Year Ended December 31
2007 2006 2005
Millions of dollars
Cash flows from operating activities:
Net income $ 3,499 $ 2,548 $ 2,358
Adjustments to reconcile net income to net cash from operations:
Income from discontinued operations (975) (171) (251)
Depreciation, depletion, and amortization 583 480 448
Provision (benefit) for deferred income taxes (111) 658 (243)
Gain on sale of business assets (52) (66) (100)
Asbestos and silica liability payment related to Chapter 11 filing (2,345)
Collection of asbestos- and silica-related insurance receivables 29 167 1,032
Other charges:
Receivables (355) (494) (314)
Accounts receivable facilities transactions (256)
Inventories (218) (609) (151)
Accounts payable 7 96 102
Contributions to pension plans (41) (75) (39)
Other 259 712 252
Cash flows from discontinued operations 31 811 210
Total cash flows from operating activities 2,726 3,557 701
Cash flows from investing activities:
Sales of property, plant, and equipment 203 152 106
Dispositions of business assets, net of cash disposed 70 98 212
Investments – restricted cash 56
Sales (purchases) of short-term investments in marketable securities, net (332) (20) 891
Acquisitions of business assets, net of cash acquired (563) (27) (105)
Disposal of KBR, Inc. cash upon separation (1,461)
Capital expenditures (1,583) (834) (575)
Other investing activities (38) (20) (36)
Cash flows from continued operations (3) 225 19
Total cash flows from investing activities (3,661) (426) 510
Cash flows from financing activities:
Proceeds from exercises of stock options 110 159 342
Tax benefit from exercise of options and restricted stock 29 53
Borrowings (repayments) of short-term debt, net 9 (13) 8
Proceeds from long-term debt, net of offering costs 23
Payments on long-term debt (7) (324) (802)
Payments of dividends to shareholders (314) (306) (254)
Payments to reacquire common stock (1,374) (1,339) (12)
Other financing activities (5) 5 (1)
Cash flows from continued operations (18) 485 (24)
Total cash flows from financing activities (1,570) (1,280) (720)
Effect of exchange rate changes on cash, including $0, $50, and $(3) related to discontinued operations (27) 37 (17)
Increase (decrease) in cash and equivalents (2,532) 1,888 474
Cash and equivalents at beginning of year, including $1,461, $390, and $188 related to discontinued operations 4,379 2,391 1,917
Cash and equivalents at end of year, including $0, $1,461, and $390 related to discontinued operations $ 1,847 $ 4,379 $ 2,391