Monsanto 10-Q 8 Jan 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Nov. 30, 2009	Jan. 05, 2010	Feb. 28, 2009
Document and Entity Information
Document type	10-Q
Document period end date	2009-11-30
Amendment flag	false
Entity registrant name	MONSANTO CO /NEW/
Entity central index key	0001110783
Entity current reporting status	Yes
Entity voluntary filers	No
Current fiscal year end date	--08-31
Entity filer category	Large Accelerated Filer
Entity well known seasoned issuer	Yes
Entity common stock shares outstanding		545,673,732
Entity public float			$41,700,000,000

Statements of Consolidated Oper

Statements of Consolidated Operations (Unaudited) (USD $)
In Millions, except Share data	3 Months Ended Nov. 30, 2009	3 Months Ended Nov. 30, 2008
Statements of Consolidated Operations
Net Sales	$1,697	$2,649
Cost of goods sold	958	1,099
Gross Profit	739	1,550
Operating Expenses:
Selling, general and administrative expenses	496	550
Research and development expenses	267	252
Restructuring charges, net	14	0
Total Operating Expenses	777	802
(Loss) Income from Operations	(38)	748
Interest expense	39	23
Interest income	(11)	(25)
Other (income) expense, net	(12)	26
(Loss) Income from Continuing Operations Before Income Taxes	(54)	724
Income tax (benefit) provision	(30)	176
(Loss) Income from Continuing Operations Including Portion Attributable to Noncontrolling Interest	(24)	548
Discontinued Operations:
Income from operations of discontinued businesses	5	18
Income tax provision	0	8
Income on Discontinued Operations	5	10
Net (Loss) Income	(19)	558
Less: Net income attributable to noncontrolling interest	0	2
Net (Loss) Income Attributable to Monsanto Company	(19)	556
Amounts Attributable to Monsanto Company:
(Loss) Income from continuing operations	(24)	546
Income on discontinued operations	5	10
Net (Loss) Income Attributable to Monsanto Company	($19)	$556
Basic (Loss) Earnings per Share Attributable to Monsanto Company:
(Loss) Income from continuing operations	-0.04	0.99
Income on discontinued operations	0.01	0.02
Net (Loss) Income	-0.03	1.01
Diluted (Loss) Earnings per Share Attributable to Monsanto Company:
(Loss) Income from continuing operations	-0.04	0.98
Income on discontinued operations	0.01	0.02
Net (Loss) Income	-0.03	$1
Weighted Average Shares Outstanding Basic	545.6	548.8
Weighted Average Shares Outstanding Diluted	545.6	557.6
Dividends Declared per Share	$0	$0

Condensed Statements of Consoli

Condensed Statements of Consolidated Financial Position (Unaudited) (USD $)
In Millions	Nov. 30, 2009	Aug. 31, 2009
Current Assets:
Cash and cash equivalents	$471	$1,956
Trade receivables, net	2,012	1,556
Miscellaneous receivables	716	654
Deferred tax assets	574	662
Inventory, net	3,560	2,934
Other current assets	98	121
Total Current Assets	7,431	7,883
Total property, plant and equipment	7,398	7,158
Less accumulated depreciation	3,678	3,549
Property, Plant and Equipment, Net	3,720	3,609
Goodwill	3,272	3,218
Other Intangible Assets, Net	1,370	1,371
Noncurrent Deferred Tax Assets	804	743
Long-Term Receivables, Net	488	557
Other Assets	521	496
Total Assets	17,606	17,877
Current Liabilities:
Short-term debt, including current portion of long-term debt	281	79
Accounts payable	765	676
Income taxes payable	52	79
Accrued compensation and benefits	223	263
Accrued marketing programs	367	934
Deferred revenues	368	219
Grower production accruals	386	139
Dividends payable	0	145
Customer payable	0	307
Restructuring reserves	221	286
Miscellaneous short-term accruals	691	629
Total Current Liabilities	3,354	3,756
Long-Term Debt	1,724	1,724
Postretirement Liabilities	729	793
Long-Term Deferred Revenue	466	488
Noncurrent Deferred Tax Liabilities	159	153
Long-Term Portion of Environmental and Litigation Liabilities	203	197
Other Liabilities	628	641
Shareowners Equity:
Common stock (authorized: 1,500,000,000 shares, par value $0.01) Issued 586,351,668 and 585,557,964 shares, respectively; Outstanding 545,354,848 and 545,407,427 shares, respectively	6	6
Treasury stock 40,996,820 and 40,150,537 shares, respectively, at cost	(1,641)	(1,577)
Additional contributed capital	9,749	9,695
Retained earnings	2,663	2,682
Accumulated other comprehensive loss	(485)	(744)
Reserve for ESOP debt retirement	(6)	(6)
Total Monsanto Company Shareowners Equity	10,286	10,056
Noncontrolling Interest	57	69
Total Shareowners Equity	10,343	10,125
Total Liabilities and Shareowners Equity	$17,606	$17,877

1_Condensed Statements of Conso

Condensed Statements of Consolidated Financial Position (Parenthetical) (Unaudited) (USD $)
	Nov. 30, 2009	Aug. 31, 2009
Common Stock:
Common Stock, Authorized	1,500,000,000	1,500,000,000
Common Stock, Par Value	0.01	0.01
Common Stock, Issued	586,351,668	585,557,964
Common Stock, Outstanding	545,354,848	545,407,427
Treasury Stock, at Cost	40,996,820	40,150,537

