Discovery Koch's Philosophy of Philanthropy

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JANUARY 2016 Discovery THE QUARTERLY NEWSLETTER OF KOCH COMPANIES

Koch’s Philosophy of Philanthropy

Koch companies, foundations, employees Koch sites have the leeway to make “We don’t want to be a micro-manager of and family members all have well- donations that address other types of needs nonprofits, because that stifles innovation. deserved reputations for generosity. in their communities. Molex employees We’re respectfully investing in their visions in Munich, for example, have supported a because we believe they align with ours,” The Salvation Army, American Red Olson said. “We’re very open to new ideas, Cross, and United Negro College Fund local social project that provides resources new partners and new ways of advancing our are among the many organizations that to disadvantaged children. vision of philanthropy.” have made points of applauding Koch’s Georgia-Pacific’s Bucket Brigade program philanthropy. Last summer, a New York has donated more than $1.75 million Unlike some donors, Koch tends to take a publication called David Koch’s donations to dozens of local fire departments for long-term view with charitable investments. “outrageously generous.” equipment, programs and training. It is not the kind of company that writes a check and then walks away or that gives For members of the Koch family, Similarly, FHR’s Pine Bend Refinery money to try to boost its reputation. charitable giving usually reflects personal donated a specially equipped trailer to the priorities. David Koch, a late-stage cancer Dakota County Fire Chiefs Association. “We don’t give to look good; we give to do survivor, has pledged or contributed In Germany, INVISTA’s nylon 6,6 yarn good,” Olson said. “We also hold people more than $1.2 billion — much of it to processing site in Michelau has also accountable for results, just as we do with our cancer research, as well as educational contributed to local emergency responders. own businesses. institutions and the arts. Elsewhere, children are the focus of “Charles Koch continually reminds us that But for Koch Industries and Charles giving. In China, the GP Cellulose Green all people have unique talents, abilities and ™ Koch, philanthropic giving is driven by a Hand Project (pictured) is giving advantages. A free society enables them to very specific vision. “My philanthropy,” thousands of schoolchildren access to discover these and succeed. explains Charles Koch, “is focused on better sanitation and cleaner water. “That’s why our overarching goal is to create advancing ideas that help people improve The Flint Hills International Children’s opportunities for earned success among the their lives. Festival in St. Paul, Minnesota, has been least advantaged.” sponsored by FHR for 16 years. FHR has “We want to help people develop the also been a major contributor to the Texas To learn more about Koch’s philanthropy in values and skills needed for success. Aquarium in Corpus Christi. action, see the story on Page 10. We also want to remove regulatory and

other obstacles that prevent them from WHAT IT’S NOT capturing opportunities.” All Koch donations, whether at the local THIS ISSUE... LOCAL TOUCH or national level, are made using a similar 5 2015: Year in Review thought process. At the local level, hundreds of Koch 9 Choosing the Wright carpet company sites around the world also Meredith Olson, vice president of public make charitable contributions. Many affairs for Koch Companies Public Sector, 10 Koch philanthropy in action of those contributions mirror Koch says the core of Koch’s philanthropy is 12 Dave Robertson: 10 years and counting Industries’ corporate vision. not about buying control. Letters and other submissions become the property of Koch Industries, Inc., and may be reproduced in whole or in Postal Pipeline part, including the author’s name, for any purpose and in any manner. Letters may be edited for length or clarity.

