|CUMMINS INC filed this Form 10-Q on 10/31/2017|
LIQUIDITY AND CAPITAL RESOURCES
Key Working Capital and Balance Sheet Data
We fund our working capital with cash from operations and short-term borrowings, including commercial paper, when necessary. Various assets and liabilities, including short-term debt, can fluctuate significantly from month to month depending on short-term liquidity needs. As a result, working capital is a prime focus of management attention. Working capital and balance sheet measures are provided in the following table:
(1) Working capital includes cash and cash equivalents.
Cash and cash equivalents were impacted as follows:
Net cash provided by operating activities increased $157 million for the nine months ended October 1, 2017, versus the comparable period in 2016, primarily due to higher consolidated net income, favorable translation and hedging activities and lower working capital levels, partially offset by higher equity in income of investees. During the first nine months of 2017, the lower working capital requirements resulted in a cash outflow of $215 million compared to a cash outflow of $302 million in the comparable period in 2016.
Net cash used in investing activities increased $196 million for the nine months ended October 1, 2017, versus the comparable period in 2016, primarily due to the acquisition of Eaton Cummins Automated Transmission Technologies for $600 million, partially offset by lower net investments in marketable securities of $268 million, higher proceeds from the disposal of property, plant and equipment of $93 million and higher cash flows from derivatives not designated as hedges of $73 million.
Net cash used in financing activities decreased $445 million for the nine months ended October 1, 2017, versus the comparable period in 2016, primarily due to lower repurchases of common stock of $354 million and lower payments on borrowings and capital lease obligations of $118 million, partially offset by lower proceeds from borrowings of $107 million.
The effect of exchange rate changes on cash and cash equivalents for the nine months ended October 1, 2017, versus the comparable period in 2016, increased $224 million primarily due to the British pound, which increased cash and cash equivalents by $198 million.