Crucial 2013 Annual Report Download - page 92

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91
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 income (losses) 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 our
convertible notes classified in equity) were as follows:
As of 2013 2012
Fair
Value Carrying
Value Fair
Value Carrying
Value
Convertible notes $ 4,167 $ 2,506 $ 2,669 $ 2,321
Elpida creditor installment payments and other notes 2,269 2,279 56 58
The fair values of our convertible debt instruments were 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 29, 2013, we had an aggregate of 160.2 million shares of common stock reserved for the issuance of stock
options and restricted stock awards, of which 83.8 million shares were subject to outstanding awards and 76.4 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.
Option activity for 2013 is summarized as follows:
Number of
Shares
Weighted-
Average
Exercise Price
Per Share
Weighted-
Average
Remaining
Contractual
Life
(In Years) Aggregate
Intrinsic Value
Outstanding at August 30, 2012 95.7 $ 8.42
Granted 17.8 6.62
Exercised (22.8) 6.60
Cancelled or expired (19.9) 12.47
Outstanding at August 29, 2013 70.8 7.41 3.3 $ 439
Exercisable at August 29, 2013 31.2 $ 8.21 1.8 $ 170
Expected to vest after August 29, 2013 37.6 6.78 4.4 255