Dow Chemical 2014 Annual Report Download - page 65

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41
In addition to the segment and business changes, the Company also changed the assignment of certain expenses previously
aligned with the Corporate segment to better reflect operating segment results and profitability. All leveraged functional costs
(i.e., information systems, finance, human resources, legal, supply chain, etc.) are now fully allocated to the segments. In
addition, long-term performance-based compensation expense, including the Employee Stock Purchase Plan, stock options,
deferred stock and performance deferred stock, are now allocated to the segments based primarily on employee alignment.
The reporting changes are retrospectively reflected in the following discussion of segment results for all periods presented.
The Company uses EBITDA (which Dow defines as earnings (i.e., "Net Income") before interest, income taxes, depreciation
and amortization) as its measure of profit/loss for segment reporting purposes. EBITDA by operating segment includes all
operating items relating to the businesses; items that principally apply to the Company as a whole are assigned to Corporate.
Additional information regarding the Company's operating segments and a reconciliation of EBITDA to “Income Before
Income Taxes” can be found in Note 25 to the Consolidated Financial Statements.
Due to the completion of several divestitures (see Note 5 to the Consolidated Financial Statements), the change in sales volume
from 2013 to 2014, 2012 to 2013 and 2011 to 2012 excluding divestitures is also provided by operating segment, where
applicable. Sales excluding divestitures exclude sales of the Polypropylene Licensing and Catalysts business, divested on
December 2, 2013 (part of the Performance Plastics segment); sales related to Nippon Unicar Company Limited, divested on
July 1, 2013 (part of the Performance Plastics segment); sales of the Polypropylene business, divested on September 30, 2011
(part of the Performance Plastics segment); and sales of Dow Haltermann, divested during 2011 (part of Performance Materials
& Chemicals segment).