Time Warner Telecom, Inc., offers network, local, and long-distance voice services, data transmission services, high-speed dedicated Internet access, and intercarrier services to business customers and organizations throughout the United States. The company’s recent annual report contained the following information (dollars in thousands):
Net loss ............. $ (98,819)
Depreciation and amortization .... 259,380
Increase in receivables ......... 18,161
Decrease in accrued interest ....... 18,207
Increase in accounts payable ........ 571
Decrease in accrued payroll and benefits . 3,236
Increase in other liabilities (current) .... 53,030
Increase in long-term debt ....... 94,248
Additions to equipment ....... 192,269

Required:
1. Based on this information, compute cash flow from operating activities using the indirect method.
2. What were the major reasons that Time Warner was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and net income important to financial analysts?