Consolidated Statements of Cash Flows

(dollars in millions)

Years Ended December 31,

2008

 

2007

 

2006

 

Cash Flows from Operating Activities

Net Income

$

6,428

 

$

5,521

 

$

6,197

 

Adjustments to reconcile net income to net cash provided by

operating activities – continuing operations:

Depreciation and amortization expense

 

14,565

 

 

14,377

 

 

14,545

 

Loss on sale of discontinued operations

 

 

 

 

 

541

 

Employee retirement benefits

 

1,955

 

 

1,720

 

 

1,923

 

Deferred income taxes

 

2,183

 

 

408

 

 

(252

)

Provision for uncollectible accounts

 

1,085

 

 

1,047

 

 

1,034

 

Equity in earnings of unconsolidated businesses, net of dividends received

 

212

 

 

1,986

 

 

(731

)

Extraordinary item, net of tax

 

 

 

131

 

 

 

Cumulative effect of accounting change, net of tax

 

 

 

 

 

42

 

Changes in current assets and liabilities, net of effects

from acquisition/disposition of businesses:

Accounts receivable

 

(1,085

)

 

(1,931

)

 

(1,312

)

Inventories

 

(188

)

 

(255

)

 

8

 

Other assets

 

(59

)

 

(140

)

 

52

 

Accounts payable and accrued liabilities

 

(1,701

)

 

(567

)

 

(383

)

Other, net

 

3,225

 

 

4,012

 

 

1,366

 

Net cash provided by operating activities – continuing operations

 

26,620

 

 

26,309

 

 

23,030

 

Net cash provided by (used in) operating activities – discontinued operations

 

 

 

(570

)

 

1,076

 

Net cash provided by operating activities

 

26,620

 

 

25,739

 

 

24,106

 

 

Cash Flows from Investing Activities

Capital expenditures (including capitalized software)

 

(17,238

)

 

(17,538

)

 

(17,101

)

Acquisitions of licenses, investments and businesses, net of cash acquired

 

(15,904

)

 

(763

)

 

(1,422

)

Net change in short-term investments

 

1,677

 

 

169

 

 

290

 

Other, net

 

(114

)

 

1,267

 

 

811

 

Net cash used in investing activities – continuing operations

 

(31,579

)

 

(16,865

)

 

(17,422

)

Net cash provided by investing activities – discontinued operations

 

 

 

757

 

 

1,806

 

Net cash used in investing activities

 

(31,579

)

 

(16,108

)

 

(15,616

)

 

Cash Flows from Financing Activities

Proceeds from long-term borrowings

 

21,598

 

 

3,402

 

 

3,983

 

Repayments of long-term borrowings and capital lease obligations

 

(4,146

)

 

(5,503

)

 

(11,233

)

Increase (decrease) in short-term obligations, excluding current maturities

 

2,389

 

 

(3,252

)

 

7,944

 

Dividends paid

 

(4,994

)

 

(4,773

)

 

(4,719

)

Proceeds from sale of common stock

 

16

 

 

1,274

 

 

174

 

Purchase of common stock for treasury

 

(1,368

)

 

(2,843

)

 

(1,700

)

Other, net

 

93

 

 

(2

)

 

(201

)

Net cash provided by (used in) financing activities – continuing operations

 

13,588

 

 

(11,697

)

 

(5,752

)

Net cash used in financing activities – discontinued operations

 

 

 

 

 

(279

)

Net cash provided by (used in) financing activities

 

13,588

 

 

(11,697

)

 

(6,031

)

 

Increase (decrease) in cash and cash equivalents

 

8,629

 

 

(2,066

)

 

2,459

 

Cash and cash equivalents, beginning of year

 

1,153

 

 

3,219

 

 

760

 

Cash and cash equivalents, end of year

$

9,782

 

$

1,153

 

$

3,219

 

See Notes to Consolidated Financial Statements.