Statement on Settlement Agreements with Rhode Island and Michigan

Monsanto has reached settlement agreements with Rhode Island and Michigan to resolve all claims relating to polychlorinated biphenyls (PCBs), a legacy product the company voluntarily ceased producing in 1977, at values that are in the company’s best interest. The settlements contain no admission of liability or wrongdoing by the company. Under the terms of the agreements, Monsanto will make upfront payments of $12.5 million to Rhode Island in June of this year and $64 million to Michigan ($32 million of which will be paid in June of this year and $32 million to be paid in March of 2027). The settlements include additional contingency payments within five years that are tied to the outcome of Monsanto’s pending action in Missouri to enforce its indemnity rights against its largest former PCB customers.

Both states agreed to cooperate with Monsanto in this action, having determined there is a substantial basis for the company’s pending indemnity case and a significant portion of the liability should be borne by Monsanto's former PCB customers. Under the terms of the agreement, Rhode Island could be paid up to an additional $50 million while Michigan could be paid up to an additional $176 million in contingency payments. The settlements include smaller backstop payments if the indemnity litigation results in substantially less than the target recoveries set forth in the agreements.

We believe the resolutions reached with a dozen states substantially mitigate the company's exposure to state PCB litigation, and the contingent payments tied to our indemnity case in the last four resolutions should further reduce the company's litigation exposure. Additionally, based on data reported to the U.S. Environmental Protection Agency about impairments of waterways by PCBs and the fact that PCBs in the environment are generally declining 45 years after production ceased, the company believes that the scope of potential future state litigation is further limited. The company will also continue to litigate these cases and settle only when it is strategically advantageous to do so.

During the time of manufacture, Monsanto conducted hundreds of studies on PCB safety, provided appropriate warnings to its sophisticated industrial customers based on state-of-the science at the time and cooperated with the U.S. government’s 1972 interdepartmental study.

To recover a substantial portion of its PCB-related litigation costs, Monsanto filed a complaint in Missouri to enforce its rights under 1972 indemnity contracts with its six largest former PCB customers. Under these contracts, these sophisticated companies agreed to indemnify Monsanto for PCB-related litigation costs. The litigation against the former PCB customers remains pending.