2020 Form 10-K Financial Statement

#000072312520000082 Filed on October 19, 2020

View on sec.gov

Income Statement

Concept 2020 2019 Q3 2019 Q2
Revenue $21.44B $4.870B $4.788B
YoY Change -8.42% -42.3% -38.59%
Cost Of Revenue $14.88B $3.475B $2.960B
YoY Change 17.15% 5.66% -3.71%
Gross Profit $6.552B $1.395B $1.828B
YoY Change -38.78% -72.92% -61.3%
Gross Profit Margin 30.57% 28.64% 38.18%
Selling, General & Admin $881.0M $212.0M $206.0M
YoY Change 5.38% -1.4% -2.37%
% of Gross Profit 13.45% 15.2% 11.27%
Research & Development $2.600B $623.0M $606.0M
YoY Change 6.51% 9.88% 0.5%
% of Gross Profit 39.68% 44.66% 33.15%
Depreciation & Amortization $5.650B $1.416B $1.360B
YoY Change 4.17% 10.19% 10.3%
% of Gross Profit 86.23% 101.51% 74.4%
Operating Expenses $3.481B $824.0M $812.0M
YoY Change 6.23% 10.46% -0.25%
Operating Profit $3.003B $650.0M $1.010B
YoY Change -59.29% -85.15% -74.45%
Interest Expense $194.0M $18.00M $29.00M
YoY Change 51.56% -158.06% -63.75%
% of Operating Profit 6.46% 2.77% 2.87%
Other Income/Expense, Net $60.00M -$3.000M -$317.0M
YoY Change -114.81% 200.0% 64.25%
Pretax Income $308.0M $655.0M $716.0M
YoY Change -559.7% -84.93% -80.73%
Income Tax $280.0M $72.00M -$135.0M
% Of Pretax Income 90.91% 10.99% -18.85%
Net Earnings $2.687B $561.0M $840.0M
YoY Change -57.44% -87.03% -78.03%
Net Earnings / Revenue 12.54% 11.52% 17.54%
Basic Earnings Per Share $2.42 $0.51 $0.76
Diluted Earnings Per Share $2.37 $0.49 $0.74
COMMON SHARES
Basic Shares Outstanding 1.110B shares 1.105B shares
Diluted Shares Outstanding 1.131B shares 1.129B shares

Balance Sheet

Concept 2020 2019 Q3 2019 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $8.142B $7.955B $6.689B
YoY Change 2.35% 16.95% -5.4%
Cash & Equivalents $7.624B $7.152B $5.157B
Short-Term Investments $518.0M $803.0M $1.532B
Other Short-Term Assets $304.0M $235.0M $215.0M
YoY Change 28.27% 30.56% 46.26%
Inventory $5.607B $5.118B $4.905B
Prepaid Expenses
Receivables $3.494B $2.778B $2.848B
Other Receivables $418.0M $175.0M $207.0M
Total Short-Term Assets $17.97B $16.50B $15.07B
YoY Change 8.86% 2.89% -2.79%
LONG-TERM ASSETS
Property, Plant & Equipment $31.62B $28.24B $27.14B
YoY Change 11.95% 19.3% 19.52%
Goodwill $1.228B $1.228B
YoY Change 0.0% 0.0%
Intangibles $340.0M $339.0M
YoY Change 2.72% 1.5%
Long-Term Investments $1.048B $1.164B $1.167B
YoY Change -9.97% 146.09% 139.63%
Other Assets $1.488B $575.0M $533.0M
YoY Change 5.38% -5.89% -11.61%
Total Long-Term Assets $35.71B $32.38B $31.22B
YoY Change 10.28% 18.46% 18.51%
TOTAL ASSETS
Total Short-Term Assets $17.97B $16.50B $15.07B
Total Long-Term Assets $35.71B $32.38B $31.22B
Total Assets $53.68B $48.89B $46.29B
YoY Change 9.8% 12.71% 10.62%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $2.191B $1.677B $1.336B
YoY Change 30.65% -0.89% -1.76%
Accrued Expenses $849.0M $695.0M $565.0M
YoY Change 22.16% -17.36% -18.35%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $270.0M $1.310B $1.346B
YoY Change -79.39% 52.5% -7.43%
Total Short-Term Liabilities $6.635B $6.390B $5.397B
YoY Change 3.83% 11.05% -8.26%
LONG-TERM LIABILITIES
Long-Term Debt $6.373B $4.541B $3.564B
YoY Change 40.34% 20.13% -39.54%
Other Long-Term Liabilities $1.674B $452.0M $417.0M
YoY Change 53.86% 27.32% -24.04%
Total Long-Term Liabilities $8.047B $452.0M $417.0M
YoY Change 42.96% 27.32% -24.04%
TOTAL LIABILITIES
Total Short-Term Liabilities $6.635B $6.390B $5.397B
Total Long-Term Liabilities $8.047B $452.0M $417.0M
Total Liabilities $14.68B $12.02B $9.999B
YoY Change 12.89% 18.86% -18.85%
SHAREHOLDERS EQUITY
Retained Earnings $30.76B $30.20B
YoY Change 26.1% 50.48%
Common Stock $8.332B $8.335B
YoY Change 0.17% -7.24%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $39.00B $35.88B $35.32B
YoY Change
Total Liabilities & Shareholders Equity $53.68B $48.89B $46.29B
YoY Change 9.8% 12.71% 10.62%

Cashflow Statement

Concept 2020 2019 Q3 2019 Q2
OPERATING ACTIVITIES
Net Income $2.687B $561.0M $840.0M
YoY Change -57.44% -87.03% -78.03%
