Total Debt (Carrying Amount)

Dow Chemical Co., Statement of Financial Position, Debt

USD $ in millions

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Notes payable 551  443  396  541  1,467 
Long-term debt due within one year 394  697  672  2,749  1,755 
Long-term debt, excluding debt due within one year 18,838  16,820  19,919  18,310  20,605 
Total debt (carrying amount) 19,783  17,960  20,987  21,600  23,827 

Source: Based on data from Dow Chemical Co., Annual Reports

Item Description The company
Total debt (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. Dow Chemical Co.'s total debt declined from 2012 to 2013 but then increased from 2013 to 2014 not reaching 2012 level.

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Total Debt (Fair Value)

 
Dec 31, 2014
Selected Financial Data (USD $ in millions)
Notes payable 551 
Long-term debt including debt due within one year 21,450 
Total debt (fair value) 22,001 
Ratio
Debt, fair value to carrying amount 1.11

Source: Based on data from Dow Chemical Co., Annual Reports

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Weighted-average Interest Rate on Debt

Interest rate on debt: 5.08%

Interest Rate Debt Amount1 Interest Rate × Debt Amount Weighted-average Interest Rate2
2.74% 60 
2.52% 805  20 
5.66% 489  28 
5.44% 567  31 
8.41% 2,168  182 
5.16% 12,063  622 
1.38% 461 
3.01% 1,013  30 
3.55% 1,528  54 
5.66% 343  19 
4.08% 551  22 
Total 20,048  1,018  5.08%

Source: Based on data from Dow Chemical Co., Annual Reports

1 USD $ in millions

2 Weighted-average interest rate = 100 × 1,018 ÷ 20,048 = 5.08%

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Interest Costs Incurred

Dow Chemical Co.

USD $ in millions

 
12 months ended Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Interest expense and amortization of debt discount 983  1,101  1,269  1,341  1,473 
Capitalized interest 125  78  84  90  72 
Interest costs incurred 1,108  1,179  1,353  1,431  1,545 

Source: Based on data from Dow Chemical Co., Annual Reports

Item Description The company
Interest expense and amortization of debt discount Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings. Dow Chemical Co.'s interest expense and amortization of debt discount declined from 2012 to 2013 and from 2013 to 2014.
Capitalized interest The amount of interest that was capitalized during the period. Dow Chemical Co.'s capitalized interest declined from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.
Interest costs incurred Total interest costs incurred during the period and either capitalized or charged against earnings. Dow Chemical Co.'s interest costs incurred declined from 2012 to 2013 and from 2013 to 2014.

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Adjusted Interest Coverage Ratio

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Net income attributable to The Dow Chemical Company 3,772  4,787  1,182  2,742  2,310 
Add: Net income attributable to noncontrolling interest 67  29  (82) 42  11 
Add: Income tax expense 1,426  1,988  565  817  481 
Add: Interest expense and amortization of debt discount 983  1,101  1,269  1,341  1,473 
Earnings before interest and tax (EBIT) 6,248  7,905  2,934  4,942  4,275 
 
Interest costs incurred 1,108  1,179  1,353  1,431  1,545 
Ratio With and Without Capitalized Interest
Interest coverage ratio (excluding capitalized interest)1 6.36 7.18 2.31 3.69 2.90
Adjusted interest coverage ratio (including capitalized interest)2 5.64 6.70 2.17 3.45 2.77

2014 Calculations

1 Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest expense and amortization of debt discount
= 6,248 ÷ 983 = 6.36

2 Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest costs incurred
= 6,248 ÷ 1,108 = 5.64

Ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). Dow Chemical Co.'s adjusted interest coverage ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014.

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