$ 104.88

Model ScenariosPrice

TargetProbability

Target

PriceUpside Decision

Bullish $ 163.83 70%

Bearish $ 46.84 30%

Key

Assumptions

Recovery

Stage

Stable

StageRecovery

Stage

Stable Stage

2.65% 4.65% 2.65% 4.65%

15.0% 12.96% 15.0% 12.96%

1.023 1.00 1.023 1.00

17.96% 17.61% 17.96% 17.61%

30% 30% 30% 30%

Monsanto Company (NYSE:

MON)

Valuation Summary

Current Price

(Otc. 31, 2013)

Buy22.75%

Risk Free Rate

Free Cash

Flow to $128.74

8.40%

Dividend Payout RatioConstant Growth Rate

After 2018:

Market risk premium

Beta

Cost of Equity

14.00%

(Dollars in millions, except per share amounts) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Net Sales $11,365 $11,724 $10,502 $11,822 $13,504 $14,861 15740.22 16758.26 18408.26 20120.48 21793.7 23306.81Cost of goods sold 5,188 4,962 5,416 5,743 6,459 7,208Gross Profit 6,177 6,762 5,086 6,079 7,045 7,653Operating Expenses:Selling, general and administrative expenses 2,312 2,037 2,064 2,190 2,390 2,550Research and development expenses 980 1,098 1,205 1,386 1,517 1,533Acquired in-process research and development 164 163Restructuring charges, net 361 210 1 (10)Total Operating Expenses 3,456 3,659 3,479 3,577 3,897 4,083Income from Operations 2,721 3,103 1,607 2,502 3,148 3,570EBITDA 3,294 3,651 2,209 3,115 3,770 4,185Interest expense 110 129 162 162 191 172Interest income (132) (71) (56) (74) (77) (92)Solutia-related income, net (187)Other expense, net 4 78 7 40 46 61Income from Continuing Operations Before Income Taxes 2,926 2,967 1,494 2,374 2,988 3,429

Income tax provision 899 845 370 717 901 915Income from Continuing Operations Including 2,027 2,122 1,124 1,657 2,087 2,514Portion Attributable to Noncontrolling InterestDiscontinued Operations:Income from operations of discontinued businesses 20 19 4 3 10 17Income tax provision 3 8 1 4 6Income on Discontinued Operations 17 11 4 2 6 11Net Income 2,044 2,133 1,128 1,659 2,093 2,525Less: Net income attributable to noncontrolling interest 20 24 19 52 48 43Net Income Attributable to Monsanto Company $2,024 $2,109 $1,109 $1,607 $2,045 $2,482Amounts Attributable to Monsanto Company:Income from continuing operations $2,007 $2,098 $1,105 $1,605 $2,039 $2,471Income on discontinued operations 17 11 4 2 6 11Net Income Attributable to Monsanto Company $2,024 $2,109 $1,109 $1,607 $2,045 $2,482

Basic Earnings per Share Attributableto Monsanto Company:Income from continuing operations $3.66 $3.83 $2.03 $2.99 $3.82 $4.63Income on discontinued operations 0.03 0.02 0.01 0.01 0.01 0.02Net Income Attributable to Monsanto Company $3.69 $3.85 $2.04 $3.00 $3.83 $4.65Diluted Earnings per Share Attributableto Monsanto Company:Income from continuing operations $3.59 $3.78 $2.01 $2.96 $3.78 $4.58Income on discontinued operations 0.03 0.02 0.01 0.02Net Income Attributable to Monsanto Company $3.62 $3.80 $2.01 $2.96 $3.79 $4.60EPS growth 4.97% -47.11% 47.26% 28.04% 21.37%Weighted Average Shares Outstanding:Basic 548.90 547.10 543.70 536.50 534.10 533.70Diluted 559.70 555.60 550.80 542.40 540.20 539.70

