A condensed version of the Kellogg Company statement of cash flows appears in Exhibit

Use that statement to answer the following two questions.
1. What was Kellogg€™s free cash flow for each of the 3 years shown?
2. What does the free cash flow tell us about Kellogg€™s ability to generate sufficient cash flow from operations to cover ongoing investing activities and pay dividends to its shareholders?

Transcribed Image Text:

(millions) 2011 2010 2009 Operating Activities Net earnings Items in net earnings not requiring (providing) cash $1,229 1,240 $1,208 369 (130) 127 1,595 392 (280) 344 1,008 Depreciation and amortization 384 (127) 178 Other noncash expenses (revenues) Changes in operating assets and liabilities Net cash provided by operating activities Investing Activities Additions to properties Other Net cash used in investing activities Financing Activities Reductions of notes payable Issuances of notes payable Issuances of long-term debt Reductions of long-term debt Net issuances of common stock Common stock repurchases Cash dividends Other Net cash used in financing activities Increase (decrease) in cash and cash equivalents 1,643 (594) (474) 9 465) (377) 587 (370) 0 189 895 (945) 291 (798) (604) 15 (1)(1,354) 10 1,241 (482) 131 (187) (546) 0 987 204 (1,052) (584) 8 5 957)(439) 1182) $51 104 91