Intel 2002 Annual Report Download - page 42

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Cash and Cash Equivalents
Highly liquid debt securities with insignificant interest rate risk and with original maturities of three months or less are classified as cash
and cash equivalents.
Investments
Trading Assets. Trading assets are stated at fair value, with gains or losses resulting from changes in fair value recognized currently in
earnings. The company elects to classify as trading assets a portion of its marketable debt securities. For these debt securities, gains or losses
from changes in fair value due to interest rate and currency market fluctuations, offset by losses or gains on related derivatives, are included in
interest and other, net. A portion of the company's marketable equity securities have been classified as trading assets, as the company no longer
deems the investments to be strategic in nature and has the ability and intent to mitigate equity market risk through the use of derivative
instruments. For these marketable equity securities, gains or losses from changes in fair value, offset or partially offset by losses or gains on
related derivative instruments, are included in gains (losses) on equity securities, net. Also included in trading assets is a marketable equity
portfolio held to generate returns that seek to offset changes in liabilities related to certain deferred compensation arrangements. Gains or losses
from changes in fair value of these equity securities, offset by losses or gains on the related liabilities, are included in interest and other, net. The
company also uses fixed income investments and derivative instruments to seek to offset the remaining portion of the changes in the
compensation liabilities.
Available-for-Sale Investments. Investments designated as available-for-sale include marketable debt and equity securities. Investments
that are designated as available-for-sale as of the balance sheet date are reported at fair value, with unrealized gains and losses, net of tax,
recorded in stockholders' equity. The cost of securities sold is based on the specific identification method. Realized gains and losses on the sale
of debt securities are recorded in interest and other, net. Realized gains or losses on the sale or exchange of equity securities and declines in
value judged to be other than temporary are recorded in gains (losses) on equity securities, net. Marketable equity securities are presumed to be
impaired if the fair value is less than the cost basis for six months, absent compelling evidence to the contrary.
Debt securities with original maturities greater than three months and remaining maturities less than one year are classified as short-term
investments. Debt securities with remaining maturities greater than one year are classified as long-term investments.
The company acquires certain equity investments for the promotion of business and strategic objectives, and to the extent these investments
continue to have strategic value, the company typically does not attempt to reduce or eliminate the inherent market risks. The marketable portion
of these investments is included in long-term investments.
Non-Marketable Equity Securities and Other Investments. Non-marketable equity securities and other investments are accounted for at
historical cost or, if Intel has significant influence over the investee, using the
50
equity method of accounting. Intel's proportionate share of income or losses from investments accounted for under the equity method and any
gain or loss on disposal are recorded in interest and other, net. Non-marketable equity securities, equity-method investments, and other
investments are included in other assets. Non-marketable equity securities are subject to a periodic impairment review; however, there are no
open-market valuations, and the impairment analysis requires significant judgment. This analysis includes assessment of the investee's financial
condition, the business outlook for its products and technology, its projected results and cash flow, the likelihood of obtaining subsequent rounds
of financing and the impact of any relevant contractual equity preferences held by Intel or others. If an investee obtains additional funding at a
valuation lower than Intel's carrying amount, it is presumed that the investment is other than temporarily impaired, unless specific facts and
circumstances indicate otherwise, for example if Intel holds contractual rights that include a preference over the rights of other investors.
Impairment of non
-
marketable equity securities is recorded in gains (losses) on equity securities, net.
Goodwill and workforce amortization, net of tax
—
1,556
1,269
Adjusted net income
$
3,117
$
2,847
$
11,804
Reported basic earnings per common share
$
0.47
$
0.19
$
1.57
Goodwill and workforce amortization, net of tax
—
0.23
0.19
Adjusted basic earnings per common share
$
0.47
$
0.42
$
1.76
Reported diluted earnings per common share
$
0.46
$
0.19
$
1.51
Goodwill and workforce amortization, net of tax
—
0.22
0.18
Adjusted diluted earnings per common share
$
0.46
$
0.41
$
1.69