Equity

Micron Shareholders' Equity

Capped Calls

Issued and Outstanding Capped Calls: We have entered into capped calls, which are intended to reduce the effect of potential dilution from our convertible notes. The capped calls provide for our receipt of cash or shares, at our election, from our counterparties if the trading price of our stock is above a specified initial strike price at the expiration date. The amount receivable varies based on the trading price of our stock, up to a specified cap price. The dollar value of the cash or shares that we would receive from the capped calls upon their expiration date ranges from $0 if the trading price of our stock is below the initial strike price for all of the capped calls to $864 million if the trading price of our stock is at or above the cap price for all of the capped calls. We paid $57 million in 2011 to purchase the 2031 Capped Calls, $103 million in 2012 to purchase the 2032 Capped Calls and $48 million in 2013 to purchase the 2033 Capped Calls. The amounts paid were recorded as charges to additional capital.

The following table presents information related to the issued and outstanding capped calls as of August 28, 2014:



Capped Calls				Strike Price		Cap Price Range				Underlying Common Shares	Value at Expiration⁽¹⁾
Capped Calls	Expiration Dates			Strike Price		Low		High		Underlying Common Shares	Minimum		Maximum
2031	Jul 2015	–	Feb 2016	$	9.50	$	12.67	$	13.17	34	$	—	$	117
2032C	May 2016	–	Nov 2017	9.80		14.26		15.69		56	—		307
2032D	Nov 2016	–	May 2018	10.16		14.62		16.04		44	—		244
2033E	Jan 2018	–	Feb 2018	10.93		14.51		14.51		27	—		98
2033F	Jan 2020	–	Feb 2020	10.93		14.51		14.51		27	—		98
										188	$	—	$	864

⁽¹⁾

Settlement in cash on the respective expiration dates would result in us receiving an amount ranging from zero, if the market price per share of our common stock is at or below the low strike price, to the maximum amount if the market price per share of our common stock is at or above the high cap price. If share settlement were elected, the number of shares received would be determined by the value of the capped calls at the time of settlement divided by the share price on the settlement date. Settlement of the capped calls prior to the expiration dates may be for an amount less than the maximum value at expiration.

Unwind of Capped Calls: In May 2014, we and the counterparties agreed to terminate and unwind a portion of our 2031 Capped Calls. We elected share settlement and received 3 million shares of our stock, equivalent to approximately $86 million based on the trading stock price at the time of the unwind. The shares were retired from treasury stock in 2014.

Restrictions on Net Assets

As a result of the Japan Proceedings, for so long as such proceedings are continuing, the MMJ Group is subject to certain restrictions on dividends, loans and advances. In addition, our ability to access IMFT's cash and other assets through dividends, loans or advances, including to finance our other operations, is subject to agreement by Intel. As a result, our total restricted net assets (net assets less intercompany balances and noncontrolling interests) as of August 28, 2014 were $3.10 billion for the MMJ Group, which included cash and equivalents of $1.60 billion, and $793 million for IMFT.

(See "Micron Memory Japan, Inc." note and "IMFT" below.)

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the year ended August 28, 2014, were as follows:



	Cumulative Foreign Currency Translation Adjustments			Gains (Losses) on Derivative Instruments, Net			Gains (Losses) on Investments, Net			Pension Liability Adjustments			Total
Balance as of August 29, 2013	$	44		$	21		$	—		$	(2	)	$	63
Other comprehensive income before reclassifications	1			(4		)	4			1			2
Amount reclassified out of accumulated other comprehensive income	(3		)	(4		)	(3		)	1			(9		)
Tax effects	—			(1		)	—			1			—
Other comprehensive income (loss)	(2		)	(9		)	1			3			(7		)
Balance as of August 28, 2014	$	42		$	12		$	1		$	1		$	56

Noncontrolling Interests in Subsidiaries



As of	2014				2013
	Noncontrolling Interest Balance		Noncontrolling Interest Percentage		Noncontrolling Interest Balance		Noncontrolling Interest Percentage
IMFT⁽¹⁾	$	693	49	%	$	601	49	%
MP Mask⁽¹⁾	93		50	%	92		50	%
MMT	9		<l%		155		11	%
Other	7		Various		16		Various
	$	802			$	864

⁽¹⁾ Entity is a variable interest entity.

IMFT

Since inception in 2006 through August 28, 2014, we have owned 51% of IMFT, a venture between us and Intel to manufacture NAND Flash memory products and certain emerging memory technologies for the exclusive use of the members. IMFT is governed by a Board of Managers and the number of managers appointed by each member to the board varies based on the members' respective ownership interests, which is based on cumulative contributions to IMFT. The IMFT joint venture agreement extends through 2024 and includes certain buy-sell rights with an Intel put right, commencing in January 2015, and our call right commencing in January 2018, pursuant to which Intel may elect to sell to us, or we may elect to purchase from Intel, Intel's interest in IMFT. If Intel elects to sell to us, we would set the closing date of the transaction within two years following such election and could elect to receive financing of the purchase price from Intel for one to two years from the closing date.

IMFT manufactures NAND Flash memory products using designs and technology we develop with Intel. We generally share with Intel the costs of product design, other NAND Flash R&D costs and R&D costs of certain emerging memory technologies. Our R&D expenses were reduced by reimbursements from Intel of $137 million, $127 million and $87 million for 2014, 2013 and 2012, respectively.

We sell a portion of our products to Intel through our IMFT venture at long-term negotiated prices approximating cost. Sales of NAND Flash products to Intel under this arrangement were $423 million, $387 million and $718 million for 2014, 2013 and 2012, respectively. Receivables from Intel for sales of NAND Flash products as of August 28, 2014 and August 29, 2013, were $66 million and $68 million, respectively.

The following table presents the assets and liabilities of IMFT included in our consolidated balance sheets, excluding intercompany balances:



As of	2014		2013
Assets
Cash and equivalents	$	84	$	62
Receivables	73		76
Inventories	48		49
Other current assets	5		4
Total current assets	210		191
Property, plant and equipment, net	1,545		1,382
Other noncurrent assets	47		46
Total assets	$	1,802	$	1,619

Liabilities
Accounts payable and accrued expenses	$	92	$	88
Deferred income	8		9
Equipment purchase contracts	14		78
Current portion of long-term debt	21		6
Total current liabilities	135		181
Long-term debt	71		13
Other noncurrent liabilities	110		118
Total liabilities	$	316	$	312

Amounts exclude intercompany balances that were eliminated in our consolidated balance sheets.

Our ability to access IMFT's cash and other assets through dividends, loans or advances, including to finance our other operations, is subject to agreement by Intel. Creditors of IMFT have recourse only to IMFT's assets and do not have recourse to any other of our assets.

The following table presents IMFT's distributions to and contributions from its shareholders:



For the year ended	2014		2013		2012
IMFT distributions to Micron	$	10	$	38	$	439
IMFT distributions to Intel	10		37		391
Micron contributions to IMFT	106		12		48
Intel contributions to IMFT	102		11		46

IMFS

We partnered with Intel to form IMFS in 2007 to manufacture NAND Flash memory products for the exclusive use of the members. Our ownership percentage of IMFS had increased from 51% at inception to 82% in April 2012 due to a series of contributions by us that were not fully matched by Intel. In April 2012, we entered into a series of agreements with Intel and acquired Intel's remaining 18% interest in IMFS for $466 million. In addition, we acquired IMFT's assets located at our Virginia wafer fabrication facility, for which Intel received a distribution from IMFT of $139 million. For both transactions, the amounts Intel received approximated the book values of Intel's interests in the assets acquired. Additionally, we received a $300 million deposit from Intel, substantially all of which was applied to Intel's purchases of NAND Flash products from 2012 to 2014 under a supply agreement. In 2012, Micron and Intel paid capital contributions to IMFS of $103 million and $131 million, respectively.

IMFS sold products to the joint venture members generally in proportion to their ownership interests at long-term negotiated prices approximating cost. IMFS sales of NAND Flash product to Intel for 2012 were $158 million and as a result of the April 2012 agreements, Intel had no continuing rights to the output from the IMFS and Virginia facilities.

MP Mask

In 2006, we formed a joint venture with Photronics to produce photomasks for leading-edge and advanced next generation semiconductors. The MP Mask joint venture agreement allows either party to terminate the joint venture in either May 2016, provided notice is given prior to May 2015, or in each five-year successive period following May 2016, provided such notice is given at least twelve months prior to the end of the successive five-year period. At inception and through August 28, 2014, we owned approximately 50% and Photronics owned approximately 50% of MP Mask. We contributed $21 million to MP Mask and Photronics contributed $20 million to MP Mask in 2012. We purchase a substantial majority of the photomasks produced by MP Mask pursuant to a supply arrangement.

The following table presents the assets and liabilities of MP Mask included in our consolidated balance sheets:



As of	2014		2013
Current assets	$	24	$	26
Noncurrent assets (primarily property, plant and equipment)	203		182
Current liabilities	28		25
Noncurrent liabilities	14		—

Amounts exclude intercompany balances that were eliminated in our consolidated balance sheets.

Creditors of MP Mask have recourse only to MP Mask's assets and do not have recourse to any other of our assets.

In February 2012, we sold to Photronics for $35 million a photomask production facility we had leased to them under an operating lease. The proceeds were equal to our net carrying value and no gain or loss was realized from the sale.

MMT

As of August 29, 2013, noncontrolling interests in MMT were 11%. In 2014, we purchased additional interests in MMT for an aggregate of $146 million, and as of August 28, 2014, noncontrolling interests in MMT were less than 1%. Substantially all of the MMT shares purchased in 2014 were financed with a short-term loan from a seller. As a result of the purchases of MMT shares in 2014, in aggregate, noncontrolling interests decreased by $180 million and additional capital increased by $34 million. (See "Debt – Other Notes Payable" note.)