AMERICAN INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 2004 and 2003
		2004		2003
		(Restated)		(Restated)
Cash flows from operating activities:
Net income (loss)	$	1,029,414	$	(943,036)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization		141,163		131,847
Common stock issued for services		1,083,717		340,049
Realized losses on marketable trading securities		8,400		251,566
Unrealized losses on trading securities		679,710		-
(Gain) loss on sale of real estate acquired for resale		(1,815,870)		14,000
Discount on notes receivable		(1,597,084)		-
(Gain) on sale of drilling rigs		(1,495,812)		-
(Gain) on sale of assets		-		(499,600)
(Increase) decrease of operating assets, net of acquisitions and dispositions:
Accounts receivable		400,116		(781,960)
Inventories		(54,658)		(379,144)
Drilling rigs held for sale		583,121		1,000,000
Prepaid expenses		218,396		(238,565)
Increase (decrease) in operating liabilities, net of acquisitions and dispositions:
Accounts payable and accrued expenses		(1,486,955)		376,925
Minority interest		867,498		4,618
Net cash used in operating activities		(1,438,744)		(723,300)
Cash flows from investing activities:
Capital expenditures for property and equipment		(421,884)		(278,545)
Proceeds from sale of real estate acquired for resale		1,350,000		86,000
Proceeds from sale of drilling rigs		5,000,000		-
Net change in investments		(54,210)		1,255,634
Receipts of principal payments on long-term notes receivable		53,373		24,177
(Increase) decrease in accounts receivable from related parties		282,639		(109,781)
Cash paid for acquisition of subsidiary		-		(1,000,000)
Net cash provided by (used in) investing activities		6,209,918		(22,515)
Cash flows from financing activities:
Proceeds from long-term debt		-		1,190,000
Proceeds from long-term borrowings from related parties		1,481,081		413,418
Repayment of borrowings from related parties		(254,557)		-
Net borrowings (repayments) under lines of credit agreements		297,300		35,227
Principal payments on short-term debt		(1,350,000)		-
Principal payments on long-term debt		(609,358)		(858,245)
Dividends paid		(200,000)		-
Net cash provided by (used in) financing activities		(635,534)		780,400
Net increase in cash		4,135,640		34,585
Cash and cash equivalents at beginning of year		944,233		909,648
Cash and cash equivalents at end of year	$	5,079,873	$	944,233
Supplemental schedule of cash flow information:
Interest paid	$	277,898	$	235,295
Taxes paid	$	-	$	30,384
Non-cash transactions:
Issuance of preferred shares for payment of debt	$	-	$	4,000,000
Issuance of common shares for payment of debt to related parties		541,870		1,865,556
Receipt of note receivable for sale of real estate acquired for resale		3,401,916
See accompanying notes to consolidated financial statements