monsanto 05-31-06

1

TERRY CREWSCHIEF FINANCIAL OFFICER,MONSANTO COMPANY

UBS BEST OF AMERICAS CONFERENCE

May 31, 2006

2

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 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.

3

Non-GAAP Financial Information

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 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.

Trademarks

Roundup, Roundup Ready, Roundup RReady2Yield, Bollgard, Bollgard II, YieldGard, Monsanto Imagine, Vine Design, Asgrow, DEKALB, Monsanto Choice Genetics, Posilac, Processor Preferred, Vistive, Stoneville and Seminis are trademarks owned by Monsanto Company and its wholly-owned subsidiaries and are italicized the first time they appear in this presentation.

All other trademarks are the property of their respective owners.

© 2006 Monsanto Company

4

OVERVIEW

Monsanto Is an Agricultural Company; Our Strategy Is Focused on Helping Farmers Be More Productive

We are an agricultural company. We apply innovation and technology to make farmers more productive and profitable by improving the ways they can produce food, fiber and feed.

4.95.4

6.3

0

1

2

3

4

5

6

7

2003 2004 2005

FOCUS: NET SALES

NE

T S

ALE

S (

$ IN

BIL

LIO

NS

)

2005 SALES BREAKDOWN

SEEDS & GENOMICSAGRICULTURAL PRODUCTIVITY

NORTH AMERICALATIN AMERICAEUROPE-AFRICAASIA PACIFIC

5

Increased Grain Production Will Be Required to Meet the World’s Changing Food Demands

OVERVIEW

UNITED STATES

20102005

81M MT86M MTSOY

297M MT278M MTCORN

ARGENTINA

20102005

40M MT38M MTSOY

27M MT23M MTCORN

BRAZIL

20102005

81M MT60M MTSOY

53M MT44M MTCORN

EUROPE

20102005

3M MT1M MTSOY

55M MT52M MTCORN

ASIA

20102005

23M MT22M MTSOY

132M MT122M MTCORN

NET EXPORTER NET IMPORTER PRODUCTION = CONSUMPTION

Source: U.S.D.A. Foreign Agricultural Service, ABIOVE, Independent Economists & Monsanto Estimates

THE THREE LEADING SOYBEAN EXPORTERS – U.S., BRAZIL, AND ARGENTINA ACCOUNT FOR > 90% OF WORLD TRADEE.U. REMAINS WORLD’S PRINCIPAL DESTINATION FOR SOYBEAN MEALIN BRAZIL, DESPITE INCREASING DOMESTIC FEED USE, INCREASING AREA ALLOWS SHARE GROWTH IN CORN AND SOY

WORLD AREA GRAIN PRODUCTION

CHINA: NET IMPORTS

-10

0

10

20

30

40

2005 2010

CORN SOY

MET

RIC

TO

NS

(M)

6

OVERVIEW

Monsanto’s Seeds And Traits Strategy Is Played Out Across Four Core Crop Franchises

BIOTECH AND

BREEDING R&D

PLATFORM

• YIELDGARD FAMILY• ROUNDUP READY

FAMILY

KEY TRAITS

• DEKALB/ASGROW• ASI, INC.• HOLDEN’S/CORN

STATES

SEED CHANNELS

CORN

• ROUNDUP READYFAMILY

• VISTIVE FAMILY

KEY TRAITS

• DEKALB/ASGROW• ASI, INC.• HOLDEN’S/CORN

STATES

SEED CHANNELS

SOYBEANS

• TOMATOES, MELONS, PEPPERS

KEY CROPS

• SEMINIS AND RELATED BRANDS

SEED CHANNELS

VEGETABLES

• BOLLGARD FAMILY• ROUNDUP READY

FAMILY

KEY TRAITS

• STONEVILLE• COTTON STATES

SEED CHANNELS

COTTON

7

OVERVIEW

Farmers ‘Buy Yield,’ Creating Opportunity for Seeds and Traits Growth

+

=

MONSANTO’S POSITION: CORN

The elegance of a seed and trait approach is that the seed is the package and traits can be ‘stacked’ for maximum effect

