United states securities and exchange commission

35

Table of Contents

Sales Variances by Segment and Geographic Region - As Reported
		2015
Percentage change from prior year		Local Price & Product Mix		Currency		Volume		Portfolio & Other 1		Total
Agriculture		(5	)%	(4	)%	(2	)%	—	%	(11	)%
Performance Materials & Coatings		(14	)	(5	)	3		—		(16	)
Industrial Intermediates & Infrastructure		(10	)	(5	)	2		(6	)	(19	)
Packaging & Specialty Plastics		(18	)	(5	)	5		—		(18	)
Electronics & Imaging		(2	)	(2	)	(1	)	—		(5	)
Nutrition & Biosciences		(1	)	(5	)	(4	)	—		(10	)
Transportation & Advanced Polymers		—		(7	)	5		—		(2	)
Safety & Construction		—		(5	)	2		—		(3	)
Total		(12	)%	(5	)%	2	%	(1	)%	(16	)%
U.S. & Canada		(13	)%	(1	)%	2	%	(2	)%	(14	)%
EMEA		(10	)	(13	)	2		(2	)	(23	)
Asia Pacific		(9	)	(3	)	5		(2	)	(9	)
Latin America		(15	)	—		1		(1	)	(15	)
Total		(12	)%	(5	)%	2	%	(1	)%	(16	)%
1.	Portfolio & Other reflects sales related to the step acquisition of Univation (Packaging & Specialty Plastics) and Cooperativa Central de Pesquisa Agrícola's, acquired on February 1, 2015 (Agriculture). Portfolio & Other also reflects the following divestitures: the chlorine value chain (Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics), ANGUS Chemical Company and the global Sodium Borohydride business (both included in Industrial Intermediates & Infrastructure).

2017 versus 2016

The Company reported net sales for 2017 of $62.5 billion, up 30 percent from $48.2 billion for 2016, primarily reflecting the Merger, the addition of Dow Corning’s silicones business, increased selling prices and demand growth. Sales growth was broad-based with increases in all segments and geographic regions. Portfolio & Other changes contributed 19 percent of the sales increase and impacted all segments, except Industrial Intermediates & Infrastructure, which was flat. Local price was up 6 percent compared with the same period last year, with increases in all geographic regions, including a double-digit increase in EMEA (up 10 percent), driven by broad-based pricing actions as well as higher feedstock and raw material prices. Local price increased in Industrial Intermediates & Infrastructure (up 10 percent) and Packaging & Specialty Plastics and Performance Materials & Coatings (both up 8 percent) and declined in Agriculture and Electronics & Imaging (both down 1 percent). Local price was flat in Nutrition & Biosciences, Transportation & Advanced Polymers and Safety & Construction. Volume increased 5 percent compared with the same period last year, with increases in all segments, except Agriculture (down 2 percent), including a double-digit increase in Nutrition & Biosciences (up 10 percent). Volume increased in all geographic regions, except Latin America (down 1 percent). Currency was flat compared with the same period last year.

2016 versus 2015

The Company reported net sales for 2016 of $48.2 billion, down 1 percent from $48.8 billion for 2015. Local price decreased 6 percent compared with the same period last year, with decreases in all segments, except Agriculture (up 1 percent), and all geographic regions, due to lower feedstock and raw material prices and competitive pricing pressures. Volume increased 3 percent compared with the same period last year, as increases in Packaging & Specialty Plastics (up 9 percent), Transportation & Advanced Polymers (up 7 percent), Electronics & Imaging (up 3 percent) and Industrial Intermediates & Infrastructure (up 1 percent) more than offset decreases in Agriculture, Performance Materials & Coatings, Nutrition & Biosciences and Safety & Construction (all down 2 percent). Volume increased in all geographic regions, except Latin America, which remained flat. Portfolio & Other changes contributed 2 percent of the sales increase, primarily reflecting the addition of Dow Corning’s silicones business. See Sales Variances by Segment and Geographic Region table on the previous page for additional information on portfolio changes. Currency was flat compared with the same period last year.

36


Table of Contents

Sales Variances by Segment and Geographic Region - Pro Forma Basis
		2017
Percentage change from prior year		Local Price & Product Mix		Currency		Volume		Portfolio & Other 1		Total
Agriculture		—	%	—	%	1	%	1	%	2	%
Performance Materials & Coatings		8		—		2		27		37
Industrial Intermediates & Infrastructure		10		—		7		—		17
Packaging & Specialty Plastics		8		—		5		—		13
Electronics & Imaging		(1	)	—		11		2		12
Nutrition & Biosciences		—		—		3		1		4
Transportation & Advanced Polymers		2		—		7		5		14
Safety & Construction		(1	)	—		4		—		3
Total		4	%	—	%	5	%	3	%	12	%
U.S. & Canada		4	%	—	%	3	%	3	%	10	%
EMEA		8		1		5		3		17
Asia Pacific		2		—		8		5		15
Latin America		1		1		—		3		5
Total		4	%	—	%	5	%	3	%	12	%
1.	Pro forma net sales for Agriculture excludes sales related to the November 30, 2017, DAS Divested Ag Business for the period January 1, 2016 through August 31, 2017; sales from September 1, 2017 through November 30, 2017, are included in Portfolio & Other. Pro forma net sales also excludes sales related to the September 1, 2017, divestiture of the EAA Business for the period January 1, 2016 through August 31, 2017. Portfolio & Other includes sales for the acquisition of the H&N Business acquired on November 1, 2017, impacting Nutrition & Biosciences. Portfolio & Other also reflects sales from January 1, 2017 through May 31, 2017, related to the ownership restructure of Dow Corning on June 1, 2016 (impacts Performance Materials & Coatings, Electronics & Imaging and Transportation & Advanced Polymers); the divestitures of SKC Haas Display Films group of companies (divested June 30, 2017) and the authentication business (divested on January 6, 2017), both impacting Electronics & Imaging; and, the divestiture of the global food safety diagnostic business (divested February 28, 2017), impacting Nutrition & Biosciences.

2017 versus 2016

The Company reported pro forma net sales for 2017 of $79.5 billion, up 12 percent from $70.9 billion for 2016, primarily reflecting demand growth, increased selling prices and the addition of Dow Corning’s silicones business. Pro forma net sales increased across all segments and geographic regions. Volume increased 5 percent compared with the same period last year, with increases in all segments, including a double-digit increase in Electronics & Imaging (up 11 percent). Volume increased in all geographic regions, except Latin America, which was flat. Local price was up 4 percent compared with the same period last year, with increases in all geographic regions, driven by broad-based pricing actions as well as higher feedstock and raw material prices. Local price increases in Industrial Intermediates & Infrastructure (up 10 percent), Performance Materials & Coatings and Packaging & Specialty Plastics (both up 8 percent) and Transportation & Advanced Polymers (up 2 percent) more than offset declines in Electronics & Imaging and Safety & Construction (both down 1 percent). Local price was flat in Agriculture and Nutrition & Biosciences. Currency was flat compared with the same period last year.