Exhibit 3.34 presents a statement of cash flows for Starbucks for 2010, 2011, and 2012. This statement is an expanded version of the statement of cash flows for Starbucks shown in Exhibit 1.28.

Required
a. Explain why equity in income of investees appears as a subtraction when net income is converted to cash flow from operations.
b. Compute the amount of cash received from investees as dividends each year. To answer this question, you need to refer to the income statement of Starbucks in Exhibit 1.27 in Chapter 1 (Integrative Case 1.1).
c. Explain why stock-based compensation appears as an addition to net income to compute cash flow from operations.
d. Discuss the relation between net income and cash flow from operations for each of the three years.
e. Discuss the relations among cash flows from operating, investing, and financing activities for each of the three years.
f. Refer to the income statement for Starbucks in Exhibit 1.27). Compute the amount of EBITDA for 2010, 2011, and 2012.
g. Discuss the relations among net income, non-working capital adjustments, working capital adjustments, operating cash flows, and EBITDA for the three years. Are the patterns similar or different? What are the primary determinants of the differences between the summary measures net income, operating cash flows, and EBITDA?
h. The income statement in Exhibit 1.27 shows depreciation and amortization expense as follows:
2012 2011 2010
$550.3 .........$523.3......... $510.4
However, the statement of cash flows shows add backs for depreciation and amortization as follows:
2012 2011 2010
$580.6 .......$550.0 ..........$540.8
Explain why the amount on the income statement differs from the amount on the statement of cash flows each year.

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Exhibit 3.34 Starbucks Corporation Comparative Statements of Cash Flows amounts in millions) (Case 3.1) Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Oct 3, 2010 OPERATING ACTIVITIES Net earnings including noncontrolling interests Adjustments to reconcile net earnings to net cash 1,384.7 1,248.0 948.3 provided by operating activities: Depreciation and amortization Gain on sale of properties Defered income taxes, net Income earned from equity method investees, 550.0 (30.2) 106.2 580.6 540.8 61.1 (42.0) (49.3) (32.9) (55.2) 145.2 33.3 (17.2) net of distributions Gain resulting from acquisition of joint ventures Stock-based compensation Other Cash provided/(used) by changes in operating assets 153.6 23.6 113.6 75.5 and liabilities: Accounts receivable Inventories Accounts payable Accrued liabilities and insurance reserves Deferred revenue Prepaid expenses, other current assets and (90.3) (273.3) (105.2) 23.7 60.8 (88.7) (422.3) 227.5 (81.8) 35.8 (33.4) 123.2 (3.6) (18.7) 24.2 (19.7) 1,750.3 other assets (22.5) 17.3 Net cash provided by operating activities INVESTING ACTIVITIES: Purchase of investments Maturities and calls of investments Acquisitions, net of cash acquired Additions to property, plant and equipment Cash proceeds from sale of property, plant, 1,612.4 1,704.9 (1,748.6) 1,796.4 (129.1) (856.2) (966.0) 430.0 (55.8) (531.9) (549.0) 209.9 (12.0) (445.8) and equipment Other Net cash used by investing activities 5.3 (41.8) (974.0) (13.2) (1,019.5) 5.1 2.3 (789.5) FINANCING ACTIVITIES: (Payments)/proceeds from short-term borrowings Purchase of noncontrolling interest Proceeds from issuance of common stock Excess tax benefit from exercise of stock options Cash dividends paid Repurchase of common stock Minimum tax withholdings on share-based awards Other Net cash used by financing activities Effect of exchange rate changes on cash and cash (30.8) 236.6 169.8 (513.0) (549.1) (58.5) 30.8 (27.5) 250.4 103.9 (389.5) (555.9) (15.0) (5.2) (608.0) (45.8) 132.8 36.9 (171.0) (285.6) (8.4) (745.5) (346.0) (0.8) (15.9) (5.2) 564.2 9.7 equivalents Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS Beginning of period End of period 40.5 1,148.1 1,188.6 1,164.0 1,148.1 599.8 $1,164.0 Source: Starbucks Corporation, Form 10-K for the Fiscal Year ended September 30, 2012.