2.4.0.82103100 - Disclosure - Pending Acquisition of Elpida Memory, Inc.truefalsefalse1false falsefalseD2013Q3YTD_us-gaap_BusinessAcquisitionAxis_mu_ElpidaCompanyMemberhttp://www.sec.gov/CIK0000723125duration2012-08-31T00:00:002013-05-30T00:00:001false 0truefalsetruefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalse1false truefalseD2013Q3YTD_us-gaap_BusinessAcquisitionAxis_mu_ElpidaCompanyMemberhttp://www.sec.gov/CIK0000723125duration2012-08-31T00:00:002013-05-30T00:00:00falsefalseElpida Company [Member]us-gaap_BusinessAcquisitionAxisxbrldihttp://xbrl.org/2006/xbrldimu_ElpidaCompanyMemberus-gaap_BusinessAcquisitionAxisexplicitMembernanafalse0Elpida Company [Member]2true 3us-gaap_BusinessAcquisitionLineItemsus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Business Acquisition [Line Items]3false 4us-gaap_BusinessCombinationDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Pending Acquisition of Elpida Memory, Inc.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On July&#160;2, 2012, we entered into an "Agreement on Support for Reorganization Companies" (the "Sponsor Agreement") with the trustees of Elpida Memory,&#160;Inc. ("Elpida") and its subsidiary, Akita Elpida Memory,&#160;Inc. ("Akita" and, together with Elpida, the "Elpida Companies"), which provides for, among other things, our acquisition of Elpida and our support for the plans of reorganization of the Elpida Companies in connection with their corporate reorganization proceedings in Japan. The Elpida Companies filed petitions for commencement of corporate reorganization proceedings with the Tokyo District Court (the "Japan Court") under the Corporate Reorganization Act of Japan on February&#160;27, 2012 (the "Japan Proceeding"). On March&#160;23, 2012, the Japan Court issued an order to commence the Japan Proceeding. Elpida filed a Verified Petition for Recognition and Chapter&#160;15 Relief (the "U.S. Proceeding") in the United States Bankruptcy Court for the District of Delaware (the "U.S. Court") on March&#160;19, 2012 and, on April&#160;24, 2012, the U.S. Court entered an order that, among other things, recognized the Japan Proceeding as a foreign main proceeding pursuant to 11 U.S.C. &#167;&#160;1517(b). On February 26, 2013, the Elpida Companies' creditors approved the plans of reorganization of Elpida and Akita and on February 28, 2013, the Japan Court issued an order approving the plans of reorganization. Appeals filed by certain creditors of Elpida in Japan challenging the plan approval order issued by the Japan Court were denied. On June 25, 2013, the U.S. Court issued a recognition order, which recognized the order of the Japan Court approving the Elpida plan of reorganization.</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In a related transaction, on July&#160;2, 2012, we entered into a share purchase agreement (the "Rexchip Share Purchase Agreement") with Powerchip Technology Corporation, a Taiwanese corporation ("Powerchip"), and certain of its affiliates (collectively, the "Powerchip Group") to acquire the Powerchip Group's approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">24%</font><font style="font-family:inherit;font-size:10pt;"> interest in Rexchip Electronics Corporation ("Rexchip"), a manufacturing joint venture formed by Elpida and Powerchip. For more information about the acquisition of the Rexchip shares from the Powerchip Group, see "Rexchip Share Purchase Agreement" below. Elpida currently owns, directly and indirectly through a subsidiary, approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">65%</font><font style="font-family:inherit;font-size:10pt;"> of Rexchip's outstanding common stock. As a result, if the transactions contemplated by the Sponsor Agreement and the Rexchip Share Purchase Agreement are completed, we will own </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">100%</font><font style="font-family:inherit;font-size:10pt;"> of Elpida and, directly or indirectly through one or more of our subsidiaries, approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">89%</font><font style="font-family:inherit;font-size:10pt;"> of Rexchip.</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Elpida's assets include, among others: a </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">300</font><font style="font-family:inherit;font-size:10pt;">mm DRAM wafer fabrication facility located in Hiroshima, Japan; its ownership interest in Rexchip, whose assets include a </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">300</font><font style="font-family:inherit;font-size:10pt;">mm DRAM wafer fabrication facility located in Taiwan; and an assembly and test facility located in Akita, Japan. Elpida's semiconductor memory products include Mobile DRAM targeted toward mobile phones and tablets. We believe that combining the complementary product portfolios of Micron and Elpida will strengthen our position in the memory market and enable us to provide customers with a wider portfolio of high-quality memory solutions. We also believe that the Elpida transactions will strengthen our market position in the memory industry through increased research and development and manufacturing scale, improved access to core memory market segments, and additional wafer capacity to balance among our DRAM, NAND Flash and NOR Flash memory solutions. There can be no assurance that we will be able to successfully consummate the transactions described above.