Monsanto 10-Q 8 Apr 10 2010 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	6 Months Ended Feb. 28, 2010	Apr. 01, 2010	Feb. 28, 2009
Document and Entity Information
Document type	10-Q
Document period end date	2010-02-28
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		545,557,688
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 Feb. 28, 2010	3 Months Ended Feb. 28, 2009	6 Months Ended Feb. 28, 2010	6 Months Ended Feb. 28, 2009
Statements of Consolidated Operations
Net Sales	$3,890	$4,035	$5,587	$6,684
Cost of goods sold	1,791	1,514	2,749	2,613
Gross Profit	2,099	2,521	2,838	4,071
Operating Expenses:
Selling, general and administrative expenses	512	522	1,008	1,072
Research and development expenses	279	265	546	517
Acquired in-process research and development	0	162	0	162
Restructuring charges, net	30	0	44	0
Total Operating Expenses	821	949	1,598	1,751
Income from Operations	1,278	1,572	1,240	2,320
Interest expense	41	26	80	49
Interest income	(14)	(18)	(25)	(43)
Other expense (income), net	2	32	(10)	58
Income from Continuing Operations Before Income Taxes	1,249	1,532	1,195	2,256
Income tax provision	360	440	330	616
Income from Continuing Operations Including Portion Attributable to Noncontrolling Interest	889	1,092	865	1,640
Discontinued Operations:
Income from operations of discontinued businesses	0	1	5	19
Income tax provision	0	0	0	8
Income on Discontinued Operations	0	1	5	11
Net Income	889	1,093	870	1,651
Less: Net income attributable to noncontrolling interest	2	1	2	3
Net Income Attributable to Monsanto Company	887	1,092	868	1,648
Amounts Attributable to Monsanto Company:
Income from continuing operations	887	1,091	863	1,637
Income on discontinued operations	0	1	5	11
Net Income Attributable to Monsanto Company	$887	$1,092	$868	$1,648
Basic Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	1.63	1.99	1.58	2.99
Income on discontinued operations	$0	0.01	0.01	0.02
Net Income	1.63	$2	1.59	3.01
Diluted Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	1.6	1.96	1.56	2.94
Income on discontinued operations	$0	0.01	0.01	0.02
Net Income	1.6	1.97	1.57	2.96
Weighted Average Shares Outstanding Basic	545.8	547.2	545.7	548
Weighted Average Shares Outstanding Diluted	553.4	555.5	553.4	556.5
Dividends Declared per Share	0.53	0.51	0.53	0.51

Condensed Statements of Consoli

Condensed Statements of Consolidated Financial Position (Unaudited) (USD $)
In Millions	Feb. 28, 2010	Aug. 31, 2009
Current Assets:
Cash and cash equivalents	$1,607	$1,956
Trade receivables, net	2,093	1,556
Miscellaneous receivables	634	654
Deferred tax assets	595	662
Inventory, net	3,199	2,934
Other current assets	117	121
Total Current Assets	8,245	7,883
Total property, plant and equipment	7,391	7,158
Less accumulated depreciation	3,704	3,549
Property, Plant and Equipment, Net	3,687	3,609
Goodwill	3,226	3,218
Other Intangible Assets, Net	1,313	1,371
Noncurrent Deferred Tax Assets	775	743
Long-Term Receivables, Net	468	557
Other Assets	532	496
Total Assets	18,246	17,877
Current Liabilities:
Short-term debt, including current portion of long-term debt	114	79
Accounts payable	673	676
Income taxes payable	266	79
Accrued compensation and benefits	185	263
Accrued marketing programs	667	934
Deferred revenues	601	219
Grower production accruals	208	139
Dividends payable	145	145
Customer payable	0	307
Restructuring reserves	197	286
Miscellaneous short-term accruals	623	629
Total Current Liabilities	3,679	3,756
Long-Term Debt	1,726	1,724
Postretirement Liabilities	720	793
Long-Term Deferred Revenue	444	488
Noncurrent Deferred Tax Liabilities	140	153
Long-Term Portion of Environmental and Litigation Liabilities	191	197
Other Liabilities	605	641
Shareowners Equity:
Common stock (authorized: 1,500,000,000 shares, par value $0.01) Issued 587,322,226 and 585,557,964 shares, respectively; Outstanding 545,569,237 and 545,407,427 shares, respectively	6	6
Treasury stock 41,752,989 and 40,150,537 shares, respectively, at cost	(1,701)	(1,577)
Additional contributed capital	9,815	9,695
Retained earnings	3,260	2,682
Accumulated other comprehensive loss	(674)	(744)
Reserve for ESOP debt retirement	(5)	(6)
Total Monsanto Company Shareowners Equity	10,701	10,056
Noncontrolling Interest	40	69
Total Shareowners Equity	10,741	10,125
Total Liabilities and Shareowners Equity	$18,246	$17,877

