROUNDUP READY SOYBEANS IN BRAZIL
PROJECTED EPS CONTRIBUTIONS (2007 VS 2010)
Global Biotech Traits
SITUATION: $0.12
$0.09-$0.11
• Largest soybean market
$0.10
outside U.S. is Brazil
• Recent pricing action taken
CONTRIBUTION TO EPS
there to promote penetration $0.08
of new seed ($ PER SHARE)
OUTLOOK:
$0.06
$0.025-$0.05 ON PENETRATION ALONE
EPS CONTRIBUTION
• In a total Brazilian market of
COULD MORE THAN
$0.04
~50M acres, 2006 penetration
DOUBLE 2007-2010
was almost 20M acres –
reflecting a remaining 30M-
$0.02
acre upside
• Penetration target of 45% for
$0.00
2007 is on track
2007F 2010F
2007 2008F 2009F 2010
ASSUMPTIONS ASSUMPTIONS
PRICING PRICING
$2.50-$3.00/acre $2.50-$3.00/acre
MARKET SIZE MARKET SIZE
50M 50M
PENETRATION PENETRATION
45% 90%
13
14. COTTON GROWTH
Upgrade to Second-Generation Cotton Traits Flourishes,
Highlighted by 2007 Roundup Ready Flex Growth
PENETRATION RATE OF SECOND-GENERATION TRAITS
PENETRATION TREND OF COTTON TRAITS AS
A PERCENT OF ANNUAL PLANTED ACRES1
Cotton Platform
2006 RESULTS
SITUATION:
• Cotton trait platform is the first
17%
Bollgard II
to move forward on complete
replacement of first-generation
14%
Roundup
traits with second-generation
Ready Flex
upgrades
• Roundup Ready Flex cotton 2007 FORECAST
launched in the U.S. in 2006;
25-30%
Launched in Australia for Bollgard II
FY2007 planting
25-30%
Roundup
OUTLOOK:
Ready Flex
• Transition to second-
generation traits continues in
2007
0% 5% 10% 15% 20% 25% 30%
• Roundup Ready Flex was
planted on ~14% of planted
ROUNDUP READY FLEX
acres in 2005 – that should
double in 2007 Even on potentially lower total planted acres, Roundup
Ready Flex penetration rate should double in 2007 to
>25% of total cotton crop
1. Percent of annual planted acres reflects the ratio of number of actual trait acres planted to total planted acres in the
identified year for the specified geography
14
15. SEMINIS GROWTH
Seminis To Leverage Portfolio, Pricing and Molecular
Breeding To Create New Growth
SEMINIS VALUE CREATION
STAGED OPPORTUNITIES FOR INCREASING BUSINESS VALUE
Seminis
SITUATION: Significant use of
molecular markers
• In 2006, narrowed commercial
VALUE CREATION OPPORTUNITY
and research focus to 25 crops
Aggressively make hybrid
that generate the most profit
conversions in strategic crops
• Began application of breeding
technology, with a target of
Identify and implement opportunities
1,000+ markers each for 9
to price products to value
crops by 2009
OUTLOOK:
Assemble genetic maps for key crops
• Seminis is targeted to
contribute $0.10 - $0.125 to
EPS in FY2007 now that
Focus on 25 most-profitable key crops
inventory step-up charge is
complete
2005 2006 2007 2008 2009 2010
PIPELINE
OPERATIONAL EXCELLENCE NEW VALUE CREATION ADVANCEMENT
Monsanto Seminis Seminis Commercialize
acquires modestly accretive to first hybrids
Seminis accretive FY2007 EPS developed by
to FY2006 in range of molecular
EPS $0.10-$0.125 breeding
15
16. SEMINIS GROWTH
Development of Fungal-Resistant Peppers For North America
Provides New Pricing Opportunity for Seminis
KEY MARKET ACRES NORTH AMERICA
AVAILABLE MARKET 200K
Fungal-Resistant Peppers PERCENT PENETRATED 0%
VALUE OPPORTUNITY: FUNGAL RESISTANCE
Seminis EXAMPLE: NORTH AMERICAN PEPPERS
Fungal-Resistant Peppers
2.00
INDEXED RETAIL SEED
PROJECT CONCEPT:
49%
VALUE PER ACRE
Fungal disease pressure affects almost 60 1.50
percent of North American pepper acres,
diminishing yield and increasing input
1.00
expenses for growers. Using molecular
markers, Seminis is creating hybrid peppers
that exhibit fungal resistance.
