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.monsanto 01-04-07b


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.monsanto 01-04-07b

  1. 1. FIRST-QUARTER 2007 FINANCIAL RESULTS Jan. 4, 2007 1
  2. 2. Forward-Looking Statements Certain statements contained in this presentation 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, including Delta and Pine Land Company; 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. Trademarks Trademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. Mavera™ is a trademark of Renessen. All other trademarks are the property of their respective owners. © 2007 Monsanto Company 2
  3. 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. 3
  4. 4. PERFORMANCE SUMMARY First-Quarter Financial Summary First First Change Quarter Quarter 2007 2006 NET SALES $1,539M $1,405M 10% GROSS PROFIT $680M $634M 7% NET INCOME $90M $59M 53% DILUTED EPS ON AS-REPORTED $0.16 $0.11 45% BASIS FREE CASH $533M $638M (17)% FLOW Note: EPS figures reflect the stock split effective July 28, 2006 4
  5. 5. STRATEGIC UPDATE Early Season Orders Signal Strong Start to Achieve 2010 Trait Opportunity 160 2007 FRONTLINE UPDATE: 140 Our national corn TRAIT ACRES IN MILLIONS brands could have 120 more than 35 percent of all seed 100 sales in the form of a triple stack 80 For the first time, 60 we will sell more acres of a triple- 40 stacked hybrid than a corn hybrid 20 with just one trait 0 2005 2006 2007F 2010F U.S. CORN TRAIT ACRES1 (IN MILLIONS) 2010 MARKET 2006 ACTUAL OPPORTUNITY 2005 ACTUAL 2007 FORECAST U.S.YIELDGARD CORN BORER 32.1 32.3 >32 50-60 ACRES U.S. YIELDGARD ROOTWORM 4.1 10 >15 25-30 ACRES U.S. ROUNDUP READY CORN 2 24.8 32.7 >40 60 ACRES 1. Trait acres reflect the total acres planted with each individual trait. In the case of stacked traits, each absolute acre will be reflected by two or more trait acres. 5
  6. 6. Reconciliation of Non-GAAP Financial Measures Reconciliation of Free Cash Flow Fiscal Year Three Months Three Months 2007 Ended Ended $ Millions Target Nov. 30, 2006 Nov. 30, 2005 Net Cash Provided (Required) by Operations $1,375 - $1,450 $600 $773 Net Cash Provided (Required) by Investing Activities (500) (67) (135) $638 Free Cash Flow $875 - $950 $533 (157) Net Cash Provided (Required) by Financing Activities N/A (156) Effect of Exchange Rate Changes on Cash and Cash Equivalents N/A 5 -- $481 Net Increase (Decrease) in Cash and Cash Equivalents N/A $382 6