1_Condensed Statements of Conso

Condensed Statements of Consolidated Financial Position (Parenthetical) (Unaudited) (USD $)
	Feb. 28, 2010	Aug. 31, 2009
Shareowners Equity:
Common Stock, Authorized	1,500,000,000	1,500,000,000
Common Stock, Par Value	0.01	0.01
Common Stock, Issued	587,322,226	585,557,964
Common Stock, Outstanding	545,569,237	545,407,427
Treasury Stock, at Cost	41,752,989	40,150,537

Statements of Consolidated Cash

Statements of Consolidated Cash Flows (Unaudited) (USD $)
In Millions	6 Months Ended Feb. 28, 2010	6 Months Ended Feb. 28, 2009
Operating Activities:
Net Income	$870	$1,651
Items that did not require (provide) cash:
Depreciation and amortization	294	270
Bad-debt expense	26	49
Stock-based compensation expense	52	55
Excess tax benefits from stock-based compensation	(31)	(12)
Deferred income taxes	(62)	2
Restructuring charges, net	44	0
Equity affiliate income, net	(18)	(9)
Acquired in-process research and development	0	162
Net gain on sale of a business or other assets	(2)	(6)
Other items	38	(2)
Changes in assets and liabilities that provided (required) cash, net of acquisitions:
Trade receivables, net	(459)	(244)
Inventory, net	(241)	(972)
Deferred revenues	341	158
Accounts payable and other accrued liabilities	(323)	402
Restructuring cash payments	(124)	0
Pension contributions	(86)	(34)
Net investment hedge settlement	(4)	27
Other items	(59)	3
Net Cash Provided by Operating Activities	256	1,500
Cash Flows Required by Investing Activities:
Maturities of short-term investments	0	102
Capital expenditures	(342)	(461)
Acquisition of businesses, net of cash acquired	(23)	(273)
Purchases of long-term debt and equity securities	(8)	(7)
Technology and other investments	(14)	(26)
Proceeds from divestiture of a business	0	300
Other investments and property disposal proceeds	42	6
Net Cash Required by Investing Activities	(345)	(359)
Cash Flows Required by Financing Activities:
Net change in financing with less than 90-day maturities	126	(73)
Short-term debt proceeds	25	55
Short-term debt reductions	(32)	0
Long-term debt reductions	(1)	(69)
Payments on other financing	(1)	0
Treasury stock purchases	(124)	(274)
Stock option exercises	38	17
Excess tax benefits from stock-based compensation	31	12
Dividend payments	(290)	(264)
Dividend payments to noncontrolling interests	(31)	(5)
Net Cash Required by Financing Activities	(259)	(601)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(1)	(149)
Net (Decrease) Increase in Cash and Cash Equivalents	(349)	391
Cash and Cash Equivalents at Beginning of Period	1,956	1,613
Cash and Cash Equivalents at End of Period	$1,607	$2,004

2_Condensed Statements of Conso

Condensed 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
Net 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 activity, 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 per common share				(565)					(565)
Dividend payments to noncontrolling interests								(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
Balance at Aug. 31, 2009	6
Net Income				868				2	870
Foreign currency translation					(17)	[1]			(17)
Postretirement benefit plan activity, net of tax					22	[1]		0	22
Realized and unrealized gain on investments, net of tax of $2					3	[1]			3
Accumulated derivative activity, net of tax					62	[1]			62
Comprehensive income								2	940
Treasury stock purchases		(124)							(124)
Restricted stock withholding			(1)						(1)
Issuance of shares under employee stock plans			38						38
Excess tax benefits from stock-based compensation			31						31
Stock-based compensation expense			52						52
Cash dividends per common share				(290)					(290)
Dividend payments to noncontrolling interests								(31)	(31)
Allocation of ESOP shares, net of dividends received							1		1
Balance at Feb. 28, 2010	$6	($1,701)	$9,815	$3,260	($674)	[1]	($5)	$40	$10,741
[1]See Note 17 - Comprehensive Income (Loss) - for further details of the components of accumulated other comprehensive loss.

