2018 Q3 Form 10-K Financial Statement

#000072312518000092 Filed on October 15, 2018

View on sec.gov

Income Statement

Concept 2018 Q3 2018 Q2 2018 Q1
Revenue $8.440B $7.797B $7.351B
YoY Change 37.5% 40.08% 58.15%
Cost Of Revenue $3.289B $3.074B $3.081B
YoY Change 8.69% 3.96% 4.65%
Gross Profit $5.151B $4.723B $4.270B
YoY Change 65.52% 81.03% 150.59%
Gross Profit Margin 61.03% 60.57% 58.09%
Selling, General & Admin $215.0M $211.0M $196.0M
YoY Change 11.4% 3.43% 4.81%
% of Gross Profit 4.17% 4.47% 4.59%
Research & Development $567.0M $603.0M $523.0M
YoY Change 26.85% 38.94% 10.57%
% of Gross Profit 11.01% 12.77% 12.25%
Depreciation & Amortization $1.285B $1.233B $1.151B
YoY Change 20.54% 24.04% 17.93%
% of Gross Profit 24.95% 26.11% 26.96%
Operating Expenses $746.0M $814.0M $719.0M
YoY Change 17.11% 27.59% 8.94%
Operating Profit $4.377B $3.953B $3.567B
YoY Change 74.94% 101.38% 241.67%
Interest Expense -$31.00M $80.00M $88.00M
YoY Change -78.47% -47.71% -45.34%
% of Operating Profit -0.71% 2.02% 2.47%
Other Income/Expense, Net -$1.000M -$193.0M -$53.00M
YoY Change 132.53% -255.88%
Pretax Income $4.346B $3.716B $3.453B
YoY Change 87.25% 113.93% 273.3%
Income Tax $103.0M -$109.0M $143.0M
% Of Pretax Income 2.37% -2.93% 4.14%
Net Earnings $4.325B $3.823B $3.309B
YoY Change 82.64% 132.12% 270.13%
Net Earnings / Revenue 51.24% 49.03% 45.01%
Basic Earnings Per Share $3.73 $3.30 $2.86
Diluted Earnings Per Share $3.56 $3.10 $2.67
COMMON SHARES
Basic Shares Outstanding 1.159B shares 1.156B shares
Diluted Shares Outstanding 1.235B shares 1.238B shares

Balance Sheet

Concept 2018 Q3 2018 Q2 2018 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $6.802B $7.071B $8.042B
YoY Change 25.31% 63.3% 106.31%
Cash & Equivalents $6.506B $6.808B $7.828B
Short-Term Investments $296.0M $263.0M $214.0M
Other Short-Term Assets $180.0M $147.0M $173.0M
YoY Change 22.45% 11.36% 10.9%
Inventory $3.590B $3.369B $3.184B
Prepaid Expenses
Receivables $5.056B $4.513B $4.050B
Other Receivables $261.0M $257.0M $253.0M
Total Short-Term Assets $16.04B $15.50B $15.84B
YoY Change 28.75% 40.61% 59.24%
LONG-TERM ASSETS
Property, Plant & Equipment $23.67B $22.71B $21.86B
YoY Change 21.83% 19.41% 14.48%
Goodwill $1.228B $1.228B $1.228B
YoY Change 0.0% 0.0% 3.19%
Intangibles $331.0M $334.0M $348.0M
YoY Change -14.47% -17.53% -18.12%
Long-Term Investments $473.0M $487.0M $520.0M
YoY Change 2856.25% 3146.67% 1268.42%
Other Assets $611.0M $603.0M $441.0M
YoY Change 35.78% 35.81% 12.79%
Total Long-Term Assets $27.34B $26.35B $25.43B
YoY Change 19.49% 18.44% 13.46%
TOTAL ASSETS
Total Short-Term Assets $16.04B $15.50B $15.84B
Total Long-Term Assets $27.34B $26.35B $25.43B
Total Assets $43.38B $41.85B $41.26B
YoY Change 22.75% 25.79% 27.53%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.692B $1.360B $1.557B
YoY Change 26.93% -8.97% 12.83%
Accrued Expenses $841.0M $692.0M $517.0M
YoY Change 39.47% 37.03% 15.66%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $859.0M $1.454B $1.514B
YoY Change -31.93% 25.24% 35.54%
Total Short-Term Liabilities $5.754B $5.883B $6.135B
YoY Change 7.87% 14.39% 17.82%
LONG-TERM LIABILITIES
Long-Term Debt $3.780B $5.895B $7.816B
YoY Change -61.79% -43.91% -31.05%
Other Long-Term Liabilities $355.0M $549.0M $746.0M
YoY Change -44.44% -7.73% 10.19%
Total Long-Term Liabilities $355.0M $549.0M $746.0M
YoY Change -44.44% -7.73% 10.19%
TOTAL LIABILITIES
Total Short-Term Liabilities $5.754B $5.883B $6.135B
Total Long-Term Liabilities $355.0M $549.0M $746.0M
Total Liabilities $10.11B $12.32B $14.68B
YoY Change -36.18% -24.05% -14.59%
SHAREHOLDERS EQUITY
Retained Earnings $24.40B $20.07B $16.25B
YoY Change 137.77% 154.28% 160.08%
Common Stock $8.318B $8.986B $9.720B
YoY Change -0.96% 7.84% 19.79%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $32.29B $28.65B $25.70B
YoY Change
Total Liabilities & Shareholders Equity $43.38B $41.85B $41.26B
YoY Change 22.75% 25.79% 27.53%

Cashflow Statement

Concept 2018 Q3 2018 Q2 2018 Q1
OPERATING ACTIVITIES
Net Income $4.325B $3.823B $3.309B
YoY Change 82.64% 132.12% 270.13%
Depreciation, Depletion And Amortization $1.285B $1.233B $1.151B
YoY Change 20.54% 24.04% 17.93%
Cash From Operating Activities $5.155B $4.261B $4.348B
YoY Change 60.94% 77.03% 209.47%
INVESTING ACTIVITIES
Capital Expenditures -$2.251B -$2.411B -$2.261B
YoY Change 77.94% 131.6% 94.24%
Acquisitions
YoY Change
Other Investing Activities $122.0M $167.0M -$148.0M
YoY Change -1038.46% 0.0% -95.49%
Cash From Investing Activities -$2.129B -$2.244B -$2.409B
YoY Change 66.59% 156.75% -45.85%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -3.333B -3.023B -138.0M
