Bank of America Merrill Lynch Global Agriculture & Chemicals Conference. Pierre Courduroux Monsanto Chief Financial Officer March 2, 2016

Transcription

1 Bank of America Merrill Lynch Global Agriculture & Chemicals Conference Pierre Courduroux Monsanto Chief Financial Officer March 2, 2016

2 Forward-Looking Statements Certain statements contained in this release 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 understanding and acceptance of our biotechnology and other agricultural products; the success of the company s research and development activities; the outcomes of major lawsuits; developments related to foreign currencies and economies; pursuit of acquisitions or other transactions; fluctuations in commodity prices; compliance with regulations affecting our 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 shortterm financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters, accidents, and security breaches, including cybersecurity incidents, 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 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. Trademarks 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. Fiscal Year References to year, or to fiscal year, are on a fiscal year basis and refer to the 12-month period ending August 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, EPS growth on an ongoing basis, EBIT and EBITDA on an ongoing basis, EBITDA on an as reported basis, gross profit on an ongoing basis, operating expenses on an ongoing basis, net income (loss) attributable to Monsanto Company on an ongoing basis, net debt, and adjusted return on capital. 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. Ongoing gross profit, ongoing operating expenses, and ongoing other expense, net, exclude certain pretax items that we do not consider part of ongoing operations, which are identified in the reconciliations. Ongoing net income (loss) attributable to Monsanto Company is defined as net income (loss) attributable to Monsanto Company excluding the cumulative after-tax impact of certain items we do not consider part of ongoing operations. Adjusted return on capital means net income (excluding certain pretax items that we do not consider part of ongoing operations) exclusive of after-tax interest expense, divided by the average of the beginning of year and end of year net capital. 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. 3

4 Bank of America Merrill Lynch Global Agriculture & Chemicals Conference Pierre Courduroux Monsanto Chief Financial Officer March 2, 2016

5 Foundation Established for Rapid Growth FY16 Outlook Considers Current Market Realities with Focus on Continued Strategic Advancement and Operational Discipline ONGOING EPS FOCUS ON DISCIPLINE AND SPEND MANAGEMENT TO SET FOUNDATION FOR FUTURE GROWTH ONGOING EPS FY2010-FY2016F $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- FREE CASH FLOW -$M Q2 OUTLOOK UPDATE $2.39 $2.96 $3.70 $4.56 $5.23 $5.73 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016F $564 $1,839 $2,017 $1,963 $959 $2,089 $4.40-$5.10 $1.4 - $1.6B Expect Q2FY16 ongoing EPS to be in the range of $2.35 to $2.45, compared to $2.90 in the prior year. Decline driven primarily by glyphosate pricing declines in Ag Productivity and the expense related to the devaluation of the Argentine peso. P&L CATEGORIES SHARE COUNT AND NFE FY2016 FINANCIAL GUIDANCE SEEDS & GENOMICS AG PRODUCTIVITY OPERATING EXPENSE OTHER INCOME/EXPENSE RELATIVELY FLAT GROSS PROFIT vs. PY 1 GROSS PROFIT MIGRATING TO THE MID- POINT OF $900M to $1.1B DOWN SLIGHTLY VS. PRIOR YEAR, INCLUSIVE OF NEW PLATFORM INVESTMENT 2 ADDITIONAL EXPENSE OF ~$170M -$180M vs. PRIOR YEAR TAX RATE LOW END OF 25% - 27% ONGOING EARNINGS PER SHARE 3 $ $5.10 NET EFFECT OF SHARE COUNT AND NET FINANCING EXPENSE EXPECT NET EFFECT OF $0.24 to $0.27 OF EPS GROWTH 1. Before estimated restructuring charges of $65M-$75M. 2. Before estimated restructuring charges of ~$450M to ~$500M and environmental and litigation settlements of $5M. 3. Adjustments and ongoing metrics defined and reconciled at the end of this presentation. 5

