Management’s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Commitments and Contingencies 19 pendently made a direct investment in Questra. Based upon an implied valuation of Questra as a result of a recent new round of venture capital funding in which the Company’s equity interest in Questra was substantial- ly diluted and investors, other than the Company, received preferential liquidation rights, the Company recorded an impairment loss for the full $2.0 million original investment in recognition of an other than temporary impairment. The Company’s investment is being accounted for under the cost basis of accounting. (See Note 4 to the Consolidated Financial Statements.) At December 31, 2002, the Company had cash and cash equivalents of approximately $126 million. The Company has used and plans to use such cash for (i) expansion of existing operations, including its offshore soft- ware development centers; (ii) continued development of new service lines and possible acquisitions of related businesses, and formation of joint ventures; and (iii) general corporate purposes, including working capital. The Company’s financing activities provided net cash of approximately $20 million, $6 million, and $1.8 million for the years ended December 31, 2002, 2001 and 2000, respectively. The increase in each year was primarily related to a higher level of cash proceeds from the exercise of stock options and employee purchases of stock.  Net cash provided by operating activities was approximately $56.7 million, $32.1 million and $30.2 million for the years ended December 31, 2002, 2001 and 2000, respectively. The increase in 2002 as compared to the prior year resulted primarily from increased net income, increased accrued employee incentive payments, which resulted in higher levels of year-end accrued liabilities, increased tax benefits related to stock plans, offset, in part, by a greater increase in accounts receivable then the prior year. The increase in 2001 as compared to 2000 results primarily from increased lev- els of accrued liabilities and accounts payable, increased net income and an increase in deferred taxes, partially offset, by increases in accounts receivable and other current assets.  The Company believes that its available funds and the cash flows expected to be generated from operations, will be adequate to satisfy its current and planned operations and needs for at least the next 12 months. The Company’s ability to expand and grow its business in accordance with cur- rent plans, to make acquisitions and form joint ventures and to meet its long-term capital requirements beyond this 12-month period will depend on many factors, including the rate, if any, at which its cash flow increas- es, its ability and willingness to accomplish acquisitions and joint ventures with capital stock, its continued intent not to repatriate earnings from India, its ability not to breach the Distribution Agreement, dated January 7, 2003, between the Company and IMS Health (the “Distribution Agreement”), especially as it relates to tax indemnities and the availability to the Company of public and private debt and equity financing. The Company cannot be certain that additional financing, if required, will be available on terms favorable to it, if at all. Trade accounts receivable increased from approximately $20.5 million at December 31, 2000 to approximately $22.5 million at December 31, 2001 and to approximately $36.7 million at December 31, 2002. Unbilled accounts receivable increased from approximately $1.9 million at December 31, 2000 and to approximately $5.4 million at December 31, 2001 and decreased to approximately $4.3 million at December 31, 2002. The increase in trade accounts receivable during 2002 was due primarily to increased revenue. The decrease in unbilled accounts receivable in 2002 compared to the prior year was primarily related to timing of fixed- bid contractual billings. The Company monitors turnover, aging and the collec- tion of accounts receivable through the use of management reports which are prepared on a customer basis and evaluated by the Company’s finance staff. At December 31, 2002, the Company’s day's sales outstanding, including unbilled receivables, was approximately 56 days as compared to 59 days and 50 days at December 31, 2001 and 2000, respectively. At December 31, 2002 and 2001, the Company had cash and cash equiva- lents of approximately $126 million and $85 million, respectively. As of December 31, 2002 and 2001 the Company had no significant third party debt. The Company had working capital of approximately $134.3 and $95.6 million at December 31, 2002 and 2001, respectively. Accordingly, the Company does not anticipate any near-term liquidity issues. The Company does not engage in hedging activities nor has it entered into off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons that are likely to affect liquidity or the availability of or requirements for capital resources. The Company’s investing activities used net cash of approximately $35.5 million, $14.9 million and $12.6 million for the years ended December 31, 2002, 2001 and 2000, respectively. The increase in 2002 compared to 2001 primarily reflects the Company’s increased purchases of property and equipment to expand the Company’s offshore development infrastructure and the acquisitions of intangible assets related to UHCI and Silverline Technologies, Inc. (See Note 4 to the Consolidated Financial Statements.) The increase in 2001 of net cash used in investing activities as compared to 2000 primarily reflects an increase in purchases of property and equipment. As of December 31, 2002, the Company has entered into fixed capital com- mitments related to its India development center expansion program of approximately $28.8 million, of which approximately $19.2 million has been spent. The multi-phase program will encompass the construction of three fully owned development centers containing approximately 620,000 square feet of space in Pune, Chennai and Calcutta. Total costs related to this program are expected to be approximately $35.6 million, which the Company expects to fund internally. In June 2000, the Company announced a strategic relationship with Trident Capital, a leading venture capital firm, to jointly invest in emerg- ing e-business service and technology companies. In accordance with this strategy, the Company invested approximately $2 million in Questra, an e-business software and consulting firm headquartered in Rochester, New York, in return for an initial 5.8% equity interest. Trident Capital also inde-