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Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
29
assets and liabilities of its operations, gains on sales of businesses and other assets in the Performance Materials and Agriculture
segments, and the impact of Imprelis® charges in 2013 versus additional insurance recoveries in 2014. These impacts were partially
offset by increased tax benefits on employee separation/asset related charges. The higher effective tax rate principally reflects the
impact of foreign exchange losses on net monetary assets for which no corresponding tax benefit is realized, in addition to the
impact of the Venezuelan bolivar devaluation which is also nondeductible.
See Note 6 to the Consolidated Financial Statements for additional details related to the provision for income taxes on continuing
operations, as well as items that significantly impact the company's effective income tax rate.
(Dollars in millions) 2015 2014 2013
INCOME FROM CONTINUING OPERATIONS AFTER INCOME
TAXES $ 1,895 $ 3,145 $ 2,206
Income from continuing operations after income taxes for 2015 was $1.9 billion compared to $3.1 billion in 2014 and $2.2 billion
in 2013. The changes between periods were due to the reasons noted above.
Corporate Outlook
Current difficult global economic conditions in agriculture and slower growth in emerging markets are expected to continue
challenging the company’s sales growth in 2016. The company expects headwinds from currency due to the continued strengthening
of the U.S. dollar which is expected to be most significant in the first half of 2016. Growth in emerging markets is expected to
slow, leading to a shift in the company’s earnings mix to higher tax jurisdictions. The company expects income from continuing
operations in 2016 will benefit from $730 million reduction in costs as a result of the 2016 global cost savings and restructuring
plan. These cost reductions will be weighted toward the second half of 2016 reflecting implementation of specific actions during
the first and second quarters. In addition, the company expects income from continuing operations in 2016 to be impacted by
transaction related costs associated with the proposed merger with Dow. See additional information regarding 2016 outlook under
"Segment Reviews" beginning on page 30.
Recent Accounting Pronouncements
See Note 1 to the Consolidated Financial Statements for a description of recent accounting pronouncements.