6 FY16 Sets Foundation for Rapid Growth New Technologies, Financial Discipline and Balanced Capital Allocation Expected to Drive Strong Underlying Growth FY17F: KEY DRIVERS OF ANTICIPATED STRONG ONGOING EPS GROWTH RETURN ON INNOVATION SOYBEANS: Intacta RR2 PRO and Roundup Ready 2 Xtend expansion CORN: Global germplasm refresh and footprint expansion COMPLEMENTARY CROPS: Bollgard II Xtend Flex expansion LICENSING: Existing and pipeline product opportunities ONGOING EPS GROWTH OUTLOOK FY16F-FY19F TARGET AT LEAST A BASELINE MID-TEENS COMPOUND ANNUAL GROWTH RATE IN ONGOING EPS FY16F-FY19F FINANCIAL DISCIPLINE RESTRUCTURING IMPLEMENTATION & COST SAVINGS INITIATIVES BALANCED CAPITAL ALLOCATION FAVORABLE COMPARISONS COGS: Corn production plan normalization and step down in Roundup Ready 2 Xtend launch costs Return on Innovation growth drivers expected to expand Financial discipline and balanced capital allocation commitments continue OTHER INCOME/EXPENSE: Argentina devaluation not expected to repeat 6

7 Innovation & Collaboration Unlock Opportunity in Ag Monsanto Uniquely Positioned to Address Key Global Challenges, Generate Significant Value for Farmer Customers, and Return Value to Shareowners INNOVATION KEY TO MEETING GLOBAL MACRO TRENDS AFFECTING AGRICULTURE DEMAND FOR FOOD Global Population 1 to increase to 8.5 Billion by Middle Class 2 Expected to Increase by 2X to Nearly 5 Billion by CLIMATE CHANGE Agriculture can play a big role in reducing the amount of carbon in our atmosphere CARBON NEUTRAL CROP PRODUCTION IMPROVING AGRICULTURAL PRODUCTIVITY HALTING DEFORESTATION INDUSTRY DYNAMICS Monsanto maintains broadest and deepest pipeline to address key agronomic needs CORN DEMAND (IN BILLION BUSHELS) Demand Trends Remain Robust 3 Actual Forecast Trendline 20 04/05 07/08 10/11 13/14 16/17 19/20 22/23 USING WATER MORE EFFICIENTLY PROMOTING BEST PRACTICES Monsanto takes action to fight climate change with program and efforts focused on several key areas YIELD WEED CONTROL INSECT CONTROL DISEASE & OTHER Partner of choice for collaborations and emerging technologies 1. United Nations 2. OECD & Rubico 3. USDA historical data for Actual and trendline WASDE Feb 2016; future forecast and projections represent Monsanto internal estimates 7

8 Monsanto's Leading R&D Pipeline Extending Leadership With Proven Product Performance and Integrated Pipeline Expected to Deliver Up to $25 Billion in Peak Net Sales DELIVERING VALUE THROUGH INNOVATION 1 2 Expected to deliver up to $25B of peak net sales, with incremental value from new platforms PROVEN PRODUCT PERFORMANCE Yield performance data reinforces our breeding advantage across two of our largest franchises DEKALB and Roundup Ready 2 Yield Platform 3 INDUSTRY LEADING INTEGRATED PIPELINE 3rd straight year of more than 20 advancements with 12 next-generation biotech traits in phase 3 and 4 8 8

9 Intacta RR2 PRO Soybeans First Generation Expected to Rapidly Penetrate 100M Acre Opportunity; Second Generation Already in Phase 4 INTACTA RR2 PRO 2025 TARGET: ~145M Acres of Trait Upgrades ACRES (IN MILLIONS) NEW: FASTEST RAMP OF ANY SOYBEAN TRAIT Strong performance and broad licensing drove penetration to 5 times Year 1 launch of 3M acres 3 INTACTA RR2 PRO: RECORD TECHNOLOGY ADOPTION RATE Intacta RR2 PRO penetration exceeded target; tracking to 35M acres in FY16 15 GENETIC DIVERSITY DRIVES ADOPTION Years 3 & 4 of new technologies typically represent largest step up in penetration ~35M ACRE FORECAST 30 75M ACRE TARGET M ACRES 100 MARKET F 2019F OPPORTUNITY TRAIT PENETRATION STARTING WITH PRODUCT LAUNCH GROWTH PROFILE: Next decade is a period of rapid acceleration with new technology penetration Expect 1st-generation technology to fully penetrate the 100M acre opportunity In process of upgrading to the 2nd-generation technology expected to commercially launch by KEY MILESTONES: Now tracking to 35M acres across South America in FY16 With varieties that fit across Brazil, expanded production for 2017 sales in Argentina to >70 varieties Technology licensed to germplasm providers with >90% share in South America 9

