Nordstrom, Inc. Consolidated Statements of Cash Flows In millions The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 40 Fiscal year 2014 2013 2012 Operating Activities Net earnings $720 $734 $735 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization expenses 508 454 429 Amortization of deferred property incentives and other, net (76) (58) (63) Deferred income taxes, net 7 12 22 Stock-based compensation expense 68 58 53 Tax benefit from stock-based compensation 20 21 23 Excess tax benefit from stock-based compensation (22) (23) (24) Bad debt expense 41 52 42 Change in operating assets and liabilities: Accounts receivable (161) (93) (99) Merchandise inventories (176) (157) (170) Prepaid expenses and other assets (4) (6) 5 Accounts payable 15 167 48 Accrued salaries, wages and related benefits 18 (12) 13 Other current liabilities 155 60 36 Deferred property incentives 110 89 58 Other liabilities (3) 22 2 Net cash provided by operating activities 1,220 1,320 1,110 Investing Activities Capital expenditures (861) (803) (513) Change in restricted cash — — 200 Change in credit card receivables originated at third parties (8) (6) (42) Other, net (20) (13) (14) Net cash used in investing activities (889) (822) (369) Financing Activities Proceeds from long-term borrowings, net of discounts 34 399 — Principal payments on long-term borrowings (7) (407) (506) (Decrease) increase in cash book overdrafts (4) 47 5 Cash dividends paid (251) (234) (220) Payments for repurchase of common stock (610) (515) (725) Proceeds from issuances under stock compensation plans 141 103 91 Excess tax benefit from stock-based compensation 22 23 24 Other, net (23) (5) (2) Net cash used in financing activities (698) (589) (1,333) Net decrease in cash and cash equivalents (367) (91) (592) Cash and cash equivalents at beginning of year 1,194 1,285 1,877 Cash and cash equivalents at end of year $827 $1,194 $1,285 Supplemental Cash Flow Information Cash paid during the year for: Income taxes, net of refunds $391 $445 $429 Interest, net of capitalized interest 152 170 169 Non-cash investing and financing activities: Issuance of common stock for Trunk Club acquisition 280 — — Debt exchange — 201 —