UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended Aug. 31, 2015

or

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-16167

MONSANTO COMPANY

Exact name of registrant as specified in its charter

Delaware	43-1878297
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
800 North Lindbergh Blvd., St. Louis, Missouri	63167
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number including area code:	(314) 694-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock $0.01 par value	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [X] No [ ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [X]

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One): Large Accelerated Filer [X] Accelerated Filer [ ] Non-Accelerated Filer [ ] Smaller Reporting Company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (Feb. 28,2015): approximately $58.0 billion.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:439,837,164 shares of common stock, $0.01 par value, outstanding at Oct. 26, 2015.

Documents Incorporated by Reference

Portions of Monsanto Company’s definitive proxy statement, which is expected to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in December 2015, are incorporated herein by reference into Part III of this Annual Report on Form 10-K.

MONSANTO COMPANY 2015 FORM 10-K

INTRODUCTION

This Annual Report on Form 10-K is a document that U.S. public companies file with the Securities and Exchange Commission (“SEC”) every year. Part II of the Form 10-K contains the business information and financial statements that many companies include in the financial sections of their annual reports. The other sections of this Form 10-K include further information about our business that we believe will be of interest to investors. We hope investors will find it useful to have all of this information in a single document.

The SEC allows us to report information in the Form 10-K by “incorporating by reference” from another part of the Form 10-K or from the proxy statement. You will see that information is “incorporated by reference” in various parts of our Form 10-K. The proxy statement will be available on our website after it is filed with the SEC in December 2015.

Monsanto was incorporated in Delaware on Feb. 9, 2000, as a subsidiary of Pharmacia Corporation (subsequently converted to Pharmacia LLC). Monsanto includes the operations, assets and liabilities that were previously the agricultural business of Pharmacia. Pharmacia is now a subsidiary of Pfizer Inc.

“Monsanto,” “the company,” “we,” “our” and “us” are used interchangeably to refer to Monsanto Company or to Monsanto Company and its subsidiaries, as appropriate to the context. With respect to the time period prior to Sept. 1, 2000, these defined terms also refer to the agricultural business of Pharmacia.

Unless otherwise indicated, trademarks owned or licensed by Monsanto or its subsidiaries are shown in special type. Unless otherwise indicated, references to “Roundup herbicides” mean Roundup branded herbicides, excluding all lawn-and-garden herbicides, and references to “Roundup and other glyphosate-based herbicides” exclude all lawn-and-garden herbicides.

Information in this Form 10-K is current as of October 29, 2015, unless otherwise specified.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

In this report, and from time to time throughout the year, we share our expectations for our company’s future performance. These forward-looking statements include statements about our business plans; the potential development, regulatory approval, and public acceptance of our products; our expected financial performance, including sales performance, and the anticipated effect of our strategic actions; the anticipated benefits of recent acquisitions; the outcome of contingencies, such as litigation and the previously announced SEC investigation; domestic or international economic, political and market conditions; and other factors that could affect our future results of operations or financial position, including, without limitation, statements under the captions “Legal Proceedings,” “Overview — Executive Summary — Outlook,” “Seeds and Genomics Segment,” “Agricultural Productivity Segment,” “Financial Condition, Liquidity, and Capital Resources” and “Outlook.” Any statements we make that are not matters of current reportage or historical fact should be considered forward-looking. Such statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will” and similar expressions. By their nature, these types of statements are uncertain and are not guarantees of our future performance.

Our forward-looking statements represent our estimates and expectations at the time that we make them. However, circumstances change constantly, often unpredictably, and investors should not place undue reliance on these statements. Many events beyond our control will determine whether our expectations will be realized. We disclaim any current intention or obligation to revise or update any forward-looking statements, or the factors that may affect their realization, whether in light of new information, future events or otherwise, and investors should not rely on us to do so. In the interests of our investors, and in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Part I. Item 1A. Risk Factors below sets forth some of the important reasons that actual results may be materially different from those that we anticipate.

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TABLE OF CONTENTS FOR FORM 10-K

PART I		Page
Item 1.	Business	3
	Seeds and Genomics Segment	3
	Agricultural Productivity Segment	5
	Research and Development	6
	Seasonality and Working Capital; Backlog	6
	Employee Relations	7
	Customers	7
	International Operations	7
	Segment and Geographic Data	7
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	Mine Safety Disclosures	12
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	13
Item 6.	Selected Financial Data	15
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Overview	16
	Results of Operations	18
	Seeds and Genomics Segment	21
	Agricultural Productivity Segment	22
	Financial Condition, Liquidity and Capital Resources	24
	Outlook	30
	Critical Accounting Policies and Estimates	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	36
	Management Report	36
	Report of Independent Registered Public Accounting Firm	37
	Statements of Consolidated Operations	38
	Statements of Consolidated Comprehensive Income	39
	Statements of Consolidated Financial Position	40
	Statements of Consolidated Cash Flows	41
	Statements of Consolidated Shareowners’ Equity	42
	Notes to Consolidated Financial Statements	43
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	102
Item 9A.	Controls and Procedures	102
Item 9B.	Other Information	105
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	106
Item 11.	Executive Compensation	107
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	107
Item 13.	Certain Relationships and Related Transactions and Director Independence	108
Item 14.	Principal Accounting Fees and Services	108
PART IV
Item 15.	Exhibits, Financial Statement Schedules	108
SIGNATURES		109
EXHIBIT INDEX		111

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PART I

ITEM 1. BUSINESS

Monsanto Company, along with its subsidiaries, is a leading global provider of agricultural products for farmers. Our seeds, biotechnology traits, herbicides and precision agriculture products provide farmers with solutions that improve productivity, reduce the costs of farming and produce better foods for consumers and better feed for animals.

We manage our business in two segments: Seeds and Genomics and Agricultural Productivity. We view our Seeds and Genomics segment as the driver for future growth for our company. In our Agricultural Productivity segment, global glyphosate producers have substantial capacity to supply the market and we expect this global capacity to maintain pressure on margins.

We provide information about our business, including analyses, significant news releases, and other supplemental information, on our website: www.monsanto.com. In addition, we make available through our website, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after they have been filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. Forms 3, 4 and 5 filed with respect to our equity securities under Section 16(a) of the Exchange Act are also available on our website by the end of the business day after filing. All of these materials can be found under the “Investors” tab. Our website also includes the following corporate governance materials, under the tab “Who We Are — Corporate Governance”: our Code of Business Conduct, our Code of Ethics for Chief Executive and Senior Financial Officers, our Board of Directors’ Charter and Corporate Governance Guidelines, and charters of our Board committees. These materials are also available on paper. Any shareowner may request them by contacting the Office of the General Counsel, Monsanto Company, 800 N. Lindbergh Blvd., St. Louis, Missouri, 63167. Information on our website does not constitute part of this report.

A description of our business follows.

SEEDS AND GENOMICS SEGMENT

Through our Seeds and Genomics segment, we produce leading seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and we develop biotechnology traits that assist farmers in controlling insects and weeds and precision agriculture products to assist farmers in decision making. We also provide other seed companies with genetic material for their seed brands. The tabular information about net sales of our seeds and traits that appears in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) — Seeds and Genomics Segment — is incorporated herein by reference.

Major Products	Applications	Major Brands
Germplasm	Row crop seeds: Corn hybrids and foundation seed Soybean varieties and foundation seed Cotton varieties, hybrids and foundation seed Other row crop varieties and hybrids, such as canola	DEKALB, Channel for corn Asgrow for soybeans Deltapine for cotton
	Vegetable seeds: Open field and protected-culture seed for tomato, pepper, melon, cucumber, squash, beans, broccoli, onions, and lettuce, among others	Seminis and De Ruiter for vegetable seeds
Biotechnology traits(1)	Enable crops to protect themselves from borers and rootworm in corn, certain lepidopteran insects in soybeans, and leaf- and boll-feeding worms in cotton, reducing the need for applications of insecticides	SmartStax, YieldGard, YieldGard VT Triple,VT Triple PRO and VT Double PRO for corn; Intacta RR2 PRO for soybeans; Bollgard and Bollgard II for cotton
	Enable crops, such as corn, soybeans, cotton and canola, to be tolerant of Roundup and other glyphosate-based herbicides	Roundup Ready and Roundup Ready 2 Yield (soybeans only) Genuity, global umbrella trait brand

(1) Monsanto also offers farmers stacked-trait products, which are single-seed products in which two or more traits are combined.

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Distribution of Products

We have a worldwide distribution and sales and marketing organization for our seeds and traits. We sell our products under Monsanto brands and license technology and genetic material to others for sale under their own brands. Through distributors, independent retailers and dealers, agricultural cooperatives and agents, we market our DEKALB, Asgrow and Deltapine branded germplasm to farmers in every agricultural region of the world. In the United States, we market regional seed brands under our American Seeds, LLC and Channel Bio, LLC businesses to farmers directly, as well as through dealers, agricultural cooperatives and agents. In countries where they are approved for sale, we market and sell our trait technologies with our branded germplasm, pursuant to license agreements with our farmer customers. In Brazil, Argentina and Paraguay, we have implemented a point-of-delivery, grain-based payment system. We contract with grain handlers to collect applicable trait fees when farmers deliver grain for which trait fees have not already been paid. In addition to selling our products under our own brands, we license a broad package of germplasm and trait technologies to large and small seed companies in the United States and certain international markets. Those seed companies in turn market our trait technologies in their branded germplasm; they may also market our germplasm under their own brand name. Our vegetable seeds are predominantly marketed under either the Seminis or De Ruiter brand in more than 150 countries either directly to farmers or through distributors, independent retailers and dealers, agricultural cooperatives, plant raisers and agents.

Competition

The global market for the products of our Seeds and Genomics segment is competitive, and the competition has intensified. Both our row crops and our vegetable seed businesses compete with numerous multinational agrichemical and seed marketers globally and with hundreds of smaller companies regionally. Most of our seed competitors in row crops are also licensees of our germplasm or biotechnology traits and a few of our vegetable seed business competitors have licensed biotech traits for sweet corn or genetic improvements through advanced breeding. In certain countries, we also compete with government-owned seed companies. Our biotechnology traits compete as a system with other practices, including the application of agricultural chemicals, and traits developed by other companies. Our weed- and insect-control systems compete with chemical and seed products produced by other agrichemical and seed marketers. Competition for the discovery of new traits based on biotechnology or genomics is likely to come from major global agrichemical companies, smaller biotechnology research companies and institutions, state-funded programs and academic institutions. Enabling technologies to enhance biotechnology trait development may also come from academic researchers and biotechnology research companies. Competitors using our technology outside of license terms and farmers who save seed from one year to the next also affect competitive conditions.

Product performance (in particular, crop vigor and yield for our row crops and quality for our vegetable seeds), customer support and service, intellectual property rights and protection, product availability and planning and price are important elements of our market success in seeds. In addition, distributor, retailer and farmer relationships are important in the United States and many other countries. The primary factors underlying the competitive success of traits are performance and commercial viability; timeliness of introduction; value compared with other practices and products; market coverage; service provided to distributors, retailers and farmers; governmental approvals; value capture; public acceptance; and environmental characteristics.

Patents, Trademarks and Licenses

In the United States and many foreign countries, we hold a broad business portfolio of patents, trademarks and licenses that provide intellectual property protection for our seeds and genomics-related products and processes. Monsanto routinely obtains patents and/or plant variety protection for its breeding technology, commercial varietal seed products, and for the parents of its commercial hybrid seed products. We also routinely obtain registrations for commercial seed products in registration countries, as well as Plant Variety Protection Act Certificates in the United States and equivalent plant breeders’ rights in other countries. In soybeans, while our patent coverage on the first generation Roundup Ready trait for soybeans has expired, most Roundup Ready soybeans in the U.S. are protected by utility patents covering specific varieties. In addition, most of our customers and licensees are choosing our second generation Roundup Ready 2 Yield trait for soybeans with patents that extend into the next decade. In Brazil, we expect farmers to adopt our next generation Intacta RR2 PRO soybean traits, which also has patent coverage extending into the next decade. Patents on our next-generation herbicide trait which confers dicamba tolerance extends into the next decade. In corn, patent coverage on our first generation YieldGard trait has expired; however, most farmers have already upgraded to next generation Genuity corn traits with patent coverage extending into the next decade. In cotton, most growers globally are already using our second generation traits with patent coverage extending into the next decade.

We broadly license technology and patents to other parties. For example, we have licensed the Roundup Ready trait in soybean, corn, canola and cotton seeds, the YieldGard traits in corn, and the Intacta RR2 PRO and Roundup Ready 2 Xtend traits in

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soybeans to a wide range of commercial entities and in some cases academic institutions. We also hold licenses from other parties relating to certain products and processes. For example, we have obtained licenses to certain technologies that we use to produce Roundup Ready seeds and Genuity SmartStax corn. These licenses generally last for the lifetime of the applicable patents.

We own trademark registrations and file trademark applications for the names and for many of the designs used on branded products around the world. Important company trademarks include Roundup Ready, Bollgard, Bollgard II, YieldGard, Genuity, Roundup Ready 2 Yield, Intacta RR2 PRO and SmartStax for traits; Acceleron for seed treatment products; DEKALB, Asgrow and Deltapine for row crop seeds; and Seminis and De Ruiter for vegetable seeds.

Raw Materials and Energy Resources

In growing locations throughout the world, we produce directly or contract with third-party growers for corn seed, soybean seed, vegetable seeds, cotton seed, canola seed and other seeds. The availability of seed and the cost of seed production depend primarily on seed yields, weather conditions, grower contract terms and commodity prices. Where practical, we seek to manage commodity price fluctuations through the use of futures contracts and other hedging instruments. Where practicable, we attempt to minimize weather risks by producing seed at multiple growing locations and under irrigated conditions. Our Seeds and Genomics segment also purchases the energy we need to process our seed; these energy purchases are managed in conjunction with our Agricultural Productivity segment.

AGRICULTURAL PRODUCTIVITY SEGMENT

Through our Agricultural Productivity segment, we manufacture Roundup brand herbicides and other herbicides and provide lawn-and-garden herbicide products for the residential market. The tabular information about net sales of agricultural productivity products that appears in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) — Agricultural Productivity Segment — is incorporated by reference herein.

Major Products	Applications	Major Brands
Herbicides	Nonselective agricultural, industrial, ornamental, turf and residential lawn and garden applications for weed control Control of preemergent annual grass and small seeded broadleaf weeds in corn and other crops	Roundup branded products Harness for corn and cotton

Distribution of Products

We have a worldwide distribution and sales and marketing organization for our agricultural productivity products. In some world areas, we use the same distribution and sales and marketing organization for our agricultural productivity products as for our seeds and traits. In other world areas, we have separate distribution and sales and marketing organizations for our agricultural productivity products. We sell our agricultural productivity products through distributors, independent retailers and dealers and agricultural cooperatives. In some cases outside the United States, we sell such products directly to farmers. We also sell certain of the chemical intermediates of our agricultural productivity products to other major agricultural chemical producers, who then market their own branded products to farmers. Certain agricultural productivity products for lawn-and-garden use are marketed through The Scotts Miracle-Gro Company ("Scotts").

Competition

We compete with numerous major global manufacturing companies for sales of agricultural herbicides. Competition from local or regional companies may also be significant. Global glyphosate producers have substantial capacity to supply the market and we expect this global capacity to affect margins. Our lawn-and-garden business has fewer than five significant national competitors and a larger number of regional competitors in the United States. The largest market for our lawn-and-garden herbicides is the United States.

Competitive success in agricultural productivity products depends on price, product performance, the scope of solutions offered to farmers, market coverage, product availability and planning, and the service provided to distributors, retailers and farmers. Our lawn-and-garden herbicides compete on product performance, price and the brand value associated with our trademark Roundup. For additional information on competition for our agricultural herbicides, see Item 7 — MD&A — Outlook — Agricultural Productivity, which is incorporated by reference herein.