10 NEW: Initiating U.S. Launch of Roundup Ready 2 Xtend 1 Soybeans Upgrade of Industry s Largest Seed Technology Platform Underway China Import Approval Received; Awaiting EPA Approval for In-Crop Use of Dicamba ROUNDUP READY XTEND CROP SYSTEM 2025 TARGET: 200M-250M Acres of Trait Upgrades Across Crops SOURCES OF VALUE IN ROUNDUP READY XTEND CROP SYSTEM Innovative Traits in Leading Germplasm Enhanced Chemistry Options Greater Flexibility, Weed Control and Yield Potential Operational Milestone: Delivered First Bags of Roundup Ready 2 Xtend Soybean Seeds GROWTH PROFILE: Next decade is a period of rapid acceleration with new technology penetration Expect this next-gen weed control technology to penetrate 200M- 250M acres across soy, cotton and corn acres by 2025 LAUNCH PLANS IN PROGRESS Targeting 3M acres in the U.S. in FY16; expect 2/3 of U.S. ~40M soybean acres penetrated ACRES by FY19 >70 products across all relative maturity zones; 6x products in Roundup Ready 2 Yield launch Targeting seed companies with > 90% U.S. soybean seed share Awaiting EPA approval of dicamba for in-crop use with Roundup Ready 2 Xtend soybeans and final EU import approval for the stack PRICING $5-10/acre premium vs. Roundup Ready 2 Yield varieties; offering introductory $5/unit price reduction DICAMBA Initial supply agreements secured to cover first 3-5 years postlaunch; continue engineering and scoping work for potential plant investment 1. USDA deregulation received. Awaiting EPA approval for in-crop use of dicamba. 10

11 Bollgard II XtendFlex Cotton Next Generation Weed Control System for Cotton Growers, Expected to Penetrate 1.5M Acres in FY16, Double FY15 s Limited Introduction ROUNDUP READY XTEND CROP SYSTEM 2025 TARGET: 200M-250M Acres of Trait Upgrades Across Crops BOLLGARD II XTENDFLEX COTTON XTEND CROP SYSTEM TRIALS JACKSON, TN 2015 GROWTH PROFILE: UNTREATED CONTROL UNTREATED CONTROL Next decade is a period of rapid acceleration with new technology penetration Expect this next-gen weed control technology to penetrate 200M-250M acres across soy, cotton and corn acres KEY MILESTONES: Excellent performance on yield and fiber quality for the five Deltapine varieties available in 2015, in maturities with a fit across the entire cotton belt Four new varieties launched in 2016 that once again bring improved yield and fiber quality Priced at a $6/acre price premium; fully discounted again in FY16 as we continue to await the EPA label for in-crop use of dicamba High grower demand; expect to double penetration to more than 1.5M acres in ROUNDUP READY XTEND CROP SYSTEM AND ROUNDUP READY PLUS SYSTEM 1. USDA deregulation received. Awaiting EPA approval for in-crop use. 11

12 Durable Global Corn Portfolio Next Generation Hybrids, Global Share Growth and Licensing Opportunities Drive Expected Growth in Largest Global Business GLOBAL SEED & TRAIT UPGRADES 2025 TARGET: ~240M Acres Global Seed & Trait Upgrades GLOBAL BRANDED CORN FOOTPRINT FY15 PERFORMANCE DEKALB CORN GERMPLASM PORTFOLIO MIX LIFT ILLUSTRATION CORN LICENSING OPPORTUNITIES U.S. Position: #1 Share: Mid-30 s% Brazil Position: #1 Share: >40% Argentina Position: #1 Share: >50% Eastern Europe Position: #1 Share: >20% Western Europe Position: #2 Share: Mid-teens RELATIVE MIX IN DEKALB PORTFOLIO GLOBAL RANGES MATURE HYBRIDS 6+ YEARS IN PORTFOLIO LOWEST VALUE PROVEN HYBRIDS 4-5 YEARS IN PORTFOLIO CORE HYBRIDS 2-3 YEARS IN PORTFOLIO FIRST-YEAR HYBRIDS NEW INTRODUCTIONS HIGHEST VALUE 10-20% 25-40% 25-40% 10-20% FY16 TARGET: Flat full year germplasm price mix in local currency and global share gains from holding or growing our share in every major region Germplasm SmartStax PRO Climate Advisors Trecepta 1 Next Generation Biotech Weed Control NEMASTRIKE nematacide Acceleron Enhanced Fungicides 1 Enhanced Corn Inoculant 1. Licensing opportunity limited to Corn States licensees and our brands. 12

