Statement on Settlement Agreements with Arizona, Arkansas, Hawaii and Mississippi

“Monsanto has reached settlement agreements with four states to resolve all claims relating to polychlorinated biphenyls (PCBs), a legacy product the company voluntarily ceased producing in 1977.

The settlements contain no admission of liability or wrongdoing by the company. Under the terms of the agreements, Monsanto will make the following up front payments:

• $25 million to Arizona split between two installments in 2026 and 2027.
• $16 million to Arkansas split between two installments in 2026 and 2027.
• $15 million to Mississippi split between two installments in 2026 and 2027.
• $10 million to Hawaii in 2026.

The settlements include additional contingency payments to each state within five years that are tied to Monsanto’s efforts to enforce its indemnity rights against its largest former PCB customers. Under these contracts, these sophisticated companies agreed to indemnify Monsanto for PCB-related litigation costs.

The States agreed to cooperate with Monsanto in this action, having determined there is a substantial basis for the company’s indemnity claims. Under the terms of the agreements the contingency payments could be:

• Arizona could be paid up to an additional $95 million.
• Arkansas could be paid up to an additional $64 million.
• Mississippi could be paid up to an additional $60 million.
• Hawaii could be paid up to an additional $35 million.

The settlements also include a smaller backstop payment to each of the states if the indemnity enforcement efforts don’t result in the target recovery set forth in the agreements. Monsanto will record the up front payments as liabilities and will increase its PCB litigation provision by $66.3 million to cover the minimum guaranteed backstop payments for these agreements.

We believe these resolutions help substantially mitigate the company's exposure to state PCB litigation, and the contingent payments tied to our indemnity enforcement efforts in the last four resolutions should reduce the company's litigation exposure. Additionally, data reported to the U.S. Environmental Protection Agency about PCB impairments of waterways shows that PCBs in the environment are generally declining nearly 50 years after production ceased. 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.”