Consolidated Variable Interest Entities

NAND Flash Joint Ventures with Intel ("IM Flash")

We have two joint ventures with Intel: IMFT, formed in 2006 and IMFS, formed in 2007, to manufacture NAND Flash memory products for the exclusive benefit of the partners. IMFT and IMFS are each governed by a Board of Managers, the number of which adjusts depending on the parties' respective ownership interests. We and Intel initially appointed an equal number of managers to each of the boards. These joint venture arrangements extend through 2016 but are subject to prior termination under certain terms and conditions. IMFT and IMFS are aggregated as IM Flash in the following disclosure due to the similarity of their function, operations and the way our management reviews the results of their operations. The partners' ownership percentages are based on contributions to the partnership. As of September 1, 2011, we owned 51% and Intel owned 49% of IMFT and we owned 86% and Intel owned 14% of IMFS. In September 2011, subsequent to the end of our 2011, we contributed $103 million and Intel contributed $131 million to IMFS, decreasing our ownership interest in IMFS to 82%.

Although our ownership interest in IMFS changes at the time we make contributions, our share of the operating costs and supply from IMFS adjusts in proportion to changes in our ownership share either 12 months or 8 months (depending on the status of IMFS' production ramp) from the date of the applicable ownership change. Accordingly, we anticipate that our share of IMFS costs and supply will increase from 57% as of September 1, 2011 to our current ownership interest in IMFS over 2012. Changes in IMFS ownership interests do not affect our NAND Flash R&D cost-sharing agreement with Intel.

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



For the year ended	2011		2010		2009
IM Flash distributions to Micron	$	234	$	278	$	723
IM Flash distributions to Intel	225		267		695
Micron contributions to IM Flash	1,580		128		25
Intel contributions to IM Flash	—		38		24

IM Flash sells products to the joint venture partners generally in proportion to their ownership interests at long-term negotiated prices approximating cost. IM Flash sales to Intel were $884 million, $764 million and $886 million for 2011, 2010 and 2009, respectively. As of September 1, 2011 and September 2, 2010, IM Flash had receivables of $165 million and $128 million, respectively, from sales of product to Intel.

Total IM Flash assets and liabilities included in our consolidated balance sheets were as follows:



As of	September 1, 2011		September 2, 2010
Assets
Cash and equivalents	$	327	$	246
Receivables	252		154
Inventories	227		160
Other current assets	11		8
Total current assets	817		568
Property, plant and equipment, net	4,121		2,894
Other noncurrent assets	66		57
Total assets	$	5,004	$	3,519

Liabilities
Accounts payable and accrued expenses	$	458	$	140
Deferred income	125		127
Equipment purchase contracts	37		8
Current portion of long-term debt	8		7
Total current liabilities	628		282
Long-term debt	58		62
Other noncurrent liabilities	4		4
Total liabilities	$	690	$	348

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

Our ability to access IM Flash's cash and marketable investment securities to finance our other operations is subject to agreement by the joint venture partners. The creditors of each IM Flash entity have recourse only to the assets of each of the respective IM Flash entities and do not have recourse to any other of our assets.

IM Flash manufactures NAND Flash memory products using designs and technology we develop with Intel. We generally share product design and other NAND Flash research and development ("R&D") costs equally with Intel. As a result, R&D expenses were reduced by reimbursements from Intel of $95 million, $104 million and $107 million for 2011, 2010 and 2009, respectively.

MP Mask Technology Center, LLC ("MP Mask")

In 2006, we formed a joint venture with Photronics to produce photomasks for leading-edge and advanced next generation semiconductors. At inception and through September 1, 2011, we owned 50.01% and Photronics owned 49.99% of MP Mask. In connection with the formation of the joint venture, we received $72 million in 2006 in exchange for entering into a license agreement with Photronics, which is being recognized over the term of the 10-year agreement. As of September 1, 2011, deferred income and other noncurrent liabilities included an aggregate of $34 million related to this agreement. In 2011, Photronics contributed $8 million and we contributed $9 million to MP Mask. MP mask made distributions to both us and Photronics of $10 million each in 2009. We purchase a substantial majority of the reticles produced by MP Mask pursuant to a supply arrangement.

Total MP Mask assets and liabilities included in our consolidated balance sheets were as follows:



As of	September 1, 2011		September 2, 2010
Current assets	$	24	$	35
Noncurrent assets (primarily property, plant and equipment)	143		85
Current liabilities	31		6

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

The creditors of MP Mask have recourse only to the assets of MP Mask and do not have recourse to any other of our assets.

In May 2009, we leased to Photronics a facility to produce photomasks under an operating lease. The lease provided for quarterly lease payments aggregating $41 million through October 2014. During 2011 and 2010, we received $8 million and $7 million, respectively, in lease payments from Photronics. As of September 1, 2011 and September 2, 2010, the carrying value of this facility was $44 million and $47 million, respectively.