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FIRST-QUARTER 2006
FINANCIAL RESULTS




Jan. 4, 2006

                     1
Forward-Looking Statements




Certain statements contained in this release are quot;forward-looking statements,quot; 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 completion and operation of
recent and proposed 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 filings with the SEC. Undue
reliance should not be placed on these forward-looking statements, which are current only as of the date
of this release. The company disclaims any current intention or obligation to update any forward-looking
statements or any of the factors that may affect actual results.




                                                                                                              2
Non-GAAP Financial Information




This presentation uses the non-GAAP financial measures of “free cash flow,” and ongoing earnings per share
(EPS). We define free cash flow as the total of cash flows from operating activities and cash flows from investing
activities. A non-GAAP EPS financial measure, which we refer to as EPS on an ongoing basis, may exclude the
impact of restructuring charges, charges associated with the settlement of litigation, gains and losses on the sale of
assets, and certain other items. The specific items that are excluded from, and result in, our non-GAAP EPS
financial measure are clearly identified as such in this presentation. The presentation of free cash flow and ongoing
EPS is intended to supplement investors’ understanding of our operating performance. These non-GAAP financial
measures may not be comparable to similar measures used by other companies. Furthermore, 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. 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
In this presentation, unless otherwise specified:
References to year, or to fiscal year, are on a fiscal year basis and refer to the 12-month period ending August 31.
References to the first quarters of 2005 and 2006 refer to three-month periods ending November 30.




                                                                                                                         3
FINANCIAL RESULTS


First-Quarter Financial Summary




                                  FIRST     FIRST
                                 QUARTER   QUARTER   CHANGE
                                   2006      2005


                     NET SALES   $1,405M   $1,072M    31%


                GROSS PROFIT     $634M     $491M      29%


          NET INCOME (LOSS)       $59M     $(40)M     NM

          DILUTED EARNINGS
                                  $0.22    $(0.15)    NM
           (LOSS) PER SHARE


NM: Not Meaningful
                                                              4
FINANCIAL RESULTS


Items Included in Reported Earnings




 First Quarter 2005:
    $0.40 per share tax benefit as a result of the loss
    incurred on the global wheat and barley business
    $(0.68) per share charge associated with certain
    liabilities in connection with the Solutia bankruptcy




                                                            5
FINANCIAL RESULTS

Fiscal Year 2006 Guidance Reflects Continued
Momentum in Seeds and Traits




   FY2006 TARGETS


                                                                  GUIDANCE
                                   $2.35-$2.50
       EARNINGS PER SHARE
                             TOWARD THE UPPER END OF
                (ONGOING)
                                   THE RANGE
                                                       Q2 and Q3 will be the
                                                       primary drivers for full-
            FREE CASH FLOW       $825M - $900M         year EPS performance
                                                       Q4 will be a loss but not
     SG&A AS A % OF SALES         ~22% RANGE
                                                       as large as in the prior
                                                       year
       R&D AS A % OF SALES        ~10% RANGE


    CAPITAL EXPENDITURES            ~$350M




                                                                                   6
FINANCIAL RESULTS

Brazil Can Accelerate Growth Potential for Roundup Ready
Soybeans


  MARKET UPDATE:                               ROUNDUP READY SOYBEANS IN BRAZIL

                                               CURRENT MARKET CONDITIONS

                                                 Planted soybean acres down roughly 5
                                                 percent for 2006 season

                                               VALUE CAPTURE
              NORTH: PRIMARY                                          New seed sales at mid to upper
              AREA FOR SALE OF                                        end of 4 – 5M acre range
                                     40            NEW SEED
              NEW ROUNDUP READY      MILLION
                                                      SALES           Value: ~$9/acre retail value
              SOYBEAN SEED           PLANTED                          shared significantly with
              VARIETIES BUT SAVED    SOYBEAN                          partners
              SEED VARIETIES EXIST   ACRES
                                                                     Saved seed estimated at ~15M
                                                                     acres
                                                 SAVED SEED          Value: ~$4.50/acre retail value
              SOUTH: PRIMARY AREA                                    shared significantly with
              FOR SAVED ROUNDUP                                      partners
              READY SEED VARIETIES
                                               EARNINGS
              BUT NEW ROUNDUP READY
              SEED SALES EXIST
                                 10 MILLION      Expected 5-10 cents per share contribution for
                                 PLANTED         FY2006
                                 SOYBEAN
                                 ACRES           Revenue recognized primarily in Q3 and Q4

                                                                                                       7
FINANCIAL RESULTS

Success in Variable-Based Pricing in Cotton Is Bellwether for
Zone-Based Royalties in Corn

                                                                                                                                                                             STEP 1
                                                                     Driving Trait Penetration in Marginal to Modest
COTTON EXAMPLE                                                       Insect-Infestation Zones
                                                                                                                                                       Differential pricing allowed
                                                                                                                51%
                                                           U.S. BOLLGARD TRAIT ACRES
                                                                                                                                                       Monsanto to earn an acre that
                                          3 .5
                                                                                                             penetrated
                                                   MARGINAL – TO – MODEST INFESTATION ZONES
  ACRES (MILLIONS)