YoY Change 288.46% 166.58% -105.41%
NET CHANGE
Cash From Operating Activities 5.155B 4.261B 4.348B
Cash From Investing Activities -2.129B -2.244B -2.409B
Cash From Financing Activities -3.333B -3.023B -138.0M
Net Change In Cash -307.0M -1.006B 1.801B
YoY Change -128.77% -352.13% -466.8%
FREE CASH FLOW
Cash From Operating Activities $5.155B $4.261B $4.348B
Capital Expenditures -$2.251B -$2.411B -$2.261B
Free Cash Flow $7.406B $6.672B $6.609B
YoY Change 65.76% 93.5% 157.26%

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8000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
UnrecognizedTaxBenefitsIncreasesResultingFromAcquisition
0 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
UnrecognizedTaxBenefitsIncreasesResultingFromAcquisition
54000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
UnrecognizedTaxBenefitsIncreasesResultingFromAcquisition
0 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
5000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
15000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
68000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Foreign Currency Translation
UnrecognizedTaxBenefitsIncreasesResultingFromForeignCurrencyTranslation
0 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Foreign Currency Translation
UnrecognizedTaxBenefitsIncreasesResultingFromForeignCurrencyTranslation
2000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Foreign Currency Translation
UnrecognizedTaxBenefitsIncreasesResultingFromForeignCurrencyTranslation
0 USD
CY2016 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
5000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
1000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
0 USD
CY2018Q3 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
256000000 USD
CY2017Q3 us-gaap Variable Interest Entity Nonconsolidated Carrying Amount Assets
VariableInterestEntityNonconsolidatedCarryingAmountAssets
76000000 USD
CY2018Q3 us-gaap Variable Interest Entity Nonconsolidated Carrying Amount Assets
VariableInterestEntityNonconsolidatedCarryingAmountAssets
63000000 USD
CY2017Q3 us-gaap Variable Interest Entity Nonconsolidated Carrying Amount Liabilities
VariableInterestEntityNonconsolidatedCarryingAmountLiabilities
80000000 USD
CY2018Q3 us-gaap Variable Interest Entity Nonconsolidated Carrying Amount Liabilities
VariableInterestEntityNonconsolidatedCarryingAmountLiabilities
63000000 USD
CY2016 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
0 shares
CY2017 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
65000000 shares
CY2018 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
77000000 shares
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
1036000000 shares
CY2017 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
1154000000 shares
CY2018 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
1229000000 shares
CY2016 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
1036000000 shares
CY2017 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
1089000000 shares
CY2018 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
1152000000 shares
CY2018 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<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;">Recently Issued Accounting Standards</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;">In October 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-16 &#8211; </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Intra-Entity Transfers Other Than Inventory</font><font style="font-family:inherit;font-size:10pt;">, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU will be effective for us in the first quarter of 2019 and requires modified retrospective adoption. We do not anticipate the adoption of this ASU will have a material impact to our financial statements.</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 June 2016, the FASB issued ASU 2016-13 &#8211; </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Measurement of Credit Losses on Financial Instruments</font><font style="font-family:inherit;font-size:10pt;">, which requires a financial asset (or a group of financial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. This ASU requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. This ASU requires that credit losses of debt securities designated as available-for-sale be recorded through an allowance for credit losses and limits the credit loss to the amount by which fair value is below amortized cost. This ASU will be effective for us in the first quarter of 2021 with adoption permitted as early as the first quarter of 2020. This ASU requires modified retrospective adoption, with prospective adoption for debt securities for which an other-than-temporary impairment had been recognized before the effective date. We are evaluating the timing and effects of our adoption of this ASU on our financial statements.