AGM 2010

Dec 16, 2010

During the course of this meeting, we may make projections or other forward looking statements regarding future events the future financial performance of the company and the industry. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to the documents the company files on a consolidated basis from time to time with the Securities And Exchange Commission. Specifically the company's most recent Form 10 K and Form 10 Q. These documents contain and identify important factors that could cause the actual results for the company on a consolidated basis to differ materially from those contained in our projections or forward looking statements. These certain factors can be found in the Investor Relations section of Micron's Web site. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results levels of activity, performance, or achievements. We are under no duty to update any of the forward looking statements after the date of the presentation to conform these statements to actual results. Well, after that exciting and uplifting message, we'll move forward with the agenda. Today, we We have both a formal and an informal agenda as we have in the past. The formal agenda will be, proceeded through first. And then we'll move to the informal agenda where we will spend a little bit of time talking about where the company was, where the company is, some of the financial metrics that we compare ourselves by to our competition and then a little bit of discussion about how the company is transitioning forward and what we're looking forward to over the next, next decade. So with that, let's get started. And before I start the formal agenda, I want to introduce the board of directors, starting on the very end. We have Larry Mondry, who is the former president and CEO of CSK Auto Corp. Next to him, we have Bob Bailey, who's the current chairman of PMC Sierra, Mercedes Johnson, who is the former Senior VP and CFO of Abago Technologies, Jim Bagley, who is the Executive Chairman of Lam Research, and, Terry Aoki Son, who is currently president of Sony University, and also, previously president of Sony America. So we are very fortunate to have them when we're aboard, and of course, they will be on the formal agenda for reelection of the directors. So let's start the formal business of the meeting I have received an affidavit stating that notice of this meeting and a proxy statement have been given to all shareholders of record as of October 18 2010, The Inspector of Election, Joe Moran of Phoenix Advisory Partners has advised has signed the oath of Inspector of Election In Inspector of Election has reported to me that we have present in person or by proxy, not less than 83% of the outstanding shares entitled to vote at this meeting, which constitutes a quorum. I, therefore, declare this meeting duly convened. We will vote by ballot today. If you have turned in a valid proxy and do not intend to change your vote today, it's not necessary for you to vote again. We will vote your proxy. If you did not turn into proxy or wish to change your vote, please raise your there. I'll just keep your hand raised, and they'll come down and give you the ballots. Does everybody have a ballot that needs 1? There's a ballot over here still needed, Jim, or Okay. Great. The proxy statement describes the items to be voted on today, The first item of business is the election of directors, Terry Aoki, Jim Bagley, Bob Bailey, Mercedes Johnson, Larry Mondry, Bob Switz, and I have been nominated to serve until the next annual meeting or until our successors are duly elected and qualified, and and I also want to note that, Bob Swit, was unavailable to be here today. He's the former chairman of ADC Telecommunications. He's he's former by about, I think, a week now because they had their company merge with another company. Is there any discussion on the election of the directors? Okay. Please mark your ballots. The second item of business is the approval of an amendment to the company's 2007 equity incentive plan. Is there any discussion? Okay, please merge your ballots. And then the 3rd and final item of business is the ratification of the appointment of PricewaterhouseCoopers as the independent registered public accounting firm of the company for fiscal 2011. Is there any discussion? Please mark your ballots. And while you're doing that, let me introduce both Larry Westfall and Trudy Fran, are you there over here on the side and their representatives from PricewaterhouseCoopers? That was the final item. The company has not received any notice of any other matter to be presented and voted upon on this meeting, so this concludes the voting. If you could pass your ballots over and they'll collect them, And while I do that, while we're doing that, I'd like to introduce some, some of our executives who, have traveled here from around the world. It's sometimes easy to forget that, you know, we have about 25,000 people in operations all over the world and people that come from all over the world. So I want a chance to introduce, the, the executives that we have here, starting with, I'm going to go down the list. They're all sitting here, Mark Durkin, who's our, president and chief operating officer, Mark Adams, our Vice President of Worldwide Sales, Kate Bedard, who is our Vice President of Investor Relations, Michael Bogan, our Vice President of Worldwide OEM Cells, Scott Deboer, our Vice President of Process Research And Development Ed Doller, our Chief Memory Systems Architect Tom Eby, who's our vice president of the Embedded Solutions Ron Foster, who is our CFO, and you'll hear a little bit from him later today. Glenn Hawk, who's our vice president of NAND Solutions Jay Hawkins, who's our vice president of Vacant Manufacturing, Dean Klein, our vice president of the memory system development, Rod Lewis, who's our, vice president of legal and our our corporate council, and our corporate secretary. Mario Michadello, who, is our vice president of