In 2005, Monsanto introduced the first triple-stack of biotech traits

FARMERS’ DECISION EQUATION

SEED(GENETIC GAIN)The starting point of all agriculture; farmers need to maximize ‘genetics’ in seed for yield

TECHNOLOGY(% OF GENETIC GAIN PRESERVED)Technology is used to protect and maximize the yield potential of the seed

MAXIMUM YIELD POTENTIAL

The basic equation represents the maximum yield potential multiplied by the percent of that yield preserved by technology

Retail brands

Licensing

Regional brands

‘Above ground’ protection

Weed control system

‘Below ground’ protection

+

=

8

OVERVIEW

Breeding and Biotech Provide Parallel R&D Paths to Commercial Products That Enhance Yield

PHASE II PHASE III PHASE IVPHASE IDISCOVERY LAUNCH

BREEDING and BIOTECHNOLOGY form two R&D pathways

Separate, but parallel, the BREEDING and BIOTECHNOLOGY pathways are linked by shared tools.

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

BIOTECHNOLOGY

GGermplasm

RSEED SOLD TO FARMERS

R&D PHASE:

9

U.S. CORN MARKET SHARE

0%

10%

20%

30%

40%

50%

60%

2001 2002 2003 2004 2005 2006F

2006 FRONTLINE UPDATE:ASGROW AND DEKALB AND ASI BRANDS ARE EXPECTED TO GROW MARKET SHARE IN 2006

43%

54%

69%

2006F20052006F2005

27%60%44%HOLDEN’S/CORN STATESLICENSEES

36%76%66%AMERICAN SEEDS, INC. (ASI)

60%90%87%DEKALB AND ASGROW BRANDS

STACKED PENETRATIONTRAIT PENETRATIONCHANNEL TO MARKET

COMMERCIAL

Breeding and Biotechnology Create Enough High-Performing Products to Supply Three Channels

10

0%

5%

10%

15%

20%

2001 2002 2003 2004 2005 2006F 2007F 2008F

0%

1%

2%

3%

4%

5%

6%

Corn Market Share Gains Still To Fully Reflect Power of Molecular Breeding Application

U.S

. MA

RK

ET

SH

AR

E

PROGRESSION OF BREEDING TECHNOLOGY

IN THE COMMERCIAL

PORTFOLIO

CYCLE 1: INTEGRATION OF GLOBAL GERMPLASM

• ASSEMBLED 36 MAJOR CORN BREEDING PROGRAMS IN 12 COUNTRIES

• FIRST INTRA-COMPANY CROSSES; BY CYCLE 3, >50% OF HYBRIDS IN THE U.S. PORTFOLIO MADE THROUGH INTRA-COMPANY CROSSES

CYCLE 2:APPLICATION OF MOLECULAR BREEDING TO SELECTION

CYCLE 3: SELECTION POWER OF MOLECULAR BREEDING

• MOLECULAR BREEDING IMPROVES GENETIC POTENTIAL BY 2X VERSUS CONVENTIONAL BREEDING

• BY 2006, FIRST MOLECULAR BREEDING HYBRIDS ENTER COMMERCIAL PORTFOLIO

• PREDICTIVE COMBINATIONS ALLOW MORE EFFICIENT BREEDING

• MOLECULAR BREEDING ACCELERATES TRAIT INTEGRATION BY SHORTENING ‘BACKCROSSING’ CYCLES

MOLECULAR-BREEDING HYBRIDS AS A PERCENT OF BRANDED

UNITS SOLD IN COMMERCIAL CORN PORTFOLIO

DEKALB AND ASGROW U.S. BRAND MARKET SHARE

PE

RC

EN

T O

F BR

AN

DE

D U

NIT

S S

OLD

IN

CO

MM

ER

CIA

L CO

RN

PO

RT

FOLIO

2005 BRANDED U.S. MARKET SHARE: 16%

COMMERCIAL

11

Successful Application of Technology in Corn Opens Opportunities to Replicate Strategy in Other Crops