Depreciation, Depletion And Amortization $5.650B $1.416B $1.360B
YoY Change 4.17% 10.19% 10.3%
Cash From Operating Activities $8.306B $2.233B $2.711B
YoY Change -37.02% -56.68% -36.38%
INVESTING ACTIVITIES
Capital Expenditures $8.223B -$2.028B -$2.403B
YoY Change -15.92% -9.91% -0.33%
Acquisitions
YoY Change
Other Investing Activities $43.00M $928.0M $337.0M
YoY Change -135.83% 660.66% 101.8%
Cash From Investing Activities -$7.589B -$1.100B -$2.066B
YoY Change -24.75% -48.33% -7.93%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $251.0M
YoY Change -90.8%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -$317.0M 892.0M -1.847B
YoY Change -87.0% -126.76% -38.9%
NET CHANGE
Cash From Operating Activities $8.306B 2.233B 2.711B
Cash From Investing Activities -$7.589B -1.100B -2.066B
Cash From Financing Activities -$317.0M 892.0M -1.847B
Net Change In Cash $411.0M 2.025B -1.202B
YoY Change -40.61% -759.61% 19.48%
FREE CASH FLOW
Cash From Operating Activities $8.306B $2.233B $2.711B
Capital Expenditures $8.223B -$2.028B -$2.403B
Free Cash Flow $83.00M $4.261B $5.114B
YoY Change -97.57% -42.47% -23.35%

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CY2019Q3 us-gaap Minority Interest
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CY2018 mu Option Indexed To Issuers Equity Settlement Effecton Shareholders Equity
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CY2020 mu Treasury Shares Acquired And Stock Repurchased And Retired
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CY2019 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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CY2018 us-gaap Increase Decrease In Deferred Income Taxes
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CY2018 us-gaap Net Cash Provided By Used In Operating Activities
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17400000000 USD
CY2020 us-gaap Payments To Acquire Property Plant And Equipment
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CY2019 us-gaap Payments To Acquire Property Plant And Equipment
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CY2018 us-gaap Payments To Acquire Property Plant And Equipment
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CY2019 us-gaap Payments To Acquire Available For Sale Securities Debt
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CY2018 us-gaap Payments To Acquire Available For Sale Securities Debt
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CY2019 us-gaap Proceeds From Sale Of Available For Sale Securities Debt
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CY2019 us-gaap Proceeds From Maturities Prepayments And Calls Of Available For Sale Securities
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CY2018 us-gaap Proceeds From Maturities Prepayments And Calls Of Available For Sale Securities
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CY2020 mu Proceeds From Government Incentives
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CY2019 mu Proceeds From Government Incentives
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CY2018 us-gaap Payments For Proceeds From Other Investing Activities
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CY2019 us-gaap Net Cash Provided By Used In Investing Activities
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CY2018 us-gaap Net Cash Provided By Used In Investing Activities
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CY2018 us-gaap Repayments Of Long Term Debt And Capital Securities
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CY2020 us-gaap Payments To Minority Shareholders
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CY2018 us-gaap Payments To Minority Shareholders
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CY2020 us-gaap Payments For Repurchase Of Common Stock
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CY2019 us-gaap Payments For Repurchase Of Common Stock
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CY2018 us-gaap Payments For Repurchase Of Common Stock
