Dow Chemical 2015 Annual Report Download - page 53

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AGRICULTURAL SCIENCES
The Agricultural Sciences segment is a global leader in providing crop protection and seed/plant biotechnology products and
technologies, urban pest management solutions and healthy oils. The business invents, develops, manufactures and markets
products for use in agricultural, industrial and commercial pest management, and food service. Agricultural Sciences consists of
two businesses - Crop Protection and Seeds.
On January 30, 2015, DAS acquired Coodetec's seed business. See Note 4 to the Consolidated Financial Statements for
additional information on this acquisition.
On July 31, 2015, the Company sold its AgroFresh business to AFSI. The AgroFresh business was reported in the Agricultural
Sciences segment through the date of divestiture. The Company has retained a minority interest in AFSI which is also reported
in the Agricultural Sciences segment. See Note 5 to the Consolidated Financial Statements for additional information on this
divestiture.
Agricultural Sciences
In millions 2015 2014 2013
Sales $ 6,381 $ 7,290 $ 7,137
Price change from comparative period (8)% (1)% 1%
Volume change from comparative period (4)% 3 % 11%
Volume change, excluding acquisitions and
divestitures (3)% 3 % 11%
Equity earnings (losses) $ (15) $ 4 $ 5
EBITDA $ 1,432 $ 962 $ 894
Certain items impacting EBITDA $ 573 $ — $ —
EBITDA excluding certain items $ 859 $ 962 $ 894
2015 Versus 2014
Agricultural Sciences sales were $6,381 million in 2015, down 12 percent from $7,290 million in 2014. Compared with the
same period last year, volume decreased 4 percent and price decreased 8 percent, including the unfavorable impact of currency
which represented approximately 40 percent of the price decline. Sales declined in all geographic areas and both businesses,
impacted by lower crop commodity prices, which drove a flat agricultural market, coupled with currency headwinds. Despite a
6 percent increase in new product sales, Crop Protection sales decreased 13 percent compared with 2014, partly driven by
declines in glyphosate and the divestiture of AgroFresh. Seeds reported an 11 percent decline in sales compared with 2014 as
soybean seeds and canola seeds growth was more than offset by lower sales of corn, primarily due to lower sales in the
Americas as a result of shifting acreage from corn to soybeans. Excluding acquisitions and divestitures, volume for the segment
was down 3 percent.
EBITDA for 2015 was $1,432 million, up $470 million from $962 million in 2014. Compared with the same period last year,
EBITDA for 2015 was positively impacted by a pretax gain of $618 million related to the divestiture of AgroFresh and
negatively impacted by $16 million of restructuring charges and $29 million of charges related to AFSI's fair value step-up of
its inventories and start-up costs. See Notes 3 and 5 to the Consolidated Financial Statements for additional information on
these items. Excluding these certain items, EBITDA declined from 2014 as lower selling prices, softer demand due to lower
crop commodity prices and the absence of earnings from the divestiture of the AgroFresh business more than offset the
favorable impact of currency on costs, lower R&D and SG&A spending driven by productivity measures and gains from the
sales of product lines and a subsidiary.
2014 Versus 2013
Agricultural Sciences sales were $7,290 million in 2014, up 2 percent from $7,137 million in 2013, a record for the segment
and both businesses. Compared with 2013, volume was up 3 percent and price was down 1 percent due to the unfavorable
impact of currency. Sales gains were reported in both businesses, driven by the introduction and ramp up of new products and
technologies, and in all geographic areas, except North America. Crop Protection sales were up 3 percent due to increased
demand for new products, which increased 20 percent, and continued strong demand for rice and cereal herbicides. Seeds sales
increased 1 percent as volume gains in soybean seeds and cotton seeds and the favorable impact of a one-time gain related to
the end of a licensing agreement were partially offset by volume declines in corn, canola and sunflower seeds.
EBITDA for 2014 was $962 million, a record for the segment and the Crop Protection business, compared with $894 million in
2013. EBITDA increased as volume growth in Crop Protection and Seeds more than offset a decline in selling prices (driven