Dow Chemical 2012 Annual Report Download - page 138

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112
The following table summarizes the carrying value of interests held, which represents the Company's maximum exposure
to loss related to the receivables sold, and the percentage of anticipated credit losses related to the trade accounts receivable
sold. Also provided is the sensitivity of the fair value of the interests held to hypothetical adverse changes in the anticipated
credit losses; amounts shown below are the corresponding hypothetical decreases in the carrying value of interests.
Interests Held at December 31
In millions 2012 2011
Carrying value of interests held $ 1,057 $ 1,141
Percentage of anticipated credit losses 0.73% 1.22%
Impact to carrying value - 10% adverse change $ 1 $ 2
Impact to carrying value - 20% adverse change $ 2 $ 4
Credit losses, net of any recoveries, were $1 million for the year ended December 31, 2012 ($8 million for the year ended
December 31, 2011, and $2 million for the year ended December 31, 2010).
Following is an analysis of certain cash flows between the Company and the conduits:
Cash Proceeds
In millions 2012 2011 2010
Sale of receivables $ 57 $ 16 $ 818
Collections reinvested in revolving receivables $ 25,828 $ 28,609 $ 22,866
Interests in conduits (1) $ 2,650 $ 1,737 $ 1,038
(1) Presented in "Operating Activities" in the consolidated statements of cash flows.
Following is additional information related to the sale of receivables under these facilities:
Trade Accounts Receivable Sold at December 31
In millions 2012 2011
Delinquencies on sold receivables still outstanding $ 164 $ 155
Trade accounts receivable outstanding and derecognized $ 2,294 $ 2,385
In September 2011, the Company repurchased $71 million of previously sold receivables related to a divestiture.
Sale of Trade Accounts Receivable in Asia Pacific
The Company sells participating interests in trade accounts receivable of select Asia Pacific entities. The Company maintains
servicing responsibilities and the related costs are insignificant. The third-party holders of the participating interests do not have
recourse to the Company’s assets in the event of nonpayment by the debtors.
During the years ended December 31, 2012, 2011 and 2010, the Company recognized insignificant losses on the sale of the
participating interests in the receivables, which is included in “Interest expense and amortization of debt discount” in the
consolidated statements of income. The Company receives cash upon the sale of the participating interests in the receivables.
Following is an analysis of certain cash flows between the Company and the third-party holders of the participating
interests:
Cash Proceeds
In millions 2012 2011 2010
Sale of participating interests $ 64 $ 143 $ 218
Collections reinvested in revolving receivables $ 58 $ 120 $ 195