Consolidated Statements of Cash Flows FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES Years ended March 31, 2003, 2002 and 2001 The accompanying notes are an integral part of these statements. 30 FUJI HEAVY INDUSTRIES LTD. Thousands of Millions Millions Millions U.S. dollars of yen of yen of yen (Note 1) 2003 2002 2001 2003 Cash flows from operating activities: Income before income taxes and minority interest ¥ 46,970 ¥ 56,136 ¥ 21,291 $ 390,765 Adjustments to reconcile income before income tax and  minority interest to net cash provided by operating activities: Depreciation and amortization 67,896 63,964 64,070 564,859 Loss on sale or disposal of property, plant and equipment, net 4,822 3,670 2,551 40,116 Increase (decrease) in accrued for pension and severance liability (106) (3,097) 40,546 (882) (Gain) loss on sale of securities 994 0 (2,815) 8,270 Loss on devaluation of securities 3,884 8,970 487 32,313 (Increase) decrease in notes and accounts receivable, trade 2,613 474 (10,231) 21,739 Increase in inventories (12,017) (14,989) (15,053) (99,975) Increase (decrease) in notes and accounts payable, trade 16,534 (13,378) 8,243 137,554 Income taxes paid (31,099) (21,608) (37,165) (258,727) Loss on liquidation of affiliated companies — 6,880 — — Loss on discontinued operations 1,882 — — 15,657 Other, net 5,690 (1,301) 7,175 47,338 Net cash provided by operating activities 108,063 85,721 79,099 899,027 Cash flows from investing activities: Purchase of property, plant and equipment (115,553) (109,117) (91,734) (961,339) Proceeds from sale of property, plant and equipment 32,213 36,634 21,439 267,995 Purchase of investment securities (10,167) (4,754) (2,714) (84,584) Purchase of marketable securities (38,596) (56,013) (50,274) (321,098) Proceeds from sale of investment securities 9,114 1,832 7,355 75,824 Proceeds from sale of marketable securities 72,588 39,493 28,423 603,893 Increase due to acquisitions of Isuzu’s share of Subaru of Indiana Automotive, Inc. (Note 5) 12,989 — — 108,062 Purchase of intangible assets (6,240) (6,577) (5,992) (51,914) Disbursement of loans receivable (75,898) (52,115) (52,216) (631,431) Collection of loans receivable 62,889 52,958 54,815 523,203 Other, net (Note 5) 573 586 2,520 4,767 Net cash used in investing activities (56,088) (97,073) (88,378) (466,622) Cash flows from financing activities: Proceeds from long-term debt 55,150 27,704 46,443 458,819 Repayment on long-term debt (58,324) (40,489) (63,677) (485,224) Issuance of bonds 10,000 50,500 — 83,195 Redemption of bonds (22,027) — (10,000) (183,253) Net increase (decrease) in commercial paper 9,000 — (30,000) 74,875 Net increase (decrease) in short-term borrowings 1,732 (11,237) (31,831) 14,409 Issuance of common stock — — 112,224 — Purchase of treasury stock (531) (47) (2,249) (4,418) Proceeds from sales of treasury stock — 35 3,901 — Dividends paid (6,689) (6,694) (6,394) (55,649) Net cash provided by (used in) financing activities (11,689) 19,772 18,417 (97,246) Effect of exchange rate changes on cash and cash equivalents (4,050) 4,704 2,529 (33,694) Net increase in cash and cash equivalents 36,236 13,124 11,667 301,465 Cash and cash equivalents: Balance at beginning of year 133,708 120,436 108,769 1,112,379 Net increase in cash and cash equivalents due to mergers — 148 — — Balance at end of year  (Note 5) ¥169,944 ¥133,708 ¥120,436 $1,413,844 Supplemental information on cash flows: Cash paid during the period for interest ¥ 3,327 ¥ 3,384 ¥ 4,573 $ 27,679 Conversion of convertible bonds 9 2 28 75