The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. 23 Fiscal Year Ended February 2, 2002 February 3, 2001 January 29, 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $46,582 $42,690 $35,049 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27,566 20,880 13,849 Deferred financing fee amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62 57 35 Loss on disposals of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . .  819 1,124 346 Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  490 1,886 2,726 Changes in operating assets and liabilities: Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (2,777 ) (4,006 ) (2,370 ) Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9,010 (12,084 ) (20,682 ) Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (943 ) (2,527 ) (2,905 ) Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  417 (619 ) (423) Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (6,168 ) 8,184 6,815 Accrued expenses, interest and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11,714 6,204 6,004 Total adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40,190 19,099 3,395 Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  86,772 61,789 38,444 CASH FLOWS FROM INVESTING ACTIVITIES: Property and equipment purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (49,114 ) (55,167 ) (61,952 ) Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (49,114 ) (55,167 ) (61,952 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  571,898 613,623 305,845 Repayments under revolving credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (575,222 ) (616,806 ) (299,338 ) Payment of obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0 0 (2 ) Exercise of stock options and employee stock purchases . . . . . . . . . . . . . . . . . . . . .  2,716 2,625 2,907 Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0 (122 ) (63 ) Net cash (used by) provided by financing activities . . . . . . . . . . . . . . . . . . . . .  (608 ) (680 ) 9,349 Effect of exchange rate change on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (0 ) ( 5 ) ( 7 ) Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . .  37,050 5,937 (14,166 ) Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8,141 2,204 16,370 Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $45,191 $8,141 $2,204 OTHER CASH FLOW INFORMATION: Cash paid during the year for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $904 $1,983 $676 Cash paid during the year for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25,555 25,907 17,065 THE CHILDREN’S PLACE RETAIL STORES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)