our wire solutions He he traveled a lot of ways for Middle East to be with us today. Thanks, Mario. Ed Mahoney, who is our vice president of Information Systems, Pat Ottie, who's our vice president of human resources, Mike Sadler, our vice president of corporate Development, John Shrek, our vice president of DRAM Development, Brian Shields, our vice president of worldwide operations, who, as of January, will be living in Singapore. Just to be clear though, I know you're Scottish. He wants to make sure that they don't call him a Welshman or anything else. This is Scottish. I know you guys are sensitive about that kind of thing over there. Brian Shirley, who's our Vice President of DRAM Solutions, Philippe Morali, who's our treasure, and Steve Thorson, who's our vice president of procurement. And I I did I miss anybody, who's here today? I don't think so. We're fortunate to have such a great team of executives around the world, and we we feel like, you know, the team is really what makes the difference. So with that, let me, let me, take us back a couple of years And you might recall, we we had this picture a couple of years ago, and it was meant to really describe what was the perfect storm, occurring. And for of us, at that point in time, we didn't we didn't really quite recognize what a perfect storm it was in terms of the economy around the world, and clearly, we were facing a number of challenges at that time. In fact, if you go back into the end of the 2008 period, this was a U. S. Commercial two filings, they were on the rise and the course went higher. If you recall, the unemployment rates at the time were forecasted to go up to 8%. Of course, we wish it only went to 8% It's much higher than that today. And then obviously the U. S. Had slowed substantially in terms of the GDP growth. And so that ultimately trickled throughout the world, and we had a reset around the world on the economic environment that we were facing. And clearly, it created a lot of difficulties for for Micron as well in particular since we had already had some industry challenges for the year or 2 prior to that. And it's a little bit difficult in those times to you know, stay the course and to continue to steer the company in a direction that you believe is the right direction when you're surrounded by so so much negative. So I thought what I would do is, really look at the company on a 40 year horizon and and and it won't take that long to go through that. So don't worry. Really, the 30 years up to now, which is essentially the history of the company and really take a look at what we're trying to accomplish over the next 10 years, and and if you look at the timeline between really 19802020, and if I look at the first half of the company, which was first half of that time period, which was really up through, about 2, about 2000, a number of things characterized the industry that we were in, and I've listed them up here. Clearly, there were a lot of producers, as we've noted before, and and and, of course, Micron is now the last producer of DRAM in the Western world, And there were a number of other factors that impacted us. We had a lot of customers during that period of time, primarily in the PC business, and the and the annual consumption of our product had grown at about 75% per year on a on a per bit basis of the of our product going into, as I said, primarily to the computing world, as we faced, then we still face a little bit today. There were there were government subsidized companies. And, people tend to forget that if you go back into the eighties and the early nineties, a lot of countries around the world felt that if you wanted a strong technology industry that you needed to have a strong semiconductor industry, and if you wanted a strong semiconductor industry, needed to have a strong DRAM industry because DRAM led the development of technology for a long time, and that's why you had, of all the major economic players in technology, that's why you had a DRAM industry, that was either fostered or encouraged and had grown over time. That's no longer the case today, but that characterized our industry in the earlier time period, and you look back, and I'm going to show you the peaks of the company as we've gone through time, this is in 1984, hard to imagine that the company peaked around $90,000,000 in revenue, but that was also the year that we went public in 1984, and this was the top of the cycle for us in that period of time. And then again, in 1989, we had another peak. We did go through a a downturn that occurred in the interim, and then, really, what's still considered one of the greater peaks that we've had was in 1995. And in 1995, the industry had about as higher gross margin as had been achieved in the DRAM industry. And keep in mind, at this time, we were predominantly DRAM RAM. In fact, we were probably DRAM right up until the next peak, but we changed something in the interim, which is the data point I show you here, which is we we acquired the memory operations of Texas Instruments, and for those of you that were either followed the company or knew the company at the time, that was that was really a big change for us because we went from being a company with essentially a dominant Boise footprint, to a worldwide geographic footprint. We went from being a company that was relatively insignificant in terms of market share in the memory business to a company that was of significance, one of the larger companies in the memory business, and we did this at the worst moment. As I said, sometimes it's hard to keep the faith when things aren't looking good, and we did it 1998, in 1998, was up and up to that point in time, one of the worst downturns we had experienced in our industry, and we still believed in advance in the company we did the deal. And of course, that ultimately led to the peak in 2000. Now there were a lot of companies that peaked in 2000. And a lot of them, what we call the tech boom, and a lot of