Banana Republic 2011 Annual Report Download - page 40

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We believe that current cash balances and cash flows from our operations will be sufficient to support our business
operations, including growth initiatives and planned capital expenditures, for the next 12 months and beyond. We
are also able to supplement near-term liquidity, if necessary, with our $500 million revolving credit facility.
Cash Flows from Operating Activities
Net cash provided by operating activities during fiscal 2011 decreased $381 million compared with fiscal 2010,
primarily due to the following:
• a decrease in net income in fiscal 2011 compared with fiscal 2010.
Net cash provided by operating activities during fiscal 2010 decreased $184 million compared with fiscal 2009,
primarily due to the following:
• an increase in inventory purchases in fiscal 2010 compared with fiscal 2009;
• a higher fiscal 2009 bonus payout in the first quarter of fiscal 2010 compared with the fiscal 2008 bonus payout
in the first quarter of fiscal 2009; partially offset by
• an increase in net income in fiscal 2010 compared with fiscal 2009.
We fund inventory expenditures during normal and peak periods through cash flows from operating activities and
available cash. Our business follows a seasonal pattern, with sales peaking over a total of about eight weeks during
the end-of-year holiday period. The seasonality of our operations may lead to significant fluctuations in certain
asset and liability accounts between fiscal year-end and subsequent interim periods.
Cash Flows from Investing Activities
Our cash outflows for investing activities are primarily for capital expenditures and purchases of investments,
while cash inflows are primarily proceeds from maturities of investments. Net cash used for investing activities
during fiscal 2011 increased $25 million compared with fiscal 2010, primarily due to the following:
• $25 million less net maturities of short-term investments in fiscal 2011 compared with fiscal 2010.
Net cash used for investing activities during fiscal 2010 decreased $108 million compared with fiscal 2009,
primarily due to the following:
• $350 million more net maturities of short-term investments in fiscal 2010 compared with fiscal 2009; partially
offset by
• $223 million more purchases of property and equipment in fiscal 2010 compared with fiscal 2009; and
• $17 million less release of restricted cash in fiscal 2010 compared with fiscal 2009.
In fiscal 2011, capital expenditures were $548 million. For fiscal 2012, we expect capital expenditures to be about
$600 million.
Cash Flows from Financing Activities
Our cash outflows from financing activities consist primarily of the repurchases of our common stock and dividend
payments. Cash inflows primarily consist of proceeds from the issuance of long-term debt. Net cash used for
financing activities during fiscal 2011 decreased $1.5 billion compared with fiscal 2010, primarily due to the
following:
• $1.65 billion of proceeds from our issuance of long-term debt in fiscal 2011; partially offset by
• $133 million more repurchases of common stock in fiscal 2011 compared with fiscal 2010.
26 Gap Inc. Form 10-K