Urology; Infectious and Respiratory Diseases; Endocrine Disorders categories; and, as a group, the Cardiovascular and Metabolic Diseases; Central Nervous System Disorders and All Other categories. The significant

(a) Working capital includes assets and liabilities held for sale, which were not significant, as of December 31, 2005 and December 31, 2004.

(b) Represents total shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares, and those held by our employee benefit trust).

The increase in working capital in 2005 as compared to 2004 was primarily due to:

• an increase in net current financial assets of $1.9 billion, primarily reflecting a shift from long-term investments to short- term investments, which was effected as part of our repatriation strategy under the Jobs Act;

• an increase in accounts receivable of $398 million, which is a result of revenue growth in our international markets, growth of our generic product sales and the impact of their longer payment terms, and increased alliance-related receivables due in part to the launch of Macugen in 2005 and growth in Spiriva revenues;

partially offset by:

• the timing of tax obligations and payments, reflected in a $1.6 billion increase in income taxes payable.

Summary of Cash Flows

partially offset by:

• lower proceeds from the sales of business, product lines and other products (a decreased provision of cash of $1.1 billion).

Our net cash used in investing activities was $9.4 billion in 2004 compared to net cash provided by investing activities of $4.9 billion in 2003. The increase in net cash used in investing activities was primarily attributable to:

• an increase in net purchases of investments (an increased use of $6.1 billion);

• net cash paid of $2.3 billion relating to the acquisitions of Esperion, Campto/Camptosar, and other entities compared to cash and cash equivalents acquired in the Pharmacia acquisition of $1.8 billion (an increased use of $4.1 billion); and

• a decrease in the proceeds from the sale of business and product lines (an increased use of $4.3 billion).

Financing Activities

Our net cash used in financing activities increased to $9.2 billion in 2005 compared to $6.6 billion in 2004. The increase in net cash used in financing activities was primarily attributable to:

• net repayments of $321 million on total borrowings in 2005 as compared to total net borrowings of $4.1 billion in 2004, as funds from the repatriation of foreign earnings were used to finance domestic activities, thereby reducing our reliance on short-term borrowings;

• an increase in cash dividends paid of $473 million as compared to 2004 due to an increase in the dividend rate; and

• a decrease of $610 million in the proceeds from the exercise of employee stock options,

partially offset by:

• a decrease of $2.9 billion in purchases of our common stock in 2005 as compared to the same period in 2004.

Our net cash used in financing activities, decreased to $6.6 billion in 2004 compared to $16.9 billion in 2003. The decrease in net cash used in financing activities was primarily attributable to:

• a decrease in common