Statements of Consolidated Cash

Statements of Consolidated Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Nov. 30, 2009	3 Months Ended Nov. 30, 2008
Operating Activities:
Net (Loss) Income	($19)	$558
Items that did not require (provide) cash:
Depreciation and amortization	144	135
Bad-debt expense	14	36
Stock-based compensation expense	24	26
Excess tax benefits from stock-based compensation	(13)	(5)
Deferred income taxes	(58)	52
Restructuring charges, net	14	0
Equity affiliate income, net	(14)	(6)
Net gain on sale of a business or other assets	(1)	(6)
Other items	2	5
Changes in assets and liabilities that provided (required) cash, net of acquisitions:
Trade receivables, net	(343)	165
Inventory, net	(539)	(832)
Deferred revenues	126	(238)
Accounts payable and other accrued liabilities	(573)	195
Restructuring cash payments	(79)	0
Pension contributions	(78)	(15)
Net investment hedge settlement	(4)	18
Other items	(17)	26
Net Cash (Required) Provided by Operating Activities	(1,414)	114
Cash Flows (Required) Provided by Investing Activities:
Capital expenditures	(192)	(264)
Acquisition of businesses, net of cash acquired	(20)	(2)
Purchases of long-term equity securities	(2)	(7)
Technology and other investments	(9)	(18)
Proceeds from divestiture of a business	0	300
Other investments and property disposal proceeds	26	1
Net Cash (Required) Provided by Investing Activities	(197)	10
Cash Flows Provided (Required) by Financing Activities:
Net change in financing with less than 90-day maturities	299	(90)
Short-term debt proceeds	25	31
Short-term debt reductions	(29)	0
Long-term debt reductions	(1)	(4)
Payments on other financing	(1)	0
Treasury stock purchases	(64)	(75)
Stock option exercises	16	7
Excess tax benefits from stock-based compensation	13	5
Dividend payments	(145)	(132)
Net Cash Provided (Required) by Financing Activities	113	(258)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	13	(137)
Net Decrease in Cash and Cash Equivalents	(1,485)	(271)
Cash and Cash Equivalents at Beginning of Period	1,956	1,613
Cash and Cash Equivalents at End of Period	$471	$1,342

Statements of Consolidated Shar

Statements of Consolidated Shareholders Equity and Comprehensive Income (Unaudited) (USD $)
In Millions	Common Stock	Treasury Stock	Additional Contributed Capital	Retained Earnings	Accumulated Other Comprehensive (Loss)		Reserve for ESOP Debt	NonControlling Interests	Total
Balance at Aug. 31, 2008	$6	($1,177)	$9,495	$1,138	($78)	[1]	($10)	$37	$9,411
Balance at Aug. 31, 2008	6	(1,177)	9,495	1,138	(78)	[1]	(10)	37	9,411
Net (Loss) Income				2,109				24	2,133
Foreign currency translation					(333)	[1]		(5)	(338)
Postretirement benefit plan activity, net of tax					(189)	[1]			(189)
Accumulated derivative loss, net of tax					(144)	[1]			(144)
Comprehensive income								19	1,462
Treasury stock purchases		(400)							(400)
Restricted stock withholding			(7)						(7)
Issuance of shares under employee stock plans			39						39
Excess tax benefits from stock-based compensation			35						35
Stock-based compensation expense			133						133
Cash dividends of $1.04 per common share				(565)					(565)
Dividends to noncontrolling interest								(10)	(10)
Allocation of ESOP shares, net of dividends received							4		4
Donation of noncontrolling interest								28	28
Purchase of noncontrolling interest								(5)	(5)
Balance at Aug. 31, 2009	6	(1,577)	9,695	2,682	(744)	[1]	(6)	69	10,125
Net (Loss) Income				(19)				0	(19)
Foreign currency translation					219	[1]		0	219
Postretirement benefit plan activity, net of tax					3	[1]			3
Realized and unrealized gain on investments, net of tax of $2					3	[1]			3
Accumulated derivative loss, net of tax					34	[1]			34
Comprehensive income								0	240
Treasury stock purchases		(64)							(64)
Restricted stock withholding			(1)						(1)
Issuance of shares under employee stock plans			17						17
Excess tax benefits from stock-based compensation			13						13
Stock-based compensation expense			25						25
Dividends to noncontrolling interest								(12)	(12)
Balance at Nov. 30, 2009	$6	($1,641)	$9,749	$2,663	($485)	[1]	($6)	$57	$10,343
[1]See Note 17 - Comprehensive Income (Loss) - for further details of the components of accumulated other comprehensive loss.

2_Statements of Consolidated Sh

Statements of Consolidated Shareholders Equity and Comprehensive Income (Parenthetical) (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Nov. 30, 2009	12 Months Ended Aug. 31, 2009
Equity Parenthetical
Postretirement benefit plan activity, tax (expense) benefit	$2	($119)
Accumulated derivative loss, tax (expense) benefit	29	(95)
Realized and unrealized gain on investments, tax benefit	$2	$0
Cash dividends per common share	$0	1.04

BACKGROUND AND BASIS OF PRESENT

BACKGROUND AND BASIS OF PRESENTATION
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
BACKGROUND AND BASIS OF PRESENTATION	NOTE 1.BACKGROUND AND BASIS OF PRESENTATIONMonsanto Company, along with its subsidiaries, is a leading global provider of agricultural products for farmers. Monsantos seeds, biotechnology trait products, and herbicides provide farmers with solutions that improve productivity, reduce the costs of farming and produce better foods for consumers and better feed for animals. Monsanto manages its business in two segments: Seeds and Genomics and Agricultural Productivity. Through the Seeds and Genomics segment, Monsanto produces leading seed brands, including DEKALB, ASGROW, DELTAPINE, SEMINIS and DE RUITER, and Monsanto develops biotechnology traits that assist farmers in controlling insects and weeds. Monsanto also provides other seed companies with genetic material and biotechnology traits for their seed brands. Through the Agricultural Productivity segment, the company manufactures ROUNDUP brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market. See Note 21 Segment Information for further details. In the fourth quarter of 2008, the company announced plans to divest its animal agricultural products business, which focused on dairy cow productivity (the Dairy business). This transaction was consummated on Oct. 1, 2008. As a result, financial data for this business has been presented as discontinued operations. The financial statements have been prepared in compliance with the provisions of the Property, Plant and Equipment topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Accordingly, for all periods presented herein, the Statements of Consolidated Operations have been conformed to this presentation. See Note 22 Discontinued Operations for further details. The accompanying consolidated financial statements have not been audited but have been prepared in conformity with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. This Report on Form 10-Q should be read in conjunction with Monsantos Report on Form 10-K for the fiscal year ended Aug. 31, 2009. Financial information for the first three months of fiscal year 2010 should not be annualized because of the seasonality of the companys business.

