CONSOLIDATED STATEMENTS OF CASH FLOWS SAUL CENTERS, INC. The accompanying notes are an integral part of these statements. 17 For the Year Ended December 31, (Dollars in thousands) 2002 2001 2000 Cash flows from operating activities Net income $ 19,566 $ 17,314 $ 14,045  Adjustments to reconcile net income to  net cash provided by operating activities: Minority interests 8,070  8,069 8,069 Gain on sale of property (1,426) -- -- Depreciation and amortization 18,546 15,324 13,992 Provision for credit losses 421 617 467 Increase in accounts receivable (2,283) (823) (1,284) Increase in prepaid expenses (7,661) (5,568) (3,152) Decrease (increase) in other assets 15 347 (252) Increase (decrease) in accounts payable,  accrued expenses and other liabilities 1,776 (4,895) 1,201  Increase (decrease) in deferred income 475 1,449 (305) Net cash provided by operating activities 37,499 31,834 32,781 Cash flows from investing activities Acquisitions of real estate investments (28,871) -- -- Additions to real estate investments (14,466) (13,055) (18,233) Additions to construction in progress (5,768) (8,745) (25,193) Net cash used in investing activities (49,105) (21,800) (43,426) Cash flows from financing activities Proceeds from notes payable 53,547  51,218 69,700 Repayments on notes payable (24,624) (42,851) (36,515) Additions to deferred debt expense (1,287) (17) (315) Proceeds from the issuance of common  stock and convertible limited partnership  units in the Operating Partnership 14,574 11,976 7,984 Distributions to common stockholders and holders of convertible limited partnership  units in the Operating Partnership (31,100) (30,327) (29,394) Net cash provided by (used in) financing activities 11,110  (10,001) 11,460  Net (decrease) increase in cash and cash equivalents (496) 33 815 Cash and cash equivalents, beginning of year 1,805 1,772 957 Cash and cash equivalents, end of year $ 1,309 $ 1,805 $ 1,772 Supplemental disclosures of cash flow information Cash paid for interest, net of amount capitalized $ 25,089 $ 24,419 $ 23,456 