(Dollars in millions, except share amounts) 2009 2010 2011 2012 2013AssetsCurrent Assets:Cash and cash equivalents (variable interest $1,956 $1,485 $2,572 $3,283 $3,668entities restricted - 2013: $140 and 2012:$120Short-term investments 302 302 254Trade receivables, net (variable interest 1,556 1,590 2,117 1,897 1,715entities restricted - 2013: $0 and 2012:$52Miscellaneous receivables 654 717 629 620 748Deferred tax assets 662 511 446 534 579Inventory, net 2,934 2,739 2,591 2,839 2,947Other current assets 121 80 152 183 166Total Current Assets 7,883 7,122 8,809 9,658 10,077Total property, plant and equipment 7,158 8,068 8,697 8,835 9,491Less: Accumulated depreciation 3,549 3,841 4,303 4,470 4,837Property, Plant and Equipment, Net 3,609 4,227 4,394 4,365 4,654Goodwill 3,218 3,204 3,365 3,435 3,520Other Intangible Assets, Net 1,371 1,263 1,309 1,237 1,226Noncurrent Deferred Tax Assets 743 1,014 873 551 454Long-Term Receivables, Net 557 513 475 376 237Other Assets 496 524 619 602 496Total Assets $17,877 $17,867 $19,844 $20,224 $20,664Liabilities and Shareowners EquityCurrent Liabilities:Short-term debt, including current portion $79 $241 $678 $36 $51 $1,803 $2,103 $2,221 $2,074 $2,112of long-term debt ($153) $618 ($351) ($1,209) ($1,556)

Accounts payable 676 752 839 794 995 3651 2209 3115 3770 4185Income taxes payable 79 66 117 75 91 -0.04 0.28 -0.11 -0.32 -0.37 -0.11Accrued compensation and benefits 263 179 427 546 492Accrued marketing programs 934 839 1,110 1,281 1,078Deferred revenues 219 219 373 396 517Grower production accruals 139 130 87 194 60Dividends payable 145 151 161 200 228Customer payable 307 83 94 14 12Restructuring reserves 286 197 24Miscellaneous short-term accruals 629 684 819 685 812Total Current Liabilities 3,756 3,541 4,729 4,221 4,336Long-Term Debt 1,724 1,862 1,543 2,038 2,061Postretirement Liabilities 793 920 509 543 357Long-Term Deferred Revenue 488 395 337 245 138Noncurrent Deferred Tax Liabilities 153 137 152 313 469Long-Term Portion of Environmental and 197 188 176 213 193Litigation LiabilitiesOther Liabilities 641 681 682 615 382Shareowners Equity:

6 6 6

Issued 601,631,267 and 596,136,929 shares, respectively

Outstanding 529,029,712 and 534,373,880 shares, respectively 6 6

Treasury stock 72,601,555 and 61,763,049 (1,577) (2,110) (2,613) (3,045) (4,140)shares, respectively, at costAdditional contributed capital 9,695 9,896 10,096 10,371 10,783Retained earnings 2,682 3,208 4,174 5,537 7,188Accumulated other comprehensive loss (744) (897) (116) (1,036) (1,278)Reserve for ESOP debt retirement (6) (4) (2)Total Monsanto Company Shareowners Equity 10,056 10,099 11,545 11,833 12,559Noncontrolling Interest 69 44 171 203 169Total Shareowners Equity 10,125 10,143 11,716 12,036 12,728Total Liabilities and Shareowners Equity $17,877 $17,867 $19,844 $20,224 $20,664Non-cash Working Capital 2,171 2,096 1,508 2,154 2,073

Common stock (authorized: 1,500,000,000 shares, par value

$0.01)

