
12.	Investments

Investments consist of the following:



	December 31,
	2013				2012
	Carrying Value		Ownership Interest		Carrying Value		Ownership Interest
	(In thousands, except percentages)
Investment in unconsolidated affiliate	$	105,214	60.0	%	$	38,690	30.0	%

J-Devices Corporation

In October 2009, Amkor and Toshiba invested in Nakaya Microdevices Corporation (“NMD”) and formed a joint venture to provide semiconductor packaging and test services in Japan. As a result of the transaction, NMD changed its name to J-Devices Corporation. We invested $16.7 million for our original 30% equity interest and options to acquire additional equity interests. In April 2013, we completed the exercise of our option to increase our ownership interest in J-Devices from 30% to 60% for an aggregate purchase price of $67.4 million. J-Devices is owned 60% by Amkor, 34% by the former shareholders of NMD and 6% by Toshiba.

At December 31, 2013, our investment includes our 60% equity interest and options to acquire additional equity interests. The remaining options are exercisable at our discretion and permit us to increase our ownership interest in J-Devices up to 66% in 2014 by purchasing shares owned by Toshiba and up to 80% in 2015 and thereafter by purchasing shares owned by the other shareholders. In 2014 and beyond, Toshiba has the option, at its discretion, to sell shares it owns to us. If we decline Toshiba's offer to sell its shares to us, then J-Devices shall have the obligation to purchase the shares. If J-Devices is unable to fulfill its obligation to purchase the shares offered by Toshiba, then we will be obligated to purchase the shares offered by Toshiba. The options in 2014 and 2015 become exercisable in the fourth quarter of such year, and if exercised, we would expect closing to occur in the first half of the following year, subject to regulatory approval. After we own 80% or more shares, the original shareholders of NMD have a put option which allows them to sell their shares to us. The exercise price for all options is payable in cash and is determined using a formula based upon the net book value and a multiple of earnings before interest, taxes, depreciation and amortization of J-Devices.

The governance provisions currently applicable to J-Devices restrict our ability, even with our majority ownership, to cause J-Devices to take certain actions without the consent of the other investors. Accordingly, we account for our investment in J-Devices using the equity method of accounting. Under the equity method of accounting, we recognize our proportionate share of J-Devices’ net income or loss, which is after J-Devices' income taxes in Japan, during each accounting period as a change in our investment in unconsolidated affiliate. J-Devices' financial information is converted to U.S. GAAP and translated into U.S. dollars using Japanese yen as the functional currency. In addition, we record equity method adjustments as a change in our investment. The equity method adjustments include the amortization of a basis difference as a result of the cost of our original investment exceeding our proportionate share of J-Devices' equity. The net unamortized basis difference from our original investment was fully amortized as of December 31, 2013. Because our incremental proportionate share of J-Devices' equity exceeded the cost of our additional investment, these adjustments also include the amortization of an additional basis difference. The net unamortized basis difference from our incremental investment was $2.9 million at December 31, 2013.

The following tables present summary financial information of J-Devices:



	For the Year Ended December 31,
	2013		2012		2011
	(In thousands)
Summary income statement information for J-Devices
Net sales	$	825,135	$	531,530	$	576,421
Gross profit	83,778		61,003		82,729
Net income	16,538		20,299		25,412



	December 31,
	2013		2012
	(In thousands)
Summary balance sheet information for J-Devices
Current assets	$	352,628	$	240,759
Non-current assets (including property, plant and equipment)	234,241		201,459
Current liabilities (including debt)	298,401		225,531
Total debt	131,275		144,733
Non-current liabilities (including debt)	108,928		96,612
Total stockholders' equity	179,540		120,075

In conjunction with entering into the joint venture, one of our existing subsidiaries in Japan purchased packaging and test equipment from Toshiba for $44.7 million and leased the equipment to J-Devices under an agreement which was accounted for as a direct financing lease. At the end of the lease in October 2012, J-Devices purchased the remaining equipment for $8.8 million, which was paid in January 2013.

Our share of the undistributed retained earnings of J-Devices amounted to approximately $31.8 million as of December 31, 2013.