Print PageCUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years ended December 31, |
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| 2007 | 2006 | 2005 | |||||||
| Millions | |||||||||
| Cash flows from operating activities Net earnings |
$ | 739 | $ | 715 | $ | 550 | |||
| Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization |
290 | 296 | 295 | ||||||
| Net (gain) loss on disposal of property, plant and equipment | (12 | ) | 5 | 4 | |||||
| Gains from the sale of businesses | (10 | ) | (9 | ) | — | ||||
| Deferred income tax provision | 60 | 139 | 124 | ||||||
| Equity in earnings of investee, net of dividends | (75 | ) | (38 | ) | 7 | ||||
| Minority interests in earnings of consolidated subsidiaries | 49 | 44 | 32 | ||||||
| Pension expense (Note 11) | 98 | 120 | 103 | ||||||
| Pension contributions | (250 | ) | (266 | ) | (151 | ) | |||
| Other post-retirement benefits expense, net of cash payments | (28 | ) | (35 | ) | (21 | ) | |||
| Stock-based compensation expense (Note 16) | 28 | 18 | 16 | ||||||
| Excess tax benefits on stock-based awards | — | — | 7 | ||||||
| Translation and hedging activities | (24 | ) | (26 | ) | 11 | ||||
| Changes in current assets and liabilities, net of acquisitions and dispositions: Receivables |
(203 | ) | (301 | ) | (309 | ) | |||
| Inventories | (255 | ) | (158 | ) | (187 | ) | |||
| Other current assets | (34 | ) | (4 | ) | (9 | ) | |||
| Accounts payable | 136 | 149 | 108 | ||||||
| Accrued expenses | 206 | 123 | 110 | ||||||
| Changes in long-term liabilities | 95 | 23 | 88 | ||||||
| Other, net | — | 45 | (18 | ) | |||||
| Net cash provided by operating activities | 810 | 840 | 760 | ||||||
| Cash flows from investing activities Capital expenditures |
(353 | ) | (249 | ) | (186 | ) | |||
| Investments in internal use software | (67 | ) | (52 | ) | (39 | ) | |||
| Proceeds from disposals of property, plant and equipment | 44 | 49 | 21 | ||||||
| Investments in and advances to equity investees | (66 | ) | (18 | ) | (13 | ) | |||
| Acquisitions of businesses, net of cash acquired | (20 | ) | (2 | ) | (2 | ) | |||
| Proceeds from the sale of businesses | 35 | 24 | — | ||||||
| Investments in marketable securities—acquisitions | (405 | ) | (303 | ) | (123 | ) | |||
| Investments in marketable securities—liquidations | 395 | 273 | 126 | ||||||
| Purchase of other investments | (57 | — | — | ||||||
| Other, net | (21 | ) | 1 | 4 | |||||
| Net cash used in investing activities | (515 | (277 | ) | (212 | ) | ||||
| Cash flows from financing activities Proceeds from borrowings |
15 | 94 | 84 | ||||||
| Payments on borrowings and capital lease obligations | (144 | ) | (400 | ) | (378 | ) | |||
| Net borrowings under short-term credit agreements | (12 | ) | (3 | ) | 2 | ||||
| Distributions to minority shareholders | (18 | ) | (20 | ) | (18 | ) | |||
| Dividend payments on common stock | (89 | ) | (66 | ) | (56 | ) | |||
| Proceeds from issuing common stock | 4 | 9 | 30 | ||||||
| Repurchases of common stock | (335 | ) | (121 | ) | (38 | ) | |||
| Excess tax benefits on stock-based awards | 11 | 6 | — | ||||||
| Other, net | (8 | ) | (7 | ) | 2 | ||||
| Net cash used in financing activities | (576 | ) | (508 | ) | (372 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 18 | 6 | (8 | ) | |||||
| Net (decrease) increase in cash and cash equivalents | (263 | ) | 61 | 168 | |||||
| Cash and cash equivalents at beginning of year | 840 | 779 | 611 | ||||||
| Cash and cash equivalents at end of year | $ | 577 | $ | 840 | $ | 779 | |||
The accompanying notes are an integral part of the Consolidated Financial Statements.