Equity

Micron Shareholders' Equity

Common Stock Issuance: In October 2017, subsequent to the end of 2017, we issued 34 million shares of our common stock for $41.00 per share in a public offering, for net proceeds of $1.36 billion, net of underwriting fees and other offering costs.

Common Stock Repurchases: Our Board has authorized the discretionary repurchase of up to $1.25 billion of our outstanding common stock in open-market purchases, block trades, privately-negotiated transactions, or derivative transactions. Through 2017, we had repurchased a total of 49 million shares for $956 million through open-market transactions pursuant to such authorization. The shares received in all periods were recorded as treasury stock. Repurchases are subject to market conditions and our ongoing determination of the best use of available cash.

Treasury Stock: In connection with the Inotera Acquisition, we sold 58 million shares of our common stock to Nanya for $986 million in cash, of which 54 million shares were issued from treasury stock. As a result, in 2017, treasury stock decreased by $1.03 billion while retained earnings decreased by $104 million for the difference between the carrying value of the treasury stock and its $925 million fair value.

Outstanding Capped Calls: We entered into capped call transactions in connection with certain of our convertible notes which are intended to reduce the effect of potential dilution. 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 strike prices on the expiration dates. As of August 31, 2017, the dollar value of cash or shares that we would receive from our outstanding capped calls upon their expiration dates range from $0, if the trading price of our stock is below strike prices for all capped calls at expiration, to $527 million, if the trading price of our stock is at or above the cap prices for all capped calls. Settlement of the capped calls prior to the expiration dates may be for an amount less than the maximum value at expiration.

The following table presents information related to outstanding capped calls as of August 31, 2017:



Capped Calls				Strike Price		Weighted-Average Cap Price		Underlying Common Shares	Value at Expiration
Capped Calls	Expiration Dates			Strike Price		Weighted-Average Cap Price		Underlying Common Shares	Minimum		Maximum
2032C	Nov 2016	–	Nov 2017	$	9.80	$	15.69	25	$	—	$	147
2032D	Nov 2016	–	May 2018	10.16		15.91		32	—		184
2033E	Jan 2018	–	Feb 2018	10.93		14.51		27	—		98
2033F	Jan 2020	–	Feb 2020	10.93		14.51		27	—		98
								111	$	—	$	527

Expiration of Capped Calls: In 2017, we cash-settled and share-settled separate expirations of portions of our capped calls, and received $125 million in cash and 4 million shares (equal to a value of $67 million) based on the volume-weighted trading stock prices at the expiration dates. In 2016 and 2015, we share-settled expirations of portions of our capped calls and received 2 million shares of our stock (equal to a value of $23 million) and 3 million shares of our stock (equal to a value of $50 million), respectively. The shares received in all periods were recorded as treasury stock.

Shareholder Rights Plan: On January 18, 2017, our shareholders approved a Section 382 Rights Agreement (the "Rights Agreement"), under which our shareholders of record as of the close of business on August 1, 2016 received one right for each share of common stock outstanding, which entitles certain shareholders to purchase additional shares of our common stock at a significant discount in the event of certain transactions that may result in an ownership change, as defined by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). In general, an ownership change will occur when the percentage of our ownership by one or more 5% shareholders has increased by more than 50% at any time during the prior three years. Rights will attach to all shares of the Company’s common stock issued prior to the earlier of the rights’ distribution date or expiration date as set forth in the Rights Agreement. Pursuant to the Rights Agreement, if a shareholder (or group) acquires beneficial ownership of 4.99% or more of the outstanding shares of our common stock without prior approval of our Board or without meeting certain customary exceptions, the rights (other than rights held by the acquiring shareholder (or group) and certain related persons) would become exercisable. The Rights Agreement is intended to avoid an adverse ownership change, thereby preserving our current ability to utilize certain net operating loss and credit carryforwards; however, there is no assurance that the Rights Agreement will prevent all transfers that could result in such an ownership change.

