The Gap 2006 Annual Report Download - page 54

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THE GAP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
53 Weeks Ended
February 3, 2007
52 Weeks Ended
January 28, 2006
52 Weeks Ended
January 29, 2005
Cash Flows from Operating Activities:
Net earnings ..................................... $ 778 $1,113 $ 1,150
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization (a) ................ 530 625 615
Share-based compensation ..................... 54 22 5
Tax benefit from exercise of stock options and
vesting of service awards ..................... 25 19 31
Excess tax benefit from exercise of stock options . . . (23) — —
Other non-cash items .......................... 11 (69) 21
Deferred income taxes ......................... (41) (46) (80)
Change in operating assets and liabilities:
Merchandise inventory ........................ (97) 114 (90)
Other assets ................................. 12 (104) (18)
Accounts payable ............................. (25) (102) 39
Accrued expenses and other current liabilities ...... 75 (121) (23)
Income taxes payable, net ...................... (102) (19) (112)
Lease incentives and other liabilities .............. 53 119 59
Net cash provided by operating activities .................. 1,250 1,551 1,597
Cash Flows from Investing Activities:
Purchase of property and equipment .................. (572) (600) (419)
Proceeds from sale of property and equipment .......... 22 27 —
Purchase of short-term investments .................. (1,460) (1,768) (1,813)
Maturities of short-term investments ................. 1,841 1,645 2,072
Purchase of long-term investments ................... — (100) —
Maturities of long-term investments .................. — 100 —
Change in restricted cash ........................... 11 959 337
Change in other assets ............................. 8 23 6
Net cash provided by (used for) investing activities .......... (150) 286 183
Cash Flows from Financing Activities:
Payments of long-term debt ......................... — — (871)
Proceeds from share-based compensation .............. 190 139 154
Purchase of treasury stock .......................... (1,050) (2,000) (1,000)
Excess tax benefit from exercise of stock options ....... 23 — —
Cash dividends paid ............................... (265) (179) (79)
Net cash used for financing activities ..................... (1,102) (2,040) (1,796)
Effect of exchange rate fluctuations on cash ................ (3) (7) —
Net decrease in cash and cash equivalents ................. (5) (210) (16)
Cash and cash equivalents at beginning of period ............ 2,035 2,245 2,261
Cash and cash equivalents at end of period ................. $2,030 $ 2,035 $ 2,245
Supplemental disclosure of cash flow information:
Cash paid for interest ................................ $ 40 $ 79 $ 168
Cash paid for income taxes ........................... $ 575 $ 738 $ 891
(a) Depreciation and amortization includes the amortization of lease incentives of $84 million, $82 million, and
$92 million for fiscal 2006, 2005, and 2004, respectively.
See Notes to the Consolidated Financial Statements
38