                                                                                                                                                       otherwise would not have used
                                               3
                                                                                                                                                       Bollgard technology, driving
                                          2 .5
                                                                                                                                                       trait penetration on marginally-
                                               2
                                                                                                                                                       to modestly-infested acres
                                                     11%
                                          1 .5
                                                                                                                                                                              STEP 2
                                                   penetrated
                                               1
                                                                                                                                                       Experience shows the farmer
                                          0 .5
                                                                                                                                                       recognizes the value and
                                               0
                                                                                                                                                       convenience of the trait
                                                   1998                                                   2005
                                                                                                                                                       package and embraces more
                                                                                                                                                       value-added technology, largely
                                                                     Increasing Monsanto’s Value per acre in Marginal
COTTON EXAMPLE                                                                                                                                         through stacked traits
                                                                     to Modest Insect-Infestation Zones

                                                                                                                                                                              STEP 3
                                                                                      5.6 X GP




                                                                                                                     RETAIL PRICE (INDEXED 1998 = 1)
                                                                                                                      WEIGHTED AVERAGE PER ACRE
                                                                                      FROM 1998
                                           6                                                                2 .0 0
                                                                                                            1 .7 5                                     Because of the increased
                                           5
                     (INDEXED 1998 = 1)




                                                                                                            1 .5 0                                     penetration and movement
GROSS PROFIT




                                           4
                                                                                                            1 .2 5                                     toward stacked-traits, the total
                                           3                                                                1 .0 0                                     value per acre captured by
                                                                                                            0 .7 5                                     Monsanto increases
                                           2
                                                                                                            0 .5 0
                                                                                                                                                       With more trait acres and more
                                           1
                                                                                                            0 .2 5
                                                                                                                                                       value generated per acre,
                                           0                                                                0 .0 0
                                                                                                                                                       overall gross profit increases
                                                           1998                         2005
                                                                  AVERAGE PER ACRE RETAIL PRICE

                                                                                                                                                                                          8
Reconciliation of Non-GAAP Financial Measures



    Reconciliation of Free Cash Flow

                                                                    Fiscal Year      Three Months        Three Months
                                                                       2006             Ended               Ended
 $ Millions                                                           Target         Nov. 30, 2005       Nov. 30, 2004
 Net Cash Provided by Operations                                   $1,300 - $1,375       $773                $769

 Net Cash Provided (Required) by Investing Activities                  $(475)           $(135)                $1
                                                                                                             $770
        Free Cash Flow                                              $825 - $900          $638
                                                                                                            $(254)
 Net Cash Provided (Required) by Financing Activities                    N/A            $(157)
                                                                                                             $516
 Net Increase in Cash and Cash Equivalents                               N/A             $481



    Reconciliation of Non-GAAP EPS
                                                                      Fiscal Year            Three Months            Three Months
                                                                         2006                   Ended                   Ended
 $ per share                                                            Target               Nov. 30, 2005           Nov. 30, 2004
 Diluted Earnings (Loss) per Share                                   $2.35 - $2.50               $0.22                   $(0.15)
     Solutia-Related Charge                                               —                                              $0.68
                                                                                                     —
     Tax Benefit on Loss from European Wheat and Barley Business                                                         $(0.40)
                                                                          —                          —

                                                                     $2.35 - $2.50               $ 0.22                  $ 0.13
 Diluted Earnings per Share from Ongoing Business




