Banana Republic 2007 Annual Report Download - page 28

THE GAP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
($ and shares in millions except per share amounts)
Common Stock Additional
Paid-in Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Earnings
Deferred
Compensation
Treasury Stock
Total
Comprehensive
EarningsShares Amount Shares Amount
Balance at January 29, 2005 ........................... 986 $ 49 $ 904 $7,181 $ 48 $ (8) (125) $(3,238) $ 4,936 Netearnings.......................................... 1,113 1,113 $1,113 Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) (25) (25) Change in fair value of derivative financial instruments, net of
taxof($1) .......................................... 1 1 1
Reclassification adjustment for realized losses on derivative
financial instruments, net of tax of ($17) . . . . . . . . . . . . . . . . . 27 27 27
Issuance of common stock pursuant to stock option and other
stock award plans and related tax benefit of $19 . . . . . . . . . . 8 1 128 129
Amortization of stock units and discounted stock options . . . . . 18 3 21 Conversion of convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 4 1,351 1,355
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . (99) (2,000) (2,000) Reissuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 28 29 Cash dividends ($0.18 per share) . . . . . . . . . . . . . . . . . . . . . . . . (161) (161)
Balance at January 28, 2006 ........................... 1,079 54 2,402 8,133 51 (5) (222) (5,210) 5,425 $1,116 Netearnings.......................................... 778 778 $ 778 Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 10
Change in fair value of derivative financial instruments, net of
taxof($10) ......................................... 15 15 15
Reclassification adjustment for realized losses on derivative
financial instruments, net of tax of ($1) . . . . . . . . . . . . . . . . . . 1 1 1
Issuance of common stock pursuant to stock option and other
stock award plans and related tax benefit of $25 . . . . . . . . . . 14 1 187 188
Amortization of unrecognized share-based compensation, net
ofestimatedforfeiture ................................ 47 47
Reversal of deferred compensation upon implementation of
SFAS123(R)....................................... (5) 5 —
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . (58) (1,050) (1,050) Reissuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 25 25 Cash dividends ($0.32 per share) . . . . . . . . . . . . . . . . . . . . . . . . (265) (265)
Balance at February 3, 2007 ........................... 1,093 55 2,631 8,646 77 — (279) (6,235) 5,174 $ 804 Netearnings.......................................... 833 833 $ 833 Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 84 84
Change in fair value of derivative financial instruments, net of
taxof$17 .......................................... (18) (18) (18)
Reclassification adjustment for realized gains on derivative
financial instruments, net of tax of $11 . . . . . . . . . . . . . . . . . . (18) (18) (18)
Cumulative effect of adoption of FIN 48 . . . . . . . . . . . . . . . . . . . (4) (4) Issuance of common stock pursuant to stock option and other
stock award plans and related tax benefit of $8 . . . . . . . . . . . 7 — 101 101
Amortization of unrecognized share-based compensation, net
ofestimatedforfeiture ................................ 49 49
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . (89) (1,700) (1,700) Reissuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 23 25 Cash dividends ($0.32 per share) . . . . . . . . . . . . . . . . . . . . . . . . (252) (252)
Balance at February 2, 2008 ........................... 1,100 $ 55 $2,783 $9,223 $125 $— (366) $(7,912) $ 4,274 $ 881
See Notes to the Consolidated Financial Statements
38฀฀฀Form฀10-K
THE GAP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
52 Weeks Ended
February 2, 2008
53 Weeks Ended
February 3, 2007
52 Weeks Ended
January 28, 2006
Cash flows from operating activities:
Net earnings ...................................................... $ 833 $ 778 $1,113
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization (a) ................................. 547 530 625
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 54 22
Tax benefit from exercise of stock options and vesting of stock units . . . . 8 25 19
Excess tax benefit from exercise of stock options and vesting of stock
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (23) —
Non-cash and other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 11 (69)
Deferred income taxes ......................................... (51) (41) (46)
Changes in operating assets and liabilities:
Merchandise inventory ...................................... 252 (97) 114
Other current assets and other long-term assets . . . . . . . . . . . . . . . . . 18 12 (104)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 (6) (95)
Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . 32 56 (128)
Income taxes payable, net of prepaid and other tax related items . . . (4) (102) (19)
Lease incentives and other long-term liabilities .................. 148 53 119
Net cash provided by operating activities .............................. 2,081 1,250 1,551
Cash flows from investing activities:
Purchases of property and equipment ................................. (682) (572) (600)
Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 11 22 27
Purchases of short-term investments ................................. (894) (1,460) (1,768)
Maturities of short-term investments .................................. 1,287 1,841 1,645
Purchases of long-term investments .................................. — — (100)
Maturities of long-term investments ................................... — — 100
Change in restricted cash ........................................... 7 11 959
Change in other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) 8 23
Net cash provided by (used for) investing activities ...................... (274) (150) 286
Cash flows from financing activities:
Payments of long-term debt (b) ...................................... (326) — —
Proceeds from share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 190 139
Repurchase of common stock ....................................... (1,700) (1,050) (2,000)
Excess tax benefit from exercise of stock options and vesting of stock
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 23 —
Cash dividends paid ............................................... (252) (265) (179)
Net cash used for financing activities .................................. (2,146) (1,102) (2,040)
Effect of exchange rate fluctuations on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 (3) (7)
Net decrease in cash and cash equivalents ............................ (306) (5) (210)
Cash and cash equivalents at beginning of period ....................... 2,030 2,035 2,245
Cash and cash equivalents at end of period ............................ $1,724 $ 2,030 $ 2,035
Supplemental disclosure of cash flow information:
Cash paid for interest during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 39 $ 40 $ 79
Cash paid for income taxes during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 535 $ 575 $ 738
(a) Depreciation and amortization is net of the amortization of lease incentives of $88 million, $84 million, and $82 million for
fiscal 2007, 2006, and 2005, respectively.
(b) Payments of long-term debt does not include the non-cash conversion of our senior convert ble debt of $1.4 billion to
85 million shares of common stock in March 2005. See Note 4.
See Notes to the Consolidated Financial Statements
฀฀ Form฀10-K฀฀฀39