Intel 1996 Annual Report Download - page 56

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manufacturers of microcomputer systems. Although the financial exposure to individual customers increased in 1996, the concentration of
credit among the largest customers decreased slightly during the year. The Company's five largest customers accounted for approximately 30%
of net revenues for 1996. At December 28, 1996, these customers accounted for approximately 25% of net accounts receivable.
The Company endeavors to keep pace with the evolving computer 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 its end customers and
geographic sales areas. Intel performs ongoing credit evaluations of its customers' financial condition and requires collateral as deemed
necessary.
Interest income and other
Other income for 1995 included approximately $58 million from the settlement of ongoing litigation and $60 million from sales of a portion of
the Company's investment in marketable equity securities. Other income for 1994 included non-recurring gains from the settlement of various
insurance claims.
Provision for taxes
The provision for taxes consisted of the following:
(In millions) 1996 1995 1994
- - ------------------------------------------------------------------------
Interest income $ 364 $ 272 $ 235
Foreign currency gains 26 29 15
Other income 16 114 23
----- ----- -----
Total $ 406 $ 415 $ 273
===== ===== =====
(In millions) 1996 1995 1994
- - ------------------------------------------------------------------------
Income before taxes:
U.S. $5,515 $3,427 $2,460
Foreign 2,419 2,211 1,143
------ ------ ------
Total income before taxes $7,934 $5,638 $3,603
====== ====== ======
Provision for taxes:
Federal:
Current $2,046 $1,169 $1,169
Deferred 8 307 (178)
------ ------ ------
2,054 1,476 991
------ ------ ------
State:
Current 286 203 162
Foreign:
Current 266 354 134
Deferred 171 39 28
------ ------ ------
437 393 162
------ ------ ------
Total provision for taxes $2,777 $2,072 $1,315
====== ====== ======
Effective tax rate 35.0% 36.8% 36.5%
====== ====== ======