Consolidated Variable Interest Entities

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 December 1, 2011, we owned 51% and Intel owned 49% of IMFT and we owned 82% and Intel owned 18% of IMFS.

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 71% as of December 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:



Quarter ended	December 1, 2011		December 2, 2010
IM Flash distributions to Micron	$	86	$	51
IM Flash distributions to Intel	83		49
Micron contributions to IM Flash	103		392
Intel contributions to IM Flash	131		—

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 $261 million and $209 million for the first quarters of 2012 and 2011, respectively. As of December 1, 2011 and September 1, 2011, IM Flash had receivables of $158 million and $165 million, respectively, from Intel.

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



As of	December 1, 2011		September 1, 2011
Assets
Cash and equivalents	$	160	$	327
Receivables	246		252
Inventories	250		227
Other current assets	9		11
Total current assets	665		817
Property, plant and equipment, net	4,094		4,121
Other noncurrent assets	63		66
Total assets	$	4,822	$	5,004

Liabilities
Accounts payable and accrued expenses	$	218	$	458
Deferred income	122		125
Equipment purchase contracts	28		37
Current portion of long-term debt	10		8
Total current liabilities	378		628
Long-term debt	79		58
Other noncurrent liabilities	3		4
Total liabilities	$	460	$	690

Amounts exclude intercompany balances that were 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 our joint venture partner. 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 R&D costs equally with Intel. As a result, R&D expenses were reduced by reimbursements from Intel of $22 million and $23 million for the first quarters of 2012 and 2011, respectively.

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 December 1, 2011, we owned 50.01% and Photronics owned 49.99% of MP Mask. In the first quarter of 2012, we contributed $8 million and Photronics contributed $7 million to 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 December 1, 2011 and September 1, 2011, deferred income and other noncurrent liabilities included an aggregate of $32 million and $34 million, respectively, related to this agreement. 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	December 1, 2011		September 1, 2011
Current assets	$	17	$	24
Noncurrent assets (primarily property, plant and equipment)	156		143
Current liabilities	23		31

Amounts exclude intercompany balances that were 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.