FirstRate Company and subsidiaries Quality of Earnings Analysis (U.S. dollars in thousands) Fiscal year ended December 31, 20X1 20X2 20X3 20X4 20X5 ¹ Net income $23,900 $24,900 $22,000 $18,100 Adjustments to reconcile Net Inc to OCF Depreciation: Property, Plant, and Equipment 10,500 11,200 11,700 12,000 Gain on disposal of equipment - - - - Loss on sale of equipment 900 - - - Changes in working capital accounts Decrease (increase):Accounts Receivable, net -2,000 -8,000 -11,000 -13,000 Decrease (increase) in inventory -4,400 -14,000 -14,900 -17,700 Increase (decrease) in accounts payable 2,200 11,100 10,100 15,400 Increase (decrease): Accrued Income Tax Pay -300 100 -400 -400 Increase (decrease): Accrued Interest Payable 100 200 400 600 Net Cash provided by (used in) Oper Activities $30,900 $25,500 $17,900 $15,000 Ratio of OCF-to-Net income Cumulative ratio of OCF-to-Net income