                                                                                                                                     9

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.monsanto 01-04-06a

  • 2. Forward-Looking Statements Certain statements contained in this release are quot;forward-looking statements,quot; 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 completion and operation of recent and proposed 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 filings with the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results. 2
  • 3. Non-GAAP Financial Information This presentation uses the non-GAAP financial measures of “free cash flow,” and ongoing earnings per share (EPS). We define free cash flow as the total of cash flows from operating activities and cash flows from investing activities. A non-GAAP EPS financial measure, which we refer to as EPS on an ongoing basis, may exclude the impact of restructuring charges, charges associated with the settlement of litigation, gains and losses on the sale of assets, and certain other items. The specific items that are excluded from, and result in, our non-GAAP EPS financial measure are clearly identified as such in this presentation. The presentation of free cash flow and ongoing EPS is intended to supplement investors’ understanding of our operating performance. These non-GAAP financial measures may not be comparable to similar measures used by other companies. Furthermore, 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. 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 In this presentation, unless otherwise specified: References to year, or to fiscal year, are on a fiscal year basis and refer to the 12-month period ending August 31. References to the first quarters of 2005 and 2006 refer to three-month periods ending November 30. 3
  • 4. FINANCIAL RESULTS First-Quarter Financial Summary FIRST FIRST QUARTER QUARTER CHANGE 2006 2005 NET SALES $1,405M $1,072M 31% GROSS PROFIT $634M $491M 29% NET INCOME (LOSS) $59M $(40)M NM DILUTED EARNINGS $0.22 $(0.15) NM (LOSS) PER SHARE NM: Not Meaningful 4
  • 5. FINANCIAL RESULTS Items Included in Reported Earnings First Quarter 2005: $0.40 per share tax benefit as a result of the loss incurred on the global wheat and barley business $(0.68) per share charge associated with certain liabilities in connection with the Solutia bankruptcy 5
  • 6. FINANCIAL RESULTS Fiscal Year 2006 Guidance Reflects Continued Momentum in Seeds and Traits FY2006 TARGETS GUIDANCE $2.35-$2.50 EARNINGS PER SHARE TOWARD THE UPPER END OF (ONGOING) THE RANGE Q2 and Q3 will be the primary drivers for full- FREE CASH FLOW $825M - $900M year EPS performance Q4 will be a loss but not SG&A AS A % OF SALES ~22% RANGE as large as in the prior year R&D AS A % OF SALES ~10% RANGE CAPITAL EXPENDITURES ~$350M 6
  • 7. FINANCIAL RESULTS Brazil Can Accelerate Growth Potential for Roundup Ready Soybeans MARKET UPDATE: ROUNDUP READY SOYBEANS IN BRAZIL CURRENT MARKET CONDITIONS Planted soybean acres down roughly 5 percent for 2006 season VALUE CAPTURE NORTH: PRIMARY New seed sales at mid to upper AREA FOR SALE OF end of 4 – 5M acre range 40 NEW SEED NEW ROUNDUP READY MILLION SALES Value: ~$9/acre retail value SOYBEAN SEED PLANTED shared significantly with VARIETIES BUT SAVED SOYBEAN partners SEED VARIETIES EXIST ACRES Saved seed estimated at ~15M acres SAVED SEED Value: ~$4.50/acre retail value SOUTH: PRIMARY AREA shared significantly with FOR SAVED ROUNDUP partners READY SEED VARIETIES EARNINGS BUT NEW ROUNDUP READY SEED SALES EXIST 10 MILLION Expected 5-10 cents per share contribution for PLANTED FY2006 SOYBEAN ACRES Revenue recognized primarily in Q3 and Q4 7
  • 8. FINANCIAL RESULTS Success in Variable-Based Pricing in Cotton Is Bellwether for Zone-Based Royalties in Corn STEP 1 Driving Trait Penetration in Marginal to Modest COTTON EXAMPLE Insect-Infestation Zones Differential pricing allowed 51% U.S. BOLLGARD TRAIT ACRES Monsanto to earn an acre that 3 .5 penetrated MARGINAL – TO – MODEST INFESTATION ZONES ACRES (MILLIONS) otherwise would not have used 3 Bollgard technology, driving 2 .5 trait penetration on marginally- 2 to modestly-infested acres 11% 1 .5 STEP 2 penetrated 1 Experience shows the farmer 0 .5 recognizes the value and 0 convenience of the trait 1998 2005 package and embraces more value-added technology, largely Increasing Monsanto’s Value per acre in Marginal COTTON EXAMPLE through stacked traits to Modest Insect-Infestation Zones STEP 3 5.6 X GP RETAIL PRICE (INDEXED 1998 = 1) WEIGHTED AVERAGE PER ACRE FROM 1998 6 2 .0 0 1 .7 5 Because of the increased 5 (INDEXED 1998 = 1) 1 .5 0 penetration and movement GROSS PROFIT 4 1 .2 5 toward stacked-traits, the total 3 1 .0 0 value per acre captured by 0 .7 5 Monsanto increases 2 0 .5 0 With more trait acres and more 1 0 .2 5 value generated per acre, 0 0 .0 0 overall gross profit increases 1998 2005 AVERAGE PER ACRE RETAIL PRICE 8
  • 9. Reconciliation of Non-GAAP Financial Measures Reconciliation of Free Cash Flow Fiscal Year Three Months Three Months 2006 Ended Ended $ Millions Target Nov. 30, 2005 Nov. 30, 2004 Net Cash Provided by Operations $1,300 - $1,375 $773 $769 Net Cash Provided (Required) by Investing Activities $(475) $(135) $1 $770 Free Cash Flow $825 - $900 $638 $(254) Net Cash Provided (Required) by Financing Activities N/A $(157) $516 Net Increase in Cash and Cash Equivalents N/A $481 Reconciliation of Non-GAAP EPS Fiscal Year Three Months Three Months 2006 Ended Ended $ per share Target Nov. 30, 2005 Nov. 30, 2004 Diluted Earnings (Loss) per Share $2.35 - $2.50 $0.22 $(0.15) Solutia-Related Charge — $0.68 — Tax Benefit on Loss from European Wheat and Barley Business $(0.40) — — $2.35 - $2.50 $ 0.22 $ 0.13 Diluted Earnings per Share from Ongoing Business 9