Intel 2004 Annual Report Download - page 63

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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 6: Investments
Trading Assets
Trading assets outstanding at fiscal year-ends were as follows:
Net holding gains on fixed income debt instruments classified as trading assets were $80 million in 2004, $208 million in 2003 and $79
million in 2002. Net holding losses on the related derivatives were $(77) million in 2004, $(192) million in 2003 and $(75) million in 2002.
These amounts were included in interest and other, net in the consolidated statements of income.
Certain equity securities within the trading asset portfolio are maintained to generate returns that seek to offset changes in liabilities
related to the equity market risk of certain deferred compensation arrangements. These deferred compensation liabilities were $458 million in
2004 and $427 million in 2003, and are included in other accrued liabilities on the consolidated balance sheets. Net holding gains (losses) on
equity securities offsetting deferred compensation arrangements were $29 million in 2004, $52 million in 2003 and $(64) million in 2002, and
were included within interest and other, net in the consolidated statements of income.
Prior to 2004, the company held certain other marketable equity securities which were included in trading assets. Net holding gains on
these equity security trading assets were $77 million in 2003 and $57 million in 2002. The $57 million net gain in 2002 included a gain of $120
million that resulted from the designation of formerly restricted equity investments as trading assets as they became marketable. The
cumulative difference between their cost and fair market value at the time they became marketable was recorded as a gain in 2002. Net holding
gains (losses) on the related derivatives were $(84) million in 2003 and $110 million in 2002. These gains and losses were included within
losses on equity securities, net in the consolidated statements of income.
58
2004
2003
(In Millions)
Net
Unrealized
Gains
Estimated
Fair Value
Net
Unrealized
Gains
Estimated
Fair Value
Debt instruments
$
187
$
2,772
$
174
$
2,321
Equity securities offsetting deferred compensation
81
339
60
304
Total trading assets
$
268
$
3,111
$
234
$
2,625