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CY2020 mu Payments On Equipment Purchase Contracts
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CY2019 mu Payments On Equipment Purchase Contracts
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CY2018 mu Payments On Equipment Purchase Contracts
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CY2020 us-gaap Proceeds From Issuance Of Long Term Debt
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CY2019 us-gaap Proceeds From Issuance Of Long Term Debt
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CY2018 us-gaap Proceeds From Issuance Of Long Term Debt
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CY2020 us-gaap Proceeds From Issuance Or Sale Of Equity
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CY2019 us-gaap Proceeds From Issuance Or Sale Of Equity
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CY2018 us-gaap Proceeds From Issuance Or Sale Of Equity
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CY2019 us-gaap Proceeds From Payments For Other Financing Activities
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CY2018 us-gaap Proceeds From Payments For Other Financing Activities
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CY2020 us-gaap Net Cash Provided By Used In Financing Activities
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CY2019 us-gaap Net Cash Provided By Used In Financing Activities
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CY2020 us-gaap Effect Of Exchange Rate On Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2019 us-gaap Effect Of Exchange Rate On Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2018 us-gaap Effect Of Exchange Rate On Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2020 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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CY2019 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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CY2018 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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CY2019Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2018Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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5216000000 USD
CY2020Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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7690000000 USD
CY2019Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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7279000000 USD
CY2018Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2020 us-gaap Income Taxes Paid Net
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CY2019 us-gaap Income Taxes Paid Net
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CY2018 us-gaap Income Taxes Paid Net
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CY2020 us-gaap Interest Paid Net
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CY2019 us-gaap Interest Paid Net
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CY2018 us-gaap Interest Paid Net
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CY2019 us-gaap Capital Expenditures Incurred But Not Yet Paid
CapitalExpendituresIncurredButNotYetPaid
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CY2018 us-gaap Capital Expenditures Incurred But Not Yet Paid
CapitalExpendituresIncurredButNotYetPaid
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CY2020 us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
Certain reclassifications have been made to prior period amounts to conform to current period presentation
CY2020 us-gaap Fiscal Period
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Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal 2020 contained 53 weeks and fiscal 2019 and 2018 each contained 52 weeks. Our fourth quarter of fiscal 2020 contained 14 weeks. All period references are to our fiscal periods unless otherwise indicated.