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Patents, Trademarks, Licenses, Franchises and Concessions

We also rely on patent protection for the Agricultural Productivity segment of our business. Patents covering glyphosate, an active ingredient in Roundup branded herbicides, have expired in the United States and all other countries. However, we have multiple patents on different glyphosate formulations and manufacturing processes in the United States and other countries with varying expiration dates. We have obtained licenses to chemicals used to make Harness herbicides and hold trademark registrations for the brands under which our chemistries are sold. The most significant trademark in this segment is Roundup. We own trademark registrations for numerous variations of Roundup such as for Roundup WeatherMAX.

We hold (directly or by assignment) numerous phosphate mineral leases from the U.S. government, the state of Idaho, and private parties. None of these leases are material individually, but are significant in the aggregate because elemental phosphorus is a key raw material for the production of glyphosate-based herbicides. The phosphate mineral leases have varying terms. The leases obtained from the U.S. government are of indefinite duration, subject to the modification of lease terms at 20-year intervals.

Environmental Matters

Our operations are subject to environmental laws and regulations in the jurisdictions in which we operate. Some of these laws restrict the amount and type of emissions that our operations can release into the environment. Other laws, such as the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq. (Superfund), can impose liability for the entire cost of cleanup on any former or current site owners or operators or any parties who sent waste to these sites, without regard to fault or to the lawfulness of the original disposal. These laws and regulations may be amended from time to time; they may become more stringent. We are committed to long-term environmental protection and compliance programs that reduce and monitor emissions of hazardous materials into the environment, and to the remediation of identified existing environmental concerns. Although the costs of our compliance with environmental laws and regulations cannot be predicted with certainty, such costs are not expected to have a material adverse effect on our earnings or competitive position. In addition to compliance obligations associated with our operations, under the terms of our Sept. 1, 2000, Separation Agreement with Pharmacia (the Separation Agreement), we are required to indemnify Pharmacia for certain liabilities it may have for environmental remediation or other environmental responsibilities that are primarily related to Pharmacia’s former chemical and agricultural businesses. For information regarding certain environmental proceedings, see Item 3 — Legal Proceedings. See also information regarding environmental liabilities, appearing in Note 24 — Commitments and Contingencies, which is incorporated herein by reference.

Raw Materials and Energy Resources

We are a significant purchaser of basic and intermediate raw materials. Typically, we purchase major raw materials and energy through long-term contracts with multiple suppliers. Certain important raw materials are supplied by a few major suppliers. We expect the markets for our raw materials to remain balanced, though pricing may be volatile given the current state of the global economy. Energy is available as required, but pricing is subject to market fluctuations. Where practical, we seek to manage commodity price fluctuations through the use of futures contracts and other hedging instruments.

Our proprietary technology is used in various global locations to produce the catalysts used in various intermediate steps in the production of glyphosate. We believe capacity is sufficient for our requirements and adequate safety stock inventory reduces the risks associated with production outages. We manufacture and purchase disodium iminodiacetic acid, a key ingredient in the production of glyphosate, and purchase chlorine from limited major suppliers. We manufacture almost all of our global supply of elemental phosphorus, a key raw material for the production of Roundup herbicides. We have multiple mineral rights which, subject to obtaining and maintaining appropriate mining permits, we believe will provide a long term supply of phosphate ore to meet our needs into the foreseeable future. As part of the ongoing course of operating our phosphorus production, we are required to periodically obtain permits for new mining operations.

RESEARCH AND DEVELOPMENT

Monsanto’s expenses for research and development ("R&D") were $1,580 million in 2015, $1,725 million in 2014 and $1,533 million in 2013.

SEASONALITY AND WORKING CAPITAL; BACKLOG

For information on seasonality and working capital and backlog practices, see information in Item 7 — MD&A — Financial Condition, Liquidity and Capital Resources, which is incorporated herein by reference.

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EMPLOYEE RELATIONS

As of Aug. 31, 2015, we employed about 22,500 regular employees worldwide and approximately 3,000 temporary employees. The number of temporary employees varies greatly during the year because of the seasonal nature of our business. We believe that relations between Monsanto and its employees are satisfactory. For additional information on employee relations, see Item 8 — Financial Statements and Supplementary Data — and Note 5 — Restructuring.

CUSTOMERS

In 2015, our four largest U.S. distributors and their affiliates represented, in the aggregate, 20 percent of our worldwide net sales and 35 percent of our U.S. net sales. During 2015, one major U.S. distributor and its affiliates represented 11 percent of the worldwide net sales for our Seeds and Genomics segment and 18 percent of the U.S. net sales for our Seeds and Genomics segment.

INTERNATIONAL OPERATIONS

See Item 1A under the heading “Our operations outside the United States are subject to special risks and restrictions, which could negatively affect our results of operations and profitability,” and Note 25 — Segment and Geographic Data, which are incorporated herein by reference. Approximately 43 percent of Monsanto’s sales, including 37 percent of our Seeds and Genomics segment sales and 54 percent of our Agricultural Productivity segment sales, originated from our legal entities outside the United States during fiscal year 2015.

SEGMENT AND GEOGRAPHIC DATA

For information on segment and geographic data, see Item 8 — Financial Statements and Supplementary Data — Note 25 — Segment and Geographic Data, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

Competition in seeds and traits and agricultural chemicals has significantly affected, and will continue to affect, our sales.

Many companies engage in research and development of plant biotechnology and breeding and agricultural chemicals, and speed in getting a new product to market can be a significant competitive advantage. Our competitors’ success could render our existing products less competitive, resulting in reduced sales compared to our expectations or past results. We expect to see increasing competition from agricultural biotechnology firms and from major agrichemical and seed companies. We also expect to face continued competition for our Roundup herbicides and selective herbicides product lines, which could be influenced by trade and industrial policies of foreign countries. The extent to which we can realize cash and gross profit from our business will depend on our ability to: control manufacturing and marketing costs without adversely affecting sales; predict and respond effectively to competitor products, pricing and marketing; provide marketing programs meeting the needs of our customers and of the farmers who are our end users; maintain an efficient distribution system; and develop new products and services with features attractive to our end users.

Efforts to protect our intellectual property rights and to defend claims against us can increase our costs and will not always succeed; any failures could adversely affect sales and profitability or restrict our ability to do business.

Intellectual property rights are crucial to our business, particularly our Seeds and Genomics segment. We endeavor to obtain and protect our intellectual property rights in jurisdictions in which our products are produced or used and in jurisdictions into which our products are imported. Different nations may provide limited rights and inconsistent duration of protection for our products. We may be unable to obtain protection for our intellectual property in key jurisdictions. Even if protection is obtained, competitors, farmers, or others in the chain of commerce may raise legal challenges to our rights or illegally infringe on our rights, including through means that may be difficult to prevent or detect. For example, the practice by some farmers of saving seeds from non-hybrid crops (such as soybeans, canola and cotton) containing our biotechnology traits has prevented and may continue to prevent us from realizing the full value of our intellectual property, particularly outside the United States. In addition, because of the rapid pace of technological change, and the confidentiality of patent applications in some jurisdictions, competitors may be issued patents from applications that were unknown to us prior to issuance. These patents could reduce the value of our commercial or pipeline products or, to the extent they cover key technologies on which we have unknowingly relied, require that we seek to obtain licenses or cease using the technology, no matter how valuable to our business. We cannot assure we would be able to obtain such a license

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on acceptable terms. The extent to which we succeed or fail in our efforts to protect our intellectual property will affect our costs, sales and other results of operations.

We are subject to extensive regulation affecting our seed biotechnology and agricultural products and our research and manufacturing processes, which affects our sales and profitability.

Regulatory and legislative requirements affect the development, manufacture and distribution of our products, including the testing and planting of seeds containing our biotechnology traits and the import of crops grown from those seeds, and non-compliance can harm our sales and profitability. Obtaining and maintaining permits for mining and production and obtaining and maintaining testing, planting and import approvals for seeds or biotechnology traits can be time-consuming and costly, with no guarantee of success. In addition, regulatory and legislative requirements may change over time which can also affect our sales and profitability. The failure to receive necessary permits or approvals could have near- and long-term effects on our ability to produce and sell some current and future products. Planting approvals may also include significant regulatory requirements that can limit our sales. Sales of our traits can be affected in jurisdictions where planting has been approved if we have not received approval for the import of crops containing such biotechnology traits by key import markets. Sales of our traits without having approval for the import of crops containing such biotechnology traits by an import market could lead to disruption of that market and we may face claims of potential liability. Concern about unintended but unavoidable trace amounts (sometimes called “low-level presence”) of commercial biotechnology traits in conventional (non-biotechnology) seed, or in the grain or products produced from conventional or organic crops, among other things, could lead to export disruption and increased regulation or legislation, which may include: liability transfer mechanisms that may include financial protection insurance; possible restrictions or moratoria on testing, planting or use of biotechnology traits; and requirements for labeling and traceability, which requirements may cause food processors and food companies to avoid biotechnology and select non-biotechnology crop sources and can affect farmer seed purchase decisions and the sale of our products. Further, the detection of the presence of biotech traits not approved in the country of planting (sometimes called “adventitious presence”) may affect seed availability or result in export disruption and compliance actions, such as crop destruction or product recalls. Legislation encouraging or discouraging the planting of specific crops can also harm our sales. In addition, concern and claims that increased use of glyphosate-based herbicides or biotechnology traits increases the potential for the development of glyphosate-resistant weeds or pests resistant to our traits could result in restrictions on the use of glyphosate-based herbicides or seeds containing our traits or otherwise reduce our sales.

The degree of public understanding and acceptance or perceived public acceptance of our biotechnology and other agricultural products can affect our sales and results of operations by affecting planting approvals, regulatory requirements and customer purchase decisions.

Although all of our products go through rigorous testing, some opponents of our technology actively raise public concern about the potential for adverse effects of our products on human or animal health, other plants and the environment. The potential for low-level or adventitious presence of commercial biotechnology traits in conventional seed, or in the grain or products produced from conventional or organic crops, is another factor that can affect general public acceptance of these traits. Public concern can affect the timing of, and whether we are able to obtain, government approvals for our products. Even after approvals are granted, public concern may lead to increased regulation or legislation or litigation against government regulators concerning prior regulatory approvals, which could affect our sales and results of operations, including by affecting planting approvals, and which may adversely affect sales of our products to farmers, including due to their concerns about available markets for the sale of crops or other products including those derived from biotechnology. In addition, opponents of agricultural biotechnology have attacked farmers’ fields and facilities used by agricultural biotechnology companies, and may launch future attacks against farmers’ fields and our field testing sites and research, production, or other facilities, which could affect our sales and our costs.

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The successful development and commercialization of our pipeline products will be necessary for our growth.

We use advanced breeding technologies to produce hybrids and varieties with superior performance in farmers' fields, and we use biotechnology to introduce traits that enhance specific characteristics of our crops. We use advanced analytics, software tools, mobile communications and new planting and monitoring equipment to provide agronomic recommendations to growers. We also research biological products to protect farmers’ crops from pests and diseases and enhance plant productivity and fertility, and we research chemical products to protect against crop pests. There are a number of reasons why new product concepts in these areas may be abandoned, including greater than anticipated development costs, technical difficulties, regulatory obstacles, competition, inability to prove the original concept, lack of demand and the need to divert focus, from time to time, to other initiatives with perceived opportunities for better returns. The processes of breeding, biotechnology trait discovery and development and trait integration are lengthy, and a very small percentage of the genes and germplasm we test is selected for commercialization. The length of time and the risk associated with the breeding and biotech pipelines are interlinked because both are required as a package for commercial success in markets where biotech traits are approved for growers. In countries where biotech traits are not approved for widespread use, our sales depend on our germplasm. Commercial success frequently depends on being the first company to the market, and many of our competitors are also making considerable investments in similar new biotechnology, improved germplasm products, biological and chemical products, and agronomic recommendation products. Consequently, if we are not able to fund extensive research and development activities and deliver new products to the markets we serve on a timely basis, our growth and operations will be harmed.

Adverse outcomes in legal proceedings could subject us to substantial damages and adversely affect our results of operations and profitability.

From time to time, we have been involved in major lawsuits concerning intellectual property, biotechnology, torts, contracts, antitrust allegations, and other matters, as well as governmental inquiries and investigations. Pending and future lawsuits and governmental inquiries and investigations may have outcomes that may be significant to our results of operations in the period recognized or limit our ability to engage in our business activities. While we have insurance related to our business operations, it may not apply to or fully cover any liabilities we incur as a result of these lawsuits. In addition, pursuant to the Separation Agreement, we are required to indemnify Pharmacia for certain liabilities that are primarily related to Pharmacia’s former chemical and agricultural businesses. We have recorded reserves for potential liabilities where we believe the liability to be probable and reasonably estimable. However, our actual costs may be materially different from this estimate. The degree to which we may ultimately be responsible for the particular matters reflected in the reserve is uncertain.

Our operations outside the United States are subject to special risks and restrictions, which could negatively affect our results of operations and profitability.

We engage in manufacturing, seed production, research and development and sales in many parts of the world. Although we have operations in virtually every region, our sales outside the United States in fiscal year 2015 were principally to customers in Brazil, Argentina, Canada and Mexico. Accordingly, developments in those parts of the world generally have a more significant effect on our operations than developments in other places. Our operations outside the United States are subject to special risks and restrictions, including: fluctuations in currency values and foreign-currency exchange rates; exchange control regulations; changes in local political or economic conditions; governmental pricing directives; import and trade restrictions; import or export licensing requirements and trade policy; restrictions on the ability to repatriate funds; and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad. Acts of terror or war may impair our ability to operate in particular countries or regions, and may impede the flow of goods and services between countries. Customers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency or sell their commodity at prevailing international prices, and we may be unable to collect receivables from such customers. Further, changes in exchange rates may affect our net income, the book value of our assets outside the United States, and our shareowners’ equity.

We may pursue acquisitions or other transactions that have risks and uncertainties that could adversely affect our results of operations and financial condition.

We have completed acquisitions and other transactions and expect to pursue additional acquisitions and other transactions. These acquisitions and other transactions involve risks and uncertainties. We must fit them into our long-term growth strategies to generate sufficient value to justify their cost. Acquisitions also present other challenges, including geographical coordination, personnel integration and retention of key management personnel, systems integration and the

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reconciliation of corporate cultures. Those operations could divert management’s attention from our business or cause a temporary interruption of or loss of momentum in our business and the loss of key personnel from the acquired companies. Any acquisition may also cause us to assume liabilities, such as ongoing lawsuits, and may subject us to litigation. In addition, we may incur debt or issue equity securities in the future to fund potential acquisitions or investments, or for other purposes. If we issue equity securities, our existing shareowners may experience dilution, and if we incur additional debt, it may increase our leverage and cost of borrowing and potentially lower our credit ratings.

Fluctuations in commodity prices can increase our costs and decrease our sales.

We contract production with multiple growers at fair value and retain the seed in inventory until it is sold. These purchases constitute a significant portion of the manufacturing costs for our seeds. Additionally, our chemical manufacturing operations use chemical intermediates and energy, which are subject to increases in price as the costs of oil and natural gas increase. Accordingly, increases in commodity prices may negatively affect our cost of goods sold or cause us to increase seed or chemical prices, which could adversely affect our sales. Where practical, we use hedging strategies and raw material supply agreements that contain terms designed to mitigate the risk of short-term changes in commodity prices. However, we are unable to avoid the risk of medium- and long-term increases. Farmers’ incomes are also affected by commodity prices; as a result, fluctuations in commodity prices could have an impact on farmers' purchasing decisions and negatively affect their ability and decisions to purchase our seed and chemical products.

Compliance with quality controls and regulations affecting our manufacturing may be costly, and failure to comply may result in decreased sales, penalties and remediation obligations.