13 The Digital Ag Platform Near-Term Strategy and Expansion Plans Unlock Path to Broad Acre Platform Adoption 2015 MILESTONES 2016 OPERATIONAL PRIORITIES Milestones firmly establish Climate Fieldview as THE Digital Ag Platform >75 million acres enrolled on the platform >55 million active acres 1 >5 million subscribed to our Climate PRO premium offering Nitrogen Field Health Climate Fieldview Platform Launched as Tiered Offering to Drive Adoption, Connect Cabs and Deliver Insights 1 PAID SERVICES: Exceed 12 Million Acres of Paid Services in US 2 PLATFORM ADOPTION 2 : Exceed 90 Million Acres Across Climate Fieldview Platform 3 GEOGRAPHIC EXPANSION: In cab visualization Data Connectivity Climate Fieldview Drive Field-level weather Notifications Scouting N-Advisor Field Health Script Creator NEW: Expanding in-field beta testing in Brazil for 2017; first product launch expected in the next two years 1. Active defined as weekly in-season use. 2. Platform includes Climate Fieldview Prime, PRO and PLUS acres 13

14 Restructuring & Cost Savings Initiatives Expected to Yield Annual Savings of $500 Million RESTRUCTURING & COST SAVINGS INITIATIVES: Create Four Strategic Commercial Hubs Create Global R&D Center of Excellence Enable greater customer value while driving excellence and cost efficiency North America South America Europe and Middle East Asia and Africa Modernize and optimize IT and supply chain networks Accelerate use of data and analytics to dramatically improve our field testing and product development cycle Unlock synergies across platforms and drive greater scale and speed to bolster rate of discovery and delivery of new innovations while driving efficiencies Rendering of Monsanto s future R&D Center of Excellence at its Chesterfield Village research site in St. Louis Streamline and re-prioritize some of our commercial, enabling, supply chain and R&D efforts Includes the exit of the sugarcane business and streamlining of the Yield & Stress program approach Plans expected to drive further optimization of operating leverage and COGS 14

15 Adjusted Return On Capital 20%+ for Past 3 Years Innovation Value Capture and Financial Discipline Drive Industry-Leading Margins, Strong Cash Generation and >20% Adjusted ROC ONGOING EBITDA MARGINS 1 FISCAL YEARS OPERATING CASH FLOWS FISCAL YEARS ONGOING EBITDA AS % OF NET SALES 35% 30% 25% 20% 15% 10% 5% 0% 27% 29% 32% FY13 FY14 FY15 NET CASH PROVIDED BY OPERATING ACTIVITIES ($ MILLIONS) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $2,740 18% 19% $3,054 $3,108 21% FY13 FY14 FY15 25% 20% 15% 10% 5% 0% NET CASH PROVIDED BY OPERATING ACTIVITIES AS % OF NET SALES ADJUSTED RETURN ON CAPITAL 1 25% 20% 15% 10% 5% 0% ADJUSTED RETURN ON CAPITAL 1 FISCAL YEARS % 23% 23% FY13 FY14 FY15 FORWARD TREND Corn and soybean gross profit margin expansion and $500M of targeted annual restructuring savings by FY18 expected to lead to continued strong operating leverage and industry-leading ongoing EBITDA margins Expect to manage receivables and inventories within similar percent of net sales as past 3 years to effectively convert earnings to operating cash 1. Components of calculation and related reconciliations provided in the non-gaap financial measures reconciliations at the end of the presentation. 15