Mr. Koch, I am an entrepreneur from Germany and I have read the book written by As a lifelong employee of Koch Pipeline, Charles Koch with interest. It has I want to express my gratitude for the really impressed me and filled me opportunities Koch has made available to with enthusiasm. me and my family. To have a different point of view leads My career with Koch began in 1966 as a to success. Mr. Koch, you have shown part-time college student at the pipeline this in your life. yard in Duncan, Oklahoma. Two dollars per hour and 48 hours per week was big money In your country, performance and to an 18-year-old. independence lead to prosperity and admiration. But in my country, Sterling Varner was gracious enough to independence and freedom are suspect Anthony Mason’s interview of Charles Koch aired introduce us at the Duncan yard where I for most people, and innovations are on CBS the week of Oct. 11. was working as an electrician. I also was often seen as negative. These are not fortunate enough to visit with you in 1969 After watching the CBS “Sunday Morning” good conditions for me and my very in Haskell, Texas, after the Service Pipeline interview with Mr. Koch, I am inspired to write small company. acquisition. The fact that you remembered and say how much I enjoyed it. me was amazing. By reading your book, I was motivated I’ve found it difficult to learn more about what not to give up and to always believe in I remained with Koch until 2005, when Mr. Koch stands for because most of what is myself and my ideas. Because there are ONEOK NGL bought Mid-Continent written is not written by Mr. Koch himself. It’s only a few role models in Germany, I’m Gathering. I retired from ONEOK in 2012. very difficult to sort through reporters’ lenses glad to have discovered and read your to really understand Mr. Koch’s message. Koch Industries must have had a strong new book. affect on me because I am still working Elisabeth Matheis Everything that was said in today’s interview as president of Manhattan Inspection in Neunkirchen, Germany resonated with me and I would like to get Shawnee, Oklahoma. I have spent the last more involved. Is there anything else you can three years working on the Sterling lines recommend that would explain Mr. Koch’s from Medford to Mont Belvieu. message without the bias that seems to go My family and I thank you for making a along with it in the reports I’ve seen? better life possible through the vision of Nikki Steingold Koch Industries. Richmond, Virginia

Ronnie D. Sims, president In addition to two books, Charles Koch has written Manhattan Inspection numerous editorials for Discovery newsletter and Shawnee, Oklahoma op-eds for major publications. All of these can be found at KOCHind.com. Discovery January 2016 It was a pleasure to watch your Volume 22 | Number 1

interview on “The Kelly File.” I have EDITORIAL BOARD heard the name “Koch” mentioned Susan Armitage so many times on the various news Philip Ellender channels and by our politicians, yet I Jeff Gentry Greg Guest had no idea who you were, what you Charles Koch looked like and what you thought. Steve Lombardo It was nice to get a small opportunity Walt Malone Dave Robertson to see and hear from you directly Ken Spain which, in turn, informs me and allows me to develop my own opinion QUESTIONS? of who you are. COMMENTS? Email us at: My conclusion: you should do more [email protected] interviews! Lynn R. Ferguson Azusa, California

www.KOCHind.com

INVISTA believes biotechnology has the potential to significantly improve the cost and availability of several chemicals and raw materials that are used to produce its current products. For years, it has researched this possibility.

Last December, Gary Smith, INVISTA’s vice president of intermediates sustainability based in Wilton, U.K., announced a breakthrough for bio-derived butadiene production through INVISTA’s collaboration with LanzaTech (founded in New Zealand).

“Through our collaboration with LanzaTech, we have developed a metabolic toolkit that has been successfully applied to generate new pathways for bio- derived butadiene production,” Smith said. This work is in an early stage of development. INVISTA hopes to commercialize it within the next several years. Butadiene, a key intermediate chemical used in the production of synthetic rubber and various plastics, is used by INVISTA in its proprietary, butadiene- based adiponitrile (ADN) production technologies.

In early January, INVISTA announced it was granted a patent for bio-derived raw materials technology developed through a collaboration with Arzeda (headquartered in Seattle).

Last October, Steve Daley, president of Koch’s MBM® capability, gave a special presentation to about 180 international students at the London campus of ESCP Europe Business School.

ESCP, established in 1819, calls itself “the world’s first business school” and also has campuses in Berlin, Madrid, Paris, Turin and Warsaw.

Daley’s presentation included an overview of Koch Industries and an explanation of the differences between good and bad profit as presented in Charles Koch’s new book. A Q&A session with the students followed Daley’s lecture.

“This was a significant opportunity to share our ideas with tomorrow’s business leaders,” Daley said. “Since we believe the concepts of economic freedom and MBM are universal, it was great to have this discussion with a European audience.”

Koch companies employ about 6,000 people at dozens of sites across Europe, ranging from manufacturing plants and research facilities to financial trading operations and business support capabilities.