them had the tech bust. But remember, each one of these peaks was higher than the prior peak, and, of course, the company had record results in 2000, and and then we had the the tech bust or the great, you know, we had some customers who had been buying maybe a $100,000,000 of product for quarter, call us and tell us they said, you know, from 1 week to the next, they said we're sorry, we don't need you to ship us any product for a year, for a year, because they had way too much inventory. And of course, that led to a lot of changes in the industry and as we went through that, you know, we up until that point in time, if I think about the 1st 20 years of the Micron history, it had been characterized by these things that I had outlined, but there were a number of things that then changed really the last 10 years starting in the year 2000. And if you look at 2001 and the tech bust, a couple of things became apparent to us at the time that drove us try to change the strategy. First of all, our customer base had really consolidated down into just a few in the PC world. And today, if you think about it, There aren't very many companies you can go buy a PC from. There might be 3 or 4, and we all know the big names. But but the but the challenge is that that then consolidates everybody that we try to sell to and the leverage shifts and makes it more difficult environment for us. On top of that, we had a fundamental shift in the demand for our product. And I'm going to show you in a few moments a little more detail about that data, but we had a shift in the demand for the product. It was averaging 75% per year, and it had fundamentally shifted to 50% per year. Now most industries would love to have a 50% per year growth in the consumption of their product. But in our case, it created a lot of structural issues for the industry because when we when we expand our technology, when we advance our technology, we create a certain number of of product And then when we build new fabs, we created a certain amount of product, and those combined historically had add up to the 75%. And now we fundamentally had down to 50% and one of the things that created such difficulties in the industry, was that we were still operating as an industry as though we had a 75% demand profile And then, of course, a couple of other things in terms of, things that we had never experienced before changed the way that we thought about the business. And so we recognized that we needed to have a really a strategic shift in our thought process, and it evolved around a couple of things. 1, we can't do everything ourselves, so that drove us to think about partnerships and more acquisition and M and A activity. Number 2, we recognized that we needed a much broader product portfolio than we ever had before because we didn't believe just being a DRAM company was going to be sufficient, and then finally, we had a lot of technology needed to make sure that we leverage that both in the partnerships and in the product portfolio arena and that's what we want to work on. So, in the in the beginning, of the decade, we took a lot of our resources. It's interesting because we had Nora's part of our portfolio, then we exited Nora because we put all those resource on to what we call our NAND product line. And then ultimately through the, through the, combination of mnemonics and Micron this year, we were back in the NOR business, but but keep in mind, the 3 largest parts of the memory world are DRAM, NAND, and NOR, and we it wasn't because we didn't like the product lines because we couldn't do it all ourselves, and and we always figured that at some day, we'd have an opportunity to reenter that business, but it was more important for us at the turn of the century to make sure that we were going to be successful on the NAND business. And and when you think about NAND, for those people who are familiar, digital steel camera cards, USB drives, solid state drives, you know, everything that you see in the, in the, in the iPod, the MP3 players, all of those things consumed NAND. And it is now the 2nd largest, part of the memory market, then we want to make sure we were successful. So that's what we did. We also continue to do some M and A, you know, we acquired Toshiba's mainstream DRAM business and they exited the business and on top of that, We did we did something that which was unusual for us. Up into that point in time, we did a very large joint venture with Intel, and that was IMFT. All those things culminated into really we we we peaked again in 2006. But if you think about 2006, at least for the memory industry, it didn't feel like much of a peak, and it's the first time in the company's history that that peak was actually lower than a prior peak in terms of financial We had never experienced that before as a company. We had always had higher highs, if you will, and 2006 was a year that we didn't, and it was for a couple of reasons. 1, was because we were changing the model of the company, and there's costs and time requirements associated with that. And then secondly, industry had still been operating as though the average demand were going to be 75% instead of 30% and that was evidenced by what was going on in terms of the capital dollars that we're being spent for equipment. I'm gonna come back to that in a second, so just keep that thought for a moment. We continued the partnership effort We did a partnership in Taiwan with a company called Formosa, which owns Nania, which is a joint development partner on the DRAM. And then as I mentioned, we had, merged mnemonics in in with Micron, and that company was in the NOR business, and they were the number one company in the NOR business. So Micron is now the number one company in our business and that created a product portfolio that really led to a change in significant change in our business. And if you look at this chart, this actually charts the percentage of our business that goes into a particular product category. And