16 Capital Structure Enhances Cash Deployment Delivering on Capital Structure Targets Enabling Significant Step Up in Cash Deployment Driving Growth and Shareowner Return $ BILLIONS $14 $12 $10 $8 $6 $4 $2 $0 CASH DEPLOYMENT: BEFORE & AFTER NEW CAPITAL STRUCTURE ROLLOUT IN JUNE 2014 FY13-Q3FY14 (21 MONTHS) $6.5 Billion 1.5x Net Debt to Ongoing EBITDA Leverage Target Rollout M&A - Technology CAPEX Dividends Share Repurchases Q4FY14-Q1FY16 (18 MONTHS) >$13 Billion >$11B returned through share repurchases and dividends since June 2014 CAPITAL ALLOCATED TO GROWTH INVESTMENTS AND SHAREOWNER RETURNS (0.5) CAPITAL STRUCTURE TARGET 1 NET DEBT / ONGOING EBITDA (0.4) FY13 FY14 FY15 TARGET BALANCED CAPITAL ALLOCATION Capital Expenditures and Technology Investments to enable expanding seed footprint and new platforms Share Repurchases continue to reduce share count and emphasize confidence in growth Dividends with growth that aligns with earnings profile NEW: Completed $3B accelerated share buyback program in late January, marking another milestone in our balanced capital allocation commitment 1. Components of calculation provided on slide

17 Innovation & Collaboration Unlock Opportunity in Ag Monsanto Uniquely Positioned to Address Key Global Challenges, Generate Significant Value for Farmer Customers, and Return Value to Shareowners INNOVATION KEY TO MEETING GLOBAL MACRO TRENDS AFFECTING AGRICULTURE DEMAND FOR FOOD Global Population 1 to increase to 8.5 Billion by Middle Class 2 Expected to Increase by 2X to Nearly 5 Billion by CLIMATE CHANGE Agriculture can play a big role in reducing the amount of carbon in our atmosphere CARBON NEUTRAL CROP PRODUCTION IMPROVING AGRICULTURAL PRODUCTIVITY HALTING DEFORESTATION INDUSTRY DYNAMICS Monsanto maintains broadest and deepest pipeline to address key agronomic needs CORN DEMAND (IN BILLION BUSHELS) Demand Trends Remain Robust 3 Actual Forecast Trendline 20 04/05 07/08 10/11 13/14 16/17 19/20 22/23 USING WATER MORE EFFICIENTLY PROMOTING BEST PRACTICES Monsanto takes action to fight climate change with program and efforts focused on several key areas YIELD WEED CONTROL INSECT CONTROL DISEASE & OTHER Partner of choice for collaborations and emerging technologies 1. United Nations 2. OECD & Rubico 3. USDA historical data for Actual and trendline WASDE Feb 2016; future forecast and projections represent Monsanto internal estimates 17

18 Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF FREE CASH FLOW Fiscal Year $ Millions 2016 Guidance Net Cash Provided by Operating Activities $2,200-$2,600 $3,108 $3,054 $2,740 $3,051 $2,814 $1,398 Net Cash Required by Investing Activities ($800-$1,000) $(1,019) $(2,095) $(777) $(1,034) $(975) $(834) Free Cash Flow $1,400-$1,600 $2,089 $959 $1,963 $2,017 $1,839 $564 Net Cash Required by Financing Activities N/A $(430) $(2,259) $(1,485) $(1,165) $(864) $(1,038) Cash Assumed from Initial Consolidation of Variable Interest Entities N/A $77 -- Effect of Exchange Rate Changes on Cash and Cash Equivalents Net Increase/(Decrease) in Cash and Cash Equivalents N/A $(325) $(1) $(93) $(141) $35 $3 N/A $1,334 $(1,301) $385 $711 $1,087 $(471) $ Per share 2016 Guidance Fiscal Year Q2 FY16 Guidance Q2 FY Diluted Earnings per Share $3.42-$4.29 $2.15-$2.35 $2.92 $4.81 $5.22 $4.60 $3.79 $2.96 $1.99 Restructuring Charges, Net $0.82-$0.99 $0.10-$ $ $(0.02) -- $0.41 Income on Discontinued Operations Environmental & Litigation Settlements ($0.02) -- $(0.02) $(0.06) $(0.03) $(0.02) $(0.01) -- $(0.01) $ $0.11 $ $ Resolution of Tax Matters $(0.02) $(0.11) SEC Settlement $ Diluted Earnings per Share from Ongoing Business RECONCILIATION OF ONGOING EPS $4.40-$5.10 $2.35-$2.45 $2.90 $5.73 $5.23 $4.56 $3.70 $2.96 $2.39 Note: See Slide 21 for discussion of reconciling items. No separate reconciliation of ongoing and as-reported EPS CAGR for the period from the end of fiscal year 2016 to fiscal year 2019 is included because a reconciliation of ongoing and as-reported EPS guidance for fiscal year 2016 is provided above and no reconciling items are expected in fiscal year