Because we use hazardous and other regulated materials in our manufacturing processes and engage in mining operations, we are subject to operational risks including the potential for unintended environmental contamination, which could lead to potential personal injury claims, remediation expenses and penalties. Should a catastrophic event occur at any of our facilities, we could face significant reconstruction or remediation costs, penalties, third party liabilities and loss of production capacity, which could affect our sales. In addition, lapses in quality or other manufacturing controls could affect our sales and result in claims for defective products.

Our ability to match our production to the level of product demanded by farmers or our licensed customers has a significant effect on our sales, costs, and growth potential.

Farmers’ decisions are affected by market, economic and weather conditions that are not known in advance. Failure to provide distributors with enough inventories of our products will reduce our current sales. However, product inventory levels at our distributors may reduce sales in future periods, as those distributor inventories are worked down. In addition, inadequate liquidity of distributors could affect distributors’ abilities to pay for our products and, therefore, affect our sales or our ability to collect on our receivables. Global glyphosate producers have the capacity to supply the market, but global dynamics including demand, environmental regulation compliance and raw material availability can cause fluctuations in the supply and the price of generic products. We expect the fluctuation in global production will impact the selling price and margin of Roundup brands and our third-party sourcing business. We depend on the availability of certain key raw materials used in our glyphosate production from single or limited major suppliers. If a major disruption in key raw materials were to occur, it could have a significant effect on our production, sales and costs.

Recent increases in and expected higher levels of indebtedness will effectively reduce our financial flexibility and the amount of funds available for other business purposes and may adversely affect our financial condition.

Since June 2014, we have incurred a significant amount of indebtedness related to our two-year, $10 billion share repurchase authorization. We would expect to incur additional long-term and short-term debt, in addition to using our cash resources, to fund share repurchases and for other general corporate purposes. Interest costs related to the increased debt are and will be substantial and will impact working capital, liquidity and cash flow. Our increased level of indebtedness and related covenants could cause adverse effects including: reducing funds available, and limiting our ability to obtain financing or increasing our cost to obtain financing, for acquisitions, capital expenditures, dividends, or other business purposes; lowering our credit ratings; and restricting our financial and operating flexibility. In addition, we regularly extend credit to our customers in certain areas of the world to enable them to acquire crop production products and seeds at the beginning of their growing seasons. Because of these credit practices and the seasonality of our sales and costs, we may need to issue short-term debt at certain times of the year to fund our cash flow requirements. The amount of short-term debt will be greater to the extent that we are unable to collect customer receivables when due and to manage our costs and expenses. Downgrades in our credit ratings, or other limitations on our access to short- or long-term financing or refinancing, could increase our interest costs and adversely affect our profitability.

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Our results of operations and financial condition may be significantly affected by disruptions caused by weather, natural disasters, accidents, and security breaches, including cybersecurity incidents.

Weather and field conditions can adversely affect the timing of crop planting, acreage planted, crop yields and commodity prices. In turn, seed production volumes, quality and cost may also be adversely affected which could impact our sales and profitability. Natural disasters or industrial accidents could also affect our facilities, or those of our major suppliers or major customers, which could affect our costs and our ability to meet supply requirements. One of our major U.S. glyphosate manufacturing facilities is located in Luling, Louisiana, which is an area subject to hurricanes. In addition, several of our key raw material and utility suppliers have production assets in the U.S. Gulf Coast region and are also susceptible to damage risk from hurricanes. Hawaii and Puerto Rico, which are also subject to hurricanes, are major seeds and traits locations for our pipeline products. Security breaches and disruptions to our information technology systems could seriously harm our operations. We utilize and critically rely upon information technology systems in all aspects of our business, including increasingly large amounts of data to support our products and advance our research and development pipeline. We have experienced cybersecurity attacks and IT system outages that have not had a material impact on our financial results, but it is not possible to predict the impact of future incidents. Failure to effectively prevent, detect and recover from the increasing number and sophistication of information security threats could result in theft, misuse, modification and destruction of information, including trade secrets and confidential business information, and cause business disruptions, delays in research and development, reputational damage, and third-party claims, which could significantly affect our results of operations and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

At Aug. 31, 2015, there were no unresolved comments from the staff of the SEC related to our periodic or current reports under the Exchange Act.

ITEM 2. PROPERTIES

We and our subsidiaries own or lease manufacturing facilities, laboratories, seed production and other agricultural facilities, office space, warehouses, and other land parcels in North America, South America, Europe, Asia, Australia and Africa. Our general offices, which we own, are located in St. Louis County, Missouri. These office and research facilities are principal properties.

Additional principal properties used by the Seeds and Genomics segment include seed production and conditioning plants at Boone, Grinnell and Williamsburg, Iowa; Constantine, Michigan; Enkhuizen, Netherlands; Illiopolis, Waterman and Farmer City, Illinois; Remington, Indiana; Kearney and Waco, Nebraska; Oxnard, California; Peyrehorade and Trèbes, France; Rojas, Argentina; Sinesti, Romania; Nagyigmand, Hungary; Uberlândia and Petrolina, Brazil; Thobontle, South Africa; and Hyderabad, India, and research sites at Ankeny, Iowa; Research Triangle Park, North Carolina; Maui, Molokai and Oahu, Hawaii; Middleton, Wisconsin; Mystic, Connecticut; and Woodland, California. We own all of these properties, except Research Triangle Park and some sites in Hawaii. The Seeds and Genomics segment also uses seed foundation and production facilities, breeding facilities, and genomics and other research laboratories at various other locations worldwide.

The Agricultural Productivity segment has principal chemicals manufacturing facilities at Antwerp, Belgium; Camaçari, Brazil; Luling, Louisiana; Muscatine, Iowa; São José dos Campos, Brazil; Soda Springs, Idaho; Zárate, Argentina; and Rock Springs, Wyoming. We own all of these properties, except the one in Antwerp, Belgium, which is subject to a lease for the land underlying the facility.

We believe that our principal properties are suitable and adequate for their use. Our facilities generally have sufficient capacity for our existing needs and expected near-term growth. Expansion projects are undertaken as necessary to meet future needs. Use of these facilities may vary with seasonal, economic and other business conditions, but none of the principal properties is substantially idle. In certain instances, we have leased portions of sites not required for current operations to third parties.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various legal proceedings that arise in the ordinary course of our business, as well as proceedings that we have considered to be material under SEC regulations. These include proceedings to which we are party in our own name and proceedings to which our former parent, Pharmacia LLC, or its former subsidiary, Solutia Inc., is a party but that we manage and for which we are responsible pursuant to certain indemnification agreements. Information regarding certain material proceedings and the possible effects on our business of proceedings we are defending is disclosed in Note 24 — Commitments and Contingencies— under the subheading “Environmental and Litigation Liabilities — Litigation” and is incorporated by reference herein.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Executive Officers

See Part III — Item 10 of this Report on Form 10-K for information about our Executive Officers.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Monsanto’s common stock is traded principally on the New York Stock Exchange, under the symbol MON. The number of shareowners of record as of Oct. 26, 2015, was 29,014.

The following table sets forth dividend declarations, as well as the high and low intra-day sales prices for Monsanto’s common stock, for the fiscal years 2015 and 2014 quarters indicated.

Dividends per Share		1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Fiscal Year
2015		$—	$0.98(1)	$—	$1.03(1)	$2.01
2014		$—	$0.86(2)	$—	$0.92(2)	$1.78
Common Stock Price		1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Fiscal Year
2015	High	$121.15	$126.00	$123.82	$117.47	$126.00
	Low	105.76	115.16	111.16	89.34	89.34
2014	High	$114.50	$117.50	$122.00	$128.79	$128.79
	Low	98.84	104.08	109.24	112.13	98.84

(1) Monsanto's board of directors declared four dividends in 2015, $0.49 per share on Dec. 8, 2014, $0.49 per share on Jan. 30, 2015, $0.49 per share on June 5, 2015, and $0.54 per share on Aug. 4, 2015.

(2) Monsanto's board of directors declared four dividends in 2014, $0.43 per share on Dec. 9, 2013, $0.43 per share on Jan. 28, 2014, $0.43 per share on June 6, 2014, and $0.49 per share on Aug. 5, 2014.

Issuer Purchases of Equity Securities

The following table summarizes purchases of equity securities during the fourth quarter of fiscal year 2015 by Monsanto and affiliated purchasers, pursuant to SEC rules.

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share(1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar     Value of Shares that May     Yet Be Purchased Under     the Plans or Programs
June 2015:
June 1, 2015, through June 30, 2015	873,681	(2)	$	114.30	873,654	$	4,057,358,821
July 2015:
July 1, 2015, through July 31, 2015	27	(2)	$	101.89	—	$	4,057,358,821
August 2015:
Aug. 1, 2015, through Aug. 31, 2015	27	(2)	$	97.67	—	$	4,057,358,821
Total	873,735		$	114.30	873,654	$	4,057,358,821

(1) The average price paid per share is calculated on a trade date basis and excludes commission.

(2) Includes 27 shares withheld for taxes on restricted stock.

In June 2014, the company announced a two-year repurchase authorization of up to $10 billion of the company's common stock. Repurchases under the authorization commenced on July 1, 2014. There were no other publicly announced plans outstanding as of Aug. 31, 2015.

On Oct. 9, 2015, the company entered into uncollared accelerated share repurchase (“ASR”) agreements with two banks to purchase approximately $3 billion of Monsanto common stock, in total, pursuant to the share repurchase authorization announced in June 2014. For a detailed discussion see the "Capital Resources and Liquidity" section of the "Financial Condition, Liquidity and Capital Resources" section in this MD&A and Note 27 — Subsequent Events.

The timing and number of shares purchased in the future under the repurchase authorization, if any, depends upon capital needs, market conditions and other factors.

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MONSANTO COMPANY 2015 FORM 10-K

Stock Price Performance Graph

The graph below compares the performance of Monsanto’s common stock with the performance of the Standard & Poor’s 500 Stock Index (a broad-based market index) and a peer group index over a 60-month period extending through the end of the 2015 fiscal year. The graph assumes that $100 was invested on Sept. 1, 2010, in our common stock, in the Standard & Poor’s 500 Stock Index and the peer group index, and that all dividends were reinvested.

Because we are involved both in the agricultural products business and in the seeds and genomics business, no published peer group accurately mirrors our portfolio of businesses. Accordingly, we created a peer group index that includes Bayer AG ADR, Dow Chemical Company, DuPont (E.I.) de Nemours and Company, BASF AG and Syngenta AG. The Standard & Poor’s 500 Stock Index and the peer group index are included for comparative purposes only. They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of our common stock.

	8/31/2010	8/31/2011	8/31/2012	8/31/2013	8/31/2014	8/31/2015
Monsanto Company	$100	$133.09	$170.77	$194.86	$233.88	$200.93
S&P 500 Index	$100	$118.50	$139.83	$165.99	$207.89	$208.88
Peer Group	$100	$124.63	$140.87	$178.64	$219.31	$198.18

In accordance with SEC rules, the information contained in Stock Price Performance Graph shall not be deemed to be “soliciting material,” or to be “filed” with the SEC or subject to the SEC’s Regulation 14A, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Monsanto specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.

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ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

	Year Ended Aug. 31,
(Dollars in millions, except per share amounts and ratios)	2015 (4)			2014 (5)			2013			2012 (6)			2011
Operating Results:
Net sales	$	15,001		$	15,855		$	14,861		$	13,504		$	11,822
Income from operations	3,523			4,075			3,570			3,148			2,502
Income from continuing operations including portion attributable to noncontrolling interest	2,297			2,749			2,514			2,087			1,657
Income on discontinued operations	28			13			11			6			2
Net income attributable to Monsanto Company	2,314			2,740			2,482			2,045			1,607
Basic Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	$	4.79		$	5.25		$	4.63		$	3.82		$	2.99
Income on discontinued operations	0.06			0.03			0.02			0.01			0.01
Net income attributable to Monsanto Company	4.85			5.28			4.65			3.83			3.00
Diluted Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	$	4.75		$	5.19		$	4.58		$	3.78		$	2.96
Income on discontinued operations	0.06			0.03			0.02			0.01			—
Net income attributable to Monsanto Company	4.81			5.22			4.60			3.79			2.96
Financial Position at End of Period:
Total assets (3)	$	21,920		$	21,918		$	20,651		$	20,210		$	19,833
Working capital(1)	5,448			4,563			5,741			5,437			4,080
Current ratio(1)	2.05:1			1.89:1			2.32:1			2.29:1			1.86:1
Long-term debt (3)	8,429			7,465			2,048			2,024			1,532
Debt-to-capital ratio(2)	56		%	49		%	14		%	15		%	16		%
Other Data:
Dividends per share	$	2.01		$	1.78		$	1.56		$	1.28		$	1.14
Stock price per share:
High	$	126.00		$	128.79		$	109.33		$	89.73		$	77.09
Low	$	89.34		$	98.84		$	82.70		$	58.89		$	47.07
End of period	$	97.65		$	115.65		$	97.89		$	87.11		$	68.93
Basic shares outstanding	476.9			519.3			533.7			534.1			536.5
Diluted shares outstanding	481.4			524.9			539.7			540.2			542.4

(1) Working capital is total current assets less total current liabilities; current ratio represents total current assets divided by total current liabilities.

(2) Debt-to-capital ratio is the sum of short-term and long-term debt, divided by total Monsanto Company shareowners' equity, short-term and long-term debt.

(3) Prior period balances have been updated to conform with current period presentation for the adoption of the accounting standard update "Presentation of Debt Issuance Costs."

(4) The company recorded $100.5 million of cost of goods sold expenses related to restructuring, $167.3 million of selling, general and administrative expenses related to environmental and litigation settlements and a potential SEC settlement, and $392.7 million of restructuring expense, with a combined corresponding income tax benefit of $187.9 million. The company also recorded $274 million of net sales as a result of the sale of a perpetual license to intellectual property, with a corresponding income tax provision of $102.1 million.

(5) The company recorded $31.8 million of selling, general and administrative expenses related to legacy environmental settlements, with a corresponding income tax benefit of $12.2 million.

(6) The company recorded $43.5 million of selling, general and administrative expenses related to legacy environmental settlements, with a corresponding income tax benefit of $16.6 million.

See Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — for information regarding the factors that have affected or may affect the comparability of our business results.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Background

Monsanto Company, along with its subsidiaries, is a leading global provider of agricultural products for farmers. Our seeds, biotechnology trait products, herbicides and precision agriculture tools provide farmers with solutions that help improve productivity, reduce the costs of farming and produce better foods for consumers and better feed for animals.

We manage our business in two segments: Seeds and Genomics and Agricultural Productivity. Through our Seeds and Genomics segment, we produce leading seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and we develop biotechnology traits that assist farmers in controlling insects and weeds and precision agriculture to assist farmers in decision making. We also provide other seed companies with genetic material and biotechnology traits for their seed brands. Through our Agricultural Productivity segment, we manufacture Roundup and Harness brand herbicides and other herbicides. Approximately 43 percent of our total company sales, 37 percent of our Seeds and Genomics segment sales and 54 percent of our Agricultural Productivity segment sales originated from our legal entities outside the United States during fiscal year 2015.

In the fourth quarter of 2008, we entered into an agreement to divest the animal agricultural products business (the Dairy business). This transaction was consummated on Oct. 1, 2008, and included a 10-year earn-out with potential annual payments being earned by Monsanto if certain revenue levels are exceeded. As a result, financial data for this business has been presented as discontinued operations as outlined below. Accordingly, for all periods presented herein, the Statements of Consolidated Operations and Consolidated Financial Position have been conformed to this presentation. The Dairy business was previously reported as part of the Agricultural Productivity segment.

This MD&A should be read in conjunction with Monsanto’s consolidated financial statements and the accompanying notes. The notes to the consolidated financial statements referred to throughout this MD&A are included in Part II — Item 8 — Financial Statements and Supplementary Data — of this Report on Form 10-K. Unless otherwise indicated, “earnings per share” and “per share” mean diluted earnings per share. Unless otherwise noted, all amounts and analyses are based on continuing operations.

