North America Equity Research

07 January 2011

Neutral
Monsanto MON, MON US
Price: $70.79
Seeds and Weeds; Raising PT and Ests
▲ Price Target: $70.00
Previous: $62.00

Monsanto traditionally uses the occasion of its F1Q earnings to review its product Specialty, Commodity &
pipeline, as the quarter itself tends to be one in which Monsanto reports a small loss or Agricultural Chemicals
AC
profit, which is unrepresentative of its annual business performance. There are no Jeffrey J. Zekauskas
meaningful new products likely to be sold in size before 2013, though many of (1-212) 622-6644
Monsanto's projects were moving forward in various stages of development. An jeffrey.zekauskas@jpmorgan.com
insect-protected trait for RR2 soybeans for Brazil, a Dicamba-tolerant soybean for the Silke Kueck
US markets, refuge-in-a-bag technology for the US corn markets, and a drought (1-212) 622-6503
tolerance trait in corn for more limited application in the United States are all possible silke.x.kueck@jpmorgan.com
for 2012-2013 as a launch year. Monsanto singled out refuge-in-a-bag as a “game-
changing technology”. Given likely comparable products from Pioneer/DuPont and Olga Guteneva
(1-212) 622-6488
the convenience benefit that accrues to the farmer from its use, we are inclined to think
olga.v.guteneva@jpmorgan.com
that Monsanto’s future rests more with its new molecular entities. The drumbeat
behind refuge-in-a bag recalls the fanfare in advance of the SmartStax launch and Ben Richardson
signals Monsanto’s intention to out-advertise Pioneer and strongly brand its product in (1-212) 622-6455
service of a premium price. ben.richardson@jpmorgan.com

J.P. Morgan Securities LLC

• Monsanto’s strategic objectives in corn, soy and Roundup are linked this year
by a focus on volume growth achieved with flat-to-up pricing. Monsanto's Price Performance
strategic errors in F2010 and F2009 were the result of aggressive pricing that
alienated customers leading to a loss of market share and to the rebuilding of 80
competitor strength: DuPont/Pioneer in seeds and Chinese manufacturers in
glyphosate. We believe Monsanto is uncertain whether its prices need to go lower to $
60
increase market share, but we believe it is sure that higher prices are not a possible
route. Should Monsanto lose share again in the US in seeds, we think that 2012 will 40
again be a year of little product pricing gains. Should Monsanto report meaningful Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
increases in seed share, there would be much more room to price higher. Monsanto
is in the position of claiming to be the leader in seed technology, but losing share in
the most technologically advanced market. This is an intolerable predicament for the
company. We believe it is conservatively experimenting with price to discover the
highest price level at which it can regain its competitive position.
• We rate Monsanto Neutral for year-ahead performance. Monsanto’s current
stock price level seems to have speculative support from the rise in grain prices and
from the rise in value of agricultural assets generally. The shares are trading at an
enterprise value to EBITDA multiple of 13.5x for F2011E versus Praxair at 10.0x
and Ecolab at 9.7x, which have more consistent rates above-average earnings
growth. It is difficult to see how its multiple could expand more except in an
environment of further advances in grain prices. We believe Potash, Agrium, and
Scott's Miracle-Gro offer better risk-return profiles.
Monsanto (MON;MON US)
2010A 2011E 2011E 2012E 2012E Company Data
(Old) (New) (Old) (New) Price ($) 70.79
EPS - Recurring ($) Date Of Price 06 Jan 11
Q1 (Nov) (0.02)A (0.02)A 0.02A 52-week Range ($) 87.06 - 44.61
Q2 (Feb) 1.70A 1.95A 1.95A Mkt Cap ($ mn) 38,297.39
Q3 (May) 0.81A 1.16A 1.16A Fiscal Year End Aug
Q4 (Aug) (0.09)A (0.29)A (0.28)A Shares O/S (mn) 541
FY 2.41A 2.80A 2.85A 3.10 3.20 Price Target ($) 70.00
Bloomberg EPS FY ($) 2.43A 2.80A 3.32 Price Target End Date 31 Dec 11
Source: Company data, Bloomberg, J.P. Morgan estimates. 'Bloomberg' above denotes Bloomberg
consensus estimates.