</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;">In February 2016, the FASB issued ASU 2016-02 &#8211; </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases</font><font style="font-family:inherit;font-size:10pt;">, which amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of- use asset and corresponding liability, measured at the present value of the lease payments. This ASU, as amended, will be effective for us in the first quarter of 2020 with early adoption permitted and allows for either a modified retrospective adoption or a retrospective adoption by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The adoption of this ASU will result in an increase to our consolidated balance sheets for these right-of-use assets and corresponding liabilities. We are evaluating the timing and other effects of our adoption of this ASU on our financial statements.</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;">In January 2016, the FASB issued ASU 2016-01 &#8211; </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Recognition and Measurement of Financial Assets and Financial Liabilities</font><font style="font-family:inherit;font-size:10pt;">, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us in the first quarter of 2019 and requires modified retrospective adoption, with prospective adoption for amendments related to equity securities without readily determinable fair values. Our assets and liabilities subject to this standard are not material.</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 May 2014, the FASB issued ASU 2014-09 &#8211; </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">, which supersedes nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States. The core principal of this ASU, as amended, is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. This ASU is effective for us in the first quarter of 2019 and we expect to elect the modified retrospective adoption method.</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;">As a result of the adoption of this ASU, we will recognize revenue from sales of products to our distributors (which generally have agreements allowing rights of return or price protection) at the time control transfers to our distributors, which is generally earlier than recognizing revenue only upon resale by our distributors under existing revenue recognition guidance. Revenue recognized upon resale by our distributors under these arrangements was </font><font style="font-family:inherit;font-size:10pt;">19%</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">20%</font><font style="font-family:inherit;font-size:10pt;">, and </font><font style="font-family:inherit;font-size:10pt;">25%</font><font style="font-family:inherit;font-size:10pt;"> of our consolidated revenue for the 2018, 2017, and 2016, respectively. As of </font><font style="font-family:inherit;font-size:10pt;">August&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, deferred income related to our distributor sales was </font><font style="font-family:inherit;font-size:10pt;">$232 million</font><font style="font-family:inherit;font-size:10pt;">. Upon adoption of this ASU, amounts deferred related to our sales to distributors, net of estimated price adjustments, will be recognized as an increase to retained earnings, net of taxes. We will also reclassify certain allowances from accounts receivable to accounts payable and accrued expenses in connection with new presentation requirements of this ASU. The tax effects of the adoption of this ASU will be recorded primarily as a reduction of net deferred tax assets.</font></div></div>
CY2018 us-gaap Fiscal Period
FiscalPeriod
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal years 2018, 2017, and 2016 each contained 52 weeks. All period references are to our fiscal periods unless otherwise indicated.</font></div></div>
