AstraZeneca reports strong financial results for 2006, with EPS up 34 percent,
and progress in strengthening the pipeline; Company continues to drive
productivity improvements.”
Financial HighlightsGroup
4th Quarter 2006 $m 4th Quarter 2005 $m Actual % CER % Full Year 2006 $m
Full Year 2005 $m Actual % CER %
Sales 7,154 6,286 +14 +11 26,475 23,950 +11 +11
Operating Profit 2,003 1,636 +22 +24 8,216 6,502 +26 +28
Profit before Tax 2,103 1,689 +25 +26 8,543 6,667 +28 +29
Earnings per Share $0.93 $0.77 +21 +22 $3.86 $2.91 +33 +34
Adjusted to exclude
Toprol-XLTM in US**
Sales 6,878 5,940 +16 +13 25,093 22,659 +11 +11
Earnings per Share $0.83 $0.66 +26 +29 $3.36 $2.50 +35 +36

** This Non-GAAP presentation excludes US sales and earnings contribution from Toprol-XLTM from both current year and prior year periods.
All narrative in this section refers to growth rates at constant exchange rates (CER) unless otherwise indicated
• Sales for the full year increased by 11 percent to $26,475 million.
• Strong performance of five key growth products (NexiumTM, SeroquelTM, CrestorTM, ArimidexTM and SymbicortTM) with combined sales reaching $13,318 million, up 23 percent for the full year.
• Operating profit increased by 28 percent for the full year to $8,216 million. Operating margin improved by 3.8 percentage points to 31.0 percent of sales.
• Free cash flow of $6,788 million for the full year. Returns to shareholders totalled $5,382 million (dividends $2,220 million; net share repurchases $3,162 million).
• Since December 2005, the Company has entered into twelve significant licensing and acquisition projects and nine significant research collaborations.
• On 11 January 2007, AstraZeneca announced a worldwide collaboration with Bristol-Myers Squibb to develop and commercialise two diabetes compounds, including saxagliptin, a dipeptidyl peptidase-4 (DPP- 4) inhibitor in Phase III development.
• The Company continues to drive productivity; initiative to improve asset utilisation announced (see page 3).
• The Company anticipates earnings per share for 2007 (excluding any contribution from US sales of Toprol- XLTM and excluding any one-off costs associated with productivity initiatives) in the range of $3.80 to $4.05
(compared with EPS in 2006 excluding Toprol-XLTM of $3.36).
• Dividend increased by 32 percent to $1.72 for the full year. Net share repurchases for 2007 set at $4 billion.
David Brennan, Chief Executive Officer, said: “In 2006, AstraZeneca reported another strong set of financial results and progress in strengthening the pipeline, but more remains to be done. Our agenda is clear. We are
determined to maintain the sales momentum of our current product portfolio and to continue to build a pipeline to sustain our growth, while driving further productivity improvements and enhancing cash returns to shareholders.”
London, 1 February 2007