(Dollars in millions) 2008 2009 2010 2011 2012 2013Operating Activities:Net Income $2,044 $2,133 $1,128 $1,659 $2,093 $2,525Adjustments to reconcile cash providedby operating activities:Items that did not require (provide) cash:Depreciation and amortization 573 548 602 613 622 615Bad-debt expense 57 49 58 3 3 27Receipt of securities from Solutia settlement (38)Stock-based compensation expense 90 116 102 104 128 100Excess tax benefits from stock-based compensation (198) (35) (43) (36) (50) (79)Deferred income taxes 47 264 10 124 263 176Restructuring charges, net 361 210 1 (10)Equity affiliate income, net (2) (22) (29) (21) (19) (17)Acquired in-process research and development 164 163Net gain on sales of a business or other assets (66) (3) (5) (4) (17)Other items, net 25 (25) 65 18 2 (77)Changes in assets and liabilities thatprovided (required) cash, net of acquisitions:Trade receivables, net (318) 526 (22) (347) 170 222Inventory, net (691) (638) 213 181 (427) (192)Deferred revenues 492 (700) (89) 85 (39) 50Accounts payable and other accrued liabilities 889 (327) (438) 586 439 (104)Restructuring cash payments (263) (183) (12)Pension contributions (120) (187) (134) (291) (83) (75)Net investment hedge settlement (124) 35 (4)Other items, net (53) 51 35 323 (25) (414)Net Cash Provided by Operating Activities 2,837 2,246 1,398 2,814 3,051 2,740Investing Activities:Cash Flows Provided (Required) by InvestingPurchases of short-term investments (132) (732) (746) (716)Maturities of short-term investments 59 132 430 746 764Capital expenditures (918) (916) (755) (540) (646) (741)Acquisition of businesses, net of cash acquired (1,022) (329) (57) (99) (322) (165)Purchases of long-term debt and equity securities (78) (7) (39)Technology and other investments (41) (72) (33) (55) (77) (88)Proceeds from divestiture of a business 300Other investments and property disposal proceeds 90 169 50 21 11 169Net Cash Required by Investing Activities (2,042) (723) (834) (975) (1,034) (777)Financing Activities:Cash Flows Provided (Required) by FinancingNet change in financing with less than 90-day maturities 92 (142) 48 69 (116) 104Short-term debt proceeds 75 75 84 30 22Short-term debt reductions (10) (45) (101) (74) (42) (29)Long-term debt proceeds 546 299 499 32Long-term debt reductions (254) (71) (4) (193) (629) (2)Payments on other financing (3) (6) (1) (1)Debt issuance costs (5) (5) (5)Treasury stock purchases (361) (398) (532) (502) (432) (1,095)Stock option exercises 114 39 56 65 117 257Excess tax benefits from stock-based compensation 198 35 43 36 50 79Tax withholding on restricted stock and (4) (19) (10)restricted stock unitsDividend payments (419) (552) (577) (602) (642) (802)Proceeds from noncontrolling interest (23) (10) (45) 69 101 133Dividend payments to noncontrolling interests (105) (77) (174)Net Cash Required by Financing Activities (125) (1,075) (1,038) (864) (1,165) (1,485)Cash Assumed from Initial Consolidations 77of Variable Interest EntitiesEffect of Exchange Rate Changes on Cash and Cash Equivalents 77 (105) 3 35 (141) (93)Net Increase in Cash and Cash Equivalents 747 343 (471) 1,087 711 385Cash and Cash Equivalents at Beginning of Period 866 1,613 1,956 1,485 2,572 3,283Cash and Cash Equivalents at End of Period $1,613 $1,956 $1,485 $2,572 $3,283 $3,668

Current

Ratio Analysis 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E 2019E

Sales growth 3.2% -10.4% 12.6% 14.2% 10.0% 5.9% 6.5% 9.8% 9.3% 8.3% 6.9%

EBITDA growth 10.8% -39.5% 41.0% 21.0% 11.0% 8.9% 8.5% 18.1% 13.5% 12.0% 10.5%

EPS growth 4.97% -47.11% 47.26% 28.04% 21.37% 20.00% 19.00% 18.00% 17.00% 16.00% 14.00% Bullish

6.00% 6.400% 6.800% 7.200% 7.600% 8.40% Bearish

Gross margin 57.7% 48.4% 51.4% 52.2% 51.5% 52.2% 51.2% 51.7% 51.8% 51.7% 51.7%

EBIT margin 26.5% 15.3% 21.2% 23.3% 24.0% 22.1% 21.2% 22.3% 22.6% 22.4% 22.1%

EBITDA margin 31.1% 21.0% 26.3% 27.9% 28.2% 26.9% 26.1% 27.1% 27.2% 27.1% 26.9%

Tax rate 28.5% 24.8% 30.2% 30.2% 26.7% 30.6% 27.2% 31.1% 27.6% 31.6% 30.0%

Net margin 18.0% 10.6% 13.6% 15.1% 16.7% 15.3% 15.4% 15.4% 16.3% 15.4% 15.5%

Return on equity (ROE) 20.8% 10.9% 13.7% 17.0% 19.5% 16.4% 17.0% 17.6% 18.2% 18.8% 20.0% Bullish