3_Condensed Statements of Conso

Condensed Statements of Consolidated Shareholders Equity and Comprehensive Income (Parenthetical) (Unaudited) (USD $)
In Millions, except Per Share data	6 Months Ended Feb. 28, 2010	12 Months Ended Aug. 31, 2009
Equity Parenthetical Abstract
Postretirement benefit plan activity, tax expense (benefit)	$14	($119)
Accumulated derivative activity, tax expense (benefit)	37	(95)
Realized and unrealized gain on investments, tax expense	$2	$0
Cash dividends per common share	0.53	1.04

BACKGROUND AND BASIS OF PRESENT

BACKGROUND AND BASIS OF PRESENTATION
	6 Months Ended Feb. 28, 2010
BACKGROUND AND BASIS OF PRESENTATION [ABSTRACT]
BACKGROUND AND BASIS OF PRESENTATION	NOTE 1.BACKGROUND AND BASIS OF PRESENTATION Monsanto Company, along with its subsidiaries, is a leading global provider of agricultural products for farmers. Monsanto's 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 Monsanto's Report on Form 10-K for the fiscal year ended Aug. 31, 2009. Financial information for the first six months of fiscal year 2010 should not be annualized because of the seasonality of the company's business.

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS
	6 Months Ended Feb. 28, 2010
NEW ACCOUNTING STANDARDS [ABSTRACT]
NEW ACCOUNTING STANDARDS	NOTE 2.NEW ACCOUNTING STANDARDS In January 2010, the FASB issued an amendment to the Fair Value Measurements and Disclosures topic of the ASC. This amendment requires disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. This amendment is effective for periods beginning after Dec. 15, 2009, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements, which will be effective for fiscal years beginning after Dec. 15, 2010. Accordingly, Monsanto will adopt this amendment in third quarter 2010, except for the additional Level 3 requirements which will be adopted in fiscal year 2011. The company is currently evaluating the disclosure impact of adopting this standard on the consolidated financial statements. 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 company's 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 its QSPE, other financing programs and on the consolidated financial statements. In April

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS
	6 Months Ended Feb. 28, 2010
BUSINESS COMBINATIONS [ABSTRACT]
BUSINESS COMBINATIONS	NOTE 3.BUSINESS COMBINATIONS Effective 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 six months ended Feb. 28, 2010, 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 Monsanto's 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 Monsanto's previous equity interest in Seminium and is included in other expense (income), net in the Statements of Consolidated Operations for the six months ended Feb. 28, 2010. 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 Monsanto's 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 and second quarter 2010 and the third and fourth quarter 2009 acquisitions are preliminary and are subject to adjustm

CUSTOMER FINANCING PROGRAMS

CUSTOMER FINANCING PROGRAMS
	6 Months Ended Feb. 28, 2010
CUSTOMER FINANCING PROGRAMS [ABSTRACT]
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 Monsanto's 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 Monsanto's 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 approximated 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 six months ended Feb. 28, 2009. Proceeds from customer loans sold through the financing program totaled $130 million for the first six 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 Feb. 28, 2010, or Aug. 31, 2009. During the second quarter 2010, Monsanto began participating in a revolving financing program in Brazil that allows Monsanto to transfer up to 1 billion Brazilian reais (approximately $550 million) in customer receivables to a QSPE. Third parties, primarily investment funds, hold an 88 percent senior interest in the QSPE, and Monsanto holds the remaining 12 percent subordinate interest. Because QSPEs are excluded from the scope of the current guidance within the Consolidation topic of the ASC, and Monsanto does not have the unilateral right to liquidate the QSP

