STAPLES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Dollar Amounts in Millions) Fiscal Year Ended January 28, 2017 January 30, 2016 January 31, 2015 Operating Activities: Net (los) income $11.497) $379 $135 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 378 388 406 Amortization of Intangibles 58 67 62 Loss gain) on sale of businesses and assets, net 16B 5 (27) Interest and fees paid from restricted cash account, net 66 Impairment of goodwill and long-lived assets 1.700 50 470 Inventory write-downs related to restructuring activities 1 26 Stock-based compensation 61 63 84 Excess tax benefits from stock-based compensation arrangements (5) (1) Deferred income tax expense benefit) 57 28 (49) 19 11 12 Changes in assets and liabilities: Decrease increase) in receivables 21 (19) (184) Decrease in merchandise inventories 63 18 62 Decrease increase) in prepaid expenses and other assets 34 (41) 138 Increase decrease) in accounts payable 4 63 (59) Decrease increase in accrued expenses and other liabilities (140) 110 (24) (Decrease) increase in other long-term obligations (58) (140) 13 Net cash provided by operating activities 934 978 1,043 Other (255) 14 55 166) (381) 27 2 Investing Activities: Acquisition of property and equipment Proceeds from the sale of property and equipment Sale of businesses, net Increase in restricted cash Acquisition of businesses, net of cash acquired Cost method investments Net cash used in investing activities (361) 5 59 (22) (78) (15) (311) (374) (375) 49 23 7 Financing Activities: Proceeds from the exercise of stock options and sale of stock under employee stock purchase plans 30 Proceeds from borrowings 187 Payments on borrowings, including payment of deferred financing fees and capital lease obligations (211) Cash dividends paid (311) Excess tax benefits from stock-based compensation arrangements Repurchase of common stock (13) Net cash used in financing activities (318) Effect of exchange rate changes on cash and cash equivalents 7 Net increase in cash and cash equivalents 312 Cash and cash equivalents at beginning of period 825 Cash and cash equivalents at end of period 1.137 Add: Cash and cash equivalents attributed to disposal group held for sale at February 1, 2014 Cash and cash equivalents at the end of the period $1,137 See notes to consolidated financial statements. (99) (308) 5 (24) (378) (28) 198 627 825 (50) (307) 1 (208) (493 (48) 127 492 619 $825 8 S627 1. In the three years reported, what was Staples primary investing activity? How was this activity financed? Be specific 2. During the most recent fiscal year, Staples purchased certificates of deposit. How were these purchases reported in the statement of cash flows? (Note: This is not an investing activity.) 3. How are issuances of debt securities and issuances of equity securities classified in a statement of cash flows? 4. How are payments to investors in debt securities (interest) and payments to investors in equity securities (dividends) classified in a statement of cash flows? Is this a conceptual inconsistency? Explain. 5. Staples' statement of cash flows reports expenditures for acquisition of businesses. It also reports additions to long-term debt. Suppose the businesses had been acquired not with cash, but by exchange for debt securities Would such a transaction be reported? Explain