BUSINESS HIGHLIGHT

Last December marked Georgia-Pacific’s 10th anniversary as a A DECADE OF CHANGE Koch company. On Dec. 23, 2005, Georgia-Pacific became a The acquisition of GP, completed in just 40 days, was valued at member of the Koch Industries family of $21 billion and remains the largest in the history of Koch Industries. companies. In announcing the acquisition, Charles Koch praised Georgia-Pacific as “. . . In Charles Koch’s new book, “Good Profit,” two of the in-depth an outstanding company with highly talented case studies provided in Chapter 11 involve Georgia-Pacific. QUESTIONS? COMMENTS? employees, a heritage of leadership in the At the conclusion of the section on GP Consumer Products, Koch Email us at: marketplace and strong branded products.” wrote: that business “is in a much better place today as a result [email protected] He predicted that “by joining our group of of applying MBM” and has “a much better understanding of privately held companies, Georgia-Pacific will what needs to be done to create long-term value for customers, be able to maintain a long-term focus on the company, and society.” growth and a commitment to delivering value To find out more about Georgia-Pacific’s companies, products and for all of its constituents.” careers, visit www.gp.com.

3 Noteworthy

On October 13, Charles Koch’s new book, “Good Profit,” was published. A week later, it Find more stories at debuted at No. 7 on The New York Times Best Sellers list for its category. It reached No. 3 overall for book sales on Amazon.

A U.K. version was also published Molding a career in October and work on a Chinese translation is underway. When Julia Huang joined Molex as a senior component of Molex culture that is now Several notable reviews of the book project engineer 11 years ago, she knew reinforced by MBM®. have appeared recently. Patrick nothing about connectors. But that didn’t “From the very beginning,” Huang said, O’Connor, writing for The Wall stop her from learning or from steadily rising “I was encouraged to break with the status Street Journal, called it “a blend through the ranks and being promoted to quo as long as it created value. At Molex, of biography, social theory and project manager in July 2005. there were no confinements like I saw at so management advice.” Then, in February 2015, Huang became the first many other companies. In Human Events magazine, female production manager at the company’s “It’s very fulfilling to be able to work Mark Skousen described it as “a Shanghai manufacturing operation. Today, she with your team to pursue ideas and drive guide for business owners and leads the 220-member molding department innovation and change.” entrepreneurs” with some good — the group responsible for one of the most “advice for investors.” important processes for manufacturing new Change has been a constant throughout laptop and mobile phone solutions. Molex’s 77-year history. The demand for F. H. Buckley, writing in The innovation in the electronics marketplace American Spectator, recommends “I have been able to learn and grow with Molex has enhanced the importance of overall the book for those who want through hard work and persistence,” Huang diversity and created opportunities for “to know how a company that said. “That’s what has made me successful and employees like Huang who are willing to forswears crony capitalism can enabled me to earn this position.” push long-standing boundaries. thrive, as Koch Industries did.” Born in a country that venerates many In addition to her supervisor role, Huang is Writing in the National Review, traditions, Huang’s remarkable career path has an active member of the Molex Women’s William Bennett called it “as been quite untraditional. Business Council, a company-sponsored much a course in ethics as business She joined Molex after graduating with a business resource group committed to management.” degree in computer science from Shanghai helping women develop and advance their And in the U.K., Ed Crooks of the University. But her earliest roles at Molex careers within the company. Financial Times described it as “a had little to do with that degree. Instead, she Having been successful in her own framework for encouraging effort helped the company develop new products and career, Huang believes she is better and creativity.” expand its socket business. She also supported prepared to help others. “I hope my tooling development. example can encourage more female Today, Huang works alongside production colleagues,” she said. engineers and tool room supervisors to, as she “I’m proud to work for Molex. This puts it, “ensure the right people do the right Courage is what it takes to stand company provides a platform where, if you things to create value.” work hard, you can create value and make a up and speak. It’s also what it In addition to her daily tasks, Huang is inspired real difference.” takes to sit down and listen. by the freedom to explore new ideas — a key – Winston Churchill