if you look at the last quarter, in particular, since NeuMoDx became part of the company, it's the first time in the company's history that DRAM accounted for less than 50 percent of our revenues. And and and we're not proud of that because DRAM is bad. DRAM is obviously the largest part of the memory market, but because it really started that we thought would be important, which was making sure that we had products that can go into all applications around the world, and that's what this next chart illustrates. That we now participate in a lot of different applications, that that that frankly many people can't even imagine because they just don't know what happens inside of whatever applicate, you know, whatever technology or whatever appliance or whatever, device that you might have, but we now go into many different applications And as a result, it obviously has added, I think a lot of growth for the company, but, but more stability in terms of financials moving forward. So all of that culminated into kind of the year that we just ended the fiscal year and and we're we're we're we're we feel pretty good that we hit a new for the company, which is the first time that's happened again, since we since, the 2006 time period. And by the way, I'm not proposing that this is the peak we don't know, you know, our business, of course, cycles, and what's interesting is that the that the world economy in some parts of the world as doing okay and other parts, it's not. I mean, I don't think any of us sitting here in the United States think that the U. S. Is on fire or that it's all of a great economy. In fact, it's interesting that our team member meetings last week, you know, we were pointing out that for because the company is is doing fairly well. It's a little bit of a dual edged sword because, you know, we went through a difficult time and and now we had a record year, but many people that we know, many of other companies that we know, many people that are our neighbors are still having a very difficult time because unemployment rate is high or or because companies are still struggling. So, so, you know, it's an interesting environment for us that, is unusual but, you know, having said that, we, we feel pretty good about the results of the company. And before I translate that into what I think, is in store for us moving forward, I want to have Ron Foster come up and share a little bit more about the financial year with you. Ron. Thanks Steve. Now that Steve's gone through a brief history of our industry and Micron's performance through the last couple decades. As Steve mentioned, I want to give you quick recap of insights, and then I'll turn it back to Steve. If you look at the, performance of the company as Steve mentioned, net sales at the top of the graph, they're $8,500,000,000, nearly in the fiscal year 2010 another record, for the, a record for the company in terms of our, our history. We also generated a $1.85 in earnings per share, as you see at the bottom of the chart there, And, and notably, we also, as Steve mentioned, have the Mnemonics acquisition that was brought into our financial results contributed about $632,000,000 of revenue to the top line as well as contribution to the bottom line performance You'll also note in the net income line of $1,850,000,000, there's a contribution of, the gain on our NeuMoDx acquisition of $488,000,000 in that $1,800,000,000 net income number. So very good outcome for the company in terms of the total business addition mnemonics and the overall performance of our core business. That strong income statement, resulted in a great balance sheet performance for the year Our cash balance grew from about $1,500,000,000 to $2,900,000,000 in the most recently completed quarter. The NeuMoDx results are integrated into this as of the acquisition in May and showing our balance sheet entries at their current levels, But notably, when we acquired NeuMoDx, we added about $682,000,000 of inventory, and that's included in the at $1,770,000,000 of inventory showing on our financial statements. The company also made some significant equity investments, minority investments in important companies to us to transform Solar joint venture. We started up this last fiscal year, showing in our equity method investments, And we also contributed, money to our in Oterra joint venture with our partner, Nania, in our equity method investments providing them process of adopting and ramping up, as we speak. So very exciting times in terms of our joint venture there, and I'll give you a little bit more detail on that in a couple of minutes. Not only did we build cash balance in 2010, but we are also able to reduce our debt balance The short term and long term debt was brought down about $500,000,000 to about $2,300,000,000 broken in the short term and long term portion there comparing year to year. And our total equity, going up to about $9,800,000,000, as a result of really strong performance in the year. Give you a little bit more detail about the NeuMoDx acquisition that we, consummated in May. We paid about $1,100,000,000 for mnemonics. One point of comparison I want to make is if you look at the current value contributed when we bought the company. The net working capital that we received in the acquisition was about $800,000,000. We also were, we sold our interest in a joint venture between mnemonics and Hynix to Hynix and they paid us $425,000,000 for that joint venture interest. The sum of those two numbers exceeds the total purchase price that we paid for mnemonics. We also had a third party valuation done as is appropriate practice for accounting purposes that came in with a value of our acquisition at the time of acquisition of about one point $6,000,000,000. You compare that to the $1,100,000,000 purchase price, and that's where you get the $488,000,000 gain we reported in our financial statements in the 2nd fiscal quarter of 2010. Other noteworthy items here in terms of, the business going