RESTRUCTURING

RESTRUCTURING
	6 Months Ended Feb. 28, 2010
RESTRUCTURING [ABSTRACT]
RESTRUCTURING	NOTE 5. RESTRUCTURING Restructuring charges were recorded in the Statements of Consolidated Operations as follows: Three Months Ended Six Months Ended (Dollars in millions) Feb. 28, 2010 Feb. 28, 2010 Costs of Goods Sold(1) $ (54) $ (54) Restructuring Charges, Net(1)(2) (30) (44) Loss from Continuing Operations Before Income Taxes (84) (98) Income Tax Benefit 30 31 Net Loss $ (54) $ (67) 1)For the three months and six months ended Feb. 28, 2010, the $54 million of restructuring charges recorded in cost of goods sold related to the Seeds and Genomics segment. For the three months ended Feb. 28, 2010, the $30 million of restructuring charges recorded in restructuring charges, net were split by segment as follows: $25 million in Agricultural Productivity and $5 million in Seeds and Genomics. For the six months ended Feb. 28, 2010, the $44 million of restructuring charges were split by segment as follows: $36 million in Agricultural Productivity and $8 million in Seeds and Genomics. (2)The restructuring charges for the three and six months ended Feb. 28, 2010, include reversals of $9 million and $11 million, respectively, related to the 2009 Restructuring Plan. On June 23, 2009, the company's 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 the vegetables and U.S. corn businesses. 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 $84 million and $98 million incurred by segment under the 2009 Restructuring Plan for the three and six months ended Feb. 28, 2010, respectively, as well as the cumulative pretax charges of $504 million under the 2009 Restructuring Plan. Three Months Ended Feb. 28, 2010 Six Months Ended Feb. 28, 2010 Seeds and Agricultural Seeds and Agricultural (Dollars in millions) Genomics Productivity Total Genomics Productivity Total Work Force Reductions $ 3 $ 1 $ 4 $ 4 $ 11 $ 15 Facility Closures / Exit Costs 2 24 26 3 25 28 Asset Impairments Property, plant and equipment 1 1 Inventory 54 54 54 54 Total Restructuring Charges, Net $ 59 $ 25 $ 84 $ 62 $ 36 $ 98 Cumulative Amount through Feb. 28, 2010 Seeds and Agricultural (Dollars in millions) Genomics Productivity Total Work Force Reductions $ 179 $

RECEIVABLES

RECEIVABLES
	6 Months Ended Feb. 28, 2010
RECEIVABLES [ABSTRACT]
RECEIVABLES	NOTE 6. RECEIVABLES Trade receivables on the Condensed Statements of Consolidated Financial Position are net of allowances of $180 million and $162 million as of Feb. 28, 2010, and Aug. 31, 2009, respectively. Long-term receivables on the Condensed Statements of Consolidated Financial Position are net of allowances of $179 million and $172 million as of Feb. 28, 2010, and Aug. 31, 2009, respectively.

INVENTORY

INVENTORY
	6 Months Ended Feb. 28, 2010
INVENTORY [ABSTRACT]
INVENTORY	NOTE 7. INVENTORY Components of inventory are: As of Feb. 28, As of Aug. 31, (Dollars in millions) 2010 2009 Finished Goods $ 1,429 $ 1,362 Goods In Process 1,433 1,340 Raw Materials and Supplies 490 417 Inventory at FIFO Cost 3,352 3,119 Excess of FIFO over LIFO Cost (153) (185) Total $ 3,199 $ 2,934

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS
	6 Months Ended Feb. 28, 2010
GOODWILL AND OTHER INTANGIBLE ASSETS [ABSTRACT]
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the net carrying amount of goodwill for the first six months 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) 13 13 Effect of foreign currency translation adjustments and other (5) (5) Balance as of Feb. 28, 2010 $ 3,164 $ 62 $ 3,226 In the six months ended Feb. 28, 2010, goodwill increased due to the 2010 acquisition of Seminium and the updating of the preliminary purchase price allocations for some of the 2009 acquisitions. See Note 3 Business Combinations for further information. Information regarding the company's other intangible assets is as follows: As of Feb. 28, 2010 As of Aug. 31, 2009 Carrying Accumulated Carrying Accumulated (Dollars in millions) Amount Amortization Net Amount Amortization Net Acquired Germplasm $ 1,168 $ (622) $ 546 $ 1,172 $ (604) $ 568 Acquired Biotechnology Intellectual Property 835 (625) 210 ` 829 (589) 240 Trademarks 347 (87) 260 345 (81) 264 Customer Relationships 321 (100) 221 317 (88) 229 Other 123 (47) 76 110 (40) 70 Total $ 2,794 $ (1,481) $ 1,313 $ 2,773 $ (1,402) $ 1,371 The increases in other intangible assets during the six months ended Feb. 28, 2010, primarily resulted from the acquisition of Seminium described in Note 3 Business Combinations. Total amortization expense of other intangible assets was $39 million in second quarter of fiscal year 2010 and $39 million in second quarter of fiscal year 2009. Total amortization expense of other intangible assets was $79 million for the six months ended Feb. 28, 2010, and $72 million for the six months ended Feb. 28, 2009. Estimated intangible asset amortization expense for each of the five succeeding fiscal years for owned assets as of Feb. 28, 2010, has not changed significantly from the amounts disclosed in Monsanto's Report on Form 10-K for the fiscal year ended Aug. 31, 2009.

