This quarter, our Specialty Engineered Materials, Performance Products & Solutions (PP&S) and Distribution segments led the way, as all three achieved year-over-year increases in operating income." Underlying organic sales growth, plus contributions from the company's recently acquired businesses, offset lower year-over-year selling prices in Distribution, PP&S, and Designed Structures and Solutions (DSS), due to lower hydro-carbon based raw material costs.

The company noted customers are citing concerns over tariffs and persistent inflation as possible drivers of these demand conditions, which most heavily impacted the Performance Products and Solutions (PP&S) and Distribution segments.  If so, lower operating income from PP&S and Distribution could offset continued growth in Color, Additives & Inks and Engineered Materials in the fourth quarter.

Announced transformative portfolio improvements by divesting Performance Products and Solutions (PP&S) segment and signing definitive agreement to acquire Clariant Masterbatch business It was also the year we took two major steps forward in our specialty transformation with the divestiture of PP&S for

Patterson added, "Performance Products & Solutions (PP&S) achieved another exceptional quarter, driven by continued mix improvement resulting in a new segment operating margin record of 12.3%.  Underlying organic sales growth plus the addition of Magenta's fiber colorant business and Kraton's TPE business was more than offset by lower year-over-year selling prices in Distribution, PP&S, and Designed Structures and Solutions (DSS), due to lower hydro-carbon based raw material costs.

Our Specialty Engineered Materials, Performance Products & Solutions (PP&S) and Distribution (POD) segments all delivered record operating income, helping us to overcome a number of macro-economic challenges and weaker performance in Designed Structures & Solutions (DSS)." These associates led to a near-immediate impact in POD and PP&S where sales cycles are the shortest within the company, and both segments reported record operating income for the full year 2016. 

March 16, 2015 Operating Income Mix Shift*^ of O perating Incom e SPECIALTY DISTRIBUTION PP&S JV's *Operating Income excludes Corporate charges and special items ^2005–2009 has not been restated for subsequent changes in accounting principles or discontinued operations 100 80 60 40 20 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 PROOF OF PERFORMANCE Our values, strategy, and execution are clearly evident in our financial performance.

$ D LL S 2007 2008 2009 2010 2011 .25 .50 .75 1.00 1.25 ADJUSTED EARNINGS PER SHARE^ 278% INCREASE O F AT IN M 2007 2008 2009 2010 2011 80 100 OPERATING MIX SHIFT* JOINT VENTURES PP&S DISTRIBUTION SPECIALTY TA 2007 2008 2009 2010 2011 1.5 3.0 4.5 6.0 7.5 ADJUSTED RETURN ON SALES∆ *Operating Income excludes Corporate Charges OPERATIONAL PERFORMANCE SPECIALTY PLATFORM OPERATING INCOME $ M IL LI S 80 100 2007 2008 2009 2010 2011 192% INCREASE 91% INCREASE ^EPS excluding special items and equity income from SunBelt SAFETY — INJURY INCIDENCE RATEº 2007 2008 2009 2010 2011 .25 .50 .75 1.0 1.25 “WORLD-CLASS” PERFORMANCE JU Y ID E AT ºNumber of injuries per 100 full-time associates TA 2007 2008 2009 2010 2011 8 12 16 WORKING CAPITAL† — PERCENTAGE OF SALES “BEST-IN-CLASS” WORKING CAPITAL MANAGEMENT † Working capital is defined as accounts receivable plus inventories minus accounts payable ∆Operating income as a percentage of sales, excluding special items and equity income from SunBelt United States Securities and Exchange Commission Washington, DC 20549 FORM 10-K Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to .

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which impacted Color, Additives and Inks (Color) and Specialty Engineered Materials (SEM), and a decline in construction related sales, which primarily impacted Performance Products and Solutions (PPS) in

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