Crucial 2013 Annual Report Download - page 96

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95
Japan Fabrication Facility
On June 2, 2011, we sold our wafer fabrication facility in Japan (the "Japan Fab") to Tower Semiconductor Ltd. ("Tower").
Under the arrangement, Tower paid $40 million in cash, approximately 1.3 million ordinary shares of Tower (subsequent to a 1
for 15 reverse stock split on August 6, 2012), and $20 million in installment payments, which we received in 2012. The net
carrying value of assets sold and liabilities transferred to Tower on the transaction date prior to the effects of the transaction
was $23 million and we recorded a gain of $54 million (net of transaction costs of $3 million) in connection with the sale of the
Japan Fab. We also recorded a tax provision of $74 million related to the gain on the sale and to write down certain deferred
tax assets associated with the Japan Fab. In connection with the sale of the Japan Fab, we entered into a supply agreement for
Tower to manufacture products for us in the facility through approximately May 2014.
Other Restructure and Asset Impairment Activities
In order to improve efficiency, labor productivity and competitiveness, we initiated certain limited activities for workforce
optimization in 2013. In connection therewith, we incurred charges of $17 million for severance and other employee-related
costs in 2013.
In September 2013, we entered into an agreement to sell our 200mm wafer fabrication equipment in Kiryat Gat, Israel to
Intel and to terminate the related facility lease with Intel. Through a series of arrangements, Intel will continue to manufacture
wafers for us through 2014. We recognized an impairment charge of $14 million in 2013 to write down the value of these
assets to their estimated fair values. The fair value of $38 million was determined primarily based on the expected proceeds of
the sale and the fair value of a supply agreement to manufacture NOR flash memory at the facility (Level 3 fair value
measurement).
Other Operating (Income) Expense, Net
For the year ended 2013 2012 2011
(Gain) loss on disposition of property, plant and equipment $ (3) $ 5 $ (17)
Samsung patent cross-license agreement — — (275)
Other (5) 27 (19)
$ (8) $ 32 $ (311)
In 2011, we entered into a 10-year patent cross-license agreement with Samsung Electronics Co. Ltd. ("Samsung"). Other
operating income for 2011 included gains of $275 million for cash received from Samsung under the agreement. The license is
a life-of-patents license for existing patents and applications, and a 10-year term license for all other patents.
Other operating expense for 2012 included $17 million from the termination of a lease with IMFT, and a charge of $10
million to write off a receivable in connection with resolution of certain prior year tax matters.
Other Non-Operating Income (Expense), Net
For the year ended 2013 2012 2011
Gain (loss) from changes in currency exchange rates $ (229) $ (6) $ (6)
Loss on extinguishment of debt (31) — (113)
Gain (loss) from investments (5) 35 (3)
Gain from issuance of Inotera shares 48 — —
Other (1) — 13
$(218) $ 29 $ (109)