Pfizer 2007 Annual Report Download - page 33

Operating Activities
Our net cash provided by continuing operating activities was
$13.4 billion in 2007, compared to $17.6 billion in 2006. The
decrease in net cash provided by operating activities was primarily
attributable to:
•higher tax payments ($2.2 billion) in 2007, related primarily to
the gain on the sale of our Consumer Healthcare business in
December 2006; and
•the timing of other receipts and payments in the ordinary
course of business.
Our net cash provided by continuing operating activities was
$17.6 billion in 2006, compared to $14.7 billion in 2005. The
increase in net cash provided by operating activities was primarily
attributable to:
•the payment of $1.7 billion in taxes in 2005 associated with the
repatriation of approximately $37 billion of foreign earnings
under the Jobs Act in 2005; and
•the timing of other receipts and payments in the ordinary
course of business.
In 2007 and 2006, the cash flow line item called Income taxes
payable primarily reflects the taxes provided in 2006 on the gain
on the sale of our Consumer Healthcare business that were paid
in 2007.
Investing Activities
Our net cash provided by investing activities was $795 million in
2007, compared to $5.1 billion in 2006. The decrease in net cash
provided by investing activities was primarily attributable to:
•lower net sales and redemptions of investments in 2007 (a
negative change in cash and cash equivalents of $6.1 billion),
partially offset by:
•the acquisitions of BioRexis and Embrex in 2007, compared to
the acquisitions of PowderMed, Rinat and sanofi-aventis’ rights
associated with Exubera in 2006 (a decreased use of cash of $1.9
billion).
Our net cash provided by investing activities was $5.1 billion in
2006, compared to net cash used by investing activities of $5.1
billion in 2005. The increase in net cash provided by investing
activities was primarily attributable to:
•higher net sales and redemptions of short-term investments in
2006 (an increased source of cash of $12.4 billion), primarily used
to pay down short-term borrowings,
partially offset by:
•an increase in net purchases of long-term investments (an
increased use of cash of $2.3 billion); and
•the acquisitions of PowderMed, Rinat and sanofi-aventis’ rights
to Exubera in 2006, compared to the acquisitions of Vicuron and
Idun in 2005 (an increased use of cash of $216 million).
Financing Activities
Our net cash used in financing activities was $12.6 billion in 2007,
compared to $23.1 billion in 2006. The decrease in net cash used
in financing activities was primarily attributable to:
•net borrowings of $4.9 billion in 2007, compared to net
repayments of $9.9 billion on total borrowings in 2006,
partially offset by:
•higher purchases of common stock in 2007 of $10.0 billion,
compared to $7.0 billion in 2006; and
•an increase in cash dividends paid of $1.1 billion, reflecting an
increase in the dividend rate, partially offset by lower shares
outstanding.
Our net cash used in financing activities was $23.1 billion in 2006,
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,
compared to $321 million in 2005;
•an increase in cash dividends paid of $1.4 billion in 2006,
compared to 2005, reflecting an increase in the dividend rate;
and
•higher purchases of common stock in 2006 of $7.0 billion,
compared to $3.8 billion in 2005,
partially offset by:
•higher proceeds of $243 million from the exercise of employee
stock options.
In June 2005, we announced a $5 billion share-purchase program,
which is primarily being funded by operating cash flows and a
portion of the proceeds from the sale of our Consumer Healthcare
business. In June 2006, the Board of Directors increased our share-
purchase authorization from $5 billion to $18 billion. In total,
under the June 2005 program, through December 31, 2007, we
purchased approximately 683 million shares for approximately
$17.5 billion.
In October 2004, we announced a $5 billion share-purchase
program, which we completed in the second quarter of 2005 and
was funded from operating cash flows. In total, under the October
2004 program, we purchased approximately 185 million shares.
In January 2008, we announced a new $5 billion share-purchase
program, which will be funded by operating cash flows.
A summary of common stock purchases follows:
SHARES OF TOTAL COST OF
COMMON AVERAGE COMMON
(MILLIONS OF SHARES AND DOLLARS, STOCK PER-SHARE STOCK
EXCEPT PER-SHARE DATA) PURCHASED PRICE PAID PURCHASED
2007:
June 2005 program 395 $25.27 $9,994
Total 395 $9,994
2006:
June 2005 program 266 $26.19 $6,979
Total 266 $6,979
2007 Financial Report 31
Financial Review
Pfizer Inc and Subsidiary Companies