39 See accompanying notes to consolidated financial statements.  Consolidated Statements of Cash Flow  (dollars in thousands, except per share data)  Year Ended December 31,  2004 2003 2002 Net income  $163,311  $103,990  $ 80,344  Adjustments for cash from operations:  Depreciation and amortization  38,829  37,007  34,825  Amortization of deferred debt issuance costs  1,428  1,473  1,413  Expense for early extinguishment of debt  -  10,367  -  Net change in:  Accounts receivable (26,016) (28,799) 1,054 Net change in receivables sold  6,200  10,600  (11,000)  Inventory (14,511) 4,647 12,897 Prepaid expenses and other assets  1,721  (3,420)  1,951  Accounts payable 3,240 20,776 3,701 Accrued income taxes  28,483  17,967  6,242  Accrued liabilities 15,731 (7,736) (6,547) Accrued interest (740) (2,429) (3,530) Accrued pension and post employment benefits  (12,929)  (5,804)  121  Deferred taxes and other assets  1,344  11,168  (625)  Other 2,160  197  (283)  Cash flow provided by operations  208,251  170,004  120,563  Cash flow from investing activities:  Additions to property, plant and equipment  (44,341)  (30,196)  (18,816)  Investments in acquisitions  (41,661)  (51,101)  (33,796)  Cash flow used by investing activities  (86,002)  (81,297)  (52,612)  Cash flow from financing activities:  Net change in borrowings under revolving credit facilities  (14,302) 1,751 (17,839) Decrease in borrowings under Bank Agreement  (86,000)  (150,543)  (63,205)  Retirement of debt: old Bank Agreement  -  (439,500)  -  senior subordinated notes  -  (148,740)  -  fees and expenses relating to refinancing -  (9,720)  -  Borrowings under new Bank Agreement  -  625,000  -  Purchase of treasury stock  (45,643)  -  -  Proceeds from exercise of stock options including tax benefit  30,335  35,919  5,777  Cash flow used by financing activities  (115,610)  (85,833)  (75,267)  Net change in cash and short-term cash investments  6,639  2,874  (7,316)  Cash and short-term cash investments balance, beginning of period  23,533  20,659  27,975  Cash and short-term cash investments balance, end of period  $30,172  $ 23,533  $ 20,659  Cash paid during the year for:  Interest  $ 21,868  $ 30,819  $ 48,059  Income taxes paid, net of refunds  43,660  21,996  34,061  ______________________________________________________________________________________________________  A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 