therapeutic product categories: Ophthalmology; Oncology; Urology; Infectious and Respiratory Diseases; Endocrine Disorders categories; and, as a group, Cardiovascular and Metabolic Diseases; Central Nervous System Disorders and All Other categories. The significant components include values determined for Celebrex, Detrol, Xalatan, Genotropin, Zyvox, Campto/Camptosar and Exubera. Also included in this category are the post-approval milestone payments made under our alliance agreements for certain Pharmaceutical products, such as Rebif, Spiriva, Celebrex (prior to our acquisition of Pharmacia) and Macugen. These rights are all subject to our impairment review process explained in the “Accounting Policies: Long-Lived Assets” section of this Financial Review.

In 2005, we recorded an impairment charge of $1.1 billion related to the developed technology rights for Bextra, a selective COX-2

Operating Activities

Our net cash used by investing activities was $5.1 billion in 2005, as compared to $9.4 billion in 2004. The decrease in net cash used by investing activities was primarily attributable to:

• a decrease in net purchases of investments (a decreased use of $4.9 billion), due primarily to higher redemptions of investments in 2005 to provide funds for the repatriation of foreign earnings in accordance with the Jobs Act; and

• lower purchases of plant, property and equipment (a decreased use of $495 million),

partially offset by:

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

The estimated net cash flows used in investing activities associated with discontinued operations were not significant.

Financing Activities

Our net cash used in financing activities increased to $23.1 billion in 2006, as compared to $9.2 billion in 2005. The increase in net cash used in financing activities was primarily attributable to:

• net repayments of $9.9 billion on total borrowings in 2006, as compared to $321 million in 2005;

• an increase in cash dividends paid of $1.4 billion in 2006, as compared to 2005, primarily due to an increase in the dividend rate; and

• higher purchases of common stock in 2006 of $7.0 billion, as compared to $3.8 billion in 2005,

partially offset by:

• higher proceeds of $243 million from the exercise of employee stock options.

Our net cash used in financing activities increased to $9.2 billion in 2005, as 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 in 2005 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, primarily 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:

• lower purchases of common stock in 2005 of $3.8 billion, as compared to $6.7 billion in 2004.

The