Consolidated Statements of Cash Flows  CONSOLIDATED FINANCIAL STATEMENTS 35 AKITA DRILLING LTD.  ANNUAL REPORT (1) Certain comparative figures have been restated to conform with IFRS 11 and IAS 19 (Note 22).  The accompanying notes are an integral part of these consolidated financial statements.  Year Ended December 31 $Thousands 2013 2012  (1) Operating Activities Net income   $ 26,515   $ 28,755  Non-cash items included in net income Depreciation and amortization Note 9  26,825   24,342  Deferred income taxes Note 11 3,852 6,742 Expense for defined benefit pension plan Note 12  369   353  Stock options charged to expense Note 16  293   302  Gain on sale of joint venture interests in rigs and other assets  (106)  (1,082) Unrealized foreign currency gain Note 6 (235) - Unrealized loss on financial guarantee contracts Note 6 106 - Funds flow from operations  57,619  59,412 Change in non-cash working capital: Accounts receivable  17,662  (14,577) Prepaid expenses and other (206) 254 Income taxes recoverable 4,487 (4,487) Accounts payable and accrued liabilities (21,866) 18,884 Deferred revenue  239   (51)  316 23 Equity income from joint ventures Note 8 (18,792) (14,163) Pension benefits paid Note 12 (15) (15) Interest paid 4 - Income taxes expense - current Note 11 5,352 2,916 Income taxes paid  (4,930)  (6,185) Net cash from operating activities  39,554  41,988 Investing Activities Capital expenditures Note 9  (35,113)  (65,356) Change in non-cash working capital related to capital (2,177) (2,425) Net distributions from investments in joint ventures Note 8 13,525 15,010 Change in cash restricted for loan guarantees Note 7 (2,950) - Change in term deposits Note 5 (5,000)  9,500  Proceeds on sale of joint venture interests in rigs and other assets 443  3,984 Net cash used in investing activities (31,272) (39,287) Financing Activities Dividends paid  (5,567)  (5,038) Proceeds received on exercise of stock options 566 18 Repurchase of share capital Note 13  (126)  (1,091) Loan commitment fee paid (160) (140) Net cash used in financing activities  (5,287)  (6,251) Increase (decrease) in cash and cash equivalents 2,995 (3,550) Cash and cash equivalents, beginning of year 11,003 14,553 Cash and Cash Equivalents, End of Year  $ 13,998  $ 11,003