Intel 2009 Annual Report Download - page 87

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Summarized Financial Information of Equity Method Investees
The following is the aggregated summarized financial information of our equity method investees, which includes summary
results of operations information for 2009, 2008, and 2007 and summary balance sheet information as of December 26, 2009
and December 27, 2008:
Summarized financial information for our equity method investees is presented on the basis of up to a one-quarter lag and is
included for the periods in which we held an equity method ownership interest.
IMFT/IMFS
Micron and Intel formed IM Flash Technologies, LLC (IMFT) in January 2006 and IM Flash Singapore, LLP (IMFS) in
February 2007. We established these joint ventures to manufacture NAND flash memory products for Micron and Intel. We
own a 49% interest in each of these ventures. Initial production at the IMFS fabrication facility, including the purchase and
installation of manufacturing equipment, remains on hold. IMFT and IMFS are each governed by a Board of Managers, with
Micron and Intel initially appointing an equal number of managers to each of the boards. The number of managers appointed
by each party adjusts depending on the parties’ ownership interests. These ventures will operate until 2016 but are subject to
prior termination under certain terms and conditions.
These joint ventures are variable interest entities. All costs of the joint ventures will be passed on to Micron and Intel through
our purchase agreements. IMFT and IMFS are dependent upon Micron and Intel for any additional cash requirements. Our
known maximum exposure to loss approximated our investment balance as of December 26, 2009, which was $1.6 billion in
IMFT/IMFS ($2.1 billion as of December 27, 2008). Our investment in these ventures is classified within other long-term
assets. As of December 26, 2009, except for the amount due to IMFT/IMFS for product purchases and services, we did not
incur any additional liabilities in connection with our interests in these joint ventures. In addition to the potential loss of our
existing investment, our actual losses could be higher, as Intel and Micron are liable for other future operating costs
and/or obligations of IMFT/IMFS. In addition, future cash calls could increase our investment balance and the related
exposure to loss. Finally, as we are currently committed to purchasing 49% of IMFT’s production output and production-
related services, we may be required to purchase products at a cost in excess of realizable value.
Our portion of IMFT costs, primarily related to product purchases and start-up costs, was $735 million during 2009 ($1.1
billion during 2008 and $790 million during 2007). The amount due to IMFT for product purchases and services provided was
$75 million as of December 26, 2009 and $190 million as of December 27, 2008. During 2009, $419 million was returned to
Intel by IMFT, which is reflected as a return of equity method investment within investing activities on the consolidated
statements of cash flows ($298 million during 2008).
76
(In Millions)
2009 2008 2007
Operating results:
Net revenue
$
3,307
$
3,456
$
1,484
Gross margin
$
305
$
444
$
67
Operating income (loss)
$
(1,216
)
$
(702
)
$
(490
)
Net income (loss)
$
(1,302
)
$
(932
)
$
(674
)
Dec. 26,
Dec. 27,
(In Millions)
2009
2008
Balance sheet:
Current assets
$
3,835
$
3,257
Non
-
current assets
$
11,174
$
7,322
Current liabilities
$
1,048
$
1,316
Non
-
current liabilities
$
2,690
$
2,469
Redeemable preferred stock
$
16
$
50
Non
-
controlling interests
$
7
$
10