Dow Chemical 2014 Annual Report Download - page 78

54
See Note 16 to the Consolidated Financial Statements for information related to the Company’s notes payable and long-term
debt activity, including debt retired and issued during the year ended December 31, 2014.
Dow’s public debt instruments and primary, private credit agreements contain, among other provisions, certain customary
restrictive covenant and default provisions. The Company’s most significant debt covenant with regard to its financial position
is the obligation to maintain the ratio of the Company’s consolidated indebtedness to consolidated capitalization at no greater
than 0.65 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and
Revolving Credit Facility Agreement ("Revolving Credit Facility") equals or exceeds $500 million. The ratio of the Company’s
consolidated indebtedness to consolidated capitalization as defined in the Revolving Credit Facility was 0.44 to 1.00 at
December 31, 2014. At December 31, 2014, management believes the Company was in compliance with all of its covenants
and default provisions. For information on Dow’s covenants and default provisions, see Note 16 to the Consolidated Financial
Statements.
Management expects that the Company will continue to have sufficient liquidity and financial flexibility to meet all of its
business obligations.
Credit Ratings
As of February 13, 2015, the Company's credit ratings were as follows:
Credit Ratings Long-Term Short-Term
Rating Agency Rating Rating Outlook
Standard & Poor’s BBB A-2 Stable
Moody’s Investors Service Baa2 P-2 Stable
Fitch Ratings BBB F2 Stable
Downgrades in the Company’s credit ratings will increase borrowing costs on certain indentures and could have a negative
impact on the Company’s ability to access credit markets.
Dividends
For the years ended December 31, 2014, 2013, and 2012, the Company paid dividends to common and preferred shareholders
as noted below:
Dividends Paid at December 31
In millions, except per share amounts 2014 2013 2012
Dividends paid, per common share $ 1.43 $ 0.96 $ 1.46
Dividends paid to common shareholders $ 1,680 $ 1,139 $ 1,710
Dividends paid to preferred shareholders $ 340 $ 340 $ 340
On November 11, 2014, the Board of Directors declared a quarterly dividend of $0.42 per share, payable January 30, 2015, to
stockholders of record on December 31, 2014. On February 12, 2015, the Board of Directors announced the declaration of a
quarterly dividend of $0.42 per share, payable April 30, 2015, to stockholders of record on March 31, 2015. Since 1912, the
Company has maintained or increased the amount of the quarterly dividend, adjusted for stock splits, with the exception of
February 12, 2009. During this 103-year period, Dow has increased the amount of the quarterly dividend 51 times
(approximately 12 percent of the time), reduced the dividend once and maintained the amount of the quarterly dividend
approximately 88 percent of the time.
On December 10, 2014, the Board of Directors declared a quarterly dividend of $85 million to Cumulative Convertible
Perpetual Preferred Stock, Series A shareholders of record on December 15, 2014, which was paid on January 2, 2015. On
February 12, 2015, the Board of Directors declared a quarterly dividend of $85 million to these shareholders, payable on
April 1, 2015. Ongoing dividends related to Cumulative Convertible Perpetual Preferred Stock, Series A will accrue at the rate
of $85 million per quarter, and are payable quarterly subject to Board of Directors’ approval.
Share Repurchase Program
On February 13, 2013, the Board of Directors approved a share buy-back program, authorizing up to $1.5 billion to be spent on
the repurchase of the Company's common stock over a period of time. On January 29, 2014, the Board of Directors announced
an expansion of the Company's share buy-back authorization, authorizing an additional amount not to exceed $3 billion to be
spent on the repurchase of the Company's common stock over a period of time. On November 12, 2014, the Board of Directors
announced a new $5 billion tranche to its share buy-back program, with the repurchase of the Company's common stock timed