St. Louis, Missouri
February 12,  2001

Monsanto Company (NYSE: MON) today reported sales and earnings for the fourth quarter and full year of 2000. 

• Sales increased 7 percent for the fourth quarter, 5 percent for full year. Net sales for 2000 reached $5.5 billion.
  * Global sales of Roundup herbicide increased 9 percent in fourth quarter and 6 percent in 2000.
• Acres planted worldwide with Monsanto biotechnology traits increase 15 percent for year.
• Capital structure improved, providing a year-end net debt-to-capital ratio of approximately 18 percent.

Other Developments:

• Brazilian government issues provisional measure, clarifying biotechnology regulatory process.
• Monsanto's new Roundup Ready corn product approved in the United States; approval pending in Japan.

Financial Summary
($ in millions, except per share)

Financial Summary
($ in millions, except per share) 

* Net sales as adjusted represents net sales as reported, excluding the effect of adopting Staff Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements," (SAB101) in 2000 and excluding the Stoneville Pedigreed Seed business, which was sold in late 1999.

** Pro forma results assume Monsanto's reduced debt level as applied to all of 1999 and 2000.

"Our industry-leading results speak to the value farmers find in the integrated solutions offered by Monsanto, which give them the greatest choice of herbicides, seeds and biotechnology traits," said Hendrik A. Verfaillie, Monsanto president and chief executive officer. "Solid growth across our core businesses, coupled with aggressive cost and cash management, speak to the focus and commitment we bring to delivering value for our shareowners." 

Sales 

Fourth-quarter net sales as adjusted increased 7 percent, to $1.21 billion. Global sales of Roundup herbicide grew 9 percent, with strong growth in the United States and Argentina. For the year, net sales as adjusted reached $5.5 billion, a 5 percent gain. Worldwide, sales of Roundup rose 6 percent for the year to $2.6 billion. Sales of other herbicides and revenue from biotechnology traits also contributed to the increase in 2000. 

Reported Earnings 

Reported fourth-quarter 2000 results showed a net loss of $52 million, a 43 percent improvement from a net loss of $92 million in the fourth quarter of 1999. Earnings per share (EPS) for the quarter increased 44 percent to a loss of 20 cents per share, from a loss of 36 cents per
share in the same period last year. Reported net income declined 1 percent to $149 million in 2000 from $150 million in 1999. EPS remained unchanged at 58 cents in both 2000 and 1999. 

Monsanto recorded restructuring and special pretax charges of $78 million in the fourth quarter and $261 million for the year. As previously stated, the company expects to take $425 million to $475 million in total restructuring charges by the end of 2001. 

In response to recently enacted revenue recognition rules released by the U.S. Securities and Exchange Commission (SAB101), Monsanto restated its sales and earnings for the full year 2000 and the first three quarters in the year. This accounting change will affect the distribution
of Monsanto earnings in individual quarters, but will have no material impact on Monsanto's annual earnings. In the near future, Monsanto will issue a news release providing restated quarterly results for 2000 and additional information on 2001. 

Pro Forma Earnings 

Monsanto's net income and earnings per share (EPS) have been adjusted to reflect the effect of a capital contribution from Pharmacia Corporation and proceeds from the company's initial public offering (IPO). This adjustment is reflected in the following pro forma results. Special items also are excluded from pro forma results. EPS for both pro forma and reported results are shown on a diluted basis and calculated using the shares outstanding following the IPO. 

Fourth-quarter net income increased to $31 million from a loss of $25 million in the fourth quarter of 1999. EPS rose to 12 cents in the quarter from a loss of 10 cents in the fourth quarter of 1999. For the full year, net income and EPS increased 29 percent. Net income was $445 million, or $1.72 per share, in 2000 vs. $344 million, or $1.33 per share, in 1999. 

Higher sales and lower expenses contributed to the improved earnings performance in 2000. Total selling, general and administrative (SG&A) and research and development (R&D) expenses for the year declined more than 3 percentage points as a percent of sales, from 36.8 percent of sales in 1999 to 33.5 percent of sales in 2000. 

For the year, SG&A spending increased 1 percent, primarily as a result of higher expenses for biotechnology acceptance and education. However, for the year, SG&A as a percent of sales dropped to 22.8 percent, from 23.6 percent of sales in 1999. R&D expenses for 2000 declined more than $100 million to $588 million as research projects were realigned to focus on key crops -- corn, cotton, soybeans and wheat. R&D charges ended the year at 10.7 percent of sales, down from 13.2 percent of sales in 1999. 

Segments 

Monsanto reports its results in two segments: Agricultural Productivity and Seeds and Genomics. Sales for Agricultural Productivity improved 10 percent for the quarter to $781 million and 8 percent for the year to $3.9 billion, led by increased sales of Roundup and selective herbicides, and by higher revenues from Roundup lawn-and-garden products. For the fourth quarter, sales of Roundup grew 9 percent to $511 million, and, for 2000, sales of Roundup were up 6 percent to more than $2.6 billion. The revenue increases were led by strong performance of branded Roundup products in the United States and Argentina, where greater use of conservation tillage practices and of in-crop applications of Roundup with Roundup Ready crops spurred growth. Earnings before interest and taxes (EBIT), if special items are excluded, rose for the fourth quarter and the year based on strong growth in gross profit. In the fourth quarter of 2000, EBIT excluding special items improved 133 percent to $133 million, compared with $57 million in the fourth quarter of 1999. For the full year, EBIT excluding special items increased 21 percent to $1.1 billion from $924 million in 1999. 

In the Seeds and Genomics sector, sales as adjusted for the segment increased slightly to $427 million for the fourth quarter, and decreased 1 percent to $1.6 billion for the year. Full-year results were affected by lower conventional seed sales, somewhat offset by increases in revenues from biotechnology traits. The number of acres planted with biotechnology traits developed by Monsanto worldwide increased 15 percent to 103 million acres in 2000 vs. 89 million acres in 1999. Growth was particularly strong in Roundup Ready soybeans and cotton traits in the United States, and in Roundup Ready soybeans and MaisGard corn in Argentina. EBIT, if special items are excluded, increased 1 percent for the quarter, for a loss of $88 million, and decreased 5 percent for the year, for a loss of $334 million.  

Other Developments 

In conjunction with the company's October IPO, the company restructured its capital structure primarily through a capital contribution from its parent and proceeds from the IPO. In addition, cash generated in the fourth quarter contributed to an improved capital structure, and year-end 
net debt (total debt less cash) levels were $1.6 billion. 

The company also made progress toward commercializing new products in new markets. A provisional measure announced by the Brazilian government on Dec. 28, 2000, establishes a national regulatory authority on biotechnology, and is a key step toward gaining approval for
commercialization of Roundup Ready soybeans there. Monsanto's new Roundup Ready corn trait, different from that currently on the market, received U.S. approvals in the fall of 2000 and is pending Japanese approval. 

Future Guidance 

Monsanto's management expects sales growth in 2001 in line with levels recorded in 2000, based on increased sales of Roundup and seeds, and higher revenues from biotechnology traits. Surveys of growers conducted by Monsanto in late 2000 indicate that the acres of crops planted with Monsanto biotechnology traits should increase in the United States. 

Net income, when compared with 2000 pro forma results that exclude special items, should increase between 9 percent and 13 percent. This growth is expected to be driven by higher gross profit and continued cost management. 

Monsanto Company, an 85 percent owned subsidiary of Pharmacia Corporation (NYSE: PHA), is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. 

Company news release
N3313