1Market Position

NORTH AMERICA

2005

34%Market Share

1Market Position

EUROPE-AFRICA

2005

19%Market Share

3Market Position

ASIA-PACIFIC

2005

7%Market Share

1Market Position

SOUTH AMERICA

2005

37%Market Share

SEMINISOPPORTUNITY

Seminis has the largest global vegetable germplasm libraryMolecular breeding tools honed in row crops will be applied to vegetables

COMMERCIAL

Seminis addition to Monsanto opens new business and research opportunities

12

In 2005, approximately 11M U.S. acres were planted with cotton traits, most in first-generation traits

OPPORTUNITY:

In 2006, Roundup ReadyFlex cotton was introduced, allowing for the first second-generation stack with Bollgard II.

Of the 80M acres of U.S. corn, in 2005, approximately 14M included stacked traits

OPPORTUNITY:

Stacked traits will soon overtake the number of single-trait acres

There are 50M acres of soybeans in BrazilOPPORTUNITY:

In 2006, approximately 20-25M acres will be planted to Roundup Ready soybeans

CURRENT STATUS:

EXAMPLE: SECOND-GENERATION U.S. COTTON TRAITS

MULTI-GENERATION

CURRENT STATUS:

EXAMPLE: CORN TRAITS IN THE UNITED STATES

STACKING

CURRENT STATUS:

PENETRATION AND EXPANSION

EXAMPLE: ROUNDUP READY SOYBEANS IN BRAZIL

Existing Biotech Traits Set Up Three Pathways for Mid-Term Growth

COMMERCIAL

13

Penetration: Market Potential for Biotech Traits by 2010 Highlights Continued Growth Opportunity

COMMERCIAL

BIOTECH ACRES PLANTED 2005

REMAINING AVAILABLE ACRES

76% 0% 35% 19% 40% 10%

25-30M50-60M60M6-8M10-15M70MUNITED STATES

36-41M84-96M118-120M28.5-35.8M34.5-44.8M156.2MTOTAL ACRES IN

KEY MARKETS

-4M6M10M11M0.2MAFRICA

CORNCOTTONSOYBEANS

---0.5M-0.8M0.5M-0.8M-AUSTRALIA

5M8M24M--1MEUROPE

-3 – 5M3 – 5M10-15M10-15M-INDIA

1M4M5M--35MARGENTINA

5M15M20M2M3M50MBRAZIL

YIELDGARDROOTWORM

YIELDGARDCORN BORER

ROUNDUP READY CORN 2

BOLLGARD AND

BOLLGARD II

ROUNDUP READYFLEX

ROUNDUP READYKEY MARKETS

14

Stacking: Increasing Demand for Stacked Traits Leads Overall Acreage Gains for Each Individual Corn Trait

COMMERCIAL

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006F

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

1.611.351.211.161.081.06TRAIT INTENSITY2

~5~20~24

1.313.030.6

08.733.6

000U.S. TRIPLE TRAIT ACRES

5.12.21.2U.S. DOUBLE TRAIT ACRES

27.323.817.7U.S. SINGLE TRAIT ACRES

AC

RE

S I

N M

ILLI

ON

S2006 FRONTLINE UPDATE:

“TRAIT INTENSITY” – A

MEASURE OF MARGIN

OPPORTUNITY PER ACRE – WILL

STEP UP CONSIDERABLY

AS THE MARKET MOVES

INCREASINGLY TOWARD TRIPLE-STACKED TRAITS

U.S. CORN ACRES1 (IN MILLIONS)

1 U.S. Corn Acres represent the total number of acres with at least one Monsanto brand trait – representing “absolute” acres2 “Trait Intensity” represents the average number of traits per acre, calculated by comparing the “trait” acres with the number of absolute acres

TR

AIT

INT

EN

IST

Y P

ER

AC

RE

15

COMMERCIAL

Multi-Generation: Monsanto Is Upgrading Our Entire Portfolio to Second- and Third-Generation Traits