See page 9 for analyst certification and important disclosures.

J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

Segment Outlook
We lifted our F2011 pro-forma EPS forecast from 2.80 to $2.85 to reflect the
better than expected Roundup results in F1Q:11.

AGRICULTURAL PRODUCTIVITY
Higher than expected glyphosate (Roundup) profits in F1Q:11 accounted for the
$0.04/share difference between reported F1Q:11 EPS of $0.02 and our estimated
of a loss of ($0.02). The segment recorded $94 million in gross profit in the current
quarter, compared to $87 million in the year-ago period, reflecting an estimated 13%
higher volumes (60 million gallons versus 53 million gallons) and lower year-over-
year selling prices.

We forecast glyphosate segment sales growth of 18% in F2011 from $2.03

billion to $2.4 billion reflecting capacity expansion versus a depressed 2010
result. We project F2011 glyphosate segment gross profits to roughly double in
F2011 from $155 million to $327 million, and versus our previous estimate of $287
million. We project the segment gross margin to improve from 8% in F2010 to 14%
in F2011. (We note that the F1Q:11 segment gross margin was 18%.) The gross
margin improvement reflects the benefit of restructuring activities to eliminate
overhead and other operating costs in the wake of lower glyphosate prices versus
peak levels experienced in 2008 and 2009.

Monsanto projects net selling prices for branded glyphosate (Roundup) of $8-
10/gallon in F2011, which are similar to levels achieved in F2010, and versus
estimated average peak prices of ~$25/gallon in F2009. Monsanto forecast total
Glyphosate volume (branded and non-branded) of 250-300 million gallons annually
in F2011, versus 251 gallon sold in F2010, and compared to 182 million gallons sold
in F2009. Our F2011 glyphosate volume projection is 292 million gallons; our price
forecast for branded glyphosate (Roundup) is $9.05/gallon.

Table: Roundup and other Glyphosate-based herbicides Sales Statistics

2005 2006 2007 2008 2009 2010E 2011E 2012E
Branded
Volume 100 120 130 150 106 159 175 191
Change (4.8%) 20.0% 8.3% 15.4% (29.3%) 50.0% 10.0% 9.0%
Price $11-13 $11-13 >$11-13 ~$20 $25.37 $10.08 $9.05 $9.04
Change 0.0% 16.7% 42.9% 20.0% (60.3%) (10.2%) (0.1%)
Non-Branded
Volume 115 115 122 107 77 92 117 107
Change 10.6% 0.0% 6.1% (12.3%) (28.0%) 20.1% 26.9% (8.4%)
Price $7.36 $7.15 $6.13 $10.22 $10.25 $7.00 $7.00 $7.00
Change (2.8%) (14.2%) 66.8% 0.3% (31.7%) 0.0% 0.0%
Total
Sales $2,046 $2,262 $2,568 $4,094 $3,527 $2,229 $2,400 $2,472
Change 10.6% 13.5% 59.4% (13.8%) (39.4%) 9.9% 3.0%
Volume 215 235 252 257 183 251 292 298
Change 2.9% 9.3% 7.2% 2.0% (28.8%) 37.4% 16.2% 2.0%
Price $9.52 $9.63 $10.19 $15.93 $19.27 $8.86 $8.21 $8.29
Change 1.1% 5.9% 56.3% 21.0% (54.0%) (7.3%) 1.0%
Gross Profit 643 648 854 1,976 1,836 155 327 362
Margin 31.4% 28.6% 33.3% 48.3% 52.1% 7.0% 13.6% 14.6%
Source: Company reports and J.P. Morgan estimates.

