Chapter 13 Statement of Cash Flows 625The statement of cash flows for IAC InterActive Corp., a diversified Internet company provid-
ing services through the Ticketmaster, Expedia, Hotels.com, and Home Shopping Network
brand names, is shown below.IAC InterActive Corp.
Statement of Cash Flows (annotated)
For the Year Ended December 31, 2004(in millions)
Cash flows from operating activities:
Net income $ 185,761
Goodwill impairment 184,780
Depreciation 526,971
Amortization 330,507
Other (111,591)
Net changes in current assets and liabilities 156,800
Net cash provided by operating activities $1,273,228
Cash flows from investing activities:
Acquisitions $ (486,033)
Capital expenditures (223,787)
Investments in securities, net (43,374)
Net cash used in investing activities $ (753,194)
Cash flows from financing activities:
Borrowings, net $ 19,039
Treasury stock purchases (430,295)
Proceeds from issuing common stock 147,283
Preferred dividends (13,053)
Other, net 17,380
Net cash used in financing activities $ (259,646)
Net increase in cash flows from continuing operations $ 260,388Case 13-5
Calculating free cash flow
and interpreting the statement
of cash flows
a. Calculate the free cash flow.
b. Explain why the cash flow from operations is nearly 600% greater than the net income.
c. Identify the major sources and uses of cash and interpret.The sales and statement of cash flows for Intel Corp.,National Semiconductor, and Texas
Instrumentsfor a recent fiscal year are shown on the following page (in millions). These three
companies are part of the semiconductor fabrication industry. Assume that investments made
in property, plant, and equipment are to maintain productive capacity.
a. Determine the free cash flow for each company.
b. Determine the free cash flow as a percent of cash flow from operating activities and as a
percent of sales for each company. Round to the nearest percent.
c. Interpret your results.Case 13-6
Free cash flow—
semiconductors