Crucial 2013 Annual Report Download - page 70

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69
Tera Probe
On July 31, 2013, we acquired, as an asset of Elpida, a 40% interest in Tera Probe, Inc. ("Tera Probe"), a Japanese-based
company mainly engaged in wafer testing and contract wafer-level package testing services. Our investment in Tera Probe was
valued at $40 million, based on the aggregate trading price of the shares in an active market on the acquisition date (Level 1
fair value measurements). The net carrying value of our investment was less than our proportionate share of Tera Probe's
equity at the time of our investment, and the difference is being amortized as a net credit to earnings through equity in net
income (loss) of equity method investees (the "Tera Probe Amortization"). As of August 29, 2013, $35 million of unamortized
Tera Probe Amortization was being recognized over a weighted-average period of 7 years.
As of August 29, 2013, based on the closing trading price of Tera Probe's shares in an active market, the market value of
our equity interest was $30 million. We evaluated our investment in Tera Probe and concluded that the decline in the market
value below carrying value was not an other-than-temporary impairment primarily because of the limited amount of time the
fair value was below the carrying value, the subsequent recovery and historical volatility of the stock price.
Tera Probe performs probe services for certain of our manufacturing processes. Included in cost of goods sold for 2013 is
$13 million for probe services performed by Tera Probe.
Other
Transform: In the second quarter of 2010, we acquired a 50% interest in Transform, a developer, manufacturer and
marketer of photovoltaic technology and solar panels, from Origin. As of August 29, 2013, we and Origin each held a 50%
ownership interest in Transform. As a result of the ongoing challenging global environment in the solar industry and
unfavorable worldwide supply and demand conditions, on May 25, 2012, the Board of Directors of Transform approved a
liquidation plan. As a result of the liquidation plan, we recognized a charge of $69 million in 2012. As of August 30, 2012,
Transform's operations were substantially discontinued.
Other noncurrent assets as of August 30, 2012 included $26 million for a portion of our Boise, Idaho manufacturing
facilities leased to Transform and other noncurrent liabilities included $26 million for deferred rent revenue on the fully-paid
lease. In 2013, Transform terminated the lease and, as a result, we recognized a gain of $25 million from the termination.
During 2012 and 2011, we and Origin each contributed $17 million and $30 million, respectively, of cash to
Transform. We recognized net sales of $13 million and $20 million in 2012 and 2011, respectively, for transition services
provided to Transform. Revenue on our sales to Transform approximated costs. Revenue and associated costs for 2013 were
not significant.
Aptina: Other equity method investments included a 31% equity interest in Aptina. The amount of cumulative loss we
recognized from our investment in Aptina through the second quarter of 2012 reduced our investment balance to zero and we
ceased recognizing our proportionate share of Aptina's losses.
Through May 3, 2013, we manufactured components for CMOS image sensors for Aptina under a wafer supply
agreement. For 2013, 2012 and 2011, we recognized net sales of $182 million, $372 million and $349 million, respectively,
from products sold to Aptina, and cost of goods sold of $219 million, $395 million and $358 million, respectively. On May 3,
2013, we assigned to LFoundry our supply agreement with Aptina to manufacture image sensors at our 200mm Avezzano
facility. (See "Restructure and Asset Impairments - Micron Technology Italia, S.r.l." note.)
In connection with the sale of our 200mm Avezzano facility to LFoundry, on May 22, 2013, we entered into a short-term,
interest-free, unsecured loan agreement with Aptina that allowed Aptina to borrow up to $45 million, drawn at their option,
in three equal tranches through July 2013. Principal amounts drawn are due in three equal payments from September 2013 to
January 2014. As of August 29, 2013, other current assets included $45 million for amounts due under the short-term loan
agreement.