PART II

Item 6. Selected Financial Data

   The selected financial information presented below for the five year period ended December 31, 2007, was derived from our Consolidated Financial Statements. This information should be read in conjunction with the Consolidated Financial Statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

  2007   2006   2005   2004   2003(1)
  Millions, except per share
For the years ended December 31,
Net sales		   $ 13,048   $ 11,362     $ 9,918     $ 8,438     $ 6,296  

U.S. percentage of sales		     46 %    50 %      49 %      52 %      53 % 
Non-U.S. percentage of sales     54 %    50 %      51 %      48 %      47 % 

Gross margin		     2,556     2,465       2,044       1,560       1,029  
Research and engineering expenses     329     321       278       241       200  
Investee equity, royalty and other income     205     140       131       120       74  
Interest expense     58     96       109       111       90  
Dividends on preferred securities of subsidiary trust . . .   —     —       —       —       11  
Earnings before cumulative effect of change in
    accounting principles		     739     715       550       350       54  
Net earnings     739     715       550       350       50  
Net earnings per share before cumulative effect of
    change in accounting principles(2):
    Basic		   $ 3.72   $ 3.76     $ 3.11     $ 2.07     $ 0.34  
    Diluted     3.70     3.55       2.75       1.85       0.34  
Net earnings per share(2):
    Basic		   $ 3.72   $ 3.76     $ 3.11     $ 2.07     $ 0.32  
    Diluted     3.70     3.55       2.75       1.85       0.32  
Dividends declared per share     0.43     0.33       0.30       0.30       0.30  
Capital expenditures     353     249       186       151       111  
 
At December 31,
Cash and cash equivalents		   $ 577   $ 840     $ 779     $ 611     $ 108  
Total assets     8,195     7,465       6,885       6,510       5,126  
Long-term debt     555     647       1,213       1,299       1,380  
Shareholders’ equity(3)     3,409     2,802       1,864       1,401       949  
(1) Net earnings included a $4 million, net of tax charge for the cumulative effect of a change in accounting principle related to the consolidation of a variable interest entity.
(2) All per share amounts have been adjusted for the impact of a two-for-one stock split on April 9, 2007 and an additional two-for-one stock split on January 2, 2008.
(3) During 2006, we adopted the provisions (except for the measurement date change) of SFAS 158, ‘‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R),’’ which resulted in an approximately $94 million non-cash charge to equity.
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