Dow Chemical 2014 Annual Report Download - page 75

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costs, lower foreign exchange losses and improved results from Ventures. EBITDA in 2013 was favorably impacted by
$1,788 million of certain items, as previously discussed.
EBITDA for 2012 was negatively impacted by $113 million of severance costs related to the workforce reduction component of
the Company's 1Q12 Restructuring plan and $701 million in restructuring charges as part of the 4Q12 Restructuring plan,
including impairments of long-lived and other assets of $313 million, severance costs of $375 million and costs associated with
exit or disposal activities of $13 million. EBITDA was also impacted by $22 million of implementation costs related to the
Company's 2012 Restructuring programs, a $123 million loss related to the early extinguishment of debt and a $73 million loss
included in equity earnings related to project development and other costs associated with Sadara. See Notes 3, 8, 11 and 16 to
the Consolidated Financial Statements for additional information on these charges.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $5,654 million at December 31, 2014 and $5,940 million at December 31,
2013, of which $3,633 million at December 31, 2014 and $2,030 million at December 31, 2013 was held by subsidiaries in
foreign countries, including United States territories. For each of its foreign subsidiaries, the Company makes an assertion
regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the
United States. The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries'
operational activities and future foreign investments. A deferred tax liability has been accrued for the funds that are available to
be repatriated to the United States. At December 31, 2014, management believed that sufficient liquidity was available in the
United States. However, in the unusual event that additional foreign funds are needed in the United States, the Company has the
ability to repatriate additional funds. The repatriation could result in an adjustment to the tax liability after considering
available foreign tax credits and other tax attributes. It is not practicable to calculate the unrecognized deferred tax liability on
undistributed foreign earnings.
The Company’s cash flows from operating, investing and financing activities, as reflected in the consolidated statements of
cash flows, are summarized in the following table:
Cash Flow Summary
In millions 2014 2013 2012
Cash provided by (used in):
Operating activities $ 6,502 $ 7,823 $ 4,075
Investing activities (3,105) (1,469) (2,687)
Financing activities (3,583) (4,731) (2,530)
Effect of exchange rate changes on cash (100) (1) 16
Summary
Increase (decrease) in cash and cash equivalents $ (286) $ 1,622 $ (1,126)
Cash and cash equivalents at beginning of year 5,940 4,318 5,444
Cash and cash equivalents at end of year $ 5,654 $ 5,940 $ 4,318
Cash Flows from Operating Activities
Cash provided by operating activities decreased in 2014 compared with 2013, which reflected the absence of the K-Dow
arbitration award. Cash provided by operating activities increased significantly in 2013 compared with 2012, primarily due to
increased earnings which were positively impacted by the K-Dow arbitration award and a reduction in working capital.
Net Working Capital at December 31
In millions 2014 2013
Current assets $ 24,267 $ 24,977
Current liabilities 11,593 11,971
Net working capital $ 12,674 $ 13,006
Current ratio 2.09:1 2.09:1
Days-sales-outstanding-in-receivables 46 46
Days-sales-in-inventory 69 70
Net working capital decreased from December 31, 2013 to December 31, 2014 principally due to a decrease in cash and cash
equivalents, accounts and notes receivable, and inventories. At December 31, 2014, trade receivables were $4.7 billion, down
from $4.9 billion at December 31, 2013. Days-sales-outstanding-in-receivables (excluding the impact of sales of receivables)