Dow Chemical 2011 Annual Report Download - page 149

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Total Debt at December 31
In millions
Notes payable
Long-term debt due within one year
Long-term debt
Gross debt
Cash and cash equivalents
Marketable securities and interest-bearing deposits
Net debt
Gross debt as a percent of total capitalization
Net debt as a percent of total capitalization
2011
$ 541
2,749
18,310
$ 21,600
$ 5,444
2
$ 16,154
48.0%
40.8%
2010
$ 1,467
1,755
20,605
$ 23,827
$ 7,039
—
$ 16,788
51.3%
42.6%
Financing Activities
As part of its ongoing financing activities, Dow has the ability to issue promissory notes under its U.S. and Euromarket
commercial paper programs. At December 31, 2011, the Company had no commercial paper outstanding. Through January
2012, the Company maintained access to the commercial paper market at competitive rates.
In the event Dow has short-term liquidity needs and is unable to issue commercial paper under these programs for any
reason, Dow has the ability to access liquidity through its committed and available $5 billion Five Year Competitive Advance
and Revolving Credit Facility Agreement dated October 18, 2011 (the “Revolving Credit Facility”) with various U.S. and
foreign banks. The Revolving Credit Facility has a maturity date in October 2016 and provides for interest at a LIBOR-plus
rate or Base Rate as defined in the Agreement. The Revolving Credit Facility replaces the previous $3 billion facility dated
June 4, 2010. On March 9, 2009, the Company borrowed $3 billion under a previous facility, and the Company used the funds
to finance its day-to-day operations, to repay indebtedness maturing in the ordinary course of business and for other general
corporate purposes. At December 31, 2009, all outstanding balances had been repaid. At December 31, 2011, the full $5 billion
Revolving Credit Facility was available to the Company.
As a well-known seasoned issuer, the Company filed an automatic shelf registration for an unspecified amount of mixed
securities with the SEC on February 19, 2010. Under this shelf registration, the Company may offer common stock, preferred
stock, depositary shares, debt securities, warrants, stock purchase contracts and stock purchase units with pricing and
availability dependent on market conditions; and, on February 19, 2010, registered an unlimited amount of securities for
issuance under the Company’s U.S. retail medium-term note program ("InterNotes"). At December 31, 2011, the Company had
Euro 5 billion (approximately $6.5 billion) available for issuance under the Company’s Euro Medium Term Note Program, as
well as Japanese yen 50 billion (approximately $645 million) of securities available for issuance under a shelf registration
renewed with the Tokyo Stock Exchange effective September 8, 2010, and which will expire on September 7, 2012.
On March 22, 2011, the Company concluded cash tender offers for $1.5 billion aggregate principal amount of certain notes
issued by the Company. As a result of the tender offers, the Company redeemed $1.5 billion of the notes and recognized a
$472 million pretax loss on early extinguishment of debt, included in “Sundry income (expense) – net” in the consolidated
statements of income and reflected in Corporate.
In 2011, the Company redeemed $800 million of notes that matured on February 1, 2011; Euro 500 million of notes that
matured on May 27, 2011 ($707 million equivalent); $250 million of floating rate notes that matured on August 8, 2011; and
$1,538 million of InterNotes, and recognized a $10 million pretax loss on early extinguishment of debt, included in "Sundry
income (expense) - net" in the consolidated statements of income and reflected in Corporate.