forward, not only did we get good financial efficiency in the short run, but we're already beginning to generate significant value synergies from the integrated company in terms of workforce optimization, elimination of redundancies in our infrastructure, factory optimization, technology roadmap optimization of the 2 companies. Also, Hynix and LP to 2 of our competitors have been supply in the DRAM and NAND memory to mnemonics. We're now replacing that supply with Micron DRAM and NAND memory. So we have that opportunity in front of us. We're reworking the tax structure of the combined company and optimizing that. We're integrating product strategies, and we formed business units and are now rationalizing that structure going forward and anticipate and already are getting significant leverage from those business activities. And we're leveraging the combined customer relationships with the 2 companies. So a lot of value already generated and much more to come as we look forward to the future. Our JVs have also been providing significant value, and I wanted to give you a picture of that. We have, a number of them Not only do we have a highly distributed company, as Steve mentioned, but we have a highly, sophisticated company in terms of the different kinds of business arrangements we have capitalizing on the leverage that Steve referred to earlier. 2 of the big joint ventures that were involved in are our DRAM joint venture with our partner Nania Technology and the Innoterra fab in Taiwan. This shows the revenue pie for Micron that we reported in fiscal year 10 and the contribution of that, in Oterra volume to our total revenue pie. And the 2 NAND, elements are the joint venture we have with Intel at Lehi, Utah in terms of the revenue it generated from that fab operation in fiscal year 2010, And going forward, we are now in the process of ramping up I MFS in Singapore, joint venture with Intel, addition to that joint venture activity, and they've just started their first wafers here in the last couple of weeks. So a lot of upside potential there as we look forward. The Micron owned pie actually includes, techsemiconductor in Singapore, which has been a 20 year joint venture of the company. I included it and owned because we, we own 87% of it and are negotiating to buy out the remaining portion from our from our partners here in the in the very near term. Another way to look at the impact of our JVs on our business The upper left pie chart shows our wafer capacity and fully half of our wafer capacity was generated by our our DRAM and NAND joint ventures with our partners. And on the lower right side of the graph is the leverage we get from our joint technology development programs with our partners in DRAM and NAND, funding over a third of our total R and D and comparisons to give you a view of, where Mark Micron fits in the competitive landscape. The blue line there is is the Micron business performance by quarter over the last couple of years. Last year, at this meeting, I commented, showing obviously only through fiscal year 9, that Micron had been the only pure play memory manufacturer who had consistently generated positive operating cash flow consistently improved our operating cash flow performance quarter by quarter, exiting the fiscal year Q4 'ten, the upper right of that graph there, with over a $1,000,000,000 of operating cash flow generated in performance on average of our One of the important things in a capital intensive business like ours is not only getting leverage with partners and JV arrangements, but managing our capital structure of the company It's critically important and valuable to us in terms of accomplishing our strategic objectives. Micron has a goal of achieving about staying in the range of about 20 percent to 25 percent debt to total capitalization ratio. And in good years, which fiscal year 10 certainly was to be at the lower the higher debt loads in their structure, and they have to service that debt over time. So we feel we're in good competitive position in terms of our capital structure. Our total cash at $2,900,000,000 is in very good position vis a vis the competition and puts us in a good position going forward to, continue executing our strategy. Another measure of cash is looking at the cash to debt relationship. This is our total gross cash minus total debt compared to our competitors, again, of the pure play memory competitors, we're the only one that has positive net cash about a $500,000,000, and the others have, significantly higher debt loads and don't have the cash surpluses to cover them. Another short term liquidity assessment, similar view is to look at the cash on hand to short term debt. This is debt that's due in the next 12 months by Micron and each of the competitors and just simply looking at the race at that ratio. So Micron has four times as much cash as we need at fiscal year end to pay off all of our debt due in the next 12 months. Our competitors are all below 1, which means they need to raise more cash just to payoff their debt obligations in the next 12 months before they have extra money to put into technology deployment, fab expansion, etcetera. And finally, I wanted to, report on a activity we got into, last month, November, we restructured some of our debt to rebalance the maturities to reduce the cost and to reduce the potential dilution of some of our convert structures. So this graph shows the debt obligations that we had by year looking out into come due then of about $1,500,000,000. Last month, we we, repurchased $267,000,000 of those convert obligations, which now shows in the fiscal year $11,976,000,000 debt repayment. So $267,000,000 of that's already been purchased and repaid, and we got we took $43,000,000 43,000,000 shares, Micron shares out of a potential dilution by taking that action, and and got them back, in our hands. And also, we spent 100 or we restructured about $175,000,000 of our 2014 debt, moving it out to effective maturity