Dow Chemical 2014 Annual Report Download - page 76

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was 46 days at December 31, 2014, flat compared with December 31, 2013. At December 31, 2014, total inventories were
$8.1 billion, down from $8.3 billion at December 31, 2013, principally due to a decline in feedstock costs which more than
offset the impact of higher operating rates. Days-sales-in-inventory at December 31, 2014 was 69 days compared with 70 days
at December 31, 2013.
Cash Flows from Investing Activities
Cash used in investing activities in 2014 was primarily for capital expenditures which was partially offset by proceeds received
on the sale-leaseback of assets, including a significant portion of the Company's North American railcar fleet. Cash used in
investing activities in 2013 was primarily for capital expenditures which was partially offset by proceeds received from the sale
of businesses and assets, including the sale of the Polypropylene Licensing and Catalysts business in the fourth quarter of 2013.
Cash used in investing activities in 2012 was primarily due to capital expenditures. Capital spending in 2013 and 2014 includes
spending related to certain U.S. Gulf Coast investment projects including an on-purpose propylene production facility, a world-
scale ethylene production facility, an ELITE™ Polymer production facility, a NORDEL™ Metallocene EPDM production
facility, and a Low Density Polyethylene (LDPE) production facility, all aligned with the Company's Performance Plastics
segment.
The following table summarizes the Company's capital expenditures, which includes capital expenditures of consolidated
variable interest entities, along with the approximate percentage of spending by project type. The Company expects capital
spending in 2015 to be approximately $3.9 billion.
Capital Expenditures Summary
In millions 2014 2013 2012
Capital expenditures $ 3,572 $ 2,302 $ 2,614
Spending by project type:
Projects related to additional capacity for new and existing products 68% 55% 43%
Projects related to environmental protection, safety, loss prevention and
industrial hygiene 10% 14% 20%
Other (primarily shared infrastructure and plant maintenance/health) 22% 31% 37%
See Note 25 to the Consolidated Financial Statements for capital expenditures by operating segment.
Cash Flows from Financing Activities
Cash used in financing activities in 2014 included purchases of treasury stock, which totaled $4.2 billion and resulted in the
completion of the Company's initial $4.5 billion share repurchase program, and increased dividends paid to stockholders which
was partially offset by proceeds received from the issuance of new debt, including $2 billion issued in the third quarter of 2014.
Cash used in financing activities in 2013 included dividends paid to stockholders; purchases of treasury stock; payments on
short- and long-term debt, including the early redemption of more than $3 billion in notes and InterNotes; partially offset by
proceeds received from the issuance of new debt. Cash used in financing activities in 2012 included payments on short- and
long-term debt, including $2.25 billion of early redemptions; higher dividends paid to stockholders, including the acceleration
of the fourth quarter of 2012 dividend payment; partially offset by proceeds from the issuance of $2.5 billion of long-term debt
in the fourth quarter of 2012. See Notes 16 and 21 to the Consolidated Financial Statements for additional information related
to the issuance or retirement of debt and the Company's share repurchase program.
Liquidity & Financial Flexibility
The Company’s primary source of incremental liquidity is cash provided by operating activities. The generation of cash from
operations and the Company's ability to access capital markets is expected to meet the Company’s cash requirements for
working capital, capital expenditures, debt maturities, dividend payments, share repurchases (with the future repurchases of the
Company's common stock timed to proceeds received from portfolio management actions and increases in operating cash
flows), contributions to pension plans and other needs. In addition to cash provided by operating activities, the Company’s
liquidity sources also include U.S. and Euromarket commercial paper, committed credit facilities, U.S. retail medium-term note
program ("InterNotes"), accounts receivable securitization facilities and long-term debt and capital markets. Additional details
on these sources of liquidity are as follows:
Commercial Paper
Dow issues promissory notes under its U.S. and Euromarket commercial paper programs. At December 31, 2014, the Company
had no commercial paper outstanding. The Company maintains access to the commercial paper market at competitive rates.