A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T  (dollars in thousands, except per share data)  Consolidated Statements of Income  Year Ended December 31,  2004 2003 2002 Net sales  $1,530,446  $1,239,504  $1,062,002  Costs and expenses:  Cost of sales, excluding depreciation and amortization  999,965  820,724  700,302  Depreciation and amortization expense  38,829  37,007  34,825  Selling, general and administrative expense  215,008  177,353  152,928  Operating income  276,644  204,420  173,947  Interest expense  (22,540)  (29,505)  (45,930)  Other expenses, net  (6,663)  (6,987)  (5,355)  Expense for early extinguishment of debt  -  (10,367)  -  Income before income taxes  247,441  157,561  122,662  Provision for income taxes  (84,130)  (53,571)  (42,318)  Net income  $ 163,311  $ 103,990  $ 80,344  Net income per common share – Basic   $1.86  $1.21 $0.95  Average common shares outstanding – Basic  88,023,082  86,100,688  84,891,698  Net income per common share – Diluted   $1.82  $1.18 $0.93  Average common shares outstanding - Diluted  89,736,656  88,131,720  86,891,200  ______________________________________________________________________________________________________  See accompanying notes to consolidated financial statements .  36 