| EXELIS INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (unaudited) | ||||||||||||
| (IN MILLIONS) | Year Ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | ||||||||||
| Operating activities | ||||||||||||
| Net income | $ | 249 | $ | 281 | $ | 330 | ||||||
| Less income from discontinued operations | 19 | 103 | 84 | |||||||||
| Income from continuing operations | 230 | 178 | 246 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | ||||||||||||
| Depreciation and amortization | 106 | 107 | 127 | |||||||||
| Stock-based compensation | 26 | 32 | 24 | |||||||||
| Restructuring and asset impairment charges | 12 | 80 | 19 | |||||||||
| Payments for restructuring | (26 | ) | (57 | ) | (20 | ) | ||||||
| Defined benefit plans expense | 58 | 87 | 43 | |||||||||
| Defined benefit plans payments | (145 | ) | (206 | ) | (290 | ) | ||||||
| Change in assets and liabilities | ||||||||||||
| Change in receivables | (107 | ) | (49 | ) | 18 | |||||||
| Change in inventories | 18 | 41 | 51 | |||||||||
| Change in other assets | 20 | (20 | ) | (2 | ) | |||||||
| Change in accounts payable | (19 | ) | (24 | ) | (22 | ) | ||||||
| Change in advance payments and billings in excess of costs | (48 | ) | (20 | ) | (52 | ) | ||||||
| Change in deferred taxes | 13 | 144 | 120 | |||||||||
| Change in other liabilities | 26 | (100 | ) | (3 | ) | |||||||
| Other, net | (4 | ) | 1 | 2 | ||||||||
| Net cash provided by operating activities from continuing operations | 160 | 194 | 261 | |||||||||
| Investing activities | ||||||||||||
| Capital expenditures | (53 | ) | (76 | ) | (116 | ) | ||||||
| Proceeds from the sale of assets | 9 | 9 | 2 | |||||||||
| Acquisitions, net of cash acquired | (23 | ) | (16 | ) | (43 | ) | ||||||
| Other, net | 1 | 2 | 1 | |||||||||
| Net cash used in investing activities from continuing operations | (66 | ) | (81 | ) | (156 | ) | ||||||
| Financing activities | ||||||||||||
| Dividends paid | (80 | ) | (58 | ) | (77 | ) | ||||||
| Common stock repurchased | (112 | ) | (16 | ) | — | |||||||
| Proceeds from the exercise of stock options | 18 | 23 | 19 | |||||||||
| Net cash distribution received from Vectrus | 133 | — | — | |||||||||
| Transfer (to) from Vectrus, net | (32 | ) | 4 | (4 | ) | |||||||
| Other, net | 1 | — | 1 | |||||||||
| Net cash used in financing activities from continuing operations | (72 | ) | (47 | ) | (61 | ) | ||||||
| Exchange rate effects on cash and cash equivalents | (7 | ) | 1 | 7 | ||||||||
| Net cash from discontinued operations | 36 | 114 | 121 | |||||||||
| Net change in cash and cash equivalents | 51 | 181 | 172 | |||||||||
| Cash and cash equivalents – beginning of year | 459 | 278 | 106 | |||||||||
| Cash and cash equivalents – end of year | $ | 510 | $ | 459 | $ | 278 | ||||||
| Supplemental disclosures of cash flow information | ||||||||||||
| Cash paid during the year for | ||||||||||||
| Income taxes (net of refunds received) | $ | 70 | $ | 97 | $ | 28 | ||||||
| Interest | $ | 34 | $ | 34 | $ | 37 | ||||||