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

SEEDS & GENOMICS

We forecast Seed and Genomics segment sale growth of 6% in F2011 from $7.61
billion to $8.04 billion reflecting new product offerings in corn and soybeans, and
higher US planted acres for corn and cotton supported by higher crop prices. We
project F2011 Seed and Genomics segment gross profits to increase 7% from $4.64
billion to $4.94 billion. We estimate segment operating profits to increase 10% from
$1.83 billion to $2.0 billion.

CORN
We shaved our seed & trait sales projection for Corn from $4.48 billion to $4.44
billion reflecting 4% growth from F2010 levels of $4.26 billion. The reduction in the
rate of sales growth reflects lower than expected sales in F1Q:11. Growth in US
planted corn acres and increased trait penetration for refuge-reducing corn seeds in
the US should contribute to segment sales growth. Refuge-reducing product offerings
(SmartStax, VT Double PRO, and VT Triple PRO) could increase from 3.2-3.5
million acres in 2010 to ~15 million acres in 2011. Mosaic during its earnings call on
January 5 indicated that US planted Corn acres could increase 4-5% from 88 million
acres in 2010 to 92-93 million acres in 2011. We forecast segment gross profit to
grow 5% from $2.56 billion to $2.68 billion, and versus our previous estimate of
$2.69 billion.

Table: Monsanto – Refuge Reducing Corn Seed & Trait Offerings

2010 2011E
Mn/trait acres Mn/trait acres
Genuity SmartStax 1.2-1.3
Genuity VT Double PRO 0.9-1.0
Genuity VT Triple PRO 1.1-1.2
Total Acres 3.2-3.5 mid-teens

US planted corn acres 88.2 92-93

Source: Monsanto company reports, Mosaic company reports, and USDA estimates.

SOYBEANS
We slightly raised our seed & trait sales projection for Soybeans from $1.565 billion
to $1.57 billion reflecting 6% growth from F2010 levels of $1.49 billion. Growth in
Roundup Ready 2 Yield soybean offerings from 6 million acres to ~15 million acres
at premium price of $5-6/acre over Roundup Ready should contribute to segment
sales growth. Mosaic during its earnings call on January 5 indicated that US planted
Soybean acres could be about flat in 2011 at 77-78 million acres. We forecast
segment gross profit to grow 8% from $905 million to $980 million, and versus our
previous estimate of $984 million.

Table: Monsanto - Soybean Seed & Trait Offerings

2010 2011E
Mn/trait acres Mn/trait acres
Roundup Ready 69
Genuity Roundup ready 2 Yield 6 mid-teens

US planted soybean acres 77.7 77-78

Source: Monsanto company reports, Mosaic company reports, and USDA estimates.

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

COTTON
We raised our seed & trait sales projection for Cotton from $684 million to $747
million reflecting 22% growth from F2010 levels of $611 million. Growth in planted
acres and trait offerings in the US, India and Argentina all should contribute to
segment sales growth. Mosaic in a presentation at the Ohio AgriBusiness Association
on January 6 indicated US planted Cotton acres could increase 9% from 11 million
acres in 2010 to 12 million acres in 2011. We forecast segment gross profit to grow
21% from $454 million to $550 million, and versus our previous estimate of $513
million.

Table: Monsanto - Cotton Seed & Trait Offerings

2010 2011E
Mn/trait acres Mn/trait acres
US - Singles 3
Roundup Ready, Genuity Roundup Flex, Bollgard, Bollgard II

US - 1 Gen Doubles 0
Bollgard & Roundup Ready; Genuity Bollgard II & Roundup Ready

US - 2 Gen Doubles 6 increasing penetration

Genuity Bollgard II & Roundup Ready Flex

US planted cotton acres 11 12

India - 1 Gen Singles (Bollgard) 7

India - 2 Gen Singles (Genuity Bollgard II) 16 increasing penetration

India planted cotton acres (hybrids only) 2008-2010 average 20-26

Source: Monsanto company reports, Mosaic company reports, and USDA estimates.

