THIRD-QUARTER 2015 FINANCIAL RESULTS & MONSANTO S LONG-TERM GROWTH STRATEGY JUNE 24, 2015

Transcription

1 THIRD-QUARTER 2015 FINANCIAL RESULTS & MONSANTO S LONG-TERM GROWTH STRATEGY JUNE 24, 2015

2 Forward-Looking Statements Cautionary Statements Regarding Forward-Looking Information: Certain statements contained in this presentation are "forward-looking statements," such as statements concerning the anticipated financial results, current and future product performance, regulatory approvals, business and financial plans of the company and the potential combined business of the company and Syngenta AG, including the expected benefits of a potential combination as well as whether a potential combination will be entered into or completed, 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 and the previously-announced SEC investigation; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting the company`s manufacturing; the accuracy of the company`s estimates related to distribution inventory levels; the recent increases in and expected higher levels of indebtedness; 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; the possibility that a potential transaction involving Syngenta will not be entered into or will be pursued on different terms and conditions, failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to a possible transaction, failure to realize the expected benefits thereof, or the impact of changes in business, financial, market, legal or other conditions; 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 owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other trademarks are the property of their respective owners. Other Information This document does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer, to purchase or subscribe for any ordinary shares in Syngenta AG, or Syngenta ADSs, nor shall it form the basis of, or be relied on in connection with, any contract there for Monsanto Company 2

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, EBIT and EBITDA on an ongoing basis, EBITDA on an as reported basis, and net debt. 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. EBIT is defined as earnings (loss) before interest and taxes, ongoing EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization and excludes certain after-tax items that we do not consider part of ongoing operations, as defined in the reconciliation, and as reported EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization. Earnings (loss) is intended to mean net income (loss) attributable to Monsanto Company as presented in the Statements of Consolidated Operations under GAAP. Net debt is defined as the sum of both short-term debt and long-term debt, less cash and cash equivalents. Our presentation of non-gaap financial measures is intended to supplement investors understanding of our operating performance, not replace net income (loss) attributable to Monsanto Company, 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. 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 Financial Results Fiscal 2015 Third Quarter and Year to Date FISCAL THIRD QUARTER FISCAL FIRST NINE MONTHS CHANGE CHANGE NET SALES $4,579M $4,250M 8% $12,646M $13,225M -4% GROSS PROFIT $2,736M $2,331M 17% $7,186M $7,341M -2% SG&A EXPENSE $718M $655M 10% $1,945M $1,869M 4% R&D EXPENSE $374M $427M -12% $1,158M $1,240M -7% NET INCOME ATTRIBUTABLE TO MONSANTO COMPANY $1,141M $858M 33% $2,809M $2,896M -3% DILUTED EPS AS-REPORTED $2.39 $ % $5.80 $5.45 6% DILUTED EPS ONGOING BASIS $2.39 $ % $5.75 $5.43 6% FREE CASH FLOW ($789M) $(1,363M) 42% 4

5 Delivering Growth in FY15 Innovation, Balanced Portfolio and Financial Discipline Enable Growth Against Difficult Macro Environment $6.00 DOUBLE-DIGIT GROWTH IN FY15: ONGOING EPS FY2010-FY2015F DOUBLE DIGIT GROWTH Q3 HIGHLIGHTS Strong third quarter performance reinforces confidence in full year guidance ONGOING EPS $5.00 $4.00 $3.00 $2.00 $1.00 $2.39 $2.96 $3.70 $4.56 $5.23 Seeds and Genomics: Strong Q3 performance and shift in U.S. Channel business drives margin improvement and growth Ag Productivity: Scotts Miracle Gro Agreement provides $274M gross profit benefit, more than offsetting Roundup price and volume softness $- ONGOING EPS FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 FY2013 FY2013 FY2014 FY2014 FY2015F FY2015 $2.39 $2.96 $3.70 $4.56 $5.23 FREE CASH FLOW $564M $1,839M $2,017M $1,963M $959M LOW END OF $ $6.00 LOW END OF $2.0 - $2.2B Disciplined operating expense management with expenses essentially flat, effectively absorbing inflationary increase and new platform spend Significant share count reduction with successful completion of $6B accelerated share repurchase 5

