The accompanying notes to consolidated financial statements are an integral part of these statements. 25 EMCOR, 2000 Annual Report (In thousands) For the Years Ended December 31, 2000 1999 1998 Cash flows from operating activities: Net income $ 40,089 $ 27,821 $ 12,315 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,483 10,675 9,846 Amortization of goodwill 4,618 3,418 734 Provision for doubtful accounts 6,419 5,967 3,508 Non-cash expense for amortization of debt issuance costs 1,236 1,236 408 Provision in lieu of income taxes 24,422 15,645 8,151 Non-cash portion of extraordinary item – – 3,152 Other, net – – 416 88,267 64,762 38,530 Change in operating assets and liabilities excluding effect  of businesses acquired: Increase in accounts receivable (118,629) (96,875) (27,219) Decrease in inventories and contracts in progress, net 76,376 17,784 1,236 Increase (decrease) in accounts payable 22,222 36,830 (3,522) Increase in accrued payroll and benefits and other accrued expenses and liabilities 19,533 6,633 20,363 Changes in other assets and liabilities, net 3,667 5,371 5,924 Net cash provided by operating activities 91,436 34,505 35,312 Cash flows from investing activities: Proceeds from sale of assets 2,765 347 308 Purchase of property, plant and equipment (16,698) (10,737) (10,946) Payments for acquisitions of businesses and related earn-out agreements (4,234) (55,782) (28,520) Net proceeds (disbursements) from other investments 7,047 6,810 (1,073) Net cash used in investing activities (11,120) (59,362) (40,231) Cash flows from financing activities: Proceeds from working capital credit lines 722,829 306,400 – Repayments of working capital credit lines (722,829) (306,400) (9,497) Net repayments of long-term debt and capital lease obligations (1,609) (7,012) (1,840) Repayment and redemption of Series C Notes – – (61,854) Net proceeds from exercise of stock options 426 221 518 Premiums paid on early extinguishment of debt – – (2,437) Repayment and redemption of Supplemental SellCo Note – – (5,464) Issuance of convertible subordinated notes – – 115,000 Net proceeds from exercise of common stock warrants – 10,015 – Net proceeds from issuance of common stock – – 22,485 Purchase of common stock – (2,868) (13,968) Debt issuance costs – – (4,347) Net cash (used in) provided by financing activities (1,183) 356 38,596 Increase (decrease) in cash and cash equivalents 79,133 (24,501) 33,677 Cash and cash equivalents at beginning of year 58,552 83,053 49,376 Cash and cash equivalents at end of year $ 137,685 $ 58,552 $ 83,053 Consolidated Statements of Cash Flows