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Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
35
PERFORMANCE MATERIALS
(Dollars in millions) 2015 2014 2013
Net sales $ 5,305 $ 6,059 $ 6,166
Operating earnings $ 1,216 $ 1,267 $ 1,249
Operating earnings margin 23% 21% 20%
2015 2014
Change in net sales from prior period due to:
Local Price and Product Mix (4)% 1 %
Currency (6)% (1)%
Volume 1 % 2 %
Portfolio and Other (3)% (4)%
Total change (12)% (2)%
2015 versus 2014 Full year 2015 segment net sales of $5.3 billion decreased $0.8 billion, or 12 percent, primarily due to the
negative impact of currency, lower ethylene pricing and the portfolio impact of the sale of Glass Laminating Solutions/Vinyls
(GLS/Vinyls) in June 2014 (see Note 3 to the Consolidated Financial Statements for additional information). Partially offsetting
the declines are increased ethylene volumes due to the prior year scheduled outage at the ethylene unit in Orange, Texas and
increased demand for Performance Polymers offerings in automotive markets, primarily in the U.S. and Europe in the second half
of 2015.
2015 operating earnings decreased as cost reductions and continued productivity improvements were more than offset by the
negative impact of currency of $132 million and lower selling prices. 2015 operating earnings includes $49 million of benefits,
comprised of a net benefit from a joint venture, the sale of a business and the realization of tax benefits associated with a
manufacturing site. Operating earnings margin increased due primarily to cost reductions and continued productivity improvements.
2014 versus 2013 Full year 2014 segment net sales of $6.1 billion decreased $0.1 billion, or 2 percent, due primarily to the
impact of the sale of GLS/Vinyls and decreased ethylene volumes as a result of the second quarter scheduled outage at the Orange,
Texas ethylene unit. This was partially offset by increased demand in automotive markets, primarily in China, Europe and North
America.
2014 operating earnings and operating earnings margin increased due primarily to increased automotive demand, partially offset
by the portfolio impact of the sale of GLS/Vinyls.
Outlook Full year 2016 segment net sales are expected to be down in the low-single digits percent and full year operating earnings
are expected to be down about 10 percent as volume growth will be more than offset by lower ethylene price and the negative
impact of currency.