Johnson and Johnson 2005 Annual Report Download - page 44

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PAGE 42 JOHNSON & JOHNSON 2005 ANNUAL REPORT
(Dollars in Millions) (Note 1) 2005 2004 2003
Cash flows from operating activities
Net earnings $10,411 8,509 7,197
Adjustments to reconcile net earnings to cash flows:
Depreciation and amortization of property and intangibles 2,093 2,124 1,869
Purchased in-process research and development 362 18 918
Deferred tax provision (46) (498) (720)
Accounts receivable allowances (31) 3 6
Changes in assets and liabilities, net of effects from acquisitions:
Increase in accounts receivable (568) (111) (691)
(Increase)/decrease in inventories (396) 11 39
(Decrease)/increase in accounts payable and accrued liabilities (911) 607 2,192
Decrease/(increase) in other current and non-current assets 620 (395) (746)
Increase in other current and non-current liabilities 343 863 531
Net cash flows from operating activities 11,877 11,131 10,595
Cash flows from investing activities
Additions to property, plant and equipment (2,632) (2,175) (2,262)
Proceeds from the disposal of assets 154 237 335
Acquisitions, net of cash acquired (Note 17) (987) (580) (2,812)
Purchases of investments (5,660) (11,617) (7,590)
Sales of investments 9,187 12,061 8,062
Other (primarily intangibles) (341) (273) (259)
Net cash used by investing activities (279) (2,347) (4,526)
Cash flows from financing activities
Dividends to shareholders (3,793) (3,251) (2,746)
Repurchase of common stock (1,717) (1,384) (1,183)
Proceeds from short-term debt 1,215 514 3,062
Retirement of short-term debt (732) (1,291) (4,134)
Proceeds from long-term debt 6 17 1,023
Retirement of long-term debt (196) (395) (196)
Proceeds from the exercise of stock options 696 642 311
Net cash used by financing activities (4,521) (5,148) (3,863)
Effect of exchange rate changes on cash and cash equivalents (225) 190 277
Increase in cash and cash equivalents 6,852 3,826 2,483
Cash and cash equivalents, beginning of year (Note 1) 9,203 5,377 2,894
Cash and cash equivalents, end of year (Note 1) $16,055 9,203 5,377
Supplemental cash flow data
Cash paid during the year for:
Interest $ 151 222 206
Income taxes 3,429 3,880 3,146
Supplemental schedule of noncash investing and financing activities
Treasury stock issued for employee compensation and stock option plans, net of cash proceeds $ 818 802 905
Conversion of debt 369 105 2
Acquisitions
Fair value of assets acquired $ 1,128 595 3,135
Fair value of liabilities assumed (141) (15) (323)
Net cash paid for acquisitions $ 987 580 2,812
See Notes to Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS JOHNSON & JOHNSON AND SUBSIDIARIES