BENEFIT: BROADER INSECT CONTROL; BETTER IRM PROPERTIES

BENEFIT: BROADER INSECT CONTROL; BETTER IRM PROPERTIES

BENEFIT: IN-PLANT CONTROL OF THE BOLLWORM

UPGRADE: IMPROVED EFFICIENCY OF STACKING

UPGRADE: NEW MODE OF ACTION FOR INSECT CONTROL

BENEFIT: CONTROL OF CORN ROOTWORM

UPGRADE: SIMPLIFIED WEED CONTROL, GREATER FLEXIBILITY

BENEFIT: NEW WEED CONTROL SYSTEM

UPGRADE: BROADER INSECT CONTROL; BETTER IRM PROPERTIES

BENEFIT: FULL-SEASON CONTROL OF EUROPEAN CORN BORER

UPGRADE: YIELD BENEFIT

UPGRADE: ADDITIONAL MODE OF ACTION


2nd GENERATION3rd GENERATION1st GENERATION

ROUNDUP READY FLEX COTTON (2006)

DICAMBA-TOLERANT COTTON

ROUNDUP READY COTTON

BENEFIT: GREATER FLEXIBILITY; HERBICIDE REPLACEMENT

BENEFIT: ADDITIONAL MODE OF ACTION



BOLLGARD II COTTON (2003)BOLLGARD III COTTONBOLLGARD COTTON

(1996)


2nd GEN YIELDGARD ROOTWORM

YIELDGARDROOTWORM II

YIELDGARD ROOTWORM (2003)

2nd GENERATION1st GENERATION

ROUNDUP READY CORN 2 (2001)

ROUNDUP READY CORN (1998)

2nd GENERATION1st GENERATION

2nd GEN YIELDGARD CORN BORER

YIELDGARD CORN BORER (1997)

COMMERCIAL UPGRADES(Launch Year)

ROUNDUP RREADY2YIELD

SOYBEANSDICAMBA-TOLERANT

SOYBEANSROUNDUP READYSOYBEANS (1996)


PHASE IVPre-Launch

PHASE IIIAdvanced Development

PHASE IIEarly Development

PHASE IProof of Concept

DISCOVERYGene/Trait Identification

CORE TRAIT PLATFORMS(Launch Year)

16

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

U.S. INDIA

10-15M 10-15M

0% 0%

DISCOVERY PHASE IProof of Concept


PHASE IIIAdv. Development

PHASE IVPre-Launch

LAUNCH

Roundup ReadyFlex Cotton

Multi-Generation: Roundup Ready Flex Launch Brings First Double-Stacked Second-Generation Traits to Market

• U.S. pricing at a premium of $6-$11 an acre over the first-generation of Roundup Readycotton

COMMERCIAL

CREATING VALUE

ROUNDUP READY FLEX COTTON

The Roundup ReadyFlex cotton trait will be coupled with our

Stoneville brand and our Cotton States

licensee brands as a showcase of

Monsanto’s cotton technologies

Launch of 2+ million acres in U.S. this season through 10 cottonseed companiesRoundup Ready Flex will only be stacked with Bollgard II at approximately 70 – 80% of mix

Introductory acres planted in Australia; full launch set for 2007

Trait in initial breeding phase in India in preparation for filing for regulatory field trials

AUSTRALIA

0.5-0.8M

0%

17

PIPELINE

Efficient Discovery Program Is in Full Gear, Fueling Pipeline Expansion and Performance