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Elpida Sponsor Agreement</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under the Sponsor Agreement, we committed to support plans of reorganization for the Elpida Companies that would provide for payments by the Elpida Companies to their secured and unsecured creditors in an aggregate amount of </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">200 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$1.98 billion</font><font style="font-family:inherit;font-size:10pt;">, assuming approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">101</font><font style="font-family:inherit;font-size:10pt;"> yen per U.S. dollar, the exchange rate as of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">May&#160;30, 2013</font><font style="font-family:inherit;font-size:10pt;">), less certain expenses of the reorganization proceedings and certain other items. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Sponsor Agreement provides that we will invest </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">60 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$593 million</font><font style="font-family:inherit;font-size:10pt;">) in cash in Elpida at the closing in exchange for </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">100%</font><font style="font-family:inherit;font-size:10pt;"> ownership of Elpida's equity. As a condition to the execution of the Sponsor Agreement, we deposited </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">1.8 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$18 million</font><font style="font-family:inherit;font-size:10pt;">) into an escrow account in July 2012, which will be applied toward our purchase price for the Elpida shares at closing. The Elpida Companies will use the proceeds of our investment to fund initial installment payments to their creditors of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">60 billion</font><font style="font-family:inherit;font-size:10pt;"> yen, which amount is subject to reduction for certain items specified in the Sponsor Agreement. The initial installment payments will be made within </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">three</font><font style="font-family:inherit;font-size:10pt;"> months following the closing of our acquisition of Elpida. The remaining </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">140 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$1.38 billion</font><font style="font-family:inherit;font-size:10pt;">) of installment payments payable to the Elpida Companies' creditors are scheduled to be made by the Elpida Companies in </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">six</font><font style="font-family:inherit;font-size:10pt;"> annual installments payable at the end of each calendar year beginning in the calendar year after the first installment payments are made. We or one of our subsidiaries are committed to enter into a supply agreement with Elpida following the closing, which will provide for our purchase on a cost-plus basis of all product produced by Elpida. Cash flows from such supply agreement will be used to satisfy the required installment payments under the plans of reorganization. Although certain key parameters of the supply agreement have been agreed to with Elpida, the detailed terms have not been completed, and the final terms will be subject to Japan Court approval.</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Sponsor Agreement contains certain termination rights, including (i) in the event of a material adverse change affecting either Elpida and its subsidiaries or Rexchip disproportionate to industry trends or (ii) if our acquisition of Elpida has not closed by January 2, 2014, which date may be extended six months under certain limited circumstances.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The consummation of the Sponsor Agreement remains subject to satisfaction or waiver of certain conditions, including the closing of the purchase of the Rexchip shares from the Powerchip Group under the Rexchip Share Purchase Agreement described above.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">There can be no assurance that the various conditions will be satisfied or that the Elpida Acquisition will ultimately be consummated on the terms and conditions set forth in the Sponsor Agreement. If the remaining closing conditions are not satisfied or waived, we will not be able to close the acquisitions. However, we believe the requirements for closing will be achieved and that we will close the acquisitions.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Summary Description of the Plans of Reorganization</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Pursuant to the Sponsor Agreement, the trustees of the Elpida Companies prepared plans of reorganization for Elpida and Akita, which plans set forth the treatment of the Elpida Companies' pre-petition creditors and their claims utilizing the support contemplated by the Sponsor Agreement. Generally, Elpida's plan of reorganization provides that secured creditors will recover </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">100%</font><font style="font-family:inherit;font-size:10pt;"> of the amount of their fixed claims, whereas unsecured creditors will recover at least </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">17.4%</font><font style="font-family:inherit;font-size:10pt;"> of the amount of their fixed claims. The remaining portion of the unsecured claims are expected to be discharged, without payment, over the period that payments