17.0% 16.2% 15.3% 14.5% 13.7% 12.0% Bearish

Payout Ratio 26.2% 52.0% 37.5% 31.4% 32.3% 35.9% 34.9% 33.9% 32.9% 32.0% 30% Bullish

35.9% 34.9% 33.9% 32.9% 32.0% 30% Bearish

Retention Ratio 73.8% 48.0% 62.5% 68.6% 67.7% 64.1% 65.1% 66.1% 67.1% 68.0% 70.0% Bullish

64.1% 65.1% 66.1% 67.1% 68.0% 70.0% Bearish

Hight Growth Stable Growth

Beta 1.023422

Estimating Risk Premium

E(Rm)= 17.61% value of stock 104.88

expected dividend 1.900772

expexted growth rate 15.80%

E( R)= Rf+ b(E(Rm) - Rf) Rf 2.65%

17.96% b 1.023422

E(Rm) 17.61%

E( R)= Rf+ b(E(Rm) - Rf) Rf 4.65%

17.61% b 1

E(Rm) 17.61%

Gordon Growth

High Growth COE

Stable Growth COE

I calculated beta using regression for the period 01/2006 - 11/2013. Using the covariance formula

Free Cash Flow to Equity Current

High

Growth

(Year Ending August 31) 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E 2019E

Net Income $2,109 $1,109 $1,607 $2,045 $2,482 2978.40 3544.30 4182.27 4893.26 5676.18 6470.84 bullish

2630.92 2799.30 2989.65 3204.91 3448.48 3738.15 bearish

Add: Depreciation 548 602 613 622 615 3.00% 633.45 652.45 672.03 692.19 712.95 734.34

Less:Capital Expenditures 916 755 540 646 741 2.00% 755.82 770.94 786.36 802.08 818.12 834.49

Inventory, net 2,934 2,739 2,591 2,839 2,947

Total Current Assets 7,883 7,122 8,809 9,658 10,077

Cash and Cash Equivalents at End of Period 1,956 1,485 2,572 3,283 3,668

Accounts payable 676 752 839 794 995

Income taxes payable 79 66 117 75 91

Dividends payable 145 151 161 200 228

Customer payable 307 83 94 14 12

Non-Cash Working Capital 7,654 7,324 7,617 8,131 8,030 102% 8150.45 8272.71 8396.80 8522.75 8650.59 8780.35

Less:Change in Non-Cash Working Capital (330) 293 514 (101) 120.45 122.26 124.09 125.95 127.84 130.00

Short-term debt proceeds 75 75 84 30 22

Long-term debt proceeds 0 0 299 499 32

Short-term debt reductions (45) (101) (74) (42) (29)

Long-term debt reductions (71) (4) (193) (629) (2)

Plus: Net Cash Inflow from Borrowings ($41) ($30) $116 ($142) $23 ($15) ($15) ($15) ($15) ($15) ($15)

FCFE $1,700 $1,256 $1,503 $1,365 $2,480 $2,721 $3,289 $3,929 $4,642 $5,428 $6,226 bullish

$ 2,373 $ 2,544 $ 2,736 $ 2,954 $ 3,200 $ 3,493 bearish

Present Value $ 2,306 $ 2,363 $ 2,393 $ 2,398 $ 2,376 $ 76,584 bullish

$ 2,012 $ 1,828 $ 1,667 $ 1,526 $ 1,401 $ 16,849 bearish

Growth Rate 14.00% bullish

8.40% bearish

Cost of Equity High Growth Stable Growth

Risk Free Rate 2.65% 4.65%

Beta 1.02 1.00

Risk Premium 14.96% 12.96%

Cost of Equity 17.96% 17.61%

Components of Value

Bullish

Target(70%)

Bearish

target(30%)

Cash Flow - High Growth $ 11,837.04 $ 8,433.32

Terminal Price $ 76,583.68 $ 16,848.67

Total Value $ 88,420.72 $ 25,282.00

Shares Outstanding 539.70 539.70

Total Value per Share $ 163.83 $ 46.84

Target price 128.74

Relative Multiple

Target Actual Potential Appreciation

Price 128.74$ 104.88$ 22.75%

Forward Earnings 5.33$ 4.56$ Recommendation

P / E 24.2x 23.0x Buy

Stable Growth