To: brushwud who wrote (37210 ) 4/24/2001 4:00:36 PM From: Petz Read Replies (1) | Respond to brushwud, thanks for clearing up the discrepancy on the convertible bonds. If you've looked at Intel's financial statements, can you give us any insight as to this statement:** Gains on equity investments and interest and other were $264 million in the first quarter, higher than previous expectations of $180 million. Interest and other includes a $45 million pre-tax gain from adopting the Statement of Financial Accounting Standards No. 133 on accounting for derivatives and hedging. This gain is primarily due to the mark-to-market of Intel Capital equity derivatives. With the adoption, approximately $1.4 billion of short-term investments were reclassified to trading assets, primarily from short-term investments. Intel Capital had no net gains on equity investments, after recognizing gains of $428 million, which were fully offset by impairment reserves. realized the derivatives gain, because it does mention that the gain was based on "mark to market." So they created a new account called "trading assets" and put some cash into it, probably to serve as margin for the sale of naked calls and capital for the purchase of puts. (If they were just going to sell covered calls, why would they need to put capital into the account?);^)