3 4 4 MARCH

12 Koch Business Solutions opens a new office and technical “hub” in Reno, FEBRUARY Nevada, supported by a local ad campaign. 10 KS&T announces it has expanded its portfolio to 13 Georgia-Pacific acquires JANUARY include European power, the Rocky Creek lumber global renewables and facility in Mexia, Alabama. 6 Molex completes its emissions trading. acquisition of SDP Telecom, a global manufacturer of wireless 30 Koch Heat Transfer communication tools. 11 Koch Nitrogen launches Company acquires the Alco™, a website about its biggest ™ ™ Alco-Twin , and Bos-Hatten project ever: a $1.3 billion brands of heat exchangers 7 An important op-ed by expansion in Enid, Oklahoma. from Peerless Mfg. Co. Charles Koch and Mark Holden promoting criminal justice reform is published in Politico magazine. 19 Koch joins the Coalition for Public Safety, a nonpartisan organization promoting 30 FHR acquires an ethanol criminal justice reform in the plant in Georgia, its seventh United States. plant overall and the first outside the Midwest U.S.

5 2015 YEAR IN REVIEW

APRIL JUNE 1 Employees begin moving 10 Koch Agronomic Services into Building H, the first new launches a new brand: Koch office facility to open on the Turf & Ornamental, with MAY Wichita campus in 23 years. solutions for golf, lawn care and ornamental markets. 3 David H. Koch celebrates his 75th birthday with family 4 KII and FHR donate and friends in Florida. $100,000 to the American 20 INVISTA and GP receive Red Cross to assist families Pinnacle Awards for chemical hard-hit by a series of violent transportation safety from 5 Molex acquires assets from storms in Texas. Union Pacific Railroad. Soligie for making printed and flexible electronic

components, such as those 24 Koch Agronomic Services 30 A Koch company acquires used in medical devices. announces plans for an complete ownership of the AGROTAIN® DRI-MAXX 52-story Georgia-Pacific Center nitrogen formulation plant in in Atlanta, GP’s headquarters. 19 Molex acquires ProTek Medical Ltd., manufacturer the Netherlands.

of customized medical devices for the global

medical industry.

6 YEAR IN REVIEW

JULY AUGUST SEPTEMBER 6 Koch Pipeline donates 10 Tri-State Fertilizer announces $30,000 worth of 9 Koch companies surpass an agreement to build a liquid emergency response 1,000 awards for safety, fertilizer terminal in North equipment to the Waupun, environmental excellence, Dakota for Koch Fertilizer. Wisconsin, fire department. community stewardship, innovation and customer service since 2009. 13 Koch announces that its 8 Hundreds of FHR quarterly newsletter, Discovery, employees and their family is now available as a public app members celebrate Pine 25 An affiliate of Koch for electronic devices. Bend Refinery’s 60th Equity Development and its anniversary. partners agree to acquire 21 Announcement that all of Truck-Lite, a provider of safety lighting and filtration Koch Industries’ proceeds 18 A Koch Fertilizer systems. from the sale of “Good Profit” affiliate and a subsidiary will be donated to the Youth of Germany’s K+S Entrepreneurs Foundation. Aktiengesellschaft sign an 29 Forbes publishes an exclusive potash supply extensive online interview agreement. with Charles Koch regarding his upcoming book and the 2016 presidential election.

8 OCTOBER

13 Charles Koch’s second book, “Good Profit,” is published. It NOVEMBER debuts at No. 7 on The New 3 Paris-based Deinove York Times Best Sellers list. announces plans to develop animal nutrition ingredients DECEMBER 21 Georgia-Pacific announces using raw materials from FHR’s plans for $110 million in biofuels plants. 1 INVISTA and LanzaTech upgrades for its Alabama announce a breakthrough River Cellulose mill in in the development of bio- 12 KII receives the Monroe County. derived butadiene production. Conservation Education Award from the Wildlife Habitat 30 Thousands of Koch Council. WHC has certified 13 2 Harvard University company employees in Koch sites in nine states. announces a $2.93 million Wichita join the Koch family donation from the Charles in celebrating Charles Koch’s Koch Foundation to fund 17 Ceres Global Ag Group 80th birthday. fellowships at the John announces an agreement with F. Kennedy School of Koch Fertilizer for storing and Government. handling dry fertilizer products in Saskatchewan, Canada. 16 Charles Koch signs more than 750 copies of his new

book, “Good Profit,” for employees.