Taxation
The effective tax rate for the year was 29.0 percent (31.3 percent for the quarter) compared with 29.1 percent (27.4 percent for the quarter) for 2005. The decrease for the year compared to 2005 is the net effect of tax
benefits arising from a different geographical mix of profits, tax deductions relating to share based payments and the recognition of deferred tax assets in respect of tax credit carry forwards, offset by an increase in tax
provisions principally in relation to global transfer pricing issues. The quarter four tax charge has increased as a result of net movements on year-end global transfer pricing and other provisions. The full year tax rate for 2007
is anticipated to be around 29 percent.
Cash Flow
Free cash flow (net cash generated and available for acquisitions or distribution to shareholders) for the year was $6,788 million, compared to $6,052 million in 2005. $5,382 million was returned to shareholders
(comprising net share repurchases of $3,162 million and dividends of $2,220 million) and $1,148 million was invested in acquisitions (Cambridge Antibody Technology Group plc [CAT] and KuDOS Pharmaceuticals Limited); $661 million was received from the sale of the Humira royalty stream (acquired as part of CAT), giving a net cash inflow for 2006 of $919 million. Net funds at the end of 2006 were $6,537 million.
Cash generated from operating activites in the year was $7,693 million, $950 million higher than in 2005. This was driven by increased profit before tax (up $1,876 million), offset by higher tax payments and working capital
requirements.
Net cash outflows from investing activities were $272 million in the year, compared to an outflow of $1,182 million in 2005. This substantially reflects the reallocation of funds between cash equivalents and short-term
deposits; after eliminating this effect, the net outflow reflects increased expenditure on acquisitions, and intangible assets arising from new collaboration deals.
Investments
During December, two agreements were signed: a deal with Cubist Pharmaceuticals Inc. to develop and commercialise all intravenous forms of Daptomycin, an anti-infective for the Asia Pacific market, with an upfront
payment of $10 million which was capitalised as an intangible asset. Secondly, a three-year research collaboration and licensing agreement with Argenta Discovery Limited to identify improved bronchodilators to treat chronic pulminary disease with an initial payment of $21 million which was accrued and capitalised as an intangible asset.
In addition, the Company accrued a further milestone payment of $20 million in relation to the collaboration agreement with Targacept Inc. following the decision to commence Proof of Concept studies on AZD3480 during December. The payment has been capitalised as an intangible asset.
Subsequent to year-end, on 11 January 2007, the Company announced a worldwide collaboration agreement with Bristol-Myers Squibb to develop and commercialise two investigational compounds being studied for the treatment of Type 2 Diabetes. The upfront payment of $100 million has been paid and will be capitalised as an intangible asset.
Dividends and Shareholder Return
The Board has recommended a 34 percent increase in the second interim dividend to $1.23 (63.0 pence, 8.60 SEK) to be paid on 19 March 2007. This brings the full year dividend to $1.72 (89.6 pence, 12.20 SEK) an increase of 32 percent.
In line with the policy stated last year the Board intends to continue its practice of growing dividends in line with earnings (maintaining dividend cover in the two to three times range) whilst substantially distributing the balance of cash flow via share repurchases. In 2006, $6,367 million ($5,382 million net of share issues) was distributed from free cash flow of $6,788 million via dividends and share repurchases. The Board intends to continue this
policy, but firmly believes that the first call on free cash flow is business need and, having fulfilled that, will return surplus cash flow to shareholders. The primary business need is to build the research pipeline by
supporting internal and external opportunitites. On this basis the Board has targeted share repurchases (net of shares issued) of $4 billion for 2007.
Share Repurchase Programme
During the fourth quarter, 19.7 million shares were repurchased for cancellation at a total cost of $1,189 million bringing the total repurchase for the full year to 72.2 million shares at a total cost of $4,147 million. During the year, 23.6 million shares were issued, in consideration of share option exercises and in relation to employee share plans, for a total of $985 million.
The total number of shares in issue at 31 December 2006 is 1,532 million.
The share buy back programme is calculated to have added 6 cents to EPS for the year, after allowing for an estimate of interest income foregone.
R&D Update
An updated R&D pipeline table is appended to this press release and is also available on the Company's website, www.astrazeneca.com, under information for investors.
The AstraZeneca pipeline now totals 120 projects, 95 of which involve new chemical entities (NCE's) and 25 for the lifecycle management (LCM) of products already on the market. The corresponding figures as at the last
update in June 2006 were: 103 projects; 79 NCE's; 24 LCM.
On 11 January 2007, AstraZeneca announced a worldwide collaboration with Bristol-Myers Squibb to develop and commercialise two diabetes compounds, including saxagliptin, a DPP-4 inhibitor in Phase III development
and dapagliflozin, a sodium-glucose cotransporter-2 (SGLT2) inhibitor in Phase IIb development. Since December 2005 externalisation efforts have added five Phase II and two Phase III molecules to our development pipeline. In addition, a further 21 new molecules entered development from our laboratories, and
the early pipeline progressed well with 12 first human exposures in the year.

In January 2007, data from three clinical trials demonstrating the effects of Crestor™ on atherosclerosis were submitted to regulatory authorities in the US and the European Union. The METEOR trial is considered the pivotal trial for registration purposes, with the ASTEROID and ORION studies providing supportive data. The METEOR study has been submitted for presentation at the American College of Cardiology Scientific sessions in March 2007.
Seroquel™ SR data for the treatment of schizophrenia were submitted for registration in the US in July, and in the EU in October 2006. Data for IR (immediate release) for bipolar depression will be submitted in the EU in
the fourth quarter 2007. Positive clinical data have been generated in studies switching patients from Seroquel™ IR to Seroquel™ SR, relapse prevention utilising Seroquel™ SR, and bipolar maintenance for Seroquel™ IR. A large lifecycle management programme is ongoing. The target date for the US regulatory submission of Seroquel™ SR for generalised anxiety disorder has been revised to the first half of 2008. There is no change to the submission target for major depressive disorder.
For Iressa™, Study V-15-32, a Phase III NSCLC, Ministry of Health, Labour and Welfare (the Japanese Regulator) post-approval commitment study in a Japanese patient population, did not meet its primary objective of demonstrating non-inferiority for Iressa™ versus docetaxel (Taxotere™) for overall survival. However, AstraZeneca believe these data have not altered the risk:benefit profile of Iressa™ in pre-treated Japanese NSCLC patients.
As previously announced by AtheroGenics, Inc., top-line results from the pivotal Phase III ARISE trial for AGI- 1067 are likely to be available no sooner than late in the first quarter 2007. AtheroGenics, Inc. also reported
that it continues to work towards its goal of presenting the results at the American College of Cardiology Scientific sessions in March 2007.
In December 2006, following successful completion of a previously disclosed Phase IIa programme of safety and product characterisation studies, AstraZeneca decided to continue development of AZD3480 in Alzheimer's
disease and cognitive deficits in schizophrenia. This decision triggered a $20 million milestone payment to Targacept Inc. under the parties' collaboration agreement.