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DOW Chemical cash flow, quarter by quarter

Latest: Q4 2018 · from the cash-flow statements filed with the SEC

Free cash flow$809M in Q4 2018

Operating cash flow$1.7B
Capital spending−$888M
Free cash flow+$809M

Analysis

In Q4 2018, DOW Chemical generated $1.7B of operating cash flow and spent $888M on capital projects, leaving free cash flow of $809M. That is $4.5B more than in Q4 2017 (−$3.7B).

Operating cash flow was $1.7B against net income of $910M — 1.9× profit, cash ran ahead of reported earnings. The largest differences: depreciation & amortization +$827M, payables −$498M, inventory +$307M.

Its cash conversion cycle was 85 days (receivables 54 + inventory 73 − payables 43).

Free cash flow

DOW Chemical: free cash flow by quarterDOW Chemical: free cash flow by quarter−$2.8BQ3 2017−$3.7BQ4 2017−$581MQ1 2018$1.1BQ2 2018−$16.0MQ3 2018$809MQ4 2018
Operating cash flow less capital spending.
DOW Chemical: operating cash flow against capital spendingDOW Chemical: operating cash flow against capital spendingOperating cash flowCapital spending−$2.1B$660MQ3 2017−$2.7B$935MQ4 2017−$158M$423MQ1 2018$1.7B$564MQ2 2018$647M$663MQ3 2018$1.7B$888MQ4 2018
Latest (Q4 2018): Operating cash flow $1.7B, Capital spending $888M.

Capital allocation, year by year

DOW Chemical: where the cash came from (up) and went (down), by fiscal yearDOW Chemical: where the cash came from (up) and went (down), by fiscal yearOperating cash flowNet borrowingShares issuedAsset salesCapital spendingAcquisitionsBuybacksDividendsFY2014: Operating cash flow $6.5BFY2014: Net borrowing $1.7BFY2014: Shares issued $948MFY2014: Asset sales $119MFY2014: Capital spending −$3.6BFY2014: Buybacks −$4.2BFY2014: Dividends −$2.0B$9.3BFY2014FY2015: Operating cash flow $7.6BFY2015: Net borrowing −$2.2BFY2015: Shares issued $508MFY2015: Asset sales $2.4BFY2015: Capital spending −$3.7BFY2015: Acquisitions −$123MFY2015: Buybacks −$1.2B$10.5BFY2015FY2016: Operating cash flow −$3.0BFY2016: Net borrowing −$589MFY2016: Shares issued $398MFY2016: Asset sales $284MFY2016: Capital spending −$3.8BFY2016: Acquisitions −$187MFY2016: Buybacks −$916M$682MFY2016FY2017: Operating cash flow −$5.0BFY2017: Net borrowing −$328MFY2017: Shares issued $489MFY2017: Asset sales $1.7BFY2017: Capital spending −$3.1BFY2017: Acquisitions $47.0MFY2017: Dividends −$1.1B$2.2BFY2017FY2018: Operating cash flow $3.9BFY2018: Net borrowing −$1.2BFY2018: Shares issued $112MFY2018: Asset sales $155MFY2018: Capital spending −$2.5BFY2018: Acquisitions −$20.0MFY2018: Dividends −$3.7B$4.2BFY2018
Over these 5 years operating cash flow totalled $10.1B; the largest uses were capital spending ($16.8B) and operating cash flow ($7.9B). Cash-flow statements as filed.

Cash runway and the debt wall

Cash & investments$2.8B
Debt$19.9B
Net debt$17.1B
Due within a year$340M

DOW Chemical funds itself: free cash flow was — over the last twelve months, and $2.8B of cash and investments stands against $19.9B of debt ($340M due within a year, 8.1× covered by cash).

DOW Chemical: debt maturities by year (FY2018)DOW Chemical: debt maturities by year (FY2018)$340MYear 1$1.8BYear 2$6.2BYear 3$1.5BYear 4$480MYear 5
Principal due in each year as disclosed in the annual report, against $2.8B of cash and investments now.

Where the cash came from and went

DOW Chemical: sources (+) and uses (−) of cash, Q4 2018DOW Chemical: sources (+) and uses (−) of cash, Q4 2018Net borrowing (+) / repaid (−)−$2.2BOperating cash flow$1.7BOther financing$1.2BCapital spending−$888MCash drawn (+) / kept (−)$725MDividends−$553MExchange rates−$41.0MOther investing$26.0MShares issued$6.0MTaxes on employees’ shares−$2.0M

From profit to cash

DOW Chemical: net income to operating cash flow, Q4 2018DOW Chemical: net income to operating cash flow, Q4 2018Net income$910MDepreciation & amortization$827MDeferred taxes−$288MGains on disposals−$13.0MOther non-cash$85.0MInventory$307MPayables−$498MOther operating capital−$15.0MOperating cash flow$1.7B
Non-cash charges are added back; money tied up in receivables or inventory is subtracted.
QuarterReceivable daysInventory daysPayable daysCash conversion cycle
Q4 201854734385
Q3 201854734286
Q2 201851694081
Q1 201848704376
Q4 201739613763
Q3 201735724166

Every quarter

QuarterOperating cash flowCapital spendingAcquisitionsDividendsNet borrowing (+) / repaid (−)Shares issuedCash drawn (+) / kept (−)Free cash flow
Q4 2018$1.7B−$888M—−$553M−$2.2B$6.0M$725M$809M
Q3 2018$647M−$663M−$20.0M−$1.0B−$292M$21.0M$1.4B−$16.0M
Q2 2018$1.7B−$564M—−$1.1B−$516M$22.0M$336M$1.1B
Q1 2018−$158M−$423M—−$1.1B−$54.0M$63.0M$1.0B−$581M
Q4 2017−$2.7B−$935M$47.0M−$1.1B−$71.0M$45.0M$2.2B−$3.7B
Q3 2017−$2.1B−$660M$31.0M—−$445M$87.0M−$2.2B−$2.8B

DOW Chemical: income statement and cash flow

DOW Chemical, Q2 2026: revenue $12.1B (+20% year over year), operating margin 7.2%. The chart follows the revenue to costs, profit and cash.

DOW Chemical: every quarter, Q/Q and Y/Y → Open in the app

Read automatically from the company’s XBRL cash-flow statements; quarterly figures for the fourth quarter are the year less the first three. Errors are possible. Not investment advice.