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 Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

Table: Monsanto – Quarterly Earnings Outlook

F2010E F1Q:11 F2Q:11E F3Q:11E F4Q:11E F2011E F1Q:12E F2Q:12E F3Q:12E F4Q:12E F2012E
Seeds and Genomics
Revenues
Corn $4,260 $614 $2,314 $1,071 $437 $4,436 $645 $2,430 $1,125 $459 $4,658
Soybeans 1,486 226 665 576 103 1,570 235 691 600 107 1,633
Cotton 611 112 39 483 113 747 121 42 522 122 807
Seminis 835 183 234 214 247 878 194 248 227 262 931
Other 419 28 107 163 106 405 28 108 165 107 409
Total Revenues $7,611 $1,163 $3,359 $2,508 $1,005 $8,036 $1,223 $3,520 $2,638 $1,056 $8,437

Gross Profit:
Corn $2,564 $339 $1,518 $643 $182 $2,682 $359 $1,606 $680 $194 $2,840
Soybeans 905 153 419 318 90 980 160 437 332 94 1,022
Cotton 454 74 29 362 85 550 80 32 392 92 596
Seminis 492 113 145 124 143 525 121 155 133 153 561
Other 223 - 51 100 55 207 - 52 101 56 209
Total Gross Profit $4,638 $679 $2,162 $1,548 $555 $4,944 $720 $2,281 $1,639 $588 $5,227

Seeds & Genomics Segment EBIT 1,829 (9) 1,491 848 (319) 2,011 8 1,590 918 (312) 2,204

Agricultural Productivity
Revenues
Roundup $2,029 $523 $553 $577 $747 $2,400 $539 $570 $594 $769 $2,472
All Other 862 144 162 304 181 791 144 162 304 181 791
Total Revenues $2,891 $667 $716 $880 $927 $3,191 $683 $732 $898 $950 $3,263

Gross Profit
Roundup and Other Glyphosate $155 $94 $66 $69 $97 $327 $97 $80 $77 $108 $362
All Other 406 45 64 126 67 302 45 64 126 67 302
Total Gross Profit $561 $139 $131 $195 $164 $629 $142 $144 $203 $175 $664

Ag Productivity Segment EBIT 67 56 4 59 67 186 57 15 64 76 213

SG&A 2,064 450 510 482 615 2,057 468 519 488 628 2,103
R&D 1,205 303 280 335 348 1,266 316 292 350 361 1,318
Depreciation 602 155 155 155 155 620 155 155 155 155 620
Consolidated Operating Income 1,930 65 1,502 925 (243) 2,250 78 1,614 1,004 (226) 2,470

Interest Expense 106 28 8 8 8 52 7 7 7 7 28

Other Charges and Expenses 7 12 5 5 5 27 7 7 7 7 28
Income Taxes 477 8 422 265 (102) 592 22 448 277 (101) 646
Income Tax Rate 27% 34% 28% 29% 40% 28% 34% 28% 28% 42% 27%

Diluted Shares 547.4 544.5 544.5 544.5 544.5 544.5 544.5 544.5 544.5 544.5 544.5

EPS $2.41 $0.02 $1.96 $1.16 ($0.29) $2.85 $0.07 $2.11 $1.28 ($0.26) $3.20
Source: Company reports and J.P.Morgan estimates.

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

Valuation and Rating Analysis

We rate Monsanto Neutral for year-ahead performance. Monsanto trades at 24.8x
EPS and 13.5x EBITDA for F2011E. We raised our December 2011 price target for
Monsanto shares from $62 to $70 reflecting our revised earnings estimates and
generally higher equity valuations for seed and fertilizer companies over the past few
weeks. Our December 2012 price target is consistent with the current share price
representing a 24.7x multiple of our F2011 EPS estimate, and a 22x multiple of our
F2012 projections. Praxair and Ecolab, companies with higher consistent rates of EPS
growth, trade at 17.6x and 19.8x P/E and 10.0x and 9.7x EBITDA respectively for 2011.
Accordingly, we believe the opportunities for share appreciation for MON based on
current high crop prices is limited by its premium valuation and risk for earnings
disappointment should crop prices reverse or competitive pricing pressures limit
sales and profit growth. We believe Potash, Agrium, and Scott's Miracle-Gro offer
better risk-return profiles.

