DuPont 2015 Annual Report Download - page 38

Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
37
Liquidity & Capital Resources
December 31,
(Dollars in millions) 2015 2014
Cash, cash equivalents and marketable securities $ 6,206 $ 7,034
Total debt 8,807 10,655
Pursuant to its cash discipline policy, the company seeks first to maintain a strong balance sheet and second, to return excess cash
to shareholders unless the opportunity to invest for growth is compelling. The company continually reviews its sources of liquidity
and debt portfolio and occasionally may make adjustments to one or both to ensure adequate liquidity and an optimum debt maturity
schedule.
The company's credit ratings impact its access to the debt capital markets and cost of capital. The company remains committed
to a strong financial position and strong investment-grade rating. The company's long-term and short-term credit ratings are as
follows:
Long-term Short-term Outlook
Standard & Poor's A- A-2 Credit Watch Negative
Moody’s Investors Service A3 P-2 Negative
Fitch Ratings A F1 Rating Watch Negative
In May 2015, Moody's Investor Service (Moody's) downgraded the company's long-term rating to A3 from A2, and the short-term
rating to P-2 from P-1. In October 2015, Standard and Poor's Rating Services (Standard and Poor's) downgraded the company's
long-term rating to A- from A, and the short-term rating to A-2 from A-1. In December 2015 following the announcement of the
Merger Agreement with Dow, Standard and Poor's and Fitch Ratings placed the outlook on the company's long-term and the short-
term rating on negative watch and Moody’s placed the company on negative outlook.
The company believes its ability to generate cash from operations and access to capital markets will be adequate to meet anticipated
cash requirements to fund working capital, capital spending, dividend payments, share repurchases, debt maturities and other cash
needs and that its current strong financial position, liquidity and credit ratings continue to provide access as needed to the capital
markets. While the company expects that capacity for its commercial paper could be reduced as a result of its current short-term
credit ratings, the company's liquidity needs can continue to be met through a variety of sources, including cash provided by
operating activities, cash and cash equivalents, marketable securities, commercial paper, syndicated credit lines, bilateral credit
lines, long-term debt markets, bank financing, committed receivable repurchase facilities and asset sales.
The company has access to approximately $4.9 billion in unused credit lines, which includes a $4 billion revolving credit facility
to support its commercial paper program, with several major financial institutions. These unused credit lines provide additional
support to meet short-term liquidity needs and general corporate purposes including letters of credit.
In February 2016, in line with seasonal agricultural working capital requirements, the company entered into a committed receivable
repurchase agreement of up to $1 billion (the repurchase facility) that expires on November 30, 2016. Under the facility, the
company may sell a portfolio of available and eligible outstanding customer notes receivables within the Agriculture segment to
participating institutions and simultaneously agree to repurchase at a future date. See further discussion of this facility in Item
9B, Other Information and Note 24 to the Consolidated Financial Statements.