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
NEW ACCOUNTING STANDARDS	NOTE 2.NEW ACCOUNTING STANDARDS In June 2009, the FASB issued its ASC Topic 105, Generally Accepted Accounting Principles, which became the single source of authoritative U.S. generally accepted accounting principles (GAAP) (other than rules and interpretive releases of the U.S. Securities and Exchange Commission). The ASC is topically based with topics organized by ASC number and updated with Accounting Standards Updates (ASUs). ASUs will replace accounting guidance that historically was issued as FASB Statements of Financial Accounting Standards (SFAS), FASB Interpretations (FIN), FASB Staff Positions (FSP), Emerging Issues Task Force (EITF) Issues or other types of accounting standards. The ASC became effective Nov. 30, 2009, for Monsanto and disclosures within this Quarterly Report on Form 10-Q have been updated to reflect the change. The ASC does not change GAAP and did not impact the companys consolidated financial statements.In June 2009, the FASB issued a standard that requires an analysis to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity. This statement requires an ongoing reassessment and eliminates the quantitative approach previously required for determining whether an entity is the primary beneficiary. This standard is effective for fiscal years beginning after Nov. 15, 2009. Accordingly, Monsanto will adopt this standard in fiscal year 2011. The company is currently evaluating the impact of adoption on the consolidated financial statements.In June 2009, the FASB issued a standard that removes the concept of a qualifying special-purpose entity (QSPE) from GAAP and removes the exception from applying consolidation principles to a QSPE. This standard also clarifies the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. This standard is effective for fiscal years beginning after Nov. 15, 2009. Accordingly, Monsanto will adopt this standard in fiscal year 2011. The company is currently evaluating the impact of adoption on the consolidated financial statements.In April 2009, the FASB issued a standard that extends the previous disclosure requirements about fair value of financial instruments to interim financial statements of publicly traded companies. This standard requires that disclosures provide quantitative and qualitative information on fair value estimates for all financial instruments not measured on the balance sheet at fair value, when practicable, with the exception of certain financial instruments. This standard is effective prospectively for interim reporting periods ending after June 15, 2009. Accordingly, Monsanto adopted this standard in first quarter fiscal year 2010. See Note 12 Debt and Other Credit Arrangements, Note 13 Fair Value Measurements and Note 14 Financial Instruments for the disclosures required by this standard.In December 2008, the FASB issued a standard that provides additional guidance regarding disclosures about plan assets of defined benefit pension or other postretirement plans. This standard is effective for financial statements issued for fiscal years endin

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
BUSINESS COMBINATIONS	NOTE 3.BUSINESS COMBINATIONSEffective Sept. 1, 2009, Monsanto adopted the new guidance in the Business Combinations topic of the ASC for acquisitions subsequent to that date. 2010 Acquisition: In October 2009, Monsanto acquired the remaining 51 percent equity interest in Seminium, S.A. (Seminium), a leading Argentinean corn seed company. Acquisition costs were less than $1 million for the quarter ended Nov. 30, 2009, and classified as selling, general and administrative expenses. The total fair value of Seminium was $36million, and it was primarily allocated to inventory, fixed assets, intangibles, and goodwill. This fair value includes $20million of cash paid (net of cash acquired) and $16 million for the fair value of Monsantos 49 percent equity interest in Seminium held prior to the acquisition. The primary items that generated goodwill were the premiums paid by the company for the right to control the business acquired and the value of the acquired assembled workforce. The goodwill is not deductible for tax purposes. Income of approximately $12 million was recognized from the re-measurement to fair value of Monsantos previous equity interest in Seminium and is included in other (income) expense, net in the Statement of Consolidated Operations for the quarter ended Nov. 30, 2009. The measurement period for purchase price allocations ends as soon as information on the facts and circumstances becomes available, but does not exceed twelve months. If new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized for assets acquired and liabilities assumed, Monsanto will retrospectively adjust the amounts recognized as of the acquisition date. 2009 Acquisitions: In July 2009, Monsanto acquired the assets of WestBred, LLC, a Montana-based company that specializes in wheat germplasm, for $49 million (net of cash acquired), inclusive of transaction costs of $4 million. The acquisition will bolster the future growth of Monsantos seeds and traits platform.In December 2008, Monsanto acquired 100 percent of the outstanding stock of Aly Participacoes Ltda. (Aly), which operates the sugarcane breeding and technology companies, CanaVialis S.A. and Alellyx S.A., both of which are based in Brazil, for $264 million (net of cash acquired), inclusive of transaction costs of less than $1 million.In 2009, Monsanto paid approximately $5 million of contingent consideration related to fiscal year 2007 regional U.S. seed company acquisitions.For all fiscal year 2010 and 2009 acquisitions described above, the business operations and employees of the acquired entities were included within the Seeds and Genomics segment from their respective dates of acquisition. These acquisitions were accounted for as purchase transactions. Accordingly, the assets and liabilities of the acquired entities were recorded at their estimated fair values at the dates of the acquisitions. The purchase price allocations for the first quarter 2010 and the second, third and fourth quarter 2009 acquisitions are preliminary and are subject to adjustment pending further assessments

CUSTOMER FINANCING PROGRAMS

CUSTOMER FINANCING PROGRAMS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
CUSTOMER FINANCING PROGRAMS	NOTE 4. CUSTOMER FINANCING PROGRAMS Monsanto previously established a revolving financing program to provide financing of up to $250 million for selected customers in the United States through a third-party specialty lender. The program was terminated in the third quarter of fiscal year 2009. Under the financing program, Monsanto originated customer loans on behalf of the lender, which was a special purpose entity (SPE) that Monsanto consolidated, pursuant to Monsantos credit and other underwriting guidelines approved by the lender. Under the program, Monsanto serviced the loans and provided a first-loss guarantee of up to $130million. Following origination, the lender transferred the loans to multi-seller commercial paper conduits through a nonconsolidated QSPE. Monsanto accounted for this transaction as a sale, in accordance with the Transfers and Servicing topic of the ASC. Monsanto had no ownership interest in the lender, the QSPE, or the loans. However, because Monsanto substantively originated the loans through the SPE (which it consolidated) and partially guaranteed and serviced the loans, Monsanto accounted for the program as if it were the originator of the loans and the transferor selling the loans to the QSPE. Because QSPEs are excluded from the current guidance within the Consolidation topic of the ASC, and Monsanto did not have the unilateral right to liquidate the QSPE, the consolidation guidance did not have an effect on Monsantos accounting for the U.S. customer financing program. Monsanto accounted for the guarantee in accordance with the Guarantees topic of the ASC, which requires that a guarantor recognize, at the inception of the guarantee, a liability for the fair value of the guarantee obligation undertaken. Monsanto recorded its guarantee liability at a value that approximates fair value (except that it did not discount credit losses because of the short-term nature of the loans), primarily driven by expected future credit losses. Monsanto did not recognize any servicing asset or liability because the servicing fee was considered adequate compensation for the servicing activities. Servicing activities including discounts on the sale of customer receivables resulted in income of $1 million for the three months ended Nov. 30, 2008. Proceeds from customer loans sold through the financing program totaled $122 million for the first three months of fiscal year 2009. These proceeds are included in net cash provided by operating activities in the Statement of Consolidated Cash Flows. There were no loan balances outstanding as of Nov. 30, 2009, or Aug. 31, 2009. Monsanto has agreements with lenders to establish programs that provide financing of up to 550 million Brazilian reais (approximately $315 million) for selected customers in Brazil. These agreements qualify for sales treatment under the Transfers and Servicing topic of the ASC. Proceeds from the transfer of receivables are included in net cash provided by operating activities in the Statements of Consolidated Cash Flows. Proceeds from the transfer of receivables through the program totaled $60 million and $36 million for the first three months of fiscal years 20

