3.25 Extracting Performance Trends from the Statement of Cash Flows. The Apollo Group is one of the largest providers of private education and runs numerous programs and services, including the University of Phoenix. Exhibit 3.23 provides statements of cash flows for 2010 through 2012.

Required Discuss the relations between net income and cash flow from operations and among cashflows from operating, investing, and financing activities for the firm, especially for 2012. Identify signals that might raise concerns for an analyst.

Exhibit 3.23The Apollo Group Statement of Cash Flows (amounts in thousands)(Problem 3.25) Year Ended August 31, 2012 2011 2010 $ 417,006 $ 535,796 $ 521,581 78,705 (1,150) 178,234 (15,510) (2,798) 70,040 (4,014) 159,006 (18,822) (2,221) 64,305 (6,648) 147,035 (13,358) (1,705) 9,400 184,570 643 219,927 1,662 16,788 (497) (26,678) 146,742 4,725 21,850 181,297 (11,951) 55,823 282,628 177,982 (125,399) Cash flows provided by (used in) operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Share-based compensation Excess tax benefits from share-based compensation Depreciation and amortization Amortization of lease incentives Amortization of deferred gains on sale-leasebacks Impairment on discontinued operations Goodwill and other intangibles impairment Noncash foreign currency (gain) loss, net Gain on sale of discontinued operations Provision for uncollectible accounts receivable Litigation charge dit), net Deferred income taxes Changes in assets and liabilities, excluding the impact of acquisitions and business dispositions: Restricted cash and cash equivalents Accounts receivable Prepaid taxes Other assets Accounts payable Student deposits Deferred revenue Accrued and other liabilities Net cash provided by operating activities Cash flows provided by (used in) investing activities: Additions to property and equipment Acquisitions, net of cash acquired Maturities of marketable securities Proceeds from sale-leaseback, net Proceeds from dispositions, net Collateralization of letter of credit Other investing activities Net cash (used in) provided by investing activities Cash flows provided by (used in) financing activities: Payments on borrowings Proceeds from borrowings Apollo Group Class A common stock purchased for treasury Issuance of Apollo Group Class A common stock Noncontrolling interest contributions Excess tax benefits from share-based compensation Net cash used in financing activities Exchange rate effect on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 61,073 (129,773) 9,303 (11,568) 12,525 (58,740) (39,154) (109,783) 551,300 64,725 (121,120) (25,241) (9,900) (3,913) (70,120) (79,488) (44,364) 897,122 (11,828) (265,996) 10,421 2,183 21,624 3,445 32,887 (528) 1,033,242 (162,573) (115,187) (73,736) (168,177) (5,497) 5,000 10,000 169,018 21,251 126,615 76,434 (126,615) (1,694) (114,183) 164,311 (295,289) (562,269) 629,145 (811,913) 11,949 1,150 (731,938) (468) (295,289) 1,571,664 $1,276,375 (437,925) 410,051 (783,168) 24,903 6,875 4,014 (775,250) 712 286,895 1,284,769 $ 1,571,664 (477,568) 475,454 (446,398) 19,671 2,460 6,648 (419,733) (1,697) 316,523 968,246 $1,284,769