6 Innovation Unlocks Solutions Demand for Food Requires Stewardship of Every Acre Innovation Provides Precise Integrated Solutions FEEDING THE WORLD Projected population of >9 billion by 2050; a 35% increase Rising incomes drive higher protein consumption and demand for corn and soybeans; cereals remain a large portion of daily caloric intake Globalization trends create desire for diversity in diets requiring productivity in developing markets to accelerate LIMITED RESOURCES Estimated ~3.5 billion acres of arable land globally Today, there is 1/2 acre of arable land per person, declining to 1/3 of an acre per person by 2050 Committed to use 1/3 fewer key resources than in 2000 by 2030 ~70% of all freshwater used in Ag; Commitment to increase irrigated water use efficiency in our own operations To preserve soil nutrients, focused on reduced tillage, use of cover crops and applying plant nutrients differently INNOVATIVE SOLUTIONS Commitment to help farmers double yields by 2030 from 2000 levels for corn, soybeans, cotton and canola CURRENT YIELD PLATFORMS CROP PROTECTION EMERGING YIELD PLATFORMS Cereals and rice underserved by technology today Innovation to increase the yield in every seed and better protect that yield to harvest is only sustainable solution to meet demand Current seed and crop protection chemistry solutions must be enhanced by new solutions and optimized by precision agriculture BIOTECHNOLOGY BREEDING INTEGRATED YIELD PIPELINE MICROBIALS 6 6

7 Strategic Rationale Strategic Pillars of Seed and Digital Ag Enable Natural Extension to Crop Protection to Unlock New Growth Scale and Diversity to Meet Needs of Growers Globally SEED TECHNOLOGY BREEDING & BIOTECHNOLOGY Industry-leading breeding engine drives key commercial advantage globally Industry-leading insectand-weed-control platforms Seed is the Most Critical Decision Influences key decisions across a grower s operation INTEGRATED YIELD SOLUTIONS CROP PROTECTION CHEMISTRY SOLUTIONS Industry-leading crop protection portfolio with deepest pipeline for new solutions both foliar and seed treatments Crop Protection is Critical Component of Integrated Solution Protects Against Key Yield Limiters BIODIRECT New opportunities for disease, insect and weed control MICROBIALS Microbial solutions as next major new technology solution DIGITAL AGRICULTURE Integrating platform for Ag on 1B acre opportunity Digital Agriculture is the Integrator Provide insights and enable more precise application of inputs CREATES WORLD S LEADING PURE PLAY INTEGRATED AGRICULTURE COMPANY Provides More Combinations and a More Fully Integrated Menu of Offerings to Growers Globally 7

8 Strategic Rationale Unique Combination Would Create Significant Strategic and Financial Value POWER OF COMBINATION: PIPELINE INNOVATION, SCALE & UNLOCKING NEW SYNERGIES INNOVATION SCALE INTEGRATED SOLUTIONS VALUE CREATION Step Change in Scope & Speed of Innovation Running R&D pipelines across all major technology-driven inputs in parallel, for the broadest, deepest, most integrated R&D engine in the industry Driving innovation across the space, at an even faster pace, creating more solutions more efficiently Stronger Global Presence Unlocking Scale & Reach Combination would provide scale in under-served emerging markets and sustainable intensification in developed markets, offering broader spectrum of products for growers Expand ability to deliver solutions into crops our core seed business does not reach today Immediate & Long-term Revenue Growth Opportunities Unmatched ability to provide leading science-based recommendations of integrated seed and crop protection solutions allowing us to more fully participate in value creation Integration of crop protection portfolio with the Climate platform would unlock a smarter, more precise approach to agriculture longer-term Combination Would Deliver Significant Value Significant cost synergies and growth opportunities would create value for shareowners of both companies Attractive financial profile with a respectable return on invested capital and responsible capital structure 8

