Financing cash flows consist primarily of repurchases and retirement of common stock, payment of dividends to stockholders, and proceeds from sales of shares through employee equity incentive plans.

For 2007 compared to 2006, the lower cash used in financing activities was primarily due to an increase in proceeds from sales of shares through employee equity incentive plans and a decrease in repurchases and retirement of common stock. Proceeds from sales of shares through employee equity incentive plans totaled $3.1 billion in 2007 compared to $1.0 billion in 2006, due to a higher volume of exercises of stock options because of our stock price trading at higher levels in 2007 compared to 2006, and a higher weighted average exercise price. During 2007, we repurchased 111 million shares of common stock as part of our common stock repurchase program at a cost of $2.75 billion (226 million shares at a cost of $4.6 billion during 2006). As of December 29, 2007, $14.5 billion remained available for repurchase under the existing repurchase authorization of $25 billion. We base our level of stock repurchases on internal cash management decisions, and this level may fluctuate. Our dividend payments for 2007 were $2.6 billion. On January 17, 2008, our Board of Directors declared a cash dividend of $0.1275 per common share for the first quarter of 2008, which represents a 13% increase in our quarterly cash dividend amount.

The lower cash used in financing activities in 2006 compared to 2005 was primarily due to a decrease in repurchases and retirement of common stock, partially offset by additions to long-term debt in 2005 of $1.7 billion.