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39
Liquidity and Capital Resources
Cash Flow Summary
(Dollars in millions)
Years ended December 31, 2012 2011 2010
Net earnings $3,900 $4,018 $3,307
Non-cash items 2,728 2,140 2,679
Changes in working capital 880 (2,135) (3,034)
Net cash provided by operating activities 7,508 4,023 2,952
Net cash (used)/provided by investing activities (3,757) 2,369 (4,831)
Net cash used by financing activities (3,477) (1,700) (1,962)
Effect of exchange rate changes on cash and cash equivalents 18 (2) (15)
Net increase/(decrease) in cash and cash equivalents 292 4,690 (3,856)
Cash and cash equivalents at beginning of year 10,049 5,359 9,215
Cash and cash equivalents at end of period $10,341 $10,049 $5,359
Operating Activities Net cash provided by operating activities was $7.5 billion during 2012, an increase
of $3.5 billion compared with 2011 primarily due to lower inventory growth in 2012, which was partially
offset by $1.6 billion of contributions to our pension plans in 2012 compared with $0.5 billion in 2011 and
$35 million in 2010. Our investment in gross inventories increased by $6.2 billion in 2012, and by $9.8
billion in 2011, driven by higher investments in commercial airplane program inventory, primarily 787
inventory. Advances and progress billings increased to $41.6 billion at December 31, 2012 compared with
$39.8 billion at December 31, 2011 and $34.7 billion at December 31, 2010.
Investing Activities Cash used by investing activities totaled $3.8 billion during 2012 compared with $2.4
billion provided during 2011, largely due to higher contributions to investments in time deposits. Net
contributions to investments were $2 billion in 2012 compared with net proceeds from investments of $4
billion in 2011. In 2012, capital expenditures totaled $1.7 billion, consistent with the prior year. We expect
capital expenditures to be higher in 2013 due to continued investment to support growth.
Financing Activities Cash used by financing activities was $3.5 billion during 2012, an increase of $1.8
billion compared with 2011 as a result of higher debt repayments of $1.1 billion and lower new borrowings
of $0.7 billion.
In 2012, we repaid $2.1 billion of debt, including repayments of $0.9 billion of debt held at BCC. At December
31, 2012 and 2011, the recorded balance of debt was $10.4 billion and $12.4 billion, of which $1.4 billion
and $2.4 billion were classified as short-term. This includes $2.5 billion and $3.4 billion of debt recorded
at BCC, of which $0.6 billion and $0.9 billion were classified as short-term.
In 2012 and 2011, we had 1,007,706 and 350,778 shares transferred to us from employees for tax
withholding and did not repurchase any shares through our open market share repurchase program. In
December 2012, we announced the resumption of this program with repurchases expected to total between
$1.5 and $2 billion in 2013.
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 have a commercial paper
program that continues to serve as a significant potential source of short-term liquidity. Throughout 2012
and at December 31, 2012, we had no commercial paper borrowings outstanding. Currently, we have $4.6