When I met with Smith in his office, he showed me the 1962 annual report, his first as CEO, in which he refers repeatedly to cash earnings (defined as net earnings plus depreciation) as the key metric in evaluating company performance, not net income. This may well be the first use in American business parlance of that now standard term. As longtime General Cinema CFO Woody Ives said, “Our focus was always on cash,” and across Smith’s tenure, the company consistently generated high levels of operating cash flow.
