Crucial 2013 Annual Report Download - page 101

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100
• certain buy-sell rights, commencing in 2015, pursuant to which Intel may elect to sell to us, or we may elect to
purchase from Intel, Intel’s interest in IMFT (if Intel so elects, we would set the closing date of the transaction within
two years following such election and could elect to receive financing from Intel for one to two years);
• financing of $65 million provided by Intel to us under a two-year senior unsecured promissory note, payable with
interest in approximately equal quarterly installments (as of August 29, 2013, $25 million of the note was
outstanding); and
• termination of IMFT's lease to use approximately 50% of our Virginia fabrication facility, which resulted in a charge
to other operating expense of $17 million in 2012.
The following table presents IM Flash's distributions to and contributions from its members ("IM Flash" includes both
IMFT and IMFS for all periods prior to April 6, 2012 and includes only IMFT for the period after April 6, 2012):
For the year ended 2013 2012 2011
IM Flash distributions to Micron $ 38 $ 439 $ 234
IM Flash distributions to Intel 37 391 225
Micron contributions to IM Flash 12 151 1,580
Intel contributions to IM Flash 11 177 —
IM Flash sells products to the joint venture members generally in proportion to their ownership interests at long-term
negotiated prices approximating cost. Due to the changes in ownership, our share of IMFS output grew from 51% in the first
quarter of 2011 to 78% in the second quarter of 2012. As a result of our restructuring of IM Flash on April 6, 2012, Intel has no
continuing rights to the output from the IMFS and Virginia facilities. Intel continues to receive output from IMFT in proportion
to its ownership interest at long-term negotiated prices approximating cost and, subsequent to April 6, 2012, also purchases
NAND Flash products from us under a cost-plus supply arrangement. Aggregate sales of NAND Flash products to Intel
(including sales by IMFT at prices approximating cost and sales by us under the cost-plus supply agreement) were
$849 million, $986 million and $884 million for 2013, 2012 and 2011, respectively. Receivables from Intel for sales of NAND
Flash products as of August 29, 2013 and August 30, 2012, were $198 million and $103 million, respectively.
As a result of changes to the timing of the passage of title in the IMFT supply agreement with Intel, effective April 6, 2012,
sales are now recognized upon completion of wafer fabrication, rather than after backend assembly and test are completed. As
a result, we sold $97 million of backend inventories, which generated a one-time increase in NAND sales and reduction in
work in process inventories in 2012.