9 Confidence in Long-Term Growth With Strong Core Business and Expanding Drivers, Target to More Than Double FY14 Ongoing EPS By FY19 5-YEAR GROWTH TARGET Strong Global Portfolio, Financial Discipline and Capital Structure Reinforces Confidence in Five Year Plan to Deliver More than Double 2014 on-going EPS by 2019 ONGOING EPS FY2010-FY2019F LONG-TERM GROWTH: FY2014-FY2019F MONSANTO S GROWTH PROFILE 1. Strong foundation and opportunity set for gross profit growth across core and new platforms 2. Continued financial discipline: Developing plans to reduce operating spend potentially in the range of $300- $500M over two years via process and portfolio optimization programs ONGOING EPS $10.00 $8.00 $6.00 $4.00 $2.00 $2.39 FY2010-FY2014 During first half of decade Monsanto delivered strong midteens-plus ongoing EPS CAGR growth $5.23 Monsanto growth strategy provides opportunity to more than double ongoing EPS over 5- year period 2X 3. Strong cash generation and capital structure compound growth, provide expected financial flexibility while returning excess capital to shareowners $0.00 FY2010 FY2014 FY2019F 9

10 Global Corn Performance Demand for High Performing Technologies Reinforcing Confidence in Long Term Outlook FY2015 GLOBAL CORN REGIONS PERFORMANCE IN KEY AREAS Q3 PERFORMANCE UPDATE GLOBAL HIGHLIGHTS 1 U.S. Position: #1 Share: Mid-30 s% Reduced Refuge Family maintains same % of portfolio; Expected growth in Genuity DroughtGard Hybrids 2 Brazil Position: #1 Share: >40% More than 2 point share growth in branded corn share to date; Introduced first rootworm trait with launch of VT3PRO 3 LAS Position: #1 Share: >50% Maintaining strong share position; Triples continue to be the trait of choice Global corn performance advantage enables expected positive full year germplasm price mix, exclusive of currency effects, as growers continue to seek the newest hybrids On track to hold or grow our branded share in every major market, in the face of declining acres 4 5 Eastern Europe Position: #1 Share: >20% Western Europe Position: #2 Share: Mid-teens Strength of our existing genetics provides yield advantage similar to the U.S.; Making investments to accelerate yield gains Launched several new silage hybrids in Western Europe. 10

11 Intacta RR2 PRO Soybeans Single Largest Incremental Growth Driver Targeting 100 Million Acre Opportunity ACRES (IN MILLIONS) FASTEST RAMP OF ANY SOYBEAN TRAIT Strong performance and broad licensing drove penetration to 5 times Year 1 launch of 3M acres More than twice the level of U.S. Genuity Roundup Ready 2 Yield Soybeans in Year INTACTA RR2 PRO U.S. Genuity Roundup Ready 2 Yield Soybeans Intacta RR2 PRO Soybeans GENETIC DIVERSITY DRIVES ADOPTION Years 3 & 4 of new technologies typically represent largest step up in penetration 17 30M ACRE TARGET Year TRAIT PENETRATION STARTING WITH PRODUCT LAUNCH KEY MILESTONES Intacta RR2 PRO Soybeans penetrated ~15M acres in FY15, five times our record year one launch Expanded production of varieties for 2016 sales to >150 varieties in Brazil alone In Northern Argentina, ~70% of growers chose to pay upfront Technology licensed to germplasm providers with >90% share in South America Now expect ~30M acres across South America for FY16 OUTLOOK: 2 ND GENERATION INSECT PROTECTION (PHASE 4) TARGET MARKET >100M ACRES Multiple modes-of-action designed to enhance durability and expanded spectrum including armyworm and podworm Full Canadian approval enabled China regulatory import submission 11

12 Roundup Ready Xtend Crop System Integrated Soybean Agronomic System Setting Up the Next Wave of Growth ROUNDUP READY XTEND CROP SYSTEM TRIALS HUXLEY, IA 2014 CURRENT STATUS MARKET OPPORTUNITY: Targeting 200M ACRES N. AND S. AMERICA SOY ACRES COMMERCIAL LICENSES: TARGETING SEED COMPANIES WITH >90% OF U.S. SOYBEAN ACRES REGULATORY STATUS: NEW ON TRACK FOR 2016 LAUNCH 1 EU IMPORT APPROVAL RECEIVED UNTREATED CONTROL ROUNDUP READY XTEND CROP SYSTEM AND RR PLUS SYSTEM LAUNCH PLANS: EXPECT >3M ACRE LAUNCH WITH >60 VARIETIES COVERING ALL MATURITY GROUPS THREE SOURCES OF VALUE IN ROUNDUP READY XTEND CROP SYSTEM Innovative Traits in Leading Germplasm Enhanced Chemistry Options Greater Flexibility, Weed Control and Yield Potential 1. USDA deregulation received. Awaiting EPA approval for in-crop use. 12