are made pursuant to the plans of reorganization. The creditors will be paid by Elpida in installments, with the first installment payment to occur within three months after the closing of Micron's acquisition of Elpida. The remaining installment payments will occur on the last business day of each calendar year over a six-year period beginning in the calendar year after the first installment payment is made. The secured creditors will be paid in full on or before the sixth installment payment date, while the unsecured creditors will be paid in seven installments. To the extent any claims remain unfixed as of the seventh installment payment date, an additional payment will be made to unsecured creditors once the remaining claims are finally fixed to the extent the remaining reserve exceeds the amounts payable with respect to the fixed claims. Akita's plan of reorganization provides that secured creditors will recover </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">100%</font><font style="font-family:inherit;font-size:10pt;"> of the amount of their claims, whereas unsecured creditors will recover </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">19%</font><font style="font-family:inherit;font-size:10pt;"> of the amount of their claims. The secured creditors of Akita will be paid in full on the first installment payment date, while the unsecured creditors will be paid in seven installments.</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The initial installment payment to be made by the Elpida Companies pursuant to the plans of reorganization is </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">60&#160;billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$593 million</font><font style="font-family:inherit;font-size:10pt;">), which amount is subject to reduction for certain items specified in the Sponsor Agreement. The Elpida Companies will use the proceeds of Micron's investment at the closing of the Elpida acquisition to fund the initial installment payment. The remaining </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">140&#160;billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$1.38&#160;billion</font><font style="font-family:inherit;font-size:10pt;">) of installment payments will be made by the Elpida Companies in six annual installments, with payments of </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">20&#160;billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$198&#160;million</font><font style="font-family:inherit;font-size:10pt;">) in each of the first four installment payments, and payments of </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">30&#160;billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$297&#160;million</font><font style="font-family:inherit;font-size:10pt;">) in each of the final two installment payments. Cash flows from the cost-plus supply agreement described above will be used to satisfy the second through seventh installment payments under the plans of reorganization.</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain contingency matters related to the Elpida Companies, which are primarily comprised of outstanding litigation claims, were not treated as fixed claims under the plans of reorganization at the time the plans were filed with the Japan Court. A portion of each installment amount payable to the creditors of the Elpida Companies will be reserved in the event that any of these matters become fixed claims, in which case these fixed claims will be paid under the plans of reorganization in the same manner as the fixed claims of other creditors. To the extent the aggregate amounts reserved from the installment payments exceed the aggregate amounts payable with respect to these unfixed claims once they become fixed, the excess amounts reserved will be distributed to unsecured creditors with respect to their fixed claims, resulting in an increased recovery for the unsecured creditors out of the installment payments. To the extent the aggregate amounts reserved is less than the aggregate amounts payable with respect to these unfixed claims once they become fixed, the Elpida Companies would be responsible to fund any shortfall to ensure that the creditors receive the recovery to which they are entitled under the plans of reorganization with respect to these claims. As a result, there is a possibility that the total amount payable by the Elpida Companies to their creditors under the plans of reorganization will exceed </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">200 billion</font><font style="font-family:inherit;font-size:10pt;"> yen. In addition, if these unfixed claims are resolved pursuant to settlement arrangements or other post-petition agreements, a substantial portion of the amounts payable with respect to the claims may have to be funded by the Elpida Companies outside of the installment payments provided for by the plans of reorganization.