CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions) 2011 2010 2009 Operating Activities: Net income attributable to common shareowners $ 4,979 $ 4,373 $ 3,829 Non-controlling interest in subsidiaries’ earnings 395 338 350 Net income 5,374 4,711 4,179 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation and amortization 1,347 1,356 1,258 Deferred income tax provision 331 413 451 Stock compensation cost 229 154 153 Change in: Accounts receivable (729) (319) 955 Inventories and contracts in progress (314) (244) 695 Other current assets 7 (17) (3) Accounts payable and accrued liabilities 618 1,105 (582) Global pension contributions (551) (1,299) (1,270) Other operating activities, net 278 46 (483) Net cash flows provided by operating activities 6,590 5,906 5,353 Investing Activities: Capital expenditures (983) (865) (826) Increase in customer financing assets (42) (217) (171) Decrease in customer financing assets 92 162 80 Investments in businesses (357) (2,758) (703) Dispositions of businesses 497 208 158 Other investing activities, net 86 283 358 Net cash flows used in investing activities (707) (3,187) (1,104) Financing Activities: Issuance of long-term debt 59 2,362 37 Repayment of long-term debt (616) (1,751) (1,012) Increase (decrease) in short-term borrowings, net 556 (141) (762) Common Stock issued under employee stock plans 226 386 342 Dividends paid on Common Stock (1,602) (1,482) (1,356) Repurchase of Common Stock (2,175) (2,200) (1,100) Other financing activities, net (453) (327) (340) Net cash flows used in financing activities (4,005) (3,153) (4,191) Effect of foreign exchange rate changes on cash and cash equivalents (1) 68 64 Net increase (decrease) in cash and cash equivalents 1,877 (366) 122 Cash and cash equivalents, beginning of year 4,083 4,449 4,327 Cash and cash equivalents, end of year $5,960 $ 4,083 $4,449 Supplemental Disclosure of Cash Flow Information: Interest paid, net of amounts capitalized $6 4 2 $ 753 $ 704 Income taxes paid, net of refunds $1 , 4 3 2 $ 1,222 $ 1,396 Non-cash investing and financing activities include: Contributions of UTC Common Stock to domestic defined benefit pension plans $4 5 0 $ 250 $ — See accompanying Notes to Consolidated Financial Statements 2011 ANNUAL REPORT 59