Operating Activities Year Ended December 31, 2004 2003 2002 Net income ................................................................................ $ 393,254 $ 332,058 $ 127,565  Adjustments to reconcile net income to net operating cash: Cumulative effect of change in accounting principle .............. 183,136  Depreciation............................................................................ 109,058 104,803 103,659  Amortization of intangible assets ............................................ 16,584 11,761 11,989  Impairment of long-lived assets .............................................. 14,556 12,454 19,948  Provisions for qualified exit costs ............................................ 2,737 14 262  Provisions for environmental-related matters .......................... 13,953 10,237 8,609  Deferred income taxes ............................................................ 17,227 39,872 19,747  Defined benefit pension plans net credit .................................. (5,992) (2,072) (23,013) Income tax effect of ESOP on other capital ............................ 19,304 24,665 22,380  Amortization of restricted stock expense ................................ 11,642 5,641 3,097  Income tax effect of non-qualified stock option exercises........ 20,932 6,944 5,776  Net increase in postretirement liability.................................... 5,122 3,904 4,086  Foreign currency related losses ................................................ 1,699 1,460 8,435  Decrease in non-traded investments ........................................ 24,331 20,276 9,278  Other ...................................................................................... 959 (2,069) 2,787 Change in working capital accounts: (Increase) decrease in accounts receivable .............................. (89,039) (39,361) 3,588  Increase in inventories ............................................................ (62,702) (153) (229) Increase in accounts payable .................................................. 33,419 60,149 81,733  Increase (decrease) in accrued taxes ........................................ 6,135 (12,117) (5,483) Other ...................................................................................... 21,779 (4,027) 4,778  Costs incurred for environmental - related matters .................... (8,712) (7,005) (12,036) Costs incurred for qualified exit costs ........................................ (3,514) (1,580) (3,663) Other.......................................................................................... 1,949 (6,925) (17,512) Net operating cash .................................................................. 544,681 558,929 558,917 Investing Activities Capital expenditures .................................................................. (106,822) (116,507) (126,530) Acquisitions of businesses .......................................................... (554,478) (48,374) (26,649) Increase in other investments...................................................... (12,739) (27,875) (16,144) Proceeds from sale of assets........................................................ 605 47,847 11,778  Other.......................................................................................... (8,447) 8,856 (15,016) Net investing cash .................................................................. (681,881) (136,053) (172,561) Financing Activities Net increase in short-term borrowings ...................................... 238,815 Payments of long-term debt........................................................ (14,135) (8,095) (95,305) Payments of acquired debt ........................................................ (67,131) Payments of cash dividends ........................................................ (96,915) (90,689) (91,007) Proceeds from stock options exercised ...................................... 88,489 47,468 37,516  Treasury stock purchased .......................................................... (267,358) (238,148) (190,320) Other.......................................................................................... (5,157) (1,310) (4,727) Net financing cash .................................................................. (123,392) (290,774) (343,843) Effect of exchange rate changes on cash .................................... 3,711 6,699 2,685  Net (decrease) increase in cash and cash equivalents.................. (256,881) 138,801 45,198  Cash and cash equivalents at beginning of year ........................ 302,813 164,012 118,814 Cash and cash equivalents at end of year .................................. $ 45,932 $ 302,813 $ 164,012  Taxes paid on income ................................................................ $ 114,908 $ 106,950 $ 103,447  Interest paid on debt .................................................................. 39,731 39,029 42,041 See notes to consolidated financial statements. 44 STATEMENTS OF CONSOLIDATED CASH FLOWS (thousands of dollars)