Risks to Our Rating

Monsanto is a stock that for periods of time can trade with the price of corn, the
price of oil, the agricultural sector generally, as well its level of EPS growth and
EBITDA.

Low prices for corn and soybean seeds could inhibit Monsanto's ability to
increase the prices of its products over a longer period of time. Corn and Soybean
seeds are the most valuable elements of the farmer’s purchases because of their
effects on yield. Lower grain prices reduce the additions to incremental value offered
by increased yields. A low grain price environment would be likely to stunt the rate
of longer-term EPS expansion and possibly lead to poor price performance.
Likewise, a higher-priced grain environment would likely enhance pricing
power and EPS growth performance.

DuPont is a formidable competitor. We believe that Monsanto possesses

impressive competitive advantages versus other major producers in most all areas of
biotechnology development for corn, soybeans, and cotton. Monsanto remains the
sole entity to commercialize glyphosate tolerance traits for soybeans, corn, and
cotton, among the most widely utilized products by farmers. DuPont appears to have
made material progress in improving its germplasm and, hence, its yields in soy and
corn. Moreover, during the next several years, DuPont’s Pioneer unit could launch
several potentially differentiated biotech trait products under the Optimum GAT
name, including double herbicide tolerance traits (glyphosate and sulfonylurea) for
both corn and soybeans. Monsanto may see its monopoly status end, and depending
upon the performance of these new products and other factors, Monsanto could see
its leadership position erode. These factors could affect Monsanto's EPS growth rate
and also its valuation. Conversely, technical achievements by Monsanto may well
surpass those of DuPont leading to market share gains and large profit
opportunities.

MON's Roundup franchise is faced with competition from both imports of

generic product and also from branded competition. A faster-than-expected
decline in either product prices or branded volumes could drive earnings below our
current assumptions and the shares price could fall. Conversely, changes in the cost

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

structure for generic producers could lead to higher product prices and benefits to
Monsanto.

Company Description
Monsanto Corp is among the world's foremost producers of crop chemicals,
seeds, and related biotechnology products for agriculture, with F2010 revenues
of $10.5 billion and operating income of $1.9 billion. MON was established as a
separate agricultural-input focused company in 2000 upon its spin-off from
Pharmacia Corp. Seeds and Genomics is a leading producer of seeds, biotechnology
traits and services sold both directly to growers and licensed to other seed companies.
Its Holden's unit develops germplasm for breeding of traditional and new seed
varieties. The DEKALB and Asgrow units are among the largest marketers of
branded seed products, including genomics-based varieties and hybrids.

Agricultural Productivity includes the Roundup herbicide franchise, as well as

selective herbicides, products for animal agriculture, and a lawn and garden
unit. Its Roundup brand of non-selective glyphosate herbicide has been the most
successful crop chemical in history, due to its high effectiveness, broad spectrum of
weed control, and strong environmental profile. Among selective herbicides,
Harness (acetanilide) is the second-largest selective herbicide for control of grassy
weeds.

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

Monsanto: Summary of Financials

Income Statement - Annual FY10A FY11E FY12E FY13E Income Statement - Quarterly 1Q11A 2Q11E 3Q11E 4Q11E

Revenues 10,502 11,242 11,717 - Revenues 1,830 4,076 3,401 1,936

Cost of products sold (ex. D&A) 5,303 5,640 5,794 - Cost of products sold (ex. D&A) 1,012 1,783 1,641 1,205
Gross profit 5,199 5,602 5,923 - Gross profit 818 2,293 1,760 731

SG&A 2,064 2,089 2,118 - SG&A 450 517 499 623

D&A 602 620 620 - D&A 155 155 155 155
Operating Income 1,930 2,245 2,484 - Operating Income 65 1,496 924 (240)

