Crucial 2014 Annual Report Download - page 18

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The operations of the MMJ Companies will be subject to continued oversight by the Japan Court during the pendency
of the corporate reorganization proceedings.
Because the plans of reorganization of the MMJ Companies provide for ongoing payments to creditors following the
closing of our acquisition of MMJ, the Japan Proceedings are continuing, and the MMJ Companies remain subject to the
oversight of the Japan Court and of the trustees (including a trustee designated by us, who we refer to as the business trustee,
and a trustee designated by the Japan Court, who we refer to as the legal trustee), pending completion of the Japan Proceedings.
The Japan Proceedings and oversight of the Japan Court are expected to continue until the final creditor payment is made under
the MMJ Companies' plans of reorganization, which is scheduled to occur in December 2019, but may occur on a later date to
the extent any claims of creditors remain unfixed on the final scheduled installment payment date. Although we may be able to
petition the court to terminate the Japan Proceedings once two-thirds of all payments under the plans of reorganization are
made, there can be no assurance that the Japan Court will grant any such petition.
During the pendency of the Japan Proceedings, the MMJ Companies are obligated to provide periodic financial reports to
the Japan Court and may be required to obtain the consent of the Japan Court prior to taking a number of significant actions
relating to their businesses, including transferring or disposing of, or acquiring, certain material assets, incurring or
guaranteeing material indebtedness, settling disputes or entering into certain material agreements. The consent of the legal
trustee may also be required for matters that would likely have a material impact on the operations or assets of the MMJ
Companies and their subsidiaries or for transfers of material assets, to the extent the matters or transfers would reasonably be
expected to materially and adversely affect execution of the plans of reorganization of the MMJ Companies. Accordingly,
during the pendency of the Japan Proceedings, our ability to effectively integrate the MMJ Companies as part of our global
operations or to cause the MMJ Companies to take certain actions that we deem advisable for their businesses could be
adversely affected if the Japan Court or the legal trustee is unwilling to consent to various actions that we may wish to take with
respect to the MMJ Companies.
If our manufacturing process is disrupted, our business, results of operations or financial condition could be materially
adversely affected.
We manufacture products using highly complex processes that require technologically advanced equipment and continuous
modification to improve yields and performance. Difficulties in the manufacturing process or the effects from a shift in product
mix can reduce yields or disrupt production and may increase our per gigabit manufacturing costs. We maintain operations and
continuously implement new product and process technology at our manufacturing operations which are widely dispersed in
multiple locations in several countries including the U.S., Singapore, Taiwan, Japan and China. Additionally, our control over
operations at our IMFT, Inotera, MP Mask and Tera Probe joint ventures is limited by our agreements with our partners. From
time to time, we have experienced disruptions in our manufacturing process as a result of power outages, improperly
functioning equipment, equipment failures, earthquakes or other environmental acts. If production at a fabrication facility is
disrupted for any reason, manufacturing yields may be adversely affected or we may be unable to meet our customers'
requirements and they may purchase products from other suppliers. This could result in a significant increase in manufacturing
costs or loss of revenues or damage to customer relationships, any of which could materially adversely affect our business,
results of operations or financial condition.
We may incur additional restructure or other charges in future periods.
In recent periods, we have implemented restructure activities and may implement restructure initiatives in future periods.
As a result, we could incur restructure charges (including but not limited to severance and other termination benefits, losses on
disposition or impairment of equipment or other long-lived assets and inventory write downs), lose production output, lose key
personnel and experience disruptions in our operations and difficulties in the timely delivery of products. In connection with
these actions, we recorded charges of $40 million for 2014 and $126 million for 2013. We do not anticipate incurring any
significant additional costs for these prior restructure activities. We may incur additional restructure charges or other losses
associated with other initiatives in future periods.