Crucial 2012 Annual Report Download - page 39

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In the second quarter of 2012, we loaned $133 million to Inotera under a 90-day note with a stated annual interest rate of
2% to facilitate the purchase of capital equipment necessary to implement new process technology. The loan was repaid to us
with accrued interest in March 2012. Also, in March 2012, we contributed $170 million to Inotera, which increased our
ownership percentage from 29.7% to 39.7%.
Financing Activities
Net cash provided by financing activities was $497 million for 2012, which included $1,065 million of proceeds from
issuance of debt, $609 million of proceeds from equipment sale-leaseback financing transactions partially offset by
$194 million of net distributions to noncontrolling interests, $203 million for repayments of debt and $172 million of payments
on equipment purchase contracts.
On April 18, 2012, we issued $550 million of 2.375% Convertible Senior Notes due May 2032 (the "2032C Notes") and
$450 million of 3.125% Convertible Senior Notes due May 2032 (the "2032D Notes" and together with the 2032C Notes, the
"2032 Notes") at face value. Issuance costs for the 2032 Notes totaled $21 million and we paid $103 million to purchase
capped calls to partially offset the potential dilutive effect if the 2032 Notes are converted into shares, resulting in net proceeds
of $876 million from issuance of the 2032 Notes.
On April 6, 2012, we entered into a series of agreements with Intel relating to our IMFS and IMFT joint ventures. In
connection therewith, we acquired Intel's 18% interest in IMFS for $466 million. In addition, we acquired the assets of IMFT
located at our Virginia wafer fabrication facility for which Intel received a distribution from IMFT of $139 million.
Additionally, Intel deposited $300 million with us, which will be applied to Intel's future purchases of NAND Flash under a
supply agreement or, under certain circumstances, refunded. As of August 30, 2012, $45 million of the deposit had been
applied. We also entered into a senior unsecured promissory note with Intel in April 2012. Under the terms of the note, we
borrowed $65 million, payable with interest in eight approximately equal quarterly installments.
In 2012, IM Flash distributed $391 million to Intel, and Intel made contributions to IM Flash of $177 million.
On September 5, 2012, we entered into a three-year revolving credit facility. Under this credit facility, we can draw up to
the lesser of $255 million or 80% of the net outstanding balance of a pool of certain accounts receivable. We granted a security
interest in such receivables to collateralize the facility. The availability of the facility is subject to certain customary
conditions, including the absence of any event or circumstance that has a material adverse effect on our business or financial
condition. Interest is payable monthly on any outstanding principal balance at a variable rate equal to the 30-day Singapore
Interbank Offering Rate ("SIBOR") plus 2.8% per annum.
On October 2, 2012, we entered into a facility agreement to obtain financing collateralized by semiconductor production
equipment. Subject to customary conditions, we can draw up to $214 million under the facility agreement prior to April 4,
2013. Amounts drawn are payable in 10 equal semi-annual installments beginning six months after the draw date. On October
18, 2012, we drew $173 million with interest at 2.38% per annum. Additional amounts drawn will bear interest, at our option,
at either (i) a fixed rate negotiated at the time of the draw request or (ii) a floating rate equal to the six-month LIBOR rate plus
1.6% per annum. The facility agreement contains customary covenants.
Elpida Memory, Inc.
On July 2, 2012, we entered into the Sponsor Agreement and the Rexchip Share Purchase Agreement that require
aggregate payments by us of approximately 60 billion yen and 10 billion New Taiwan dollars (approximately $1.1 billion at the
closing of the transactions, which we expect to occur in the first half of calendar 2013), plus additional installment payments by
the Elpida Companies of 140 billion yen (or approximately $1.75 billion) in the aggregate from 2014 through 2019. In
addition, capital expenditures will be required in furtherance of the planned technology road maps for the Elpida and Rexchip
operations. We are obligated to provided financial support, subject to certain conditions, which may include guarantees of
Elpida's financing for up to $200 million of working capital and up to $800 million for capital expenditures. We may be
required to provide these obligations even if the transactions do not close. (See "Overview – Elpida Memory, Inc.”)