Intel 2001 Annual Report Download - page 51

The company sold available-for-sale securities with a fair value at the date of sale of $1.3 billion in 2001, $4.2 billion in 2000 and $1.0 billion in 1999. The gross realized gains on these
sales totaled $548 million in 2001, $3.4 billion in 2000 and $883 million in 1999. The company realized gross losses on sales of $187 million in 2001, $52 million in 2000 and none in 1999.
The company recognized gains on shares exchanged in third-party merger transactions of $156 million in 2001 and $682 million in 2000. The company recognized impairment losses on
available-for-sale and non-marketable investments of $1.1 billion in 2001 and $297 million in 2000. For 2001, the company also recognized $122 million of net marked-to-market gains on
equity trading assets and equity derivatives.
The amortized cost and estimated fair value of available-for-sale investments in debt securities at December 29, 2001, by contractual maturity, were as follows:
Fair values of financial instruments
The estimated fair values of financial instruments outstanding at fiscal year-ends were as follows:
Due to restrictions on sales extending beyond one year, publicly traded securities with a carrying value of $85 million and an estimated fair value of $210 million were classified as non-
marketable equity securities at December 29, 2001. At December 30, 2000, similarly restricted securities had a carrying amount of $109 million and an estimated fair value of $631 million.
Concentrations of credit risk
Financial instruments that potentially subject the company to concentrations of credit risk consist principally of investments in debt securities, derivative financial instruments 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. Investments in debt securities with maturities of greater than six months consist primarily of A and A2 or better rated financial instruments and
counterparties. Investments with maturities of up to six months consist primarily of A-1 and P-1 or better rated financial instruments and counterparties. Government regulations
imposed on investment alternatives of non-U.S. subsidiaries, or the absence of A and A2 rated counterparties in certain countries, result in some minor exceptions. Credit rating criteria for
derivative instruments are similar to those for investments. The amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which a
counterparty's obligations exceed the obligations of Intel with that counterparty. At December 29, 2001, debt investments were placed with approximately 180 different counterparties. Intel's
practice is to obtain and secure available collateral from counterparties against obligations, including securities lending transactions, whenever Intel deems appropriate.
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 38% of net revenues for 2001. At December 29, 2001, these customers accounted for approximately 41% of net accounts receivable.
The company endeavors to keep pace with the evolving computer and communications industries, 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 and other, net
$
13,909
$
825
$
(525
) $
14,209
(In millions) Cost
Estimated
fair value
Due in 1 year or less $
9,990
$
9,993
Due in 1
-
2 years
679
680
Due in 2-5 years
107
107
Due after 5 years
515
515
Total investments in available-for- sale debt securities $
11,291
$
11,295
2001 2000
(In millions—assets (liabilities))
Carrying
amount
Estimated fair
value
Carrying
amount
Estimated
fair value
Cash and cash equivalents $
7,970
$
7,970
$
2,976
$
2,976
Short-term investments $
2,356
$
2,356
$
10,498
$
10,498
Trading assets
$
1,224
$
1,224
$
355
$
355
Marketable strategic equity securities $
155
$
155
$
1,915
$
1,915
Other long-term investments $
1,319
$
1,319
$
1,801
$
1,801
Non
-marketable equity securities $
1,276
$
1,719
$
1,726
$
2,912
Other non
-
marketable instruments
$
161
$
161
$
148
$
148
Warrants and other equities marked-to-market as derivatives in 2001 $
172
$
172
$
12
$
36
Options hedging or offsetting equities $
51
$
51
$ — $ —
Swaps related to investments in debt securities
$
12
$
12
$
12
$
12
Options related to deferred compensation liabilities $
(6
) $
(6
) $
(5
) $
(5
Short-term debt $
(409
) $
(409
) $
(378
) $
(378
Long
-
term debt
$
(1,050
)
$
(1,045
)
$
(707
)
$
(702
Swaps hedging debt $
4
$
4
$ — $ (
1
Currency forward contracts $
1
$
1
$
2
$
6
(In millions) 2001 2000 1999