EBITDA 2,532 2,865 3,104 - EBITDA 220 1,651 1,079 (85)

Net interest income / (expense) 106 52 28 - Net interest income / (expense) 28 8 8 8

Other income / (expense) 7 27 28 - Other income / (expense) 12 5 5 5
Pretax income 1,799 2,141 2,402 - Pretax income 19 1,481 897 (256)

Income taxes 477 591 660 - Income taxes 8 420 264 (101)
Net income - GAAP 1,110 1,546 1,742 - Net income - GAAP 6 1,061 633 (155)
Net income - recurring 1,322 1,550 1,742 - Net income - recurring 11 1,061 633 (155)

Diluted shares outstanding 547 544 544 - Diluted shares outstanding 544 544 544 544

EPS - GAAP 2.03 2.84 3.20 - EPS - GAAP 0.01 1.95 1.16 (0.28)
EPS - recurring 2.41 2.85 3.20 - EPS - recurring 0.02 1.95 1.16 (0.28)

Balance Sheet and Cash Flow Data FY10A FY11E FY12E FY13E Ratio Analysis FY10A FY11E FY12E FY13E

Cash and cash equivalents 1,485 1,856 2,625 - Sales growth (10.4%) 7.1% 4.2% -
Accounts receivable 1,590 1,591 1,651 - EBIT growth (39.1%) 13.2% 8.3% -
Inventories 2,739 3,037 3,111 - EPS growth (45.2%) 17.9% 12.4% -
Other current assets 1,358 1,295 1,295 -
Current assets 7,172 7,779 8,683 - Gross margin 49.5% 49.8% 50.5% -
PP&E 4,227 4,376 4,582 - EBIT margin 18.4% 20.0% 21.2% -
Total assets 17,917 18,634 19,669 - EBITDA margin 24.1% 25.5% 26.5% -
Tax rate 26.5% 27.6% 27.5% -
Total debt 2,103 2,120 2,120 - Net margin 12.6% 13.8% 14.9% -
Total liabilities 7,818 7,590 7,645 -
Shareholders' equity 10,099 11,044 12,023 - Net Debt / EBITDA 0.2 0.1 (0.2) -
Net Debt / Capital (book) 17.2% 16.1% 15.0% -
Net Income (including charges) 1,128 1,552 1,742 -
D&A 602 620 620 - Return on assets (ROA) - - - -
Change in working capital (702) (349) (119) - Return on equity (ROE) - - - -
Other - - - - Return on invested capital (ROIC) - - - -
Cash flow from operations 1,398 1,962 2,386 -
Enterprise value / Sales - - - -
Capex (755) (612) (650) - Enterprise value / EBITDA 17.0 14.9 13.5 -
Free cash flow 643 1,349 1,736 - Free cash flow yield 1.5% 3.2% 4.1% -
P/E 34.9 24.9 22.1 -
Cash flow from investing activities (834) (744) (826) -
Cash flow from financing activities (461) (355) (219) -
Dividends 1.05 1.06 1.05 -
Dividend yield 1.5% 1.5% 1.5% -

Source: Company reports and J.P. Morgan estimates.

Note: $ in millions (except per-share data). Fiscal year ends Aug

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

Analyst Certification:
The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily
responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with
respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report
accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research
analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the
research analyst(s) in this report.
Important Disclosures

• Client of the Firm: Monsanto is or was in the past 12 months a client of JPM; during the past 12 months, JPM provided to the
company investment banking services, non-investment banking securities-related service and non-securities-related services.
• Investment Banking (past 12 months): J.P. Morgan received, in the past 12 months, compensation for investment banking services
from Monsanto.
• Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking
services in the next three months from Monsanto.
• Non-Investment Banking Compensation: JPMS has received compensation in the past 12 months for products or services other
than investment banking from Monsanto. An affiliate of JPMS has received compensation in the past 12 months for products or
services other than investment banking from Monsanto.