CY2018 us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<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;">Contingencies</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;">We have accrued a liability and charged operations for the estimated costs of adjudication or settlement of various asserted and unasserted claims existing as of the balance sheet date, including those described below. We are currently a party to other legal actions arising from the normal course of business, none of which is expected to have a material adverse effect on our business, results of operations, or financial condition.</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;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Patent Matters</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;">As is typical in the semiconductor and other high-tech industries, from time to time, others have asserted, and may in the future assert, that our products or manufacturing processes infringe upon their intellectual property rights.</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;">On November 21, 2014, Elm 3DS Innovations, LLC ("Elm") filed a patent infringement action against Micron, MSP, and Micron Consumer Products Group, Inc. in the U.S. District Court for the District of Delaware. On March 27, 2015, Elm filed an amended complaint against the same entities. The amended complaint alleges that unspecified semiconductor products of ours that incorporate multiple stacked die infringe </font><font style="font-family:inherit;font-size:10pt;">13</font><font style="font-family:inherit;font-size:10pt;"> U.S. patents and seeks damages, attorneys' fees, and costs.</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;">On December 15, 2014, Innovative Memory Solutions, Inc. ("IMS") filed a patent infringement action against Micron in the U.S. District Court for the District of Delaware. The complaint alleges that a variety of our NAND products infringe </font><font style="font-family:inherit;font-size:10pt;">eight</font><font style="font-family:inherit;font-size:10pt;"> U.S. patents and seeks damages, attorneys' fees, and costs. On July 23, 2018, IMS served a patent infringement complaint on Micron Semiconductor (Deutschland) GmbH and Micron Europe Limited alleging that products including our SSDs infringe a European patent. The complaint seeks unspecified damages and an order forbidding Micron Semiconductor (Deutschland) GmbH and Micron Europe Limited from offering to sell, using, and importing the accused products. On August 31, 2018, Micron was served with a complaint filed by IMS in Shenzhen Intermediate People's Court in Guangdong Province, China. The complaint alleges that certain of our NAND flash products infringe a Chinese patent. The complaint seeks an order requiring Micron to stop manufacturing, using, selling, and offering for sale the accused products in China, and to pay damages of </font><font style="font-family:inherit;font-size:10pt;">1 million</font><font style="font-family:inherit;font-size:10pt;"> Chinese yuan plus expenses.</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;">On June 24, 2016, the President and Fellows of Harvard University filed a patent infringement action against Micron in the U.S. District Court for the District of Massachusetts. The complaint alleged that a variety of our DRAM products infringed </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> U.S. patents and sought damages, injunctive relief, and other unspecified relief. On March 1, 2018, we executed a settlement agreement resolving this litigation. The settlement amount did not have a material effect on our business, results of operations, or financial condition.</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;">On March 19, 2018, Micron Semiconductor (Xi&#8217;an) Co., Ltd. ("MXA") was served with a patent infringement complaint filed by Fujian Jinhua Integrated Circuit Co., Ltd. ("Jinhua") in the Fuzhou Intermediate People&#8217;s Court in Fujian Province, China (the "Fuzhou Court").&#160;On April 3, 2018, Micron Semiconductor (Shanghai) Co. Ltd. ("MSS") was served with the same complaint. The complaint alleges that MXA and MSS infringe a Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products in China, and to pay damages of </font><font style="font-family:inherit;font-size:10pt;">98 million</font><font style="font-family:inherit;font-size:10pt;"> Chinese yuan plus court fees incurred.</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;">On March 21, 2018, MXA was served with a patent infringement complaint filed by United Microelectronics Corporation ("UMC") in the Fuzhou Court.&#160;On April 3, 2018, MSS was served with the same complaint. The complaint alleges that MXA and MSS infringe a Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules.&#160;The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products in China, and to pay damages of </font><font style="font-family:inherit;font-size:10pt;">90 million</font><font style="font-family:inherit;font-size:10pt;"> Chinese yuan plus court fees incurred.