Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. 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 in 2007 compared to an increase in 2006, offset by higher purchases of trading assets exceeding maturities. Lower product costs and the reclassification of NOR inventory to held for sale in conjunction with our anticipated divestiture of the NOR flash memory business contributed to the lower inventory balance in 2007. In comparison, our inventory increased in 2006 as a result of higher product costs. In 2007, we began designating floating-rate securitized financial instruments purchased after 2006 as trading assets.

For 2007 and 2006, our two largest customers accounted for 35% of our net revenue. In 2007, one of these customers accounted for 18% of our net revenue (19% in 2006) and another customer accounted for 17% of our net revenue (16% in 2006). Additionally, these two largest customers accounted for 35% of our accounts receivable at December 29, 2007 and December 30, 2006.

For 2006 compared to 2005, the largest contributing factors to the decrease in cash provided by operating activities were lower net income, lower net maturities of trading assets, and changes in the amount of estimated tax payments, partially offset by a decrease in accounts receivable balances. Fiscal year 2006 included share-based compensation charges of $1.4 billion (zero for 2005).