Bayer AG - Annual Report 2006 - Proposal for Distribution of the Profit

Management Report

Proposal for Distribution of the Profit

Under German law, the dividend payment is based on the balance sheet profit of the parent company, which amounted to €764 million in 2006:

Bayer AG Summary Income Statements	2005	2006
€ million
Net sales	197	196
Cost of goods sold	(134)	(146)
Gross profit	63	50
Selling and administration expenses	(215)	(194)
Other operating income and expenses – net	110	(5)
Operating result	(42)	(149)
Non-operating result	719	1,449
Income before income taxes	677	1,300
Income taxes	(64)	(50)
Net income	613	1,250
Allocation (to) from retained earnings	81	(486)
Balance sheet profit	694	764

We will propose to the Annual Stockholders’ Meeting on April 27, 2007 that the balance sheet profit be used to pay a dividend of €1.00 per share (764,341,920 shares) on the capital stock of €2.0 billion entitled to the dividend for 2006.