Consider a very basic Income Statement layout...

Sales
less Cost of Sales
= Gross Profit
less Other Expenses (including depreciation)
= Net Profit

So in order to go "back up the statement" from Net Profit to Gross Profit, you add back the "Other Expenses" (including depreciation) to Net Profit to get back to Gross Profit.

Depreciation is not directly a cash flow, per se...unfortunately from the wording in some texts, you'd get the impression that it is. Instead, it's an expense--deducted on the P&L--which did NOT require a cash outlay.

Suppose you had $100 on your P&L as total expenses, consisting of $80 of expenses paid with cash, plus $20 of depreciation. So although your 'expenses' show as $100, only $80 of that was an actual cash outlay. Thus, in reconciling your P&L Net Income to Cash Flow, you must 'add back' the $20 of depreciation to Net Income to arrive at actual Cash Flow for the period.

In that reconciliation, depreciation expense will have the appearance of being a positive Cash Flow item, when in fact it's simply a recognition of the fact that not ALL of your expenses were paid out in cash.