The statement of cash flows for IAC InterActive Corp., a diversified Internet company providing services through the Ticketmaster, Expedia, Hotels.com, and Home Shopping Network brand names, is shown below.

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 andinterpret.

AC InterActive Corp. Statement of Cash Flows (annotated) For the Year Ended December 31, 2004 (in millions) Cash flows from operating activities: Net income Goodwill impairment Depreciation Amortization Other Net changes in current assets and liabilities 185,761 184,780 526,971 330,507 (111,591) 156,800 $1,273,228 Net cash provided by operating activities Cash flows from investing activities: Acquisitions Capital expenditures Investments in securities, net $(486,033) (223,787) (43,374) $(753.194) Net cash used in investing activities Cash flows from financing activities Borrowings, net Treasury stock purchases Proceeds from issuing common stock Preferred dividends Other, net $19,039 (430,295) 147,283 (13,053) 17,380 $ (259,646) S 260,388 Net cash used in financing activities Net increase in cash flows from continuing operations