Income Tax Accounting Policy
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts. Management regularly assesses the likelihood that deferred tax assets will be recovered from future taxable income, and 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. The net deferred tax assets as of Aug. 31, 2017, and Aug. 31, 2016, represent the estimated future tax benefits to be received from future reductions of taxes payable.

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 Monsanto’s tax returns in the jurisdictions in which it does business. Management regularly assesses the risk of Monsanto’s tax return filing positions and believes its accruals for uncertain tax positions are adequate as of Aug. 31, 2017, and Aug. 31, 2016.

Source: 10-K (filing date: 2017-10-27).

Monsanto Co., income tax expense (benefit), continuing operations

USD $ in millions

	12 months ended	Aug 31, 2017		Aug 31, 2016		Aug 31, 2015		Aug 31, 2014		Aug 31, 2013		Aug 31, 2012
	U.S. federal
	U.S. state
	Outside United States
	Current
	U.S. federal
	U.S. state
	Outside United States
	Deferred
	Income tax provision from continuing operations

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Monsanto Co.’s current declined from 2015 to 2016 and from 2016 to 2017.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Monsanto Co.’s deferred increased from 2015 to 2016 and from 2016 to 2017.
Income tax provision from continuing operations	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Monsanto Co.’s income tax provision from continuing operations declined from 2015 to 2016 and from 2016 to 2017.

Monsanto Co., effective income tax rate (EITR) reconciliation

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	U.S. federal statutory tax rate
	Effective tax rate

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Monsanto Co.’s effective tax rate increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

Monsanto Co., components of deferred tax assets and liabilities

USD $ in millions

		Aug 31, 2017		Aug 31, 2016		Aug 31, 2015		Aug 31, 2014		Aug 31, 2013		Aug 31, 2012
	Net operating loss and other carryforwards
	Employee fringe benefits
	Royalties
	Restructuring and impairment reserves
	Inventories
	Allowance for doubtful accounts
	Environmental and litigation reserves
	Intangibles
	Other
	Deferred tax assets, gross
	Valuation allowance
	Deferred tax assets
	Property, plant and equipment
	Intangibles
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

Item	Description	The company
Deferred tax assets, gross	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Monsanto Co.’s deferred tax assets, gross increased from 2015 to 2016 and from 2016 to 2017.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Monsanto Co.’s deferred tax assets declined from 2015 to 2016 but then slightly increased from 2016 to 2017.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Monsanto Co.’s net deferred tax assets (liabilities) declined from 2015 to 2016 and from 2016 to 2017.

Monsanto Co., deferred tax assets and liabilities, classification

USD $ in millions

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	Current deferred tax assets
	Noncurrent deferred tax assets
	Current deferred tax liabilities
	Noncurrent deferred tax liabilities

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

Item	Description	The company
Noncurrent deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Monsanto Co.’s noncurrent deferred tax assets increased from 2015 to 2016 but then slightly declined from 2016 to 2017.
Noncurrent deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Monsanto Co.’s noncurrent deferred tax liabilities declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

Monsanto Co., adjustments to financial data

USD $ in millions

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Monsanto Company Shareowners’ Equity
	Total Monsanto Company shareowners’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Monsanto Company shareowners’ equity (adjusted)
	Adjustment to Net Income Attributable To Monsanto Company
	Net income attributable to Monsanto Company (as reported)
	Add: Deferred income tax expense (benefit)
	Net income attributable to Monsanto Company (adjusted)

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

Monsanto Co., Financial Data: Reported vs. Adjusted

Monsanto Co., adjusted ratios

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Monsanto Co.’s adjusted current ratio deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Monsanto Co.’s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Monsanto Co.’s adjusted total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Monsanto Co.’s adjusted financial leverage increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Monsanto Co.’s adjusted ROE improved from 2015 to 2016 and from 2016 to 2017.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Monsanto Co.’s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Monsanto Co., Ratios: Reported vs. Adjusted

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	As Reported
	Selected Financial Data (USD $ in millions)
	Current assets
	Current liabilities
	Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

2017 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Monsanto Co.’s adjusted current ratio deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Monsanto Company
	Net sales
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net income attributable to Monsanto Company
	Net sales
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

2017 Calculations

¹ Net profit margin = 100 × Net income attributable to Monsanto Company ÷ Net sales
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income attributable to Monsanto Company ÷ Net sales
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Monsanto Co.’s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	As Reported
	Selected Financial Data (USD $ in millions)
	Net sales
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Net sales
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

2017 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Monsanto Co.’s adjusted total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	As Reported
	Selected Financial Data (USD $ in millions)
	Total assets
	Total Monsanto Company shareowners’ equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted total assets
	Adjusted total Monsanto Company shareowners’ equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

2017 Calculations

¹ Financial leverage = Total assets ÷ Total Monsanto Company shareowners’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Monsanto Company shareowners’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Monsanto Co.’s adjusted financial leverage increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Monsanto Company
	Total Monsanto Company shareowners’ equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net income attributable to Monsanto Company
	Adjusted total Monsanto Company shareowners’ equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

2017 Calculations

¹ ROE = 100 × Net income attributable to Monsanto Company ÷ Total Monsanto Company shareowners’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income attributable to Monsanto Company ÷ Adjusted total Monsanto Company shareowners’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Monsanto Co.’s adjusted ROE improved from 2015 to 2016 and from 2016 to 2017.

		Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Monsanto Company
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net income attributable to Monsanto Company
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2017-10-27), 10-K (filing date: 2016-10-19), 10-K (filing date: 2015-10-29), 10-K (filing date: 2014-10-29), 10-K (filing date: 2013-10-23), 10-K (filing date: 2012-10-19).

2017 Calculations

¹ ROA = 100 × Net income attributable to Monsanto Company ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income attributable to Monsanto Company ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Monsanto Co.’s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

	Monsanto Co.	Other companies (not purchased previously)
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Discounted Cash Flow (DCF) Valuation
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Long-term Trends
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Monsanto Co. (MON)

Analysis of Income Taxes

Income Tax Accounting Policy

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Analyst Adjustments: Removal of Deferred Taxes

Monsanto Co., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Monsanto Co., Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)