of 2017 and dropping that 2014 debt balance to $1,100,000,000. So we got a very, good debt obligation structure when we look out into the future, not only are we in good shape now in terms of our cash to short term debt but we are working to restructure out into the future to keep that in good shape. So all in all, it's been a great year for Micron, We've been able to execute strategic moves to improve our performance and our competitive position overall, and it certainly positions us well the future. And with that, I'll turn it back to Steve who's going to talk a little bit about the future. Thanks, Ron. So if you if you then take that all as a backdrop, what's happened in the history of the company, where we're at financially, and they look towards the future. I think some of the future is is pretty well understood by most people, and in particular, for companies like Micron and in the technology world, this is now this was our fiscal year, where we actually shipped our product. And you can see if you do the math on this, we're just under 80% of our product is now sold outside the United States, and about 20% continues to be in the U. S. That's a big shift from where we were a decade ago or a couple of decades ago. And it just highlights, both, first of all, the export nature of our business, but in addition to that, it highlights what we need to continue to be focused on as we move forward to make sure we can address the markets that, that evolve over time, around the world. So as we look really at the next 10 years, you know, we think that memory will continue to be a critical, part of the technology world, a critical part of really everybody's life, because of all the emerging products. And in fact, if you look at this industry statistic, this is a bar chart of the percentage of all semiconductors that are memory. So of all semiconductors around the world in terms of the total TAM, the total available market, almost 40% of them now are memory. When you combine the 3 part categories that we have, and there's a couple of other minor ones that we don't participate in. So that just and it's not expected to change. It's it's really amazing how far memory penetrates now in all the applications around the world. And then if you combine that with there remember I was talking earlier about structurally how the industry continued to expand thinking that the growth was going to be 75% per year but we've now seen that shift. And if you look at the 3 product categories, they're all much lower than they were in earlier periods of time, and that's evidenced by, this chart here, which shows you that the average now, and by the way, I'm not suggesting it won't move around because it does. But that the average, really has reset in the DRAM business and if you look at, what's happening in terms of the supply growth, which is obviously had a large impact in terms of the effect it's had on us as a company supply growth from our competition that it it really has been mitigated. And one of the things that that that evidence is at is what's happening in terms of the amount of equipment that's being purchased with which to produce the kinds of product that we that we produce. And this chart, there's really 2 things to note on it. 1, is the, the, the darker blue and then the other is kind of the lighter blue aqua, and that's the split between what happens with the equipment. Is it going for new capacity in terms of silicon or is it being spent on your current capability in just advancing the technology? And if you recall earlier, I talked about Rogue, the total amount of growth in the product per year. Well, some of it is driven by advancing the technology because we shrink it, we get more off of the same wafer, and other other part of the growth is being driven by just more wafers or more expansion of silicon in our business and What you'll notice is first of all, the industry went from a peak, in particular, in DRAM, this is showing DRAM. The industry went from a of about $22,000,000,000, a couple years ago to where for last year, it really hit a low of about 4,000,000,000 or 4,500,000,000 And this year, it might get up to somewhere around 10, but it's still half of what it was before, and, and you're already seeing some moderation of that today going forward, that's one important piece, which addresses, how much total money is being spent, and the other piece is significant is the amount of money that's going into advancing the technology instead of new silicon, and almost all the dollars being spent today are being driven toward advancing the technology that we have in our manufacturing operations around the world, not just for Micron, but for our competitor And what's significant about that is if you advance the technology, you're able to grow about 35% per year. And if you add silicon, then that adds on to that growth. Well, when you go from and we were, by the way, as an industry, we were advancing the technology and growing about 35% of the year, 35% per year and then we're also putting new capacity in place adding up to the other 35% or 40% per year growth, adding up to the 75% to 80% growth that I was referencing earlier. Well, when we had the tech bust in 2001, everybody kept doing that. And we were growing the supply much more than the actual demand was and as a result, it created a lot of structural issues for the for the industry for the last 10 years. That that that is essentially, I think, been mitigated, and if you look at this chart here, it tells you that almost all of the expansion is going into advancing the which accounts for around 35 or 40 percent per year, yes, we'll optimize and there'll be some silicon added to get up to that 50%, but there's nothing crazy going on right now. And so when you look at that, for the DRAM and then look at it for the NAND, it's it it all looks actually pretty rational in terms of how I think companies are acting. So when we look at that, and then we say, well, what's going