1<510sTHOUSANDSTENS OF THOUSANDSGENES IN TESTING

•REGULATORY SUBMISSION

•SEED BULK-UP•PRE-MARKETING

•TRAIT INTEGRATION•FIELD TESTING•REGULATORY DATA GENERATION

•TRAIT DEVELOPMENT

•PRE-REGULATORY DATA

•LARGE-SCALE TRANSFORMATION

•GENE OPTIMIZATION•CROP TRANSFORMATION

•HIGH-THROUGHPUT SCREENING

•MODEL CROP TESTING

KEY ACTIVITY

90 PERCENT75 PERCENT50 PERCENT25 PERCENT5 PERCENTAVERAGE PROBABILITY OF SUCCESS2

12 to 36 MONTHS12 to 24 MONTHS12 to 24 MONTHS12 to 24 MONTHS24 to 48 MONTHSAVERAGE DURATION1

PHASE IVPre-launch



PHASE IProof Of Concept


MONSANTO DISCOVERY + COLLABORATIVE PARTNERS

KEY INFLECTION POINT:AFTER PHASE II COMMERCIAL SUCCESS GOES TO >50% WITH LEADS ON COMMERCIAL TRACK

1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the time estimated here.2. This is the estimated average probability that the traits will ultimately become commercial products, based on our experience. These probabilities may change over time.

TRAIT INTEGRATION

FIELD TESTING

REGULATORY DATA GENERATIONREGULATORY SUBMISSIONSEED BULK UP

18

Bollgard III

2nd-Gen Drought-tolerant corn

2006 Pipeline AS OF JANUARY 1, 2006

PIPELINE

YieldGard Rootworm II

Dicamba-tolerant soybeans

Omega-3 soybeans

Vistive III Low Lin – Mid Oleic – Low Sat soybeans

Vistive II Low Lin – Mid Oleic soybeans

Improved-protein soybeans

High oil soybeans for processing1

Feed Corn with balanced proteins1

2nd-Gen High-value corn with lysine1

Mavera™ II High-value soybeans1

Mavera™ I High-value soybeans1

Mavera™ High-value corn with lysine1

PHASE IVPre-launch



PHASE IProof Of Concept


Drought-tolerant corn

Insect-protected soybeans

Soybean nematode-resistance

Higher-yielding canola

Roundup RReady2Yield canola

Roundup RReady2Yield soybeans

Higher-yielding soybeans

Nitrogen utilization corn

Higher-yielding corn

Drought-tolerant cotton

Drought-tolerant soybeans

2nd-Gen YieldGard Corn Borer

2nd-Gen YieldGard Rootworm

Dicamba-tolerant cotton

Roundup Ready Flex cotton

FAR

ME

RP

RO

CE

SS

OR

CO

NS

UM

ER

1. These product candidates are in the Renessen pipeline. Renessen is a Monsanto/Cargill joint venture

19

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

U.S. BRAZIL ARGENTINA

80M 30M 6M

0% 0% 0%

DISCOVERY PHASE IProof of Concept


PHASE IIIAdv. Development

PHASE IVPre-Launch

LAUNCH

Farmer Benefits: Multi-Generational Drought-Tolerant Corn Is Advancing Closer to Commercial Reality

RE

SU

LTS

SEGMENTED VALUE OPPORTUNITY

BROAD ACRE WATER USE EFFICIENCY

STATES WITH CONSISTENTDROUGHT STRESS AND IRRIGATION REQUIREMENTS

WITH TRAIT WITHOUT TRAITWITH TRAIT WITHOUT TRAIT

4032 34oC 4032 34oC

Drought tolerance established through plant physiology (performance) over three years of testing

PIPELINE

STATES WITH INCONSISTENTDROUGHT STRESS

20

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

U.S. BRAZIL ARGENTINA

5M 2M 1M

0% 0% 0%

MaveraTM High-Value Corn with Lysine

PIPELINE

Processor Benefits: High-Lysine Is First Biotechnology Quality Trait for Animal Feed Industry

CREATING VALUE

MILESTONES

• Final U.S. regulatory clearance received in February• Initially, high-lysine trait will be offered in stacked

combination with YieldGard Corn Borer, with the opportunity to move to additional combinations with YieldGard Rootworm and Roundup Ready Corn 2

• Final commercial evaluation under an experimental field program in 2006, with limited commercial acreage in 2007

• High-Value Corn with Lysine enhances level of limiting essential amino acids and corn oil content in feed and lowers cost of animal feed ration

MaveraTM High-Value Corn with Lysine

CONCEPT

PROJECT OVERVIEWMonsanto’s joint

venture with Cargill, Renessen, is researching new products with enhanced componentsfor animal feed and processing grain. Today, Renessenis using both biotechnology and breeding to produce corn and soybeans with higher levels of oil, protein, and aminoacids.