8 8 Looking Back

INVISTA: Doing it Wright

At a quiet intersection in Wichita’s College Hill neighborhood “We were delighted to have the opportunity stands a house Frank Lloyd Wright called “one of my best.” to contribute to this marvelous house,” said Marc Ahrens, vice president of INVISTA’s USA Today agrees, calling it one of the “10 great Frank Lloyd Wright commercial flooring business. “It’s a home tours” in the nation. treasure we want to share with everyone.” Frank Lloyd Wright’s Allen House is named after its first owners, Howard Ellington, executive director of the Henry and Elsie Allen. Henry was a Wichita newspaper publisher Frank Lloyd Wright Allen House, noted that and two-term Kansas governor. replacing carpet in such an historic home is Commissioned in 1915 and completed in 1918, this was the last not a simple project. house Wright designed in his so-called Prairie School style, “For an architectural restoration like which emphasized horizontal lines, earth tones and a blending of this,” said Ellington, “the color has to be interiors with exteriors. absolutely correct. Wright specified a light It features more than 30 pieces of Wright-designed furniture (23 of ochre and there can be no pattern in the them on loan from Wichita State University), all of its original art weave of the carpet. glass and several new-for-their-time innovations, such as wall- “We’re also using an integral carpet pad In 1933, newlyweds hung water closets and an attached garage. so we can avoid the carpet staining caused Fred and Mary Koch dined in this house For more than 25 years, the house and its programs have been by the adhesive that was used on the with its owners, funded by Koch-supported foundations. previous replacement.” former Kansas governor Henry Allen Guided tours of the house are quite popular; however, due to its Installation, which involved moving and his wife, Elsie. size and configuration, visiting groups must be limited to no more much of the historic furniture, began than 25 persons at a time. in mid-January. Tours are expected to Even so, there has been considerable wear and tear on the carpet, resume in February and can be booked at which was last replaced about 25 years ago. fllwallenhouse.org.

To help solve that problem, INVISTA, in partnership with Bentley A popular film about Wright (directed by Mills of Los Angeles, has donated brand new custom carpet made Ken Burns and Lynn Novick) was made from INVISTA’s ANTRON® nylon carpet fiber. Star Lumber & possible by funding from David H. Koch. It Supply of Wichita donated the installation. is available from PBS and many retailers.

9 KOCH Philanthropy In Action

In keeping with Koch Industries’ vision for philanthropy (see Page 1), most of the company’s donations are focused on helping the least-advantaged and most The Career Academy provides high vulnerable in society. school students the opportunity to sample a variety of career paths This is usually done in one of two ways: while gaining hands-on experience. by funding opportunities for self- improvement, or by helping remove obstacles to earned success.

