CONSOLIDATED STATEMENTS OF CASH FLOWS American Express Company See Notes to Consolidated Financial Statements. I 56 AXP I CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, (Millions) 2002 2001 2000 Cash Flows from Operating Activities Net income $ 2,671 $ 1,311 $ 2,810 Adjustments to reconcile net income  to net cash provided by operating activities: Provisions for losses and benefits 2,988 3,283 2,697 Depreciation, amortization, deferred taxes and other 951 1,049 393 Non-cash portion of restructuring charges (7) 580 — Non-cash portion of disaster recovery charge (7) 20 — Changes in operating assets and liabilities, net of  effects of acquisitions and dispositions: Accounts receivable and accrued interest 484 455 (1,623) Other assets (473) (69) (426) Accounts payable and other liabilities 1,365 (1,456) 2,377 Increase (decrease) in Travelers Cheques outstanding 431 (89) (82) Increase in insurance reserves 271 240 207 Net cash provided by operating activities 8,674 5,324 6,353 Cash Flows from Investing Activities Sale of investments 13,155 11,049 3,117 Maturity and redemption of investments 6,410 6,182 5,295 Purchase of investments (24,961) (19,912) (9,121) Net increase in cardmember loans/receivables (7,793) (3,147) (10,661) Cardmember loans/receivables sold to trust, net 4,339 3,465 3,338 Loan operations and principal collections, net (115) 592 (299) Purchase of land, buildings and equipment (670) (859) (919) Sale of land, buildings and equipment 125 22 35 (Acquisitions) dispositions, net of cash acquired/sold (58) (165) 212 Net cash used in investing activities (9,568) (2,773) (9,003) Cash Flows from Financing Activities Net increase in customers’ deposits 3,246 988 954 Sale of annuities and investment certificates 9,950 5,506 5,588 Redemption of annuities and investment certificates (5,782) (4,761) (5,641) Net (decrease) increase in debt with maturities of three months or less (7,201) (4,220) 7,117 Issuance of debt 19,392 15,083 12,559 Principal payments on debt (14,167) (15,318) (15,362) Issuance of American Express common shares 161 84 226 Repurchase of American Express common shares (1,153) (626) (1,377) Dividends paid (430) (424) (421) Net cash provided by (used in) financing activities 4,016 (3,688) 3,643 Effect of exchange rate changes on cash (56) (128) 23 Net increase (decrease) in cash and cash equivalents 3,066 (1,265) 1,016 Cash and cash equivalents at beginning of year 7,222 8,487 7,471 Cash and cash equivalents at end of year $ 10,288 $ 7,222 $ 8,487