21

Consumer Benefits: Vistive Family of Improved Oils Meets Multiple Needs in Food Industry

PIPELINE

IMPROVED SOYBEAN QUALITY FOR LIQUID OILS

OIL FOR FRYING AND SPRAYINGCrackersSnack chips

CONSUMER MARKET

TARGET: LOW LINOLENIC

VISTIVE SOYBEANS2005 LAUNCH

500K ACRES IN US

TARGET: LOW LINOLENIC

VISTIVE RAPESEED2005 LAUNCH40K ACRES IN EUROPE

TARGET: INCREASED OLEIC + LOW LINOLENIC

VISTIVE II LOW LIN –MID OLEIC SOYBEANSPHASE III

TARGET: LOW SAT +INCREASED OLEIC + LOW LINOLENIC

VISTIVE III LOW LIN –MID OLEIC – LOW SAT SOYBEANSPHASE IIVISTIVE

FAMILY

OIL PROFILES ALONG THE THREE-STEP CHANGE IMPROVEMENT

LOW LIN

ZERO SAT + MID OLEIC + LOW LIN

LINOLENIC18:3

LINOLEIC18:2

OLEIC18:1

SATS18:0 / 16:0

MID OLEIC + LOW LIN

STANDARD SOYBEAN

22

Monsanto’s Strategic and Financial Opportunity Lies In The Seed and Trait Business

SUMMARY12

-MO

NT

H R

OLL

ING

GR

OS

S P

RO

FIT

($

IN

MIL

LIO

NS

)

$0

$500

$1,000

$1,500

$2,000

$2,500

Q1 200

3Q2 2

003

Q3 200

3Q4 2

003

Q1 200

4Q2 2

004

Q3 200

4Q4 2

004

Q1 200

5Q2 2

005

Q3 200

5Q4 2

005

Q1 200

6Q2 2

006

FOCUS: 12-MONTH ROLLING GROSS PROFIT BY BUSINESS SEGMENT

SEEDS & GENOMICS SEGMENT

AGRICULTURAL PRODUCTIVITY SEGMENT

KEY INFLECTION POINT:MID-2004, THE ROLLING GROSS PROFIT FOR THE SEEDS & GENOMICS BUSINESS SEGMENT SURPASSES AGRICULTURAL PRODUCTIVITY

23

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2003 2004 2005 2006F

Seeds and Traits Strategy Comes Together to Drive Ongoing EPS Performance

SUMMARY

CORE SEEDS-AND-TRAITS

MILESTONES AND

STRATEGIC DRIVERS

2003-2004: 12% ONGOING EPS GROWTH

• IN 2003, GROSS PROFIT FROM SEEDS AND TRAITS SURPASSES ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES

• BEGINNING OF THE TRANSITION FROM SINGLE TRAITS TO STACKED TRAITS

2004-2005:31% ONGOING EPS GROWTH

2005-2006: 20%+ ONGOING EPS GROWTH

• EXPECTED ONGOING EPS IN 3Q: $1.15-$1.20

• U.S. CORN MARKET SHARE GAINS FOR 5TH STRAIGHT YEAR

• INCREASED PENETRATION OF STACKED CORN TRAITS

• LAUNCH OF ROUNDUP READYFLEX COTTON

• EU APPROVALS UNLOCK U.S. CORN GROWTH

• VALUE-CAPTURE SYSTEM ESTABLISHED IN BRAZIL FOR ROUNDUP READYSOYBEANS

• LAUNCH OF VISTIVE –THE FIRST CONSUMER-ORIENTED TRAIT

$1.42$1.59

$2.08

$2.50 - $2.55

ON

GO

ING

EP

S (

$/S

HA

RE

)