</font></div><div style="line-height:120%;font-size:13pt;"><font style="font-family:inherit;font-size:13pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Micron Credit Support Arrangements with Respect to the Elpida Companies</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Pursuant to the Sponsor Agreement, we agreed, subject to certain conditions, to provide certain support to Elpida with respect to obtaining financing for working capital purposes and capital expenditures. This support included a commitment to use reasonable best efforts to assist Elpida with the extension or replacement of Elpida's then-existing working capital credit facility through the closing of the Elpida acquisition, which assistance may include the provision of a payment guarantee by us under certain circumstances. Under the Sponsor Agreement, we also agreed, subject to certain conditions, to use reasonable best efforts to assist the Elpida Companies in financing up to </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">64 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$633 million</font><font style="font-family:inherit;font-size:10pt;">) of eligible capital expenditures incurred through June&#160;30, 2014, including up to </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">40 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">$395 million</font><font style="font-family:inherit;font-size:10pt;">) incurred prior to June&#160;30, 2013, which may include us providing payment guarantees of third party financing under certain circumstances or direct financial support from Micron or one of its subsidiaries.</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">May&#160;30, 2013</font><font style="font-family:inherit;font-size:10pt;"> we provided a guarantee of Elpida's payments through December 2014 related to financing of capital expenditures with an outstanding borrowing of </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">5 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">$50 million</font><font style="font-family:inherit;font-size:10pt;">). We also provided a guarantee of Elpida's payments relating to an extension of Elpida's existing working capital credit facility, with an outstanding borrowing as of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">May&#160;30, 2013</font><font style="font-family:inherit;font-size:10pt;"> of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">8 billion</font><font style="font-family:inherit;font-size:10pt;"> yen (or the equivalent of approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$79 million</font><font style="font-family:inherit;font-size:10pt;">). On June 28, 2013, Elpida's working capital credit facility matured and was repaid in full, relieving us of our payment guarantee. We have entered into an omnibus reimbursement agreement with Elpida in connection with our financial support obligations under the Sponsor Agreement, whereby Elpida and certain of its subsidiaries have agreed, among other things, to reimburse us for any amounts that we are required to pay under or in connection with the payment guarantees. These obligations under the omnibus reimbursement agreement are collateralized by approximately </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">93%</font><font style="font-family:inherit;font-size:10pt;"> of the Rexchip shares held by Elpida and one of its subsidiaries. In the event we are required to make any payments to Elpida's lenders under the guarantees, our rights will be subrogated to those of the lenders, including any rights to exercise remedies with respect to collateral securing the underlying loans. Failure to close the Elpida acquisition would not relieve us of our obligations under the foregoing payment guarantees. Under the Sponsor Agreement, certain conditions require Elpida's cash balances to be below a certain level in order for capital expenditure financing support to be available to Elpida. As of May 30, 2013, these conditions were not satisfied.&#160; As a result, we would not be obligated to provide any such further support unless and until such conditions, as well as all other applicable conditions, are met. Although we were not obligated to do so, in June 2013, we provided an additional payment guarantee related to the financing of capital expenditures of an aggregate of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$16 million</font><font style="font-family:inherit;font-size:10pt;"> in order for Elpida to obtain more favorable financing terms. The financing of Elpida is collateralized by certain of its semiconductor equipment.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Rexchip Share Purchase Agreement</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On July&#160;2, 2012, we entered into the Rexchip Share Purchase Agreement with the Powerchip Group, under which we will purchase approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">714 million</font><font style="font-family:inherit;font-size:10pt;"> shares of Rexchip common stock, which represents approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">24%</font><font style="font-family:inherit;font-size:10pt;"> of Rexchip's outstanding common stock, for approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">10 billion</font><font style="font-family:inherit;font-size:10pt;"> New Taiwan dollars (or the equivalent of approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$334 million</font><font style="font-family:inherit;font-size:10pt;">, assuming approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">30</font><font style="font-family:inherit;font-size:10pt;"> New Taiwan dollars per U.S. dollar, the exchange rate as of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">May&#160;30, 2013</font><font style="font-family:inherit;font-size:10pt;">). The consummation of the Rexchip Share Purchase Agreement is subject to various closing conditions, including the closing of the transactions contemplated by the Sponsor Agreement. At the closing of the Sponsor Agreement and the Rexchip Share Purchase Agreement, we will own, directly or indirectly through one or more of our subsidiaries, approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">89%</font><font style="font-family:inherit;font-size:10pt;"> of Rexchip.