RESTRUCTURING

RESTRUCTURING
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
RESTRUCTURING	NOTE 5. RESTRUCTURING Restructuring charges were recorded in the Statement of Consolidated Operations as follows: Three months ended (Dollars in millions) Nov. 30, 2009 Restructuring Charges, Net(1)(2) $ (14) Loss from Continuing Operations Before Income Taxes (14) Income Tax Benefit 1 Net Loss $ (13) (1)The $14 million of restructuring charges were split by segment as follows: $11 million in Agricultural Productivity and $3 million in Seeds and Genomics.(2)The restructuring charges for the three months ended Nov. 30, 2009, include reversals of $2 million related to the 2009 Restructuring Plan. On June 23, 2009, the companys Board of Directors approved a restructuring plan (2009 Restructuring Plan) to take future actions to reduce costs in light of the changing market supply environment for glyphosate. The company created a separate division for its ROUNDUP and other herbicides business, which is expected to better align spending and working capital needs. This action is designed to enable Monsanto to stabilize the ROUNDUP business and allow it to deliver optimal gross profit and a sustainable level of operating cash in the coming years. The company also announced that it will take steps to better align the resources of its global seeds and traits business. These actions include certain product and brand rationalization within our vegetables business. On Sept. 9, 2009, the company committed to take additional actions related to the previously announced restructuring plan. The plan is expected to be completed by the end of fiscal year 2010.The following table displays the pretax charges of $14 million incurred by segment under the 2009 Restructuring Plan for the first quarter ended Nov. 30, 2009, as well as the cumulative pretax charges of $420 million under the 2009 Restructuring Plan. Three Months Ended Nov. 30, 2009 Cumulative Amount through Nov. 30, 2009 Seeds and Agricultural Seeds and Agricultural (Dollars in millions) Genomics Productivity Total Genomics Productivity Total Work Force Reductions $ 1 $ 10 $ 11 $ 176 $ 73 $ 249 Facility Closures / Exit Costs 1 1 2 4 48 52 Asset Impairments Property, plant and equipment 1 1 32 4 36 Inventory 24 24 Other intangible assets 59 59 Total Restructuring Charges $ 3 $ 11 $ 14 $ 295 $ 125 $ 420 The companys written human resource policies are indicative of an ongoing benefit arrangement with respect to severance packages. Benefits paid pursuant to an ongoing benefit arrangement are specifically excluded from the Exit or Disposal Cost Obligations topic of the ASC, therefore severance charges incurred in connection with the 2009 Restructuring Plan are accounted for when probable and estimable as required under the Compensation Nonretirement Postemployment Benefits topic of the ASC.In first quarter 2010, pretax restructuring charges of $14 million were recorded, primarily relating to work force reductions in Europe. The following table summarizes the activities related to the companys 2009 Restructuring Plan. See Note 3 Business Combinations for restructuring reserves related to

RECEIVABLES

RECEIVABLES
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
RECEIVABLES	NOTE 6. RECEIVABLESTrade receivables on the Condensed Statements of Consolidated Financial Position are net of allowances of $174 million and $162 million as of Nov. 30, 2009, and Aug. 31, 2009, respectively.Long-term receivables on the Condensed Statements of Consolidated Financial Position are net of allowances of $185 million and $172 million as of Nov. 30, 2009, and Aug. 31, 2009, respectively.

INVENTORY

INVENTORY
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
INVENTORY	NOTE 7. INVENTORYComponents of inventory are: As of Nov. 30, As of Aug. 31, (Dollars in millions) 2009 2009 Finished Goods $ 1,663 $ 1,362 Goods In Process 1,562 1,340 Raw Materials and Supplies 500 417 Inventory at FIFO Cost 3,725 3,119 Excess of FIFO over LIFO Cost (165) (185) Total $ 3,560 $ 2,934

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the net carrying amount of goodwill for the first quarter of fiscal year 2010, by segment, are as follows: Seeds and Agricultural (Dollars in millions) Genomics Productivity Total Balance as of Aug. 31, 2009 $ 3,156 $ 62 $ 3,218 Acquisition Activity (see Note 3) 8 8 Effect of Foreign Currency Translation Adjustments and Other 46 46 Balance as of Nov. 30, 2009 $ 3,210 $ 62 $ 3,272 In first quarter 2010, goodwill increased due to the 2010 acquisition and the updating of the preliminary purchase price allocations for some of the 2009 acquisitions.Information regarding the companys other intangible assets is as follows: As of Nov. 30, 2009 As of Aug. 31, 2009 Carrying Accumulated Carrying Accumulated (Dollars in millions) Amount Amortization Net Amount Amortization Net Acquired Germplasm $ 1,186 $ (618) $ 568 $ 1,172 $ (604) $ 568 Acquired Biotechnology Intellectual Property 835 (609) 226 829 (589) 240 Trademarks 352 (84) 268 345 (81) 264 Customer Relationships 332 (97) 235 317 (88) 229 Other 116 (43) 73 110 (40) 70 Total $ 2,821 $ (1,451) $ 1,370 $ 2,773 $ (1,402) $ 1,371 The increases in other intangible assets during the three months ended Nov. 30, 2009, primarily resulted from the acquisition of Seminium described in Note 3 Business Combinations. Total amortization expense of other intangible assets was $40 million in first quarter of fiscal year 2010 and $33 million in first quarter of fiscal year 2009. Estimated intangible asset amortization expense for each of the five succeeding fiscal years for owned assets as of Nov. 30, 2009, has not changed significantly from the amounts disclosed in Monsantos Report on Form 10-K for the fiscal year ended Aug. 31, 2009.

