Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities. For 2008 compared to 2007, the $1.7 billion decrease in cash provided by operating activities was primarily due to the $1.7 billion decrease in net income, while total adjustments to reconcile net income to cash provided by operating activities, including net changes in assets and liabilities, were approximately flat.

Inventories as of December 27, 2008 increased compared to December 29, 2007, due to higher chipset and microprocessor inventories partially offset by lower inventories of other products. As of December 27, 2008, our other accrued liabilities included $447 million in customer credit balances, which were reclassified from accounts receivable. Accounts receivable as of December 27, 2008 decreased significantly compared to December 29, 2007, due to a significant decline in revenue during the last month in the fourth quarter of 2008. Customer credit balances were not significant as of December 29, 2007. For 2008, our two largest customers accounted for 38% of our net revenue (35% in 2007). In 2008, one of these customers accounted for 20% of our net revenue (17% in 2007), and another customer accounted for 18% of our net revenue (18% in 2007). Additionally, these two largest customers accounted for 46% of our accounts receivable as of December 27, 2008 (35% as of December 29, 2007).

Due to the adoption of SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115" (SFAS No. 159), in 2008, the related cash flows for marketable debt instruments classified as trading assets are now included in investing activities.

For 2007 compared to 2006, the increase in cash provided by operating activities was primarily due to higher net income. Changes to working capital in 2007 from 2006 were approximately flat, with a decrease in inventory levels compared to an increase in 2006, offset by higher purchases of trading assets exceeding maturities.