Accumulated Other Comprehensive Income (Loss): Changes in accumulated other comprehensive (loss) by component for the year ended August 31, 2017 were as follows:



	Cumulative Foreign Currency Translation Adjustments			Gains (Losses) on Derivative Instruments, Net			Pension Liability Adjustments			Total
As of September 1, 2016	$	(49	)	$	2		$	12		$	(35	)
Other comprehensive income	27			15			4			46
Amount reclassified out of accumulated other comprehensive income	21			1			(1		)	21
Tax effects	—			(1		)	(2		)	(3		)
Other comprehensive income	48			15			1			64
As of August 31, 2017	$	(1	)	$	17		$	13		$	29

Noncontrolling Interests in Subsidiaries



As of	2017				2016
	Noncontrolling Interest Balance		Noncontrolling Interest Percentage		Noncontrolling Interest Balance		Noncontrolling Interest Percentage
IMFT	$	832	49	%	$	832	49	%
Other	17		Various		16		Various
	$	849			$	848

IMFT: Since 2006, we have owned 51% of IMFT, a joint venture between us and Intel to manufacture memory products exclusively for its members, who share the output of IMFT in proportion to their investment under a long-term supply agreement at prices approximating cost. In 2017, IMFT began to transition its manufacturing from NAND to 3D XPoint memory products. IMFT is governed by a Board of Managers, for which the number of managers appointed by each member varies based on the members' respective ownership interests. The IMFT joint venture agreement extends through 2024 and includes certain buy-sell rights. Through December 2018, Intel can put to us, and from January 2019 through December 2021, we can call from Intel, Intel's interest in IMFT, in either case, for an amount equal to the noncontrolling interest balance attributable to Intel at such time either member exercises its right. If Intel exercises its put right, we can elect to set the closing date of the transaction to be any time within two years following such election by Intel and can elect to receive financing of the purchase price from Intel for one to two years from the closing date. Creditors of IMFT have recourse only to IMFT's assets and do not have recourse to any other of our assets.

IMFT manufactures memory products using designs and technology we develop with Intel. We generally share with Intel the costs of product design and process development activities for NAND and 3D XPoint memory at IMFT and our other facilities. Our R&D expenses were reduced by reimbursements from Intel of $213 million, $205 million, and $224 million for 2017, 2016, and 2015, respectively.

Non-Trade sales primarily consists of NAND and 3D XPoint memory products manufactured and sold to Intel through IMFT and were $553 million, $501 million, and $463 million for 2017, 2016, and 2015, respectively.

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



As of	2017		2016
Assets
Cash and equivalents	$	87	$	98
Receivables	81		89
Inventories	128		68
Other current assets	7		6
Total current assets	303		261
Property, plant, and equipment, net	1,852		1,792
Other noncurrent assets	49		50
Total assets	$	2,204	$	2,103

Liabilities
Accounts payable and accrued expenses	$	299	$	175
Deferred income	6		7
Current debt	19		16
Total current liabilities	324		198
Long-term debt	75		66
Other noncurrent liabilities	88		94
Total liabilities	$	487	$	358

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

The table below presents IMFT's distributions to and contributions from its members for 2016 and 2015. There were no distributions or contributions for 2017.



For the year ended	2016		2015
IMFT distributions to Micron	$	36	$	6
IMFT distributions to Intel	34		6
Micron contributions to IMFT	38		148
Intel contributions to IMFT	37		142

Restrictions on Net Assets

As a result of the corporate reorganization proceedings of MMJ initiated in 2012, and for so long as such proceedings continue, MMJ is subject to certain restrictions on dividends, loans, and advances. In addition, the 2021 MSTW Term Loan contains covenants that limit or restrict the ability of MSTW and/or MTTW to distribute cash dividends. Also, our ability to access the cash and other assets of IMFT 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 (excluding intercompany balances and noncontrolling interests) as of August 31, 2017 were $3.65 billion for the MMJ Group, $2.22 billion for MSTW and MTTW, and $885 million for IMFT. As of August 31, 2017, the MMJ Group held cash and equivalents of $580 million, MSTW and MTTW held an aggregate of $56 million, and IMFT held $87 million.