</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;">On April 3, 2018, MSS was served with another patent infringement complaint filed by Jinhua and two additional complaints filed by UMC in the Fuzhou Court. The three additional complaints allege that MSS infringes three Chinese patents by manufacturing and selling certain Crucial MX300 SSDs and certain GDDR5 memory chips. The two complaints filed by UMC each seek an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products in China, and to pay damages of </font><font style="font-family:inherit;font-size:10pt;">90 million</font><font style="font-family:inherit;font-size:10pt;"> Chinese yuan plus court fees incurred. The complaint filed by Jinhua seeks an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products in China, and to pay damages of </font><font style="font-family:inherit;font-size:10pt;">98 million</font><font style="font-family:inherit;font-size:10pt;"> Chinese yuan plus court fees incurred. On October 9, 2018, UMC withdrew its complaint that alleged MSS infringed a Chinese patent by manufacturing and selling certain GDDR5 memory chips.</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;">On July 5, 2018, MXA and MSS were notified that the Fuzhou Court granted a preliminary injunction against those entities that enjoins them from manufacturing, selling, or importing certain Crucial and Ballistic-branded DRAM modules and solid-state drives in China. The affected products make up slightly more than </font><font style="font-family:inherit;font-size:10pt;">1%</font><font style="font-family:inherit;font-size:10pt;"> of our annualized revenues. We are complying with the ruling and have requested the Fuzhou Court to reconsider or stay its decision.</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;">Among other things, the above lawsuits pertain to substantially all of our DRAM, NAND, and other memory and storage products we manufacture, which account for a significant portion of our net sales.</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;">We are unable to predict the outcome of assertions of infringement made against us and therefore cannot estimate the range of possible loss. A determination that our products or manufacturing processes infringe the intellectual property rights of others or entering into a license agreement covering such intellectual property could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Any of the foregoing could have a material adverse effect on our business, results of operations, or financial condition.</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;">Qimonda</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;">On January 20, 2011, Dr. Michael Jaff&#233;, administrator for Qimonda's insolvency proceedings, filed suit against Micron and Micron Semiconductor B.V., our Netherlands subsidiary ("Micron B.V."), in the District Court of Munich, Civil Chamber. The complaint seeks to void, under Section 133 of the German Insolvency Act, a share purchase agreement between Micron B.V. and Qimonda signed in fall 2008, pursuant to which Micron B.V. purchased substantially all of Qimonda's shares of Inotera (the "Inotera Shares"), representing approximately </font><font style="font-family:inherit;font-size:10pt;">18%</font><font style="font-family:inherit;font-size:10pt;"> of Inotera's outstanding shares as of </font><font style="font-family:inherit;font-size:10pt;">August&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, and seeks an order requiring us to re-transfer those shares to the Qimonda estate. The complaint also seeks, among other things, to recover damages for the alleged value of the joint venture relationship with Inotera and to terminate, under Sections 103 or 133 of the German Insolvency Code, a patent cross-license between us and Qimonda entered into at the same time as the 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-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Following a series of hearings with pleadings, arguments, and witnesses on behalf of the Qimonda estate, on March 13, 2014, the court issued judgments:&#160;(1) ordering Micron B.V. to pay approximately </font><font style="font-family:inherit;font-size:10pt;">$1 million</font><font style="font-family:inherit;font-size:10pt;"> in respect of certain Inotera Shares sold in connection with the original share purchase; (2) ordering Micron B.V. to disclose certain information with respect to any Inotera Shares sold by it to third parties; (3) ordering Micron B.V. to disclose the benefits derived by it from