to happen in terms of all the producers out there who who don't have the kinds of portfolios that we do, we actually think that there's not gonna be that many companies that survive over the long run. Fact, we think there'll probably be 2 or 3, and this is a list of all the companies in the memory space. And when we look at memory, we look at it with all these products combined. We don't looked at it specifically to DRAM or specifically to NAND or specifically to NOR, because we think that the the synergies and the leverage across all those product groups really adds up to what your position is in the industry. And you can see there are only 2 companies that have the portfolio that we do it's us and Samsung, and you'll notice on this chart, by the way, that we are smaller than Hynix, this quarter, but we were larger last quarter, and as we have Nina and the ImFS stuff come through, we'll probably leapfrog them again. But but the point on this chart is that you can see there are several of us that are really quite large in terms of the total memory business, and then there are a lot of people that are small. And we think that they'll they'll be challenged and with what Ron described Dirdner, if you look at their debt structures, and their capital structures, we think that, that it bodes well for us moving forward and I'm not suggesting that we won't have cycles in our industry because we will. We know that we will. I'm just suggesting that first of all, we think we can weather them, pretty well. And secondly, we'll be able to take advantage of it as we move forward. So you know, we believe that the next 10 years, which is now evidenced by really 2010, being part of it, we think that the next 10 years they have to be better than the last 10 years because the last 10 years really weren't very good as I was mentioning before. We also think that we're one of the unique companies that can take advantage of opportunities that exist in the industry. In fact, we've probably been the dominant catalyst in terms of industry restructuring and industry consolidation than more so than any other company. And as a result, we think we will on a go forward basis, be able to generate a pretty good financial result for the company. So again, you know, how do we, how do we win, how do we do this? Well, first of all, we need to continue to be pretty efficient on our capital deployment. And we've noted before, Ron's noted a couple of things, Mark Durkin and prior discussions, note a couple of things, we have been very efficient at our capital deployment. And what do I mean when I say that? Well, first of all, we, we like to think that we spend our money wisely or we spend your money wisely. As shareholders, but but in correlation to that, when we go out and we do something, if it's if an acquisition of a company or if it's an acquisition of assets or the or a combination of companies, we try to do it in the most efficient way possible, and we try to do it in the most cost effective way One, a good example of that is when we did the Inoterra transaction, which was we we bought, rights to the output of Inoterra in involve shares and equity ownership of in Oterra jointly with Nanya that, we've already described. Well, that facility, we know factually because we've built these facilities, that facility cost us would cost us around 3,500,000,000 dollars, 3,500,000,000 dollars, $4,000,000,000 to put in place to date. We know that factually. We we bought those shares in the right to that output for about $400,000,000, okay? The total facility by the way is about a $8,000,000,000 facility, but but our share of its half of it with our partner and we spent $400,000,000 for that, and that's very, very capital efficient deployment. As compared to our primary competitor, which I showed on the screen earlier, Samsung, when when, they go out and they, and they don't really do M and A or transactions, and they're all organic, they spend full price for all that stuff, right? And we're able to take advantage of it and be more efficient in our capital deployment and there are lots of examples that we have as we've done that over time. The second thing we need to do is make sure that we continue to have very good partnerships. And, and, I think we've proven that we're a company that can do those and get benefit from it, and we have a number of examples there. We also have to continue to make sure that we're effective in making sure that we look out around the horizons and recognize when there's opportunity for M And A because we, as I said, we've been one of the few companies that have been able to successfully do that. And obviously, we have to optimize our facilities. Nobody in our business gets a free pass on cost and optimization. And finally, as Ron pointed out, we're very conscious of the financials of the company. We want to make sure that we continue to reduce debt and conserve cash so that we can take advantage of these things as they come along. So when you think about where the company is today, I think all of us acknowledge that we had a pretty tough 1st 1st 10 years of the century for a lot of reasons that I've already described. But we stayed the course and we continued to do the things inside of the company that ultimately positioned us to where we are today, which is, by no means where we where we hope to be, but certainly, a long ways from where we were, and in a position to take advantage as this industry moves forward because we think that, that what we're doing today is going to be a huge part of the technology world moving forward, and we think that the technology world, of course, is going to be a huge part of the economy moving forward. And I have a just a quick video I want to show you that, that just highlights that. Progress comes in many forms. It could be improvement, discovery, or a change for the better. And often, it's something more. Progress is having the unprecedented power to map the human genome and using that knowledge