Non-GAAP Financial Measures

MD&A includes financial information prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"), as well as two other financial measures, EBIT and free cash flow, that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. The presentation of EBIT and free cash flow information is intended to supplement investors’ understanding of our operating performance and liquidity. Our EBIT and free cash flow measures may not be comparable to other companies’ EBIT and free cash flow measures. Furthermore, these measures are not intended to replace net income (loss), cash flows, financial position or comprehensive income (loss), as determined in accordance with GAAP.

EBIT is defined as earnings (loss) before interest and taxes. Earnings (loss) is intended to mean net income (loss) as presented in the Statements of Consolidated Operations under GAAP. EBIT is an operating performance measure for our two business segments. We believe that EBIT is useful to investors and management to demonstrate the operational profitability of our segments by excluding interest and taxes, which are generally accounted for across the entire company on a consolidated basis. EBIT is also one of the measures used by Monsanto management to determine resource allocations within the company. See Note 25 — Segment and Geographic Data — for a reconciliation of EBIT to net income for fiscal years 2015, 2014 and 2013.

We also provide information regarding free cash flow, an important liquidity measure for Monsanto. We define free cash flow as the total of net cash provided or required by operating activities and net cash provided or required by investing activities. Free cash flow does not represent the residual cash flow available for discretionary expenditures. We believe that free cash flow is useful to investors and management as a measure of the ability of our business to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to our shareowners through dividend payments or share repurchases. Free cash flow is also used by management as one of the performance measures in determining incentive compensation. See the “Financial Condition, Liquidity and Capital Resources — Cash Flow” section of MD&A for a reconciliation of free cash flow to net cash provided by operating activities and net cash required by investing activities on the Statements of Consolidated Cash Flows.

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Executive Summary

Consolidated Operating Results — Net sales decreased$854 million, or 5 percent, in fiscal year 2015 compared to fiscal year 2014. The primary contributors to the decrease are our corn seed and traits business and global Roundup and other glyphosate-based herbicides, partially offset by growth in our soybean seed and traits business. Net income attributable to Monsanto Company in fiscal year 2015 was $4.81 per share, compared with $5.22 per share in fiscal year 2014.

Financial Condition, Liquidity and Capital Resources — In fiscal year 2015, working capital was $5,448 million compared with $4,563 million in fiscal year 2014, an increase of $885 million. For a detailed discussion of the factors affecting the working capital comparison, see the "Working Capital and Financial Condition" section of the "Financial Condition, Liquidity and Capital Resources" section in this MD&A.

In fiscal year 2015, net cash provided by operating activities was $3,108 million compared with $3,054 million in fiscal year 2014. Net cash required by investing activities was $1,019 million in fiscal year 2015 compared with $2,095 million in fiscal year 2014. Free cash flow was $2,089 million in fiscal year 2015 compared with $959 million in fiscal year 2014. For a detailed discussion of the factors affecting the free cash flow comparison, see the "Cash Flow" section of the "Financial Condition, Liquidity and Capital Resources" section in this MD&A.

At Aug. 31, 2015, our debt-to-capital ratio was 56 percent compared with 49 percent at Aug. 31, 2014. The increase was due to an increase in long-term debt as a result of the $365 million debt issuance in January 2015, the $800 million debt issuance in April 2015 and treasury stock purchases during fiscal year 2015. These factors were offset by an increase in shareowners' equity resulting from earnings during the fiscal year.

In fiscal year 2015, capital expenditures were $967 million compared with $1,005 million in fiscal year 2014, a decrease of $38 million. The primary driver of the decrease is reduced spending across key functions of the company; however, we continue to progress on projects related to our additional corn seed plant expansions in Brazil, Latin America and Europe and research facility in the United States.

We recorded pretax restructuring expenses of $493 million in fiscal year 2015, of which $393 million was recorded in restructuring charges and $100 million was recorded in cost of goods sold in the Statement of Consolidated Operations. See Note 5 — Restructuring — for further discussion.

On Oct. 9, 2015, we entered into uncollared accelerated share repurchase (“ASR”) agreements with two banks to purchase approximately $3 billion of Monsanto common stock, in total, pursuant to the share repurchase program announced in June 2014. For a detailed discussion see the "Capital Resources and Liquidity" section of the "Financial Condition, Liquidity and Capital Resources" section in this MD&A and Note 27 — Subsequent Events.

Outlook — We plan to continue to innovate and improve our products in order to maintain market leadership and to support near-term performance. We are focused on applying innovation and technology to make our farmer customers more productive and profitable by protecting and improving yields and improving the ways they can produce food, fiber, feed and fuel. We use the tools of modern biology and technology in an effort to make seeds easier to grow, to allow farmers to do more with fewer resources and to help produce healthier foods for consumers. Our current R&D strategy and commercial priorities are focused on bringing our farmer customers integrated yield solutions through our innovative platforms in plant breeding, biotechnology, chemistry, biologicals and data science. Our capabilities in biotechnology and breeding research are generating a rich product pipeline that is expected to drive long-term growth. The viability of our product pipeline depends in part on the speed of regulatory approvals globally, continued patent and legal rights to offer our products, general public acceptance of the products and the value they will deliver to the market.

Roundup herbicides remain the largest crop protection brand globally. Monsanto’s crop protection business focus is to strategically support Monsanto’s Roundup Ready crops through our weed management platform that delivers weed control offerings for farmers. We are focused on managing the costs associated with our agricultural chemistry business as that sector matures globally.

See the “Outlook” section of MD&A for a more detailed discussion of some of the opportunities and risks we have identified for our business. For additional information related to the outlook for Monsanto, see “Caution Regarding Forward-Looking Statements” above and Part I — Item 1A — Risk Factors of this Form 10-K.

New Accounting Pronouncements — See Note 3 — New Accounting Standards — for information on recently issued accounting guidance.

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MONSANTO COMPANY 2015 FORM 10-K

RESULTS OF OPERATIONS

	Year Ended Aug. 31,									Change
(Dollars in millions, except per share amounts)	2015			2014			2013			2015 vs. 2014		2014 vs. 2013
Net Sales	$	15,001		$	15,855		$	14,861		(5	)%	7	%
Cost of goods sold	6,819			7,281			7,208			(6	)%	1	%
Gross Profit	8,182			8,574			7,653			(5	)%	12	%
Operating Expenses:
Selling, general and administrative expenses	2,686			2,774			2,550			(3	)%	9	%
Research and development expenses	1,580			1,725			1,533			(8	)%	13	%
Restructuring charges	393			—			—			NM		NM
Total Operating Expenses	4,659			4,499			4,083			4	%	10	%
Income from Operations	3,523			4,075			3,570			(14	)%	14	%
Interest expense	433			248			172			75	%	44	%
Interest income	(105		)	(102		)	(92		)	3	%	11	%
Other expense, net	34			102			61			(67	)%	67	%
Income from Continuing Operations Before Income Taxes	3,161			3,827			3,429			(17	)%	12	%
Income tax provision	864			1,078			915			(20	)%	18	%
Income from Continuing Operations Including Portion Attributable to Noncontrolling Interest	2,297			2,749			2,514			(16	)%	9	%
Discontinued Operations:
Income from operations of discontinued businesses	45			22			17			NM		NM
Income tax provision	17			9			6			NM		NM
Income on Discontinued Operations	28			13			11			NM		NM
Net Income	$	2,325		$	2,762		$	2,525		(16	)%	9	%
Less: Net income attributable to noncontrolling interest	11			22			43			(50	)%	(49	)%
Net Income Attributable to Monsanto Company	2,314			2,740			2,482			(16	)%	10	%
Diluted Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	$	4.75		$	5.19		$	4.58		(8	)%	13	%
Income on discontinued operations	0.06			0.03			0.02			NM		NM
Net Income Attributable to Monsanto Company	$	4.81		$	5.22		$	4.60		(8	)%	13	%
NM = Not Meaningful
Effective Tax Rate	27		%	28		%	27		%
Comparison as a Percent of Net Sales:
Cost of goods sold	45		%	46		%	49		%
Gross profit	55		%	54		%	51		%
Selling, general and administrative expenses	18		%	17		%	17		%
Research and development expenses	11		%	11		%	10		%
Total operating expenses	31		%	28		%	27		%
Income from continuing operations before income taxes	21		%	24		%	23		%
Net income attributable to Monsanto Company	15		%	17		%	17		%

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MONSANTO COMPANY 2015 FORM 10-K

Overview of Financial Performance(2015 compared with 2014)

The following section discusses the significant components of our results of operations that affected the comparison of fiscal year 2015 with fiscal year 2014.

Net salesdecreased$854 million in fiscal year 2015 from fiscal year 2014. Our Seeds and Genomics segment net sales decreased$497 million, and our Agricultural Productivity segment net sales decreased$357 million. The following table presents the percentage changes in fiscal year 2015 worldwide net sales by segment compared with net sales in fiscal year 2014, including the effect that volume, price and currency had on these percentage changes:

	2015 Percentage Change in Net Sales vs. 2014
	Volume	Price (1)	Currency	Total
Seeds and Genomics Segment	(4)%	3%	(4)%	(5)%
Agricultural Productivity Segment	(3)%	1%	(5)%	(7)%
Total Monsanto Company	(3)%	2%	(4)%	(5)%

(1) Agricultural Productivity Segment includes the impact of the agreement with Scotts entered into in the third quarter of 2015, which resulted in $274 million of upfront revenue accounted for as a perpetual license to intellectual property.

Cost of goods sold decreased$462 million in fiscal year 2015 from fiscal year 2014. Our Seeds and Genomics segment cost of goods sold decreased$178 million, and our Agricultural Productivity segment cost of goods sold decreased$284 million. Cost of goods sold as a percent of net sales for the total company decreased1 percentage point to 45 percent. The following table represents the percentage changes in fiscal year 2015 worldwide cost of goods sold by segment compared with cost of goods sold in fiscal year 2014, including the effect that volume, costs and currency had on these percentage changes:

	2015 Percentage Change in Cost of Goods Sold vs. 2014
	Volume	Costs	Currency	Total
Seeds and Genomics Segment	(3)%	4%	(5)%	(4)%
Agricultural Productivity Segment	(4)%	(1)%	(4)%	(9)%
Total Monsanto Company	(3)%	1%	(4)%	(6)%

Gross profitdecreased$392 million. Total company gross profit as a percent of net sales increased1 percentage point to 55 percent in fiscal year 2015.

For a more detailed discussion of the factors affecting the net sales, cost of goods sold and gross profit comparison, see the “Seeds and Genomics Segment” and the “Agricultural Productivity Segment” sections.

Operating expensesincreased$160 million in fiscal year 2015 from fiscal year 2014. Selling, general and administrative (SG&A) expenses decreased$88 million, or 3 percent, primarily because of lower incentive accruals, lower operational spend and favorable currency impacts, partially offset by increased investment in growth platforms, including The Climate Corporation and BioAg Alliance, increased commissions and accruals related to the ongoing SEC investigation discussed in Item 8 — Financial Statements and Supplementary Data — and Note 24 — Commitments and Contingencies. R&D expenses decreased$145 million, or 8 percent, due to lower incentive accruals, lower operational spend and favorable currency impacts. As a percent of net sales, SG&A expense increased1 percentage point to 18 percent of net sales and R&D expense remained consistent at 11 percent of net sales in fiscal year 2015 compared to fiscal year 2014. Restructuring charges were $393 million in fiscal year 2015 as a result of the 2015 Restructuring Plan discussed in Note 5 — Restructuring. There were no restructuring charges recognized in fiscal year 2014.

Interest expense increased$185 million in fiscal year 2015 from fiscal year 2014. The increase was primarily the result of the $4.5 billion debt issuance in July 2014, the $365 million debt issuance in January 2015 and the $800 million debt issuance in April 2015.

Other expense — netdecreased$68 million in fiscal year 2015 due to lower foreign currency losses, largely related to the Argentine peso, compared to the prior fiscal year.

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MONSANTO COMPANY 2015 FORM 10-K

Income tax provision for fiscal year 2015 was $864 million, a decrease of $214 million from fiscal year 2014 primarily as a result of the decrease in pretax income from continuing operations in 2015 and higher discrete tax benefits. The effective tax rate decreased to 27 percent, a decrease of 1 percentage point from fiscal year 2014. Fiscal year 2015 included several discrete tax adjustments resulting in a tax benefit of $62 million, compared to a tax benefit of $12 million in fiscal year 2014. The majority of the fiscal year 2015 benefit resulted from favorable adjustments to our U.S. and Ex-U.S. tax returns filed during the year. Without the discrete items, our effective tax rate for fiscal year 2015 would have been higher than the 2014 rate, primarily due to higher taxes on foreign operations.

Overview of Financial Performance(2014 compared with 2013)

The following section discusses the significant components of our results of operations that affected the comparison of fiscal year 2014 with fiscal year 2013.

Net sales increased $994 million in fiscal year 2014 from fiscal year 2013. Our Seeds and Genomics segment net sales increased $400 million, and our Agricultural Productivity segment net sales increased $594 million. The following table presents the percentage changes in fiscal year 2014 worldwide net sales by segment compared with net sales in fiscal year 2013, including the effect that volume, price and currency had on these percentage changes:

	2014 Percentage Change in Net Sales vs. 2013
	Volume	Price	Currency	Total
Seeds and Genomics Segment	(1)%	6%	(1)%	4%
Agricultural Productivity Segment	5%	10%	(2)%	13%
Total Monsanto Company	1%	7%	(1)%	7%

Cost of goods sold increased $73 million in fiscal year 2014 from fiscal year 2013. Our Seeds and Genomics segment cost of goods sold decreased $113 million, and our Agricultural Productivity segment cost of goods sold increased $186 million. Cost of goods sold as a percent of net sales for the total company decreased 3 percentage points to 46 percent. The following table represents the percentage changes in fiscal year 2014 worldwide cost of goods sold by segment compared with cost of goods sold in fiscal year 2013, including the effect that volume, costs and currency had on these percentage changes:

	2014 Percentage Change in Cost of Goods Sold vs. 2013
	Volume	Costs	Currency	Total
Seeds and Genomics Segment	1%	(2)%	(2)%	(3)%
Agricultural Productivity Segment	5%	2%	(1)%	6%
Total Monsanto Company	3%	(1)%	(1)%	1%

Gross profit increased $921 million. Total company gross profit as a percent of net sales increased 3 percentage points to 54 percent in fiscal year 2014.

For a more detailed discussion of the factors affecting the net sales, cost of goods sold and gross profit comparison, see the “Seeds and Genomics Segment” and the “Agricultural Productivity Segment” sections.

Operating expenses increased $416 million in fiscal year 2014 from fiscal year 2013. Selling, general and administrative (SG&A) expenses increased 9 percent primarily because of increased investment in additional growth platforms, including The Climate Corporation, and increased activity related to marketing and administrative functions. R&D expenses increased 13 percent due to The Climate Corporation acquisition, breeding expansion and increased investment in our product pipeline. As a percent of net sales, SG&A expense remained consistent at 17 percent of net sales and R&D expense increased 1 percentage point to 11 percent of net sales in fiscal year 2014.

Interest expense increased $76 million in fiscal year 2014 from fiscal year 2013. The increase was primarily the result of the $1 billion debt issuance that occurred in November 2013 and the $4.5 billion debt issuance that occurred in July 2014.

Other expense — net increased $41 million in fiscal year 2014. The increase was primarily the result of current period foreign currency losses largely related to the Argentine peso.

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MONSANTO COMPANY 2015 FORM 10-K

Income tax provision for fiscal year 2014 was $1,078 million, an increase of $163 million from fiscal year 2013 primarily as a result of lower discrete tax benefits and the increase in pretax income from continuing operations in 2014. The effective tax rate increased to 28 percent, an increase of 1 percentage point from fiscal year 2013. Fiscal year 2014 included several discrete tax adjustments resulting in a tax benefit of $12 million, compared to a benefit of $153 million in fiscal year 2013. Without the discrete items, our effective tax rate for fiscal year 2014 would have been lower than the 2013 rate, primarily due to foreign tax credits.

