Dow Chemical 2015 Annual Report Download - page 59

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business transfers materials to Dow's derivative businesses and the Energy business supplies utilities to Dow's businesses at net
cost, resulting in EBITDA that is at or near break-even for both businesses.
Performance Plastics
In millions 2015 2014 2013
Sales $ 18,357 $ 22,386 $ 21,910
Price change from comparative period (23)% 2% 1 %
Volume change from comparative period 5 % —% (4)%
Volume change, excluding acquisitions and divestitures 5 % 1% (3)%
Equity earnings $ 220 $ 257 $ 355
EBITDA $ 5,399 $ 4,422 $ 4,503
Certain items impacting EBITDA $ 597 $ — $ 544
EBITDA excluding certain items $ 4,802 $ 4,422 $ 3,959
Performance Plastics, Excluding Hydrocarbons and Energy
In millions 2015 2014 2013
Price change from comparative period (16)% 4 % 4 %
Volume change from comparative period 7 % (1)% (3)%
Volume change, excluding acquisitions and divestitures 6 % 1 % (1)%
2015 Versus 2014
Performance Plastics sales for 2015 were $18,357 million, down 18 percent from $22,386 million in 2014, with price down
23 percent and volume up 5 percent. Price decreased across all geographic areas and all businesses in response to significantly
lower raw material costs coupled with the unfavorable impact of currency, which represented approximately 20 percent of the
price decline. Double-digit price declines were reported in Hydrocarbons as prices for monomers and ethylene by-products are
generally correlated to Brent crude oil prices, which declined approximately 45 percent compared with 2014. Volume increased
across all geographic areas and all businesses, except Energy. Volume in Hydrocarbons increased due to new supply
agreements with Olin as a result of the split-off of the chlorine value chain. Dow Packaging and Specialty Plastics volume
improved across all geographic areas due to improved operating rates and increased demand in the food and specialty
packaging, industrial and consumer packaging, and hygiene and medical market sectors. Dow Elastomers volume improved
across all geographic areas due to improved raw material supply and higher demand in the transportation, infrastructure and
consumer goods market sectors. Volume in Dow Electrical and Telecommunications was flat compared with 2014 as growth in
North America was offset by volume declines in EMEAI and Latin America. Volume declined in the Energy business due to
reduced sales in North America which more than offset increased volume from new supply agreements with Olin as a result of
the split-off of the chlorine value chain. Excluding the impact of acquisitions and divestitures, Hydrocarbons and Energy sales
decreased 10 percent with price down 16 percent and volume up 6 percent.
The Company uses derivatives of crude oil and natural gas as feedstock in its ethylene facilities. In addition, the Company
purchases electric power, ethylene and propylene to supplement internal production, as well as other raw materials. The
Company's cost of purchased feedstock and energy decreased $8,542 million in 2015, a 42 percent decrease from 2014,
primarily due to decreased naphtha, condensate, propane, natural gas and purchased monomers costs in Europe and North
America.
EBITDA for 2015 was $5,399 million, up from $4,422 million in 2014. EBITDA in 2015 was positively impacted by a pretax
gain of $349 million related to the step acquisition of Univation, a $317 million pretax gain related to the split-off of the
chlorine value chain and negatively impacted by $57 million of asset impairments and related costs and $12 million of
restructuring charges, consisting of asset write-downs and write-offs. See Notes 3, 4, and 6 to the Consolidated Financial
Statements for additional information on these items. Excluding these certain items, EBITDA improved compared with 2014 as
the impact of lower feedstock and energy costs, higher sales volume and increased equity earnings from The SCG-Dow Group
more than offset the impact of lower selling prices, higher maintenance turnaround spending and lower equity earnings from
EQUATE, TKSC and Univation and increased equity losses from Sadara.
2014 Versus 2013
Performance Plastics sales for 2014 were $22,386 million, up 2 percent from $21,910 million in 2013 with price up 2 percent
and volume unchanged. Price increased in all geographic areas, except EMEAI, and in all businesses, except Hydrocarbons.
Price declined in Hydrocarbons primarily due to a significant drop in crude oil prices which drove monomers and other by-
products' prices down, primarily in Europe. Dow Packaging and Specialty Plastics prices were higher in most geographic areas,