CREATING OPPORTUNITIES college students temporary roles at local employers as a way of Education is a powerful tool for creating the evaluating different career pathways. opportunities that can transform lives. “Exposing students to a wide range of career opportunities is what Right: Mark Holden, Charles Koch began contributing to TCA is all about,” said Wendy Van, president of the Foundation Koch Industries’ university programs more than 50 years general counsel, for Lincoln Public Schools. “Our business partners are critical to ago. Today, various Koch entities support has become an making education come alive by opening their doors to students.” outspoken advocate programs at hundreds of colleges and “The Career Academy helps prepare students by giving them for criminal justice universities, and dozens of public school reform. Holden has exposure to high-skill, high-demand careers,” explained Laura systems across the U.S. met with White Hands, Koch’s community affairs director. “By working in one of House officials to Sometimes these donations are quite large our biofuels plants or manufacturing facilities, these students get discuss this issue, and attract significant attention — such as essential hands-on experience and a better understanding of their which is receiving Koch’s $25 million gift to the United Negro career options.” strong bi-partisan College Fund. support. The Career Academy concept is popular with many communities More often, the gifts are unnoticed — such because it not only helps develop students into better employees, it as the fact that all of Koch Industries’ creates an incentive for skilled and technical workers to remain in proceeds from the best-selling book “Good the area, where they contribute to economic growth. Profit” are being donated to the Youth Entrepreneurs Foundation. Wendy Birdsall, president of the Lincoln Chamber of Commerce, is enthusiastic about this Koch-supported program. YE, which was founded in 1991 by Liz and Charles Koch, has helped thousands of “The Lincoln Chamber of Commerce views The Career Academy disadvantaged high school students learn as a vital component to bridging the gap in our workforce needs,” the values and skills necessary for success. Birdsall said. “We see the connection of business and education It also provides scholarships and venture coming together today, building the Lincoln of our future.” capital grants, and arranges for mentoring REMOVING OBSTACLES by local business leaders. Koch’s fight to eliminate needless licensure barriers is a A different sort of educational program, good example of how the company tries to remove barriers to launched last summer, is being supported opportunity. At first glance, neither this nor criminal justice by three Koch companies — Flint Hills reform might seem like philanthropic endeavors, but both Resources, Koch Ag & Energy Solutions initiatives are helping people improve their lives. and Molex — in southeast Nebraska. Those companies are contributing $200,000 over In 2015, the White House released a report that estimated “more four years to The Career Academy in Lincoln. than one-quarter of U.S. workers now require a license to do their jobs” and “the share of workers licensed at the state level has risen TCA is a partnership that includes Lincoln’s five-fold since the 1950s.” public schools, Southeast Community College and dozens of regional businesses Many licensure requirements often seem arbitrary and counter- and industries. It offers high school and productive. For example, on average, it takes more than a year to

10 “My philanthropy is focused on advancing ideas that help people improve their lives.” – Charles Koch

become a licensed cosmetologist but only 33 days to become an “Reducing burdensome requirements on emergency medical technician. job seekers is also essential for reforming the criminal justice system,” said Holden. Would-be entrepreneurs, ranging Top, L-R: Teens learn “If we prevent non-violent ex-cons who financial responsibility from dog walkers to fitness trainers, have paid their debt to society from getting and interview skills have become frustrated with good jobs, how can we expect them to at YMCA Job Prep, a licensing requirements that often free program aimed improve their lives and eventually become make no sense. The cost to the to prepare students productive citizens?” economy of all this licensure is much and graduates for summer employment. larger than most people realize. WHATEVER IT TAKES Youth Entrepreneurs, In his recent op-ed for The Wall Street To help create opportunities for others, founded by Liz and Journal, Koch Industries’ general Koch companies have donated to a wide Charles Koch, helps students develop the counsel, Mark Holden, wrote: “The variety of organizations and initiatives. passion and skills to harm of licensing rules shouldn’t be Koch has also shown a willingness succeed in business underestimated. By one assessment, to partner with traditional as well as and in life through such regulation has prevented the team activities and unconventional allies who share the creation of nearly 3 million jobs” in experiential learning. company’s vision of removing obstacles the U.S. Wichita Center for to opportunity. the Arts announced To help remove these obstacles to “It’s true that we always evaluate our plans to build an opportunity, Koch provided seed philanthropic opportunities within the innovative facility to capital for the Institute for Justice, expand opportunities framework of a specific vision,” said a nonprofit based in Arlington, for art education in Meredith Olson, vice president of public the Wichita area. Virginia, that has taken the lead in affairs for Koch Companies Public Sector. This will be made tackling the problem of too much occupational licensing in the U.S. “But we are very open to new ideas and possible by gifts from the Fred and Mary “In many cases,” the website for the Institute for Justice states, eager to innovate. Koch Foundation licensing “boards operate without any direct oversight from state “We want to give a hand up to the people and the Charles Koch lawmakers or executive branch officials. Often, they are filled who need it most, and we see philanthropy Foundation. with representatives of the very industry the board is supposed to as an essential tool for helping to make regulate, and the rules they approve are intended not to protect the that happen. public’s health and safety, but rather to erect barriers that limit “We also want to optimize our giving so competition and keep prices artificially high.” we can really influence social change. As an example of how egregious this problem has become, the Whether it’s Big Brothers Big Sisters, Institute for Justice website includes the story of an Iowa woman YMCA Job Prep, Rise Up For Youth or who has braided hair professionally for 15 years but has been told Youth Entrepreneurs, we want to put our by the State Board of Cosmetology that she cannot do so in Iowa money where it will really make a lasting without a cosmetology license. difference,” Olson said.