INVESTMENTS AND EQUITY AFFILIAT

INVESTMENTS AND EQUITY AFFILIATES
	6 Months Ended Feb. 28, 2010
INVESTMENTS AND EQUITY AFFILIATES [ABSTRACT]
INVESTMENTS AND EQUITY AFFILIATES	NOTE 9. INVESTMENTS AND EQUITY AFFILIATES Investments Monsanto has investments in long-term equity securities, which are considered available-for-sale. As of Feb. 28, 2010, and Aug. 31, 2009, these long-term debt and equity securities are recorded in other assets in the Condensed Statements of Consolidated Financial Position at a fair value of $36 million and $25million, respectively. Net unrealized losses (net of deferred taxes) of $4million and $6million are included in accumulated other comprehensive loss in shareowners' equity related to these investments as of Feb. 28, 2010, and Aug. 31, 2009, respectively. Equity Affiliates Monsanto 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 Feb. 28, 2010, and Aug. 31, 2009, this investment is recorded in other assets in the Condensed Statements of Consolidated Financial Position at $62 million and $60 million, respectively. Monsanto purchased $101million and $109 million of inventory from the seed supplier for the three and six months ended Feb. 28, 2010, respectively, and $41 million and $140 million for the three and six months ended Feb. 28, 2009. There were no sales of inventory to the seed supplier in either 2010 or 2009. As of Feb. 28, 2010, and Aug. 31, 2009, the amount payable to the seed supplier was $18 million and $84 million, respectively, and recorded in accounts payable in the Condensed Statements of Consolidated Financial Position. As of Feb. 28, 2010, there were no prepayments, while the prepayment as of Aug. 31, 2009, was $5million, included in other current assets in the Condensed Statements of Consolidated Financial Position related to inventory delivered in fiscal year 2010.

DEFERRED REVENUE

DEFERRED REVENUE
	6 Months Ended Feb. 28, 2010
DEFERRED REVENUE [ABSTRACT]
DEFERRED REVENUE	NOTE 10. DEFERRED REVENUE In 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 for the three months ended Feb. 28, 2010, and Feb. 28, 2009, and revenue of $40 million was recorded for the six months ended Feb. 28, 2010, and Feb. 28, 2009. As of Feb. 28, 2010, and Aug. 31, 2009, the remaining receivable balance is $462 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 Feb. 28, 2010, and Aug. 31, 2009, the remaining deferred revenue balance is $436 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 $8 million for the three and six months ended Feb. 28, 2010, respectively. Interest income for the three and six months ended Feb. 28, 2009, was $5 million and $10 million, respectively. In third quarter 2008, Monsanto and Syngenta entered into a GENUITY ROUNDUP READY 2 YIELD Soybean License Agreement. The agreement grants Syngenta access to Monsanto's GENUITY 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 Feb. 28, 2010, and Aug. 31, 2009, the remaining receivable balance is $71 million and $70 million, respectively, related to the net present value of expected payments under this agreement. The majority of this balance is included in long-term receivables on the Condensed Statements of Consolidated Financial Position and the current portion is included in trade receivables. The interest portion of this receivable is reported in interest income in the Statements of Consolidated Operations and was less than $1 million and $1 million for both the three and six months ended Feb. 28, 2010, and Feb. 28, 2009. As of Feb. 28, 2010, and Aug. 31, 2009, the remaining deferred revenue balance of $66 million and $70 million, respectively, is included in long-term deferred revenue in the Condensed Statements of Consolidated F

INCOME TAXES

INCOME TAXES
	6 Months Ended Feb. 28, 2010
INCOME TAXES [ABSTRACT]
INCOME TAXES	NOTE 11. INCOME TAXES Management regularly assesses the tax risk of the company's tax return filing positions for all open years and establishes reserves accordingly. In the first half of 2010, statutes expired in several jurisdictions and several domestic and ex-US tax matters were resolved favorably. In addition, favorable adjustments were recorded as a result of the preparation of tax returns in several jurisdictions. Primarily as a result of these items, Monsanto recorded a tax benefit of $32 million in the first half of 2010. During the first half of 2009 several domestic and ex-US 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 the first half of 2009, Monsanto recorded an income tax benefit of $95 million primarily as a result of these items.

