SUPERVALU is one of the largest grocery chains in the United States. Its February 28, 2015, statement of cash flows included the following (dollars in millions):

REQUIRED:
a. Depreciation and amortization are added back to net earnings in the computation of net cash provided by operations. Does this mean that depreciation and amortization are sources of cash?
b. What is meant by €œimpairment charges€? What event would lead to such an expense? Why is it added back to net earnings?
c. Explain why the €œgain on the sale€ of assets is subtracted from net earnings, while €œloss on sale€ is added. Describe the entries that led to these disclosures.
d. Comment on the trends across time of the company€™s current accounts, especially inventory and receivables.
e. Comment on the quality of the company€™s earnings over the three-year period.

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SUPERVALU Inc. and Subsidiaries Consolidated Statements of Cash Flows (in millions) Fiscal Years Ended February 28, 2015 (53 weeks) February 22, 2014 (52 weeks) February 23, 2013 (52 weeks) Cash flows from operating activities $ 199 $ 189 $(1,456) Net earnings (loss) including noncontrolling interests Income (loss) from discontinued operations, net of tax 72 176 (1,203) Net earnings (loss) from continuing operations 127 13 (253) Adjustments to reconcile Net earnings (loss) from continuing operations to Net cash provided by operating activities- continuing operations: Goodwill and intangible asset impairment charges Asset impairment and other charges 45 194 283 Net gain on sale of assets and exits of surplus leases (14) (17) (6) 302 Depreciation and amortization 285 365 LIFO charge (credit) 8. (9) 4 Deferred income taxes (39) (50) Stock-based compensation 23 22 13 Net pension and other postretirement benefits cost 96 79 102 (169) Contributions to pension and other postretirement benefit plans (124) (98) Other adjustments 30 34 26 Changes in operating assets and liabilities, net of effects from business combinations: Receivables (54) 30 Inventories (124) 51 Accounts payable and accrued liabilities 75 (127) (69) Income taxes (15) (79) 75 Other changes in operating assets and liabilities (47) (68) (52) Fiscal Years Ended February 28, 2015 (53 weeks) February 22, 2014 (52 weeks) February 23, 2013 (52 weeks) Net cash provided by operating activities-continuing operations $ 333 $ 129 $ 427 Net cash provided by (used in) operating activities-discontinued operations 75 (101) 481 Net cash provided by operating activities 408 28 908 Cash flows from investing activities Proceeds from sale of assets 14 38 Purchases of property, plant and equipment (239) (111) (228) Payments for business acquisition (55) Other 11 Net cash used in investing activities-continuing operations (285) (86) (189) Net cash provided by (used in) investing activities-discontinued operations 135 (175) Net cash (used in) provided by investing activities (285) 49 (364) Cash flows from financing activities Proceeds from issuance of debt 350 2,098 1,713 Proceeds from the sale of common stock 177 Payments of debt and capital lease obligations (400) (2,221) (2,099) Payments for debt financing costs (42) (151) (66) Distributions to noncontrolling interests (8) (9) (10) Dividends paid (37) Other (1) (7) Net cash used in financing activities- continuing operations (107) (506) Net cash used in financing activities-discontinued operations (36) (46) Net cash used in financing activities (92) (143) (552) Net increase (decrease) in cash and cash equivalents (66) (8) Cash and cash equivalents at beginning of year 83 149 157 Cash and cash equivalents at end of year $ 114 $ 83 2$ 149 Less cash and cash equivalents of discontinued operations at end of year (77) Cash and cash equivalents of continuing operations at end of year $ 114 83 %24 72 SUPPLEMENTAL CASH FLOW INFORMATION The Company's noncash activities were as follows: