2021 Q4 Form 10-Q Financial Statement

#000072312522000004 Filed on January 06, 2022

View on sec.gov

Income Statement

Concept 2021 Q4 2020 Q4
Revenue $7.687B $5.773B
YoY Change 33.15% 12.23%
Cost Of Revenue $4.122B $4.037B
YoY Change 2.11% 6.86%
Gross Profit $3.565B $1.736B
YoY Change 105.36% 27.09%
Gross Profit Margin 46.38% 30.07%
Selling, General & Admin $259.0M $214.0M
YoY Change 21.03% 1.42%
% of Gross Profit 7.27% 12.33%
Research & Development $712.0M $647.0M
YoY Change 10.05% 1.09%
% of Gross Profit 19.97% 37.27%
Depreciation & Amortization $1.671B $1.487B
YoY Change 12.37% 14.74%
% of Gross Profit 46.87% 85.66%
Operating Expenses $971.0M $861.0M
YoY Change 12.78% 1.18%
Operating Profit $2.631B $866.0M
YoY Change 203.81% 67.18%
Interest Expense $45.00M $48.00M
YoY Change -6.25% 2.13%
% of Operating Profit 1.71% 5.54%
Other Income/Expense, Net -$75.00M $13.00M
YoY Change -676.92% -71.74%
Pretax Income $2.521B $841.0M
YoY Change 199.76% 49.91%
Income Tax $219.0M $51.00M
% Of Pretax Income 8.69% 6.06%
Net Earnings $2.306B $803.0M
YoY Change 187.17% 63.54%
Net Earnings / Revenue 30.0% 13.91%
Basic Earnings Per Share $2.06 $0.72
Diluted Earnings Per Share $2.04 $0.71
COMMON SHARES
Basic Shares Outstanding 1.119B shares 1.115B shares
Diluted Shares Outstanding 1.130B shares 1.135B shares

Balance Sheet

Concept 2021 Q4 2020 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $9.580B $7.032B
YoY Change 36.23% -7.33%
Cash & Equivalents $8.680B $5.985B
Short-Term Investments $900.0M $1.047B
Other Short-Term Assets $521.0M $285.0M
YoY Change 82.81% 31.34%
Inventory $4.827B $5.521B
Prepaid Expenses
Receivables $4.924B $3.182B
Other Receivables $109.0M $214.0M
Total Short-Term Assets $20.19B $16.53B
YoY Change 22.16% 2.24%
LONG-TERM ASSETS
Property, Plant & Equipment $35.73B $32.81B
YoY Change 8.91% 11.77%
Goodwill $1.228B $1.228B
YoY Change 0.0% 0.0%
Intangibles $347.0M $336.0M
YoY Change 3.27% 0.9%
Long-Term Investments $1.984B $1.264B
YoY Change 56.96% 111.02%
Other Assets $1.188B $802.0M
YoY Change 48.13% 38.51%
Total Long-Term Assets $41.06B $37.16B
YoY Change 10.48% 10.99%
TOTAL ASSETS
Total Short-Term Assets $20.19B $16.53B
Total Long-Term Assets $41.06B $37.16B
Total Assets $61.25B $53.69B
YoY Change 14.07% 8.14%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.896B $1.656B
YoY Change 14.49% -11.87%
Accrued Expenses $758.0M $636.0M
YoY Change 19.18% 14.18%
Deferred Revenue $74.00M
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $118.0M $273.0M
YoY Change -56.78% -40.91%
Total Short-Term Liabilities $6.512B $5.688B
YoY Change 14.49% -9.96%
LONG-TERM LIABILITIES
Long-Term Debt $6.904B $6.356B
YoY Change 8.62% 22.51%
Other Long-Term Liabilities $632.0M $555.0M
YoY Change 13.87% 30.28%
Total Long-Term Liabilities $632.0M $555.0M
YoY Change 13.87% 30.28%
TOTAL LIABILITIES
Total Short-Term Liabilities $6.512B $5.688B
Total Long-Term Liabilities $632.0M $555.0M
Total Liabilities $15.34B $13.78B
YoY Change 11.27% 5.62%
SHAREHOLDERS EQUITY
Retained Earnings $41.27B $34.14B
YoY Change 20.88% 9.35%
Common Stock $9.686B $9.154B
YoY Change 5.81% 7.1%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $45.91B $39.91B
YoY Change
Total Liabilities & Shareholders Equity $61.25B $53.69B
YoY Change 14.07% 8.14%

Cashflow Statement

Concept 2021 Q4 2020 Q4
OPERATING ACTIVITIES
Net Income $2.306B $803.0M
YoY Change 187.17% 63.54%
Depreciation, Depletion And Amortization $1.671B $1.487B
YoY Change 12.37% 14.74%
Cash From Operating Activities $3.938B $1.967B
YoY Change 100.2% -2.19%
INVESTING ACTIVITIES
Capital Expenditures $3.265B $2.738B
YoY Change 19.25% 40.92%
Acquisitions
YoY Change
Other Investing Activities $77.00M -$21.00M
YoY Change -466.67% -275.0%
Cash From Investing Activities -$2.485B -$3.418B
YoY Change -27.3% 187.47%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $259.0M $0.00
YoY Change -100.0%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -$513.0M -$214.0M
YoY Change 139.72% -78.43%
NET CHANGE
Cash From Operating Activities $3.938B $1.967B
Cash From Investing Activities -$2.485B -$3.418B
Cash From Financing Activities -$513.0M -$214.0M
Net Change In Cash $934.0M -$1.638B
YoY Change -157.02% 790.22%
FREE CASH FLOW
Cash From Operating Activities $3.938B $1.967B
Capital Expenditures $3.265B $2.738B
Free Cash Flow $673.0M -$771.0M
YoY Change -187.29% -1233.82%

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<div><span style="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="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="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="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. On November 5, 2021, the District Court dismissed MLC’s claims with prejudice pursuant to a stipulation of dismissal filed by the parties.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On December 15, 2014, Innovative Memory Solutions, Inc. 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. Subsequently, six patents were invalidated or withdrawn, leaving two asserted patents in the District Court.</span></div><div><span><br/></span></div><div><span style="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="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. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaints against MXA and MSS.</span></div><div><span><br/></span></div><div><span style="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 an additional complaint filed by UMC in the Fuzhou Court. The additional complaints allege that MSS infringes two Chinese patents by manufacturing and selling certain Crucial MX300 SSDs. The complaint filed by UMC 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 90 million Chinese yuan plus court fees incurred. The complaint filed by Jinhua seeks an order </span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaint against MSS.</span></div><div><span><br/></span></div><div><span style="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="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On May 4, 2020, Flash-Control, LLC 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. On July 21, 2020, in a separate matter, the District Court ruled that two of the four asserted patents are invalid, and on July 14, 2021, the U.S. Court of Appeals for the Federal Circuit affirmed the ruling of invalidity.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On April 28, 2021, Netlist, Inc. filed two patent infringement actions against Micron, Micron Semiconductor Products, Inc. and Micron Technology Texas, LLC in the U.S. District Court for the Western District of Texas. The first complaint alleges that a single U.S. patent is infringed by certain of our non-volatile dual in-line memory modules. The second complaint alleges that three U.S. patents are infringed by certain of our load-reduced dual in-line memory modules. Each complaint seeks injunctive relief, damages, attorneys’ fees, and costs.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On May 10, 2021, Vervain, LLC filed a patent infringement action against Micron, Micron Semiconductor Products, Inc., and Micron Technology Texas, LLC in the U.S. District Court for the Western District of Texas. The complaint alleges that four U.S. patents are infringed by certain SSD products. The complaint seeks injunctive relief, damages, attorneys’ fees, and costs.</span></div><div><span><br/></span></div><div><span style="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="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="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 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="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 </span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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. On March 4, 2021, the Appeals Court issued an order setting forth a new legal view that whether the 2008 sale of Inotera Shares is voidable depends on the question whether, in October 2008, Qimonda had a restructuring plan in place, and whether Micron was aware of and reasonably relied on that restructuring plan sufficient to form a belief that Qimonda was not imminently illiquid.</span></div><div><span><br/></span></div><div><span style="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="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 the plaintiffs the opportunity to file a consolidated, amended complaint. On October 28, 2019, the plaintiffs filed a consolidated, amended complaint that purported to be on behalf of a nationwide class of indirect purchasers of DRAM products. The amended complaint asserted 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 sought treble monetary damages, costs, interest, attorneys’ fees, and other injunctive and equitable relief. On December 21, 2020, the District Court dismissed the plaintiffs’ claims and entered judgment against them. On January 19, 2021, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. On May 3, 2021, several plaintiffs filed a substantially identical complaint in the U.S. District Court for the Northern District of California purportedly on behalf of a nationwide class of indirect purchasers of DRAM products. On July 19, 2021, the District Court dismissed the May 3, 2021 complaint pursuant to an agreement between the plaintiffs and Micron providing that the plaintiffs may refile the complaint if the District Court’s December 21, 2020 dismissal order is not affirmed on appeal. </span></div><div><span><br/></span></div><div><span style="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 purported to be on behalf of a nationwide class of direct purchasers of DRAM products. The consolidated complaint asserted 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 sought treble monetary damages, costs, interest, attorneys’ fees, and other injunctive and equitable relief. On December 21, 2020, the District Court granted Micron’s motion to dismiss and granted the plaintiffs permission to file a further amended complaint. On January 11, 2021, the plaintiffs filed a further amended complaint asserting substantially the same claims and seeking the same relief. On September 3, 2021, the District Court granted Micron’s motion to dismiss the further amended complaint with prejudice. On October 1, 2021, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit.</span></div><div><span><br/></span></div><div><span style="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 on the dates indicated: Superior Court of Quebec (April 30, 2018 and May 3, 2018), the Federal Court of Canada (May 2, 2018), the Ontario Superior Court of Justice (May 15, 2018), and the Supreme Court of British Columbia (May 10, 2018). The plaintiffs in these cases are individuals seeking certification of class actions on behalf of direct and indirect purchasers of DRAM in Canada (or regions of Canada) between June 1, 2016 and February 1, 2018. 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="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="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="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On March 5, 2019, a derivative complaint was filed by a shareholder against certain current and former officers and directors of Micron, allegedly on behalf of and for the benefit of Micron, in the U.S. District Court for the District of Delaware alleging securities fraud, breaches of fiduciary duties, and other violations of law involving misrepresentations about purported anticompetitive behavior in the DRAM industry. The complaint seeks damages, fees, interest, costs, and other appropriate relief.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On February 9, 2021, a derivative complaint was filed by a shareholder against Sanjay Mehrotra and other current and former directors of Micron, allegedly on behalf of and for the benefit of Micron, in the U.S. District Court for the District of Delaware alleging violations of securities laws, breaches of fiduciary duties, and other violations of law involving allegedly false and misleading statements about Micron’s commitment to diversity and progress in diversifying its workforce, executive leadership, and Board of Directors. The complaint seeks damages, fees, interest, costs, and an order requiring Micron to take various actions to allegedly improve its corporate governance and internal procedures.</span></div><div><span><br/></span></div><div><span style="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="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 alleged 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 sought damages, restitution, disgorgement of profits, injunctive relief, and other appropriate relief. On January 3, 2022, pursuant to a settlement agreement between UMC and Micron, the District Court dismissed Micron's claims against UMC. </span></div><div><span><br/></span></div><div><span style="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="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="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On July 13, 2015, Allied Telesis, Inc. and Allied Telesis International (Asia) Pte Ltd. filed a complaint against Micron in the Superior Court of California in Santa Clara alleging breach of implied and express warranties and fraudulent inducement to contract arising from plaintiffs’ purchase of certain allegedly defective DDR1 products between 2008 and 2010. Through subsequent amendments to the complaint, the plaintiffs substituted Allied Telesis K.K. as plaintiff, withdrew the warranty claims, and added claims of fraudulent concealment, negligent misrepresentation, negligence, and strict products liability. The plaintiff’s amended complaint seeks an unspecified award of damages, including punitive damages and lost profits. On September 3, 2020, the Superior Court granted summary judgment dismissing the claims for negligence and strict products liability and denied summary judgment as to the claims for negligent misrepresentation, fraudulent concealment, and fraudulent inducement to contract. On November 15, 2021, the Superior Court granted summary judgment dismissing the claims for negligent misrepresentation and fraudulent inducement to contract. A trial regarding plaintiff’s claim for fraudulent concealment is scheduled to begin on January 10, 2022.</span></div><div><span><br/></span></div><div><span style="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 style="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 matters, binding arbitration with Intel, or any other matters noted above, and cannot make a reasonable estimate of the potential loss or range of possible losses. 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 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.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="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 in this note 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>
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