Sears 2006 Annual Report Download - page 57

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SEARS HOLDINGS CORPORATION
Consolidated Statements of Cash Flows
millions 2006 2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ........................................................... $1,490 $ 858 $1,106
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ........................................ 1,142 932 27
Cumulative effect of change in accounting principle, net of tax .............. — 90 —
Provision for uncollectible credit card accounts ........................... — 49 —
Gain on total return swaps, net ........................................ (74) — —
Gain on sales of assets ............................................... (82) (39) (946)
Gain on sale of investments .......................................... (18) (38) —
Change in operating assets and liabilities (net of acquisitions and
dispositions): ....................................................
Deferred income taxes ........................................... 258 58 597
Credit card receivables .......................................... — (380) —
Merchandise inventories ......................................... (841) 208 (43)
Merchandise payables ........................................... (145) (71) 251
Income and other taxes .......................................... (173) (53) 66
Other operating assets ........................................... 193 318 100
Other operating liabilities ........................................ (306) 366 (90)
Net cash provided by operating activities ................................ 1,444 2,298 1,068
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired .......................... (283) (1,020) —
Proceeds from sale of business ........................................ — 2,044 —
Proceeds from sales of property and investments .......................... 143 157 562
Purchases of property and equipment ................................... (513) (546) (230)
Change in collateral on total return swaps, net ............................ (80) — —
Cash settlements on total return swaps, net ............................... 70 — —
Net cash (used in) provided by investing activities ......................... (663) 635 332
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt issuances ......................................... 524 176 —
Repayments of long-term debt ........................................ (875) (577) (53)
Decrease in short-term borrowings, primarily 90 days or less ................ (83) (414) —
Proceeds from termination of interest rate swaps .......................... — 60 —
Sears Canada dividend paid to minority shareholders ...................... — (794) —
Issuance of subsidiary stock .......................................... — 59 —
Purchase of treasury stock ............................................ (816) (590) —
Debt issue costs .................................................... (2) (27) —
Income tax benefit on exercise of nonqualified stock options ................ — 53 —
Proceeds from the exercise of stock options .............................. — 102 —
Net cash used in financing activities .................................... (1,252) (1,952) (53)
Effect of exchange rate changes on cash and cash equivalents .................... (1) 24 —
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ......... (472) 1,005 1,347
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ............... 4,440 3,435 2,088
CASH AND CASH EQUIVALENTS, END OF YEAR ...................... $3,968 $ 4,440 $3,435
SUPPLEMENTAL DISCLOSURE ABOUT NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Bankruptcy related settlements resulting in the receipt of treasury stock ............ $ 3 $ 25 $ 88
Sale of owned and assignment of leased properties ............................ — — 403
Conversion of 9% convertible note ......................................... — 63 —
Capital lease obligation incurred ........................................... 61 65 49
Supplemental Cash Flow Data:
Income taxes paid .................................................. 574 114 6
Cash interest paid .................................................. 282 255 52
See accompanying Notes to Consolidated Financial Statements.
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