INVESTMENTS AND EQUITY AFFILIAT

INVESTMENTS AND EQUITY AFFILIATES
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
INVESTMENTS AND EQUITY AFFILIATES	NOTE 9. INVESTMENTS AND EQUITY AFFILIATESInvestmentsMonsanto has investments in long-term equity securities, which are considered available-for-sale. As of Nov. 30, 2009, and Aug. 31, 2009, these long-term equity securities are recorded in other assets in the Condensed Statements of Consolidated Financial Position at a fair value of $30million and $25million, respectively. Net unrealized losses (net of deferred taxes) of $3million and $6million are included in accumulated other comprehensive loss in shareowners equity related to these investments as of Nov. 30, 2009, and Aug. 31, 2009, respectively.Equity AffiliatesMonsanto owns a 19 percent interest in a seed supplier that produces, conditions, and distributes corn and soybean seeds. Monsanto is accounting for this investment as an equity method investment as Monsanto has the ability to exercise significant influence over the seed supplier. As of Nov. 30, 2009, and Aug. 31, 2009, this investment is recorded in other assets in the Condensed Statements of Consolidated Financial Position at $62million and $60 million, respectively. In first quarter 2010, Monsanto purchased $19million of inventory from the seed supplier and there were no sales of inventory to the seed supplier. As of Nov. 30, 2009, there was no payment due to the seed supplier while the amount payable as of Aug. 31, 2009, was $84million, recorded in accounts payable in the Condensed Statement of Consolidated Financial Position. As of Nov. 30, 2009, and Aug. 31, 2009, prepayments of $4million and $5million, respectively, were included in other current assets in the Condensed Statements of Consolidated Financial Position related to inventory that will be delivered in fiscal year 2010.

DEFERRED REVENUE

DEFERRED REVENUE
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
DEFERRED REVENUE	NOTE 10. DEFERRED REVENUEIn first quarter 2008, Monsanto entered into a corn herbicide tolerance and insect control trait technologies agreement with Pioneer Hi-Bred International, Inc., a wholly-owned subsidiary of E. I. du Pont de Nemours and Company. Among its provisions, the agreement modified certain existing corn license agreements between the parties, included provisions under which the parties agreed not to assert certain intellectual property rights against each other, and granted each party the right to use certain regulatory data of the other in order to develop additional products. As a result of the new agreement which requires fixed annual payments, the company recorded a receivable and deferred revenue of $635 million in first quarter 2008. Cumulative cash receipts will be $725 million over an eight-year period. Revenue of $20 million related to this agreement was recorded in the first three months of fiscal years 2010 and 2009. As of Nov. 30, 2009, and Aug. 31, 2009, the remaining receivable balance is $480 million and $543 million, respectively. The majority of this balance is included in long-term receivables, and the current portion is included in trade receivables. As of Nov. 30, 2009, and Aug. 31, 2009, the remaining deferred revenue balance is $456 million and $476 million, respectively. The majority of this balance is included in long-term deferred revenue, and the current portion is included in deferred revenue in the Condensed Statements of Consolidated Financial Position. The interest portion of this receivable is reported in interest income and totaled $4 million and $5 million for the three months ended Nov. 30, 2009, and Nov. 30, 2008, respectively.In third quarter 2008, Monsanto and Syngenta entered into a Roundup Ready 2 Yield Soybean License Agreement. The agreement grants Syngenta access to Monsantos Roundup Ready 2 Yield Soybean technology in consideration of royalty payments from Syngenta, based on sales. Under this agreement Syngenta will fulfill the contractual sales volumes over a nine-year period. The minimum obligation from Syngenta over this period is $81 million. As of Nov. 30, 2009, and Aug. 31, 2009, the remaining receivable and deferred revenue balance is $70 million related to the net present value of expected payments under this agreement. The majority of this balance is included in long-term receivables and long-term deferred revenue on the Condensed Statements of Consolidated Financial Position and the current portion is included in trade receivables and deferred revenue. The interest portion of this receivable is reported in interest income in the Statements of Consolidated Operations and was less than $1 million for the three months ended Nov. 30, 2009 and Nov. 30, 2008.

INCOME TAXES

INCOME TAXES
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
INCOME TAXES	NOTE 11. INCOME TAXESManagement regularly assesses the tax risk of the companys tax return filing positions for all open years and establishes reserves accordingly. During first quarter 2010 statutes expired in several jurisdictions and an audit was completed in an ex-U.S. jurisdiction. Primarily as a result of these items, Monsanto recorded a tax benefit of $16 million in first quarter 2010. During first quarter 2009 several domestic tax matters were resolved favorably. On Oct. 3, 2008, the retroactive extension of the research and development credit was enacted as part of the Emergency Economic Stabilization Act of 2008. During first quarter 2009 Monsanto recorded a tax benefit of $44 million primarily as a result of these items.

