Related Parties and Strategic Investments

6 Months Ended

Jun. 28, 2015

Related Party Transactions [Abstract]

Related Parties and Strategic Investments

Related Parties and Strategic Investments

Flash Ventures with Toshiba. The Company owns 49.9% of each entity within Flash Ventures and accounts for its ownership position under the equity method of accounting. The Company’s obligations with respect to Flash Ventures’ master lease agreements, take-or-pay supply arrangements are described in Note 13, “Commitments, Contingencies and Guarantees.” The financial and other support provided by the Company in all periods presented was either contractually required or the result of a joint decision to expand wafer capacity, transition to new technologies or refinance existing equipment lease commitments. Entities within Flash Ventures are variable interest entities (“VIEs”). The Company evaluated whether it is the primary beneficiary of any of the entities within Flash Ventures for all periods presented and determined that it is not the primary beneficiary of any of the entities within Flash Ventures because it does not have a controlling financial interest in any of those entities. In determining whether the Company is the primary beneficiary, the Company analyzed the primary purpose and design of Flash Ventures, the activities that most significantly impact Flash Ventures’ economic performance, and whether the Company had the power to direct those activities. The Company concluded, based upon its 49.9% ownership, the voting structure and the manner in which the day-to-day operations are conducted for each entity within Flash Ventures, that the Company lacked the power to direct most of the activities that most significantly impact the economic performance of each entity within Flash Ventures.

The Company purchased NAND flash memory wafers from Flash Ventures and made investments and loans to Flash Ventures, totaling $470.0 million and $973.8 million during the three and six months endedJune 28, 2015, respectively. The Company received loan repayments from Flash Ventures of $86.5 million and $176.2 million during the three and six months endedJune 28, 2015, respectively. The Company purchased NAND flash memory wafers from Flash Ventures and made investments and loans to Flash Ventures totaling $504.5 million and $964.7 million during the three and six months endedJune 29, 2014, respectively. The Company received loan repayments from Flash Ventures of $88.0 million and $112.3 million during the three and six months endedJune 29, 2014, respectively.

At June 28, 2015 and December 28, 2014, the Company had accounts payable balances due to Flash Ventures of $139.8 million and $136.1 million, respectively.

The Company’s maximum reasonably estimable loss exposure (excluding lost profits), based upon the exchange rate at each respective balance sheet date, as a result of its involvement with Flash Ventures, is presented below. Flash Ventures’ investments are denominated in Japanese yen and the maximum possible loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S. dollar.

	June 28, 2015		December 28, 2014
	(In millions)
Notes receivable	$	448	$	467
Equity investments	488		496
Operating lease guarantees	636		551
Maximum estimable loss exposure	$	1,572	$	1,514

Solid State Storage Solutions, Inc. Solid State Storage Solutions, Inc. (“S4”) was a venture with third parties to license IP. During the second quarter of 2015, the Company sold its interest in S4 and, accordingly, deconsolidated this subsidiary, which resulted in a loss of $1.9 million recorded in “Interest (expense) and other income (expense), net” on the Condensed Consolidated Statements of Operations. The operating results of S4 were not material for all periods presented.