13 Bollgard II XtendFlex Cotton Roundup Ready XTEND Crop System Update 2014 GROUND BREAKERS TRIALS Gordon, AL SYSTEM BENEFITS Bollgard II XtendFlex Cotton is the industry s first 3-way stack of herbicide tolerant technologies in cotton, including Bollgard II with Roundup Ready FLEX cotton stacked with dicamba 1 -and-glufosinate-tolerant cotton; designed to be the most effective weed management system available Glyphosate application window Glufosinate application window Dicamba 1 application window Bollgard II Roundup Ready FLEX System Weed Management Program: PRE-PLANT:Treflan(1.5pt) + Reflex(12 oz) POST: Roundup PowerMax plus Warrant at 4-5 nodes Bollgard II XtendFlex Variety Weed Management Program: PRE-PLANT: Treflan (1.5pt) + Reflex (12 oz) lbs dicamba 1 POST : 48 ounce application of dicamba 1 and glyphosate premix UPDATE Limited introduction for 2015 season now estimated to be on more than 750,000 acres, above target of 500,000 acres We are in a sold-out position and Deltapine expected to be the #1 planted cotton brand this season due to high demand for new herbicide tools and new varieties Glyphosate and glufosinate approved for in-crop use; in-crop use of dicamba pending regulatory approval $6/acre price premium; fully rebated in 2015 as an introductory XtendFlex Chemistry discount Five Deltapine varieties available in 2015, in maturities that fit across the entire upland cotton belt Eight new varieties being evaluated for 2016, expecting to bring even higher yield and better fiber quality 1. Pending final regulatory approvals. In-crop use of Dicamba pending regulatory approvals; not authorized for in-crop use in

14 The Climate Corporation Platform Significant Commercial Progress Across Key FY2015 Priorities FY2015 PRIORITIES ❶ STEP UP INVESTMENT TO BUILD ON HEAD START ❷ CULTIVATE ACTIVE ENROLLMENT TO BUILD PLATFORM COMMERCIAL MILESTONES ❶ INVESTMENT MILESTONES: Continued investment in new platform to enhance modeling, insights, capabilities and data connectivity Successful 640 Labs acquisition to improve connectivity and ease of data transfer Increase active acres 1 by 50% +50% ❷ ENROLLMENT MILESTONES: Registered CLIMATE Platform acres now exceed 75M ACRES Enrollment and usage trends put us on track to meet our active usage target of 45M acres ❸ BUILD RUNWAY FOR PREMIUM OFFERING Targeting to double acres of premium offerings in FY15, including Climate PRO and FieldScripts offerings Long-term and operating agreements with key partners enable broad distribution ❸ PREMIUM OFFERING MILESTONES: Launched Enhanced Climate Pro Offerings NITROGEN FIELD HEALTH Orders for premium offerings now exceed 5M ACRES Continued progress developing partnerships across retail, distribution, and equipment companies. 1. Active acres are defined as the acre base by a Climate BASIC those who use the platform weekly. 14

15 Preliminary Investment in Dicamba Plant To Secure Supply and Support Grower Accessibility to an Affordable System ❶ GROWTH DRIVER: Roundup Ready Xtend holds significant broad acre opportunity ❷ OPPORTUNITY: Current Dicamba capacity is not sufficient to meet future needs driven by Roundup Ready Xtend HIGHLIGHT: MARKET OPPORTUNITY ACROSS THE AMERICAS CURRENT MARKET PRODUCTION CAPACITY FUTURE PRODUCITON CAPACITY NEEDS >200M ACRES ~40M ACRES Current Production Capacity Serves ~ 40M Acres Being used to meet existing market needs to control a wide spectrum of broadleaf weeds Significant Expansion Opportunity of >200M Acres Roundup Ready Xtend Crop System creates capacity opportunity for >200M acres for soybeans and cotton alone With practical fit on more than 200M acres, the Roundup Ready Xtend crop system holds potential as largest soybean trait platform since Roundup Ready soybeans 1. Monsanto Internal Estimates. ❸ INVESTMENT: Opportunity supports meaningful capital investment in production of Dicamba NEW Potential investment at Luling, Louisiana plant expected to exceed $1B over 3-to-5 years Potential to further diversify Ag Productivity segment and provide a source of growth longer-term, as we more fully participate in the Roundup Ready Xtend platform value creation 15