DEBT AND OTHER CREDIT ARRANGEME

DEBT AND OTHER CREDIT ARRANGEMENTS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
DEBT AND OTHER CREDIT ARRANGEMENTS	NOTE 12. DEBT AND OTHER CREDIT ARRANGEMENTS Monsanto plans to issue new fixed-rate debt on or before Aug. 15, 2012, to repay $485 million of 7% Senior Notes that are due on Aug. 15, 2012. In March 2009, the company entered into forward-starting interest rate swaps with a total notional amount of $250 million. The purpose of the swaps was to hedge the variability of the forecasted interest payments on this expected debt issuance that may result from changes in the benchmark interest rate before the debt is issued. Unrealized gains net of tax of $7 million and $9 million were recorded in accumulated other comprehensive loss to reflect the aftertax change in the fair value of the forward-starting interest rate swaps as of Nov. 30, 2009, and Aug. 31, 2009, respectively. These swaps are accounted for under the Derivatives and Hedging topic of the ASC. As of first quarter 2010, Monsanto had commercial paper borrowings outstanding of $195 million which is included in short-term debt on the Condensed Statement of Consolidated Financial Position. The fair value of the total short-term debt was $281 million and $79 million as of Nov. 30, 2009, and Aug. 31, 2009, respectively. The fair value of the total long-term debt was $1,878 million and $1,863 million as of Nov. 30, 2009, and Aug. 31, 2009, respectively.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
FAIR VALUE MEASUREMENTS	NOTE 13. FAIR VALUE MEASUREMENTS Effective Sept. 1, 2008, Monsanto adopted a standard which provides a framework for measuring fair value. The standard also eliminates the deferral of gains and losses at inception associated with certain derivative contracts whose fair value was not evidenced by observable market data. The standard requires that the impact of this change in accounting for derivative contracts be recorded as an adjustment to opening retained earnings in the period of adoption. Monsanto did not have any deferred gains or losses at inception of derivative contracts and therefore no adjustment to opening retained earnings was made upon adoption of the standard.Monsanto determines the fair market value of its financial assets and liabilities based on quoted market prices, estimates from brokers, and other appropriate valuation techniques. The company uses the fair value hierarchy established in the Fair Value Measurements and Disclosures topic of the ASC, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy contains three levels as follows, with Level 3 representing the lowest level of input:Level 1 Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.Level 2 Values based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 Values generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions would reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques could include use of option pricing models, discounted cash flow models and similar techniques. Monsanto does not currently have any instruments with fair value determined using Level 3 inputs.The following tables set forth by level Monsanto's assets and liabilities that were accounted for at fair value on a recurring basis as of Nov. 30, 2009, and Aug. 31, 2009. As required by the Fair Value Measurements and Disclosures topic of the ASC, assets and liabilities are classified in their entirety based on the lowest level of input that is a significant component of the fair value measurement. Monsanto's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels. Fair Value Measurements at Nov. 30, 2009 Using Cash Collateral Net (Dollars in millions) Level 1 Level 2 Offset(1) Balance Assets at Fair Value: Cash Equivalents $ 166 $ $ $ 166 Equity Securities 30 30 Derivative Assets Related to: Foreign Currency 17 17 Interest Rates 11 11 Commodities 39 (39) Total Assets at Fair Value $ 235 $ 28 $ (39) $ 224 Liabilities at Fair

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
FINANCIAL INSTRUMENTS	NOTE 14. FINANCIAL INSTRUMENTSMonsantos business and activities expose it to a variety of market risks, including risks related to changes in commodity prices, foreign-currency exchange rates and interest rates. These financial exposures are monitored and managed by the company as an integral part of its market risk management program. This program recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effects that market volatility could have on operating results. As part of its market risk management strategy, Monsanto uses derivative instruments to protect fair values and cash flows from fluctuations caused by volatility in currency exchange rates, commodity prices and interest rates. Cash Flow HedgesThe company uses foreign-currency options and foreign-currency forward contracts as hedges of anticipated sales or purchases denominated in foreign currencies. The company enters into these contracts to protect itself against the risk that the eventual net cash flows will be adversely affected by changes in exchange rates.Monsantos commodity price risk management strategy is to use derivative instruments to minimize significant unanticipated earnings fluctuations that may arise from volatility in commodity prices. Price fluctuations in commodities, mainly in corn and soybeans, can cause the actual prices paid to production growers for corn and soybean seeds to differ from anticipated cash outlays. Monsanto uses commodity futures and options contracts to manage these risks. Monsantos energy risk management strategy is to use derivative instruments to minimize significant unanticipated manufacturing cost fluctuations that may arise from volatility in natural gas prices and diesel prices.Monsantos interest rate risk management strategy is to use derivative instruments to minimize significant unanticipated earnings fluctuations that may arise from volatility in interest rates of the companys borrowings and to manage the interest rate sensitivity of its debt.For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.The maximum term over which the company is hedging exposures to the variability of cash flow (for all forecasted transactions) is 21 months for foreign-currency hedges, 52 months for commodity hedges and 33 months for interest rate hedges. During the next 12 months, a pretax net loss of approximately $64 million will be reclassified from other comprehensive income into earnings. During the three months ended Nov. 30, 2009, a loss of $4 million was reclassified into earnings as a result of the discontinuance of cash flow hedges because it was probable that the original forecasted transaction would not occur by the end of the originally specified time period. No cash flo

POSTRETIREMENT BENEFITS-PENSION

POSTRETIREMENT BENEFITS-PENSIONS, HEALTHCARE AND OTHER
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
POSTRETIREMENT BENEFITS-PENSIONS, HEALTHCARE AND OTHER	NOTE 15. POSTRETIREMENT BENEFITS PENSIONS, HEALTH CARE AND OTHERThe majority of Monsantos employees are covered by noncontributory pension plans sponsored by the company. The company also provides certain postretirement health care and life insurance benefits for retired employees through insurance contracts. The companys net periodic benefit cost for pension benefits, and health care and other postretirement benefits include the following components: Three Months Ended Nov. 30, 2009 Three Months Ended Nov. 30, 2008 Pension Benefits Outside the Outside the (Dollars in millions) U.S. U.S. Total U.S. U.S. Total Service Cost for Benefits Earned During the Period $ 13 $ 2 $ 15 $ 12 $ 2 $ 14 Interest Cost on Benefit Obligation 25 4 29 27 4 31 Assumed Return on Plan Assets (32) (4) (36) (30) (4) (34) Amortization of Unrecognized Net Loss 14 1 15 10 10 Total Net Periodic Benefit Cost $ 20 $ 3 $ 23 $ 19 $ 2 $ 21 Health Care and Other Postretirement Benefits Three Months Ended Nov. 30, (Dollars in millions) 2009 2008 Service Cost for Benefits Earned During the Period $ 3 $ 3 Interest Cost on Benefit Obligation 4 5 Amortization of Unrecognized Net Gain (4) (4) Total Net Periodic Benefit Cost $ 3 $ 4 Monsanto contributed $75 million and $15 million to its U.S. qualified plan and $3 million and $2 million to plans outside the United States in each of the three month periods ended Nov. 30, 2009, and Nov. 30, 2008, respectively. As of Nov. 30, 2009, management expects to make additional contributions of approximately $35 million and $19 million to the companys pension plans in the United States and outside the United States, respectively, in fiscal year 2010. Employee Savings PlanThe Monsanto leveraged employee stock ownership plan (Monsanto ESOP) debt was restructured in November 2008 to level out the future allocation of stock thereunder in an impartial manner intended to ensure equitable treatment for and generally to be in the best interests of current and future plan participants consistent with the level of benefits that Monsanto intended for the plan to provide to participants. To that end, the terms of the restructuring were determined pursuant to an arms length negotiation between Monsanto and an independent trust company serving as fiduciary for the plan for this restructuring. In this role, the independent fiduciary determined that the restructuring, including certain financial commitments and enhancements that were made or will be made in the future by Monsanto to benefit participants and beneficiaries of the plan, was completed in accordance with the best interests of plan participants. A liability of $53 million and $52 million is due to the Monsanto ESOP from the company and is included in other liabilities on the Condensed Statements of Financial Position as of Nov. 30, 2009, and Aug. 31, 2009, respectively, related to this restructuring and the 2004 ESOP enhancement.

