Crucial 2012 Annual Report Download - page 86

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Our ability to access IMFT's cash and investments to finance our other operations is subject to agreement by Intel.
Creditors of IMFT have recourse only to its assets and do not have recourse to any other of our assets.
IM Flash manufactures NAND Flash memory products using designs and technology we develop with Intel. We generally
share product design and other NAND Flash R&D costs with Intel. The April 6, 2012 agreements with Intel expanded our
NAND Flash R&D cost-sharing agreement with Intel to include certain emerging memory technologies, but did not change the
cost-sharing percentage. R&D expenses were reduced by reimbursements from Intel of $87 million, $95 million and $104
million for 2012, 2011 and 2010, respectively.
MP Mask
In 2006, we formed a joint venture with Photronics to produce photomasks for leading-edge and advanced next generation
semiconductors. At inception and through August 30, 2012, we owned 50.01% and Photronics owned 49.99% of MP Mask.
We contributed $21 million and $9 million to MP Mask in 2012 and 2011, respectively. Photronics contributed $20 million and
$8 million to MP Mask in 2012, 2011, respectively. In connection with the formation of the joint venture, we received
$72 million in 2006 in exchange for entering into a license agreement with Photronics, which is being recognized over the term
of the 10-year agreement. Deferred income and other noncurrent liabilities included an aggregate of $26 million and
$34 million as of August 30, 2012 and September 1, 2011, respectively, related to this agreement. We purchase a substantial
majority of the reticles produced by MP Mask pursuant to a supply arrangement.
Total MP Mask assets and liabilities included in our consolidated balance sheets were as follows:
As of 2012 2011
Current assets $ 19 $ 24
Noncurrent assets (primarily property, plant and equipment) 170 143
Current liabilities 12 31
Amounts exclude intercompany balances that were eliminated in our consolidated balance sheets.
Creditors of MP Mask have recourse only to the assets of MP Mask and do not have recourse to any other of our assets.
Through February 24, 2012, we leased to Photronics a facility to produce photomasks under an operating lease. On
February 24, 2012, we sold the facility to Photronics for $35 million. The proceeds were equal to our net carrying value and no
gain or loss was realized from the sale.
TECH Semiconductor Singapore Pte. Ltd.
Since 1998, we had participated in TECH Semiconductor Singapore Pte. Ltd. ("TECH"), a semiconductor memory
manufacturing joint venture in Singapore with Canon Inc. ("Canon") and Hewlett-Packard Singapore (Private) Limited
("HP"). In December 2010 and January 2011, we acquired HP's and Canon's interests, respectively, in two separate
transactions for an aggregate of $159 million. In connection therewith, noncontrolling interests in subsidiaries decreased by
$226 million and additional capital increased by $67 million. As a result of these transactions, our ownership interest in TECH
increased during 2011 from 87% to 100%. In 2010, we purchased shares of TECH for $80 million, which increased our
ownership from 85% to 87% and increased additional capital by $10 million.
Segment Information
Segment information reported herein is consistent with how it is reviewed and evaluated by our chief operating decision
makers. Factors used to identify our segments include, among others, products, technologies and customers. We have the
following four reportable segments:
NAND Solutions Group ("NSG"): Includes high-volume NAND Flash products sold into data storage, personal music
players, and the high-density computing market, as well as NAND Flash products sold to Intel through IM Flash.
DRAM Solutions Group ("DSG"): Includes DRAM products sold to the PC, consumer electronics, networking and
server markets.