Crucial 2013 Annual Report Download - page 63

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IMFS: Prior to April 6, 2012, IM Flash Singapore, LLP ("IMFS") was a VIE because all of its costs were passed to us and
its other member, Intel, through product purchase agreements and IMFS was dependent upon us or Intel for any additional cash
requirements. Prior to April 6, 2012, we determined that we had the power to direct the activities of IMFS that most
significantly impacted its economic performance. Additionally, since 2010, we had significantly greater economic exposure
than Intel as a result of our significantly higher ownership interest in IMFS. Therefore, we consolidated IMFS. On April 6,
2012, we acquired Intel's remaining interests in IMFS and it ceased to be a VIE.
MP Mask: MP Mask Technology Center, LLC ("MP Mask") is a VIE because substantially all of its costs are passed to us
and its other member, Photronics, Inc. ("Photronics"), through product purchase agreements and MP Mask is dependent upon
us or Photronics for any additional cash requirements. We determined that we have the power to direct the activities of MP
Mask that most significantly impact its economic performance, primarily because (1) of our tie-breaking voting rights over key
operating decisions and (2) nearly all key MP Mask activities are driven by our supply needs. We also determined that we have
the obligation to absorb losses and the right to receive benefits from MP Mask that could potentially be significant to
it. Therefore, we consolidate MP Mask.
For further information regarding our consolidated VIEs, see "Consolidated Variable Interest Entities" note.
Recently Issued Accounting Standards
There have been no recently issued accounting pronouncements that have had or are expected to have a material impact on
our financial statements.
Acquisition of Elpida Memory, Inc.
On July 31, 2013, we completed the acquisition of Elpida Memory, Inc., a Japanese corporation, pursuant to the terms and
conditions of an Agreement on Support for Reorganization Companies (as amended, the "Sponsor Agreement") that we entered
into on July 2, 2012, with the trustees of Elpida and one of its subsidiaries, Akita Elpida Memory, Inc., a Japanese corporation
("Akita" and, together with Elpida, the "Elpida Companies") pursuant to and in connection with the Elpida Companies'
corporate reorganization proceedings under the Corporate Reorganization Act of Japan. We paid $615 million for the
acquisition of Elpida, of which substantially all was deposited into accounts that are legally restricted for payment to the
secured and unsecured creditors of the Elpida Companies in October 2013. As of August 29, 2013, the amount held in the
restricted accounts was presented as restricted cash. Of the $615 million paid at closing, $18 million was applied from amounts
we had deposited into an escrow account in July 2012 as a condition to the execution of the Sponsor Agreement.
On July 31, 2013, we also completed the acquisition of an additional 24% ownership interest in Rexchip Electronics
Corporation ("Rexchip"), a Taiwanese corporation and manufacturing joint venture formed by Elpida and Powerchip
Technology Corporation ("Powerchip") from Powerchip and certain of its affiliates (the "Powerchip Group") pursuant to a
share purchase agreement. We paid $334 million in cash for the shares. Elpida owns, directly and indirectly through a
subsidiary, approximately 65% of Rexchip's outstanding common stock. Therefore, as a result of the consummation of our
acquisition of Elpida and the Rexchip shares from the Powerchip Group, we own approximately 89% ownership interest in
Rexchip.
Elpida's assets include, among others: a 300mm DRAM wafer fabrication facility located in Hiroshima, Japan; its
approximate 65% ownership interest in Rexchip, whose assets include a 300mm DRAM wafer fabrication facility located in
Taichung City, Taiwan; and a 100% ownership interest in Akita, whose assets include an assembly and test facility located in
Akita, Japan. Elpida's semiconductor memory products include mobile DRAM targeted toward mobile phones and tablets. We
believe that combining the complementary product portfolios of Micron and Elpida strengthens our position in the memory
market and enables us to provide customers with a wider portfolio of high-quality memory solutions. We also believe that our
acquisition of Elpida strengthens our market position in the memory industry through increased research and development and
manufacturing scale, improved access to core memory market segments, and additional wafer capacity to balance among our
DRAM, NAND Flash and NOR Flash memory solutions.
The Elpida Acquisition and Rexchip share purchase are treated as a single business combination because (1) the two
transactions were entered into and closed contemporaneously and (2) the Rexchip share purchase was negotiated in
contemplation of the Elpida acquisition and its completion was contingent on the closing of the Elpida acquisition.