Boeing 2010 Annual Report Download - page 51

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Liquidity and Capital Resources
Cash Flow Summary
(Dollars in millions)
Years ended December 31, 2010 2009 2008
Net earnings $ 3,307 $ 1,312 $ 2,672
Non-cash items 2,679 2,381 1,829
Changes in working capital (3,034) 1,910 (4,902)
Net cash provided/(used) by operating activities 2,952 5,603 (401)
Net cash (used)/provided by investing activities (4,831) (3,794) 1,888
Net cash (used)/provided by financing activities (1,962) 4,094 (5,202)
Effect of exchange rate changes on cash and cash equivalents (15) 44 (59)
Net (decrease)/increase in cash and cash equivalents (3,856) 5,947 (3,774)
Cash and cash equivalents at beginning of year 9,215 3,268 7,042
Cash and cash equivalents at end of year $ 5,359 $ 9,215 $ 3,268
Operating Activities Net cash provided by operating activities decreased by $2,651 million to $2,952
million during 2010 compared with 2009 primarily due to higher net working capital in 2010, driven by
growth in inventory as we continue to build inventories prior to the anticipated delivery and production
ramp-up of the 787 and 747-8 programs. We expect the 787 inventory growth in 2011 to be similar to
the growth experienced in 2010 while we expect 747-8 inventory to begin to decline as aircraft are
delivered.
Investing Activities Cash used by investing activities totaled $4,831 million during 2010 compared
with $3,794 million used during 2009, primarily due to higher net contributions to time deposits during
2010. In 2010, capital expenditures totaled $1,125 million down from $1,186 million in 2009. We expect
capital spending in 2011 to be higher than 2010 due to the ongoing construction of a 787 final
assembly line in North Charleston, South Carolina and higher spending to support commercial airplane
production rate increases. Expenditures on acquisitions totaled $932 million, up from $639 million,
largely reflecting the acquisition of Argon ST, Inc. for $782 million.
Financing Activities Cash used by financing activities totaled $1,962 million during 2010 compared
with $4,094 million provided during 2009, primarily due to proceeds from borrowings of $5,961 million
in 2009.
At December 31, 2010 and 2009, the recorded balance of debt was $12,421 million and $12,924
million, of which $948 million and $707 million were classified as short-term. This includes $3,446
million and $4,075 million of debt recorded at BCC, of which $801 million and $659 million were
classified as short-term. In 2010, we repaid $689 million of debt, including repayments of $645 million
of debt held at BCC.
In 2010, we had 494,939 shares transferred to us from employees for tax withholding and did not
repurchase any shares through our open market share repurchase program. During 2009 and 2008,
cash used in our open market share repurchase program totaled $50 million and $2,937 million. In
2008, we also repurchased shares for $95 million as part of the ShareValue Trust distribution.
Capital Resources We have substantial borrowing capacity. Any future borrowings may affect our
credit ratings and are subject to various debt covenants as described below. We and BCC have
commercial paper programs that continue to serve as significant potential sources of short-term
liquidity. Throughout 2010 and at December 31, 2010, neither we nor BCC had any commercial paper
borrowings outstanding. Currently, we have $4,376 million ($1,500 million exclusively available for
BCC) of unused borrowing on revolving credit line agreements. We anticipate that these credit lines will
primarily serve as backup liquidity to support possible commercial paper borrowings.
39