Crucial 2015 Annual Report Download - page 36

34
Other Operating and Non-Operating
In 2014, we settled all pending litigation between us and Rambus, including all antitrust and patent matters, and entered
into a patent cross-license agreement. As a result, other operating expense for 2014 included a $233 million charge to accrue a
liability, which reflects the discounted value of amounts due under this arrangement.
Other non-operating expense for 2015, 2014, and 2013 included losses from the restructure of our debt of $49 million,
$184 million, and $31 million, respectively. (See "Item 8. Financial Statements and Supplementary Data – Notes to
Consolidated Financial Statements – Debt.")
Other non-operating expense included losses from changes in currency exchange rates of $27 million, $28 million, and
$229 million for 2015, 2014, and 2013, respectively. The loss for 2013 included a $228 million loss for currency contracts to
hedge our yen-denominated obligations in connection with the MMJ Acquisition.
On August 15, 2014, ON Semiconductor Corporation acquired Aptina for approximately $433 million and we recognized a
non-operating gain of $119 million on the sale of our shares based on our diluted ownership interest of approximately 27%.
On May 15, 2014, Inotera issued 400 million common shares in a public offering at a price equal to 31.50 New Taiwan
dollars per share, which was in excess of our carrying value per share. As a result of the issuance, our ownership interest
decreased from 35% to 33% and we recognized a non-operating gain of $93 million in 2014. On May 28, 2013, Inotera issued
634 million common shares to Nanya and certain of its affiliates in a private placement at a price equal to 9.47 New Taiwan
dollars per share, which was in excess of our carrying value per share. As a result of the issuance, our ownership interest
decreased from 40% to 35% and we recognized a non-operating gain of $48 million in 2013.
Further discussion of other operating and non-operating income and expenses can be found in the following notes
contained in "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements":
• Equity Plans
• Other Operating (Income) Expense, Net
• Other Non-Operating Income (Expense), Net
Liquidity and Capital Resources
Our primary sources of liquidity are cash generated from operations and financing obtained from capital markets. We
generated cash from operations of $5.21 billion in 2015 and $5.70 billion in 2014. Cash generated from operations is highly
dependent on selling prices for our products, which can vary significantly from period to period. We obtained $2.50 billion
from debt and lease financing in 2015 and $2.23 billion in 2014. As of September 3, 2015, we had (1) revolving credit facilities
available that provide for up to $842 million of additional financing based on eligible receivables and inventories and (2) a term
loan agreement available to obtain financing collateralized by certain property, plant, and equipment in the amount of 6.90
billion New Taiwan dollars or an equivalent amount in U.S. dollars (approximately $213 million as of September 3, 2015), of
which we drew $40 million on June 18, 2015. We are continuously evaluating alternatives for efficiently funding capital
expenditures, dilution-management activities (including repurchases of convertible notes and our common stock), and ongoing
operations. We expect, from time to time in the future, to engage in a variety of transactions for such purposes, including the
issuance or incurrence of secured and unsecured debt and the refinancing and restructuring of existing debt.
To develop new product and process technologies, support future growth, achieve operating efficiencies, and maintain
product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D. As a result of
the MMJ acquisition and our expansion in Singapore, we expect our future capital spending will be higher than our historical
levels. We estimate that cash expenditures in 2016 for property, plant, and equipment will be approximately $5.3 billion to $5.8
billion, which includes amounts we expect to be funded by our partners. The actual amounts for 2016 will vary depending on
market conditions. Investments in capital expenditures for 2015 were $4.12 billion. Total additions to property, plant, and
equipment were $4.46 billion, which, in comparison to cash expenditures, reflects differences in timing of receipts and
payments for equipment as well as non-cash additions such as equipment leases. As of September 3, 2015, we had
commitments of approximately $1.62 billion for the acquisition of property, plant, and equipment, substantially all of which is
expected to be paid within one year.