Aug. 17, 2006

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Cargill reports fourth-quarter and fiscal 2006 earnings

MINNEAPOLIS – Cargill today reported net earnings of $168 million in the 2006 fourth quarter ended May 31, including a one-time, $190 million noncash charge to Cargill’s earnings that is the company’s share of a restructuring charge taken by The Mosaic Company related to its phosphate fertilizer business. Cargill is the majority shareholder in Mosaic.

Excluding the noncash charge, Cargill’s fourth-quarter earnings were $358 million compared with $230 million in the same period a year ago.

For the 2006 fiscal year, Cargill earned $1.54 billion, including the noncash charge described above. Fiscal 2005 earnings of $2.1 billion also included a special item: a $578 million noncash net gain related to the formation of Mosaic in the second quarter of that year.

Excluding the special items in both years, Cargill earned a record $1.73 billion in fiscal 2006, up 13 percent from $1.53 billion a year ago.

Revenues for the full year rose 6 percent to $75.2 billion. Cash flow from operations increased 4 percent to $3.3 billion.

“We are delighted to report earnings of $1.73 billion, which marks the company’s fifth consecutive year of improved performance,” said Warren Staley, Cargill chairman and chief executive officer. “Our results show the strength of Cargill’s strategy, diversification and global presence working in tandem. We’ve become more adept at collaborating with customers to create solutions that help them succeed. The diversity within our business and geographic mix enabled us to benefit from good economic growth in much of the world. Our team also did a good job managing the market volatility that accompanied the growth.”

Earnings in the 2006 fiscal year were led by Cargill’s risk management and financial segment, with outstanding performance in value investment and strong contributions from asset management, energy and finance. The origination and processing segment, which comprises Cargill’s global supply chain in grains, oilseeds, sugar and other agricultural commodities, increased earnings from a year ago. Results in agriculture services also were improved. Although the food ingredients and applications segment lagged the year-ago level, earnings advanced in several of Cargill’s edible oils, sweeteners, meat and poultry businesses around the world. Industrial, which rounds out Cargill’s five-segment structure, was down for the year although results in salt products were strong.

In the 2006 fourth quarter, segment earnings in risk management and financial and in industrial exceeded results in the same period a year ago. Earnings in the other three segments were below the prior year’s fourth quarter.

Cargill’s investments in fiscal 2006 reflected the company’s business and geographic breadth. Leading acquisitions included Degussa’s food ingredients operations, which specialize in texturizers and flavor systems for the food and beverage industry; the joint-venture purchase of oil palm plantations in Indonesia and Papua New Guinea; and the purchase of beef processing businesses in the United States and Canada. Expansions announced or under way included growth in animal nutrition, cocoa processing and oilseed processing. Cargill also made investments related to biofuel feedstocks and production in Europe and the United States.