As a customs broker, the Company makes significant 5-10 business day cash advances for its customers’ obligations such as the payment of duties to U.S. Customs. These advances are made as an accommodation for a select group of credit-worthy customers. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. The billings of such advances to customers are accounted for as a direct increase in accounts receivable to the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency. Cash used in investing activities for the year ended December 31, 2002 was $113 million, as compared with $53 million during the same period of 2001. The largest use of cash in investing activities is cash paid for capital expenditures. For the year ended December 31, 2002, the Company made capital expenditures of $81 million as com- pared with $37 million for the same period in 2001. Capital expenditures in 2002 included $59 million for acquisitions of real estate and office/warehouse facilities in New Jersey and the United Kingdom. Capital expenditures in 2001 related primarily to investments in technology and office furniture and equipment. Cash of $31.3 million was paid into escrow during 2002 to acquire an office and warehouse facility near the San Francisco, California International Airport; the transaction closed on January 7, 2003. Cash used in financing activities for the year ended December 31, 2002 was $13 million as compared with cash used in financing activities of $58 million for the same period in 2001. In 2002, the Company paid down $0.4 million on short-term debt, as compared with $3 million for the same period of 2001. The Company uses the proceeds from stock option exercises to repurchase the Company’s stock on the open market. The differences between proceeds from the issuance of common stock and the amounts paid to repurchase common stock for the years ended December 31, 2002 and 2000 represent a timing difference in the receipt of proceeds and the subsequent repurchase of outstanding shares. During the third quarter of 2001, the Board of Directors autho- rized management to repurchase 2,000,000 shares of the Company’s common stock. The difference between proceeds from the issuance of common stock and the amounts paid to repurchase common stock for the year ended December 31, 2001 is primarily due to the repurchase of stock under the discretionary plan authorized by the Board of Directors in September 2001. The repurchase of all 2,000,000 shares was completed on October 11, 2001 at an average price of $22.56 per share. In November 2001, the Board 83 expd 02 MD&A