DEBT AND OTHER CREDIT ARRANGEME

DEBT AND OTHER CREDIT ARRANGEMENTS
	6 Months Ended Feb. 28, 2010
DEBT AND OTHER CREDIT ARRANGEMENTS [ABSTRACT]
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 $486 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 $12 million and $9 million were recorded in accumulated other comprehensive loss to reflect the after tax change in the fair value of the forward-starting interest rate swaps as of Feb. 28, 2010, and Aug. 31, 2009, respectively. These swaps are accounted for under the Derivatives and Hedging topic of the ASC. As of Feb. 28, 2010, Monsanto did not have any commercial paper outstanding. The fair value of the total short-term debt was $114 million and $79 million as of Feb. 28, 2010, and Aug. 31, 2009, respectively. The fair value of the total long-term debt was $1,843 million and $1,863 million as of Feb. 28, 2010, and Aug. 31, 2009, respectively.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS
	6 Months Ended Feb. 28, 2010
FAIR VALUE MEASUREMENTS [ABSTRACT]
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. 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 Feb. 28, 2010, 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 Feb. 28, 2010 Using Cash Collateral Net (Dollars in millions) Level 1 Level 2 Level 3 Offset (1) Balance Assets at Fair Value: Cash equivalents $ 1,276 $ $ $ $ 1,276 Debt and Equity securities 32 4 36 Derivative assets related to: Foreign currency 32 32 Interest rates 19 19 Commodities 11 6 (11) 6 Total Assets at Fair Value $ 1,319 $ 57 $ 4 $ (11) $ 1,369 Liabilities at Fair Value: D

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS
	6 Months Ended Feb. 28, 2010
FINANCIAL INSTRUMENTS [ABSTRACT]
FINANCIAL INSTRUMENTS	NOTE 14. FINANCIAL INSTRUMENTS Monsanto's 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 Hedges The 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. Monsanto's 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. Monsanto's 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. Monsanto's 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 company's 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 18 months for foreign-currency hedges, 49 months for commodity hedges and 30 months for interest rate hedges. During the next 12 months, a pretax net loss of approximately $40 million will be reclassified from other comprehensive income into earnings. During the three and six months ended Feb. 28, 2010, a loss of $25 million and $29 million, respectively, 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

POSTRETIREMENT BENEFITS-PENSION

POSTRETIREMENT BENEFITS-PENSIONS, HEALTHCARE AND OTHER
	6 Months Ended Feb. 28, 2010
POSTRETIREMENT BENEFITS-PENSIONS, HEALTHCARE AND OTHER [ABSTRACT]
POSTRETIREMENT BENEFITS-PENSIONS, HEALTHCARE AND OTHER	NOTE 15. POSTRETIREMENT BENEFITS PENSIONS, HEALTH CARE AND OTHER The majority of Monsanto's 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 company's net periodic benefit cost for pension benefits, and health care and other postretirement benefits include the following components: Three Months Ended Feb. 28, 2010 Three Months Ended Feb. 28, 2009 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 $ 12 $ 1 $ 13 $ 12 $ 1 $ 13 Interest Cost on Benefit Obligation 22 4 26 26 4 30 Assumed Return on Plan Assets (29) (4) (33) (28) (5) (33) Amortization of Unrecognized Net Loss 13 1 14 9 2 11 Curtailment and Settlement Charge (Gain) 2 (7) (5) Total Net Periodic Benefit Cost (Gain) $ 20 $ (5) $ 15 $ 19 $ 2 $ 21 Six Months Ended Feb. 28, 2010 Six Months Ended Feb. 28, 2009 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 $ 25 $ 3 $ 28 $ 24 $ 3 $ 27 Interest Cost on Benefit Obligation 47 8 55 53 8 61 Assumed Return on Plan Assets (61) (8) (69) (58) (9) (67) Amortization of Unrecognized Net Loss 27 2 29 19 2 21 Curtailment and Settlement Charge (Gain) 2 (7) (5) Total Net Periodic Benefit Cost (Gain) $ 40 $ (2) $ 38 $ 38 $ 4 $ 42 Health Care and Other Postretirement Benefits Three Months Ended Feb. 28, Six Months Ended Feb. 28, (Dollars in millions) 2010 2009 2010 2009 Service Cost for Benefits Earned During the Period $ 2 $ 3 $ 5 $ 6 Interest Cost on Benefit Obligation 2 4 6 9 Amortization of Unrecognized Net Gain (2) (4) (6) (8) Total Net Periodic Benefit Cost $ 2 $ 3 $ 5 $ 7 Monsanto contributed $75 million and $30 million to its U.S. qualified plan and $11 million and $4 million to plans outside the United States in each of the six month periods ended Feb. 28, 2010, and Feb. 28, 2009, respectively. As of Feb. 28, 2010, management does not expect to make additional contributions to the company's U.S. qualified plan in fiscal 2010.Pension plan funding regulations include conditions that allow a plan'scredit balance created as a result of prior years' contributions in excess of the required minimum to be used to satisfy current year contributions. Discretionary contributions made by the company previously have created a credit balance and the company expects to use a portion of it in lieu of making additional fiscal year 2010 contributions. As of Feb. 28, 2010, management expects to make additional contributions of approximately $11 million to the company's pension plans outside the United States in fiscal year 2010. Employee Savings