0.50
2006 PERFORMANCE UPDATE:
• Seminis is mapping molecular 0.00
markers for 9 key crops, which is CONVENTIONAL FUNGAL-RESISTANT
helping better locate genetic sites for PEPPERS PEPPERS
factors like fungal resistant and
disease, allowing breeders to apply
Fungal disease affects 60% of the 200K+ acres of peppers grown
that information to upgrade product in the U.S., Canada and Mexico, requiring intensive chemical
offerings faster spraying for control
• Ultimately fungal-resistance could be
Using molecular-breeding tools, Seminis scientists are working
combined with other or additional on developing hybrid peppers that are resistant to fungal disease
disease-resistance characteristics for
The enhanced value of fungal resistance is projected to increase
commercial launch
the per-acre retail price by almost half
16
17. PIPELINE UPDATE
Pipeline Demonstrates Increased Breadth and Depth; Key
Projects on Track for Commercial Launch
R&D PIPELINE: JANUARY 2007
PHASE PHASE PHASE PHASE
PHASE PHASE PHASE PHASE
D
D 1 2 3 4
1 2 3 4
PROCESSOR BENEFITS
FARMER BENEFITS
MAVERA™ HIGH-VALUE CORN
ROUNDUP READY FLEX COTTON
WITH LYSINE1
ROUNDUP RREADY2YIELD SOYBEANS
MAVERA™ I HIGH-VALUE SOYBEANS1
ROUNDUP RREADY2YIELD CANOLA
MAVERA™ II HIGH-VALUE SOYBEANS1
DICAMBA-TOLERANT SOYBEANS
2nd-GEN HIGH-VALUE CORN WITH
LYSINE1
DICAMBA-TOLERANT COTTON
FEED CORN WITH BALANCED
PROTEINS1
YIELDGARD VT ROOTWORM/RR2
2ND-GEN YIELDGARD ROOTWORM
HIGH OIL SOYBEANS FOR
PROCESSING1
YIELDGARD VT PRO
2ND-GEN YIELDGARD CORN BORER
CONSUMER BENEFITS
INSECT-PROTECTED SOYBEANS
YIELDGARD ROOTWORM II IMPROVED-PROTEIN SOYBEANS
SOYBEAN NEMATODE-RESISTANCE VISTIVE II SOYBEANS
BOLLGARD III VISTIVE III SOYBEANS
COTTON LYGUS CONTROL OMEGA-3 SOYBEANS
HYBRIDIZATION SYSTEM FOR CORN
DROUGHT-TOLERANT CORN
2ND-GEN DROUGHT-TOLERANT CORN High Impact Technologies (HIT) project
HIGHER-YIELDING CANOLA
Jan. 4, 2007 Advancements/Additions
WATER-USE EFFICIENCY SOYBEANS
Jan. 4, 2006 Advancements/Additions
DROUGHT-TOLERANT COTTON
1. These product candidates are in the Renessen pipeline. Renessen is a
HIGHER-YIELDING CORN
Monsanto/Cargill joint venture.
NITROGEN UTILIZATION CORN
2. The colored bar associated with each project indicates which phase that project is
HIGHER-YIELDING SOYBEANS in. It is not intended to represent the relative status of the project within a particular
stage.
