Crucial 2012 Annual Report Download - page 77

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Fair Value Measurements on a Nonrecurring Basis
Our non-marketable securities, equity method investments, and non-financial assets such as intellectual property and
property, plant and equipment are carried at cost unless impairment is deemed to have occurred.
During the third quarter of 2012, the Board of Directors of Transform approved a liquidation plan. As a result, we
impaired our investment in Transform to the estimated liquidation values for its assets and liabilities measured using
unobservable inputs (Level 3). Transform's primary assets were semiconductor equipment and a manufacturing facility. The
fair values for semiconductor equipment were based on quotations obtained from equipment dealers, which consider the
remaining useful life and configuration of the equipment. Fair value for the facility was determined based on sales of similar
facilities and properties in comparable markets. Based on our valuation of Transform's net assets, we recognized an other-than-
temporary impairment charge of $69 million in equity in net loss of equity method investees.
Fair Value of Financial Instruments
Amounts reported as cash and equivalents, receivables, and accounts payable and accrued expenses approximate fair value.
The estimated fair value and carrying value of debt instruments (carrying value excludes the equity components of the 2014
Notes, the 2027 Notes, the 2031 Notes, and the 2032 Notes classified in equity) were as follows:
As of 2012 2011
Fair
Value Carrying Value Fair Value Carrying Value
Convertible notes $ 2,669 $ 2,321 $ 1,845 $ 1,578
Other notes 56 58 — —
The fair value of our convertible debt instruments was determined based on inputs that are observable in the market or that
could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on
similar debt issued by parties with credit ratings similar to ours (Level 2). The fair value of our other debt instruments was
estimated based on discounted cash flows using inputs that are observable in the market or that could be derived from, or
corroborated with, observable market data, including interest rates based on similar debt issued by parties with credit ratings
similar to ours (Level 2).
Equity Plans
As of August 30, 2012, we had an aggregate of 169.0 million shares of common stock reserved for the issuance of stock
options and restricted stock awards, of which 105.1 million shares were subject to outstanding awards and 63.9 million shares
were available for future awards. Awards are subject to terms and conditions as determined by our Board of Directors.
Stock Options
Our stock options are generally exercisable in increments of either one-fourth or one-third per year beginning one year
from the date of grant. Stock options issued after September, 2004 generally expire six years from the date of grant. All other
options expire ten years from the grant date.