19 Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF ONGOING EBITDA As Reported Net Income Attributable to Monsanto Company Fiscal Year $ Millions $2,314 $2,740 $2,482 Restructuring Charges, Net $ Income on Discontinued Operations $(28) $(13) $(11) Environmental and Litigation Settlements $54 $20 -- SEC Settlement $ Resolution of Legacy Tax Matters $(11) Ongoing Net Income $2,758 $2,747 $2,460 Interest Expense Net $328 $146 $80 Income Tax Provision $1,053 $1,088 $926 Tax Expense Related to Noncontrolling Interest $(24) $(19) $(22) Ongoing EBIT $4,115 $3,962 $3,444 Depreciation and Amortization $716 $691 $615 Ongoing EBITDA $4,831 $4,653 $4,059 ONGOING EBITDA AS A PERCENT OF NET SALES Fiscal Year $ Millions As Reported Net Sales $15,001 $15,855 $14,861 Ongoing EBITDA as a % of Net Sales 32% 29% 27% RECONCILIATION OF EBITDA As Reported Net Income Attributable to Monsanto Company Fiscal Year $ Millions $2,314 $2,740 $2,482 Interest Expense Net $328 $146 $80 Income Tax Provision 1 $858 $1,066 $898 Depreciation and Amortization $716 $691 $615 As Reported EBITDA $4,216 $4,643 $4,075 RECONCILIATION OF NET DEBT Fiscal Year End $ Millions Short-Term Debt $615 $233 $51 Long-Term Debt $8,429 $7,465 $2,048 Less: Cash and Cash Equivalents $3,701 $2,367 $3,668 Total Net Debt $5,343 $5,331 $(1,569) 1. Includes the income tax provision attributable to Monsanto. 2. Recast to reflect change in accounting for debt issuance costs, formerly included in other assets

20 Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF ADJUSTED RETURN ON CAPITAL As Reported Net Income Attributable to Monsanto Company Adjustment for certain items, after-tax: Fiscal Year $ Millions $2,314 $2,740 $2,482 Resolution of Legacy Tax Matter - - $(11) Restructuring Charges $ Environmental & Litigation Settlement $54 $20 - SEC Settlement $ (Income) Loss on Discontinued Operations $(28) $(13) $(11) Ongoing Net Income $2,758 $2,747 2,460 Interest (income) Expense Net of taxes $238 $94 59 Operating Profit After-tax (excluding certain items) $2,996 $2,841 $2,519 Short-Term and Long-Term Debt Fiscal Year End $ Millions $9,044 $7,698 $2,099 Shareowners Equity $7,005 $7,914 $12,728 Cash and Cash Equivalents $(3,701) $(2,367) $(3,668) Cash for Operations $400 $400 $400 Total Capital $12,748 $13,645 $11,559 Prior Period Capital $13,645 $11,559 $11,227 Average Capital $13,197 $12,602 $11,393 Fiscal Year $ Millions Operating Profit After-tax (excluding certain items) $2,996 $2,841 $2,519 Average Capital $13,197 $12,602 $11,393 Adjusted Return on Capital 22.7% 22.5% 22.1% 20 20

21 Reconciliation of Non-GAAP Financial Measures DEFINITION OF ONGOING ADJUSTMENTS Restructuring Charges: 2015 included a pretax restructuring charge totaling $493 million, of which $100 million related to certain asset impairment charges, primarily in our corn ($65M) and vegetable ($28M) businesses, and is included in cost of goods sold, and $393 million related to various other operating charges including severance and is included in restructuring expenses. Environmental & Litigation Settlements: Total pretax charges incurred during fiscal year 2015 are $34 million and $53 million for the legacy environmental liability and settlement of legacy litigation matters, respectively. SEC Settlement: Fiscal 2015 included a charge of $80 million for the SEC investigation. Income Tax Benefit: Represents the tax impact of the Restructuring and Settlements based on the effective tax rate in the locality in which the expense was incurred. Income on Discontinued Operations, Net: The company reports annual earn-out payments received as a result of the 2008 divestment of the Dairy Business as discontinued operations. 21