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Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
27
SAFETY & PROTECTION
(Dollars in millions) 2013 2012 2011
Segment sales $ 3,884 $ 3,825 $ 3,934
PTOI $ 694 $ 562 $ 661
PTOI margin 18% 15% 17%
2013 2012
Change in segment sales from prior period due to:
Price (1)% — %
Volume 3 % (3)%
Portfolio / Other — % — %
Total change 2 % (3)%
2013 versus 2012 The sales increase was driven by higher volume reflecting improved demand in industrial markets, protective
garments, and construction products which offset softness in global public sector spending.
2013 PTOI and PTOI margin increased on higher volume, primarily in industrial markets, productivity improvements, and the
absence of $58 million of restructuring charges recorded in 2012, partially offset by weaker sales mix.
2012 versus 2011 Lower U.S. public sector demand and softness in certain industrial markets, including stalled infrastructure
projects in China, was partially offset by higher demand for Sustainable Solutions offerings. Higher local prices were offset by
the impact of unfavorable currency.
2012 PTOI and PTOI margin decreased primarily due to $58 million of restructuring charges noted above, unfavorable currency
and lower volume.
Outlook Sales are expected to be up modestly reflecting continued improvement in industrial markets across all businesses.
Favorable construction and housing demand will temper anticipated public sector weakness. Earnings are expected to be up
moderately, reflecting improving demand, favorable sales mix, and continued productivity gains.
PHARMACEUTICALS
(Dollars in millions) 2013 2012 2011
Segment sales $ — $ — $ —
PTOI $ 32 $ 62 $ 289
Decreases in PTOI reflect the expiration of certain patents related to Cozaar®/Hyzaar®.
Outlook Earnings contributions to the company from the collaboration with Merck are expected to be insignificant in 2014 and
will be reported within the Other segment.