Monsanto (MON) Price Chart

Date Rating Share Price Price Target

228 OW $100 N $72 N $47 ($) ($)
06-Oct-08 OW 75.48 -
190 OW $83 N $75 N $80 N $54 N $62 19-Dec-08 OW 71.63 83.00
08-Jan-09 OW 86.16 100.00
152 OW N $82 N $72 N $68 N $49
03-Apr-09 N 81.41 82.00
Price($) 28-May-09 N 79.88 75.00
114
08-Oct-09 N 74.97 72.00
07-Jan-10 N 86.27 80.00
76
26-Feb-10 N 71.18 72.00
08-Apr-10 N 68.86 68.00
38
28-May-10 N 50.87 54.00
01-Jul-10 N 46.22 47.00
0
Oct Jul Apr Jan Oct Jul
07-Oct-10 N 48.83 49.00
06 07 08 09 09 10 09-Nov-10 N 62.77 62.00

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Break in coverage Feb 28, 2002 - Dec 31, 2003. This chart shows J.P. Morgan's continuing coverage of this stock; the
current analyst may or may not have covered it over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Explanation of Equity Research Ratings and Analyst(s) Coverage Universe:

J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] J.P. Morgan Cazenove’s UK Small/Mid-Cap dedicated research
analysts use the same rating categories; however, each stock’s expected total return is compared to the expected total return of the FTSE
All Share Index, not to those analysts’ coverage universe. A list of these analysts is available on request. The analyst or analyst’s team’s
coverage universe is the sector and/or country shown on the cover of each publication. See below for the specific stocks in the certifying
analyst(s) coverage universe.

Coverage Universe: Jeffrey J. Zekauskas: Agrium (AGU), Air Products and Chemicals (APD), Albemarle Corporation
(ALB), Amyris, Inc. (AMRS), Ashland Inc. (ASH), Avery Dennison (AVY), CF Industries Holdings, Inc. (CF), Cabot
Corporation (CBT), Compass Minerals International, Inc. (CMP), Dow Chemical (DOW), DuPont (DD), Eastman Chemical
Company (EMN), Ecolab Inc. (ECL), Ferro Corp (FOE), Georgia Gulf (GGC), H.B. Fuller (FUL), Huntsman Corporation

9
Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

(HUN), International Flavors & Fragrances (IFF), Lubrizol Corporation (LZ), LyondellBasell Industries (LYB), Minerals
Technologies (MTX), Monsanto (MON), Nalco (NLC), Novozymes (NZYMb.CO), Pall Corporation (PLL), Polypore
International (PPO), Potash Corp. (POT), Praxair (PX), RPM International Inc. (RPM), Scotts Miracle-Gro Co. (SMG),
Sherwin-Williams (SHW), Synthesis Energy Systems, Inc. (SYMX), The Mosaic Company (MOS), Valspar Corp (VAL),
WD-40 Company (WDFC), Westlake Chemical Corp. (WLK)

J.P. Morgan Equity Research Ratings Distribution, as of December 31, 2010

Overweight Neutral Underweight
(buy) (hold) (sell)
J.P. Morgan Global Equity Research Coverage 46% 42% 12%
IB clients* 53% 50% 38%
JPMS Equity Research Coverage 43% 49% 8%
IB clients* 71% 63% 59%
*Percentage of investment banking clients in each rating category.
For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category.

Valuation and Risks: Please see the most recent company-specific research report for an analysis of valuation methodology and risks on
any securities recommended herein. Research is available at http://www.morganmarkets.com , or you can contact the analyst named on
the front of this note or your J.P. Morgan representative.

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include revenues from, among other business units, Institutional Equities and Investment Banking.

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

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“Other Disclosures” last revised January 1, 2011.

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Jeffrey J. Zekauskas North America Equity Research
(1-212) 622-6644 07 January 2011
jeffrey.zekauskas@jpmorgan.com

Copyright 2011 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan.#$J&098$#*P

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