CONSOLIDATED WATER CO. LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in United States dollars) Footnotes to the consolidated statements of cash flows: For the year ended December 31, 2000 1999 1998 Reconciliation of net cash from operating activities  to net income from operations: Net income 2,404,820 1,569,717 1,451,933 Adjustments to reconcile net income to net cash  from operating activities Depreciation (Notes 5 and 9) 1,071,455 816,960 768,745 Gain on sale of fixed assets - ( 1,920) ( 20,000) Amortization of intangible asset (Note 3) 64,979 - - Amortization of deferred costs - - 1,688 Share issue costs deferred - 89,145 - Stock compensation (Note 21) 51,579 377,260 49,606 Cumulative effect of a change in accounting principle - 117,576 - Change in assets and liabilities Decrease/(increase) in spares inventory  25,278 ( 25,662) ( 60,176) (Increase)/decrease in inventory of water ( 5,235) 1,677 ( 14,352) Increase in accounts receivable ( 56,259) ( 401,926) ( 13,578) Decrease/(increase) in prepaid expenses and other assets 1,647 ( 111,213) 13,137 Increase in accounts payable and other liabilities  368,442 101,807 179,907 Decrease in advances in aid of construction ( 3,994) ( 4,500) ( 36,168) Net cash from operating activities $ 3,922,712 $ 2,528,921 $ 2,320,742 The accompanying notes are an integral part of these financial statements.