Intel 1998 Annual Report Download - page 47

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Concentrations of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments and trade
receivables. Intel places its investments with high-credit-quality counterparties and, by policy, limits the amount of credit exposure to any one
counterparty based on Intel's analysis of that counterparty's relative credit standing. A majority of the Company's trade receivables are derived
from sales to manufacturers of computer systems, with the remainder spread across various other industries. The Company's five largest
customers accounted for approximately 42% of net revenues for 1998. At December 26, 1998, these customers accounted for approximately
39% of net accounts receivable.
The Company endeavors to keep pace with the evolving computing industry and has adopted credit policies and standards intended to
accommodate industry growth and inherent risk. Management believes that credit risks are moderated by the diversity of the Company's end
customers and geographic sales areas. Intel performs ongoing credit evaluations of its customers' financial condition and requires collateral as
deemed necessary.
Other income for 1998 and 1997 included approximately $185 and $106 million, respectively, from sales of a portion of the Company's
investments in marketable strategic equity securities.
Comprehensive income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income," at the beginning of fiscal 1998. The adoption had no impact on net
income or total stockholders' equity. Comprehensive income consists of net income and other comprehensive income.
The components of other comprehensive income and related tax effects were as follows:
Accumulated other comprehensive income presented in the accompanying consolidated balance sheets consists of the accumulated net
unrealized gain on available-for-sale investments.
PROVISION FOR TAXES
Income before taxes and the provision for taxes consisted of the following:
INTEREST INCOME AND OTHER
(IN MILLIONS) 1998 1997 1996
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Interest income $ 593 $ 562 $ 364
Foreign currency gains 11 63 26
Other income, net 188 174 16
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TOTAL $ 792 $ 799 $ 406
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(IN MILLIONS) 1998 1997 1996
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Gains on investments during the year, net of tax
of $(357), $(4) and $(37) in 1998, 1997 and 1996,
respectively $ 665 $ 5 $75
Less: adjustment for gains included in net income,
net of tax of $65, $37, and $2 in 1998, 1997, and
1996, respectively (120) (69) (5)
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OTHER COMPREHENSIVE INCOME $ 545 $ (64) $70
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(IN MILLIONS) 1998 1997 1996
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Income before taxes:
U.S. $6,677 $8,033 $5,515
Foreign 2,460 2,626 2,419
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TOTAL INCOME BEFORE TAXES $9,137 $10,659 $7,934
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Provision for taxes:
Federal:
Current $2,321 $2,930 $2,046
Deferred 145 30 8
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2,466 2,960 2,054
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State:
Current 320 384 286
Foreign:
Current 351 394 266