Dow Chemical 2014 Annual Report Download - page 70

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products in all geographic areas, except North America. Price decreased in most geographic areas, most notably in Asia Pacific
due to the unfavorable impact of currency. Price increased in North America driven by higher feedstocks and energy costs.
Modest price gains in Performance Monomers and Dow Coating Materials were more than offset by declines in Dow Building
& Construction and Energy & Water Solutions.
EBITDA for 2013 was $941 million, down from $963 million in 2012. EBITDA in 2013 was negatively impacted by
$94 million of certain items, as previously discussed. EBITDA in 2012 included $37 million of restructuring charges related to
the 1Q12 Restructuring plan consisting of asset write-downs and write-offs of $33 million and costs associated with exit or
disposal activities of $4 million. The 4Q12 Restructuring plan included $24 million for asset write-downs and write-offs. In
addition, EBITDA in 2012 included an $81 million charge related to Dow Corning's restructuring and asset abandonment. See
Notes 3 and 8 to the Consolidated Financial Statements for additional information on these charges. Excluding these certain
items, EBITDA decreased in 2013 as lower selling prices and higher feedstock and energy and other raw material costs more
than offset higher sales volume and the favorable impact of currency on costs.
Infrastructure Solutions Outlook for 2015
Infrastructure Solutions sales are likely to be lower in 2015, primarily due to pressure on selling prices as a result of declining
feedstock prices and unfavorable currency impacts due to the strengthening U.S. dollar, partially offset by higher demand. Dow
Building & Construction sales are expected to increase, primarily driven by higher demand for insulation products in North
America. Dow Coating Materials sales demand is expected to increase due to global economic conditions and innovative
products. Energy & Water Solutions expects strong demand for differentiated products utilized in energy and water applications
offset by lower demand in the oil and gas exploration industry due to the impact of lower oil prices. Performance Monomers
volume is expected to be flat to slightly higher as improved plant operating rates and global economic conditions are expected
to improve supply and demand balances for vinyl acetate monomers while volume for acrylates is expected to be flat due to
capacity additions within the industry.
PERFORMANCE MATERIALS & CHEMICALS
The Performance Materials & Chemicals segment consists of the following businesses: Chlor-Alkali and Vinyl, Chlorinated
Organics, Epoxy, Industrial Solutions and Polyurethanes. The segment also includes the results of MEGlobal and a portion of
the results of EQUATE, TKOC, Map Ta Phut Olefins Company Limited and Sadara, all joint ventures of the Company.
The segment included Dow Haltermann until it was fully divested at December 31, 2011.
Performance Materials & Chemicals
In millions 2014 2013 2012
Sales $ 15,114 $ 14,824 $ 14,981
Price change from comparative period —% 1 % (6)%
Volume change from comparative period 2% (2)% (2)%
Volume change, excluding divestitures 2% (2)% (1)%
Equity earnings $ 322 $ 480 $ 362
EBITDA $ 2,193 $ 1,913 $ 1,603
Certain items impacting EBITDA $ — $ (55) $ (511)
2014 Versus 2013
Performance Materials & Chemicals sales were $15,114 million in 2014, up 2 percent from $14,824 million in 2013, with
volume up 2 percent and price flat. Compared with 2013, volume was higher primarily due to increases in EMEAI and Latin
America, which were partially offset by a decrease in Asia Pacific. Improved economic conditions and favorable supply and
demand fundamentals for polyols and PO/PG drove volume increases in Polyurethanes across all geographic areas. Industrial
Solutions reported lower volume, primarily due to the expiration of a low margin marketing agreement in Asia Pacific in 2013.
Chlor-Alkali and Vinyl volume increased in all geographic areas, except North America, driven by higher downstream demand
in the chlorine chain. Epoxy reported volume increases across all geographic areas, except Latin America. Chlorinated
Organics reported lower volume primarily driven by the shutdown of a chloromethanes plant in North America at the end of
2013. Price was flat as increases in North America and Asia Pacific were offset by decreases in EMEAI and Latin America.
Polyurethanes reported higher prices in Asia Pacific, North America and EMEAI due to tight supply as a result of planned and
unplanned events across the industry. Favorable supply and demand balances drove price gains in Industrial Solutions in North
America and Latin America. Price decreases were reported by Chlor-Alkali and Vinyl due to lower caustic soda prices. Excess
industry capacity and lower raw material costs drove price down in Epoxy across all geographic areas.