3. Roundup Ready Flex Cotton advanced from Phase 4 to commercialization in 2006.
17
18. PIPELINE UPDATE
Roundup RReady2Yield Soybeans Advance to Phase 4,
Beginning Pre-Launch Activities
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Roundup RReady2Yield AVAILABLE MARKET 70M 60M 35M
Soybeans PERCENT PENETRATED 0% 0% 0%
P R O JE CT
2006 TESTING: RELATIVE PERFORMANCE OF ROUNDUP READY AND
R&D Pipeline
ROUNDUP RREADY2YIELD EXPERIMENTAL LINES
Roundup RReady2Yield Soybeans
PROJECT CONCEPT:
PERCENT OF POPULATION
50
Second-generation of Monsanto’s popular ROUNDUP READY
ROUNDUP
EXPERIMENTAL
herbicide-tolerant platform in soybeans RREADY2YIELD
LINES
40
that will provide farmers with soybeans that EXPERIMENTAL LINES
have enhanced yield, with a target of up to
30
5 bushel-per-acre yield increase over
comparable Roundup Ready soybeans
KEY RESULTS
20
2006 PERFORMANCE UPDATE:
10
Phase 4
2006 STATUS:
• Performance indicates that the
enhanced yields associated with -10 -5 0 5 10 15
Roundup RReady2Yield are YIELD DIFFERENCE (BU/AC)
consistent across multiple years
and diverse germplasm 2006 breeding trials compared Roundup RReady2Yield
experimental lines with Roundup Ready experimental lines that
backgrounds
were in the same stage of development. The Roundup
VALUE CATEGORIES:
RReady2Yield lines averaged 3 to 5 bushels per acre higher than
TOTAL RETAIL Roundup Ready experimental lines – shifting the entire yield
$10 - $30/acre
VALUE/ACRE:
curve positively and providing further validation for the product
concept target of up to a 5 bushel-per-acre yield increase
18
19. PIPELINE UPDATE
Multi-Generational Drought-Tolerant Corn Creates Value
Across Multiple Market Segments
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
AVAILABLE MARKET 80M 30M 6M
Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0%
P R O JE CT
SEGMENTED VALUE OPPORTUNITY ACROSS MARKETS:
R&D Pipeline U.S. EXAMPLE
Drought-Tolerant Corn
High annual
PROJECT CONCEPT: precipitation
First-generation drought tolerance is
targeted to minimize uncertainty in farming
by buffering against the effects of water
limitation, primarily in areas of annual water
stress
2006 PERFORMANCE UPDATE:
Low annual
Phase 2 precipitation
2006 STATUS:
Source: Spatial Climate Analysis Service, Oregon State University
• Yield enhancement demonstrated
WESTERN
IRRIGATED STABILITY
again in 2006 under water-stress
DRYLAND
conditions in U.S.
8-12M acres 10-12M acres 50-60M acres
• Lead gene chosen
• 2007 trials expected to demonstrate 14-18” typical 14-18” typical 17-19” typical
yield enhancement in multiple precipitation in precipitation in precipitation in
hybrids under dryland conditions growing season growing season growing season
VALUE CATEGORIES: Irrigated Non-irrigated Non-irrigated
TOTAL RETAIL
$10 - $30/acre Value is in replacing Value is in improved Value is in improved
VALUE/ACRE:
irrigation, reducing yields annually, by yields when moisture
the variable costs of improving water-use is less than optimal
irrigation efficiency
19
20. PIPELINE UPDATE
First of Drought-Tolerant Corn Traits Continues To
Deliver Yield Boost in Third-Year Testing
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
AVAILABLE MARKET 80M 30M 6M
Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0%
P R O JE CT
2006 TESTING: YIELD IMPROVEMENT OF LEAD EVENT UNDER
DROUGHT STRESS
R&D Pipeline
Percent yield difference vs. control
Drought-Tolerant Corn
14 7.3% 10.5% 10.9% 23.2% 9.0%
PROJECT CONCEPT:
12
First-generation drought tolerance is
targeted to minimize uncertainty in farming
VS. CONTROL (BU/ACRE)
10
YIELD DIFFERENCE
by buffering against the effects of water
limitation, primarily in areas of annual water
8
stress
KEY RESULTS
6
2006 PERFORMANCE UPDATE:
NOT TESTED
Phase 2
2006 STATUS: 4
• Yield enhancement demonstrated 2
again in 2006 under water-stress
0
conditions in U.S.
