Boeing 2011 Annual Report Download - page 50

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Other segment operating loss for the year ended December 31, 2010 increased by $175 million
primarily due to $144 million of charges related to our customer financing portfolio and higher
environmental remediation expenses of $36 million.
Liquidity and Capital Resources
Cash Flow Summary
(Dollars in millions)
Years ended December 31, 2011 2010 2009
Net earnings $ 4,018 $ 3,307 $ 1,312
Non-cash items 2,140 2,679 2,381
Changes in working capital (2,135) (3,034) 1,910
Net cash provided by operating activities 4,023 2,952 5,603
Net cash provided/(used) by investing activities 2,369 (4,831) (3,794)
Net cash (used)/provided by financing activities (1,700) (1,962) 4,094
Effect of exchange rate changes on cash and cash equivalents (2) (15) 44
Net increase/(decrease) in cash and cash equivalents 4,690 (3,856) 5,947
Cash and cash equivalents at beginning of year 5,359 9,215 3,268
Cash and cash equivalents at end of year $10,049 $ 5,359 $ 9,215
Operating Activities Net cash provided by operating activities increased by $1,071 million to $4,023
million during 2011 compared with 2010 primarily due to higher earnings and lower working capital
growth as the continued growth in inventory was partially offset by increases in advances from
customers and accounts payable. Our investment in gross inventories increased to $56,499 million at
December 31, 2011, up from $46,738 million at December 31, 2010 while advances and progress
billings increased to $39,755 million at December 31, 2011 compared with $34,744 million at
December 31, 2010. The increase in inventory was driven by higher investments in commercial
airplane program inventory, specifically 787 inventory, while higher advances and progress payments
reflect increased production rates and commercial airplane orders. We expect inventory to grow at a
lower rate in 2012 as additional deliveries offset the ramp up of commercial airplane production and as
design changes are incorporated into completed 747 and 787 airplanes. Cash contributions to our
pension plans totaled $531 million and $35 million in 2011 and 2010.
Investing Activities Cash provided by investing activities totaled $2,369 million during 2011 compared
with $4,831 million used during 2010, primarily due to lower investments in time deposits during 2011.
In 2011, capital expenditures totaled $1,713 million up from $1,125 million in 2010. Capital spending in
2011 is higher than 2010 due to the construction of a 787 final assembly factory and related site
buildings in North Charleston, South Carolina, higher spending to support commercial airplane
production rate increases and capital improvements. We expect capital expenditures to be higher in
2012 due to continued investment to ramp up commercial production rates. Expenditures on
acquisitions totaled $42 million, down from $932 million in 2010 which included the acquisition of Argon
ST, Inc. for $782 million.
Financing Activities Cash used by financing activities totaled $1,700 million during 2011 compared
with $1,962 million used during 2010 as proceeds from new borrowings of $799 million in 2011 more
than offset $314 million of higher repayments of distribution rights financing and $241 million of higher
debt repayments.
In 2011, net proceeds from BCC borrowings amounted to $745 million and we repaid $930 million of
debt, including repayments of $798 million of debt held at BCC. At December 31, 2011 and 2010, the
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