CY2020 us-gaap Use Of Estimates
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<div><span style="background-color:rgb(255,255,255, 0.0);color:#0090da;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;">Use of Estimates</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:115%;">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. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may differ under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Actual results could differ from estimates.</span></div>
CY2019Q3 us-gaap Operating Lease Liability
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CY2019Q3 us-gaap Operating Lease Right Of Use Asset
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CY2020 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
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<div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial Narrow',sans-serif;font-size:22pt;font-weight:700;line-height:120%;">Recently Issued Accounting Standards</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In August 2020, the FASB issued ASU 2020-06 – </span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;">Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">, which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU will be effective for us in the first quarter of 2023, with early adoption permitted beginning in the first quarter of 2022, and permits the use of either the modified retrospective or fully retrospective method of transition. We are evaluating the timing and effects of our adoption of this ASU on our financial statements.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In November 2018, the FASB issued ASU 2018-18 – </span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;">Collaborative Arrangements</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. This ASU is effective for us in the first quarter of 2021 and requires retrospective adoption to the date we adopted ASC 606, which was August 31, 2018, by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented. We do not anticipate the adoption of this ASU will have a significant impact on our financial statements.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In June 2016, the FASB issued ASU 2016-13 – </span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;">Measurement of Credit Losses on Financial Instruments</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">, 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 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 is effective for us in the first quarter of 2021 and 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 do not anticipate the adoption of this ASU will have a significant impact on our financial statements.</span></div>
CY2020Q3 us-gaap Cash And Cash Equivalents At Carrying Value
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CY2020Q3 us-gaap Available For Sale Securities Debt Securities Noncurrent
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1048000000 USD
CY2020Q3 mu Cash Cash Equivalentsand Availablefor Sale Debt Securities
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9190000000 USD
CY2019Q3 us-gaap Cash And Cash Equivalents At Carrying Value
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CY2019Q3 us-gaap Available For Sale Securities Debt Securities Current
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803000000 USD
CY2019Q3 us-gaap Available For Sale Securities Debt Securities Noncurrent
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CY2020Q3 us-gaap Restricted Cash Noncurrent
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CY2019Q3 us-gaap Restricted Cash Noncurrent
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7690000000 USD
CY2019Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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7279000000 USD
CY2020Q3 us-gaap Debt Securities Available For Sale Continuous Unrealized Loss Position12 Months Or Longer
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0 USD
CY2019Q3 us-gaap Inventory Finished Goods Net Of Reserves
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CY2020Q3 us-gaap Accounts Receivable Net Current
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CY2019Q3 us-gaap Accounts Receivable Net Current
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CY2020Q3 us-gaap Income Taxes Receivable
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232000000 USD
CY2019Q3 us-gaap Income Taxes Receivable
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242000000 USD
CY2020Q3 us-gaap Other Receivables Net Current
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CY2019Q3 us-gaap Other Receivables Net Current
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CY2020Q3 us-gaap Receivables Net Current
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3912000000 USD
CY2019Q3 us-gaap Receivables Net Current
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3195000000 USD
CY2020Q3 us-gaap Inventory Finished Goods Net Of Reserves
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1001000000 USD
CY2020Q3 us-gaap Inventory Work In Process Net Of Reserves
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3854000000 USD
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<div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial Narrow',sans-serif;font-size:22pt;font-weight:700;line-height:120%;">Contingencies</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We are currently a party to legal actions other than those described below arising from the normal course of business, none of which are expected to have a material adverse effect on our business, results of operations, or financial condition.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#0090da;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;">Patent Matters</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">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.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On August 12, 2014, MLC Intellectual Property, LLC filed a patent infringement action against Micron in the U.S. District Court for the Northern District of California. The complaint alleges that Micron infringes a single U.S. patent and seeks damages, attorneys’ fees, and costs.