2004 2005 2006
• Lead gene chosen
• 2007 trials expected to demonstrate Hybrid 1: 2004, 4 locations; 2005 5 locs; 2006, 1 loc (20 reps)
Hybrid 2: 2004, not tested; 2005, 5 locs, 2006, 3 locs
yield enhancement in multiple
hybrids under dryland conditions In third year field testing in U.S., drought-tolerant leads are
VALUE CATEGORIES: consistently delivering higher yields compared with controls under
drought-stressed conditions
TOTAL RETAIL
$10 - $30/acre
VALUE/ACRE:
First leads show primary benefit under water-stress conditions
20
21. PIPELINE
Monsanto’s Pipeline Is Funded for Growth, but Focused on
Return on Investment
PIPELINE VALUE: TOP-TEN PROJECTS
REFLECTING COMMERCIAL VALUE1
SOURCE OF VALUE PER MARKEY CORE
PHASE
R&D Pipeline VALUE ACRE OPPORTUNITY MARKETS
Renessen Corn Processing
SITUATION: U.S
4 $10 - $30 20M Brazil
System and Mavera™ High- Feed and fuel
Europe
Value Corn with Lysine2
• In FY2006, three
projects were U.S.
Roundup RReady2Yield
HIT
4 Yield
$10 - $30 155M Brazil
designated as “HIT” enhancement
soybeans Argentina
projects reflecting
3
Omega 3 soybeans >$30 5M U.S.
Improved health
our confidence in
their commercial U.S.
4 Insect
YieldGard VT PRO $10 - $30 41M Brazil
track 2 -GEN YIELDGARD CORN BORER
nd protection Europe
U.S
Water
2
HIT HIT
Brazil
Drought-tolerant corn $10 - $30 164M
replacement
Europe
and yield
2
Vistive III soybeans $10 - $30 12-15M U.S.
Improved health
U.S.
2 Yield
Higher yielding soybeans $10 - $30 155M Brazil
enhancement Argentina
2 Brazil
Insect-protected soybeans <$10 95M
Yield
1. Top ten not presented in WITH ROUNDUP RREADY2YIELD Argentina
ranked order; Commercial
U.S.
value calculated by
Water
penetration and retail
1 India
Drought-tolerant cotton $10 - $30 36M
replacement
value during three-year Brazil
and yield
span at peak. Australia
2. Value and acres are for
U.S
Nitrogen
1
direct feed piece only and
Nitrogen utilization corn $10 - $30 164M Brazil
replacement
do not include value for
Europe
and yield
Renessen’s corn
processing system, which
is still to be determined
21
22. SUMMARY
All Six Growth Drivers Are On Track in 2007, Setting Stage
for Continued Growth Through End of Decade
MONSANTO’S OPPORTUNITY
FY2007 PRIORITIES
FACTOR
FOCUS: GROSS PROFIT AS A PERCENT OF SALES
• Drive trait penetration, especially
triple-stacks
54%
U.S. corn
• Seed market share growth in U.S.
national and ASI brands
GROSS MARGIN ‘PULL’
52% International • Grow market share in key
international market
corn
• Achieve 2.5-5 cents EPS for
50% Global biotech
Roundup Ready soybeans in
traits Brazil
• Complete Delta and Pine Land
48%
acquisition
Cotton
CURRENT LEVEL platform • Continue penetration of second-
generation stacked traits in U.S.
46%
• Achieve 10-12.5 cents EPS
Seminis
contribution
44%
2003 2004 2005 2006 2007F 2008F 2009F 2010F
• Emphasis on “HIT” projects
R&D pipeline
22
23. Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP EPS
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
$ per share 2006 2005 2004 2003
Net Income (Loss) per Share $1.25 $0.47 $0.50 $0.13
Cumulative Effect of Change in Accounting Principle $0.01 -- -- $0.02
Diluted Earnings (Loss) per Share Before Effect of $1.26 $0.47 $0.50 $0.15
Accounting Change
Tax Charge on Repatriated Earnings $0.04 -- -- --
Seminis and Stoneville In-Process R&D -- $0.45 -- --
Solutia-Related Charge -- $0.32 -- --
Tax Benefit on Loss from European Wheat and -- $(0.19) -- --
Barley Business
Restructuring Charges -- Net -- $0.01 $0.18 $0.05
Loss (Income) on Discontinued Operations $0.01 $(0.02) -- $0.04
Impairment of Goodwill -- -- $0.12 --
PCB Litigation Settlement Expense – Net -- -- -- $0.48
Diluted Earnings (Loss) per Share from Ongoing Business $1.31 $1.04 $0.80 $0.72
Note: EPS figures reflect the stock split effective July 28, 2006
23