SEEDS AND GENOMICS SEGMENT

	Year Ended Aug. 31,						Change
(Dollars in millions)	2015		2014		2013		2015 vs. 2014		2014 vs. 2013
Net Sales
Corn seed and traits	$	5,953	$	6,401	$	6,596	(7	)%	(3	)%
Soybean seed and traits	2,276		2,102		1,653		8	%	27	%
Cotton seed and traits	523		665		695		(21	)%	(4	)%
Vegetable seeds	816		867		821		(6	)%	6	%
All other crops seeds and traits	675		705		575		(4	)%	23	%
Total Net Sales	$	10,243	$	10,740	$	10,340	(5	)%	4	%
Gross Profit
Corn seed and traits	$	3,557	$	3,932	$	3,929	(10	)%	—	%
Soybean seed and traits	1,510		1,364		948		11	%	44	%
Cotton seed and traits	408		461		519		(11	)%	(11	)%
Vegetable seeds	372		401		337		(7	)%	19	%
All other crops seeds and traits	430		438		350		(2	)%	25	%
Total Gross Profit	$	6,277	$	6,596	$	6,083	(5	)%	8	%
EBIT(1)	$	2,206	$	2,607	$	2,412	(15	)%	8	%

⁽¹⁾  EBIT is defined as earnings (loss) before interest and taxes. Interest and taxes are recorded on a total company basis. We do not record these items at the segment level. See Note 25 — Segment and Geographic Data — and the “Overview — Non-GAAP Financial Measures” section of MD&A for further details.

Seeds and Genomics Financial Performance for Fiscal Year 2015

Net Sales for the Seeds and Genomics segment decreased$497 million in fiscal year 2015 compared to fiscal year 2014. The net sales decrease of $448 million in corn seed and traits was primarily driven by unfavorable foreign currency changes and lower planted acres in key regions including Argentina, United States and Europe. The net sales decrease of $142 million in cotton seed and traits was driven primarily by decreased planted area in the United States and decreased planted area in Australia due to lower water availability.

The net sales decreases were partially offset by an increase of $174 million in soybean seed and traits, which was driven by increased acres in Brazil resulting from the fiscal year 2014 launch of Intacta RR2 PRO.

Cost of goods sold in the Seeds and Genomics segment primarily represents field growing, plant processing and distribution costs. Cost of goods sold decreased$178 million, or 4 percent, to $3,966 million in fiscal year 2015 compared to $4,144 million in fiscal year 2014. The decrease in corn seed and traits was primarily the result of lower sales volumes in the United States and foreign currency changes offset by higher cost of goods in South America and Europe and asset impairments resulting from the 2015 Restructuring Plan. Cost of goods in the cotton seed and trait business decreased due to decreased planted area in the United States and Australia as noted in the net sales discussion.

Gross profit decreased$319 million, or 5 percent, to $6,277 million in fiscal year 2015 compared with $6,596 million in fiscal year 2014. Gross profit as a percent of sales for this segment remained consistent at 61 percent in fiscal year 2015.

Gross profit for corn seed and traits decreased$375 million, or 10 percent, due to lower volumes in key regions as noted in the net sales discussion, in addition to higher costs in Brazil and Europe and asset impairments resulting from the 2015 Restructuring Plan. Gross profit for cotton seed and traits decreased$53 million, or 11 percent, which was due to the decrease in planted area for cotton seed and traits as noted in the net sales discussion.

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MONSANTO COMPANY 2015 FORM 10-K

Gross profit for soybean seed and traits increased$146 million, or 11 percent, compared to the 8 percent increase in net sales for soybean seed and traits due to the increase in trait revenue in Brazil.

Seeds and Genomics Financial Performance for Fiscal Year 2014

The net sales increase of $449 million in soybean seed and traits was driven by increased collections of Roundup Ready 2 Yield royalties in the United States, volume growth and improved germplasm and trait mix in the United States and the launch of Intacta RR2 PRO, primarily in Brazil.

The net sales decrease of $195 million in corn seed and traits was primarily driven by lower volumes in the United States and Latin America and unfavorable foreign currency changes in Brazil, offset by increases in pricing in all world areas due to improved germplasm and trait mix and volume growth in Europe.

The net sales increase of $130 million in all other seeds and traits was primarily due to The BioAg Alliance with Novozymes and higher canola volume.

Cost of goods sold in the Seeds and Genomics segment primarily represents field growing, plant processing and distribution costs. Cost of goods sold decreased $113 million, or 3 percent, to $4,144 million in fiscal year 2014 compared to $4,257 million in fiscal year 2013. The decrease was primarily the result of lower volumes and lower costs in corn seed and traits in Latin America and the United States and favorable currency changes in Brazil, Europe and Canada. The decrease was offset by higher volumes in soybean seed and traits, higher costs in cotton seed and traits and The BioAg Alliance with Novozymes.

Gross profit increased $513 million, or 8 percent, to $6,596 million in fiscal year 2014 compared with $6,083 million in fiscal year 2013. Gross profit as a percent of sales for this segment increased 2 percentage points to 61 percent in fiscal year 2014.

Gross profit for soybean seed and traits increased 44 percent compared to the 27 percent increase in net sales for soybean seed and traits. This additional percentage increase in gross profit over the net sales increase is the result of improved price mix and Roundup Ready royalties in the United States, which carry higher gross margins, and the launch of Intacta RR2 PRO in Brazil.

Gross profit for vegetable seeds increased 19 percent compared to the 6 percent increase in net sales for vegetable seeds. This additional percentage increase in gross profit over the net sales increase is primarily the result of decreased inventory obsolescence.

Gross profit for cotton seed and traits decreased 11 percent compared to the 4 percent decrease in sales for cotton seeds and traits. This additional percentage decrease in gross profit over the net sales decrease was primarily due to an inventory obsolescence write down in the current fiscal year.

Gross profit for all other crops seeds and traits increased 25 percent compared to the 23 percent increase in net sales for all other crops seeds and traits. The increase in gross profit was driven by higher net sales due to The BioAg Alliance and higher volumes in canola discussed above.

AGRICULTURAL PRODUCTIVITY SEGMENT

	Year Ended Aug. 31,						Change
(Dollars in millions)	2015		2014		2013		2015 vs. 2014		2014 vs. 2013
Net Sales
Agricultural Productivity	$	4,758	$	5,115	$	4,521	(7	)%	13	%
Total Net Sales	$	4,758	$	5,115	$	4,521	(7	)%	13	%
Gross Profit
Agricultural Productivity	$	1,905	$	1,978	$	1,570	(4	)%	26	%
Total Gross Profit	$	1,905	$	1,978	$	1,570	(4	)%	26	%
EBIT(1)	$	1,294	$	1,345	$	1,048	(4	)%	28	%

⁽¹⁾  EBIT is defined as earnings (loss) before interest and taxes. Interest and taxes are recorded on a total company basis. We do not record these items at the segment level. See Note 25 — Segment and Geographic Data — and the “Overview — Non-GAAP Financial Measures” section of MD&A for further details.

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MONSANTO COMPANY 2015 FORM 10-K

Agricultural Productivity Financial Performance for Fiscal Year 2015

Net sales in our Agricultural Productivity segment decreased$357 million, or 7 percent, in fiscal year 2015 primarily due to lower volumes, unfavorable currency impacts and decreased average net selling price. Lower volumes in our global supply and branded businesses resulted from lower customer demand due to weather conditions, primarily in the United States and Latin America, and average net selling price decreased in 2015 compared to 2014 as a result of a decline in acid prices. These decreases were partially offset by the agreement with Scotts entered into in 2015, which resulted in $274 million of upfront revenue accounted for as a perpetual license to intellectual property.

Cost of goods sold in the Agricultural Productivity segment primarily represents material, conversion and distribution costs. Cost of goods sold decreased$284 million, or 9 percent, in fiscal year 2015 to $2,853 million compared to $3,137 million in fiscal year 2014. Roundup and other glyphosate-based herbicides cost of goods sold decreased primarily as a result of the lower sales volumes discussed above and lower raw material prices.

The net sales and cost of goods sold discussed above resulted in a $73 milliondecrease in gross profit in fiscal year 2015. Gross profit as a percent of sales for the Agricultural Productivity segment increased1 percentage point to 40 percent in fiscal year 2015 primarily due to the agreement with Scotts entered into in 2015, partially offset by lower average net selling prices in 2015 compared to 2014.

Agricultural Productivity Financial Performance for Fiscal Year 2014

Net sales in our Agricultural Productivity segment increased $594 million in fiscal year 2014 due to increased sales of Roundup and other glyphosate-based herbicides in all markets. This improvement was primarily due to an increase in the average net selling price of Roundup and other glyphosate-based herbicides in Brazil, United States, Latin America and Europe. The average net selling price for Roundup and other glyphosate-based herbicides increased as sales shifted to higher priced branded products in fiscal year 2014 compared to fiscal year 2013.

Cost of goods sold in the Agricultural Productivity segment primarily represents material, conversion and distribution costs.Cost of goods sold increased $186 million, or 6 percent, in fiscal year 2014 to $3,137 million compared to $2,951 million in fiscal year 2013. Roundup and other glyphosate-based herbicides cost of goods sold increased as fiscal year 2014 sales shifted to branded products, which are more costly to produce. In addition, the cost of goods sold for Roundup and other glyphosate-based herbicides increased from higher priced raw materials when compared to 2013. 

The net sales and cost of goods sold discussed above resulted in $408 million higher gross profit in fiscal year 2014. Gross profit as a percent of sales for the Agricultural Productivity segment increased 4 percentage points to 39 percent in fiscal year 2014 primarily due to the increased average net selling price discussed above.

RESTRUCTURING

On Oct. 6, 2015, the company approved actions to realign resources to increase productivity, enhance competitiveness by delivering cost improvements and support long-term growth (2015 Restructuring Plan). Planned actions include streamlining and reprioritizing some commercial, enabling and research and development efforts, including the exit of the sugarcane business.

Cumulative pretax charges related to the 2015 Restructuring Plan are estimated to be $850 million to $900 million. Implementation of the 2015 Restructuring Plan is expected to be completed by the end of fiscal year 2018, and substantially all of the cash payments are expected to be made by the end of fiscal year 2018. These pretax charges are currently estimated to be comprised of the following categories: $330 million to $350 million in work force reductions, including severance and related benefits; $145 million to $160 million in facility closures / exit costs, including contract termination costs; $375 million to $390 million in asset impairments and write-offs related to property, plant and equipment, inventory and goodwill and other intangible assets. These pretax charges are currently estimated to be incurred primarily by the Seeds and Genomics segment.

In fiscal year 2015, pretax restructuring charges of $493 million were recorded. The $217 million in work force reductions was split relatively evenly between the United States and outside of the United States. In asset impairments, property, plant and equipment impairments of $81 million were related primarily to certain manufacturing facilities in Argentina and manufacturing and technology facilities in the United States. In asset impairments, inventory impairments of $51 million recorded in cost of goods sold were related to discontinued products worldwide. Goodwill disposition associated with the exit of the sugarcane business of $73 million, and intangible assets impairments of $71 million related primarily to the write-off of intellectual property for technology that the company elected no longer to pursue.

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MONSANTO COMPANY 2015 FORM 10-K

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Working Capital and Financial Condition

	As of Aug. 31,
(Dollars in millions, except current ratio)	2015		2014
Cash and Cash Equivalents(1)	$	3,701	$	2,367
Trade Receivables, Net(1)	1,636		2,014
Inventory, Net	3,496		3,597
Other Current Assets(2)	1,792		1,697
Total Current Assets	$	10,625	$	9,675
Short-Term Debt(1)	$	615	$	233
Accounts Payable(1)	836		1,111
Accrued Liabilities(1)(3)	3,726		3,768
Total Current Liabilities	$	5,177	$	5,112
Working Capital(4)	$	5,448	$	4,563
Current Ratio(4)	2.05:1		1.89:1

⁽¹⁾  Includes restrictions as a result of our variable interest entities. See the Statements of Consolidated Financial Position and Note 8 — Variable Interest Entities and Cost Basis Investments — for more information.

⁽²⁾  Includes short-term investments, miscellaneous receivables, deferred tax assets and other current assets.

⁽³⁾  Includes income taxes payable, accrued compensation and benefits, accrued marketing programs, deferred revenues, grower production accruals, dividends payable, customer payable, miscellaneous short-term accruals and restructuring reserves.

⁽⁴⁾  Working capital is total current assets less total current liabilities; current ratio represents total current assets divided by total current liabilities.

Working capital increased$885 million between Aug. 31, 2015, and Aug. 31, 2014, primarily because of the following factors:

• Cash and cash equivalents increased$1,334 million. For a more detailed discussion of the factors affecting the cash flow comparison, see the “Cash Flow” section in this section of MD&A.

• Accounts payable decreased$275 million primarily due to the absence of a bank overdraft, which existed in the prior year, the impact of foreign currency changes and the timing of payments.

• Accrued liabilities decreased$42 million primarily due to the following fluctuations:

◦ Accrued compensation and benefitsdecreased$196 million due to lower incentive accruals.

◦ Miscellaneous short-term accrualsdecreased$171 million primarily due to a decrease in royalties and current deferred tax liabilities, partially offset by an increase in legal reserves.

◦ Deferred revenuesdecreased$68 million due to the impact of foreign currency and timing of shipments.

The decreases in accrued liabilities were partially offset by the following:

◦ Restructuring reservesincreased$170 million as a result of the 2015 Restructuring Plan.

◦ Income taxes payableincreased$135 million primarily as a result of the timing of tax payments in the United States.

◦ Accrued marketing programsincreased$98 million due to lower customer receivable balances with the right of offset, primarily in the United States.

These increases to working capital were partially offset by the following factors:

• Short-term debt increased$382 million as a result of a reclassification of $300 million long-term debt due in April, 2016 and short-term borrowings in Europe, partially offset by repayment of redeemable shares related to a consolidated variable interest entity.

• Trade receivables, net decreased$378 million due to the impact of foreign currency changes, primarily in Brazil and Europe and the timing of cash collections including receipts from customer financing programs in the United States.

• Inventory, net decreased$101 million due to the impact of foreign currency and inventory impairments, partially offset by increased inventory volumes in Europe due to a larger fiscal year 2015 production plan compared to lower sales, increased inventory volumes in Argentina due to lower sales in fiscal year 2015 and larger volumes in Brazil due to a larger Safrinha growing season.

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MONSANTO COMPANY 2015 FORM 10-K

Backlog: Inventories of finished goods, goods in process and raw materials and supplies are maintained to meet customer requirements and our scheduled production. As is consistent with the nature of the seed industry, we generally produce in one growing season the seed inventories we expect to sell the following season. In general, we do not manufacture our products against a backlog of firm orders; production is geared to projected demand.

Customer Financing Programs: We participate in various customer financing programs in an effort to reduce our receivables risk and to reduce our reliance on commercial paper borrowings. As of Aug. 31, 2015, the programs had $975 million in outstanding balances, and we received $1,017 million of proceeds in fiscal year 2015 under these programs. Our future maximum payout under all programs, including our responsibility for our guarantees with lenders, was $209 million as of Aug. 31, 2015. See Note 7 — Customer Financing Programs — for further discussion of these programs.

Cash Flow

	Year Ended Aug. 31,
(Dollars in millions)	2015			2014			2013
Net Cash Provided by Operating Activities	$	3,108		$	3,054		$	2,740
Net Cash Required by Investing Activities	(1,019		)	(2,095		)	(777		)
Free Cash Flow(1)	2,089			959			1,963
Net Cash Required by Financing Activities	(430		)	(2,259		)	(1,485		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(325		)	(1		)	(93		)
Net Increase (Decrease) in Cash and Cash Equivalents	1,334			(1,301		)	385
Cash and Cash Equivalents at Beginning of Period	2,367			3,668			3,283
Cash and Cash Equivalents at End of Period	$	3,701		$	2,367		$	3,668

⁽¹⁾  Free cash flow represents the total of net cash provided or required by operating activities and provided or required by investing activities (see the “Overview — Non-GAAP Financial Measures” section in MD&A for a further discussion).