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Currency Hedging</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Elpida Hedges:</font><font style="font-family:inherit;font-size:10pt;"> On July 2, 2012, we executed a series of separate currency exchange transactions pursuant to which we purchased call options to buy </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">200 billion</font><font style="font-family:inherit;font-size:10pt;"> yen with a weighted-average strike price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">79.15</font><font style="font-family:inherit;font-size:10pt;"> (yen per U.S. dollar). In addition, to reduce the cost of these call options, we sold put options to sell </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">100 billion</font><font style="font-family:inherit;font-size:10pt;"> yen with a strike price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">83.32</font><font style="font-family:inherit;font-size:10pt;"> and we sold call options to buy </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">100 billion</font><font style="font-family:inherit;font-size:10pt;"> yen with a strike price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">75.57</font><font style="font-family:inherit;font-size:10pt;">. These currency exchange transactions (the "Original Elpida Hedges") were settled on March 26, 2013 and we paid </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$191 million</font><font style="font-family:inherit;font-size:10pt;"> on settlement.</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Upon settlement of the Original Elpida Hedges, on March 26, 2013, we executed a series of new separate currency exchange transactions to hedge our exposure to the yen-denominated acquisition payments under the Sponsor Agreement pursuant to which we entered into below-market forward contracts to buy </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">80 billion</font><font style="font-family:inherit;font-size:10pt;"> yen with a weighted-average price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">91.00</font><font style="font-family:inherit;font-size:10pt;"> (yen per U.S. dollar) and purchased put options to sell </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">80 billion</font><font style="font-family:inherit;font-size:10pt;"> yen with a weighted-average strike price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">94.24</font><font style="font-family:inherit;font-size:10pt;"> (the "New Elpida Hedges"). The New Elpida Hedges, which expire on September 25, 2013, mitigate the risk of a strengthening yen for certain of our yen-denominated payments under the Sponsor Agreement while preserving some ability for us to benefit if the value of the yen weakens relative to the U.S. dollar. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The forward and option contracts detailed above were not designated for hedge accounting and are remeasured at fair value each period with gains and losses reflected in our results of operations. As a result of the mark-to-market adjustments for the Original Elpida Hedges and the New Elpida Hedges (the "Elpida Hedges"), we recorded losses to other non-operating expense of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$46 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$222 million</font><font style="font-family:inherit;font-size:10pt;"> for the third quarter and first nine months of 2013, respectively. As of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">May&#160;30, 2013</font><font style="font-family:inherit;font-size:10pt;">, our cumulative loss on the Elpida Hedges was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$214 million</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Rexchip Hedges:</font><font style="font-family:inherit;font-size:10pt;"> On July 25, 2012, we purchased call options to buy </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">10 billion</font><font style="font-family:inherit;font-size:10pt;"> New Taiwan dollars with a weighted-average strike price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">29.21</font><font style="font-family:inherit;font-size:10pt;"> (New Taiwan dollar per U.S. dollar). These options expired on April 2, 2013 and we paid </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$3 million</font><font style="font-family:inherit;font-size:10pt;"> on settlement. On April 9, 2013, we purchased call options for </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$1 million</font><font style="font-family:inherit;font-size:10pt;"> to buy </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">10 billion</font><font style="font-family:inherit;font-size:10pt;"> New Taiwan dollars with a strike price of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">28.50</font><font style="font-family:inherit;font-size:10pt;"> (New Taiwan dollar per U.S. dollar). These options expire on September 25, 2013. These option contracts were not designated for hedge accounting and were remeasured at fair value each period with gains and losses reflected in our results of operations.</font></div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph F4 -Subparagraph e -Appendix F Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51, 52 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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