Crucial 2015 Annual Report Download - page 34

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Operating Expenses and Other
Selling, General and Administrative
SG&A expenses for 2015 increased 2% as compared to 2014 primarily due to an additional week in 2015 and higher legal
costs.
SG&A expenses for 2014 increased 26% as compared to 2013 primarily due to the incremental costs resulting from the
MMJ Acquisition and higher payroll costs resulting primarily from the reinstatement of variable pay plans.
Research and Development
R&D expenses for 2015 increased 12% from 2014 primarily due to a higher volume of development wafers processed, an
increase in depreciation expense due to R&D capital expenditures, higher payroll costs, higher subcontracted engineering and
other professional service costs, and an additional week in 2015. Increases in R&D expenses for 2015 as compared to 2014
were partly attributable to increased spending on controllers, firmware, and engineering to support system level products,
including SSD, managed NAND Flash, and HMC products.
R&D expenses for 2014 increased 47% from 2013 primarily due to the incremental costs resulting from the MMJ
Acquisition, higher payroll costs resulting primarily from the reinstatement of variable pay plans, and increased resources
dedicated to development efforts.
We generally share with Intel the costs of product design and process development activities for NAND Flash memory and
3D XPoint memory. Our R&D expenses reflect net reductions of $231 million, $162 million, and $176 million in 2015, 2014,
and 2013, respectively, as a result of reimbursements under our Intel and other cost-sharing arrangements.
Our process technology R&D efforts are focused primarily on development of successively smaller line-width process
technologies which are designed to facilitate our transition to next generation memory products. Additional process technology
R&D efforts focus on the enablement of advanced computing and mobile memory architectures, the investigation of new
opportunities that leverage our core semiconductor expertise, and the development of new manufacturing materials. Product
design and development efforts include our high density DDR3 and DDR4 DRAM, Mobile LPDRAM products, high density
NAND Flash memory (including 3D NAND and MLC and TLC technologies), 3D XPoint memory, SSDs, Hybrid Memory
Cubes, specialty memory, NOR Flash memory, and other memory technologies and systems.
Restructure and Asset Impairments
For the year ended 2015 2014 2013
Loss on impairment of LED assets $ 1 $ (6) $ 33
Loss on impairment of MIT assets — (5) 62
Gain on termination of lease to Transform — — (25)
Loss on restructure of ST consortium agreement — — 26
Other 2 51 30
$ 3 $ 40 $ 126
In order to optimize operations, improve efficiency, and increase our focus on our core memory operations, we have
entered into various restructure activities. For 2014 and 2013, other restructure included charges associated with our efforts to
wind down our 200mm operations primarily in Agrate, Italy and Kiryat Gat, Israel and charges associated with workforce
optimization activities, primarily related to our MBU and EBU operating segments. As of September 3, 2015, we do not
anticipate incurring any significant additional costs for these restructure activities. (See "Item 8. Financial Statements and
Supplementary Data – Notes to Consolidated Financial Statements – Restructure and Asset Impairments.")
Interest Income (Expense)
Net interest expense for 2015, 2014, and 2013, included aggregate amounts of amortization of debt discount and other
costs of $138 million, $167 million, and $122 million, respectively.