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS
	6 Months Ended Feb. 28, 2010
STOCK-BASED COMPENSATION PLANS [ABSTRACT]
STOCK-BASED COMPENSATION PLANS	NOTE 16. STOCK-BASED COMPENSATION PLANS The following table shows total stock-based compensation expense included in the Statements of Consolidated Operations for the three and six months ended Feb. 28, 2010, and Feb. 28, 2009. Stock-based compensation cost capitalized in inventory was $7 million as of Feb. 28, 2010, and Aug. 31, 2009. Three Months Ended Feb. 28, Six Months Ended Feb. 28, (Dollars in millions) 2010 2009 2010 2009 Cost of Goods Sold $ 4 $ 4 $ 8 $ 8 Selling, General and Administrative Expenses 17 19 32 35 Research and Development Expenses 7 6 12 12 Pre-Tax Stock-Based Compensation Expense 28 29 52 55 Income Tax Benefit (10) (10) (18) (19) Net Stock-Based Compensation Expense $ 18 $ 19 $ 34 $ 36 During the six months ended Feb. 28, 2010, Monsanto granted 3,296,890 stock options and 491,675 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 six months ended Feb. 28, 2010. In addition, during the six months ended Feb. 28, 2010, 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 six months ended Feb. 28, 2010, was $24.08 per share. Pre-tax unrecognized compensation expense for stock options, net of estimated forfeitures, was $104 million as of Feb. 28, 2010, and will be recognized as expense over a weighted-average period of 2.2years. The weighted-average grant-date fair value of restricted stock units granted during the six months ended Feb. 28, 2010, was $72.29 per share. Pre-tax unrecognized compensation expense, net of estimated forfeitures, for nonvested restricted stock and restricted stock units was $1 million and $92 million, respectively, as of Feb. 28, 2010, 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 1.6 years and 2.8 years, respectively, as of Feb. 28, 2010. The weighted-average grant-date fair value of directors' deferred stock and directors' restricted stock granted during the six months ended Feb. 28, 2010, was $81.94 per share. Pre-tax unrecognized compensation expense for awards granted under the Director Plan was $1 million as of Feb. 28, 2010, and will be recognized as expense over a weighted-average period of one year.

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME (LOSS)
	6 Months Ended Feb. 28, 2010
COMPREHENSIVE INCOME (LOSS) [ABSTRACT]
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. Information regarding comprehensive income is as follows: Three Months Ended Feb. 28, Six Months Ended Feb. 28, (Dollars in millions) 2010 2009 2010 2009 Comprehensive Income $ 700 $ 947 $ 940 $ 690 The components of accumulated other comprehensive loss are as follows: As of Feb. 28, As of Aug. 31, (Dollars in millions) 2010 2009 Accumulated Foreign Currency Translation Adjustments $ (158) $ (141) Net Unrealized Loss on Investments, Net of Tax (3) (6) Net Accumulated Derivative Loss, Net of Tax (39) (101) Postretirement Benefit Plan Activity, Net of Tax (474) (496) Accumulated Other Comprehensive Loss $ (674) $ (744)

