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ValleyCrest Holding Co. and Subsidiaries <br />Consolidated Statement of Cash Flows <br />Year Ended April 30, 2008 <br />Operating activities <br />Net income <br />Adjustments to reconcile net income to net cash provided by operating activities: <br />Provision for doubtful accounts <br />Depreciation and amortization <br />Deferred taxes <br />Tax benefit related to purchase accounting for goodwill <br />Tax expense of unrealized loss on interest rate swap <br />Stock -based compensation <br />Changes in operating assets and liabilities: <br />Investments and escrowed retention <br />Trade receivables <br />Other receivables <br />Costs and estimated earnings in excess of billings on uncompleted contracts <br />Inventories <br />Prepaid expenses <br />Other long -term assets <br />Accounts payable and accrued liabilities <br />Billings in excess of costs and estimated earnings on uncompleted contracts <br />Income taxes payable <br />Net cash provided by operating activities <br />Investing activities <br />Issuance of notes receivable <br />Collection of notes receivable <br />Purchases of property and equipment, net <br />Acquisitions <br />Net cash used in investing activities <br />Financing activities <br />Repayment of long -term debt <br />Proceeds from issuance of long -tern debt <br />Book overdraft <br />Change in unrealized gain on investment <br />Net cash provided by financing activities <br />Net change in cash <br />Cash at beginning of year <br />Cash at end of year <br />Supplemental disclosures of cash flow information <br />Cash paid during the year for: <br />Interest <br />Income taxes, net of refunds received <br />Supplemental disclosures of noncash flow information <br />Increase in other long -term liability due to unrealized loss on <br />interest rate swap <br />See accompanying notes. <br />1,967,000 <br />2,507,000 <br />35,095,000 <br />(7,183,000) <br />(2,553,000) <br />1,636,000 <br />909,000 <br />(538,000) <br />5,919,000 <br />(928,000) <br />(854,000) <br />1,472,000 <br />901,000 <br />(2,745,000) <br />7,958,000 <br />11,879,000 <br />6,552,000 <br />61,994,000 <br />(668,000) <br />807,000 <br />(10,712,000) <br />(40,140,000) <br />(50,713,000) <br />(40,916,000) <br />53,357,000 <br />(5,511,000) <br />14,000 <br />6,944,000 <br />18,225,000 <br />69,000 <br />$ 18,294,000 <br />$ 24,055,000 <br />$ 6,224,000 <br />$ 7,467,000 <br />10 —(( ✓ok # I <br />ValleyCrest landscape Maint.6 <br />16400 NW 127th Ave. <br />Miami, FL 33018 -1051 <br />