16 Delivering Growth in FY15 Innovation, Balanced Portfolio and Financial Discipline Enable Growth Against Difficult Macro Environment DOUBLE-DIGIT GROWTH IN FY15: ONGOING EPS FY2010-FY2015F FY2015 FINANCIAL GUIDANCE $6.00 SEEDS & GENOMICS GROSS PROFIT IN LINE WITH PRIOR YEAR ONGOING EPS $5.00 $4.00 $3.00 $2.00 $2.39 $2.96 $3.70 $4.56 $5.23 P&L CATEGORIES AG PRODUCTIVITY OPERATING EXPENSE GROSS PROFIT DOWN SLIGHTLY DOWN 3-5% INCLUSIVE OF NEW PLATFORM INVESTMENT TRENDING TO HIGH END TAX RATE 27% - 28% $1.00 ONGOING EARNINGS PER SHARE $ $6.00 TRENDING TO LOW END $- ONGOING EPS FY2010 FY2011 FY2012 FY2013 FY2014 FY2015F $2.39 $2.96 $3.70 $4.56 $5.23 FREE CASH FLOW $564M $1,839M $2,017M $1,963M $959M LOW END OF $ $6.00 LOW END OF $2.0 - $2.2B NET EFFECT OF SHARE REPURCHASE NET FINANCING EXPENSE SHARE COUNT UP SIGNIFICANTLY OVER PRIOR YEAR TREND LINE EXPECT NET EFFECT OF INTEREST FROM DEBT AND REDUCED SHARE COUNT TO DELIVER 4-5% OF EPS GROWTH 16

17 Cash Generation and Deployment Strong Cash Generation Reflects Earnings Growth, Investment and Shareowner Return FREE CASH FLOW ($ MILLIONS) $2,400 $2,000 $1,600 $1,200 $800 $400 $- TRACKING CASH GENERATION: FREE CASH FLOW FY2012-FY2015F $2,017 $1,963 $959 $2,000 - $2,200 FY2012 FY2013 FY2014 FY2015F FY2012 FY2013 FY2014 FY2015F (0.5) CAPITAL ALLOCATION TARGET 1 (0.4) NET DEBT / EBITDA FY13 FY14 TARGET 1 BALANCED CAPITAL ALLOCATION Capital Expenditures and Technology Investments to enable expanding seed footprint and new platforms NET CASH PROVIDED BY OPERATING $3,051M $2,740M $3,054M $3.0B- $3.3B Share Repurchases continue to reduce share count and emphasize confidence in growth 2 NET CASH REQUIRED BY INVESTING ACTIVITIES ($1,034M) ($777M) ($2,095M) ($1.0B- $1.1B) Dividends with growth that aligns with earnings profile 1. Target is for Monsanto as a stand-alone company. 2. Share repurchase program on hold as the company continues to pursue proposal to combine with Syngenta. 17