11 Perspective

Dave Robertson President and COO, Koch Industries, Inc.

Last month, I celebrated my 10th year as KII’s president and chief Just as we broadened our horizons operating officer. So this seems like a good time to reflect on with the acquisitions of INVISTA, what’s changed, what hasn’t and what’s next for Koch. Georgia-Pacific and Molex, I have no doubt that 10 years from now Our changes during the past 10 years have been significant. Just we’ll be in businesses that most of to name a few, we’ve updated our Vision and Guiding Principles, us can’t even imagine today. spent more than $46 billion on acquisitions, investments and capital expenditures, and transformed our Wichita campus. Given the significant investments we’re making in new software, Our strong financial performance helped us acquire Molex (which and the unrelenting pace of has more employees than any other Koch company) and enabled technological innovation in general, FHR, GP, Koch Chemical Technology Group and Molex to make the tools we will have at our significant acquisitions. We have also funded the building of disposal are likely to be radically world-class production facilities (still under construction) for different in the years to come. INVISTA and KAES. We’re already hard at work On a more personal note, Charles Koch wrote two best-selling developing bio-derived processes books, celebrated the marriages of both of his children and is now a for creating chemicals and fuels, proud grandfather. and finding new ways to engineer Not so happily, we have become even more of a target — especially smart processes into our operations for politicians and media attackers who choose to misrepresent and products. our company, our principles and our owners. Consequently, we When I became president 10 years ago, there were no iPhones. are managing our corporate reputation and telling our story much Twenty years ago there were no DVDs. The future is likely to bring more actively. about more life-improving innovations at an even faster pace. WHAT HASN’T CHANGED SO WHAT? As much as we talk about embracing change, it should be clear to I’m confident that as an employee of a Koch company, you can look everyone that our shareholders have remained steadfast in doing forward to more, better and different opportunities for applying what’s best for the company in a way that benefits society. They your comparative advantages, leading to an even more fulfilling continue to fund our growth by reinvesting 90 percent of profits work life. back into the company. This company, shaped by our MBM® Guiding Principles, has made a Our desire to remain private, to hire based on values before skills, real difference in the world and will continue to do so. to be principled entrepreneurs and to emphasize humility and integrity continue to set us apart. Every day, we have more than 100,000 employees around the world working to produce products and provide services that help people I am especially proud of our company’s commitment to improve their lives. That’s something I’m proud of, and I hope you environmental, health and safety excellence. It is a big part of what are as well. defines us as a company. When I look back — not just 10 years ago when I started this role, We also continue to believe that Koch companies are capability- but to 1984, when I began my career here with Koch’s asphalt based rather than limited by industry areas. That’s why we business — it’s amazing to reflect on what has happened. continue to seek new opportunities where our capabilities can add value, rather than just doing more of the same. What’s even more amazing is to think about what we will do tomorrow, next year and in the next 10 years. And our fundamental goal to succeed by creating value for our customers and society as a whole is unchanged — which is why our Given our unique combination of shareholders, private status, opposition to corporate welfare remains so strong. MBM culture, Guiding Principles and extremely talented employees, I have great confidence in the future of Koch Industries. WHAT’S NEXT? As Charles wrote in the conclusion of his new book, “Good Profit,” As Charles often reminds us, “the future is unknown and what we are doing at Koch contributes to a better life for millions unknowable.” Even so, I’m willing to hazard a few thoughts about of others around the world. what’s ahead of us. By pursuing our capabilities and passions, we “make a difference If we live up to our Vision of doubling earnings, on average, every by helping others improve their lives.” six years, we will be a much bigger and even more diverse company in the year 2022.