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On November 21, 2014, Elm 3DS Innovations, LLC (“Elm”) filed a patent infringement action against Micron; Micron Semiconductor Products, Inc.; 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 13 U.S. patents and seeks damages, attorneys’ fees, and costs.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">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 eight U.S. patents and seeks damages, attorneys’ fees, and costs. On August 31, 2018, Micron was served with a complaint filed by IMS in Shenzhen Intermediate People’s Court in Guangdong Province, China. On </span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">November 12, 2019, IMS filed an amended complaint in the same court. The amended 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 and costs of 21 million Chinese yuan. On August 4, 2020, the China National Intellectual Property Administration ruled invalid each of the asserted claims in the Chinese patent matter. On August 17, 2020, IMS withdrew its complaint filed in Shenzhen Intermediate People’s Court.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On March 19, 2018, Micron Semiconductor (Xi’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’s Court in Fujian Province, China (the “Fuzhou Court”). 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 98 million Chinese yuan plus court fees incurred.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On March 21, 2018, MXA was served with a patent infringement complaint filed by United Microelectronics Corporation (“UMC”) in the Fuzhou Court. 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. 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 90 million Chinese yuan plus court fees incurred.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">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 for each complaint of 90 million 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 98 million 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.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">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 Ballistix-branded DRAM modules and solid-state drives in China. The affected products made up slightly more than 1% of our annualized revenue in 2018. We are complying with the ruling and have requested the Fuzhou Court to reconsider or stay its decision.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On May 4, 2020, Flash-Control, LLC (“Flash-Control”) filed a patent infringement action against Micron in the U.S. District Court for the Western District of Texas. The complaint alleges that four U.S. patents are infringed by unspecified DDR4 SDRAM, NVRDIMM, NVDIMM, 3D XPoint, and/or SSD products that incorporate memory controllers and flash memory. The complaint seeks damages, attorneys’ fees, and costs.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">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 substantially all of our revenue.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#0090da;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;">Qimonda</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On January 20, 2011, Dr. Michael Jaffé, administrator for Qimonda’s insolvency proceedings, filed suit against Micron and Micron Semiconductor B.V. (“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 18% of Inotera’s outstanding shares at that time, and seeks an order requiring us to re-transfer those shares to the Qimonda estate. The complaint also seeks, among </span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">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.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:115%;">Following a series of hearings with pleadings, arguments, and witnesses on behalf of the Qimonda estate, on March 13, 2014, the court issued judgments: (1) ordering Micron B.V. to pay approximately $1 million 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 had no immediate, enforceable effect and Micron, accordingly, has been able to continue to operate with full control of the Inotera Shares subject to further developments in the case. On April 17, 2014, Micron and Micron B.V. filed a notice of appeal with the German Appeals Court challenging the District Court’s decision. After opening briefs, the Appeals Court held a hearing on the matter on July 9, 2015, and thereafter appointed an independent expert to perform an evaluation of Dr. Jaffé’s claims that the amount Micron paid for Qimonda was less than fair market value. On January 25, 2018, the court-appointed expert issued a report concluding that the amount paid by Micron was within an acceptable fair-value range. The Appeals Court held a subsequent hearing on April 30, 2019, and on May 28, 2019, the Appeals Court remanded the case to the expert for supplemental expert opinion. On March 31, 2020, the expert presented a revised opinion to the Appeals Court which reaffirmed the earlier view that the amount paid by Micron was still within an acceptable range of fair value.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#0090da;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;">Antitrust Matters</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On April 27, 2018, a complaint was filed against Micron and other DRAM suppliers in the U.S. District Court for the Northern District of California. Subsequently, two substantially identical cases were filed in the same court. The lawsuits purported to be on behalf of a nationwide class of indirect purchasers of DRAM products. On September 3, 2019, the District Court granted Micron’s motion to dismiss and allowed plaintiffs the opportunity to file a consolidated, amended complaint. On October 28, 2019, the plaintiffs filed a consolidated amended complaint that purports to be on behalf of a nationwide class of indirect purchasers of DRAM products. The amended complaint asserts claims based on alleged price-fixing of DRAM products under federal and state law during the period from June 1, 2016 to at least February 1, 2018, and seeks treble monetary damages, costs, interest, attorneys’ fees, and other injunctive and equitable relief.