2015 compared with 2014:

Operating: The increase in cash provided by continuing operations in fiscal year 2015 compared to fiscal year 2014 was primarily due to the following:

• Increased collections on trade receivables, including receipts from customer financing programs, primarily in the United States;

• Decrease in payments for inventory due to lower production plan for corn inventory, partially offset by an inventory build in agricultural productivity for the production of dicamba; and

• Increase in customer prepayments for Intacta RR2 PRO in Brazil.

The above factors were partially offset by the following:

• Increase in payments for accounts payable and accrued liabilities primarily due to timing of payments and increased accrued marketing programs; and

• Decrease in earnings from fiscal year 2014 to fiscal year 2015.

Investing: The decrease in cash required by investing activities in fiscal year 2015 compared to fiscal year 2014 was primarily due to decreased business acquisitions and technology investments, as the prior fiscal year included the acquisition of The Climate Corporation and the collaboration with Novozymes. We also had a decrease in capital expenditures and purchases of short-term investments, offset by a decrease in cash provided by maturities of short-term investments.

Financing: The decrease in cash required by financing activities in fiscal year 2015 compared to fiscal year 2014 was primarily due to decreased treasury stock purchases as the prior fiscal year included the impact of the July 2014 ASR agreements, as discussed below. The decrease in cash required was offset by lower long-term debt proceeds, which were used for general corporate purposes, including share repurchases, in the current fiscal year, while the prior year proceeds were used to partially fund the ASR agreements and fund the acquisition of The Climate Corporation.

Foreign Currency: The effect of exchange rate changes on cash and cash equivalents reduced the value of our cash and cash equivalents by $325 million during fiscal year 2015. This decrease was primarily driven by declines in value of the Brazil real and European euro compared to the U.S. dollar.

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MONSANTO COMPANY 2015 FORM 10-K

2014 compared with 2013: In 2014, our free cash flow was a source of cash of $959 million, compared with $1,963 million in 2013. Cash provided by operating activities increased11 percent, or $314 million, to $3,054 million in 2014 compared with $2,740 million in 2013. The increase was primarily driven by increased earnings from fiscal year 2013 to fiscal year 2014 and a decrease in payments for accounts payable and accrued liabilities primarily due to timing. These factors were offset by an increase in payments for inventory due to higher production plans for corn and soybeans and an inventory build for agriculture productivity, an increase in receivables due to increased revenue from royalty agreements in the U.S. and sales in Brazil and Europe, a decrease in receipts of deferred revenues due to higher fiscal year 2013 deferred revenue balance in Brazil, and an increase in tax payments due to increased earnings and timing of tax payments.

Cash required by investing activities was $2,095 million in 2014 compared with $777 million in 2013. The increase was primarily due to the acquisition of The Climate Corporation, the collaboration with Novozymes and an increase in capital expenditures, offset by net cash provided by net purchases and maturities of short-term investments used to fund operations and investments.

The amount of cash required by financing activities was $2,259 million in 2014 compared with $1,485 million in 2013. The increase was primarily driven by increased treasury stock purchases and dividend payments in order to provide increased returns to our shareowners, lower proceeds from noncontrolling interests and increased debt issuance costs related to the $4.5 billion issuance and $1 billion issuance during fiscal year 2014. These factors were offset by long-term debt proceeds from the $4.5 billion issuance and $1 billion issuance and lower payments to noncontrolling interests.

Capital Resources and Liquidity

	As of Aug. 31,
(Dollars in millions, except debt-to-capital ratio)	2015			2014
Short-Term Debt	$	615		$	233
Long-Term Debt	8,429			7,465
Total Monsanto Company Shareowners’ Equity	6,990			7,875
Debt-to-Capital Ratio	56		%	49		%

A major source of our liquidity is operating cash flows, which can be derived from net income. This cash-generating capability and access to long-term investment grade debt financing markets provides us with the financial flexibility we need to meet operating, investing and financing needs. We believe our sources of liquidity will be sufficient to sustain operations and to finance anticipated investments. To the extent that cash provided by operating activities is not sufficient to fund our cash needs, we believe short-term commercial paper borrowings can be used to finance these requirements. We had no commercial paper borrowings outstanding at Aug. 31, 2015.

In April 2015, we issued $800 million aggregate principal amount of senior notes with a group of underwriters. The net proceeds from the issuance are expected to be used for general corporate purposes, which may include share repurchases and capital expenditures.

In January 2015, we issued $365 million aggregate principal amount of senior notes with two underwriters. The net proceeds are expected to be used for general corporate purposes, which may include share repurchases and capital expenditures.

We have a $3.0 billion credit facility agreement with a group of banks that provides a senior unsecured revolving credit facility through Mar. 27, 2020. As of Aug. 31, 2015, we did not have any borrowings under this credit facility, and we were in compliance with all financial debt covenants.

Our debt-to-capital ratio increased to 56 percent at Aug. 31, 2015, compared with 49 percent at Aug. 31, 2014, as a result of the debt issuances as discussed above and treasury share purchases as discussed below, offset by the increase in shareowners' equity as a result of earnings.

We held cash and cash equivalents and short-term investments of $3,748 million and $2,407 million at Aug. 31, 2015, and Aug. 31, 2014, respectively, of which $1,001 million and $2,023 million was held by foreign entities, respectively. Our intent is to indefinitely reinvest approximately $4.7 billion of the $4.9 billion of undistributed earnings of our foreign operations that existed as of Aug. 31, 2015. It is not practicable to estimate the income tax liability that might be incurred if such indefinitely reinvested earnings were remitted to the United States.

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MONSANTO COMPANY 2015 FORM 10-K

Dividends: In fiscal year 2015, we declared the following dividends:

Quarter Ending	Declaration Date	Dividend	Payable Date	To Shareowners of Record as of:
Aug. 31, 2015	Aug. 4, 2015	54 cents	Oct. 30, 2015	Oct. 9, 2015
Aug. 31, 2015	June 5, 2015	49 cents	July 24, 2015	July 2, 2015
Feb. 28, 2015	Jan. 30, 2015	49 cents	April 24, 2015	April 2, 2015
Feb. 28, 2015	Dec. 8, 2014	49 cents	Jan. 30, 2015	Jan. 9, 2015

We paid dividends totaling $938 million in fiscal year 2015, $904 million in fiscal year 2014 and $802 million in fiscal year 2013.

Share Repurchases: On Oct. 9, 2015, we entered into uncollared accelerated share repurchase ("ASR") agreements with each of Citibank, N.A. ("Citi") and JPMorgan Chase Bank, N.A. ("JPMorgan"). Under the ASR agreements, we agreed to purchase an aggregate of approximately $3.0 billion of Monsanto common stock. On Oct. 13, 2015, Citi and JPMorgan delivered to us approximately 28.4 million shares in total based on then-current market prices, and we paid a total of $3.0 billion. The payments to Citi and JPMorgan will be recorded as a reduction to shareowners' equity consisting of a $2.55 billion increase in treasury stock, which reflects the value of the 28.4 million shares received upon initial settlement, and a $450 million decrease in additional contributed capital, which reflects the value of the stock held back by Citi and JPMorgan pending final settlement of the ASR agreements. The final number of shares of Monsanto common stock that we may receive, or may be required to remit, upon settlement under the ASR agreements will be based upon the average daily volume weighted-average price of Monsanto common stock during the term of the ASR agreements, less a discount. Final settlement of the ASR agreements is expected to occur in the next six months and may occur earlier at the option of Citi and JPMorgan. The terms of the ASR agreements are subject to adjustment if we were to enter into or announce certain types of transactions that may affect the company's stock. If we are obligated to make an adjustment payment under the ASR agreements, we may elect to satisfy such obligation in cash or in shares of Monsanto common stock. The ASR agreements were entered into pursuant to the share repurchase authorization announced in June 2014 and were funded by commercial paper and cash on hand.

On July 1, 2014, we entered into uncollared ASR agreements with each of JPMorgan and Goldman, Sachs & Co. ("Goldman Sachs"), which settled in March 2015. In accordance with the terms of the agreements, an additional 13.2 million shares were received upon final settlement in the third quarter of fiscal year 2015 for a total of 51.8 million shares of Monsanto common stock repurchased at an aggregate cost to Monsanto of $6.0 billion. The ASR agreements were entered into pursuant to share repurchase authorizations announced in June 2013 and June 2014.

In June 2014, we announced a two-year repurchase authorization of up to $10 billion of the company's common stock. As of Aug. 31, 2015, we had approximately $4.1 billion remaining under the June 2014 share repurchase authorization. We would expect to incur additional long-term and short-term debt, in addition to using our cash resources, to fund share repurchases and for other general corporate purposes.

In June 2013, we announced a share repurchase authorization, effective July 1, 2013, for up to $2 billion of the company's common stock over a three-year period. Repurchases under the authorization commenced on Aug. 20, 2013, and were completed on July 1, 2014. For the years ended Aug. 31, 2014, and Aug. 31, 2013, 17.0 million and 0.3 million shares were repurchased for $1.97 billion and $30 million, respectively, under the June 2013 authorization.

There were no other publicly announced plans outstanding as of Aug. 31, 2015. The timing and number of shares purchased in the future under the repurchase programs, if any, depends upon capital needs, market conditions and other factors.

Capital Expenditures: Our capital expenditures were $967 million in fiscal year 2015, $1,005 million in fiscal year 2014 and $741 million in fiscal year 2013. The primary driver of this year’s decrease is reduced spending across key functions of the company. We continue to progress on projects related to our additional corn seed plant expansions in Brazil, Latin America and Europe and research facility in the United States. We expect fiscal year 2016 cash required by investing to be $1.1 billion to $1.3 billion, with the capital expenditures component primarily allocated towards the seeds and genomics segment and growth platforms.

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MONSANTO COMPANY 2015 FORM 10-K

Healthcare Benefits: The short-term impact of the Healthcare Acts does not have a material impact on our consolidated financial statements. We are currently evaluating the long-term impact of the Healthcare Acts, but we do not expect a material impact on our consolidated financial statements. We will continue to assess how the Healthcare Acts apply to us and how best to meet the stated requirements.

Pension Contributions: In addition to contributing amounts to our pension plans if required by pension plan regulations, we continue to also make discretionary contributions if we believe they are merited. Monsanto did not make any cash contributions to its U.S. qualified plan in fiscal year 2015. Although contributions to the U.S. qualified plan were not required, we contributed $32 million in fiscal year 2014 and $36 million in fiscal year 2013. For fiscal year 2016, management does not expect to make any cash contributions to the plan. As the level of required future contributions is unpredictable and depends heavily upon return on plan asset experience and interest rate levels, we will evaluate required contributions to the plan on a regular basis in the near term.

Fiscal year 2016 pension expense will be determined using assumptions as of Aug. 31, 2015. Our expected rate of return on assets assumption will remain consistent for fiscal year 2016 at 7.50 percent for the U.S. Plan. This assumption was 7.50 percent in each of fiscal years 2015, 2014 and 2013. To determine the rate of return, we consider the historical experience and expected future performance of the plan assets, as well as the current and expected allocation of the plan assets. The U.S. qualified pension plan’s asset allocation as of Aug. 31, 2015, was approximately 53 percent equity securities, 43 percent debt securities and 4 percent other investments, in line with our policy ranges. We periodically evaluate the allocation of plan assets among the different investment classes to ensure that they are within policy guidelines and ranges. Although we do not currently expect to change the assumed rate of return in the near term, holding all other assumptions constant, we estimate that a half-percent decrease in the expected return on plan assets would lower our fiscal year 2016 pre-tax income by approximately $11 million.

Our discount rate assumption for the 2016 pension expense is 4.33 percent for U.S. pension plans. This assumption was 4.04 percent, 4.44 percent and 3.44 percent in fiscal years 2015, 2014 and 2013, respectively. In determining the discount rate, we use yields on high-quality fixed-income investments that match the duration of the pension obligations. To the extent the discount rate increases or decreases, our pension obligation is decreased or increased accordingly. Holding all other assumptions constant, we estimate that a quarter-percent decrease in the discount rate would decrease our fiscal year 2016 pre-tax income by approximately $5 million. Our salary rate assumption as of Aug. 31, 2015, was approximately 4.0 percent. Holding all other assumptions constant, we estimate that a half-percent decrease in the salary rate assumption would increase our fiscal year 2016 pretax income by $4 million.

Divestiture: In October 2008, we consummated the sale of the Dairy business after receiving approval from the appropriate regulatory agencies and received $300 million in cash, and may receive additional contingent consideration. The contingent consideration is a 10-year earn-out with potential annual payments being earned by the company if certain revenue levels are exceeded.

2014 Collaboration: In February 2014, we entered into a collaborative agreement with Novozymes to launch The BioAg Alliance. The BioAg Alliance is focused on the next wave of microbial solutions by bringing together Novozymes' capabilities for discovering, developing and producing microbial solutions with Monsanto's discovery programs, and advanced development, testing and commercial capabilities. Value from commercialization is shared 50-50 between both companies. We paid Novozymes an aggregate upfront cash payment of $300 million for recognition of Novozymes' ongoing business and capabilities in microbials and for Novozymes' ability to supply alliance products.

2014 Acquisition: In November 2013, we acquired 100 percent of the outstanding stock of The Climate Corporation, a San Francisco, California based company. The Climate Corporation is a leading data analytics company with core capabilities around hyper-local weather monitoring, weather simulation and agronomic modeling which has allowed it to develop risk management tools and agronomic decision support tools for growers. The acquisition combined The Climate Corporation's expertise in agriculture risk-management with Monsanto’s R&D capabilities, and is expected to further enable farmers to significantly improve productivity and better manage risk from variables that could limit agriculture production. The total fair value of the acquisition was $932 million and the total cash paid for the acquisition was $917 million (net of cash acquired). The fair value was primarily allocated to goodwill and intangibles. The primary item that generated goodwill was the premium paid by the company for the right to control the acquired business and technology.

For the acquisition described above, the business operations and employees of the acquired entities were added into the Seeds and Genomics segment results upon acquisition. This acquisition was accounted for as a purchase transaction. Accordingly, the assets and liabilities of the acquired entity were recorded at their estimated fair values at the date of the acquisition. See Note 4 — Business Combinations and Collaborative Arrangements — for further discussion of the acquisition.

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MONSANTO COMPANY 2015 FORM 10-K

Contractual Obligations: We have certain obligations and commitments to make future payments under contracts. The following table sets forth our estimates of future payments under contracts as of Aug. 31, 2015. See Note 24 — Commitments and Contingencies — for a further description of our contractual obligations.

			Payments Due by Fiscal Year Ending Aug. 31,
(Dollars in millions)	Total		2016		2017		2018		2019		2020		2020 and beyond
Total Debt, including Capital Lease Obligations(1)	$	9,044	$	615	$	995	$	302	$	800	$	3	$	6,329
Interest Payments Relating to Long-Term Debt and Capital Lease Obligations(1)	6,657		330		321		300		281		268		5,157
Operating Lease Obligations	525		138		99		78		61		50		99
Purchase Obligations:
Commitments to purchase inventories	2,681		1,075		364		332		313		264		333
Commitments to purchase breeding research	550		55		55		55		55		55		275
R&D alliances and joint venture obligations	166		49		39		30		22		21		5
Uncompleted additions to property	198		198		—		—		—		—		—
Other Liabilities:
Postretirement liabilities(2)	42		42		—		—		—		—		—
Unrecognized tax benefits(3)	80		—		—		—		—		—		—
Other liabilities	201		24		16		12		6		6		137
Total Contractual Obligations	$	20,144	$	2,526	$	1,889	$	1,109	$	1,538	$	667	$	12,335

⁽¹⁾ For variable rate debt, interest is calculated using the applicable rates as of Aug. 31, 2015.

