predictions/12.html

<table>
  <tr>
    <th></th>
    <th colspan="3">Year Ended December 31</th>
  </tr>
  <tr>
    <th></th>
    <th>2007</th>
    <th>2006</th>
    <th>2005</th>
  </tr>
  <tr>
    <td>Millions of dollars</td>
    <td></td>
    <td></td>
    <td></td>
  </tr>

  <tr>
    <td>Cash flows from operating activities:</td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
  <tr>
    <td>Net income</td>
    <td>$ 3,499</td>
    <td>$ 2,548</td>
    <td>$ 2,358</td>
  </tr>
  <tr>
    <td>Adjustments to reconcile net income to net cash from operations:</td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
  <tr>
    <td>Income from discontinued operations</td>
    <td>(975)</td>
    <td>(171)</td>
    <td>(251)</td>
  </tr>
  <tr>
    <td>Depreciation, depletion, and amortization</td>
    <td>583</td>
    <td>480</td>
    <td>448</td>
  </tr>
  <tr>
    <td>Provision (benefit) for deferred income taxes</td>
    <td>(111)</td>
    <td>658</td>
    <td>(243)</td>
  </tr>
  <tr>
    <td>Gain on sale of business assets</td>
    <td>(52)</td>
    <td>(66)</td>
    <td>(100)</td>
  </tr>
  <tr>
    <td>Asbestos and silica liability payment related to Chapter 11 filing</td>
    <td>—</td>
    <td>—</td>
    <td>(2,345)</td>
  </tr>
  <tr>
    <td>Collection of asbestos- and silica-related insurance receivables</td>
    <td>29</td>
    <td>167</td>
    <td>1,032</td>
  </tr>
  <tr>
    <td>Other charges:</td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
  <tr>
    <td>Receivables</td>
    <td>(355)</td>
    <td>(494)</td>
    <td>(314)</td>
  </tr>
  <tr>
    <td>Accounts receivable facilities transactions</td>
    <td>—</td>
    <td>—</td>
    <td>(256)</td>
  </tr>
  <tr>
    <td>Inventories</td>
    <td>(218)</td>
    <td>(609)</td>
    <td>(151)</td>
  </tr>
  <tr>
    <td>Accounts payable</td>
    <td>7</td>
    <td>96</td>
    <td>102</td>
  </tr>
  <tr>
    <td>Contributions to pension plans</td>
    <td>(41)</td>
    <td>(75)</td>
    <td>(39)</td>
  </tr>
  <tr>
    <td>Other</td>
    <td>259</td>
    <td>712</td>
    <td>252</td>
  </tr>
  <tr>
    <td>Cash flows from discontinued operations</td>
    <td>31</td>
    <td>811</td>
    <td>210</td>
  </tr>
  <tr>
    <td>Total cash flows from operating activities</td>
    <td>2,726</td>
    <td>3,557</td>
    <td>701</td>
  </tr>

  <tr>
    <td>Cash flows from investing activities:</td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
  <tr>
    <td>Sales of property, plant, and equipment</td>
    <td>203</td>
    <td>152</td>
    <td>106</td>
  </tr>
  <tr>
    <td>Dispositions of business assets, net of cash disposed</td>
    <td>70</td>
    <td>98</td>
    <td>212</td>
  </tr>
  <tr>
    <td>Investments – restricted cash</td>
    <td>56</td>
    <td>—</td>
    <td>—</td>
  </tr>
  <tr>
    <td>Sales (purchases) of short-term investments in marketable securities, net</td>
    <td>(332)</td>
    <td>(20)</td>
    <td>891</td>
  </tr>
  <tr>
    <td>Acquisitions of business assets, net of cash acquired</td>
    <td>(563)</td>
    <td>(27)</td>
    <td>(105)</td>
  </tr>
  <tr>
    <td>Disposal of KBR, Inc. cash upon separation</td>
    <td>(1,461)</td>
    <td>—</td>
    <td>—</td>
  </tr>
  <tr>
    <td>Capital expenditures</td>
    <td>(1,583)</td>
    <td>(834)</td>
    <td>(575)</td>
  </tr>
  <tr>
    <td>Other investing activities</td>
    <td>(38)</td>
    <td>(20)</td>
    <td>(36)</td>
  </tr>
  <tr>
    <td>Cash flows from continued operations</td>
    <td>(3)</td>
    <td>225</td>
    <td>19</td>
  </tr>
  <tr>
    <td>Total cash flows from investing activities</td>
    <td>(3,661)</td>
    <td>(426)</td>
    <td>510</td>
  </tr>

  <tr>
    <td>Cash flows from financing activities:</td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
  <tr>
    <td>Proceeds from exercises of stock options</td>
    <td>110</td>
    <td>159</td>
    <td>342</td>
  </tr>
  <tr>
    <td>Tax benefit from exercise of options and restricted stock</td>
    <td>29</td>
    <td>53</td>
    <td>—</td>
  </tr>
  <tr>
    <td>Borrowings (repayments) of short-term debt, net</td>
    <td>9</td>
    <td>(13)</td>
    <td>8</td>
  </tr>
  <tr>
    <td>Proceeds from long-term debt, net of offering costs</td>
    <td>—</td>
    <td>—</td>
    <td>23</td>
  </tr>
  <tr>
    <td>Payments on long-term debt</td>
    <td>(7)</td>
    <td>(324)</td>
    <td>(802)</td>
  </tr>
  <tr>
    <td>Payments of dividends to shareholders</td>
    <td>(314)</td>
    <td>(306)</td>
    <td>(254)</td>
  </tr>
  <tr>
    <td>Payments to reacquire common stock</td>
    <td>(1,374)</td>
    <td>(1,339)</td>
    <td>(12)</td>
  </tr>
  <tr>
    <td>Other financing activities</td>
    <td>(5)</td>
    <td>5</td>
    <td>(1)</td>
  </tr>
  <tr>
    <td>Cash flows from continued operations</td>
    <td>(18)</td>
    <td>485</td>
    <td>(24)</td>
  </tr>
  <tr>
    <td>Total cash flows from financing activities</td>
    <td>(1,570)</td>
    <td>(1,280)</td>
    <td>(720)</td>
  </tr>

  <tr>
    <td>Effect of exchange rate changes on cash, including $0, $50, and $(3) related to discontinued operations</td>
    <td>(27)</td>
    <td>37</td>
    <td>(17)</td>
  </tr>
  <tr>
    <td>Increase (decrease) in cash and equivalents</td>
    <td>(2,532)</td>
    <td>1,888</td>
    <td>474</td>
  </tr>
  <tr>
    <td>Cash and equivalents at beginning of year, including $1,461, $390, and $188 related to discontinued operations</td>
    <td>4,379</td>
    <td>2,391</td>
    <td>1,917</td>
  </tr>
  <tr>
    <td>Cash and equivalents at end of year, including $0, $1,461, and $390 related to discontinued operations</td>
    <td>$ 1,847</td>
    <td>$ 4,379</td>
    <td>$ 2,391</td>
  </tr>
</table>