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On June 26, 2018, a complaint was filed against Micron and other DRAM suppliers in the U.S. District Court for the Northern District of California. Subsequently, four substantially identical cases were filed in the same court. On October 28, 2019, the plaintiffs filed a consolidated, amended complaint. The consolidated complaint purports to be on behalf of a nationwide class of direct purchasers of DRAM products. The consolidated complaint asserts claims based on alleged price-fixing of DRAM products under federal and state law during the period from June 1, 2016 through at least February 1, 2018, and seeks treble monetary damages, costs, interest, attorneys’ fees, and other injunctive and equitable relief.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Additionally, six cases have been filed in the following Canadian courts: Superior Court of Quebec, the Federal Court of Canada, the Ontario Superior Court of Justice, and the Supreme Court of British Columbia. The substantive allegations in these cases are similar to those asserted in the cases filed in the United States.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On May 15, 2018, the Chinese State Administration for Market Regulation (“SAMR”) notified Micron that it was investigating potential collusion and other anticompetitive conduct by 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.</span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#0090da;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;">Securities Matters</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On January 23, 2019, a complaint was filed against Micron and two of our officers, Sanjay Mehrotra and David Zinsner, in the U.S. District Court for the Southern District of New York. The lawsuit purported to be brought on behalf of a class of purchasers of our stock during the period from June 22, 2018 through November 19, 2018. Subsequently two substantially similar cases were filed in the same court adding one of our former officers, Ernie Maddock, as a defendant and alleging a class action period from September 26, 2017 through November 19, 2018. The separate cases were joined, and a consolidated amended complaint was filed on June 15, 2019. The consolidated amended complaint alleged that defendants committed securities fraud through misrepresentations and omissions about purported anticompetitive behavior in the DRAM industry and sought compensatory and punitive damages, fees, interest, costs, and other appropriate relief. On October 2, 2019, the parties submitted a joint stipulation to dismiss the complaint. The Court approved the stipulation and dismissed the complaint on October 3, 2019.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:115%;">On March 5, 2019, a derivative complaint was filed by a shareholder in the U.S. District Court for the District of Delaware, based on similar allegations to the securities fraud cases, allegedly on behalf of and for the benefit of Micron, against certain current and former officers and directors of Micron for alleged breaches of their fiduciary duties and other violations of law. The complaint seeks damages, fees, interest, costs, and other appropriate relief. Similar shareholder derivative complaints were subsequently filed in the U.S. District Court for the District of Delaware and the U.S. District Court for the District of Idaho. On November 20, 2019, the plaintiff in the second action filed in the U.S. District Court for the District of Delaware voluntarily dismissed his complaint. On November 21, 2019, the plaintiff voluntarily dismissed his complaint that was filed in the U.S. District Court for the District of Idaho.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#0090da;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;">Other</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On December 5, 2017, Micron filed a complaint against UMC and Jinhua in the U.S. District Court for the Northern District of California. 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. Micron’s complaint seeks damages, restitution, disgorgement of profits, injunctive relief, and other appropriate relief.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On June 13, 2019, current Micron employee Chris Manning filed a putative class action lawsuit on behalf of Micron employees subject to the Idaho Wage Claim Act who earned a performance-based bonus after the conclusion of 2018 whose performance rating was calculated based upon a mandatory percentage distribution range of performance ratings. On July 12, 2019, Manning and three other Company employees filed an amended complaint as putative class action representatives. On behalf of themselves and the putative class, Manning and the three other plaintiffs assert claims for violation of the Idaho Wage Claim Act, breach of contract, breach of the covenant of good faith and fair dealing, and fraud. On June 24, 2020, the court entered judgment in favor of Micron based on the statute of limitations, and the plaintiffs filed a notice of appeal on July 23, 2020.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">On July 31, 2020, Micron and Intel entered into a binding arbitration agreement under which the parties agreed to present to an arbitral panel various financial disputes related to the IMFT joint venture between Micron and Intel, which ended October 31, 2019, and to other agreements relating to the joint development, production, and sale of non-volatile memory products. Each party alleges that the other owes damages relating to allegations of breach of one or more agreements.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify another 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.</span></div><div><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We are unable to predict the outcome of the patent matters, Qimonda matter, antitrust matters, securities matter, binding arbitration with Intel, or any other matters noted above, 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, as well </span></div>as the resolution of any other legal matter noted above, could have a material adverse effect on our business, results of operations, or financial condition.
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