of our payment of a $40 million patent litigation settlement. Operating cash flows and free cash flows can be volatile and are sensitive to many factors, including changes in working capital, and the timing and magnitude of capital expenditures. Working capital at any specific point in time is subject to many variables, including seasonality, inventory management and category expansion, the timing of cash receipts and payments, vendor payment terms, and fluctuations in foreign exchange rates. 

Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $3.1 billion, $2.0 billion, and $2.0 billion at December 31, 2007, 2006 and 2005. Amounts held in foreign currencies were $1.2 billion, $623 million, and $905 million at December 31, 2007, 2006, and 2005 and were primarily Euros, British Pounds, and Japanese Yen. 

Cash provided by operating activities was $1.4 billion, $702 million, and $733 million in 2007, 2006, and 2005. Our operating cash flows result primarily from cash received from our customers, from sellers, and from non-retail activities such as our co-branded credit card agreements, Amazon Enterprise Solutions, and miscellaneous marketing and promotional agreements, offset by cash payments we make for products and services, employee compensation (less amounts capitalized pursuant to SOP 98-1 that are reflected as cash used in investing activities), payment processing and related transaction costs, operating leases, and interest payments on our long-term debt obligations. Cash received from customers, sellers, developers, and other activities generally corresponds to our net sales. Because our customers primarily use credit cards to buy from us, our receivables from customers settle quickly. 

Cash provided by (used in) investing activities corresponds with purchases, sales, and maturities of marketable securities, cash outlays for acquisitions and intellectual property rights, and purchases of fixed assets, including internal-use software and website development costs. Cash provided by (used in) investing activities was $42 million, $(333) million, and $(778) million in 2007, 2006, and 2005, with the variability caused primarily by purchases, maturities, and sales of marketable securities. Capital expenditures were $224 million, $216 million and $204 million in 2007, 2006 and 2005, with the sequential increases primarily reflecting additional investments in technology infrastructure, fulfillment-related assets and the development of new features and product offerings on our websites. Capital expenditures included $108 million, $108 million and $79 million for internal-use software and website development during 2007, 2006 and 2005. Stock-based compensation capitalized for internal-use software and website development costs does not affect cash flows. We made payments for the acquisition of certain companies and intellectual property rights, resulting in cash payments, net of acquired cash, of $75 million, $32 million, and $24 million in 2007, 2006 and 2005 attributable to cash provided by investing activities. 

Cash