SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2003, 2002 and 2001 in thousands Non-cash transactions: During 2002, the Company issued 4,654 shares of Company stock to employees valued at $0.1 million in recognition of the Company’s 100 $^{th}$ year anniversary. In December 2001, the Company received 310,158 shares of VeriSign Inc. common stock in exchange for 333,504 shares of Illuminet Holdings, Inc. stock as a result of the merger of the two entities. The Company completed the sale of its GSM network equipment in January 2001, for approximately $6.5 million of which approximately $4.9 million was escrowed as part of a like-kind exchange transaction. The escrowed funds were disbursed as new equipment was received during the first six months of 2001. See accompanying notes to consolidated financial statements. 17 ■  2003 ANNUAL REPORT 2003 2002 2001 Cash Flows From Financing Activities Proceeds from issuance of long-term debt $ $ - $ 24,641 Principal payments on long-term debt (8,697) (4,393) (23,692) Net proceeds from (payments of) lines of credit (3,503) (2,697) 6,200 Debt issuance costs - - (175) Dividends paid (2,960)  (2,794) (2,635) Proceeds from exercise of incentive stock options 487 296 133 Net cash provided by (used in) financing activities $(14,673) $ (9,588) $ 4,472 Net cash used in continuing operations $ 3,477 $ (7,573) $ (6,952) Net cash provided by discontinued operations 23,010 7,745 6,444 Net increase (decrease) in cash and cash equivalents $ 26,487 $ 172 $ (508) Cash and cash equivalents: Beginning 2,209 2,037 2,545 Ending $ 28,696 $ 2,209 $ 2,037 Supplemental Disclosures of Cash Flow Information Cash payments for: Interest, net of capitalized interest of $26 in 2003; $93 in 2002, and $134 in 2001 $ 3,577 $ 4,274 $ 4,217 Income taxes $ 15,569 $ 1,045 $ 506