Seeds and traits business contributes to strong results in third quarter and Year-To-Date for Monsanto Company

ST. LOUIS, June 28 2007 — The Monsanto Company has announced its third quarter and year-to-date results.

“The 2007 season is shaping up to be an extraordinary year for agriculture. We’ve been able to deliver strong results through this point of the year, and we expect that our gains will
contribute to added momentum for our business through the end of the decade.”

Market Conditions

The 2007 crop season is well under way throughout the Northern Hemisphere. In the United States, farmers planting corn, cotton and soybean worked with varied temperatures and conditions,
including excessive dry and wet areas, as they worked to plant this season’s crops. Currently, reports from the U.S. Department of Agriculture (USDA) note that the majority of corn, cotton and
soybean varieties are facing good crop growing conditions with the vast majority of these crops already having emerged. Monsanto continues to see strong customer demand for its branded corn
seed products in the U.S. corn seed market. The company is also seeing strong customer demand for its branded corn seed products in key countries in Europe particularly in Italy, France and
Germany.

In the Southern Hemisphere, the harvest season is under way. The USDA’s world production report suggests that corn farmers in Argentina and Brazil both experienced higher yields this season.
Both countries are also expected to see higher production in soybeans as farmers expanded their planted crop areas. In India, Monsanto continues to see strong demand for its Bollgard
insect-protected cotton technologies. In the 2007 season, Indian cotton farmers planted an estimated 13 to 14 million acres of Monsanto’s cotton trait technologies, or up by approximately
two-thirds from last year.

Operations Update

Monsanto reported record net sales of $2.8 billion for the third quarter of fiscal year 2007, which were 23 percent higher than sales in the same period in fiscal year 2006. Key drivers for the
quarter were increased corn seed and traits revenues in the United States, as well as higher sales of Roundup and other glyphosate-based herbicides in the North America and Europe-Africa
regions. Increased sales in the current quarter were partially offset by lower cotton trait revenues in the United States, as farmers reduced the number of acres planted to cotton.

Net sales in the company’s first nine months of fiscal year 2007 resulted in year-to-date sales of $7.0 billion, which were 18 percent higher compared with sales in the same period last year.
Key contributors to the company’s growth included higher U.S. corn seed and traits revenues, as well as higher sales of Roundup and other glyphosate-based herbicides globally. Sales in the
first nine months were partially offset by lower soybean seed and trait revenues, as U.S. farmers reduced the number of acres planted in favor of corn. Results in the first three quarters also
reflected lower cotton trait revenues, as the total number of acres planted in Australia and the United States were reduced compared with the prior year.

Monsanto’s net income for the third quarter of fiscal year 2007 was 71 percent higher than net income in the same period last year. For the first nine months of fiscal year 2007, net income was
44 percent higher than net income in the same period last year.

Earnings per share (EPS) for the third quarter of fiscal year 2007 was $1.03 on an as-reported basis, and $1.02 on an ongoing basis. Earnings per share (EPS) for the first nine months of fiscal
year 2007 was $2.17 on an as-reported basis, and $2.18 on an ongoing basis. EPS results for the third quarter and first three quarters reflects the effect of discontinued operations for the
Stoneville© and NexGen© cottonseed businesses. (For a reconciliation of ongoing EPS, see note 2.)

Cash Flow

For the first nine months of fiscal year 2007, net cash provided by operating activities was $89 million, compared with $184 million in the same period in 2006. Net cash required by investing
activities was $410 million for the first nine months of 2007, compared with net cash required of $408 million for the same period last year. As a result, free cash flow was a use of $321
million for the first nine months of fiscal year 2007, compared with a use of $224 million in the same period in fiscal year 2006. (For a reconciliation of free cash flow, see note 2.) Free
cash flow in the first three quarters, when compared with free cash in the same period last year, reflected higher net income which was more than offset by higher working capital. Net cash
required by financing activities was $204 million for the first nine months of 2007, compared with net cash provided of $294 million for the same period last year.

Outlook

Earlier this month, Monsanto announced that it was increasing its fiscal year 2007 ongoing earnings per share (EPS) guidance to $1.75 to $1.80 per share, up from its prior guidance of $1.60 to
$1.65 per share on an ongoing basis. The company’s ongoing EPS excludes the nonrecurring effect of the Stoneville and NexGen divestitures and the write-off of acquired in-process R&D
associated with the acquisition of Delta and Pine Land Company (D&PL). On an as-reported basis, Monsanto expects EPS to be in the range of $1.36 to $1.54. (For a reconciliation of ongoing
EPS, see note 2.)

The company expects that its free cash flow for fiscal year 2007 will now be in the range of a use of $250 million to a use of $200 million, compared with its previous guidance in the range of
$875 million to $950 million. The company’s free cash flow guidance for the 2007 fiscal year reflects the cash effect of Monsanto’s $1.5 billion acquisition D&PL, net of cash acquired and
debt assumed; as well as the receipt of $317 million for the sale of the Stoneville and NexGen cottonseed businesses. The company expects net cash provided by operating activities to be in the
range of $1.71 billion to $1.76 billion, and net cash required by investing activities to be approximately $1.96 billion for fiscal year 2007. (For a reconciliation of free cash flow, see note
2.)

Monsanto’s fourth quarter is largely influenced by its U.S. cotton and U.S. Roundup business. The company historically records a loss in the fourth quarter. This year, the company announced
that earnings from its recent D&PL acquisition will also be consolidated into its results beginning in the fourth quarter. The company continues to expect that D&PL earnings will be
moderately dilutive, as it historically has reported a loss in the fourth quarter.

www.monsanto.com

Related Posts
Leave a reply