EQUIPMENT OPERATIONS*

FINANCIAL SERVICES

2012

2011

2010

2012

2011

2010

Cash Flows from Operating Activities

Net income

$

3,071.6

$

2,807.8

$

1,874.4

$

460.3

$

471.0

$

372.4

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

Provision (credit) for doubtful receivables

6.0

4.5

6.3

(.9

)

9.0

100.1

Provision for depreciation and amortization

643.1

587.0

548.7

439.2

401.5

424.6

Goodwill impairment charges

33.4

27.2

Undistributed earnings of unconsolidated subsidiaries and affiliates

(413.7

)

(118.8

)

(156.7

)

(1.3

)

(1.0

)

(.9

)

Provision (credit) for deferred income taxes

(115.7

)

(278.3

)

74.8

23.9

110.2

100.2

Changes in assets and liabilities:

Trade receivables

(255.0

)

(109.5

)

(333.0

)

Insurance receivables

(338.5

)

(300.1

)

Inventories

(947.6

)

(1,281.8

)

(647.7

)

Accounts payable and accrued expenses

887.0

1,027.0

1,062.9

382.1

351.3

5.7

Accrued income taxes payable/receivable

(102.7

)

45.3

6.5

30.4

(44.1

)

15.6

Retirement benefits

71.2

483.2

(140.1

)

(7.9

)

12.1

(14.0

)

Other

70.5

(168.0

)

221.6

(109.9

)

55.1

270.5

Net cash provided by operating activities

2,948.1

2,998.4

2,544.9

877.4

1,065.0

1,274.2

Cash Flows from Investing Activities

Collections of receivables (excluding trade and wholesale)

14,320.7

13,333.1

12,287.7

Proceeds from maturities and sales of marketable securities

200.1

.3

40.2

32.2

38.4

Proceeds from sales of equipment on operating leases

799.5

683.4

621.9

Government grants related to property and equipment

92.3

Proceeds from sales of businesses, net of cash sold

30.2

911.1

34.9

Cost of receivables acquired (excluding trade and wholesale)

(16,730.2

)

(15,365.9

)

(13,681.6

)

Purchases of marketable securities

(802.2

)

(503.1

)

(120.0

)

(83.8

)

(63.4

)

Purchases of property and equipment

(1,316.2

)

(1,054.3

)

(735.5

)

(3.1

)

(2.4

)

(26.2

)

Cost of equipment on operating leases acquired

(1,562.0

)

(1,230.5

)

(1,098.4

)

Increase in investment in Financial Services

(264.1

)

(69.0

)

(43.8

)

Acquisitions of businesses, net of cash acquired

(60.8

)

(37.2

)

(8.3

)

Increase in trade and wholesale receivables

(1,518.5

)

(561.8

)

(838.8

)

Other

(95.6

)

(79.5

)

(32.9

)

138.8

(35.7

)

18.3

Net cash used for investing activities

(2,247.8

)

(855.3

)

(814.5

)

(4,634.6

)

(3,231.4

)

(2,658.1

)

Cash Flows from Financing Activities

Increase (decrease) in total short-term borrowings

(36.4

)

230.8

(127.9

)

931.3

(456.9

)

883.9

Change in intercompany receivables/payables

45.5

(552.6

)

(1,229.9

)

(45.5

)

552.6

1,229.9

Proceeds from long-term borrowings

2,521.5

69.0

305.0

8,120.5

5,586.0

2,316.0

Payments of long-term borrowings

(220.1

)

(11.5

)

(311.5

)

(5,175.9

)

(3,209.3

)

(3,364.2

)

Proceeds from issuance of common stock

61.0

170.0

129.1

Repurchases of common stock

(1,587.7

)

(1,667.0

)

(358.8

)

Capital investment from Equipment Operations

264.1

69.0

43.8

Dividends paid

(697.9

)

(593.1

)

(483.5

)

(43.5

)

(340.1

)

(217.2

)

Excess tax benefits from share-based compensation

30.1

70.1

43.5

Other

(32.7

)

(17.3

)

(20.7

)

(33.6

)

(31.2

)

(20.6

)

Net cash provided by (used for) financing activities

83.3

(2,301.6

)

(2,054.7

)

4,017.4

2,170.1

871.6

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(63.2

)

(2.3

)

(17.2

)

24.4

13.7

(7.3

)

Net Increase (Decrease) in Cash and Cash Equivalents

720.4

(160.8

)

(341.5

)

284.6

17.4

(519.6

)

Cash and Cash Equivalents at Beginning of Year

3,187.5

3,348.3

3,689.8

459.7

442.3

961.9

Cash and Cash Equivalents at End of Year

$

3,907.9

$

3,187.5

$

3,348.3

$

744.3

$

459.7

$

442.3