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Equity Method Investments | 6 Months Ended
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Mar. 05, 2015
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments | Equity Method Investments
|  | March 5, 2015 |  | August 28, 2014
|  | Investment Balance |  | Ownership Percentage |  | Investment Balance |  | Ownership Percentage
Inotera(1) |  | $ | 1,190 |  |  | 33 | % |  | $ | 914 |  |  | 33 | %
Tera Probe |  | 32 |  |  | 40 | % |  | 48 |  |  | 40 | %
Other |  | 17 |  |  | Various |  |  | 9 |  |  | Various |
|  | $ | 1,239 |  |  |  |  |  | $ | 971 |  |  |  |
(1) Entity is a variable interest entity. As of March 5, 2015, substantially all of our maximum exposure to loss from our VIEs that were not consolidated was the $1.19 billion carrying value of our investment in Inotera. We may also incur losses in connection with our rights and obligations to purchase all of Inotera's wafer production capacity under our supply agreements with Inotera. We recognize our share of earnings or losses from our equity method investees generally on a two-month lag. Included in our share of earnings for the second quarter 2015 was $65 million related to Inotera's full release of its valuation allowance against net deferred tax assets related to its net operating loss carryforward. Equity in net income of equity method investees, net of tax, included the following:
|  | Quarter Ended |  | Six Months Ended
|  | March 5, 2015 |  | February 27, 2014 |  | March 5, 2015 |  | February 27, 2014
Inotera |  | $ | 206 |  |  | $ | 131 |  |  | $ | 335 |  |  | $ | 215 |
Tera Probe |  | 1 |  |  | 4 |  |  | (6 | ) |  | 6 |
Other |  | 1 |  |  | (1 | ) |  | 3 |  |  | (1 | )
|  | $ | 208 |  |  | $ | 134 |  |  | $ | 332 |  |  | $ | 220 |
Inotera We have partnered with Nanya in Inotera, a Taiwan DRAM memory company, since 2009. As of March 5, 2015, we held a 33% ownership interest in Inotera, Nanya and certain of its affiliates held a 33% ownership interest, and the remaining ownership interest in Inotera was publicly held. As of March 5, 2015, the market value of our equity interest in Inotera was $3.09 billion based on the closing trading price of 45.25 New Taiwan dollars per share in an active market. As of March 5, 2015 and August 28, 2014, there were losses of $19 million and gains of $44 million, respectively, in accumulated other comprehensive income for cumulative translation adjustments from our equity investment in Inotera. Since January 2013, we have purchased all of Inotera's DRAM output at a price reflecting a discount from market prices for our comparable components under a supply agreement (the "2013 Supply Agreement"). In the second quarter of 2015, we executed a supply agreement, to be effective beginning on January 1, 2016 (the "2016 Supply Agreement"), which will replace the 2013 Supply Agreement. Under the 2016 Supply Agreement, the price for DRAM products sold to us will be based on a formula that equally shares margin between Inotera and us. The 2016 Supply Agreement has an initial two-year term, followed by a three-year wind-down period, and contemplates negotiations in late 2016 with respect to a two-year extension, and annual negotiations thereafter with respect to successive one-year extensions. Upon termination of the initial two-year term of the 2016 Supply Agreement, or any extensions, we would purchase DRAM from Inotera for the wind-down period. Our share of Inotera's capacity would decline over the wind-down period. In the first six months of 2015 and in 2014, our cost of products purchased from Inotera was significantly higher than our cost of similar products manufactured in our wholly-owned facilities. We purchased $628 million and $1.36 billion of DRAM products from Inotera in the second quarter and first six months of 2015, respectively, and $714 million and $1.30 billion in the second quarter and first six months of 2014, respectively. Tera Probe In 2013, we acquired a 40% interest in Tera Probe, which provides semiconductor wafer testing and probe services to us and others. As of March 5, 2015, the market value of our equity interest in Tera Probe was $33 million based on the closing trading price of 1,076 yen per share in an active market. During the first quarter of 2015, we recorded an impairment charge of $10 million within equity in net income of equity method investees to write down the carrying value of our investment in Tera Probe to its fair value, based on its trading price (Level 1 fair value measurement). As of March 5, 2015, the difference between our investment balance and our proportionate share of underlying equity in Tera Probe was $31 million and is expected to be accreted as income to our earnings through equity in net income of equity method investees over a weighted-average period of 7 years. We incurred manufacturing costs for services performed by Tera Probe of $22 million and $47 million for the second quarter and first six months of 2015, respectively, and $31 million and $64 million for the second quarter and first six months of 2014, respectively.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=35687916&loc=d3e32787-111569 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=35687916&loc=d3e32847-111569 + Details
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