18 Monsanto s Growth Road Map Global Portfolio, Financial Discipline & Capital Structure Backs Confidence in Long-Term Growth Global portfolio to drive gross profit growth, continued financial discipline and capital structure commitment provide more growth catalysts allowing us to better withstand the near-term variability and supports our ability to more than double our 2014 ongoing EPS by ❶ GLOBAL GROWTH CATALYSTS DELIVER GROSS PROFIT GROWTH IN THE RANGE OF $4B STRATEGIC SOURCES OF INCREMENTAL GROWTH DECADE OF THE SOYBEAN Blockbuster Soybean Upgrades CORN: CONTINUED EXPANSION OF LARGEST GLOBAL PLATFORM Global Germplasm Upgrades Expanding Footprint & Trait Upgrades COMPLEMENTARY CROP PLATFORM GROWTH Complementary Growth in Seed & Trait Portfolio LICENSING OPPORTUNITIES: Differentiated brands and technologies continue to attract licensing opportunities across portfolio NEW GROWTH PLATFORMS Climate & Biological Platforms to Emerge as Meaningful Gross Profit Contributors ❷ FINANCIAL DISCIPLINE Targeting total operating cost structure Prioritizing resources to fund highest growth opportunities and driving benefits from process and portfolio optimization programs OPERATING COST Developing plans for reduction potentially in the range of $300 to $500 million over two years CAPITAL STRUCTURE Strong cash generation and capital structure expected to compound growth through share repurchases 2, accretive acquisitions, and capital investments Provides financial flexibility to pursue organic and external growth opportunities, while returning excess capital to shareowners CAPITAL STRUCTURE 1 Net Debt to EBITDA target ratio of Target is for Monsanto as a stand-alone company. 2. Share repurchase program on hold as the company continues to pursue proposal to combine with Syngenta. 18

19 Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF FREE CASH FLOW Fiscal Year Fiscal First Nine Months $ Millions 2015 Target Net Cash (Required) Provided by Operating Activities $3,000 - $3,300 $3,054 $2,740 $3,051 $2,814 $1,398 ($30) $371 Net Cash Required by Investing Activities ($1,000 - $1,100) $(2,095) $(777) $(1,034) $(975) $(834) $(759) $(1,734) Free Cash Flow $2,000-$2,200 $959 $1,963 $2,017 $1,839 $564 ($789) $(1,363) Net Cash Required by Financing Activities N/A $(2,259) $(1,485) $(1,165) $(864) $(1,038) $(143) $(420) Cash Assumed From Initial Consolidations of Variable Interest Entities Effect of Exchange Rate Changes on Cash and Cash Equivalents Net (Decrease)/Increase in Cash and Cash Equivalents N/A $ N/A $(1) $(93) $(141) $35 $3 $(256) $13 N/A $(1,301) $385 $711 $1,087 $(471) ($1,188) $(1,770) RECONCILIATION OF ONGOING EPS Fiscal Year Fiscal Third Quarter Fiscal First Nine Months $ Per share 2015 Guidance Diluted Earnings per Share $5.80- $6.05 $5.22 $4.60 $3.79 $2.96 $1.99 $2.39 $1.62 $5.80 $5.45 Restructuring Charges, Net $(0.02) -- $ Income on Discontinued Operations $(0.05) $(0.03) $(0.02) $(0.01) -- $(0.01) $(0.05) $(0.02) Legacy Environmental Settlements -- $ $ Resolution of Legacy Tax Matters $(0.02) $(0.11) Diluted Earnings per Share from Ongoing Business $5.75-$6.00 $5.23 $4.56 $3.70 $2.96 $2.39 $2.39 $1.62 $5.75 $

20 Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF ONGOING EBITDA RECONCILIATION OF EBITDA Fiscal Year Fiscal Year $ Millions $ Millions As Reported Net Income Attributable to Monsanto Company $2,740 $2,482 As Reported Net Income Attributable to Monsanto Company $2,740 $2,482 Restructuring Charges, Net Interest Expense Net $146 $80 Income on Discontinued Operations $(13) $(11) Income Tax Provision 1 $1,066 $898 Legacy Environmental Settlements $20 -- Depreciation and Amortization $691 $615 Resolution of Legacy Tax Matters -- $(11) As Reported EBITDA $4,643 $4,075 Ongoing Net Income $2,747 $2,460 Interest Expense Net $146 $80 RECONCILIATION OF NET DEBT Income Tax Provision $1,088 $926 Fiscal Year End Tax Expense Related to Noncontrolling Interest $(19) $(22) $ Millions Ongoing EBIT $3,962 $3,444 Short-Term Debt $233 $51 Depreciation and Amortization $691 $615 Long-Term Debt $7,528 $2,061 Ongoing EBITDA $4,653 $4,059 Less: Cash and Cash Equivalents $2,367 $3,668 Total Net Debt $5,394 $(1,556) 1. Includes the income tax provision attributable to Monsanto. 20