24

Earnings Should Continue to Translate to Free Cash Flow

SUMMARY

CORE SEEDS-AND-TRAITS

MILESTONES AND

STRATEGIC DRIVERS

2003-2004: 2004-2005: 2005-2006:

• ANNOUNCED $800 MILLION, FOUR-YEAR SHARE REPURCHASE PROGRAM IN OCTOBER 2005

• CUMULATIVE INCREASE OF 42 PERCENT IN DIVIDEND SINCE 2002 SPIN-OFF

$646M

$999M

$70M

$825M - $900M

FRE

E C

AS

H F

LOW

($

IN

MIL

LIO

NS

)

$0

$200

$400

$600

$800

$1,000

$1,200

2003 2004 2005 2006F

• ESTABLISHED DISCIPLINED APPROACH TO CASH MANAGEMENT

• REDUCED RECEIVABLES AS A PERCENT OF SALES FROM 47% IN 2003 TO 31% IN 2004

• FREE CASH FLOW REACHED APPROXIMATELY $1 BILLION IN 2004

• INITIATED A $500 MILLION SHARE REPURCHASE IN 2003

• IN 2005, MONSANTO USED ROUGHLY $1.5 BILLION OF CASH FOR ACQUISITIONS, INCLUDING SEMINIS, EMERGENT AND ASI

• COMPLETED $500 MILLION SHARE REPURCHASE PROGRAM

25

SUMMARY

2006 Performance Sets Up Seeds and Traits for Further Acceleration into the Next Decade

FINANCIAL FOCUS

The growth of Monsanto’s core seeds and traits business is sustainable, underpinned by the continued opportunity for the current commercial technology and products

There is substantial opportunity from Monsanto’s R&D pipeline that should be additive to the commercial portfolio

Everything we undertake is done with financial discipline and a commitment to our strategy

$2.35 -$2.50

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2003 2004 2005 2006

$1.42 $1.59

$2.08

ONGOING EPS

2003 2004 2005 2006F

$0

$200

$400

$600

$800

$1,000

$1,200

2003 2004 2005 2006F

$646M

$999M

$70M

$825M-$900M

FREE CASH FLOW

$2.50-$2.55

26

Reconciliation of Non-GAAP Financial Measures

$1.15-$1.20

--

--

--

--

--

--

--

$1.15-$1.20

--

$1.15-$1.20

Third Quarter Fiscal Year

2006 Forecast

$0.96------PCB Litigation Settlement Expense – Net

$0.05------Cumulative Effect of Change in Accounting Principle

$0.26$0.99$0.94$2.50-$2.55Net Income per Share

$1.42

--

$0.06

$0.09

--

--

--

$0.31

12 Months Ended Aug. 31,

2003

--$(0.04)--Income on Discontinued Operations and Related Restructuring

--$(0.39)--Tax Benefit on Loss from European Wheat andBarley Business

--$0.64--Solutia-Related Charge and Tax Benefit

--$0.91--In-Process R&D Write-off Related to the Seminis and Stoneville Acquisitions

$2.08

--

$0.02

$0.94


2005

$1.59$2. 50-$2.55Diluted Earnings per Share from Ongoing Business

$0.24--Impairment of Goodwill

$0.36--Restructuring Charges -- Net

$0.99$2.50-$2.55Diluted Earnings (Loss) per Share Before Effect of Accounting Change


2004


2006Forecast$ per share

Reconciliation of Non-GAAP EPS

Reconciliation of Free Cash Flow

$144

$(502)

$646

$(482)

$1,128

12 Months Ended Aug. 31, 2003


$756$(512)N/ANet Increase (Decrease) in Cash and Cash Equivalents

$(243)$(582)N/ANet Cash Provided (Required) by Financing Activities

$999$70$825 - $900Free Cash Flow

$(262)$(1,667)$(550)Net Cash Required by Investing Activities

$1,261$1,737$1,375-$1,450Net Cash Provided (Required) by Operating Activities



Forecast$ Millions

monsanto 05-31-06

Economy & Finance