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
STOCK-BASED COMPENSATION PLANS	NOTE 16. STOCK-BASED COMPENSATION PLANSThe following table shows total stock-based compensation expense included in the Statements of Consolidated Operations for the three months ended Nov. 30, 2009, and Nov. 30, 2008. Stock-based compensation cost capitalized in inventory was $7 million as of Nov. 30, 2009, and Aug. 31, 2009. Three Months Ended Nov. 30, (Dollars in millions) 2009 2008 Cost of Goods Sold $ 4 $ 4 Selling, General and Administrative Expenses 15 16 Research and Development Expenses 5 6 Pre-Tax Stock-Based Compensation Expense 24 26 Income Tax Benefit (8) (9) Net Stock-Based Compensation Expense $ 16 $ 17 During the three months ended Nov. 30, 2009, Monsanto granted 3,249,030 stock options and 260,525 restricted stock units to employees under the Monsanto Company Long-Term Incentive Plan (LTIP), as amended, and the Monsanto Company 2005 Long-Term Incentive Plan (2005 LTIP). No restricted stock awards were granted under the LTIP or the 2005 LTIP during the first quarter of fiscal year 2010. In addition, during the three months ended Nov. 30, 2009, 17,970 shares of deferred stock and 1,190 shares of restricted stock were granted to directors under the Monsanto Non-Employee Director Equity Incentive Compensation Plan (Director Plan). The weighted-average grant-date fair value of non-qualified stock options granted during the three months ended Nov. 30, 2009, was $24.05 per share. Pre-tax unrecognized compensation expense for stock options, net of estimated forfeitures, was $120 million as of Nov. 30, 2009, and will be recognized as expense over a weighted-average period of 2.4years.The weighted-average grant-date fair value of restricted stock units granted during the first quarter of fiscal year 2010 was $70.61 per share. Pre-tax unrecognized compensation expense, net of estimated forfeitures, for nonvested restricted stock and restricted stock units was $1 million and $85 million, respectively, as of Nov. 30, 2009, which will be recognized as expense over the weighted-average remaining requisite service periods. The weighted-average remaining requisite service periods for nonvested restricted stock and restricted stock units were 1.7 years and 2.8 years, respectively, as of Nov. 30, 2009. The weighted-average grant-date fair value of directors deferred stock and directors restricted stock granted during the three months ended Nov. 30, 2009 was $81.94, per share. Pre-tax unrecognized compensation expense for awards granted under the Director Plan was $1 million as of Nov. 30, 2009, and will be recognized as expense over a weighted-average period of one year.

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME (LOSS)
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
COMPREHENSIVE INCOME (LOSS)	NOTE 17. COMPREHENSIVE INCOME (LOSS)Comprehensive income (loss) includes all nonshareowner changes in equity and consists of net income, foreign currency translation adjustments, net unrealized losses on available-for-sale securities, postretirement benefit plan activity, and net accumulated derivative gains and losses on cash flow hedges not yet realized. As of Nov. 30, As of Aug. 31, (Dollars in millions) 2009 2009 Accumulated Foreign Currency Translation Adjustments $ 78 $ (141) Net Unrealized Loss on Investments, Net of Tax (3) (6) Net Accumulated Derivative Loss, Net of Tax (67) (101) Postretirement Benefit Plan Activity, Net of Tax (493) (496) Accumulated Other Comprehensive Loss $ (485) $ (744)

EARNINGS

EARNINGS (LOSS) PER SHARE
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
EARNINGS (LOSS) PER SHARE	NOTE 18. EARNINGS (LOSS) PER SHARE Basic (loss) earnings per share (EPS) was computed using the weighted-average number of common shares outstanding during the period shown in the table below. The diluted EPS computation takes into account the effect of dilutive potential common shares, as shown in the table below. In the three months ended Nov. 30, 2009, basic loss per share and diluted loss per share were the same because the effect of dilutive potential securities would have been antidilutive as the company generated a loss from continuing operations. Potential common shares consist primarily of stock options, restricted stock, restricted stock units and directors deferred shares calculated using the treasury stock method and are excluded if their effect is antidilutive. Approximately 5.0 million stock options were excluded from the computations of dilutive potential common shares as they were antidilutive as of Nov. 30, 2008. Effective Sept. 1, 2009, the company retrospectively adopted a FASB-issued standard that requires unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents to be included in the two-class method of computing earnings per share as described in the Earnings Per Share topic of the ASC. The adoption of this standard increased the weighted average number of basic and diluted shares by 0.6 million and 0.2 million, respectively, for the three months ended Nov. 30, 2008, but did not change net income per share on the consolidated financial statements. Three Months Ended Nov. 30, 2009 2008 Weighted-Average Number of Common Shares 545.6 548.8 Dilutive Potential Common Shares 8.8

SUPPLEMENTAL CASH FLOW INFORMAT

SUPPLEMENTAL CASH FLOW INFORMATION
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
SUPPLEMENTAL CASH FLOW INFORMATION	NOTE 19. SUPPLEMENTAL CASH FLOW INFORMATION Cash payments for interest and taxes were as follows: Three Months Ended Nov. 30, (Dollars in millions) 2009 2008 Interest $ 30 $ 18 Taxes 57 97