⁽²⁾ Includes the company’s planned pension and other postretirement benefit contributions for 2016. The actual amounts funded in 2016 may differ from the amounts listed above. Contributions in 2017 and beyond are excluded as those amounts are unknown. Refer to Note 16 — Postretirement Benefits — Pensions — and Note 17 — Postretirement Benefits - Health Care and Other Postemployment Benefits — for more information.

⁽³⁾ Unrecognized tax benefits relate to uncertain tax positions recorded under the Income Taxes topic of the ASC. The company is unable to reasonably predict the timing of tax settlements, as tax audits can involve complex issues and the resolution of those issues may span multiple years, particularly if subject to negotiation or litigation. See Note 12 — Income Taxes — for more information.

Off-Balance Sheet Arrangements

Under our Separation Agreement with Pharmacia, we are required to indemnify Pharmacia for certain liabilities that are primarily related to Pharmacia’s former chemical and agricultural businesses. To the extent we are currently managing any such matters, we evaluate them in the course of managing our own potential liabilities and establish reserves as appropriate. However, additional matters may arise in the future, and we may manage, settle or pay judgments or damages with respect to those matters in order to mitigate contingent liability and protect Pharmacia and Monsanto. See Note 24 — Commitments and Contingencies — and Part I — Item 3 — Legal Proceedings — for further information.

We have entered into various customer financing programs which are accounted for in accordance with the Transfers and Servicing topic of the ASC. See Note 7 — Customer Financing Programs — for further information.

We are in the process of making a significant expansion of our Chesterfield, Missouri, facility. In December 2013, we executed the first of a series of incentive agreements with the County of St. Louis, Missouri. Under these agreements we have transferred our Chesterfield, Missouri, facility to St. Louis County and received Industrial Revenue Bonds in the amount of up to $470 million which enables us to reduce our cost of constructing and operating the expansion by reducing certain state and local tax expenditures. We immediately leased the facility from the County of St. Louis and have an option to purchase the facility upon tendering the Industrial Revenue Bonds we received to the County. The payments due to us in relation to the Industrial Revenue Bonds and owed by us in relation to the lease of the facilities qualify for the right of offset under ASC 210, Balance Sheet, on our Statements of Consolidated Financial Position. As such, neither the Industrial Revenue Bonds nor the lease obligation are recorded on the Statements of Consolidated Financial Position as an asset or liability, respectively. The Chesterfield facilities and the expansion is being treated as being owned by Monsanto.

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Other Information

As discussed in Note 24 — Commitments and Contingencies — and Part I — Item 3 — Legal Proceedings, Monsanto is responsible for significant environmental remediation and is involved in a number of lawsuits and claims relating to a variety of issues. Many of these lawsuits relate to intellectual property disputes. We expect that such disputes will continue to occur as the agricultural biotechnology industry evolves.

Seasonality

Our fiscal year end of August 31 synchronizes our quarterly and annual results with the natural flow of the agricultural cycle in our major markets. It provides a more complete picture of the North American and South American growing seasons in the same fiscal year. Sales by our Seeds and Genomics segment, and to a lesser extent, by our Agricultural Productivity segment, are seasonal. In fiscal year 2015, approximately 72 percent of our Seeds and Genomics segment sales occurred in the second and third quarters. This segment’s seasonality is primarily a function of the purchasing and growing patterns in North America. Agricultural productivity segment sales were more evenly spread across our fiscal year quarters in 2015.

Net income has been the highest in second and third quarters, which correlates with the sales of the Seeds and Genomics segment and its gross profit contribution. Sales and income may shift somewhat between quarters, depending on planting and growing conditions. Our inventory has been at its lowest level at the end of our fiscal year, which is consistent with the agricultural cycles in our major markets. Additionally, our trade accounts receivable has been at its lowest levels in our fourth quarter, primarily due to timing of collections on behalf of both segments in the United States and Latin America and the seasonality of our sales.

As is the practice in our industry, we regularly extend credit to enable our customers to acquire crop protection products and seeds at the beginning of the growing season. Because of the seasonality of our business and the need to extend credit to customers, we sometimes use short-term borrowings to finance working capital requirements. Our need for such financing has generally been higher in the first and third quarters of the fiscal year and lower in the second and fourth quarters of the fiscal year. Our customer financing programs are expected to continue to reduce our receivable risk and to reduce our reliance on commercial paper borrowings.

OUTLOOK

We believe we have achieved an industry-leading position in the areas in which we compete in both of our business segments. However, the outlook for each part of our businesses is quite different. In the Seeds and Genomics segment, our seeds and traits business is expected to expand via our investment in new products. In the Agricultural Productivity segment, we expect to continue to deliver competitive products that support our Seeds and Genomics segment.

We believe that our company is positioned to deliver value-added products to growers enabling us to grow our gross profit in the future. We expect to see strong cash flow in the future, and we remain committed to returning value to shareowners through vehicles such as share repurchases, investments that expand the business and dividends. We will remain focused on cost and cash management, both to support the progress we have made in managing our investment in working capital and to realize the full earnings potential of our businesses. We are in the process of executing our plan to reduce operational spending through fiscal year 2018. We plan to continue to seek additional external financing opportunities for our customers as a way to manage receivables for each of our segments.

In the United States, we expect to incur significantly higher interest costs due to increased debt levels. We will continue to evaluate options for returning value to shareowners, including the possibility of continued dividend increases and additional share repurchases, subject to market conditions, business needs and other factors.

Outside of the United States, our businesses will continue to face challenges related to the risks inherent in operating in international markets. We will continue to consider, assess and address these developments and the challenges and issues they place on our businesses. We believe we have taken appropriate measures to manage our credit exposure, which has the potential to affect sales negatively in the near term. In addition, volatility in foreign currency exchange rates may negatively affect our profitability, the book value of our assets outside the United States, and our shareowners’ equity. We continuously monitor the potential for currency devaluation in Brazil, Argentina, Venezuela and Ukraine, including changes to exchange rate mechanisms or structures, and the potential impact on future periods.

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MONSANTO COMPANY 2015 FORM 10-K

Seeds and Genomics

Our capabilities in plant breeding and biotechnology research and development are generating a rich and balanced product pipeline that we expect will drive long-term growth. We plan to continue to invest in the areas of seeds, genomics, biotechnology, precision agriculture and biologicals and to invest in technology arrangements that have the potential to increase the efficiency and effectiveness of our R&D efforts. We believe that our seeds and traits businesses will have near-term growth opportunities through a combination of improved breeding, continued growth of stacked biotech traits and expansion in established and emerging markets.

We expect advanced breeding techniques combined with improved production practices and capital investments will continue to contribute to improved germplasm quality and yields for our seed offerings, leading to increased global demand for both our branded germplasm and our licensed germplasm. Our vegetable seeds business, which has a portfolio focused on 21 crops, is expected to continue to develop and deliver new innovative products to our customer base as we continue to focus on our breeding investments and process optimization. We expect to see continued competition in seeds and genomics. We believe we will maintain a competitive advantage because of our global breeding capabilities and our multiple-channel sales approach in the United States for corn and soybean seeds.

Commercialization of second- and third-generation traits and the stacking of multiple traits in corn, soy and cotton are expected to increase penetration in approved markets, particularly as we continue to price our traits in line with the value growers have experienced.We continue to experience an increase in competition in biotechnology as more competitors launch traits in the United States and internationally. Acquisitions may also present mid-to-longer term opportunities to increase penetration of our traits.

In South America, we expect to operate our business model of collecting on the sale of certified seeds, a point-of-delivery payment system (Intacta RR2 PRO soybeans) and our indemnification collection system (Bollgard cotton), to capture value on Intacta RR2 PRO soybeans and Bollgard cotton crops grown there. To achieve this, we are pursuing grower and grain handler agreements to help ensure we will be compensated for providing the technology. The system has been operating in Brazil for many years, and nearly all of the grain handlers have enrolled in the point-of-delivery system. The system is being rolled out in Argentina in connection with Intacta RR2 PRO and nearly all of the exporting grain handlers have enrolled, and we are enrolling additional local elevators. Intacta RR2 PRO technology has been fully approved by Brazil, Argentina, Paraguay, Uruguay and key export markets, and we are currently selling that technology in Brazil, Argentina, Paraguay and Uruguay. We intend to expand the number of soybean varieties available in South America containing the Intacta RR2 PRO technology. Following an adverse ruling from a panel of five judges in the Brazilian Superior Court of Justice denying our term correction for the first generation Roundup Ready patent term to 2014, we deferred collection of royalties for first generation Roundup Ready soybeans in Brazil until a final decision is reached by the courts. The Supreme Court of Brazil has granted certiorari of the patent term correction case. We do not plan to collect on first generation Roundup Ready soybeans in Argentina.

Our international traits businesses, in particular, are likely to continue to face unpredictable regulatory environments that may be highly politicized. We operate in volatile, and often difficult, economic and political environments. Longer term, income is expected to grow in South America as farmers choose to plant more of our approved traits in soybeans, corn and cotton. The agricultural economy in Brazil and Argentina could be impacted by global commodity prices, particularly for corn and soybeans. We continue to maintain our strict credit policy, expand our grain-based collection system and focus on cash collection and sales, as part of a continuous effort to manage our risk in Brazil and Argentina against such volatility. Growth in India's cotton germplasm and traits business continues to be impacted principally by government controlled pricing and uncertainties in the regulatory approval process for new trait introductions.

Agricultural Productivity

Our Agricultural Productivity businesses operate in markets that are competitive. Gross profit and cash flow levels will fluctuate in the future based on global business dynamics including market supply, demand and manufacturing capacity. We expect to maintain our branded prices at a slight premium over generic products, and we believe our Roundup herbicide business will continue to be a sustainable source of cash and gross profit. Monsanto’s crop protection business focus is to support strategically Monsanto’s Roundup Ready crops through our weed management platform that delivers weed control offerings for farmers. We are evaluating additional investments related to our pending Roundup Ready XTEND crop system which could include capital expenditures to construct a manufacturing facility in Luling, Louisiana. In addition, we expect our lawn-and-garden business will continue to be a solid contributor to our Agricultural Productivity segment.

Global glyphosate producers have the capacity to supply the market, but global dynamics including demand, environmental regulation compliance and raw material availability can cause fluctuations in supply and price of those generic products. We expect the fluctuation in global capacity will impact the selling prices and margins of Roundup brands and our third party sourcing opportunities.

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MONSANTO COMPANY 2015 FORM 10-K

The staff of the SEC is conducting an investigation of financial reporting associated with our customer incentive programs for glyphosate products for the fiscal years 2009 and 2010, and we have received subpoenas in connection therewith. The company has preliminarily agreed to the terms of a potential settlement of the investigation that the SEC enforcement staff has indicated it is prepared to recommend to the Commission. The proposed settlement is subject to acceptance and authorization by the Commission. The proposed settlement would, among other things, require us to pay an $80 million penalty, which we have recorded in fiscal year 2015. However, the terms of the settlement remain subject to the approval of the Commission. Accordingly, there can be no assurance that the company's efforts to resolve the SEC’s investigation will be successful or that the settlement amount will be as anticipated, and we cannot predict the ultimate timing or the final terms of the settlement.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing our financial statements, we must select and apply various accounting policies. Our most significant policies are described in Note 2 — Significant Accounting Policies. In order to apply our accounting policies, we often need to make estimates based on judgments about future events. In making such estimates, we rely on historical experience, market and other conditions, and on assumptions that we believe to be reasonable. However, the estimation process is by its nature uncertain given that estimates depend on events over which we may not have control. If market and other conditions change from those that we anticipate, our results of operations, financial condition and changes in financial condition may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or to take other corrective actions, either of which may also have a material effect on our results of operations, financial condition or changes in financial condition. Members of our senior management have discussed the development and selection of our critical accounting estimates, and our disclosures regarding them, with the audit and finance committee of our board of directors, and do so on a regular basis.

We believe that the following estimates have a higher degree of inherent uncertainty and require our most significant judgments. In addition, had we used estimates different from any of these, our results of operations, financial condition or changes in financial condition for the current period could have been materially different from those presented.

Restructuring: We may from time to time initiate restructuring activities. Management is required to estimate the timing and amount of severance and other related benefits for workforce reduction, fair value of property, plant and equipment and goodwill and other intangible assets. Our written human resource policies are indicative of an ongoing benefit arrangement with respect to severance packages. Costs associated with severance and other related benefits for workforce reduction that we considered probable and estimable as of Aug. 31, 2015, totaling $217 million, were recognized in the period. The primary factors affecting our accrual for severance and related benefit costs include estimated years of service and eligible pay related to the position severed. We review long-lived assets and finite-lived intangible assets for impairment when, in management's judgment, conditions indicate a possible loss. Such an assessment involves estimating undiscounted cash flows over the remaining useful life of the assets. If the review indicates that undiscounted cash flows are less than the recorded value of the assets, the assets are considered to be impaired. If an impairment is indicated, the asset is written down to its fair value, or if fair value is not readily determinable, to an estimated fair value based on discounted cash flows. As of Aug. 31, 2015, we recognized $81 million of impairments related to property, plant and equipment and $71 million of impairments related to intangible assets as a result of the 2015 Restructuring Plan.

Goodwill: The majority of our goodwill relates to our seed company acquisitions. We are required to periodically assess whether any of our goodwill is impaired. In order to do this, we apply judgment in determining our reporting units, which represent component parts of our business. Our annual goodwill impairment assessment involves estimating the fair value of a reporting unit and comparing it with its carrying amount. If the carrying value of the reporting unit exceeds its fair value, additional steps are required to calculate a potential impairment loss.

Calculating the fair value of the reporting units requires significant estimates and long-term assumptions. Any changes in key assumptions about the business and its prospects, or any changes in market conditions, interest rates or other externalities, could result in an impairment charge. We estimate the fair value of our reporting units by applying discounted cash flow methodologies. A discounted cash flow analysis requires us to make various judgmental estimates and assumptions that include, but are not limited to, sales growth, gross profit margin rates and discount rates. Discount rates were evaluated by reporting segment to account for differences in inherent industry risk. Sales growth and gross profit margin assumptions were based on our long range plan.

The annual goodwill impairment tests were performed as of Mar. 1, 2015, and Mar. 1, 2014. No indications of goodwill impairment existed as of either date. The results of management’s Mar. 1, 2015, goodwill impairment test indicated that all reporting units had a calculated fair value greater than 10 percent in excess of its carrying value. In 2014, we recorded goodwill related to our acquisition (see Note 4 — Business Combinations and Collaborative Arrangements).

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MONSANTO COMPANY 2015 FORM 10-K

Income Taxes: Management regularly assesses the likelihood that deferred tax assets will be recovered from future taxable income. To the extent management believes that it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is established. When a valuation allowance is established, increased or decreased an income tax charge or benefit is included in the consolidated financial statements, and net deferred tax assets are adjusted accordingly. Changes in tax laws, statutory tax rates and estimates of the company’s future taxable income levels could result in actual realization of the deferred tax assets being materially different from the amounts provided for in the consolidated financial statements. If the actual recovery amount of the deferred tax asset is different than anticipated, we would be required to adjust the remaining deferred tax asset and the tax provision, resulting in an adjustment to net income and shareowners’ equity.

Under the Income Taxes topic of the ASC, in order to recognize the benefit of an uncertain tax position, the taxpayer must be more likely than not of sustaining the position, and the measurement of the benefit is calculated as the largest amount that is more than 50 percent likely to be realized upon resolution of the position. Tax authorities regularly examine the company’s returns in the jurisdictions in which we do business. Management regularly assesses the tax risk of the company’s return filing positions and believes its accruals for uncertain tax benefits are adequate as of Aug. 31, 2015.

