Bayer AG - Stockholders' Newsletter Third Quarter 2006

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Financial Statements

Bayer Group
Consolidated Statements of Income

	3rd Quarter 2005	3rd Quarter 2006	First Nine Months 2005	First Nine Months 2006
€ million
Net sales	6,177	7,783	19,249	21,971
Cost of goods sold	(3,481)	(4,226)	(10,531)	(11,757)
Gross profit	2,696	3,557	8,718	10.214

Selling expenses	(1,311)	(1,739)	(3,856)	(4,594)
Research and development expenses	(418)	(678)	(1,264)	(1,549)
General administration expenses	(331)	(420)	(992)	(1,173)
Other operating income	633	65	1,422	440
Other operating expenses	(473)	(126)	(1,539)	(724)
EBIT	796	659	2,489	2,614

Equity-method income (loss)	(6)	(3)	(2)	(14)
Non-operating income	412	196	698	500
Non-operating expenses	(588)	(465)	(1,138)	(1,205)
Non-operating result	(182)	(272)	(442)	(719)

Income before income taxes	614	387	2,047	1,895

Income taxes	(157)	(118)	(599)	(601)

Income from continuing operations after taxes	457	269	1,448	1,294

Income from discontinued operations after taxes	39	51	105	78

Income after taxes	496	320	1,553	1,372
of which attributable to minority interest	3	0	2	0
of which attributable to Bayer AG stockholders (net income)	493	320	1,551	1,372

Earnings per share (€)
From continuing operations
Basic*	0.62	0.36	1.98	1.72
Diluted*	0.62	0.36	1.98	1.72
From continuing and discontinued operations
Basic*	0.68	0.42	2.12	1.82
Diluted*	0.68	0.42	2.12	1.82