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
COMMITMENTS AND CONTINGENCIES	NOTE 20. COMMITMENTS AND CONTINGENCIESEnvironmental and Litigation Liabilities: Monsanto is involved in environmental remediation and legal proceedings related to its current business and, pursuant to its indemnification obligations, related to Pharmacias former chemical and agricultural businesses. In addition, Monsanto has liabilities established for various product claims. With respect to certain of these proceedings, Monsanto has a liability recorded of $267 million and $262 million as of Nov. 30, 2009, and Aug. 31, 2009, respectively, for the estimated contingent liabilities. Information regarding the environmental liabilities appears in Monsantos Report on Form 10-K for the fiscal year ended Aug. 31, 2009.Litigation: The above liability includes amounts related to certain third-party litigation with respect to Monsantos business, as well as tort litigation related to Pharmacias former chemical business, including lawsuits involving polychlorinated biphenyls (PCBs), dioxins, and other chemical and premises liability litigation. Additional matters that are not reflected in the liability may arise in the future, and Monsanto may manage, settle, or pay judgments or damages with respect thereto in order to mitigate contesting potential liability. Following is a description of one of the more significant litigation matters reflected in the liability. As described in our Report on Form 10-K for the fiscal year ended Aug. 31, 2009, on Dec. 17, 2004, 15 plaintiffs filed a purported class action lawsuit, styled Virdie Allen, et al. v. Monsanto, et al., in the Putnam County, West Virginia, state court against Monsanto, Pharmacia and seven other defendants. Monsanto is named as the successor in interest to the liabilities of Pharmacia. The alleged class consists of all current and former residents, workers, and students who, between 1949 and the present, were allegedly exposed to dioxins/furans contamination in counties surrounding Nitro, West Virginia. The complaint alleges that the source of the contamination is a chemical plant in Nitro, formerly owned and operated by Pharmacia and later by Flexsys, a joint venture between Solutia and Akzo Nobel Chemicals, Inc. (Akzo Nobel). Akzo Nobel and Flexsys were named defendants in the case but Solutia was not, due to its then pending bankruptcy proceeding. The suit seeks damages for property cleanup costs, loss of real estate value, funds to test property for contamination levels, funds to test for human exposure, and future medical monitoring costs. The complaint also seeks an injunction against further contamination and punitive damages. Monsanto has agreed to indemnify and defend Akzo Nobel and the Flexsys defendant group. The class action certification hearing was held on Oct. 29, 2007. On Jan. 8, 2008, the trial court issued an order certifying the Carter and Allen (now Zina G. Bibb et al. v. Monsanto et al., because Bibb replaced Allen as class representative) cases as class action matters. The court has set a trial date of April 4, 2011, for the Bibb class action. In October 2007 and November 2009, a total of approximately 200 separate, single plaintiff civil actions were filed in Putnam Count

SEGMENT INFORMATION

SEGMENT INFORMATION
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
SEGMENT INFORMATION	NOTE 21. SEGMENT INFORMATION Monsanto conducts its worldwide operations through global businesses, which are aggregated into reportable segments based on similarity of products, production processes, customers, distribution methods and economic characteristics. The operating segments are aggregated into two reportable segments: Seeds and Genomics and Agricultural Productivity. The Seeds and Genomics segment consists of the global seeds and related traits businesses and biotechnology platforms. Within the Seeds and Genomics segment, Monsantos significant operating segments are corn seed and traits, soybean seed and traits, cotton seed and traits, vegetable seeds and all other crops seeds and traits. The wheat and sugarcane businesses acquired in fourth and second quarter 2009, respectively, are included in the all other crops seeds and traits operating segment. The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products. The Dairy business, which was previously included in the Agricultural Productivity segment, was divested in fiscal year 2009 and is included in discontinued operations. Within the Agricultural Productivity segment, the significant operating segments are ROUNDUP and other glyphosate-based products and all other agricultural products. EBIT is defined as earnings (loss) before interest and taxes and is the primary operating performance measure for the two business segments. EBIT is useful to management in demonstrating the operational profitability of the segments by excluding interest and taxes, which are generally accounted for across the entire company on a consolidated basis. Sales between segments were not significant. Certain selling, general and administrative expenses are allocated between segments based on activity. Based on the Agricultural Productivity segments decreasing contribution to total Monsanto operations, the allocation percentages were changed at the beginning of fiscal year 2010. Data for the Seeds and Genomics and Agricultural Productivity reportable segments, as well as for Monsantos significant operating segments, is presented in the table that follows: Three Months Ended Nov. 30, (Dollars in millions) 2009 2008 Net Sales(1) Corn seed and traits $ 569 $ 628 Soybean seed and traits 201 212 Cotton seed and traits 59 47 Vegetable seeds 173 157 All other crops seeds and traits 29 55 Total Seeds and Genomics $ 1,031 $ 1,099 ROUNDUP and other glyphosate-based herbicides $ 509 $ 1,359 All other agricultural products 157 191 Total Agricultural Productivity $ 666 $ 1,550 Total $ 1,697 $ 2,649 EBIT(2)(3)(4) Seeds and Genomics $ (57) $ 65 Agricultural Productivity 34 673 Total $ (23) $ 738 Depreciation and Amortization Expense Seeds and Genomics $ 110 $ 103 Agricultural Productivity 34 32 Total $ 144 $ 135 (1)Represents net sales from continuing operations.(2)EBIT is defined as earnings (loss) before interest and taxes; see the following table for reconciliation. Earnings (loss) is intended to mean net income (loss) as presented in the Statements

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
DISCONTINUED OPERATIONS	NOTE 22. DISCONTINUED OPERATIONSDairy Business Divestiture: During fourth quarter 2008, the company determined that the Dairy business was no longer consistent with its strategic business objectives, and thus entered into an agreement to sell the majority of the Dairy business assets (excluding cash, trade receivables and certain property) to Eli Lilly and Company for $300 million, plus additional contingent consideration. The contingent consideration is a 10 year earn-out with potential annual payments being earned by Monsanto if certain revenue levels are exceeded. On Oct. 1, 2008, Monsanto consummated the sale to Eli Lilly after receiving approval from the appropriate regulatory agencies. As a result, the Dairy business has been segregated from continuing operations and presented as discontinued operations. The Dairy business was previously reported as a part of the Agricultural Productivity segment. During the three months ended Nov. 30, 2008, income from operations of discontinued businesses included an $11 million pre-tax gain related to the sale. During the three months ended Nov. 30, 2009, income from operations of discontinued businesses included a $5 million pre-tax gain related to the sale of assets.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS
	3 Months Ended Nov. 30, 2009 USD / shares
Notes to the Consolidated Financial Statements - Unaudited
SUBSEQUENT EVENTS	NOTE 23. SUBSEQUENT EVENTS Monsanto has evaluated subsequent events, as defined by the Subsequent Events topic of the ASC, through the date that the financial statements were issued on Jan. 8, 2010.On Dec. 7, 2009, the board of directors declared a quarterly dividend on the companys common stock of 26.5 cents per share. The dividend is payable on Jan. 29, 2010, to shareowners of record on Jan. 8, 2010.