As of Aug. 31, 2015, management has recorded deferred tax assets of approximately $291 million in Brazil primarily related to net operating loss carryforwards (NOLs) that have no expiration date. Management continues to believe it is more likely than not that we will realize our deferred tax assets in Brazil.

Revenue Recognition: Monsanto sells its products directly to customers as well as through distributors. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. Product is considered delivered to the customer or distributor once it has been shipped and risk and rewards of ownership have been transferred.

We may enter into multiple-element arrangements, including those where a customer purchases technology and licenses. When elements of a multiple element arrangement do not have stand-alone value, we account for such elements as a combined unit of accounting. We allocate revenue to each unit of accounting in a multiple-element arrangement based upon the relative selling price of each deliverable. When applying the relative selling price method, we determine the selling price for each deliverable by using vendor-specific objective evidence (“VSOE”) of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a unit of accounting, we use our best estimate of selling price for that unit of accounting. When we use our best estimate to determine selling price, significant judgment is required. The significant assumptions used to estimate selling price for significant units of accounting may consist of cost, gross margin objectives or forecasted customer selling volumes. Changes in assumptions used to estimate selling price could result in a different allocation of arrangement consideration across the units of accounting within an arrangement. Revenue allocated to each unit of accounting is recognized when all revenue recognition criteria for that unit of accounting have been met. Biotechnology trait license revenue, including those within multiple element arrangements, is generally recognized over the contract period as third-party seed companies sell seed containing Monsanto traits, which can be from one year up to the related patent term. License revenue from the sale of intellectual property, including those within multiple element arrangements, is generally recognized upon commencement of the license term.

We record reductions to revenue for estimated customer sales returns and certain customer incentive programs. These reductions to revenue are made based upon reasonable and reliable estimates that are determined by historical experience, economic trends, contractual terms, current market conditions and changes in customer demand. The primary factors affecting our accrual for estimated customer returns include estimated return rates as well as the number of units shipped that have a right of return. At least each quarter, we re-evaluate our estimates to assess the adequacy of our recorded accruals for customer returns and allowance for doubtful accounts, and adjust the amounts as necessary.

Customer Incentive Programs: Customer incentive program costs are recorded in accordance with the Revenue Recognition topic of the ASC, based upon specific performance criteria met by our customers, such as purchase volumes, promptness of payment and market share increases. The cost of certain customer incentive programs is recorded in net sales in the Statements of Consolidated Operations. Certain customer incentive programs require management to estimate the number of customers who will actually redeem the incentive. As actual customer incentive program expenses are not known at the time of the sale, an estimate based on the best available information (such as historical experience and market research) and the specific terms and conditions of particular incentive programs are used as a basis for recording customer incentive program liabilities. If a greater than estimated proportion of customers redeem such incentives, Monsanto would be required to record additional reductions to revenue, which would have a negative impact on our results of operations and cash flow. Management analyzes and reviews the customer incentive program balances on a quarterly basis, and adjustments are recorded as appropriate.

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MONSANTO COMPANY 2015 FORM 10-K

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to the effect of interest rate changes, foreign currency fluctuations, and changes in commodity, equity and debt securities prices. Market risk represents the risk of a change in the value of a financial instrument, derivative or nonderivative, caused by fluctuations in interest rates, currency exchange rates, and commodity, equity and debt securities prices. Monsanto handles market risk in accordance with established policies by engaging in various derivative transactions. Such transactions are not entered into for trading purposes.

See Note 2 — Significant Accounting Policies, Note 14 — Fair Value Measurements —and Note 15— Financial Instruments — to the consolidated financial statements for further details regarding the accounting and disclosure of our derivative instruments and hedging activities.

The sensitivity analysis discussed below presents the hypothetical change in fair value of those financial instruments held by the company as of Aug. 31, 2015, that are sensitive to changes in interest rates, currency exchange rates and commodity and equity securities prices. Actual changes may prove to be greater or less than those hypothesized.

Changes in Interest Rates: Our interest-rate risk exposure pertains primarily to the debt portfolio. To the extent that we have cash available for investment to ensure liquidity, we will invest that cash only in short-term instruments. Most of our debt as of Aug. 31, 2015, consisted of fixed-rate long-term obligations.

Market risk with respect to interest rates is estimated as the potential change in fair value resulting from an immediate hypothetical one percentage point parallel shift in the yield curve. The fair values of our investments and debt are based on quoted market prices or discounted future cash flows. As the carrying amounts on short-term debt and investments maturing in less than 360 days and the carrying amounts of variable-rate medium-term notes approximate their respective fair values, a one percentage point change in the interest rates would not result in a material change in the fair value of our debt and investments portfolio.

The following table illustrates the fair values of the company's long-term debt instruments at Aug. 31, 2015, and Aug. 31, 2014, and the effect on fair values for each of these instruments of a hypothetical one percentage point decrease in interest rates to the rate that existed at Aug. 31, 2015, and Aug. 31, 2014:

	Initial Principal Amount Issued		Fair Value (3)				Fair Value Sensitivity
			As of Aug. 31,				As of Aug. 31,
(Dollars in millions)			2015		2014		2015		2014
5.500% Senior Notes due 2035 issued July 2005	$	400	$	424	$	483	$	524	$	552
5.500% Senior Notes due 2025 issued August 2005	314		350		376		402		410
5.125% Senior Notes due 2018 issued April 2008	300		325		335		338		347
5.875% Senior Notes due 2038 issued April 2008	250		277		310		352		358
2.750% Senior Notes due 2016 issued April 2011	300		303		310		300		313
2.200% Senior Notes due 2022 issued July 2012	250		229		238		255		256
3.600% Senior Notes due 2042 issued July 2012	250		195		228		254		272
1.850% Senior Notes due 2018 issued November 2013	300		300		300		311		312
4.650% Senior Notes due 2043 issued November 2013	300		280		326		358		386
1.150% Senior Notes due 2017 issued July 2014	500		496		499		510		513
2.125% Senior Notes due 2019 issued July 2014	500		498		501		525		525
2.750% Senior Notes due 2021 issued July 2014	500		490		502		533		535
3.375% Senior Notes due 2024 issued July 2014	750		720		765		823		832
4.200% Senior Notes due 2034 issued July 2014	500		457		519		576		595
4.400% Senior Notes due 2044 issued July 2014	1,000		904		1,032		1,171		1,228
4.700% Senior Notes due 2064 issued July 2014	750		647		780		888		962
4.300% Senior Notes due 2045 issued January 2015 (1)	365		313		—		383		—
2.850% Senior Notes due 2025 issued April 2015 (1)	300		276		—		317		—
3.950% Senior Notes due 2045 issued April 2015 (1)	500		421		—		548		—
Floating Rate Senior Notes due 2016 issued November 2013(2)	400		400		401		400		404

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MONSANTO COMPANY 2015 FORM 10-K

⁽¹⁾  These instruments were not outstanding as of Aug. 31, 2014, accordingly, no amounts are shown for prior year comparisons.

⁽²⁾  A one percentage point increase in interest rates would result in an annualized increase to interest expense of approximately $4 million related to the Floating Rate Senior Notes due 2016.

⁽³⁾  Does not include the fair value of other long term debt, primarily consisting of capital lease obligations, which had a fair value of $28 million and $23 million at Aug. 31, 2015, and Aug. 31, 2014, respectively.

Foreign Currency Fluctuations: Monsanto transacts business in various foreign currencies other than the U.S. dollar, principally the European euro, Brazil real, Argentine peso, Canadian dollar and Mexican peso, which exposes us to movements in exchange rates which may impact revenue and expenses, assets and liabilities and cash flows. In managing foreign currency risk, we focus on reducing the volatility in consolidated cash flows and earnings caused by fluctuations in exchange rates. We may use foreign currency forward exchange contracts, foreign currency options and economic hedges to manage the net currency exposure, in accordance with established hedging policies. We may hedge recorded commercial transaction exposures, intercompany loans, net investments in foreign subsidiaries and forecasted transactions.

The company’s significant hedged positions included the European euro, the Brazilian real, the Canadian dollar, the Australian dollar and the Argentine peso. The total notional amount of foreign currency derivative instruments designated as hedges and not designated as hedges at Aug. 31, 2015, was $2,382 million, representing a settlement asset of $29 million. All of these derivatives are hedges of anticipated transactions, translation exposure, or existing assets or liabilities, and mature within 24 months. For all derivative positions, we evaluated the effects of a 10 percent shift in exchange rates between those currencies and the U.S. dollar, holding all other assumptions constant. Unfavorable currency movements of 10 percent would negatively affect the fair values of the derivatives held to hedge currency exposures by $170 million. These unfavorable changes would generally have been offset by favorable changes in the values of the underlying exposures.

The company held cash and cash equivalents and short-term investments of$3,748 millionat Aug. 31, 2015, of which $1,001 million was held by foreign entities. For all non-U.S. dollar denominated cash held by foreign entities, we evaluated the effects of a 10 percent shift in exchange rates between those currencies and the U.S. dollar, holding all other assumptions constant. Unfavorable currency movements of 10 percent would negatively affect the fair values of cash and cash equivalents and short-term investments by $87 million.

Changes in Commodity Prices: Where practical, we use futures contracts to protect the company against commodity price increases and use option contracts to limit the unfavorable effect that price changes could have on these purchases. Our futures contracts are accounted for as cash flow hedges and are mainly in the Seeds and Genomics segment. Our option contracts do not qualify for hedge accounting under the provisions specified by the Derivatives and Hedging topic of the ASC. The majority of these contracts hedge the committed or future purchases of, and the carrying value of payables to growers for, soybean and corn inventories. In addition, we collect payments on certain customer accounts in grain, and enter into forward sales contracts to mitigate the commodity price exposure. A 10 percent decrease in the prices would have a negative effect on the fair value of these instruments of $40 million. We also use natural gas, diesel and ethylene swaps to manage energy input costs and raw material costs. A 10 percent decrease in the price of these swaps would have a negative effect on the fair value of these instruments of $11 million.

Changes in Equity Securities Prices: We also have investments in marketable equity securities. All such investments are classified as long-term available-for-sale investments. The fair value of these investments is $17 million as of Aug. 31, 2015. These securities are listed on a stock exchange, quoted in an over-the-counter market or measured using an independent pricing source and adjusted for expected future credit losses. If the market price of the marketable equity securities should decrease by 10 percent, the fair value of the equities would decrease by $2 million. See Note 14 — Fair Value Measurements — for further details.

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MONSANTO COMPANY 2015 FORM 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management Report

Monsanto Company’s management is responsible for the fair presentation and consistency, in accordance with accounting principles generally accepted in the United States of America, of all the financial information included in this Form 10-K. Where necessary, the information reflects management’s best estimates and judgments.

Management is also responsible for establishing and maintaining an effective system of internal control over financial reporting. The purpose of this system is to provide reasonable assurance that Monsanto’s assets are safeguarded against material loss from unauthorized acquisition, use or disposition, that authorized transactions are properly recorded to permit the preparation of accurate financial information in accordance with generally accepted accounting principles, that records are maintained which accurately and fairly reflect the transactions and dispositions of the company, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company. This system of internal control over financial reporting is supported by formal policies and procedures, including a Business Conduct program designed to encourage and assist employees in living up to high standards of integrity, as well as a Code of Ethics for Chief Executive and Senior Financial Officers. Management seeks to maintain the effectiveness of internal control over financial reporting by careful personnel selection and training, division of responsibilities, establishment and communication of policies, and ongoing internal reviews and audits. See Management’s Annual Report on Internal Control over Financial Reporting for Management’s conclusion of the effectiveness of Monsanto’s internal control over financial reporting as of August 31, 2015.

Monsanto’s consolidated financial statements have been audited by Deloitte & Touche LLP, independent registered public accounting firm. Their audits were conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), and included a test of financial controls, tests of accounting records, and such other procedures as they considered necessary in the circumstances.

The Audit and Finance Committee, composed entirely of outside directors, meets regularly with management, with the internal auditors and with the independent registered public accounting firm to review accounting, financial reporting, auditing and internal control matters. The committee has direct and private access to the registered public accounting firm and internal auditors.

/s/ Hugh Grant

Hugh Grant

Chairman and Chief Executive Officer

/s/ Pierre Courduroux

Pierre Courduroux

Senior Vice President and Chief Financial Officer

October 29, 2015

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MONSANTO COMPANY 2015 FORM 10-K

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareowners of Monsanto Company:

We have audited the accompanying statements of consolidated financial position of Monsanto Company and subsidiaries (the "Company") as of August 31, 2015, and 2014, and the related statements of consolidated operations, comprehensive income, cash flows and shareowners’ equity for each of the three years in the period ended August 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Monsanto Company and subsidiaries as of August 31, 2015 and 2014 and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of August 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated October 29, 2015 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

St. Louis, Missouri

October 29, 2015

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MONSANTO COMPANY 2015 FORM 10-K

Statements of Consolidated Operations

	Year Ended Aug. 31,
(Dollars in millions, except per share amounts)	2015			2014			2013
Net Sales	$	15,001		$	15,855		$	14,861
Cost of goods sold	6,819			7,281			7,208
Gross Profit	8,182			8,574			7,653
Operating Expenses:
Selling, general and administrative expenses	2,686			2,774			2,550
Research and development expenses	1,580			1,725			1,533
Restructuring charges	393			—			—
Total Operating Expenses	4,659			4,499			4,083
Income from Operations	3,523			4,075			3,570
Interest expense	433			248			172
Interest income	(105		)	(102		)	(92		)
Other expense, net	34			102			61
Income from Continuing Operations Before Income Taxes	3,161			3,827			3,429
Income tax provision	864			1,078			915
Income from Continuing Operations Including Portion Attributable to Noncontrolling Interest	2,297			2,749			2,514
Discontinued Operations:
Income from operations of discontinued businesses	45			22			17
Income tax provision	17			9			6
Income on Discontinued Operations	28			13			11
Net Income	2,325			2,762			2,525
Less: Net income attributable to noncontrolling interest	11			22			43
Net Income Attributable to Monsanto Company	$	2,314		$	2,740		$	2,482
Amounts Attributable to Monsanto Company:
Income from continuing operations	$	2,286		$	2,727		$	2,471
Income on discontinued operations	28			13			11
Net Income Attributable to Monsanto Company	$	2,314		$	2,740		$	2,482
Basic Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	$	4.79		$	5.25		$	4.63
Income on discontinued operations	0.06			0.03			0.02
Net Income Attributable to Monsanto Company	$	4.85		$	5.28		$	4.65
Diluted Earnings per Share Attributable to Monsanto Company:
Income from continuing operations	$	4.75		$	5.19		$	4.58
Income on discontinued operations	0.06			0.03			0.02
Net Income Attributable to Monsanto Company	$	4.81		$	5.22		$	4.60
Weighted Average Shares Outstanding:
Basic	476.9			519.3			533.7
Diluted	481.4			524.9			539.7

The accompanying notes are an integral part of these consolidated financial statements.

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MONSANTO COMPANY 2015 FORM 10-K

Statements of Consolidated Comprehensive Income

	Year Ended Aug. 31,
(Dollars in millions)	2015			2014			2013
Comprehensive Income Attributable to Monsanto Company
Net Income Attributable to Monsanto Company	$	2,314		$	2,740		$	2,482
Other Comprehensive Income (Loss), Net of Tax:
Foreign currency translation, net of tax of $(18), $(33) and $(24), respectively	(1,596		)	100			(229		)
Postretirement benefit plan activity, net of tax of $(39), $76 and $80, respectively	(65		)	119			128
Unrealized net gains on investment holdings, net of tax of $0, $0 and $4, respectively	—			—			9
Realized net gains on investment holdings, net of tax of $(1), $(2) and $(3), respectively	(3		)	(3		)	(6		)
Unrealized net derivative losses, net of tax of $(46), $(42) and $(45), respectively	(54