consolidated statements of cash flows Diodes Incorporated and Subsidiaries 31 Years ended December 31, 2002  2003  2004 Cash Flows From Operating Activities Net income  $ 5,802,000  $ 10,095,000  $ 25,551,000  Adjustments to reconcile net income to net cash provided  by operating activities: Depreciation and amortization  9,747,000  11,073,000  13,173,000  Minority interest earnings  320,000  436,000  676,000  Loss on impairment and disposal of property, plant and equipment  43,000  1,037,000  14,000  Changes in operating assets and liabilities Accounts receivable  (4,779,000)  (8,490,000)  (13,203,000) Inventories  2,139,000  (1,248,000)  (6,074,000) Prepaid expenses and other  (711,000)  (388,000)  (2,474,000) Deferred income taxes  646,000  270,000  5,463,000  Accounts payable  3,153,000  5,082,000  3,728,000  Accrued liabilities  3,481,000  –  1,468,000  Income taxes payable  149,000  954,000  978,000  Net cash provided by operating activities  19,990,000  18,821,000  29,300,000  Cash Flows From Investing Activities Purchases of property, plant and equipment  (6,777,000)  (15,646,000)  (26,201,000) Proceeds from sales of property, plant and equipment  3,000  357,000  68,000  Net cash used by investing activities  (6,774,000)  (15,289,000)  (26,133,000) Cash Flows From Financing Activities Advances (repayments) on line of credit, net  (3,478,000)  5,463,000  (2,321,000) Net proceeds from the issuance of common stock  321,000  2,014,000  5,628,000  Management incentive reimbursement from LSC  375,000  375,000  375,000  Proceeds from long-term debt  –  –  3,583,000  Repayments of long-term debt  (11,080,000)  (5,833,000)  (4,819,000) Minority shareholder investment in subsidiary  –  –  175,000 Repayments of capital lease obligations  (133,000)  (157,000)  (158,000) Dividend to minority shareholders  –  –  (300,000) Net cash provided (used) by financing activities  (13,995,000)  1,862,000  2,163,000  Effect of Exchange Rate Changes on Cash and Cash Equivalents (40,000)  169,000  793,000  Increase (Decrease) in Cash (819,000)  5,563,000  6,123,000  Cash,  beginning of year  8,103,000  7,284,000  12,847,000  Cash,  end of year  $ 7,284,000  $ 12,847,000  $ 18,970,000 Supplemental Disclosure of Cash Flow Information Cash paid during the year for: Interest  $ 1,229,000  $ 876,000  $ 683,000 Income taxes  $ 965,000  $ 999,000  $ 2,504,000 Non-cash activities: Tax benefit related to stock options credited to paid-in capital  $ 98,000  $ 1,139,000  $ 8,514,000 Building acquired through capital lease obligation  $ 2,785,000  $ –  $ – The accompanying notes are an integral part of these financial statements.