EARNINGS PER SHARE

EARNINGS PER SHARE
	6 Months Ended Feb. 28, 2010
EARNINGS PER SHARE [ABSTRACT]
EARNINGS PER SHARE	NOTE 18. EARNINGS PER SHARE Basic earnings per share (EPS) was computed using the weighted-average number of common shares outstanding during the period shown in the table below. For the three months and six months ended Feb. 28, 2010, and Feb. 28, 2009, diluted EPS was computed taking into account the effect of dilutive potential common shares, as shown in the table below. 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 8.1 million and 5 million stock options were excluded from the computations of dilutive potential common shares as they were antidilutive for the three and six months ended Feb. 28, 2010, and Feb. 28, 2009, respectively. Of those antidilutive options, approximately 5 million stock options were excluded from the computations of dilutive potential common shares for the three and six months ended Feb. 28, 2010, and Feb. 28, 2009, as their exercise prices were greater than the average market price of common shares for the period. 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 0.3 million, respectively, for the three months ended Feb. 28, 2009, and by 0.7 million and 0.2 million, respectively, for the six months ended Feb. 28, 2009. Three Months Ended Feb. 28, Six Months Ended Feb. 28, 2010 2009 2010 2009 Weighted-Average Number of Common Shares 545.8 547.2 545.7 548.0 Dilutive Potential Common Shares 7.6 8.3 7.7 8.5

SUPPLEMENTAL CASH FLOW INFORMAT

SUPPLEMENTAL CASH FLOW INFORMATION
	6 Months Ended Feb. 28, 2010
SUPPLEMENTAL CASH FLOW INFORMATION [ABSTRACT]
SUPPLEMENTAL CASH FLOW INFORMATION	NOTE 19. SUPPLEMENTAL CASH FLOW INFORMATION Cash payments for interest and taxes were as follows: Six Months Ended Feb. 28, (Dollars in millions) 2010 2009 Interest $ 81 $ 55 Taxes 160 105 During the first half of fiscal 2010 and 2009, the company recorded the following noncash investing and financing transaction: In second quarter 2010 and 2009, the board of directors declared a dividend which was payable in third quarter 2010 and 2009, respectively. As of Feb. 28, 2010, and Feb. 28, 2009, a dividend payable of $145 million was recorded.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	6 Months Ended Feb. 28, 2010
COMMITMENTS AND CONTINGENCIES [ABSTRACT]
COMMITMENTS AND CONTINGENCIES	NOTE 20. COMMITMENTS AND CONTINGENCIES Environmental 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 Pharmacia's 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 $281 million and $262 million as of Feb. 28, 2010, and Aug. 31, 2009, respectively, for the estimated contingent liabilities. Information regarding the environmental liabilities appears in Monsanto's 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 Monsanto's business, as well as tort litigation related to Pharmacia's 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 Monsanto's Report on Form 10-K for the fiscal year ended Aug. 31, 2009, and Monsanto's Report on Form 10-Q for the quarterly period ended Nov. 30, 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 200

SEGMENT INFORMATION

SEGMENT INFORMATION
	6 Months Ended Feb. 28, 2010
SEGMENT INFORMATION [ABSTRACT]
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, Monsanto's 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 segment's 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 Monsanto's significant operating segments, is presented in the table that follows: Three Months Ended Feb. 28, Six Months Ended Feb. 28, (Dollars in millions) 2010 2009 2010 2009 Net Sales (1) Corn seed and traits $ 2,247 $ 2,078 $ 2,816 $ 2,706 Soybean seed and traits 633 615 834 827 Cotton seed and traits 34 33 93 80 Vegetable seeds 223 209 396 366 All other crops seeds and traits 111 107 140 162 Total seeds and genomics $ 3,248 $ 3,042 $ 4,279 $ 4,141 ROUNDUP and other glyphosate-based herbicides $ 465 $ 776 $ 974 $ 2,135 All other agricultural products 177 217 334 408 Total agricultural productivity $ 642 $ 993 $ 1,308 $ 2,543 Total $ 3,890 $ 4,035 $ 5,587 $ 6,684 EBIT (2)(3)(4) Seeds and genomics $ 1,362 $ 1,212 $ 1,305 $ 1,277 Agricultural productivity (87) 326 (53) 999 Total $ 1,275 $ 1,538 $ 1,252 $ 2,276 Depreciation and Amortization Expense Seeds and

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS
	6 Months Ended Feb. 28, 2010
DISCONTINUED OPERATIONS [ABSTRACT]
DISCONTINUED OPERATIONS	NOTE 22. DISCONTINUED OPERATIONS Dairy 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 six months ended Feb. 28, 2010, income from operations of discontinued businesses included a $5 million pre-tax gain related to the sale of assets. During the six months ended Feb. 28, 2009, income from operations of discontinued businesses included an $11 million pre-tax gain related to the sale.