Consolidated statement of cash flows (audited)
| ($ in millions) | |||
| For the year ended December 31: | 2008 | 2007 | 2006 |
|---|---|---|---|
|
* Non-operating finance receivables — net represents cash flows from short-term commercial financing arrangements (terms generally 30 to 90 days) with dealers and remarketers of predominantly non-IBM products. Amounts previously presented gross within purchases/proceeds of marketable securities and other investments. The accompanying notes are an integral part of the financial statements. |
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| Cash flow from operating activities from continuing operations: | |||
| Net income | $12,334 | $10,418 | $9,492 |
| (Income)/loss from discontinued operations | — | 00 | (76) |
| Adjustments to reconcile income from continuing operations to cash provided by operating activities: | |||
| Depreciation | 4,140 | 4,038 | 3,907 |
| Amortization of intangibles | 1,310 | 1,163 | 1,076 |
| Stock-based compensation | 659 | 713 | 846 |
| Deferred taxes | 1,900 | 740 | 1,724 |
| Net gain on asset sales and other | (338) | (89) | (175) |
| Change in operating assets and liabilities, net of acquisitions/divestitures: | |||
| Receivables (including financing receivables) | 274 | (1,408) | (512) |
| Retirement related | (1,773) | (228) | (850) |
| Inventories | (102) | 182 | 112 |
| Other assets/other liabilities | 1,268 | 706 | (881) |
| Accounts payable | (860) | (142) | 355 |
| Net cash provided by operating activities from continuing operations | 18,812 | 16,094 | 15,019 |
| Cash flow from investing activities from continuing operations: | |||
| Payments for plant, rental machines and other property | (4,171) | (4,630) | (4,362) |
| Proceeds from disposition of plant, rental machines and other property | 350 | 537 | 430 |
| Investment in software | (716) | (875) | (804) |
| Purchases of marketable securities and other investments* | (4,590) | (24,117) | (23,530) |
| Proceeds from disposition of marketable securities and other investments* | 6,100 | 24,984 | 20,533 |
| Non-operating finance receivables — net* | (16) | 125 | (18) |
| Divestiture of businesses, net of cash transferred | 71 | 310 | — |
| Acquisition of businesses, net of cash acquired | (6,313) | (1,009) | (3,799) |
| Net cash used in investing activities from continuing operations | (9,285) | (4,675) | (11,549) |
| Cash flow from financing activities from continuing operations: | |||
| Proceeds from new debt | 13,829 | 21,744 | 1,444 |
| Short-term (repayments)/borrowings less than 90 days — net | (6,025) | 1,674 | 1,834 |
| Payments to settle debt | (10,248) | (11,306) | (3,400) |
| Common stock repurchases | (10,578) | (18,828) | (8,084) |
| Common stock transactions — other | 3,774 | 4,123 | 1,685 |
| Cash dividends paid | (2,585) | (2,147) | (1,683) |
| Net cash used in financing activities from continuing operations | (11,834) | (4,740) | (8,204) |
| Effect of exchange rate changes on cash and cash equivalents | 58 | 294 | 201 |
| Net cash used in discontinued operations from: Operating activities | — | (5) | (12) |
| Net change in cash and cash equivalents | (2,250) | 6,969 | (4,546) |
| Cash and cash equivalents at January 1 | 14,991 | 8,022 | 12,568 |
| Cash and cash equivalents at December 31 | $12,741 | $14,991 | $8,022 |
| Supplemental data: | |||
| Income taxes paid — net of refunds received | $2,111 | $2,608 | $2,068 |
| Interest paid on debt | $1,460 | $1,485 | $1,202 |
| Capital lease obligations | $41 | $57 | $36 |