to create new life saving treatments in medicine. Progress is the ability to instantly search any book or document ever and being able to access this information from anywhere on the planet. It's developing new ways to create energy as well as finding innovative means of saving energy. And who drives this progress forward? We do. We're Micron. We're an international team of dreamers, visionaries, and scientific super heroes. We've built 1 of the strongest patent portfolios in the world to power all these possibilities and more Our technologies are at the heart of the world's fastest supercomputers, performing astonishing petascale calculations. Flooring, analyzing, and solving problems that had previously been unsolvable, and shaping the 21st century. In fact, Micron's products are practically everywhere in our everyday lives, making travel safer. Healthcare more effective. Energy greener, information faster, and people closer. Our brightest minds are turbo charging key industries and changing lives. Giving you power in places you probably didn't even realize, power to connect, to share, to inform, to learn, where micro the world's memory experts. So with that, I'll open it up to questions. We can turn the lights up and if you have a question and, by the way, I was remissing, welcome everybody that's on the webcast because we also webcast this meeting. And we ask that you use the microphone so that the people on the webcast can hear the question as well. Yeah. Steve, what can we as shareholders do to help invigorate the Boise site in the Treasure Valley mainly, so our our youths, can have better job opportunities locally? Yes. Well, I think that we there are a couple of levels that we have to deal with. One is that we as a state and you hear a lot about this, of course, states fighting for their rights with the federal government We as a state, of course, get overshadowed in some ways by what happens at the federal level, and then we obviously have the state activities in to try to improve the economic environment for not only Boise and Treasure Valley, but also for the state. So, you know, at those two levels, I would give a couple different answers. 1, clearly, you know, if you want, if you want to have jobs, you're going to have healthy businesses, small and large. And so everything that we can do to improve the environment for those of us here we should try to do. And an example of this, by the way, is there was a new regulation that came through that I think from the EP inadvertently we'll capture if we don't get it resolved we'll capture a company like Micron whereby we're a manufacturing site and as a manufacturing site we may be required to get a permit every time that we just even want to change a process or add a new product or change of flow in our in in in that in that permitting process right now, by the way, the way that it's being characterized will take a year and a half. Well, we don't have a year and a half to make those kind of changes. And so we're working diligently right now trying to make sure that at the federal level, we we don't get captured by, inadvertently, especially I think by this regulation that they have that that would just bring us to a halt. Those kinds of things will kill us, in terms of being able to operate, not only here in the state but in the country. The with this, so those kinds of things, everything that we can do at the federal level as, you know, with our representation in Washington, we should try to do to make sure that we have an environment where we can be competitive. But setting that aside at the state level, you know, I attended the governor had a forum where they were looking for ideas on how maybe the state could allocate some of its dollars to do more here in the valley. Now, obviously, you know, Micron is a large part of what happens in Idaho, but we're not the only piece. And you know, I think that, to the extent that we can to the the state deploys dollars for economic activity, that they really should try to deploy those dollars in a in a matching way to companies that have the opportunity to start small that but can grow large. A lot of people forget that, you know, Micron, we were a very small startup back in the early '80s and we grew to employ a lot of people. Well, that we need more of that. We need more that. And obviously, Micron has been a big participant with the university here trying to make sure that they have programs in particular in science and technology that will that will, you know, interest the the young minds of not only people in the state, but people that might come to the state. And then in addition to that, I think that there needs to be a lot of activity with, with efforts to get new companies going, that have the opportunity to participate in a global economy because it doesn't help that much if you create a business that's only local in terms of, in terms of, generating new export capability and new revenues from outside the outside this country coming in to with which to create more jobs. If it's just a localized course you know, we all have to have localized businesses and that that's helpful, but what you really want are those kinds of businesses that that grow and employ lots of people but but participate in a worldwide global economy because we really are, now you know, as the, as the book said, the world really is flat. And for those of us and for a company like Micron, where we spend our time traveling throughout the world, we recognize that world really is flat you have to be able to take advantage of those opportunities as they come up wherever they happen to be around the globe. Any other questions? Or comments. Okay. Well, let me thank everybody for coming. We very much appreciate the support of the shareholders we we feel pretty good that we we had the kind of year that we had. As I said, our work is not done. We're going to continue to drive forward and become a better company. Thank you again for attending.