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CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
(Dollars in millions) 2014 2013 2012
Cash flows from operating activities – continuing operations:
Net earnings (loss) $ 2,533 $ 2,357 $ (332)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation of property, plant and equipment 375 382 376
Amortization of intangible assets 121 143 214
Goodwill and intangible asset impairments – – 2,295
Stock-based compensation expense 128 120 114
Excess tax benefit from stock-based compensation (83) (23) (29)
Deferred income tax (benefit) provision 136 115 (144)
Discontinued operations, net of tax 140 129 (49)
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable 330 (223) 225
Contracts in process 281 177 149
Inventories (303) (200) (490)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable (161) (204) (413)
Customer advances and deposits 691 330 730
Other current liabilities (246) (118) 23
Other, net (214) 126 (63)
Net cash provided by operating activities 3,728 3,111 2,606
Cash flows from investing activities – continuing operations:
Capital expenditures (521) (436) (436)
Purchases of held-to-maturity securities (500) – (260)
Purchases of available-for-sale securities (136) (135) (252)
Sales of available-for-sale securities 135 99 186
Maturities of available-for-sale securities 4 14 110
Other, net (84) 95 10
Net cash used by investing activities (1,102) (363) (642)
Cash flows from financing activities – continuing operations:
Purchases of common stock (3,382) (740) (602)
Dividends paid (822) (591) (893)
Proceeds from option exercises 547 583 146
Repayment of fixed-rate notes – – (2,400)
Proceeds from fixed-rate notes – – 2,382
Other, net 82 23 (15)
Net cash used by financing activities (3,575) (725) (1,382)
Net cash provided (used) by discontinued operations 36 (18) 65
Net (decrease) increase in cash and equivalents (913) 2,005 647
Cash and equivalents at beginning of year 5,301 3,296 2,649
Cash and equivalents at end of year $ 4,388 $ 5,301 $ 3,296
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
38 General Dynamics Annual Report 2014