2012 ANNUAL REPORT 45 Management’s Discussion and Analysis Cash Flow—Financing Activities of Continuing Operations Cash Flow—Investing Activities of Continuing Operations We have an existing universal shelf registration statement filed with the SEC for an indeterminate amount of debt and equity securities In 2012, we paid aggregate dividends on common stock of approximately $1.8 billion, consisting of $0.48 per share in the first quarter of 2012 totaling $412 million, $0.48 per share in the second quarter of 2012 totaling $413 million, $0.535 per share in the third quarter of 2012 totaling $463 million, and $0.535 per share in the fourth quarter of 2012 totaling $464 million. During 2011, an aggregate $1.6 billion of cash dividends were paid to common stock shareowners. Customer financing activities were a net use of cash of $25 million in 2012, compared to a net source of cash of $50 million in 2011. While we expect that 2013 customer financing activity will be a net use of funds, actual funding is subject to usage under existing customer financing commitments during the year. We may also arrange for third-party investors to assume a portion of our commit- ments. At December 31, 2012, we had commercial aerospace financing and other contractual commitments of approximately $10.9 billion, which includes approximately $5.8 billion of IAE commitments, related to commercial aircraft and certain contractual rights to provide product on new aircraft platforms, of which as much as $1.1 billion may be required to be disbursed during 2013. As discussed in Note 17, we have entered into certain collaboration arrangements, which In connection with the Goodrich acquisition, we suspended share repurchases for 2012 and the fourth quarter of 2011, and will significantly reduce repurchases from historical levels for 2013 and 2014. At December 31, 2012, management had authority to repurchase approximately 7 million shares under the previously announced share repurchase program. When we repurchase shares, our share repurchases vary depending upon various factors including the level of other investing activities. Financing cash out- flows for 2011 included the repurchase of 26.9 million shares of our common stock for approximately $2.2 billion under the previously announced share repurchase program. The increase in cash used in investing activities of continu- ing operations was primarily a result of the Goodrich acquisition, which required cash payments, net of cash acquired, of $15.8 bil- lion, as well as payments made to Rolls-Royce, net of cash acquired, to acquire their ownership and collaboration interests in IAE and license its V2500 intellectual property to Pratt & Whitney of approximately $1.7 billion in total, reflected in acquisitions of busi- nesses and as an increase in collaboration intangible assets. Parti- ally offsetting these increases, concurrent with the closing of the purchase of Rolls-Royce’s interests in IAE, Pratt & Whitney entered into a collaboration arrangement with MTU with respect to a portion of the acquired collaboration interest in IAE for consideration of approximately $233 million, with additional payments due to Pratt & Whitney in the future. Investments in businesses during 2012 also included a number of additional small acquisitions in our commer- cial and aerospace businesses. We expect total cash investments for acquisitions in 2013 to be approximately $1 billion; however, actual acquisition spending may vary depending upon the timing, availability and appropriate value of acquisition opportunities. Capi- tal expenditures increased $460 million primarily at Pratt & Whitney and Otis, reflecting expenditures related to investments in new programs and low-cost manufacturing facilities, as well as at UTC Aerospace Systems due to spending at legacy Goodrich busi- nesses subsequent to acquisition. The timing and levels of certain cash flow activities, such as acquisitions and repurchases of our stock, have resulted in the issuance of both long-term and short-term debt. In June 2012, we issued $9.8 billion of long-term debt and $1.1 billion of equity units, and in July 2012, we borrowed $2.0 billion from our term loan credit agreement and issued $3.2 billion of commercial paper pri- marily to partially finance the Goodrich acquisition and pay related fees, expenses and other amounts due and payable by UTC as a result of the acquisition. Commercial paper borrowings and revolv- ing credit facilities provide short-term liquidity to supplement operat- ing cash flows and are used for general corporate purposes, including the funding of potential acquisitions and repurchases of our stock. We had $320 million and $455 million of commercial paper outstanding at December 31, 2012 and 2011, respectively. In December 2011, we redeemed the entire $500 million out- standing principal amount of our 6.100% notes that would other- wise have been due May 15, 2012. plan assets. We expect to make contributions of approximately $200 million to our foreign defined benefit pension plans in 2013. Although our domestic defined benefit pension plans are approximately 84% funded on a projected benefit obligation basis, and we are not required to make additional contributions through the end of 2013, we may elect to make discretionary contributions in 2013. Con- tributions to our global defined benefit pension plans in 2013 are expected to meet or exceed the current funding requirements. may include participation by our collaborators in these commitments. At December 31, 2012, our collaborators’ share of these commit- ments was approximately $2.0 billion, which includes approximately $1.1 billion of IAE commitments, of which as much as $252 million may be required to be disbursed during 2013. Refer to Note 5 to the Consolidated Financial Statements for additional discussion of our commercial aerospace industry assets and commitments. (DOLLARS IN MILLIONS) 2012 2011 Net cash flows provided by (used in) financing activities of continuing operations $ 8,021 $ (3,983) (DOLLARS IN MILLIONS) 2012 2011 Net cash flows used in investing activities of continuing operations $ (18,795) $ (672)