ownership of the Inotera Shares, including in particular, any profits distributed on the Inotera Shares and all other benefits; (4) denying Qimonda's claims against Micron for any damages relating to the joint venture relationship with Inotera; and (5) determining that Qimonda's obligations under the patent cross-license agreement are canceled. In addition, the court issued interlocutory judgments ordering, among other things: (1) that Micron B.V. transfer to the Qimonda estate the Inotera Shares still owned by Micron B.V. and pay to the Qimonda estate compensation in an amount to be specified for any Inotera Shares sold to third parties; and (2) that Micron B.V. pay the Qimonda estate as compensation an amount to be specified for benefits derived by Micron B.V. from ownership of the Inotera Shares. The interlocutory judgments have no immediate, enforceable effect on us, and, accordingly, we expect to be able to continue to operate with full control of the Inotera Shares subject to further developments in the case. We have filed a notice of appeal, and the parties have submitted briefs to the appeals court.</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;">We are unable to predict the outcome of the matter and therefore cannot estimate the range of possible loss. The final resolution of this lawsuit could result in the loss of the Inotera Shares or monetary damages, unspecified damages based on the benefits derived by Micron B.V. from the ownership of the Inotera Shares, and/or the termination of the patent cross-license, which could have a material adverse effect on our business, results of operation, or financial condition.</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;">Antitrust Matters</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 April 27, 2018, a purported class-action lawsuit was filed against Micron and other DRAM suppliers in the U.S. District Court for the Northern District of California asserting claims based on alleged price-fixing of DRAM products during the period from June 1, 2016 to February 1, 2018. Similar cases were subsequently filed in federal court in the United States, as well as in Canadian courts in Quebec, Montreal and Toronto, Ontario. The complaints seek treble monetary damages, costs, interest, attorneys' fees, and other injunctive and equitable relief. We are unable to predict the outcome of these matters and therefore cannot estimate the range of possible loss. The final resolution of these matters could result in significant liability and could have a material adverse effect on our business, results of operations, or financial condition.</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;">On May 15, 2018, the Chinese State Administration for Market Regulation ("SAMR") notified Micron that it was investigating potential collusion among DRAM suppliers in China. On May 31, 2018, SAMR made unannounced visits to our sales offices in Beijing, Shanghai, and Shenzhen to seek certain information as part of its investigation. We are cooperating with SAMR in its investigation.</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;">Other</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;">On December 5, 2017, Micron filed a complaint against UMC and Jinhua in the U.S. District Court for the Northern District of California.&#160;The complaint alleges that UMC and Jinhua violated the Defend Trade Secrets Act, the civil provisions of the Racketeer Influenced and Corrupt Organizations Act, and California's Uniform Trade Secrets Act by misappropriating Micron's trade secrets and other misconduct.&#160;Micron's complaint seeks damages, restitution, disgorgement of profits, injunctive relief, and other appropriate relief.</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;">In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations, or financial condition.</font></div></div>
CY2018 us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain reclassifications have been made to prior period amounts to conform to current period presentation</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of Estimates:</font><font style="font-family:inherit;font-size:10pt;"> The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures.&#160;Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances.&#160;Estimates and judgments may differ under different assumptions or conditions.&#160;We evaluate our estimates and judgments on an ongoing basis.&#160;Actual results could differ from estimates.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>

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