Sears 2007 Annual Report Download - page 56

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SEARS HOLDINGS CORPORATION
Consolidated Statements of Cash Flows
millions 2007 2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .................................................................. $ 826 $1,492 $ 857
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ............................................... 1,049 1,143 942
Cumulative effect of change in accounting principle, net of tax ..................... — — 90
Provision for uncollectible credit card accounts .................................. — — 49
Curtailment gain on Sears Canada’s post-retirement benefit plans ................... (27) — —
Loss (gain) on total return swaps, net .......................................... 14 (74) —
Gain on sales of assets ...................................................... (38) (82) (39)
Gain on sale of investments ................................................. (2) (18) (38)
Other non-cash items affecting earnings ........................................ 12 — —
Change in operating assets and liabilities (net of acquisitions and dispositions):
Deferred income taxes .................................................. (84) 263 52
Credit card receivables ................................................. — (5) (381)
Merchandise inventories ................................................ 66 (835) 205
Merchandise payables .................................................. 93 (140) (78)
Income and other taxes ................................................. (541) (240) (134)
Other operating assets .................................................. 35 227 285
Other operating liabilities ............................................... 144 (303) 383
Net cash provided by operating activities ....................................... 1,547 1,428 2,193
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 ................................. 95 141 160
Purchases of investments ................................................... (30) — —
Purchases of property and equipment .......................................... (570) (508) (552)
Cash settlements and change in collateral on total return swaps, net .................. 68 (10) —
Net cash (used in) provided by investing activities ................................ (437) (660) 632
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt issuances ................................................ 3 524 176
Repayments of long-term debt ............................................... (672) (875) (578)
Increase (decrease) in short-term borrowings, primarily 90 days or less ............... 68 (83) (414)
Proceeds from sale leaseback transaction ....................................... 88 — —
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 ................................................... (2,926) (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 ........................................... (3,439) (1,252) (1,953)
Effect of exchange rate changes on cash and cash equivalents ........................... 112 (16) 32
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ................ (2,217) (500) 904
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ...................... 3,839 4,339 3,435
CASH AND CASH EQUIVALENTS, END OF YEAR .............................. $1,622 $ 3,839 $ 4,339
SUPPLEMENTAL DISCLOSURE ABOUT NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Bankruptcy related settlements resulting in the receipt of treasury stock ................... $ 29 $ 3 $ 25
Conversion of 9% convertible note ................................................ — — 63
Capital lease obligation incurred .................................................. 66 61 65
Supplemental Cash Flow Data:
Income taxes paid ......................................................... 372 576 114
Cash interest paid ......................................................... 243 282 256
See accompanying Notes to Consolidated Financial Statements.
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