EQUIPMENT OPERATIONS*

FINANCIAL SERVICES

2011

2010

2009

2011

2010

2009

Cash Flows from Operating Activities

Net income

$

2,807.8

$

1,874.4

$

873.1

$

471.0

$

372.4

$

202.3

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for doubtful receivables

4.5

6.3

35.3

9.0

100.1

196.5

Provision for depreciation and amortization

587.0

548.7

516.2

401.5

424.6

409.0

Goodwill impairment charges

27.2

289.2

Undistributed earnings of unconsolidated subsidiaries and affiliates

(118.8

)

(156.7

)

(195.1

)

(1.0

)

(.9

)

(.5

)

Provision (credit) for deferred income taxes

(278.3

)

74.8

83.2

110.2

100.2

88.4

Changes in assets and liabilities:

Receivables

(109.5

)

(333.0

)

325.9

(5.6

)

1.2

Inventories

(1,281.8

)

(647.7

)

773.0

Accounts payable and accrued expenses

1,027.0

1,062.9

(1,127.2

)

351.3

5.7

18.1

Accrued income taxes payable/receivable

45.3

6.5

(247.0

)

(44.1

)

15.6

12.9

Retirement benefits

483.2

(140.1

)

(25.7

)

12.1

(14.0

)

(2.1

)

Other

(168.0

)

221.6

123.7

(245.0

)

276.1

(29.2

)

Net cash provided by operating activities

2,998.4

2,544.9

1,424.6

1,065.0

1,274.2

896.6

Cash Flows from Investing Activities

Collections of receivables (excluding trade and wholesale)

13,333.1

12,287.7

12,399.0

Proceeds from maturities and sales of marketable securities

.3

803.4

32.2

38.4

21.7

Proceeds from sales of equipment on operating leases

683.4

621.9

477.3

Government grants related to property and equipment

92.3

Proceeds from sales of businesses, net of cash sold

911.1

34.9

Cost of receivables acquired (excluding trade and wholesale)

(15,365.9

)

(13,681.6

)

(12,155.4

)

Purchases of marketable securities

(503.1

)

(7.6

)

(83.8

)

(63.4

)

(22.0

)

Purchases of property and equipment

(1,054.3

)

(735.5

)

(788.0

)

(2.4

)

(26.2

)

(118.7

)

Cost of equipment on operating leases acquired

(1,230.5

)

(1,098.4

)

(834.4

)

Increase in investment in Financial Services

(69.0

)

(43.8

)

(60.0

)

Acquisitions of businesses, net of cash acquired

(60.8

)

(37.2

)

(49.8

)

(8.3

)

Increase in trade and wholesale receivables

(561.8

)

(838.8

)

(151.0

)

Other

(79.5

)

(32.9

)

(20.7

)

(35.7

)

18.3

52.8

Net cash used for investing activities

(855.3

)

(814.5

)

(122.7

)

(3,231.4

)

(2,658.1

)

(330.7

)

Cash Flows from Financing Activities

Increase (decrease) in total short-term borrowings

230.8

(127.9

)

(52.2

)

(456.9

)

883.9

(1,332.6

)

Change in intercompany receivables/payables

(552.6

)

(1,229.9

)

550.9

552.6

1,229.9

(550.9

)

Proceeds from long-term borrowings

69.0

305.0

1,384.8

5,586.0

2,316.0

4,898.0

Payments of long-term borrowings

(11.5

)

(311.5

)

(75.6

)

(3,209.3

)

(3,364.2

)

(3,754.7

)

Proceeds from issuance of common stock

170.0

129.1

16.5

Repurchases of common stock

(1,667.0

)

(358.8

)

(3.2

)

Capital investment from Equipment Operations

69.0

43.8

60.0

Dividends paid

(593.1

)

(483.5

)

(473.4

)

(340.1

)

(217.2

)

Excess tax benefits from share-based compensation

70.1

43.5

4.6

Other

(17.3

)

(20.7

)

(25.8

)

(31.2

)

(20.6

)

(116.1

)

Net cash provided by (used for) financing activities

(2,301.6

)

(2,054.7

)

1,326.6

2,170.1

871.6

(796.3

)

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(2.3

)

(17.2

)

26.7

13.7

(7.3

)

15.5

Net Increase (Decrease) in Cash and Cash Equivalents

(160.8

)

(341.5

)

2,655.2

17.4

(519.6

)

(214.9

)

Cash and Cash Equivalents at Beginning of Year

3,348.3

3,689.8

1,034.6

442.3

961.9

1,176.8

Cash and Cash Equivalents at End of Year

$

3,187.5

$

3,348.3

$

3,689.8

$

459.7

$

442.3

$

961.9